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Economic warfare oreconomic war is an economic strategy used by belligerent states with the goal of weakening theeconomy of other states. This is primarily achieved by the use of economic blockades.[1] Ravaging the crops of the enemy is a classic method, used for thousands of years.
Inmilitary operations, economic warfare may reflecteconomic policy followed as a part of open orcovert operations,cyber operations,information operations[2] during or preceding awar. Economic warfare aims to capture or otherwise to control the supply of critical economic resources so friendly military andintelligence agencies can use them and enemy forces cannot.[citation needed]
The concept of economic warfare is most applicable tototal war, which involves not only the armed forces of enemy countries but also mobilizedwar-economies. In such a situation, damage to an enemy's economy is damage to that enemy's ability to fight a war.Scorched-earth policies may deny resources to an invading enemy.
Policies and measures in economic warfare may includeblockade,blacklisting,preclusive purchasing, rewards and the capturing or the control of enemy assets orsupply lines.[3] Other policies may includetariff discrimination,sanctions, the suspension of aid, the freezing of capital assets, the prohibition of investment and other capital flows,expropriation, and debasing the target's currency bycounterfeiting.[4][5]
Agriculture in ancient Greece was subject to ravaging of the crops by enemy armies. This was done to loot a valuable item, to starve the victims, and to intimidate and deter them.[1]
In hisBook on the Recovery of the Holy Land,Fidentius of Padua provides prescriptions for economic warfare to be waged against theMamluk sultanate of Egypt in furtherance of theCrusades. He envisions a fleet of 40–50galleys to enforce a blockade on trade between Europe and Egypt. He sees the trade as helping Egypt in two ways: it obtains warmateriel (iron, tin, timber, oil) from Europe and dues on goods brought in via theRed Sea from Asia for trade to Europe. If thespice trade were deflected from the Red Sea toMongol Persia, Egypt would be deprived of customs duties and lose export markets because of the reduction in shipping. That may also make it unable to afford moreslave soldiers imported via theBlack Sea slave trade.[6]
During theSeven Years' War of 1756 to 1763, theKingdom of Prussia occupied Saxony and used its mint todebase both the Saxon and Polish-Lithuanian currencies.[7]
Union forces in theAmerican Civil War of 1861 to 1865 had the challenge of occupying and controlling the 11 states of theConfederacy, a vast area larger thanWestern Europe. TheConfederate economy proved surprisingly vulnerable.[8]
Guerrilla warfare in the American Civil War was supported by a large fraction of the Confederate population that provided food, horses, and hiding places for official and unofficial Confederate units.[9] TheUnion response was to ravage the local economy, as in theBurning Raid of 1864 and on a bigger scale,Sherman's March to the Sea. Before the war, most passenger and freight traffic had moved by water through the river system or coastal ports.Confederate railroads were already inadequate and suffered much damage during the fighting. Travel became far more difficult.
Having crippled Confederate foreign trade by imposing theUnion blockade with its blue-water fleet, theUnion Navy built a riverineMississippi River Squadron of small powerful gunboats to take control of the main southern rivers. Land transportation was contested, as Confederate supporters tried to block shipments of munitions, reinforcements and supplies through West Virginia, Kentucky, and Tennessee to Union forces in the south. Both sides burned bridges, tore up railroad tracks, and cut telegraph lines. They effectively ruined the infrastructure of the Confederacy.[10][11]
The Confederacy in 1861 had 297 towns and cities with a total population of 835,000 people, 162 of which were at one point occupied by Union forces, involving a total population of 681,000 people. In practically every case, infrastructure was damaged, and trade and economic activity was disrupted for a while. Eleven cities were severely damaged by war action, including Atlanta, Charleston, Columbia, and Richmond. The rate of damage in smaller towns was much lower, with severe damage to 45 out of a total of 830.[12]
Farms went into disrepair, and the prewar stock of horses, mules, and cattle was much depleted; 40% of the South's livestock was killed.[13] The South's farms were not highly mechanized, but the value of farm implements and machinery in the 1860 census was $81 million and had been reduced by 40% by 1870.[14] The transportationinfrastructure lay in ruins, with little railroad orriverboat service available to move crops or animals to market.[15] Railroad mileage was located mostly in rural areas, and over two thirds of the South's rails, bridges, rail yards, repair shops, and rolling stock were in areas reached by Union armies, which systematically destroyed what they could. Even in untouched areas, the lack of maintenance and repair, the absence of new equipment, the heavy overuse, and the relocation of equipment by the Confederacy from remote areas to the war zone ensured that the system would be ruined at war's end.[16]
The enormous cost of the Confederate war effort took a high toll on the South's economic infrastructure. The direct costs to the Confederacy inhuman capital, government expenditures, and physical destruction totaled perhaps $3.3 billion. By 1865, theConfederate dollar was worthless because of highinflation, and people in the South had to resort tobartering for goods or services to use scarce Union dollars. With theemancipation of the slaves, the entire economy of the South had to be rebuilt. Having lost their enormous investment in slaves, whiteplanters had minimal capital to pay freedmen workers to bring in crops. As a result, a system ofsharecropping developed in which landowners broke up largeplantations and rented small lots to the freedmen and their families. The main feature of the Southern economy changed from an elite minority of landed gentry slaveholders to atenant farming agriculture system. The disruption of finance, trade, services, and transportation nodes severely disrupted the pre-war agricultural system and impoverished the entire region for generations.[17]
The British used their greatly-superiorRoyal Navy to cause a tight blockade of Germany and a close monitoring of shipments to neutral countries to prevent them from being transshipped to there. Germany could not find enough food since its younger farmers were all in the army, and the desperate Germans were eating turnips by the winter of 1916–17.[18][19] US shipping was sometimes seized, and Washington protested. The British paid monetary compensation so that the American protests would not escalate into serious trouble.[20]
Clear examples of economic warfare occurred during World War II when theAllied powers followed such policies to deprive theAxis economies of critical resources. The British Royal Navyagain blockaded Germany although with much more difficulty than in 1914.[21] TheUS Navy, especially its submarines, cut off shipments of oil and food toJapan.
In turn, Germany attempted to damage the Allied war effort viasubmarine warfare: the sinking of transport ships carrying supplies, raw materials, and essential war-related items such as food and oil.[22] As the Allied air forces grew, they mounted theoil campaign of World War II to deprive Germany of fuel.
Neutral countries continue to trade with both sides. The Royal Navy could not stop land trade, so the allies made other efforts to cut off sales to Germany of critical minerals such astungsten,chromium,mercury andiron ore from Spain, Portugal, Turkey,Sweden and elsewhere.[23] Germany wantedSpain to enter the war but they could not agree to terms. To keep Germany and Spain apart, Britain used acarrot-and-stick approach. Britain provided oil and closely monitored Spain's export trade. It outbid Germany for the tungsten, whose price soared, and by 1943, tungsten was Spain's biggest export-earner. Britain's cautious treatment of Spain brought conflict with the more aggressive American policy. In theWolfram Crisis of 1944 Washington cut off oil supplies but then agreed with London's requests to resume oil shipments.[24][25] Portugal feared a German-Spanish invasion, but when that became unlikely in 1944, it virtually joined the Allies.[26]
During theMalayan Emergency (1948–1960), theBritish military deployedherbicides anddefoliants in the Malaysian countryside (including crop fields) in order to depriveMalayan National Liberation Army (MNLA) insurgents of cover, potential sources of food and to flush them out of the jungle. The herbicides and defoliants deployed by the British containedTrioxone, an ingredient which was also formed part of the chemical composition of theAgent Orange herbicide used by theU.S. military during theVietnam War. Deployment of herbicides and defoliants served the dual purpose of thinning jungle trails to prevent ambushes and destroying crop fields in regions where the MNLA was active to deprive them of potential sources of food. Herbicides and defoliants were also sprayed fromRoyal Air Force (RAF) aircraft.[27]
On 17 November 1953, theGreek National Intelligence Service (KYP) proposed conducting tax audits on suspected communist book publishers and cinema owners, censoringSoviet movies and promoting Soviet films of particularly low quality. In 1959, KYP launched exhibitions of Soviet products inVolos,Thessaloniki andPiraeus. The bulk of the products were cheap and defective, purposefully selected to tarnish the Soviet Union's image.[28]
During theVietnam War, between 1962 and 1971, the United States military sprayed nearly 20,000,000 U.S. gallons (76,000 m3) of various chemicals – the "rainbow herbicides" and defoliants – inVietnam, easternLaos, and parts ofCambodia as part ofOperation Ranch Hand, reaching its peak from 1967 to 1969. For comparison purposes, an olympic size pool holds approximately 660,000 U.S. gal (2,500 m3).[29][30][31] As the British did in Malaysia, the goal of the U.S. was to defoliate rural/forested land, depriving guerrillas of food and concealment and clearing sensitive areas such as around base perimeters.[32]Samuel P. Huntington argued that the program was also a part of a general policy offorced draft urbanization, which aimed to destroy the ability of peasants to support themselves in the countryside, forcing them to flee to the U.S.-dominated cities, depriving the guerrillas of their rural support base.[33][30][34]
Christian Harbulot, the director of theEconomic Warfare School in Paris, provides an historical reconstruction of the economic balance of power between states. In his study, he demonstrates that the strategies that states put in place to increase theireconomic power and their impact on the internationalbalance of power can be interpreted only by the concept of economic warfare.[35]
The Covenant of the League of Nations provided for military andeconomic sanctions against aggressor states, and the idea of economic sanctions was regarded as a great innovation.[36] However, economic sanctions without military ones failed to dissuade Italy from conqueringAbbysinia.
In 1973–1974, theoil-producing Arab states imposed anoil embargo against the United States, the United Kingdom, Canada, South Africa, Japan, and other industrialized countries that supportedIsrael during theYom Kippur War of October 1973. Results included the1973 oil crisis and a sharp rise in prices[37] but not an end to support for Israel.
ManyUnited States government sanctions have been imposed since the mid-20th century.
Fortress economics or a fortress economy is a phrase used in relation to the defense and sustenance of a country's economy amidstinternational sanctions.[40] The term has been used in reference to Russia in 2022,[41][42][43] Taiwan with relation to China-US relations,[44][45] and Europe.[46]
Some common means of economic warfare are trade embargoes, boycotts, sanctions, tariff discrimination, the freezing of capital assets, the suspension of aid, the prohibition of investment and other capital flows, and expropriation.
When Frederick occupied Saxony he debased its currency to an even greater extent than the Prussian thaler. [...] Since Poland had no mint - her coins were minted in Saxony - the Prussian authorities were also able to debase the Polish currency. The PolishTympfe - equal in value to a Prussian thaler - was minted at a ratio of 1 : 40 instead of [...] 1 : 14. Frederick purchased war supplies in Saxony and Poland with depreciated coins [...]
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