Japan-US Oil and Steel Embargo (World War II)

Another externality is embargoes. From time to time we impose embargoes on different countries. I talked about the Japanese and the oil and steel embargo trying to get them to behave in Nanking and China and not murder all the people. We thought we were doing a good thing. We have embargoes against the North Koreans. We just ended some of our embargoes against Iran. Well, back when I was in elementary school and high school, in the '60s, they had a civil war in Rhodesia — Zimbabwe now is what Rhodesia was. And it turns out Rhodesian chrome ore is the best in the world. This is sort of like the conflict diamonds. This chrome ore is so good you can basically just stick it in the furnace, you don't have to do any processing to upgrade it. It's the richest in the world. It's unmistakable in its appearance.

In the 1960s and 70s the cost of scrap dropped dramatically. One of the reasons people say the Japanese attacked Pearl Harbor was that we were starting to put restrictions on the amount of scrap steel we would sell to Japan. We were the consumer of steel for the first half of the 20th century; we were producing the scrap that was coming back after twenty or thirty years of use. We had all the steel scrap compared to most of the rest of the world, and we were withholding it. This wasn't the only reason for Pearl Harbor, but it was one — read the historians. We put restrictions on the amount of scrap they could buy, and that was fueling their industry.

US 1930s cutoff of scrap steel shipments to Japan as one cause of Pacific War; framed in context of attempted appeasement re: Nanking.

Anybody know why World War 2 started? One of the reasons — the Japanese didn't have scrap steel, they didn't have a big industry, and one of the things we did in the late 1930s was cut off all steel scrap shipments to Japan. We were trying to keep them — they raped and killed 30 million people in China, the Nanking stuff, and we were trying to appease them, like Chamberlain. By the way, has anybody seen Darkest Hour, the movie? It's very good, it's worth seeing. It's where Churchill took over from Chamberlain.

Externalities as military precipitant. US scrap iron/steel withholding and oil cutoff to Japan triggered Pearl Harbor — compared to modern North Korea and Iran sanctions.

The military. You might know the story of Japan and iron, oil, and steel. It's called World War Two. You may not have heard about it before, but we always say the Japanese did a sneak attack on Pearl Harbor. Let's ask the five wise's — why did the Japanese go to war with the United States? Well, they did it because we decided to withhold from them all the scrap iron and steel, and raised the prices on scrap iron and steel. We were stopping their steel economy in Japan. They were trying to be a military power — they already controlled Korea and they wanted to go into China, they had imperialistic inclinations. We at that time were probably the major exporter of oil in the world. We were essentially doing to the Japanese what the world does to North Korea today — we put them in isolation, what we do to Iran today to get them to stop their nuclear thing. The Japanese basically decided they would try to do a sneak attack on Pearl Harbor because we were playing games with the oil and steel business.

Military externality. The 1941 embargo of oil (Long Beach) and scrap iron to Japan in response to atrocities in China is presented as the proximate cause of Pearl Harbor. Tom develops the case through Japanese carrier strategy (four-carrier strike force aimed at U.S. carriers, which were at sea).

Another is a military externality. Anyone ever heard of World War II? What was the reason for World War II? Why did the Japanese bomb Pearl Harbor? We're doing the same politics today with North Korea, folks. If they really have a bomb they can deliver, they might do the same thing the Japanese did — a preemptive strike. The Japanese had designs — they were murdering, slaughtering millions of people in Nanking, China in the late 1930s. They wanted to take over most of East Asia. They'd already taken Korea, and they were marching into China. They estimate thirty million Chinese were killed. You can talk about the Jewish Holocaust under Hitler, but the Japanese killed a lot more Chinese than Hitler ever killed Jews and others in Europe.