Rumors of war (think Ukraine) in a complicated world suggest that we look at a simple model of war and peace. Consider a world with two countries, Borduria and Syldavia. State propagandists as well as diplomats often say things like “Borduria has asked Syldavia to respond in writing to its demands.” In reality, it is the government of Borduria that asked something to the government of Syldavia. The government of each country is made of an assemblage of politicians, bureaucrats, and institutions; the latter may include voters or not, or include them to a variable extent.
Economist Jack Hirshleifer’s article “The Dark Side of the Force” reviewed individual incentives in the use of violence in general. Here we are just doing the same for the individual as a participant in a collective decision about the use of violence. In each of our two countries, the incentives of the individuals manning the government and its institutions depend on each one’s self-interest and, crucially, on one’s influence in the process governmental decision-making. The “head of state” or prime minister has much influence and therefore strong incentives to push for war or peace depending on whether one or the other is in his own best interest. The individual voter’s influence is infinitesimal and generates little incentive for him to use resources to defend his self-interest through smart voting or just voting. Let’s define “the ruler” as the group of individuals who have decisive influence on the government’s decision. (The King of Prussia and his generals appear on the featured image of this post.)
Borduria and Syldavia can be very different countries if power is distributed differently within them and if the incentives of individuals manning governing institutions consequently differ. In a country where widespread voters’ dissatisfaction—dissatisfaction strong enough to bring voters to follow the crowd at voting polls—has a chance to throw the rascals out, the ruler has comparatively more incentives to avoid war. Hence, the frequent observation that democratic governments go to war less often. Similarly and probably more importantly, the more a government is constrained on the use of its “human resources” (subjects or citizens), the lower the incentives of the ruler to wage war, ceteris paribus. Let’s assume that in both Borduria and Syldavia, the only constraint on government action is its need for popular support, either through formal elections or less formal means.
At least in contemporary times, where a large number of people (it is hoped) understand that blowing up capital (factories, bridges, etc.) is not the road to prosperity, the ruler of Borduria, who wants to keep or increase his power, will normally want peace in order that his subjects be prosperous and happy, that is, content and quiet. It is the same in Syldavia.
If his subjects are restless and currently threaten his power, the ruler of Borduria will have more incentives for war, ceteris paribus. War will distract and occupy the subjects and allow the ruler to increase his control over them, not counting his possible glory if he wins the war. War will also generate more identification of his subjects to “Borduria” and its flag: it’s “us Bordurians against them Syldavians.” Whether the incentives of the Bordurian ruler will go more toward war or peace will depend on where his personal expected net gain is the largest, or where the minimization of his expected net cost is the smallest. Again, the same incentives play in Syldavia.
In this simple model, war happens when the ruler (as defined) calculates that it is in his best (probabilistic) interest given his social, political, and economic constraints. He may be pushed into war by mobbish nationalism but, most of the time, he or his predecessor is the one who has inflamed it.
Assume that the government of Borduria declares war. What will be the position of a Bordurian classical liberal or libertarian in Borduria is quite obvious: he will oppose a war that responds to the ruler’s self-interest. It is not as obvious what will or should be the position of a Syldavian classical liberal or libertarian.
There are many ways to bring this simple model closer to reality. Other countries than Borduria and Syldavia exist in the world, including “allied countries.” If the Bordurian government starts military operations, the Syldavian government may, as a substitute for war, impose economic sanctions on its own subjects in their dealings with Bordurian entities. Or perhaps the Bordurian or the Syldavian ruler is a Madisonian angel, morally detached from his personal self-interest?
Another complication is whether we may consider a “country” as a protection club against foreign tyrants, as James Buchanan’s constitutional political economy and other classical-liberal theories would suggest (in certain circumstances). But which country today fits this model except (perhaps) for the strange case of Switzerland?
READER COMMENTS
Jose Pablo
Jan 24 2022 at 9:39pm
“In each of our two countries, the incentives of the individuals manning the government and its institutions depend on each one’s self-interest”
Two comments (maybe just one, twice):
1.- This “self-interest” is an “ex-ante” calculation of the individual. Humans are known to be prone to an optimistic bias. Particularly so, it seems to be the case, when war is involved. An “event” in which miscalculations (some of them of epic proportions) have historically occur.
This, would predict:
a) an increasing risk of war the longer the time since the last war waged. Recent personal memories are a vaccine against miscalculations
b) that leaders full of self-confindence that, for instance, ride horses semi naked in the middle of the winter are more prone to wage wars (for a given level of “self-interest”)
Both bad news in the Ukrainian case.
2.- The “self-interest model” seems to respond to a “Myth of the Rational Warmonger”(paraphrasing the very interesting Caplan’s book). As it is the case with voters, very likely, warmongers (voters and/or decision makers) respond to cognitive bias and signaling more than to a “rational” calculation of their self-interest.
An analysis “a la Caplan” of these biases could be particularly useful: the optimistic bias (in the ex-ante calculation of the personal benefits and harm of war), and the “anti-foreign” bias are among them. But sure there are more.
Pierre Lemieux
Jan 24 2022 at 10:52pm
Jose: You are right. Self-interest is (and, in a methodological sense, can only be) what an individual thinks his self-interest is. Individuals do make mistakes, and the more so when they participate in collective decisions.
nobody.really
Jan 25 2022 at 1:17am
Don’t pretty much all countries operate as a protection club against foreign tyrants? (Ok, some small nations have no “military,” although many authorize their police force to defend their boarders in times of emergency.) It seems to me that a primary role of most governments is to displace other (and potentially worse) governments. Rephrased, a primary challenge to anarchy is keeping potential conquerors at bay in the absence of an organization designed to keep them out.
I sense you mean that few nations manage to keep the people who control the military from expanding their roles.
Pierre Lemieux
Jan 25 2022 at 11:06am
You are right in many ways. Every government, especially if you mean “political regime,” wants to prevent another one from replacing it. That is what Anthony de Jasay sees as the only practical role of government from its own point of view, its “revealed preference.” My penultimate paragraph intended to emphasize the club aspect in contractual theories of the state (I should have italicized “club”), that is, to take the viewpoint of each individual instead the point of view of those who man the government.
Monte
Jan 25 2022 at 4:16pm
Now, lets try to construct a more realistic model of war and peace, focusing in particular in the conflict currently taking place between Russia and Ukraine. There isn’t really a deliberate collective action on the part of either country’s populace. Authoritarian regimes know that their citizens will simply acquiesce when petitioning for war.
There was a piece written some years ago, The Economics of War, suggesting that “need, creed, and greed” intersect to form the primary motive for pursuing a policy of aggression against neighboring countries. Citing former World Bank economist Paul Collier:
The Russian belief in NATO betrayal narrative represents the grievance component, while Russia’s desire to reclaim Ukraine for reasons of population, territory, and economy represent the greed component.
I think Mises sums up the economics of war and peace rather nicely in his magnum opus, Human Action. To wit:
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