Handbook on the Economics of Conflict

Handbook on the Economics of Conflict

Elgar original reference

Edited by Derek L. Braddon and Keith Hartley

The Handbook on the Economics of Conflict conveys how economics can contribute to the understanding of conflict in its various dimensions embracing world wars, regional conflicts, terrorism and the role of peacekeeping in conflict prevention.

Chapter 2: The History of Economic Thought on Conflict

Fanny Coulomb

Subjects: economics and finance, international economics, political economy, public sector economics, politics and public policy, political economy, terrorism and security


Fanny Coulomb 2.1 INTRODUCTION The economic analysis of conflicts raises two main questions. The first lies in the interpretation of the causes of conflicts, which differ according to the theoretical school. Thus, liberal economists present conflicts as resulting from a non-competitive economic environment, characterized by state intervention. Other contrasting views consider that conflicts are inherent in the functioning of the economy and that trade or military conflicts may be economically useful. The second issue is that of the methods of conflict analysis. Economic theories expounded before the rise of microeconomics tended to present a global explanation of societies. Most of the great economists in the history of economic thought have therefore dealt, in more or less detail, with military and trade conflict issues. That is the case of heterodox economists who analyse the role of institutions and of interventionism in economic change. But it is also the case of the original liberals: thus, Adam Smith did not evade the debate on power, defence and international conflict issues. When economists have aimed to build an economic science, using mathematical abstraction, the question of conflict has been omitted from their models. ‘Pure’ economic science became focused on the demonstration of the superiority of a free market economy. Only applied economics could deal with facts related to interventionism. But the neoclassical school of economics born in the 1870s was not interested in international relations topics, in spite of the numerous tensions at that time, concerning foreign markets, raw materials supply and colonies. This...

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