After the British swept the seas of German cruisers by early 1915, the naval war shifted to European waters, where the Allied navies adopted a strategy of “distant blockade” against Germany (on a line between Scotland and Norway) and against Austria-Hungary (across the Otranto Straits). At Dogger Bank (24 January 1915) Beatty’s battle cruiser squadron defeated its German counterpart, prompting William II to order his capital ships to remain in port for an entire year. At Jutland (31 May-1 June 1916), the war’s only fleet-scale battle, Scheer’s High Sea Fleet won a tactical victory over Jellicoe’s Grand Fleet but failed to break the blockade; afterward Scheer advocated resumption of unrestricted submarine warfare, attempted during 1915 but abandoned under pressure from the United States. After unrestricted submarine warfare brought the United States into the war in April 1917, the British and Americans devised a convoy system to ensure the flow of US troops and supplies to Europe. In 1917–18 the blockaded fleets of Germany and Austria-Hungary (along with Russia, whose Baltic and Black Sea fleets were similarly idled) experienced serious mutinies. For Germany, a prewar net importer of food, the inability to trade by sea arguably was the single most important factor in its ultimate defeat.

This chapter analyzes the forces pulling Germany into war in 1914 and how both the international republic of letters and the integrated world economy were shattered by it and the crippling blockade imposed by Britain. It also explores the work done by Hermann Schumacher, Max Sering, and Gustav Schmoller to rationalize wartime raw materials and the food supply, as well as their activity advocating for unrestricted submarine warfare. Despite strong prewar ties between Germany and the United States and active efforts to court American public opinion by Bernhard Dernburg in New York, the “war of words” was won easily by the Entente. The decision for unrestricted submarine warfare is set in the context of the failure of dreadnought deterrence and the tightening blockade, which had rendered much of the High Seas Fleet impotent and led to the loss of Germany's overseas colonies and bases.A growing rift emerged by 1916 between populist forces unleashed by Alfred Tirpitz and the “submarine professors,” on the one hand, and the Kaiser and government of Bethmann Hollweg, on the other, which now also included Karl Helfferich as Treasury Secretary.

The civil truce between parties and religious confessions proclaimed by the Kaiser in August 1914 was severely eroded by the controversy over war aims that Karl Rathgen, Hermann Schumacher, and Max Sering played key roles in defining. Set in the context of the preceding chapters, annexationist war aims must be seen as a continuation of “World Policy” with liberal imperialist features. Meanwhile, Gustav Schmoller became embroiled in a public controversy sparked by the army’s “Jewish census,” lending anti-Semitic prejudice credibility and further eroding the civil truce. War aims would prove highly controversial, and along with the debate over the resumption of unrestricted submarine warfare, fueled the anti-government and anti-Kaiser populism that culminated in the formation of the Fatherland Party and the final gamble to secure a victory with annexations and war indemnities. After Germany’s defeat the war aims debate, the Jewish census, and the Fatherland Party would cast a long shadow. Along with the inherent contradictions of the Paris Peace, they turned a sizeable portion of the German public into intractable foes of their republic and the new world order.