Blood and Iron, Coal and Oil
World War Wednesday: the struggle for strategic resources
From July 1914 to May 1915, the Austro-Hungarian Empire’s war against Serbia was joined by Germany and, later, the Ottomans on the Austrian side. On the Serbian side stood the Russian, British, French, and Japanese Empires, along with Montenegro, joined in May 1915 by Italy. Belgium also fought as an independent coalition member against Germany. The strategic reality for Austria-Hungary and its allies was one of increasing encirclement against a growing alliance.
However, the way countries sourced their strategic resources for their militaries was actually destroyed by the war itself.
Prior to the conflict, the major empires maintained interconnected trading relationships that supplied natural resources for their home industries, including weapons and war materiel production. Yet, during the war, the old trading system was divided into rival blocs. The Russians were cut off in the Baltic Sea by the German navy, and the Ottoman fleet at the Bosporus Strait trapped Russia’s warm-water capability in the Black Sea. This left the often-frozen northern routes as the remaining points of sea trade for the tsar.
Likewise, the Germans found it hard to access their African colonies due to French and British power on the continent. The neutral Americans, as was their tradition, attempted to make money by trading with everyone; but the Europeans were facing shortages and seeking workarounds to their limited options. Ultimately, by going to war and severing critical trade routes, the belligerents effectively self-sabotaged their own supply chains.
The First World War rapidly evolved into an industrial war of attrition that would not be over by Christmas 1914. As a result it triggered a desperate, insatiable demand for weapons, munitions and fuel. Attacks were direct not just against political capitals but against regions rich with natural resources, the kind you want to take from the enemy. Germany’s invasion of Northeastern France gave it control of half of the French coal and iron supply. Holding those resources, exploiting them for the kaiser and denying them to France were as important as attempting to advance on Paris.
Concurrently, anxiety over oil supplies led the British to launch campaigns against the Ottomans in Mesopotamia to secure the Persian Gulf resources in what is now Kuwait and Iraq. Because the great powers had previously functioned within a largely free-trading global ecosystem, the war forced a rethink of their economic strategies. Faced with potential shortages of critical materials, the warring governments aggressively intervened in their market-economies. Operating at different levels of intensity and penetration into the private sector, this unprecedented war-statism created specialized state administrations designed to control, ration, and distribute raw materials.
Consequently, the world watched as European leaders blew up their system and sought to profit as best they could to both advance their positions, but also to avoid losses from the disruption of trade with Europe as much as within Europe. Global markets for raw materials temporarily shifted in the direction of the non-European nations and neutral territories, particularly in decolonized Latin America and East Asia. Those economies initially suffered from the sudden collapse of international finance and trade caused by the war absorbing European capital, but they soon saw a massive boom in the export of vital wartime commodities. Europe wrecked the global economy but the world adjusted, it was Europe that was left with the bill.
Yet, the biggest winner would be the United States of America, who alone among the great powers remained at peace, while its geopolitical rivals spent their men, money and material on a war that continued to drag on into 1915.
