Mises Wire

The Tragedy of America’s Entry into World War I

This week some 80 world dignitaries including Presidents Putin, Trump, and Chancellor Merkel are gathering in France to mark the culmination of year-long remembrances of the centenary of the end of “the Great War” on November 11, 1918 – later labeled and known to every American high school history student as World War I. While at least 17 million people, including more than 116,000 Americans, died in this war — and millions more were wounded, gassed, or maimed — it’s a conflict widely misunderstood today. Indeed, because of World War II’s size and scope, cultural influence, and greater media coverage and capture, the First World War is often called “the forgotten war.”

Yet it was a cataclysmic event in its own right that both foreshadowed more intense and violent warfare in the 20th century, and fueled the growth of gargantuan central government in the United States. Most crucially, however, it was a war that should never have been fought — its causal origins and assignment of guilt for same are still a hot topic of debate a century later, a fact that alone attests to its superfluity — and one that, in any case, the United States should never have entered. These are disturbing theses about the war that will not be remembered by any of the global elites in Paris this weekend, but given the lessons for today, Americans should learn about them so as to demand of their Beltway solons wiser policy choices in the future. What follows is a short summary of America’s involvement in the war and lessons for today.

Origins of the Conflict in 1914

When the United States declared war on Germany following strong majority votes in both houses of Congress and the impassioned speech of President Woodrow Wilson to a joint session on April 2, 1917, he asserted that America must fight in the European war “to make the world safe for democracy.” This was a mere five months after Wilson had won re-election in 1916 via a slogan of “He kept us out of war.” 100 years later, though, there’s still no clearly-enunciated explanation of what it means to create safety for democracy. Later history would prove, however, that this goal — whatever it meant — was most certainly not achieved by the victorious Entente or their associated power and late entrant, the United States.

Nonetheless, when Count von Metternich convened the Congress of Vienna in November 1814 to settle long-simmering disputes in Europe following the  Napoleonic wars, little could he have guessed that precisely a century later his august project would crash forever upon the shoals of boiling Balkan nationalism. Metternich’s Concert of Europe had, in fact, been durable and substantial: after 1815 there had been only minor-but-contained skirmishes across Europe in the 19th century: the formation of the Second French Republic after the liberal revolution of 1848, the Franco-German War of 1871 that flipped Alsace-Lorraine, and the consolidation of German and Italian nation-states. The British, meanwhile, were extending their empire into the far reaches of Asia and Africa. But after victory over Napoleon at Waterloo in 1815, there would be no sizable war in the heart of Europe for another century.

Across the continent as a whole, then, the 19th century was one of general peace and ever-increasing material wealth for the masses, thanks to increasing economic integration and its attendant gains from trade.  The rule of law, protection of property rights, a sound monetary framework, and the unleashing of entrepreneurial energies, thanks to patient capital, had spread across the continent and built a civilized order. It was, said the Austrian economist Ludwig von Mises later, the Age of Liberalism , and marked by the broad cessation of warfare and its attendant impoverishing taxation and destruction.

The First World War that ended this widespread peace and prosperity was, therefore, an appalling tragedy. In the end, some 65 million troops were mobilized (including 4.7 million Americans), there were more than 20 million casualties including civilians, and the Austro-Hungarian, German, Ottoman, and Russian empires were destroyed. Meanwhile the victorious British and French empires peaked and were effectively bankrupted. The British needed a century to pay off its war loans. Many national boundaries were redrawn, and activist high-tax/interventionist governments replaced laissez-faire regimes everywhere.

American Entry into the War in 1917

However, initially with the advent of hostilities in 1914, President Wilson attempted to steer a neutral course. There was no discernible reason for America ever to become involved in a European land war, and the United States traded with — and had immigrants from — all countries in the conflict. Following a longstanding foreign policy that had first been enunciated by Wilson’s foremost predecessor, George Washington, the American position on the Great War remained, as always, “Friend of Liberty everywhere, Guarantor only of our own.” Critics called it “isolationist,” but the American people in near-unanimity sought to steer clear of the massive conflict across the Atlantic Ocean.

Tensions rose in May of 1915 with the sinking of the merchant cruiser Lusitania by a German U-boat, killing 128 Americans, among others. While there was an outcry against Germany over such unrestricted submarine warfare, the German government had in fact taken pains to warn American passengers via advertisements in major east coast media, and indeed the Lusitania was carrying contraband, and hence was a legitimate target of war. In any case Mr. Wilson was able to get the German government to restrict its operations and let a specified number and type of American ships pass through to England, and in spite of a few other minor incidents, the President cruised to re-election in November 2016 via the campaign war-cry of “He kept us out of war.”

By the end of 1916, however, things looked bleak for the Triple Entente (the alliance between Britain, France, and Russia). Russia was in trouble in the east and riddled with revolutionary fervor. The western front, while stabilized, would be bled by increased and more powerful German thrusts should Russia quit the war, as increasingly looked likely. The French and British, racked by losses in Turkey and higher casualties on their German front than the Germans, were beginning to fear an inability to continue to finance the war effort. The Italians were stalemated. The Allies increasingly saw one big solution to their plight, and it lay across the Atlantic.

Pressures thus were mounting on Mr. Wilson to join the fray. The British, as they were to do again after 1939, mounted a broad effort to entice America into their war via propaganda such as alleged German battlefront atrocities in Belgium. Further, tens of billions of (2018-equivalent) dollars had been loaned to Britain and France by New York banks such as Goldman Sachs and J.P. Morgan (which had major European offices in London and Paris, and thus led American capital raising efforts for these belligerents), in at least five times the amount lent to the Central Powers (Germany and Austria-Hungary): should Germany win the war, these loans to the western powers could not be recouped. American armaments makers and industrial producers such as Bethlehem Steel or DuPont, many of which had suffered during the 1913-14 recession in the United States, loved the advent of war. Exports to Britain and France quadrupled between 1914 and 1917.1

Hence there were fervent supporters of American entry into the war from American industrial and financial quarters, as well as some voices in the political class, including former President Theodore Roosevelt, the “John McCain of his day” regarding his “all war, everywhere” bellicosity.

Early in 1917 the Germans came therefore to believe that these various pressures would draw the Americans into the war against them no matter what actions they took. But they also concluded it would take several months for America to mobilize and join the fight. They sensed a quick end in the east and intended to press the attack in the west such that, along with an intensified naval blockade, they could starve Britain and France into forced capitulation before the United States could make a difference.

On January 19, 1917, the Foreign Secretary of the German Empire, Arthur Zimmermann, sent a coded message to the German Ambassador at Mexico City, announcing a resumption of unrestricted submarine warfare on February 1. While a plea would be made to the United States to remain neutral. It was anticipated this would trigger a declaration of war, in which case Germany sought an alliance with Mexico, to attack the United States and reclaim territories in the American Southwest lost 70 years earlier. This Zimmermann Telegram, as it came to be known, was intercepted by the British and made public in the United States, which along with the resumption of sub warfare led President Wilson to break diplomatic relations with Germany on February 2. Mr. Zimmermann admitted the veracity of the note on March 3, and following a few more ship sinkings involving Americans, led Wilson to ask for war on April 2, with a formal declaration approved on April 6.

Wartime Conduct of the Wilson Administration and the Advent of Big Government and Central Planning

Although most Americans were inflamed with a sense of patriotic fervor when reminded of the Lusitania (from 23 months earlier!) and then became enraged at news of the Zimmermann Telegram, U.S. entry into the war was not uncontroversial. Secretary of State William Jennings Bryan had already resigned his cabinet position in the aftermath of the Lusitania sinking, fearing a tilt toward the British via war finance. Bryan had recommended to Wilson right away in 1914 that American loans or exports to belligerents be forbidden as a way to shorten the war. This counsel was ignored. Well-known Leftist and progressive Randolph Bourne publicly broke with Wilson over the war. He was one of many who did so. And there were also critics from what would today be called small-government libertarian types, most prominently H.L. Mencken of the Baltimore Sun.

This is of interest today because while the war effort went well enough once American soldiers and Marines were on the ground fighting in France, there were pockets of protesters in the United States. The protestors saw no logic to our fighting wars on behalf of European belligerents, with all of whom we had friendly commercial relations before the war, and none of whom represented any threat to us. It is an historical parallel to current era American wars in the Muslim world, and earlier wars in east Asia.

Domestically, historian Ralph Raico reports that the war ushered in central planning on a massive scale not seen since the Civil War, whose controls and federal dictates were easily surpassed in 1917. Congress passed the National Defense Act, for example. It gave the president the authority, in a time of war “or when war is imminent,” to place orders with private firms which would “take precedence over all other orders and contracts.” If the manufacturer refused to fill the order at a “reasonable price as determined by the Secretary of War,” the government was “authorized to take immediate possession of any such plant and to manufacture therein such product or material as may be required” for the war effort. The private business owner, meanwhile, would be “deemed guilty of a felony.”

Once war was declared, the power of the federal government grew at a dizzying pace in all sorts of directions. The Lever Act, for example, passed on August 10, 1917, was a law that, among other things, created the United States Food Administration and the Federal Fuel Administration: this put the federal government in charge of the production and distribution of all food and fuel in the United States. President Wilson reached into all corners of American life for the sake of the war effort via price controls and monetary manipulation, as well as such direct actions as banning beer sales (and this right before Prohibition).

Some of the Wilson Administration’s conduct was shameful. For example, in an effort at control of public opinion that would make Josef Goebbels proud, some 850 citizens were prosecuted under the Espionage and Sedition Acts between 1917 and 1919, with many jailed for having the temerity to question the logic behind the war. Most famous of these was the former Socialist candidate for President Eugene V. Debs, who was fined and given a 10-year jail sentence – at age 63 – after a June 1918 speech in Canton, Ohio wherein he decried American involvement in a war that was of no consequence to us or our national security; Debs further criticized the use of a conscript/slave labor army to prosecute the war. He was given early release by President Harding at Christmas 1921 and met at the White House the next day. But in a cold, damp, dark federal penitentiary in Atlanta, Debs had contracted tuberculosis, sending him to perhaps an early death in 1926.

Further, Wilson set up a propaganda office immediately after the declaration of war, called the Committee on Public Information. This was a government-staffed propaganda agency charged with message control of the media (viz. putting “spin” on war news) to sustain morale in the U.S., to administer voluntary press censorship, and to develop propaganda abroad. This entity eventually comprised 37 distinct divisions. These included the Division of Pictorial Publicity which employed hundreds of artists to create graphics with patriotic themes, or to incite fear and hatred of Germans.

Mr. Wilson also had one of his cronies, Albert M. Briggs, set up the American Protective League (APL), an organization of 250,000 private citizens that worked with federal law enforcement agencies during World War I to identify suspected German sympathizers. Its mission was to “counteract the activities of radicals, anarchists, anti-war activists, and left-wing labor and political organizations.” In other words, it was a giant “army” of snitches, sort of a benign Gestapo. One victim was a man named Taubert in New Hampshire who received a sentence of three years in prison for saying out loud and in public that World War I was a war “for J.P. Morgan, and not for the people.” He meant the was was being fought to recoup Morgan’s war loans to the British and French, and pad the bottom line of the capitalist class.

The American entry into the war did have the desired effect for the Allies: Germany ran out of money, out of food, and began to suffer reversals in the west. Even though not one square inch of German soil was ever breached, it was the Germans who blinked, and the war was finished precisely 100 years ago this weekend, on November 11, 1918, at 11 AM Central European Time.

In a final scandal, there were perhaps 10,000 casualties in the final hours of the war’s final day ç some 320 Americans died and 3,240 were wounded on the morning of November 11, including U.S. Marines ordered to charge and cross the Meuse River, and the U.S. Army’s 92nd Infantry Division in an attack in the Argonne. In spite of general knowledge on November 9 that the end would likely be on the 11th, and with firm knowledge as of 5 AM on the 11th that the Germans had agreed to halt hostilities six hours later, Americans were ordered to attack, in some places, German machine gun nests. The commander of the American Expeditionary Force, General John Pershing, was challenged in congressional testimony a year later about the insanity of attack orders on the final morning of the war, whereupon he dissembled in his answers. What was later shown to be true was Pershing’s lying to Congress about knowledge of the precise ending of the war. But Pershing, by then an anointed war hero, was never charged with anything, nor was any other American officer.

The Aftermath of the War and Lessons for Today

President Wilson, having obtained his victory, and also his seat at the Versailles Conference, sought to pursue a peace grounded in a 14-point proposal that he hoped would form the basis for permanent international tranquility monitored through the League of Nations. But the American people quickly turned inward, rejected American participation in the League, and pulled out of Europe.

Meanwhile, the terms of the Versailles agreements were unduly harsh toward the loser countries. John Maynard Keynes predicted in his 1919 book, The Economic Consequences of the Peace, that as a result, the war would resume in 20 years. In this, he was precisely correct, as Versailles set forth reparations amounts that the vanquished could never repay (and hence were eventually repudiated in any case). But they were harsh enough into the 1920s to ensure political instability and the destruction of civil society in Germany — that ushered in Hitler.

The participation in the war caused economic gyrations in the United States, too. First and foremost, 116,000 Americans died, and around 320,000 were wounded or maimed  and more than half the war-dead died due to various sicknesses, including deadly influenza that swept the world in 1918-19. (The Spanish Flu claimed 500,000 lives inside the U.S.). Thanks to the exigencies of wartime finance and production, the U.S. economy experienced a jump in debt, inflation, and monetary gyrations, and then a punishing post-war recession in 1920-21. Then called a “depression,” it was the worst in American history up until then, and remains one of the top four contractions since the Founding of the Republic). Unemployment quadrupled to 12% in 1921, and industrial production declined by more than 30%, amidst much human suffering.

Wartime regulatory oversight and taxes were challenging for American business, and only when deregulation and the Mellon tax cuts came under President Coolidge did the U.S. economy fully recover a vibrancy stolen in the post-war correction.

When seen especially against the outsized global panorama that was World War II, the First World War has receded in Americans’ collective memory. It is little-studied and even less-discussed. But in the fullness of time, armed with full information of subsequent history, analysts have begun to ask the ultimately uncomfortable questions. Why did America go to war, and what was accomplished? In any analysis of costs and benefits of American intervention in a European war, was it the right decision?

Here, the answer is now clear: morally, strategically, and financially, the American entry was a disaster. The American effort clearly failed vis-à-vis President Wilson’s own stated war aim: ensuring the spread of democracy and an end to all wars.

But this answer confers more incisive insights with deeper thinking. Historian Jim Powell of the Cato Institute offers an interesting and compelling theory about what an alternative flow of events would have looked like in the absence of American intervention in the war. While we cannot ever prove a counterfactual assertion, it is safe to say that had the United States not intervened, the belligerent nations would have likely fought to some sort of draw. They would have negotiated a truce, accepting a status quo according to the position of opposing armies in 1918. This would have had enormous implications going forward. Specifically:

(a) When the czarist regime of Nicholas II collapsed in mid-March 1917, a Provisional Government headed by former Foreign Minister Alexander Kerensky was formed, with an intended goal of sustaining a parliamentary democracy. But confusion and low morale reigned on Russia’s battlefronts, and the Kerensky government was forced to confront an immediate fiscal crisis. Kerensky hoped to exit the war and build a stable polity, but state bankruptcy loomed.

Western powers were approached for financial support, and President Wilson sent former Secretary of State Elihu Root , then 72 years old, to Petrograd to negotiate. Root offered the Russians $325 million in war loans, equivalent to about $6.4 billion today, but only if they stayed in the war. Kerensky balked but soon relented, feeling he had no choice; the Russians took the American money and launched new offensives against the Germans in July and August of 1917. These failed, causing Kerensly to lose credibility and support with the Russian people and army. By October, Lenin was on the doorstep to power, taking it in the November 7 revolution. Soon thereafter Lenin and Trotsky concluded a peace with Germany at Brest-Litovsk. It included the surrender of vast territories including the Baltic states to Germany. While this treaty was annulled at Versailles, it did give Lenin legitimacy for ending the war that had eluded Kerensky, as well as breathing room to begin consolidating Bolshevik power via the Russian Civil War (1917-22).

(b) But had the Americans not intervened and aided the Kerensky government, Kerensky may well have seen his country as effectively bankrupted and surrendered in March of 1917. The Germans would have had no need to use Lenin, who returned to Petrograd after ten years in exile on April 16 (from Switzerland, through German lines). Nor would they needed to support him in inciting Bolshevik passions to overthrow the Romanov dynasty. Instead, the Germans might have supported Kerensky and stabilized Russia prior to the eventual chaos there that fall.

(c) No Lenin and no Bolshevik Revolution in 1917 may well have meant no consolidation of power by the Reds, and thus no Stalin in 1924. Any successful momentum for Kerensky would have implied peace with the West, and perhaps aid in establishing a quasi-liberal market order. No Stalin would imply a different trajectory for history in Russia in the decades before World War II.

(d) The German army meanwhile would have stabilized its front in the West, and indeed perhaps captured additional French and Belgian territory. The war in the West might well have then ended in a general stalemate, with a slight redrawing of border lines and maintenance of Alsace and Lorraine in the Kaiser’s Reich. But there would have been no Versailles, no destruction of German civil society, no hyperinflation, and hence no mass suffering that could only lead to the rise of extremism that in turn produced Adolf Hitler. And no Hitler makes World War II unlikely, at least on the scale that it occurred.

(e) Indeed, even if the Germans had captured Paris, it is unlikely Germany could have subdued England, given British naval superiority and Germany’s worsening fiscal situation by 1918. At some level peace would have obtained in Europe again just as had happened in the 19th century. Liberalizing forces would have tamed the alleged German militarism.

(f) A stable German government and society would have meant a faster economic recovery and likely the forestalling of the Nazi regime 13 years later. It is likely Austria, Hungary, Czechoslovakia, and others would have recovered faster, too.

(g) Of course it cannot be forgotten that had the Americans refrained from entry into World War I, the U.S. economy would not have experienced the inflationary boom and then depression in 1920-21, and nor taken on massive war debt, all of which led to Federal Reserve gyrations and severe economic dislocations during and in the years following the war. American mobilization and production of armaments and munitions altered the build-up of capital and consumer goods commensurate with growing peace-time wealth, too.

The bottom line: American intervention in World War I, in league with the Triple Entente powers, spawned Lenin; Versailles; Stalin; Germany’s collapse and descent into anarchy, hyperinflation and bankruptcy; and then Hitler. All this, of course, was followed by World War II and 60 million deaths. Of course the analysis can be extended: no Cold War, thanks to a vastly reduced-in-scope World War II, might well have meant neither Korean nor Vietnamese Wars occurred.

World War I was of zero financial, strategic, or moral interest to the vast majority of Americans. There certainly was never any credible threat of an attack against the United States from the Central Powers. And so getting involved in a clash between European empires (and a Turkish/Muslim imperial power being thrown in on one side) made no sense, again, either morally, strategically, or financially.

The uncomfortable truth about World War I from an American perspective is that it made absolutely no difference, to most all Americans, who won the war, short or long term. Had the flag of the Imperial German Reich eventually flown over Paris in 1920, it would have mattered little to most all of us. But it would have mattered a great deal to certain interests, primarily in Washington or New York, at the time. The bankers, industrialists, and power-seeking politicians all had their reasons to want American entry into the war, but of course, no American citizen will ever support the sending of our forces into battle for the sake of corporate profits. So, a fancier and loftier and more sublime war aim was developed by the great manipulator of public opinion, Woodrow Wilson: “Make the world safe for democracy.”

Will We Finally Learn?

We have seen this political legerdemain several times in American history, before and since. For example, why did America fight the Spanish in 1898, especially since it is highly dubious that they had anything to do with the sinking of the U.S.S. Maine? Why did America fight in Vietnam, especially since Communism collapsed 16 years later anyway? Why did America go to war in the Middle East in 1991 on behalf of two Arab dictatorships that were at the time being menaced by a third?

And, similar to the flow of events following World War I, what if America had not fought in 1991? There’d have been no 1991-2003 No Fly Zone War that killed 500,000 Iraqi women and children, or stationing of troops in Saudi Arabia, that enraged Osama Bin Laden and al Qaeda. In turn, while not provable, it is at least thus quite possible that American intervention in Iraq in 1991 begat 9/11/2001, which in turn begat wars in the Muslim world in 2001 and 2003 – that continue to rage today.

It is imperative that in a dangerous world the United States possess an impregnable national defense. But based on our considerable history, and the primordial lesson unveiled by World War I’s unintended consequences, will we ever learn to be more circumspect in our deployment of combat power? Will we learn both the wisdom and humility of mission-capable defense that is second to none, but to be careful in attacking others for no good reason?

Let us be starkly clear in our closing thought: America went to war 100 years ago for no good reason, and certainly not for the “general interest” of national security. Instead, President Wilson wanted war for the sake of narrow special interests contained in what President Eisenhower was to later call the “military-industrial- congressional complex.” This panoply of overlapping Beltway groups or individuals, coupled with the “ruling class elite” who toil in Manhattan boardrooms, is still alive and well today. These groups can all do great things on their own, legitimately on behalf of the American people, as the case may be. But never again should an American soldier or Marine be asked to die, face down in the mud, thousands of miles away from the borders he is paid to defend, for anything less than a lethal threat to our national security. Nor should hard-pressed American taxpayers foot the bill for the wars of others. THAT is the primordial lesson of World War I, which reverberates through time and still resonates today.

On the occasion of the centennial of the second most brutal human conflict of all time, we salute all who died on all sides, and as Americans express our respect to the American war-dead. Yet at the same time, knowing the history of this and similar conflicts, one feels nothing but contempt for Woodrow Wilson and his fellow politicians. The foreign policy of a free and great commercial republic should anywhere and everywhere be: champion of liberty for all; vindicator only of our own.

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