War is really not about killing. Rather, it is about wielding power. Countries often use physical violence to get other countries to do what they want. But there are lots of other ways that a country can do the same thing. And although war is a particularly awful way to yield power, we shouldn’t just cast aside other abuses of power as though they didn’t matter.
The United States is especially bad in this regard. We have no problem bringing in our military, but we meddle in just about every country on earth. Much of the time, violence is implicit. But we also use our economic power against countries all the time — directly as well as through international organizations like the International Monetary Fund. And as we move into the future, I’m sure that powerful countries will use this tactic more and more. As a result, I think we have to get past this idea that just because people are shooting at each other, the powerful are not abusing their power. More and more it seems that economic extortion is the rule rather than the exception.
Many people have noticed that I have a fairly bad opinion of Germany. I think their behavior in the EU has been absolutely terrible. One of the reasons for forming the EU was to integrate the region so that they didn’t have any more world wars. That’s a laudable goal. Just the same, we seem to have ended up with the same thing. It is just that no one is shooting. And I’ll admit: that’s a positive change. But the fact remains that Germany has the largest economy in the EU and the country uses it to push the rest of the countries around.
The best example of this has been how Germany has acted since the financial crisis of 2008. Instead of looking for the best way to heal the entire economy of the European Union, Germany has spent the time complaining that other countries — especially in the south — are just not as virtuous as they are and if only these countries would act more like them, all would be fine. If this sounds vaguely racist and not too different from German thinking during the lead-up to World War II, I don’t think it is surprising.
What Europe needs is for the countries who are doing well to spend more and increase their inflation rate to allow the countries that are doing poorly to produce more and climb out of debt. This is the most basic of economic concepts: everyone can’t simultaneously save or it will just cause further depression of the economy. It even has a name: paradox of thrift. But Germany has done exactly the opposite of what it should: it has kept wages down, making it even harder for other countries to compete and break into the German markets. And to top matters off, Germany is smug about what it’s doing. So they claim they are virtuous, even as they are causing enormous amounts of pain throughout Europe and to a lesser extend worldwide.
Paul Krugman put together this helpful graph to show what’s going on. It shows how much wages have increased since the monetary union was established in 1999. And what you see is that during a time when German wages should have been rising faster than in Italy and France, they have been rising at less than one-third the rate of these countries. And this is not just some accident; this is German government policy. Krugman put it well:
But the German people would be shocked to hear that they aren’t playing by the rules. Their government and their media are not only telling them they are behaving exactly as they should but also that all the problems in southern Europe is caused by those countries not being enough like Germany. So let me be clear: Germany is a bully. And praising them for not invading southern Europe is a pretty low bar of accountability. Carl von Clausewitz said that war “is an act of violence to compel our opponent to fulfill our will.” That is what German is doing now. They just don’t need the violence anymore.