The Bear's Lair: World War I is still damaging us today

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http://www.prudentbear.com/2014/07/the-bears-lair-world-war-i-is-still.html#.U83t9ih8vzI

The Bear's Lair: World War I is still damaging us today
July 21, 2014 posted by Martin Hutchinson

A fascinating new book, "Archduke Franz Ferdinand Lives!: A World Without World War I," by Richard Ned Lebow (Palgrave Macmillan, 2014) looks at history's likely trajectory if the Sarajevo assassin Gavrilo Princip had missed. He concludes that, while much would be changed, we would at best be only modestly better off. However, Lebow is not an economist and he misses two enormous economic factors that would almost certainly be different in a world without World War I. His "worst-world" scenario might have derailed us, but absent that, 2014 without World War I would probably enjoy much greater prosperity than today's real world.

Lebow's book takes its subject seriously; he constructs "Best World" and "Worst World" scenarios in which he explores how the world would have evolved given a century of big-power peace, and what might have gone wrong. Franz Ferdinand himself plays an important role. Initially staving off calls for war, after his accession on Franz Josef's death in 1916, he reforms Austria-Hungary by turning the Dual Monarchy into a Triple Monarchy. That results in more power for the Slavs while democratizing Hungary, thus breaking the power of the Hungarian baronage. Austria-Hungary thus remains a stable element in the following century in both scenarios, on average somewhat richer than in real life and playing an especially important cultural, scientific and economic-theory role as its 20th-century diaspora doesn't happen.

The split between "best" and "worst" worlds comes in the Kaiser's Germany, where a coup around 1920 takes one of two forms. The first is a democratic one in which the Social Democrat and Centre Party parliamentarians' power increases and Germany is largely democratized and pacified. The other is an authoritarian one, in which Germany's semi-democracy is emasculated and the military runs the country behind the scenes. In the latter case there is a "cold war" between the authoritarian powers of Germany and Russia and the democracies, which in one variant turns into a small-scale nuclear war in the 1970s. In even this pessimistic scenario, Hitler and Stalin remain insignificant, and the lack of a war tradition makes even authoritarian policymakers much more cautious than the 1930s dictatorships (hence full-scale nuclear holocaust is avoided).

Lebow points out that there are certain disadvantages of even his better world. Some scientific advances, prompted by war, are considerably postponed. He postulates that without wartime code-breaking, the computer would have been delayed and without DARPA we might still not have the Internet. Here I think he may be too pessimistic. Most of the intellectual advances that led to computers were undertaken by Alan Turing in the 1930s, while a network of computers exchanging information had obvious scientific potential. As I shall discuss below, economic factors that Lebow does not consider might well have led to more long-term research facilities inside large corporations, similar to the old Bell Laboratories, in which case basic technological advances might well have been accelerated compared with our own timeline.