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Dangerous Rivalries: Blunt Warning of Economic Wars!
Professor Werner Plumpe publishes his book about economic rivalries. Other topics in the UniReport provide insights into research and events at the University of Frankfurt.
Dangerous Rivalries: Blunt Warning of Economic Wars!
On July 18, 2025, Prof. Werner Plumpe from Goethe University published his new book “Dangerous Rivalries,” which addresses the history of economic competition between states and the danger of escalations in trade and economic wars. In his work he describes the current world order as characterized by a loss of order, particularly as a result of the end of the Pax Americana. Plumpe sees Donald Trump's re-election as explosive, but it is not the main reason for publishing his book. He highlights the challenges posed by a multipolar world in which there is no dominant actor and warns of the dangers of escalation.
A potential bright spot in this complex situation is Trump's deal policy. The economic historian says that the idea of economic self-sufficiency makes little sense for Germany because the German economy is dependent on open markets. This argument reflects the historical and theoretical development of international trade, which has been analyzed in research on the international division of labor since the 18th century. The resulting theoretical insights are crucial for economic policy decisions aimed at promoting prosperity.
International trade relations
The debate about free trade versus protectionism plays a major role in this context. The term free trade, which Adam Smith advocated as early as 1776, refers to the international exchange of goods without trade barriers. Smith's ideas were later expanded by David Ricardo's theorem of comparative cost advantage, which suggests that countries should specialize in the production of goods that they can produce relatively cheaply. An example is the cooperation between Poland and Germany, where Poland is better at producing steel, while Germany has an advantage when it comes to cars.
Market factors such as different soil conditions, origin of supply and production factors lead to these specializations and contribute to increasing prosperity. The development of trade models that take more countries, goods and production factors into account highlights the complexity of modern trade. Newer theories, such as factor proportion theory or product life cycle theory, expand the classic models and illustrate the need for international cooperation.
Escalations and trading strategies
The current discussion about trade strategies is influenced by the history of free trade and protectionism, from the period of mercantilism through industrialization to the world wars. Institutions such as the GATT and the WTO have played a key role in trade liberalization, but the debate about their influence remains controversial. Arguments for free trade emphasize competition, innovation, and lower prices, while the protective measures of protectionism aim to protect key industries from unfair competition.
Given the impact of the international division of labor on jobs and the need for consumer protection and environmental protection regulations, it is clear that a balanced trade strategy is of great importance. Regulatory barriers are a contentious issue in the WTO and reflect tensions between national interests and global market development.
Given these complex relationships, Prof. Plumpe highlights in his book the need for dialogue and long-term strategies to minimize the risks of rivalries in a globalized world. Such a discussion involves not only economists, but also politicians, entrepreneurs and civil society. The question of how the international economic order will shape itself in the face of new balances of power remains open.
For further information about the various aspects of international economic relations and their theoretical foundations, we recommend taking a look at the detailed analyzes by bpb.de or the political implications of manager-magazin.de to consider.