Two Dismal Sciences Are Better Than One--Economics and the Study of National Security: A Review Essay

Jack Hirshleifer, The Dark Side of the Force:Economic Foundations of Conflict Theory.New York: Cambridge University Press, 2001.

War is economics by other means. States may increase their wealth by developing their own resources and through the promotion of foreign trade, or instead by seizing the economies of other nations. As Jack Hirshleifer puts it in The Dark Side of the Force, "There are two main methods of making a living...the way of production and exchange versus the way of predation and conflict." ¹

Why do states choose one strategy over another? Under what conditions will they threaten other governments, and when will they seek to appease them? Economic theory has played a key role in shaping the way that scholars grapple with these and many other questions in the field of security studies.

Have economic methods and models proved useful in advancing scholarly understanding of strategic interactions among nations? That question provokes a surprising amount of controversy within the academic community. ² The publication of Hirshleifer's collected papers on conflict theory provides a fresh opportunity to assess the influence of economics on the study of national security since World War II. ³

Using Hirshleifer's pioneering work in conflict theory as a touchstone, this review essay makes three central arguments. First, economics has played a critical role in the institutionalization of security studies within the academy during the postwar era, by providing the field with theories and methods that were previously lacking. Second, the most important contribution of the economics approach to security studies—and one that should not be minimized—is as a heuristic device. This approach helps to sharpen academic arguments and analysis and to raise important security-related questions. Nonetheless, it has not lived up to its full potential in this respect, given the failure of economists to engage the broader public in informed debates over defense policy. Third, serious gaps remain in the economics-inspired literature on national security; in particular, the tools of modern political economy have not been appropriately exploited to probe important phenomena with respect to defense policy and military procurement. This suggests the worrying possibility that the current generation of economists is taking less of an interest in security problems than did its predecessors, a trend, if it is such, that the field should seek to reverse. ⁴

In this essay I do not claim that economics is or should be the dominant approach to modern strategic studies. Indeed, I heartily concur with Stephen Walt when he asserts that "members of the security studies profession should actively strive to retain the intellectual and methodological diversity of our field." ⁵ Historians, political scientists, sociologists, and philosophers have all contributed to scholarly understanding of violent conflict, and economists would do well to develop greater familiarity with this body of literature. Further, Walt's demand for relevance is certainly not misplaced at a time when academic research on public policy, including security policy, risks marginal- ization from mainstream political debate, as if that has not already occurred to a significant extent. These caveats aside, I seek to demonstrate that a strong case can be made for the value-added of economics to national security studies and, as suggested above, to broader discussions of defense policy.

The essay proceeds as follows. First, I provide a brief history of the relationship between economics and national security studies, to establish the broader academic and policy context that stimulated Hirshleifer's research agenda in conflict theory. Next, I examine a few signal contributions that economists have made, drawing both on Hirshleifer's corpus and on other research. In particular, Hirshleifer's work provides fresh insights into some of the fundamental issues in security studies and international relations, including the nature of anarchy; the relative versus absolute gains debate; the disproportionate influence that small...