Marginal Revolutiontalks about an interesting phenomenon during World War 1. The British War Effort had a shortage of binoculars and so placed an order for several thousand of them from the leading manufacturer of the time, Germany, who was aware that they were being used for militarily purposes. The Germans told the British that if they wanted to find a catalogue of the kind of binoculars Germany would be able to supply Great Britain, they simply had to examine the equipment of German soldiers that The British had captured. On the other hand when the Germans had a shortage of rubber for their war effort the British delivered it to them in Switzerland.

Why did these belligerents help each other out in their efforts to annihilate one another? Marginal Revolution suggests four theories:

• Because it was a two front war for Germany, the British believed that the Russians would bear the brunt of the cost of aid to the German war machine.
• Commercial interests in the two countries drove the deal forward
• Politicians did it to appeal to military lobbies
• They were mutually beneficial transactions because the two sides disagreed about what the goods were worth. This happens on Wall Street every day.

To read a wider discussion about the issues involved, and to contribute your own theories you can click here, or suggest something in the comments below.

Source: Marginal Revolution.