My dissertation examines how and why economic sanctions emerged in Europe during and after the First World War. Today we think of sanctions as peaceful measures that are an alternative to war. However, the policymakers in Britain and France who laid the groundwork for modern sanctions conceived of them as an 'economic weapon'. To cripple Germany and its allies in the war, they created an international blockade controlling vital infrastructural networks as well as flows of trade, money, and raw materials. In the decade and a half after the war, the economic weapon was recast under international law as 'sanctions' and became the chief instrument used by the League of Nations to preserve inter-state peace. My project traces how sanctions were conceptualized, elaborated and contested in the two countries that were most disposed to use them—Britain and France—as well as in Germany, which was their main target during this period. It argues that because sanctions were intended as peacetime instruments, they broke with preceding international law, which considered the imposition of economic isolation on a country an act of war. Sanctions were controversial not only because they shifted the boundary between war and peace for civilian populations, but also because they entailed new state interventions in social and economic life. My dissertation therefore illuminates one of the great paradoxes of European liberalism in the early twentieth century: how the two countries most ideologically committed to free trade and the protection of private property developed the most sweeping ways to control trade and expropriate property. Altogether, the dissertation will provide an account of the origins and development of sanctions as both a political-strategic idea and a material-institutional practice, which explains why considerable hopes and fears were projected onto these instruments of economic coercion that continue to be used frequently today.