Hubris

Bismarck’s Boners

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The Iron Chancellor, who fathered the German state in the 19th century, made few mistakes. But two were crucial, setting the stage for World War I. He detached Alsace and Lorraine from France after beating her in 1871. He allied Germany to Austria-Hungary in 1879. The first mistake guaranteed the implacable hatred of an enemy to the west. The second ensured the enmity of Russia, the enemy to the east.” Sanford Rose

Dolors & Sense

By Sanford Rose

The Iron Chancellor made two bone-headed errors.
The Iron Chancellor made two bone-headed errors.

Sanford RoseKISSIMMEE Florida—(Weekly Hubris)—12/9/2013—The Iron Chancellor, who fathered the German state in the 19th century, made few mistakes.

But two were crucial, setting the stage for World War I.

He detached Alsace and Lorraine from France after beating her in 1871.

He allied Germany to Austria-Hungary in 1879.

The first mistake guaranteed the implacable hatred of an enemy to the west.

The second ensured the enmity of Russia, the enemy to the east.

Bismarck recognized his French error.

He tried compensating for it, not by returning the lost provinces, which was politically impossible, but by attempting to isolate France diplomatically.

To that end, he sought to link Germany, Austria-Hungary and Russia in a League of Three Emperors.

It didn’t work.

Russia and Austria quarreled over the Balkans.

Russia tried setting up a puppet Big Bulgaria, which would occupy most of the Balkan peninsula.

Austria objected to the expansion of Russian power and influence to its south and southeast.

Both Russia and Austria took their dispute to the 1878 Congress of Berlin, over which Bismarck presided.

Though proclaiming himself an “honest broker,” Bismarck found it hard not to lean toward Austria, especially since Britain, which feared Russian expansion into the Mediterranean, took Austria’s side.

The Congress decided to cut Russia’s Big Bulgaria down to size.

What’s more, it allowed Austria to administer and fortify Bosnia and Herzegovina, as well as a strategic tongue of territory between Serbia, on Bulgaria’s west, and Montenegro, dubbed the Sanjak of Novipazar.

From the Sanjak, one could simultaneously menace Bulgaria and Albania while inching toward Salonika in Greece.

Russia was outraged. It had beaten the Turks in order to get its Big Bulgaria. Now, Bismarck was stripping it of the prize while allowing Austria, which hadn’t beaten anyone, to greatly extend its power.

Russia never forgave Bismarck.

It became diplomatically frigid toward Germany, pushing the latter into the formal 1879 pact with Austria.

Meanwhile, France saw a chance to take advantage of that frigidity by making a military alliance with Russia.

Bismarck’s double boner thus led to the encirclement of Germany.

Feeling encircled, Germany developed military plans suitable to that encirclement.

The infamous Schlieffen Plan called for a preventive strike at France through Belgium in order to knock out France before Russia, notoriously slow to mobilize, could take the field.

That’s precisely what happened in August, 1914. Its roots lay in two major policy errors made 40 years earlier.

Note: The image of Otto von Bismarck used to illustrate this column derives from http://www.flickr.com/photos/fuglylogic/3485589101/?rb=1, a photo taken at Madame Tussaud’s in Berlin.

Sanford Rose, of New Jersey and Florida, served as Associate Editor of Fortune Magazine from 1968 till 1972; Vice President of Chase Manhattan Bank in 1972; Senior Editor of Fortune between 1972 and 1979; and Associate Editor, Financial Editor and Senior Columnist of American Banker newspaper between 1979 and 1991. From 1991 till 2001, Rose worked as a consultant in the banking industry and a professional ghost writer in the field of finance. He has also taught as an adjunct professor of banking at Columbia University and an adjunct instructor of economics at New York University. He states that he left gainful employment in 2001 to concentrate on gain-less investing. (A lifelong photo-phobe, Rose also claims that the head shot accompanying his Weekly Hubris columns is not his own, but belongs, instead, to a skilled woodworker residing in South Carolina.)