Lpolitical economy was born at the turn of the 16the and XVIIe centuries with the mercantilists. For them, the economy is the continuation of war by other means. They thought in terms of conflicts, of power struggles. The enrichment of a country occurs through unequal exchange or predation. Warrior or merchant, it’s all one! As Jean Bodin (1530-1596) or Montaigne (1533-1592) say, one person’s gain is another’s loss. Hence the conflict, which is quite consistent in an economy where productivity gains are low.
A revolution took place in the 18th centurye century. THE “sweet trade”, according to Montesquieu (1689-1755), allowing human beings to know each other better, should dissuade them from going to war. And above all, for liberal economists, economic war and war in general, far from being means of enrichment at the expense of others, are considered losses for all. Conversely, exchange allows everyone to gain against nature: free trade will impose peace. However, the first of them, Adam Smith (1723-1790), approved the Navigation Acts passed under Cromwell’s mandate in 1651, reinforcing the domination of the Royal Navy and English maritime commerce…
Whatever doctrines they profess, war will remain a major center of interest for economists. Both to study the causes in order to avoid it and its consequences to know how to manage them.
Breakup
The second industrial revolution at the end of the 19th centurye century is accompanied by serious economic and financial crises, the development of powerful monopolistic companies and an outbreak of protectionism. Liberals highlight the risks of confrontation posed by these obstacles to the free market, and Marxists explain that these phenomena lead to imperialism and war. Economists like Thorstein Veblen (1857-1929) or Joseph Schumpeter (1883-1950) rather emphasize the responsibility of the “leisure class” or the old aristocracy.
The First World War was a rupture: economists were interested in its consequences, its financing, and analyzed the phenomena of debt, inflation or deflation. They link economic cycles and wars, highlighting the risks that social inequalities and unemployment pose to peace.
War and peace are thus at the heart of the economic theory of John Maynard Keynes (1883-1946), who became famous with The economic consequences of peace (1919) and editor in 1940 for the English government of How to pay for war. According to him, the war, by destroying heritage, also destroyed the appetite for accumulation, which was the condition of economic development in the 19th century.e century, and discredited savings. This is nothing more than a residue of consumption, which has become the main engine of the post-1945 economy. Keynesian theory cannot be separated from this historical reality.
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