Does capitalism lead to war, or does conflict arise from government intervention in markets? Drawing on Ludwig von Mises, this article challenges a common narrative about the causes of modern wars.
Is capitalism the cause of wars? A widespread idea in today’s media, particularly regarding China and the United States, suggests that the competition inherent in the market economy leads almost inevitably to armed conflict. The question of whether capitalism is the cause of wars is a recurring theme in public discourse.
According to this premise, conflict is structurally embedded in our economic system. Society is perceived as a zero-sum game, involving either a “latent civil war” between the exploited and the exploiters, or a war between nations, pitting those “who have nothing” against those “who own the resources.” From this perspective, interests are deemed completely irreconcilable, leaving force as the only solution.
However, economist Ludwig von Mises offers an argument that overturns this perspective. For Mises, this diagnosis is flawed and misses the true origin of conflicts. He argues that the problem is not capitalism, but quite the opposite. According to his thesis, the real culprits behind modern wars are interventionist policies designed specifically to curb the market. This is a radical shift in perspective, moving the blame from the market economy to government policy.
Economic nationalism: a philosophy of war 
To identify these anti-capitalist policies, Mises groups them under a single term he considers both powerful and destructive: economic nationalism. Economic nationalism is defined as the philosophy that a government must intervene to protect its own industries, shielding them from foreign competition, even if this contravenes the fundamental principles of free trade.
This approach translates into an arsenal of tools often considered instruments of economic warfare, including: • Barriers to trade and immigration. • Tariffs and embargoes. • Discrimination against foreign products and capital.
Mises insists that these policies simply have no place in a truly free market economy.
Protectionism as an act of aggression 
In a globalized world where nations are interdependent for access to vital resources (whether cotton in the past or semiconductors today), the establishment of a trade barrier goes beyond a simple political decision: it is perceived as a genuine act of aggression.
Mises raises a fundamental question: if one government blocks access to its own resources, how can other nations hope to improve the well-being of their populations? Protectionism, therefore, does not just harm another state; it directly penalizes consumers and businesses worldwide. Mises' most powerful conclusion lies in his famous statement: “The philosophy of protectionism is a philosophy of war.” For him, protectionism is not merely one economic policy among many; it is a mindset whose explicit goal is to harm foreign interests, and which leads directly to armed conflict.
The alternative: a peaceful liberal order 
If interventionism is the cause of the problem, Mises proposes imagining a radically different world in order to envisage the solution. The pillars of this peaceful world are clear and based on integral economic liberalism:
- Total private ownership of the means of production.
- Total freedom of movement for capital, labor, and goods.
- The absence of any legal discrimination, whether against citizens of the country or foreigners.
- A government limited to its essential role: protecting life and property.
In such an environment, borders would become “almost anecdotal, just lines on a map.” Crucially, if no individual can enrich themselves personally by annexing territory, the economic incentive to wage war disappears completely. Mises concludes that if “conquest no longer pays,” war becomes economically irrational and, therefore, obsolete.
Conclusion: from truce to true peace Mises argues that as long as people believe that they can only prosper by crushing other nations, “peace will never be more than a truce, a period of preparation for the next war.” The distinction is fundamental: free trade is a pursuit of mutual benefit (a win-win game), while protectionism explicitly seeks to harm foreign interests. This is why, according to Mises, large international organizations such as the League of Nations (yesterday) or the UN (today) are doomed to failure. They act as “government clubs” which, while discussing peace, continue to wage economic war against each other.
Resources Books: Ludwig von Mises, Human Action, 1949
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