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Neutrality in War

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Economic History of Warfare and State Formation

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Abstract

Neutrality has long been seen as impartiality in war and is codified as such in The Hague and Geneva Conventions. This chapter investigates the activities of three neutral states in the Second World War and determines, on a purely economic basis, that these countries actually employed realist principles to ensure their survival. Neutrals maintain their independence by offering economic concessions to the belligerents to make up for their relative military weakness. Despite their different starting places, governments, and threats against them, Spain, Sweden, and Switzerland provided similar types of political and economic concessions to the belligerents.

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Notes

  1. 1.

    Winston Churchill, The Second World War: triumph and tragedy, vol. VI (1953), p. 712.

  2. 2.

    The most important texts presenting the revisionist position on Switzerland are Mark Aarons and John Loftus, Unholy trinity (1998); Tom Bower, Blood money (1997); Adam LeBor, Hitler’s secret bankers (1997); Werner Rings, Raubgold aus Deutschland: die Golddrehscheibe Schweiz in Zweiten Weltkrieg (1990); Philipp Sarasin and Regina Wecker, Raubgold Réduit Flüchtlinge (1998); Isabel Vincent, Swiss Banks, Nazi gold, and the pursuit of justice (1997); and Jean Ziegler, The Swiss, the gold, and the dead (1998).

  3. 3.

    Jussi M. Hanhimaki, “Non-aligned to what?” in Bott, Hanhimaki et al. (eds.), Neutrality and neutralism in the global cold war: between or within the blocs?”(2016)

  4. 4.

    “Jordan ends neutrality, assailing allied war effort,” The New York Times, February 7, 1991.

  5. 5.

    See United States Congress: Senate. Committee on banking, housing, and urban affairs, Swiss banks and the status of assets of Holocaust survivors or heirs: hearing before the Committee on banking, housing, and urban affairs, United States Senate, one hundred fourth congress, second session, April 23, 1996; and United States Congress: Senate. Committee on banking, housing, and urban affairs, Swiss banks and attempts to recover assets belonging to the victims of the Holocaust hearing, 15 May 1997.

  6. 6.

    Jan Heuman, “Final report on the Riksbank’s wartime acquisition of gold” Riksbank (1997); International Commission of Experts, Switzerland: national socialism and the Second World War (2002), p. 245ff; Mugacia Commission, Report of the commission of inquiry on gold transactions with the Third Reich (1998).

  7. 7.

    William Z. Slany “Preliminary study on US and allied efforts to recover and restore gold and other assets stolen or hidden by Germany during World War II” United States Department of State Report (May 1997).

  8. 8.

    Ziegler, The Swiss, p.163.

  9. 9.

    Ibid.

  10. 10.

    Neff, Stephen C. The rights and duties of neutrals: a general history (2000, chapter 7).

  11. 11.

    Eric Golson, “Did Swedish ball bearings keep the Second World War going? Re-evaluating neutral Sweden’s role” Scandinavian Economic History Review, 60:2 (June 2012), p. 165–182.

  12. 12.

    Mancur Olson, The economics of wartime shortage: history of British food supplies in the Napoleonic War and in World Wars I and II (1965).

  13. 13.

    Eric Golson, “Sweden as an occupied country? Swedish-Belligerent trade in the Second World War” in Jonas Scherner and Eugene N. White (eds.), Hitler’s war and Nazi Economic hegemony in occupied Europe (2016).

  14. 14.

    NA CAB122/241, correspondence dated 27 May 1942, November 1942 and between January to February 1943.

  15. 15.

    Neville Wylie (ed.), European neutrals and non-belligerents during the Second World War (2002).

  16. 16.

    Christian Leitz, Nazi Germany and neutral Europe during the Second World War (2000).

  17. 17.

    Ibid., p. 71, 131.

  18. 18.

    Bruno S. Frey and Marcel Kucher, “History as reflected in the capital markets: the case of World War II” The Journal of Economic History, 60:2 (June 2000), pp. 468–496; Bruno S. Frey and Marcel Kucher, “Wars and markets: how bond values reflect the Second World War,” Economica, New Series, 68:271 (August 2001), pp. 317–333; Daniel Waldenström and Bruno S. Frey, “Using markets to measure pre-war threat assessments: the Nordic countries facing World War II,” IMF Working Paper No. 676 (2006).

  19. 19.

    Frey and Kucher, “History as reflected in the capital markets…,” pp. 484–485.

  20. 20.

    S. Collet and E. Golson, “Neutral Central Bank financing in the Great War: how do neutral bond markets react to First World War financial and political events” Banque de France Research Seminar, November 2014.

  21. 21.

    Hugo Grotius, De Jure Belli ac Pacis [On the laws of war and peace], vol. 2:bk. 3 (1925), p. 783 (Translation).

  22. 22.

    Ibid.

  23. 23.

    See The Fifth Hague Convention of 1907, and the International Naval Conference of London, 1908–1909. For examples of the ways in which institutions lower systemic uncertainty, see Douglass North, Institutions, institutional change, and economic performance (1990).

  24. 24.

    Neff, The rights and duties of neutrals.

  25. 25.

    William Gerald Downey, Jr. “Claims for reparations and damages resulting from violation of neutral rights” Law and Contemporary Problems, 16:3 (Summer 1951), p. 488.

  26. 26.

    Jonathan E. Helmreich, “The diplomacy of apology: U.S. bombings of Switzerland during World War II” Air University Review (May–June 1977); also by the same author, “The bombing of Zurich” Aerospace Power Journal (Summer 2000), pp. 48–55.

  27. 27.

    Jack Snyder, “Civil–military relations and the cult of the offensive, 1914 to 1984” International Security, 9:1 (Summer 1984), pp. 108–146.

  28. 28.

    Nils Ørvik, The decline of neutrality 1914–1941 (1971), pp. 13–16.

  29. 29.

    For more information on rational deterrence theory, see Christopher Achen and Duncan Snidal, “Rational deterrence theory and comparative case studies” World Politics, 41:2 (January 1989), pp. 143–169; Jack S. Levy “When do deterrent threats work?” British Journal of Political Science, 18:4 (October 1988), pp. 485–512; and John J. Mearsheimer, Conventional deterrence (1983); Richard Ned Lebow, “Rational Deterrence Theory: I Think, Therefore I Deter” World Politics, 41:2 (January 1989), pp.208–224; and Kenneth Waltz, Theory of international politics (1979).

  30. 30.

    Ronald H. Coase, “The problem of social cost,” The Journal of Law and Economics, 3:1960, pp. 144–171.

  31. 31.

    Martin van Creveld, Technology and war: from 2000 B.C. to the present (1991); Larry H. Addington, The patterns of war since the eighteenth century (2004), pp. 176–189.

  32. 32.

    Sweden relied on a 1925 strategy almost identical to its strategy in the Great War; see Ulf Olsson, “The state and industry in Swedish rearmament” in Martin Fritz et al, The adaptable nation: essays in Swedish economy during the Second World War (1983), p. 60. Switzerland relied on a defense-in-depth scheme from September 1939, later replaced by the national redoubt (réduit); see Henri Guisan, Bericht an die Bundesversammlung Über den Aktivdienst 1939–1945 (1946), pp. 91–126.

  33. 33.

    Bob Moore, “The Netherlands,” in Wylie, European Neutrals, pp. 76–96.

  34. 34.

    It took Germany 3.5 years (1935–1938) to build an air force of 50,000 men trained to use the various new types of aircraft. Defensive efforts were made, but these were insufficient against the superior German military of the time. Swiss General Guisan built a national redoubt (réduit) in July 1940, a series of linked defensive fortifications in the Alps based on the defeat of the German mechanized forces by the highly skilled Swiss troops. See Willi Gautschi, General Henri Guisan: Commander in Chief of the Swiss Army in World War II (2003), pp. 240–273. After 15 years of spending under $50 million altogether, Swedish military spending in 1939 increased to $322 million. It peaked in 1942 at $527 million (1938 dollars). Little information exists on Spanish military forces at this time.

  35. 35.

    Maddison, The World Economy, Table 1b.

  36. 36.

    Ibid.

  37. 37.

    Ibid.

  38. 38.

    Ibid.

  39. 39.

    Ibid.

  40. 40.

    Enrique Prieto Tejeiro, Agricultura y Atraso en la España Contemplo-Ranea (1988), pp. 58–59.

  41. 41.

    Angus Maddison, The World Economy: Historical Statistics (OECD, 2003), Table 1a–1d; Mark Harrison (ed.), The Economics of World War II (1998), p. 3.

  42. 42.

    Eric Golson, “Sweden as an Occupied Country? Swedish-Belligerent Trade in the Second World War” in Jonas Scherner and Eugene N. White (eds.), Hitler’s war and Nazi economic hegemony in occupied Europe (2016).

  43. 43.

    Eric Golson, “German and British balance of payments with European neutrals in the Second World War” forthcoming; Maddison, The World Economy, Table 1b.

  44. 44.

    Golson, “Swedish ball bearings”.

  45. 45.

    NA FO837/960-962.

  46. 46.

    Maddison, The world economy, Table 1b.

  47. 47.

    Eric Golson, “Swiss trade with the allied and axis powers during the Second World War” Jahrbuch Für Wirtschaftsgeschichte, 2014:2 (November 2014), p. 71–97.

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Authors and Affiliations

  1. University of Surrey, Guildford, Surrey, UK

    Eric Golson

  2. School of Oriental and African Studies, University of London, London, UK

    Eric Golson

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Editors and Affiliations

  1. Department of History, Appalachian State University, Boone, North Carolina, USA

    Jari Eloranta

  2. University of Surrey Guildford, Surrey, United Kingdom

    Eric Golson

  3. New Economic School , Moscow, The Moscow Area, Russia

    Andrei Markevich

  4. Humboldt University , Berlin, Germany

    Nikolaus Wolf

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Golson, E. (2016). Neutrality in War. In: Eloranta, J., Golson, E., Markevich, A., Wolf, N. (eds) Economic History of Warfare and State Formation. Studies in Economic History. Springer, Singapore. https://doi.org/10.1007/978-981-10-1605-9_11

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