Why countries trade with each other while fighting

Summary

In World War II, Britain was fighting for its survival against German aerial bombardment. Yet Britain was importing dyes from Germany at the same time. This sounds curious, to put it mildly. How can two countries at war with each other also be trading goods?Examples of this abound, actually. Britain also traded with its enemies for almost all of World War I. India and Pakistan conducted trade with each other during the First Kashmir War, from 1947 to 1949, and during the India-Pakistan War of 1965. Croatia and then-Yugoslavia traded with each other while fighting in 1992.“States do in fact trade with their enemies during wars,” says MIT political scientist Mariya Grinberg. “There is a lot of variation in which products get traded, and in which wars, and there are differences in how long trade lasts into a war. But it does happen.”Indeed, as Grinberg has found, state leaders tend to calculate whether trade can give them an advantage by boosting their own economies while not supplying their enemies with anything too useful in the near term.“At its heart, wartime trade is all about the tradeoff between military benefits and economic costs,” Grinberg says. “Severing trade denies the enemy access to your products that could increase their military capabilities, but it also incurs a cost to you because you’re losing trade and neutral states could take over your long-term market share.” Therefore, many countries try trading with their wartime foes.Grinberg explores this topic in a groundbreaking new book, the first one on the subject, “Trade in War: Economic Cooperation Across Enemy Lines,” published this month by Cornell University Press. It is also the first book by Grinberg, an assistant professor of political science at MIT.Calculating time and utility“Trade in War” has its roots in research Grinberg started as a doctoral student at the University of Chicago, where she noticed that wartime trade was a phenomenon not yet incorporated into theories of state behavior.Grin...