Europe in the early 20th century was experiencing unprecedented change. The country was in the midst of technological revolution that was second only to the United States. The country was also flourishing due to intellectual capital being spread throughout the region. The industrial revolution was beginning to set root within the economy. New industries and methods of transportation arose from the industrial revolution. Trade was expanding as goods were able to be shipped more seamlessly than ever before. The overall economy also experience long periods of over 5% GDP growth through the early 20th century. Unfortunately, even with this great amount of prosperity, conflicts still arose. In particular, 1914 was a period of strong international conflicts between rival nations. In 1914 war broke out that would threaten citizens of Europe, the Middle East, Africa, and the Americas (Fromkin, pg. 5). In many instances, it was the economic prosperity of the Americans that provided goods and services to aid in this Great War. Ultimately however, it was the war of 1914 that would lead to many of the conflicts throughout the 20th century. As Fritz Stern, a German scholar once wrote, " The first calamity of the twentieth century, the Great War, from which all other calamities sprang (Fromkin, pg. 6)" To begin, the conflict of 1914 would result in over 20 million causalities between both coalitions participating in the war (Fromkin, pg. 5). The first coalition, dubbed the Triple Entente was composed of Great Britain, France, and Russia. The second coalition, called the Triple Alliance, was composed of Austria, Hungary, and Germany. Together these two coalitions would drag the world into war, plunging modern society into chaos. This war also had grave consequences for individual countries as well. In many instances, countries that did not exist prior to the war came into being subsequently after. Saudi Arabia, Iraq, and Jordan are countries that plague the United States and the world even to this day. The over period was marred with conflict. Historians often agree that the First World War was a precursor to the second. In addition, the Second World War was a precursor to the eventual cold war. 1914 was the period that began the massive world conflicts that have shaped the world. In fact, Osama Bin Laden referenced the intrusion of Christian Europeans into the Middle East as his motivation for orchestrating the 2001 terrorist attacks. Terrorism was also a heavy utilized tool through the religious wars in the caves of Tora Bora (Fromkin, pg. 119). These conflicts are all ultimately related to bargaining hypothesis

In extractive countries, there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing countries over time, the bargain obsolesces. A prime example of this is with the United States. Initially as a colony, America did not have much bargaining power. They shipped goods and services back to Europe in exchange for the opportunity to live in America. It was believed that in order to obtain wealth, colonization must occur. As a result, many European nations rushed to form colonies, with America being one of them (Fromkin, pg. 22).Over time, as the thirteen colonies became more prosperous. As they grow, the bargaining hypothesis began to have a more robust relationship as it related to Europe. Overtime power shifted to developing countries creating a more dynamic negotiation and ultimately succession from Great Britain. The same concept applies to politics and warfare as it relates to the war of 1914. Great Britain in particular was fearful on its inability to maintain its ability to colonize and maintain its Naval might (Fromkin pg. 62)Although there are some peculiar reasons as to why many of the countries would even go to war in the first place. The reasoning behind this, and how it relates to the bargaining hypothesis, is mentioned below.

The first question relating to the bargaining hypothesis is how France, Germany and Russia could have all simultaneously convinced themselves that war was a favorable outcome. As it relates to the bargaining hypothesis, a possible explanation could be the shifting power balances were far more important to these countries. Much like our American example earlier, the balance of power was shifting due in part to globalization, the industrial revolution, and a strong flow of information. For example, many of Europe's political leaders attempted to reason about the strategic consequences of the balance of power, and how it will impact the countries alliances. The problem however, lied in their overall reasoning. The reasoning of political leaders is often skewed and 1914 was...

They reasoned differently due in part to self-absorption in their own distinctive strategic problems. They often though only of their domestic audiences and did not take into account new, often shared information. For example Stephen Van Evera argued about the offensive behaviors leading to preventive war. He argued the offense cult magnified the consequences of the shifts of the balance of power. He believed that through this offense cult, small problems would eventually become larger ones. He also believed that the notion of cumulative conquest was inherently unstable. This belief, much like the others of the time period, was not grounded in reality but instead organizational interests. In short, Stephen Van Evera could not accept the fact that war was not as viable an option as it was in the past. Instead, he and many of the other political leaders at the time elected to mold the facts to fit their own personal agenda. Through this mechanism military personnel and politicians could maintain their overall status in society. More importantly, the military would remain elevated in the eyes of the county's domestic constituents. As it relates to the bargaining hypothesis, these behaviors created a widespread notion of nationalism with the European society (think Hitler). The nationalism highlighted the uneven growth of nation-states in the area. Just as the bargaining hypothesis states- countries that are developing gain, more power over time. Larger countries therefore do not want this to occur and use their own agenda to keep the status quo intact. This is what Stephen Van Evera wanted. Nationalism also created barriers as it related to economic growth. The early 20th century should have been prosperous for the world in general. In hindsight, it still was a great period economically. However, due to the nationalism motives, countries could not properly trade and flourish. Restrictive policies ultimately, forced countries to enact their own restrictive policies fueled by people like Stephen Van Evera. William Wohlforths was other elite whose ideals did not correspond to reality. In short Wohlforth's permissive condition inspired countries to be overly optimistic about victory in the immediate future while also being overly pessimistic about possible defeat in later periods. In short, William creates a type of fear mechanism used to exacerbate war in the most current period for fear of losing a war in a later period. This relates directly to the bargaining hypothesis as countries became fearful of the growing economies and countries. They therefore elected to engage in war to maintain the balance of power and their overall social standing in the world. These concepts became pervasive around the European and Middle Eastern regions (Fromkin pg. 12- 17).
Another aspect that contributed to this notion was class conflicts. This area as it relates to the bargaining hypothesis is rarely discussed. This is particularly true as it relates to the war of 1914. There is however, a very strategic element to it. European political elites for example, focused almost entirely on their own nation's social divisions and complexities. Once again the bargaining hypothesis becomes evident. The political elites believed bargaining with enemies competed with the need to bargain to maintain domestic coalitions, friendships, and allies. As a result, the political elite spent most of their time bargaining to create coalitions as oppose to suppressing threats posed by foreign competitors. This concept again relates to the bargaining hypothesis. The large countries simply want to maintain their power and diminish the bargaining capabilities of the smaller nations. To accomplish this, coalitions were formed. Ultimately, the smaller nations also formed their own coalitions resulting in an even greater degree of conflict. As a result, enemies could not reach a diplomatic compromise because they were stifled by intra-alliance bargains. These intra-alliance bargains were founded on the principles of nationalism and the cult of offense mentioned above. See how it all comes together?

Many of the nations that started the war in 1914 had series issues of nationalism prevalent within their own borders (again, think Hitler). This nationalism was sparked by political elites who first wanted to maintain their overall status in society and were willing to do anything to maintain it. They also did not want to become obsolete in a world that was becoming more information and technology oriented. To accomplish their task many politicians and social elites used the bargaining hypothesis theory to stir propaganda (Fromkin pg. 57- 68). They wanted to maintain the balance of power. To effectively…