The Speculative Economics Rising From the Film ‘Civil War’

Episode Summary

Executive Summary: FP’s Ones and Twos uses the film Civil War as a springboard to examine the economics of secession, state survival, military financing, and post-breakup reintegration. Cameron Abadi and Adam Tooze argue that wealthy U.S. regions could likely function economically on their own, but credible statehood and war-making depend on controlling revenue streams, borrowing capacity, and institutions—not just guns.

Main Topics: Economic viability of seceding U.S. regions (Priority: 5/5): The hosts assess whether California, Texas, or other U.S. regions could survive as independent countries, arguing that major states have enough resources, energy, and agricultural capacity to remain functional, though trade dependence and transition shocks would be severe. How new states fund armies and sovereignty (Priority: 5/5): Tooze explains how emerging states historically build fiscal and military capacity by hypothecating revenue streams, securing creditor control, and using foreign patrons or arms suppliers to create credibility and deterrence. Resources, debt, and violent state formation (Priority: 5/5): The conversation links sovereign borrowing to coercion, showing how new regimes often seize assets or revenue sources—oil, customs, minerals—to back debt, buy weapons, and establish authority. Ukraine-Russia as a contemporary analogue (Priority: 4/5): Tooze compares a hypothetical U.S. breakup conflict to Russia’s war against Ukraine: a larger former hegemon trying to reverse secession against a smaller breakaway state that must rely on outside support to survive. Historical precedents for breakup and reintegration (Priority: 4/5): The hosts trace possible paths to future U.S. reunification through long historical examples: the Roman Empire, Habsburg Europe, the Thirty Years’ War, and the later formation of the European Union. The limits of comparisons with China and other major powers (Priority: 3/5): Tooze notes that the U.S. has never faced an economic peer like China in scale, especially in electricity and steel output, underscoring how novel contemporary great-power competition is.

Key Arguments: California and Texas would likely have sufficient economic fundamentals—energy, agriculture, industrial capacity—to function as independent polities, though self-sufficiency would still be difficult without trade. Large modern economies can survive with trade shares around 10–15%, but breakup would force more trade and expose regions to costly adjustment. Statehood and military capacity are not created simply by declaring independence; they depend on control of tax revenues, debt markets, and institutional credibility. Historically, new states borrow by pledging specific revenue streams and sometimes surrendering part of sovereignty to creditors or foreign agencies. Resource-backed financing is a common basis for state formation and conflict, visible in South Sudan, Sudan, and earlier examples involving oil, gold, tobacco, and customs revenues. A hypothetical U.S. civil war would likely pit a wealthier rump state against secessionists much as Russia is contesting Ukraine’s independence, but with serious asymmetry in sustainability. The U.S. has historically fought wars against far weaker opponents, making a conflict with a breakaway California unusually challenging in comparative historical terms. Reunifying a broken U.S. would probably take generations, not years, if history is any guide; integration after civilizational rupture is a very long process.

Data Points: Civil War box office in first two weeks: $44.8 million - The film’s early U.S. box office performance is used as the prompt for the discussion. California GDP comparison: About the size of Italy - Tooze uses this to argue California resembles a mid-sized European economy. Texas GDP comparison: About the size of Spain - Used to show Texas could also plausibly function as a standalone economy. Global online therapy scale (BetterHelp ad): Over 5 million people globally - Advertiser claims for BetterHelp’s reach. BetterHelp therapist network: 30,000 therapists - Cited as evidence of platform scale. BetterHelp live session rating: 4.9 out of 5 - Average rating based on client reviews. BetterHelp client reviews: 1.7 million reviews - Used to support credibility of the service. California National Guard strength: 24,000 troops - Tooze cites this as an existing military capacity that could be repurposed in a secession scenario. California National Guard deployed since 2001: 38,000 servicemembers - Shows combat experience among California Guard personnel. South Sudan debt: $3.5 billion - Example of resource-backed debt accumulation in a new state. South Sudan debt-to-GDP ratio: 67% - Illustrates the burden of early sovereign borrowing. Russian war effort against Ukraine: 5%–10% of GDP - Tooze estimates the scale of Russia’s sustained military effort. Ukraine economic collapse in 2022: Over 30% - Shows the severe hit to a smaller breakaway state under invasion. Ukraine defense spending burden: 30%–35%+ of GDP - Used to explain why outside support is essential for survival. Confederate vs Union spending ratio: 2:1 - Union outspent the Confederacy during the U.S. Civil War. U.S. vs Imperial Japan GDP ratio: About 2.5x - Illustrates U.S. economic superiority in World War II. U.S. continental economy overtakes British Empire: 1916 - During World War I, U.S. economic output surpassed the entire British Empire. China electricity generation vs U.S.: Twice as large - Used to illustrate China’s industrial scale relative to the U.S. China steel production vs U.S.: More than 10x larger - Highlights the scale of China’s industrial advantage in steel.

Pivotal Quotes: "no one in their right mind would choose to stand totally alone" — Adam Tooze: On why even large independent states would still depend on trade. "you establish sovereignty by delegating it in a funny kind of way" — Adam Tooze: On how new states gain credibility by ceding some control to creditors or foreign institutions. "the only way that Ukraine can sustain that is by pulling in outside support" — Adam Tooze: On the fiscal and military imbalance facing smaller breakaway states in war.

Implications: The episode suggests that secession is less about flags than finance: whoever controls taxes, assets, and external credit can fight and survive. It also implies that post-breakup reintegration would be slow, institution-heavy, and historically rare.