My project asks how the integration of Germany into global capital markets shaped national security and foreign policy from the late 19th century to the outbreak of the First World War in 1914. Germany’s position in global capital markets raised concerns about the weaknesses and vulnerabilities of its financial system. These concerns raised questions surrounding the country’s readiness for war, which in turn led military and civil institutions across the state to consider how to mitigate the effects of war on financial stability. Germany’s deepening global financial integration also offered opportunities for German diplomacy to utilise capital exports as a tool in achieving foreign policy aims.
This project asks three major questions. First, this project will assess what impact war scares had on German financial markets, as markets, amongst many things, constitute measures of risk – for example war scares in 1911 and 1912 alarmed investors and market panic, in turn, alarmed decision makers. Second, this project will examine debates, amongst officials and in the public sphere, about the advantages and vulnerabilities arising from financial interdependence within the global economy. Capital export was an important lever of German foreign policy and capital import funded industrial growth, yet it also rendered Germany vulnerable. Finally, it will assess how various state military and civil institutions prepared for the financial risks associated with the breakout of major European war as this thesis will show that civilian and military leaders took the risk seriously and that it generated significant public debate.
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