Are We Repeating History? Economic Parallels Between the Pre-War Periods and Today

By Mika Horelli, BRUSSELS – I was born decades after the First World War and fifteen years after the Second, so my understanding of the years leading up to those conflicts is indirect—gleaned mostly from the stories of my parents’ and grandparents’ generations. Their lives were shaped by the aftermath of these wars, but they still carried vivid memories of the political and economic conditions that led to such catastrophes. While I am far removed from those times, it’s hard not to see certain similarities between then and now. History may not repeat itself, as the saying goes, but it often rhymes.

Before the First World War, the world was highly globalized economically, bringing prosperity and technological advancement. However, this did not prevent disaster. It is almost poetic irony that on the eve of World War I, Europe’s states were led by cousins: King George V of Great Britain, Kaiser Wilhelm II of Germany, and Tsar Nicholas II of Russia—under whose rule Finland also fell. These familial ties did not stop the war, even though royal marriages had long been used to strengthen dynastic bonds. This fact underscores how easily trust and cooperation can crumble under the weight of national interests and mutual suspicion.

The years preceding the First World War were a time of economic boom. International trade thrived as steamships and railways connected markets in unprecedented ways. Major powers like Britain and France dominated global commerce, but rising powers such as Germany and the United States were challenging their economic supremacy. Industrialization surged, and technological innovations such as electricity and the telephone revolutionized production and communication.

However, underlying this progress were significant tensions. European powers were locked in an arms race, with Germany striving to challenge Britain’s naval dominance. Meanwhile, imperial competition in Africa and Asia heightened friction between nations, as did the nationalist fervor spreading through the Balkans. From today’s vantage point, it is tempting to think that economic interdependence might have prevented the war. But history shows that without trust and stability, such ties are fragile. The assassination of Archduke Franz Ferdinand in Sarajevo was merely the spark; the powder keg was already full. That same keg is full again today—only now, it is not just gunpowder but nuclear warheads.

The First World War ”Great War” was supposed to be “the war to end all wars,” but the interwar years revealed how fragile peace can be. The Treaty of Versailles imposed enormous reparations on Germany, sowing bitterness and radicalization. Meanwhile, the speculative bubbles, unrestrained capitalism, and growing inequality of the 1920s laid the groundwork for future crises—trends that might seem eerily familiar in today’s world.

The global depression that began in 1929 was a pivotal moment. Many countries turned to protectionism and closed their economies to international competition. Nationalism intensified as people sought scapegoats for their economic misery. Germany became a stark example of how economic despair and demagoguery can pave the way for extremist regimes.

At the same time, the world’s leading nations once again escalated their arms race. International cooperation was weak, and the League of Nations failed to prevent acts of aggression. This is a sobering reminder of the challenges faced by today’s international institutions, such as the UN and the WTO.

While we live in a very different world than that of the early 20th century, certain historical patterns are disturbingly familiar. Globalization is facing headwinds as protectionism and economically nationalist rhetoric gain ground. The trade war between the United States and China echoes the economic rivalries before both world wars. Economic inequality and rising national debts are reminiscent of the 1920s and 1930s. Furthermore, the great power rivalry between the U.S. and China is strikingly similar to the contest between Britain and Germany before 1914.

The race to dominate emerging technologies such as artificial intelligence and quantum computing is today’s version of the arms race. International institutions struggle with legitimacy and effectiveness, and growing economic inequality fuels the rise of populist and extremist movements, much like in the 1930s.

History often reveals humanity’s limited ability to learn from its mistakes. On the eve of the First World War, Europe’s royal cousins failed to prevent war, even though their familial ties could have offered a path to reconciliation. Their failure reminds us that even close relationships—whether economic or personal—cannot prevent conflict when mistrust and national interests take precedence.

Today, global economic ties also seem insufficient to prevent tensions between great powers. Russia’s invasion of Ukraine in 2022 demonstrated that economic sanctions alone are not enough of a deterrent. As was the case a century ago, today’s leaders gamble with consequences they cannot fully control. This is made even more precarious by the presence of leaders like Vladimir Putin and Donald Trump, who seem detached from reality yet seek their own place in immortal history.

If there is one lesson to be drawn from history, it is that progress is rarely linear. The same forces that drive advancement and prosperity can also create divisions and conflicts. Our challenge is to recognize the warning signs in time. It is crucial to understand that economic interdependence is only part of the solution. It cannot replace diplomacy based on trust and proactive conflict prevention. Periods of economic growth and great power rivalries often breed hubris that blinds us to risks—just as in the past.

Although I was not there to witness the pre-war periods, the recurring themes in history are clear. Cousins could not prevent the First World War, and economic ties failed to prevent the Second. Whether humanity can learn from history this time or condemns itself to repeat the same mistakes remains to be seen. As someone once grimly predicted, the Fourth World War will likely be fought with sticks and stones—if anyone is left to fight it at all.