Why Economists Study War In Times Of Peace

Compared to ancient times, the world is a relatively peaceful place right now. Strangely, this has begun to push economists to study the historical costs and returns of war.

Counting cash in peaceful Ho Chi Minh City, Vietnam
Counting cash in peaceful Ho Chi Minh City, Vietnam
Jean-Marc Vittori

TOULOUSE Strange days, as we mark the beginning of the end of World War II in Normandy, just before commemorating the outbreak of World War I. These dreadful conflicts were first of all military and political moments. They also had deep economic consequences — millions of men killed at the dawn of their working lives, thousands of factories destroyed, fields abandoned to battles, mass public debt.

Economists, however, have long ignored the topic of war, as if it were too serious to be left in their hands and mathematical formulations. That time is over. They now provide many perspectives on the question, including those at the recent Tiger Forum at the Toulouse School of Economics in southern France.

The world is by and large becoming pacified, says Ian Morris, an anthropologist from Stanford University. In the Stone Age, between 10 and 20% of humans died in a violent way, according to analyses of their bones. Today, it is less than 1%.

There are still traces of this distant past, in which tribes continuously fought each other for their living space, explains Eli Berman from the University of San Diego. “We are programmed to overreact to violence.” George W. Bush was reelected on the promise of fighting terrorism. He may not have been as successful if he promised to fight heart diseases, which kill far more people.

Even the 20th century World Wars were not exceptional. Conflicts in ancient times could kill one-quarter of armies in two or three years, explains Azar Gat from Tel Aviv University. Proportionally, the Thirty Years’ War caused more deaths than the World Wars. “There has been progress in weaponry, but also in tools for defense.”

For Stanford's Morris, pacification comes from the emergence of states, in the 15th century. “Violence created governments, which in turn reduced violence," he explained. "The cost of peace has decreased.”

Gat said that with the expansion of world trade, which was encouraged by the British Empire in the 19th century and the United States in the second half of the 20th century, “it was no longer necessary to possess land to gain access to its resources.”

Poverty and mountains

Symmetrically, civil wars are a threat when states crumble. “Since World War II, they have caused three to four times more deaths than wars between states,” notes Eli Berman. Pakistan, Lebanon, Mali, Afghanistan, Syria… the list is long.

Berman contends the idea that strong cultural differences inside a country play the central role. “There are only two predictive indicators of these conflicts: a low per capita income… and the presence of mountains.”

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World War II poster (UK National Archives)

Since the beginning of the 21st century, there are however two times fewer civil wars than at the end of the 20th century, notes Jean-Paul Azam from the Toulouse School of Economics. “There is a simple reason: a rise in development aid.” This aid had decreased by $15 to $20 billion per year in the last decade of the 20th century. Since 9/11, it has bounced back to $40 billion, which has increased stability in various regions, notably in Africa.

The researchers have worked on other military aspects. By examining the specific economic effects of 279 coups d’état, Erik Meyersson, from Stockholm University, refutes the idea that a putsch is the only way to bring on essential reforms (an argument used in Chile in 1973): on average, growth slows down by 1% per year when a coup overthrows a democracy.

Saumitra Jha, another Stanford researcher, has analyzed the link between military training and political changes, and how the experience of war helps develop organizational capacities within a society. He shows maps of France in 1789 with striking overlap between the places of origin of soldiers who went to fight in America between 1780 and 1783 and the sources of the French Revolution.

In all these studies, examples often arrive from the distant past, which is logical because there are fewer conflicts nowadays. Still, the study of war continues to expand beyond the military field. Comparing economic competition between countries and firms offers fertile terrain for understanding war. There is also, of course, sports: just look at the nations battling for the World Cup. Big stakes indeed.

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A protest in Saxony last year against COVID-19 restrictions

Zentralbild/dpa via ZUMA
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