The Political Economy of War and Peace PDF
Preview The Political Economy of War and Peace
THE POLITICAL ECONOMY OF WAR AND PEACE RECENT ECONOMIC THOUGHT SERIES Editors: Warren J. Samuels William Darity, Jr. Michigan State University University of North Carolina East Lansing, Michigan, USA Chapel Hill, North Carolina, USA Other books in the series: Burley, P. and Foster, J.: ECONOMICS AND THERMODYNAMICS: NEW PERSPECTIVES ON ECONOMIC ANALYSIS Brennan, H.G. and Waterman, A.C.: ECONOMICS AND RELIGION: ARE THEY DISTINCT? Klein, Philip A.: THE ROLE OF ECONOMIC THEORY Semmler, Willi.: BUSINESS CYCLES: THEORY AND EMPIRICS Little, Daniel: ON THE RELIABILITY OF ECONOMIC MODELS: ESSAYS IN THE PHILOSOPHY OF ECONOMICS Weimer, David L.: INSTITUTIONAL DESIGN Davis, John B.: THE STATE OF THE INTERPRETATION OF KEYNES Wells, Paul: POST-KEYNESIAN ECONOMIC THEORY Hoover, Kevin D.: MACROECONOMETRICS: DEVELOPMENTS, TENSIONS AND PROSPECTS Kendrick, John W.: THE NEW SYSTEMS OF NATURAL ACCOUNTS Groenewegen, John: TRANSACTION COST ECONOMICS AND BEYOND King, J.E.: AN ALTERNATIVE MACROECONOMIC THEORY Schofield, Norman: COLLECTIVE DECISION-MAKING: SOCIAL CHOICE AND POLITICAL ECONOMY Menchik, Paul L.: HOUSEHOLD AND FAMILY ECONOMICS Gupta, Kanhaya L.: EXPERIENCES WITH FINANCIAL LIBERALIZATION Cohen, Avi J., Hagemann, Harald, and Smithin, John: MONEY FINANCIAL INSTITUTIONS AND MACROECONOMICS Mason, P.L. and Williams, R.M.: RACE, MARKETS, AND SOCIAL OUTCOMES Gupta, Satya Dev: THE POLITICAL ECONOMY OF GLOBALIZATION Fisher, R.C.: INTERGOVERNMENTAL FISCAL RELATIONS Mariussen, A. and Wheelock, J.: HOUSEHOLDS, WORK AND ECONOMIC CHANGE: A COMPARATIVE INSTITUTIONAL PERSPECTIVE Gupta, Satya Dev: GLOBALIZATION, GROWTH AND SUSTAINABILITY Gupta, Satya Dev: DYNAMICS OF GLOBALIZATION AND DEVELOPMENT Medema, Steven G.: COASEAN ECONOMICS: LAW AND ECONOMICS AND THE NEW INSTITUTIONAL ECONOMICS Peoples, James: REGULATORY REFORM AND LABOR MARKETS Dennis, Ken: RATIONALITY IN ECONOMICS: ALTERNATIVE PERSPECTIVES Ahiakpor, James C.W.: KEYNES AND THE CLASSICS RECONSIDERED THE POLITICAL ECONOMY OF WARAND PEACE Edited by Murray Wolfson State Fullerton Calţfomia Universiţy, I11III... " SPRINGER SCIENCE+BUSINESS MEDIA, LLC Library of Congress Cataloging-in-Publication Data The political economy of war and peace / edited by Murray Wolfson. p. cm. - (Recent economic thought series) Thirteen original chapters by 19 scholars. Includes bibliographical references and indexes. ISBN 978-1-4613-7251-6 ISBN 978-1-4615-4961-1 (eBook) DOI 10.1007/978-1-4615-4961-1 1. War-Economic aspects. 2. Peace-Economic aspects. 1. Wolfson, Murray. II. Series: Recent economic thought. HB195.P636 1998 330.9-dc21 98-30948 CIP Copyright CI 1998 Springer Science+Business Media New York Originally published by Kluwer Academic Publishers, New York in 1998 So:ftcover reprint ofthe hardcover Ist edition 1998 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC Printed on acid-free paper. TABLE OF CONTENTS EDITOR'S PREFACE ix 1 THE EVOLVING NATIONAL SECURITY STRATEGY OF THE UNITED STATES 1 Carl H. Groth Jr. Adjunct Professor, George Washington University Former Acting Deputy Assistant Secretary of Defense 2 DEFINING TERRORISM 29 Rear Admiral Yedidia Groll-Ya ari Deputy Chief of Naval Operations Israel Navy 3 THE ECONOMIC CONSEQUENCES OF THE AMERICAN CIVIL WAR 49 Roger L. Ransom Professor of History University of California-Riverside 4 JOHN MAYNARD KEYNES ARCHITECT OF THE POSTWAR PEACE 75 John E. Elliott Professor of Economics Director, Political Economy and Public Policy Program University of Southern California 5 DYADS, DISPUTES AND THE DEMOCRATIC PEACE 103 William J. Dixon Professor of Political Science University of Arizona vi 6 COOPERATION AND CONFLICT AMONG DEMOCRACIES: WHY DO DEMOCRACIES COOPERATE MORE AND FIGHT LESS? 127 Solomon W. Polachek Professor of Economics and Political Science, Dean ofHarpur College State University of New York-Binghamton John Robst Department of Economics State University of New York-Binghamton 7 IN A WORLD OF CANNIBALS EVERYONE VOTES FOR WAR: DEMOCRACY AND PEACE RECONSIDERED 155 Murray Wolfson Professor of Economics California State University-Fullerton Patrick James Professor of Political Science Iowa State University Eric J. Solberg Professor of Economics California State University-Fullerton 8 ENVIRONMENTAL RESOURCE SCARCITY AND CONFLICT 177 Jane V. Hall Professor of Economics California State University -Fullerton Darwin C. Hall Professor of Economics California State University -Long Beach 9 RACE, RATIONALITY, AND BEHAVIOR 201 Raymond Dacey Professor of Business and Statistics College of Business and Economics University of Idaho vii 10 THE LONG AND THE SHORT OF AN ARMS RACE 223 David Kinsella Assistant Professor, School of International Service American University Sam-man Chung Commander, Naval Forces Development Command Republic of Korea Navy 11 THEORY OF MOVES AND THE PERSIAN GULF WAR 247 Tansa George Massoud Assistant Professor of Political Science Bucknell University 12 MORAL HAZARD AND CONFLICT INTERVENTION 267 Dane Rowlands David Carment Assistant Professors The Norman Paterson School of International Affairs Ottawa, Canada 13 A MODEL OF DISPUTE SEQUENCES 287 Robert G. Muncaster Associate Professor of Mathematics University of Illinois at Urbana-Champaign Dina A. Zinnes Merriam Professor of Political Science University of Illinois at Urbana-Champaign REFERENCES 313 SUBJECT INDEX 333 NAME INDEX 343 EDITOR'S PREFACE cancer n. any malignant tumor. .. Metastasis may occur via the bloodstream or the lymphatic channels or across body cavities ... setting up secondary tumors ... Each individual primary tumor has its own pattern. .. There are probably many causative factors ... Treatment...depends on the type of tumor, the site of the primary tumor and the extent of the spread. (Oxford Concise Medical Dictionary 1996, 97) Let us begin by stating the obvious. Acts of organized violence are not necessarily an intrinsic part of human nature, but they are endogenous events arising within the evolution of complex systems of social interaction. To be sure, all wars have features in common - people are killed and property is destroyed - but in their origin wars are likely to be at least as different as the social structures from which they arise. Consequently, it is unlikely that there can be a simple theory of the causes of war or the maintenance of peace. The fact that wars are historical events need not discourage us. On the contrary, we should focus our understanding of the dimensions of each conflict, or classes of conflict, on the conjuncture of causes at hand. It follows that the study of conflict must be an interdisciplinary one. It is not humility or a penchant for eclecticism that leads to that conclusion, but the multi-dimensionality of war itself. That is why this volume is entitled The Political Economy of War and Peace rather than the economics or politics - or history, mathematics and military science - of war and peace. I doubt that there will soon be a grand theoretical synthesis of economics and politics of conflict into some "unified field theory" that will accomplish that goal. Nevertheless, we can contribute to meeting the urgent need for the practice of political economy to apply the knowledge we have to understanding and preventing war. Naturally, academics will disagree about the domain of applicability of their discipline. After all, professors are paid to profess, and tend to claim more for their mode of study than others might concede. That is why it is important to listen to the practitioners represented in this volume as well as the professors. In the interplay of ideas and actions, they must act as best they can even while listening to what the sciences have to offer. Carl Groth opens this volume with a critical history of the national securIty policy of the United States from the early days of the Cold War to the present (Chapter 1). Groth writes from the dual points of view of economist and defense analyst. He shows how the dimensions of American military posture evolved in response to the external threats it perceived and to the internal political and economic realities. Although he is careful to explain opposing points of view, Groth concludes by supporting President Clinton's policy ofmultilateralism and spreading democratic institutions worldwide as the most important instruments for avoiding x EDITOR'S PREFACE war and preserving the security of the United States. The strategy of primarily working with political instruments rather than economic growth or military deterrence is the policy operationalization of the belief that democratic countries are unlikely to go to war with each other. The contribution by Rear Admiral Yaari-Groll of the Israeli Navy takes a less sanguine and more operationally focused view (Chapter 2). Yaari-Groll is on the front line of the sub-national ethnic conflicts that are looming larger and larger on the world stage. He is charged with the specific task of countering terrorism. To do so, he must know what terrorism is. Most of his essay is devoted to developing a system of filters of actions, motives and results that he hopes will be sufficient to distinguish terrorism from ordinary crime or acts of guerrilla or large scale interstate war. There is no more vivid insight into the apparently intractable syndrome of sub national conflict in the post-Cold War world than this study of terrorism. Yaari Groll writes from the vantage point of an officer whose duty is to "hold terrorism at bay," even while realizing that without a resolution of its root causes, peace and safety for his country will remain beyond his reach. Yaari-Groll despises terrorists. His definitions really are only partly directed at effective counter terrorist action. They also include an ethical and legal distinction between the justifiable use of force in military and police actions, and the politics of terror which he regards as beyond civilized norms. Yaari-Groll does not flinch from naming those incidents in which Israeli nationals were guilty, although clearly he regards the onus of terrorism as largely originating elsewhere. As Admiral Yaari-Groll knows first hand, the resolution of the conflicts that defme his duty must lie in the ultimate causal factors at work. The difficulty of third party intervention in such sub-national and ethnic conflicts is studied by the Canadian political scientists, Dane Rowlands and David Carment (Chapter 12). Realistic intervention by foreign agencies, they argue, presumes that two pre-requisites are met: a basis for a compromise peace exists, and the conflict does not by itself escalate into unbounded violence. The interveners' assignment is therefor to enforce the limits that the parties might accept, but cannot themselves enforce. The authors show that even within those limits, the interveners actually may bring about a negative result due to the effect of "moral hazard." Moral hazard is a term taken over from the insurance industry. When the insurance company cannot observe or control the risks taken by the insured, the policy holders have a greater incentive toward activities that involve the danger of costs the insurance company must reimburse. Rowlands and Carment rigorously demonstrate how intervention may insure an aggressive party against loss and thus give them an incentive toward more violence, rather than less. The noted historian, Roger Ransom, leads us to an understanding of the interaction of forces leading to conflict in an innovative counterfactual analysis of the American Civil War (Chapter 3). In the tradition of Charles and Mary Beard, Ransom argues that the causes of the "irrepressible conflict" were the incompatible THE POLITICAL ECONOMY OF WAR AND PEACE xi evolution of the free and slave economies within the Union. Beard's view was that the war was a "second American revolution." It unleashed the forces of economic growth through legislation which included the distribution of land to free farmers in the West, the construction of the transcontinental railroad, protective tariffs against British industry, and the development of mass higher education keyed to agriculture, engineering and military science. This viewpoint has come under increasing criticism by some economic historians. They extrapolate ante-bellum growth rates to show that after all the damage to persons and property, the actual postwar trajectory of output did not exceed the pre-war track. On this view, the Civil War was not cost-effective. At worst it was a blunder, and at best it was motivated by an abolitionist drive to extend democratic freedoms to slaves, and a nationalistic desire to "preserve the Union." Ransom's tour de force is to argue that the Civil War, like so many other costly conflicts, is not properly evaluated by extrapolating ante-bellum trends which could not be sustained given the opposed interests of the parties. Rather, the proper comparison is what would have happened had the war not been fought, or if the Confederacy had won over the Union. His counterfactual study shows not so much that the legislation that Beard noted was worth the war, but that the free economy, and the social institutions derived from it, would have been submerged by slavery. That was a much higher price to pay. In my Presidential Address to the Peace Science Society (Wolfson 1995) I came to similar conclusions by constructing a mathematical model of the four incompatible systems operating simultaneously on the North American continent: slave agriculture, free agriculture, capitalist manufacturing and Native American traditional economies. The fact is that all of these sectors - as well as the British and Mexican governments who were engaged in various stages of the struggle - could lay claim to being democracies and yet fought a series of bitter battles of which the Civil War was the costliest. The inability of American society to overcome the legacy of its history and achieve full equality of black citizens suggests that the process has still not run its course. Raymond Dacey provides a deep insight into this unfinished business and lays out a theoretical basis for constructive public policy(Chapter 9). He searches for an explanation of the continued shocking differential in earnings, shortened life expectancy, and imprisonment for crime between black and white Americans. He fmds his answer not in the difference in the utility functions between these ethnic groups but in their similarity. Dacey argues that members of minority groups, particularly blacks, are largely trapped in self-reinforcing circumstances. His analysis is based on the modem account of risk bearing. Dacey shows that under the risky circumstances in which black Americans fmd themselves, accumulation in human capital is simply a bad investment. This is a classic case of divergence between patterns of behavior in
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