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 5: The Economics of Destructive Power

Mehrdad Vahabi

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


* Mehrdad Vahabi 5.1 INTRODUCTION The ordinary healthy high-schooled graduate, of slightly below average intelligence, has to work fairly hard to produce more than $3000 or $4000 of value per year; but he could destroy a hundred times that much if he set his mind to it according to the writer’s hasty calculations. Given an institutional arrangement in which he could generously abstain from destruction in return for a mere fraction of the value that he might have destroyed, the boy clearly has a calling as an extortionist rather than as a mechanic or clerk. (Schelling, 1963, p. 141) From its inception, political economy has been interested in analysing the value that agents, individually or collectively, produce or exchange at local, national or international levels. According to Jean-Baptiste Say, political economy has to be ‘confined to the science which treats of wealth’ and ‘unfolds the manner in which wealth is produced, distributed, and consumed’ (Say, [1821] 1964, p. xv). The main object of political economy is thus the productive (creative) power of human beings. But what about their destructive power? This latter question is no less important than the traditional central question of political economy, since it is easier to destroy than to create. In fact, we are able to destroy 100 or even 1000 times more than we create. The French riots in 2005 provide a good illustration for Schelling’s epigraph. The crisis of the suburbs that began on 3 November 2005 culminated in two weeks of urban violence that...

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