Norman Angell challenges the long-standing axiom of modern statecraft that a nation must expand its political frontiers and maintain military preponderance to secure its commercial prosperity and feed its growing population. Through a detailed analysis of European politics, he posits that military power is economically useless because wealth in the civilized world is founded upon credit and commercial contract. Any attempt by an invader to confiscate private property or disrupt financial systems would inevitably trigger a collapse of credit that would damage the victor's economy as severely as the vanquished nation's.
The author illustrates this economic futility by examining the financial stability of small European States like Switzerland, Belgium, and Norway, which exercise no political power yet boast public credit and per capita wealth often surpassing that of the Great Powers. Furthermore, he demonstrates that a nation cannot capture the foreign trade of a rival through military force, nor can it absorb the wealth of annexed territory, since the population that creates and owns the wealth remains in possession of it, just as the inhabitants of Alsace-Lorraine retained their property after German annexation.
Analyzing the historic indemnity paid by France to Germany after the Franco-Prussian War, Angell reveals that the transfer of immense sums of money produced severe financial crises, inflated prices, and commercial dislocation in the victorious nation, while the vanquished recovered with remarkable resilience. He argues that the cost of preparing for war and guarding against retribution invariably exceeds any tangible economic advantage a victor might hope to secure.
Turning to colonial expansion, Angell asserts that colonies are no longer possessions yielding tribute or exclusive economic privilege. Modern colonial empires survive only by granting self-government and economic autonomy, making the Mother Country's position with regard to her colonies virtually identical to her position regarding independent foreign nations. The experience of colonial rule demonstrates that force cannot compel commercial submission without destroying the economic vitality of the territory itself.
Finally, Angell examines the psychological and moral arguments for war, challenging the false biological analogies that treat human society as a primitive struggle for existence between rival tribes. He shows that human advance is marked by a progressive replacement of physical force by co-operation and the division of labor. As economic and financial interdependence transcends political frontiers, the real conflicts of mankind are revealed to be social and economic divisions within nations rather than struggles between rival States.
