Trade Barriers Didn’t Trigger World War II

Among the most troubling aspects of the continuing debate over the U.S. trade deficit with Japan is the recurring mention, particularly in recent weeks, of World War II. The comments have come from both sides of the Pacific, most recently from Japanese Prime Minister Yasuhiro Nakasone.

“When pondering why the Second World War broke out,” he said “we find that . . . the chief cause was the high walls of tariffs which nations built against foreign goods, forming blocs. This led to disputes, unemployment and recessions, which in turn caused conflicts to escalate, and eventually the World War.”

Pressing his people to buy more foreign goods, the prime minister declared solemnly, “We must not repeat that tragedy.”

Considering the noise that protectionists are making in this country and Japanese industry’s stubborn reluctance to open many of its own markets, the urgency of Nakasone’s plea is understandable. However, most people in his country and ours aren’t quite old enough to know first-hand what he was talking about.

Ample Evidence

A weekend with the history book helps. It turns up ample evidence that trade problems heightened tensions in those prewar years.

Winston Churchill, in “The Gathering Storm,” the first of his six-volume history of the war, wrote of the impact of the “economic blizzard of 1929 to 1931” on Japan and the rest of the world. As domestic industries weakened, there was increasing pressure to protect them from foreign competition.

“In the violent Depression,” Churchill wrote, “Britain and 40 other countries felt increasingly compelled, as the years passed, to apply restrictions or tariffs against Japanese goods produced under labor conditions unrelated to European or American standards.”

China and the United States, among Japan’s biggest export markets, were included in that group. Japan badly needed to sell in order to pay for needed raw materials. China was both an immigrant market and the main source of coal and iron. Hence, Churchill concluded, China became a chief target of Japanese imperialism, the beginning of the military adventures that led to Pearl Harbor.

The problem with this assessment is that it begins with the Great Depression, a period when protectionism was indeed rampant, no doubt worsening the world’s economic crisis. Yet protectionism was clearly more a symptom of that crisis than an initial cause.

The real economic seeds of war were probably sown far earlier, in a period of economic excesses and speculative fervor--in the United States and elsewhere--that produced the great collapse. In Japan, as well as in Germany, economic collapse destroyed the existing government and brought to power militarist regimes.

Lost Influence

In Japan, during the 1920s, “the militarists had been losing their political influence and power had been passing to the commercial classes and the Diet (Japan’s parliament,)” wrote G. C. Allen in his book, “A Short Economic History of Modern Japan.”

The collapse of the American economy, already a prime market for Japanese textiles, badly damaged Japan’s economy and helped to discredit its new leaders, he observed. The military regained ascendancy, leading to aggression against China, bigger defense budgets and the assassination in 1936 of the nation’s finance minister. He had defied the military by attempting to curb defense spending and to prevent its destructive impact on the civilian economy.

The resulting decline in Japan’s export business was perhaps as much due to this diversion of resources as to trade barriers put up by China and the Western world, according to Allen and historian Takafusa Nakamura, in his “Economic Growth in Prewar Japan.”

Moreover, Allen contended that the forces that led to Japan’s militarism were far broader than economics. “The root of Japanese imperialism is certainly not to be found in economic causes,” he argues, but rather in fanatic national ambition.

As the outbreak of world war approached, trade became even more restricted as the United States and Britain sought to shut off vital supplies to the Japanese war machine.

It may be good drama to recall those dismal years, but in those days trade barriers were no more than a convenient excuse for war. It all bears little resemblance to today’s effort by peaceful nations to chart a course to greater prosperity.