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Harold Adams Innis

Robin Neill, University of Prince Edward Island

Harold Innis has been called “the first Canadian-born social scientist to achieve an international reputation” and “the father of Canadian Economic History.” He was the second president of the Economic History Association (1942-1944) and the fifty-fourth President of the American Economic Association (1951). He has been credited with joint authorship of the Staple Theory of Canadian Economic Development (W.T. Easterbrook, 967, p. 261). In a backhanded posthumous complement a Keynesian said of him that he led the Canadian economics profession down the wrong path for fifteen years.

Innis’s influence in Canadian social science was pervasive in the pre-Keynesian period. His studies of the fur trade, the cod fisheries, and the mining and forest frontiers broke new ground, and provided an economic underpinning for the Laurentian School of Canadian historians. His students, W.T. Easterbrook, Hugh G.J. Aitken, Albert Faucher, and two of the then famous four Saskatonians, Vernon C. Fowke and Kenneth A.H. Buckley, are still cited in current Canadian economic history texts. The building-of-the-Canadian-nation histories that typified the Laurentian School have lost some of their appeal. Regional and community histories are now more frequently celebrated. Close reading of Innis, and particularly of Fowke (R.F. Neill, 1999), however, shows the two to have made a greater contribution in this regard than one would surmise from reading the general texts that draw on their work.

Innis’s influence in economic history in general has been considerable. His reworking of the “vent for surplus” theory of economic development, that is the “staple,” “primary products” or “export base” theory of economic development, was extended by Douglass North in applications to regional development in the United States, and to the experience of what were then called underdeveloped countries. Subsequently it was elaborated in generalized export-base models used to describe the experience of newly industrializing countries.

Innis’s contribution to historical economics, we have to assume, was noted. His success in the profession would indicate that it was. But that sort of Old Institutional, historical theorizing fell out of fashion after the Second World War. Neither Innis’s “cyclonics” nor J.M Clark’s “non Euclidian economics” had any formal standing in the period following general acceptance of Keynesian macroeconomic theory. Nonetheless, Innis had some influence beyond economic history. His most celebrated student, Harry G. Johnson, referred back to Innis as his “greatest teacher in economics” (Johnson and Johnson, 1978, p. 234).

The studies of communication media that characterized the so-called “later Innis” were not understood by, or, better, were outside the grasp of, economists preoccupied with positivistic testing of neoclassical, neo-Keynesian, and Monetarist-New Classical hypotheses. The root of the media studies can be traced back to the work of nineteenth-century historical economists, such as J.K. Ingram, who had much to say about “the prevalent mode of thinking” that shaped the nature of economic theory in any given period (Ingram, 1888, p. 2-3). Innis’s studies of communication media were an attempt to specify one causal factor in changes in the prevalent mode of thinking. His approach gave him grounds for assessing the economics profession itself.

He was not alone in this. J.J. Spengler, whose work also emerged from 1930s discussion of the nature of economics, also adopted an “external” approach to the history of economics (Spengler, 1940). This approach has had considerable acceptance among historians of economic thought, and it has been taken up by intellectual historians in general. Indeed, it gained high fashion following Michel Foucault’s discussion of the biased information environments that he called “epistemes,” and following Jacques Derrida’s emphasis on the linguistic context of all knowledge, both of which were related to analyses of prevalent modes of thinking.

Harold Adams Innis was born on November 5, 1894, in Otterville, Ontario, the first born of William Anson and Mary (Adams) Innis. His parents worked a hundred-acre farm outside of Otterville in Oxford County. At age eleven Harold was admitted to the Otterville high school. Two years later, in the fall of 1908, he began commuting twenty miles to the Woodstock Collegiate Institute. After graduation, he taught grade school for a year and then registered at McMaster University in Hamilton at the western end of Lake Ontario. The First World War interrupted his education. Upon graduating from McMaster, in the spring of 1916, he enlisted in the Canadian Army. By Christmas his group, the 69th Battery, was on the front in France. By the end of July, Innis had been wounded and sent to England for convalescence. During his stay in England he studied for a Master’s degree through a wartime institution called Khaki College. On arrival back in Canada he passed the examination for an M.A. in Economics. Disappointment over what he had learned was a major motivation in his enrolling in the doctoral program at the University of Chicago, a Baptist institution appropriate for one raised strictly in that faith.

When Innis arrived at Chicago there was considerable dissent in the United States with respect to the tenets of neoclassical economic theory. Its fundamental assumptions were being questioned by the Institutionalist Thorstein Veblen and by his student and colleague, John R. Commons. Some of the controversy was brought to Innis’s attention by his mentors, C.W. Wright and C.S. Duncan, but his most effective contact with current economic thought was through Frank H. Knight, who was then an instructor at Chicago. Knight’s skepticism captured Innis’s imagination and drew him into a small, informal group, including Carter Goodrich, Morris Copeland, W.B. Smith, J.W. Angel, and, of course, Knight himself. Their discussions focused on the nature and implications of Veblen’s critique of received economic doctrine.

Innis returned to Canada in 1920 to take a position in the Department of Political Economy at the University of Toronto. With the exception of its redoubtable Head, James Mavor, the Department was young and aware that it had the economics of Canada still to discover. Mavor had attempted an introduction to Canadian economic history, but had left it unfinished. C.R. Fay, the economic historian, was at Toronto in those years, and was aware that there was something to be done. He and Innis became life long friends in their mutual endeavor to see that it did. V.W. Bladen, recently arrived from Oxford, was pulled into the effort by Innis who insisted that Bladen could not understand the economics of Canada unless he personally visited every part of it.

The first fifteen of Innis’s years at Toronto were a difficult but fruitful time. He was not always understood, and, at one point, he was withdrawn from teaching a course because he pursued its subject “along too radical lines.” Still, his efforts began to produce results with the 1930 publication of his own introduction to Canadian economic history, The Fur Trade of Canada. Following the 1929 stock market crash, the Canadian Political Science Association was reestablished. Innis was deeply involved. A year earlier, with the help of the Bladens, he initiated a periodical, Contributions to Canadian Economics. The publication provided a medium for the Canadian Political Science Association, and its success in that capacity was a major factor in the Association’s decision to launch the Canadian Journal of Economics and Political Science. Innis’s contributions to the literature on Canadian economic history, and his involvement in the institutionalization of economics brought public recognition. In 1934 he was elected fellow of the Royal Society of Canada. He was promoted to Full Professor rank in 1936. He was an invited member of the Nova Scotia Royal Commission of Economic Enquiry in 1933. In 1937 he was appointed Head of the Department of Political Economy at the University of Toronto, and he remained Head until his death in 1952. From 1947 until 1952 he was Dean of Graduate Studies at Toronto, and had, in the meantime been a member of a Federal Royal Commission on Transportation. These public appointments say much for his influence on the economics profession in Canada, but they are not the end of it. He took a personal interest in the politics of the Department of Economics and Political Science at the University of Saskatchewan, which was headed by his student and close friend George Britnell. Perhaps his greatest influence was exercised through Canada’s Social Science Research council of which he was Chairman in 1945-46, and Chairman of the Grants-in-Aid Committee for its first nine years. Funds then available to assist research in the social sciences were minuscule by later standards, but none were allocated without Innis’s concurrence. He met regularly with Anne Bezanson, another sometime president of the EHA, who represented the Carnegie Foundation. Together they poured over names and projects related to social science research in Canada. In recommending reorganization of the Canadian Social Science Research Council in 1968, Mabel Timlin stated that in the beginning elaborate organization was not needed because Innis knew everyone.

For all his involvement in the institutionalization of economics in Canada, Innis did not withdraw from contacts in the United States. He was involved in the founding of the Economic History Association and the launching of the Journal of Economic History. He was the Association’s second president, and was deeply involved with the Committee on Research in Economic History, sponsored by the Social Science Research Council of the United States. It was these activities that brought Innis into close contact with American economic historians, Arthur H. Cole, Anne Bezanson, Robert B. Warren, and Earl J. Hamilton. At the same time Innis continued his interest in the general debates over the nature of economics in the United States, reviving his interaction with Frank Knight and eventually leading to his presidency of the American Economics Association in 1951. Innis has been the only president of the Economic History Association or the American Economic Association never to become an American citizen.

The lines of cleavage in the 1930s American debate over the nature of economics are now being clarified (Yonay, 1998; Morgan and Rutherford, 1998). One was drawn over the extent to which the values of elites should direct government economic policy. Another was drawn over the role of values in social science in general, but, particularly, in economics. With respect to these cleavages, Innis found himself in opposition to Frank Underhill and the socialist League for Social Reconstruction, which was active at the University of Toronto. Knight opposed the interventionist economics of the New Deal “brains trust” economist Guy Rexford Tugwell. Neither Innis nor Knight was well disposed towards the rise of Keynesian macroeconomics. Innis found it to be too interventionist given what he thought to be the unreliable state of the economics on which it was based. Perhaps it was for this reason that, from 1943 to 1947, Innis had an open invitation from the University of Chicago, where other, now famous, dissenters were gathering (Kitch, 1983).

Harold Innis died November 8, 1952. He was at the peak of his career. He had been invited to give the Beit Lectures in Imperial History at Oxford in 1949. While in England he was invited to give the Cust Lecture at Nottingham, and he spoke at the University of London. His thesis was, perhaps, not clearly presented, and not well received. Still, he continued to develop it over the succeeding years, leaving behind a body of writing well ahead of its time in intellectual history, and well off from contemporary paradigms in economics.

Selected Publications of Harold Innis: Books and Collections of Articles

A History of the Canadian Pacific Railway. London: P.S. King, 1923; Toronto: University of Toronto Press, 1971.

The Fur Trade in Canada: An Introduction to Canadian Economic History. New Haven: Yale University Press, 1930.

Peter Pond: Fur Trader and Adventurer. Toronto, 1930.

Select Documents in Canadian Economic History, Volume 1 (1497-1783), Volume 2 (1783-1885), co-edited with A.R.M. Lower. Toronto: University of Toronto Press, 1929 and 1933.

Problems of Staple Production in Canada. Toronto: University of Toronto Press, 1933.

Settlement and the Mining Frontier. Toronto: University of Toronto Press, Toronto, 1936.

The Cod Fisheries: The History of an International Economy. New Haven: Yale University Press, 1940.

Political Economy and the Modern State. Toronto: University of Toronto Press, 1946.

Empire and Communications. Oxford: Clarendon Press, 1950.

The Bias of Communication. Toronto: University of Toronto Press, 1951.

Changing Concepts of Time. Toronto: University of Toronto Press, 1952.

Essays in Canadian Economic History, ( M.Q. Innis, editor). Toronto: University of Toronto Press, 1956.

The Idea File of Harold Adams Innis, (introduced and edited by William Christian). Toronto: University of Toronto Press, 1980.

Innis on Russia: The Russian Diary and Other Writings (edited with a preface by William Christian). Toronto: University of Toronto Press, 1981.

Selected Writings about Innis: Biographical, Bibliographical, and Interpretative

Barnes, T.J. “Focus: A Geographical Appreciation of Harold A. Innis.” Canadian Geographer. 37 (1993): 352-364.

Creighton, Donald. Harold Adams Innis: Portrait of a Scholar. Toronto: University of Toronto Press, 1957.

Havelock, E.A. “Harold Innis: A Man of His Times” and “Harold Innis: The Philosophical Historian.” Et cetra 38 (1981): 242-268.

Neill, Robin. A New Theory of Value: The Canadian Economics of Harold Adams Innis. Toronto: University of Toronto Press, 1972.

Neill, Robin. “Rationality and the Information Environment: A Reassessment of the Work of Harold Adams Innis.” Journal of Canadian Studies 22 (1987-88): 78-92.

Patterson, Graeme. History and Communications: Harold Innis, Marshall McLuhan, the Interpretation of History. Toronto: University of Toronto Press, 1990.

Stamps, Judith. Unthinking Modernity: Innis, McLuhan, and the Frankfurt School. Kingston and Montreal: McGill-Queen’s University Press, 1995.

Additional References: Relevant to the Presented Interpretation

Ingram, J.K. A History of Political Economy. New York: Augustus M. Kelly (1888, 1967).

Johnson, E.S. and Johnson, H.G. In the Shadow of Keynes. Oxford: Basil Blackwell, 1978.

Kitch, E.W. “Fire of Truth: A Remembrance of Law and Economics at Chicago, 1932-1970.” Journal of Law and Economics 26 (1983): 163-233.

Morgan, M.S. and Rutherford, M., editors. From Interwar Pluralism to Postwar Neoclassicism. Durham, NC: Duke University, 1998.

Neill, R.F. “Economic Historiography in the 1950s: The Saskatchewan School.” Journal of Canadian Studies 34 (1999): 243-260.

Spengler, J.J. “Sociological Presuppositions in Economic Theory.” Southern Economic Journal 7 (1940): 131-157.

Yonay, Y.P. The Struggle over the Soul of Economics. Princeton University Press, Princeton, 1998.

Citation: Neill, Robin. “Harold Adams Innis”. EH.Net Encyclopedia, edited by Robert Whaples. March 16, 2008. URL http://eh.net/encyclopedia/harold-adams-innis/

Marginal Man: The Dark Vision of Harold Innis

Author(s):Watson, Alexander John
Reviewer(s):Neill, Robin

Published by EH.NET (March 2006)

Alexander John Watson, Marginal Man: The Dark Vision of Harold Innis. Toronto: University of Toronto Press, 2006. ix + 525 pp. $65 (Canadian) (cloth), ISBN: 0-8020-3916-2.

Reviewed for EH.NET by Robin Neill, Department of Economics, Carleton University and the University of Prince Edward Island.

Watson asserts a dominating and consistent intention in all of Harold Innis’s academic activities, from before his service in the First World War to his death in the early 1950s: an intention to raise concern about the condition of Western Civilization. In the past, according to Watson’s Innis, Western Civilization had been renewed by activity liberated from ossified intellectual and institutional expressions of its genius. This renewal took place on the margins of established forms of civilization. Indeed, Watson’s Innis, born on the frontier of Euro-American civilization, is a “marginal man” crying doom. As he saw it, the forces suppressing insurgency on the margin were getting the upper hand. By exhaustive reference to Innis’ writings, the sources of his ideas, and his political program in the academic world, Watson makes his point. It may be a mere imputation that Innis was from the beginning self-conscious of his role as prophet, but that Innis assumed this role, whether deliberate and self aware or not, is evident from Watson’s exhaustive and exhausting exposure of Innis’s analysis of the advance of Western civilization.

Watson is not writing as a practicing academic or private sector economist. Following degrees in English Literature, Political Science, and Political Economy (PhD, 1981) he has given most of his time to Care Canada, a non-sectarian international humanitarian aid organization. At the time of the publication of Marginal Man he was its Chief Executive Officer. Still, there is something that can be said apropos of the book that should be of interest to Canadian economic historians, and historians of economic thought of whatever nationality.

There are now at least four book-length treatments of Innis, each with a different purpose. (1) Donald Creighton’s Harold Innis; Portrait of a Scholar (University of Toronto Press, Toronto, 1957) is a eulogy out of which, by reference to Innis’s studies of the fur trade and the cod fisheries, Creighton drew the conclusion that Canada was a British country, and, by implication, not French and not American. (2) My own, A New Theory of Value: The Canadian Economics of Harold Innis (University of Toronto Press, Toronto, 1972) was part of an extended attempt to take a fresh look at Canadian economic development through the history of economic thought in Canada. In that exercise I had some success in extracting Innis’s economics from his broader considerations, but I was more successful later when I compared Innis to Herbert Simon and found similarities. I was not fully successful (in my own estimation) until I saw Innis as a partial contributor to a grand narrative of Canadian economic development. Innis wrote about primary product exports. Others, bringing the narrative closer to the substance of the Canadian case, wrote about agriculture, manufacturing, and banking. This grand narrative, to which they (Adam Shortt, Donald Creighton, W.A. Mackintosh, W.J.A. Donald, S.D. Clark, Vernon Fowke, and others) were all contributing, was still unfinished when grand narratives of national emergence passed from intellectual fashion in North American history. Watson’s account quite misses this. (3) Paul Heyer’s Harold Innis (Rowman and Littlefield, London, 2003), focusing on “the later Innis,” is a most readable account of the content of Innis’s essays on media of communication. Innis’s essays were considered, and perhaps still are considered, unreadable by all but a few devoted disciples. Watson apologizes for this by asserting that Innis developed a special method of presentation with hidden purposes, without explicitly explaining what those purposes were. I think Innis’s “special method” was a consequence of the time constraints on a very busy academic administrator, and of the less than felicitous literary style that marked all of his work. Heyer goes some distance in overcoming the difficulty. Finally there is John Watson’s Marginal Man.

Watson focuses on Innis’s personal life, his motivation and his inner struggles, but in a one-sided way. At the very end of his exhaustively researched account Watson refers to Innis as a pleasant, encouraging, even light hearted and sociable person. The depiction comes as a surprise after most of the book depicted him as an obsessive, psychopathic, Machiavellian academic entrepreneur, successfully bullying his way up the administrative ladder at the University of Toronto. Indeed, after reading Watson’s restrained account of Innis’s apparently pathetic relationship with a particular female student, it takes some effort to see him as in any way light hearted. The book presents Watson’s dark vision of Innis, as much as it presents Innis’s dark vision of the trend of Western Civilization.

In other ways Watson’s treatment of Innis is one-sided. He reveals, with painstaking, even excessive, proof, that in his communication essays Innis relied on the writings and insights of a number of contemporary Classicists — to a point just short of “plagiarism” (the word is Watson’s). But much that Innis wrote from 1935 on was heavily influenced also by a number of economists in the United States, and Watson only mentions this. Watson seems not to have been looking for the economist in Innis. Terms such as “Historical Economics,” “Institutional Economics,” “Neoclassical Economics,” and “Positive Economics” do not appear in the index. Three pages (111-14) out of 416 are devoted to Innis’s place in the history of economics. The term “cyclonics,” by which Innis pointed to the dynamics of an economy passing from one general equilibrium to another under the impetus of technological change, is given a passing nod in two pages (159-60). All of this, of course, is not a criticism of the book, but an indication of its content.

Watson’s biography of Innis, like all biographies, is a work of art. It puts a construction on Innis’s work, attributing to it a single, consistent, life-long intention to elaborate a paradigm of the advance of civilization. In this paradigm, advance is generated by the vision of frontiersmen who are free from the entrenched, unchanging, and suffocating mentality of those at the center of which the frontier is a frontier — hence, “marginal man.” With this construction Watson is able to assert that the communication studies that Innis produced towards the end of his life were not an outgrowth of his staples histories, but part of a larger pre-existing project. By the end of the book one is almost convinced.

Watson misses the fact that Innis was not the only one dealing with the generality of his concern in the middle years of the twentieth century, though Innis took a different approach. Frank Knight, with whom he was in constant contact, and J.J. Spengler, like Innis, were shocked at the passing of Modernity. In Modernity, rationality, objectivity, a generally accepted moral order, and truth, though not achieved, were thought to be achievable and approaching achievement. Much of what Innis wrote in his last seventeen years was an account of changing informational environments — an attempt to explain the passing of Modernity. The account was depressing for Innis, Knight, and others, because it led up to the advent of the Postmodern view in which objective truth and emotion-free rationality are thought to be not attainable. There were many others, however, who, writing very shortly after Innis, saw the same thing without dismay. Intellectual historians, philosophers, and sociologists of science (Jacques Derrida, John Higham, Maurice Mandelbaum, H.J. White), whose work was germinating contemporaneously with “the later Innis,” saw that the informational environment was changing, and accepted that all informational environments were largely constructed and constantly changing under pressure from internal and external forces.

It was Marshall McLuhan, who was aware of trends in literary criticism and pursued communication studies with Innis, who introduced me to Postmodernism at Toronto in the early 1950s – indeed, even when I was first hearing of Innis. That aspect of McLuhan’s thought and its implications for the place of Innis in the history of thought have not found a place in Marginal Man.

Robin Neill is Adjunct Professor of Economics at Carleton University and the University of Prince Edward Island. Neill is author of A New Theory of Value: The Canadian Economics of H.A. Innis, University of Toronto Press, 1972; “Rationality and the Informational Environment: A Reassessment of the Work of H.A. Innis,” Journal of Canadian Studies, 22, 1988: 78-92; and “Innis, Postmodernism, and Communications: Reflections on Paul Heyer’s Harold Innis,” History of Economic Thought and Methodology, 24, 2006 (forthcoming). He is currently researching the place of the history of economics in the practice of economics, and continentalizing forces in the economic development of Canada.

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

Military Spending Patterns in History

Jari Eloranta, Appalachian State University

Introduction

Determining adequate levels of military spending and sustaining the burden of conflicts have been among key fiscal problems in history. Ancient societies were usually less complicated in terms of the administrative, fiscal, technological, and material demands of warfare. The most pressing problem was frequently the adequate maintenance of supply routes for the armed forces. On the other hand, these societies were by and large subsistence societies, so they could not extract massive resources for such ventures, at least until the arrival of the Roman and Byzantine Empires. The emerging nation states of the early modern period were much better equipped to fight wars. On the one hand, the frequent wars, new gunpowder technologies, and the commercialization of warfare forced them to consolidate resources for the needs of warfare. On the other hand, the rulers had to – slowly but surely – give up some of their sovereignty to be able to secure required credit both domestically and abroad. The Dutch and the British were masters at this, with the latter amassing an empire that spanned the globe at the eve of the First World War.

The early modern expansion of Western European states started to challenge other regimes all over the world, made possible by their military and naval supremacy as well as later on by their industrial prowess. The age of total war in the nineteenth and twentieth centuries finally pushed these states to adopt more and more efficient fiscal systems and enabled some of them to dedicate more than half of their GDP to the war effort during the world wars. Comparatively, even though military spending was regularly the biggest item in the budget for most states before the twentieth century, it still represented only a modest amount of their GDP. The Cold War period again saw high relative spending levels, due to the enduring rivalry between the West and the Communist Bloc. Finally, the collapse of the Soviet Union alleviated some of these tensions and lowered the aggregate military spending in the world. Newer security challenges such as terrorism and various interstate rivalries have again pushed the world towards growing overall military spending.

This article will first elaborate on some of the research trends in studying military spending and the multitude of theories attempting to explain the importance of warfare and military finance in history. This survey will be followed by a chronological sweep, starting with the military spending of the ancient empires and ending with a discussion of the current behavior of states in the post-Cold War international system. By necessity, this chronological review will be selective at best, given the enormity of the time period in question and the complexity of the topic at hand.

Theoretical Approaches

Military spending is a key phenomenon in order to understand various aspects of economic history: the cost, funding, and burden of conflicts; the creation of nation states; and in general the increased role of government in everyone’s lives especially since the nineteenth century. Nonetheless, certain characteristics can be distinguished from the efforts to study this complex topic among different sciences (mainly history, economics, and political sciences). Historians, especially diplomatic and military historians, have been keen on studying the origins of the two World Wars and perhaps certain other massive conflicts. Nonetheless, many of the historical studies on war and societies have analyzed developments at an elusive macro-level, often without a great deal of elaboration on the quantitative evidence behind the assumptions on the effects of military spending. For example, Paul Kennedy argued in his famous The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 (1989) that military spending by hegemonic states eventually becomes excessive and a burden on its economy, finally leading to economic ruin. This argument has been criticized by many economists and historians, since it seems to lack the proper quantitative sources to support his notion of interaction between military spending and economic growth.[2] Quite frequently, as emerging from the classic studies by A.J.P. Taylor and many of the more current works, historians tend to be more interested in the impact of foreign policy decision-making and alliances, in addition to resolving the issue of “blame,” on the road towards major conflicts[3], rather than how reliable quantitative evidence can be mustered to support or disprove the key arguments. Economic historians, in turn, have not been particularly interested in the long-term economic impacts of military spending. Usually the interest of economic historians has centered on the economics of global conflicts — of which a good example of recent work combining the theoretical aspects of economics with historical case studies is The Economics of World War II, a compilation edited by Mark Harrison — as well as the immediate short-term economic impacts of wartime mobilization.[4]

The study of defense economics and military spending patterns as such is related to the immense expansion of military budgets and military establishments in the Cold War era. It involves the application of the methods and tools of economics to the study of issues arising from such a huge expansion. At least three aspects in defense economics set it apart from other fields of economics: 1) the actors (both private and public, for example in contracting); 2) theoretical challenges introduced by the interaction of different institutional and organizational arrangements, both in the budgeting and the allocation procedures; 3) the nature of military spending as a tool for destruction as well as providing security.[5] One of the shortcomings in the study of defense economics has been, at least so far, the lack of interest in periods before the Second World War.[6] For example, how much has the overall military burden (military expenditures as a percentage of GDP) of nation states changed over the last couple of centuries? Or, how big of a financial burden did the Thirty Years War (1618-1648) impose on the participating Great Powers?

A “typical” defense economist (see especially Sandler and Hartley (1995)) would model and attempt, based on public good theories, to explain military spending behavior (essentially its demand) by states with the following base equation:

(1)

In Equation 1, ME represents military expenditures by state i in year t, PRICE the price of military goods (affected by technological changes as well), INCOME most commonly the real GDP of the state in question, SPILLINS the impact of friendly states’ military spending (for example in an alliance), THREATS the impact of hostile states’ or alliances’ military expenditures, and STRATEGY the constraints imposed by changes in the overall strategic parameters of a nation. Most commonly, a higher price for military goods lowers military spending; higher income tends to increase ME (like during the industrial revolutions); alliances often lower ME due to the free riding tendencies of most states; threats usually increase military spending (and sometimes spur on arms races); and changes in the overall defensive strategy of a nation can affect ME in either direction, depending on the strategic framework implemented. While this model may be suitable for the study of, for example, the Cold War period, it fails to capture many other important explanatory factors, such as the influence of various organizations and interest groups in the budgetary processes as well as the impact of elections and policy-makers in general. For example, interest groups can get policy-makers to ignore price increases (on, for instance, domestic military goods), and election years usually alter (or focus) the behavior of elected officials.

In turn within peace sciences, a broader yet overlapping school of thought compared to defense economics, the focus in research has been to find the causal factors behind the most destructive conflicts. One of the most significant of such interdisciplinary efforts has been the Correlates of War (COW) project, which started in the spring of 1963. This project and the researchers loosely associated with it, not to mention its importance in producing comparative statistics, have had a big impact on the study of conflicts.[7] As Daniel S. Geller and J. David Singer have noted, the number of territorial states in the global system has ranged from fewer than 30 after the Napoleonic Wars to nearly 200 at the end of the twentieth century, and it is essential to test the various indicators collected by peace scientists against the historical record until theoretical premises can be confirmed or rejected.[8] In fact, a typical feature in most studies of this type is that they are focused on finding those sets of variables that might predict major wars and other conflicts, in a way similar to the historians’ origins-of-wars approach, whereas studies investigating the military spending behavior of monads (single states), dyads (pairs of states), or systems in particular are quite rare. Moreover, even though some cycle theorists and conflict scientists have been interested in the formation of modern nation states and the respective system of states since 1648, they have not expressed any real interest in pre-modern societies and warfare.[9]

Nevertheless, these contributions have had a lot to offer to the study of long-run dynamics of military spending, state formation, and warfare. According to Charles Tilly, there are four approximate approaches to the study of the relationships between war and power: 1) the statist; 2) the geopolitical; 3) the world system; and 4) the mode of production approach. The statist approach presents war, international relations, and state formation chiefly as a conse­quence of events within particular states. The geopolitical analysis is centered on the argument that state formation responds strongly to the current system of relations among states. The world system approach, á la Wallerstein, is mainly rooted in the idea that the different paths of state formation are influenced by the division of resources in the world system. In the mode of production framework, the way that production is organized determines the outcome of state formation. None of the approaches, as Tilly has pointed out, are adequate in their purest form in explaining state formation, international power relations, and economic growth as a whole.[10] Tilly himself maintains that coercion (a monopoly of violence by rulers and ability to wield coercion also externally) and capital (means of financing warfare) were the key elements in the European ascendancy to world domination in the early modern era. Warfare, state formation, and technological supremacy were all interrelated fundamentals of the same process.[11]

How can these theories of state behavior at the system level be linked to the analysis of military spending? According to George Modelski and William R. Thompson, proponents of Kondratieff waves and long cycles as explanatory forces in the development of world leadership patterns, the key aspect in a state’s ascendancy to prominence via such cycles in such models is naval power; i.e., a state’s ability to vie for world political leadership, colonization, and domination in trade.[12] One of the less explored aspects in most studies of hegemonic patterns is the military expenditure component in the competition between the states for military and economic leadership in the system. It is often argued, for example, that uneven economic growth levels cause nations to compete for economic and military prow­ess. The leader nation(s) thus has to dedicate increasing resources to armaments in order to maintain its position, while the other states, the so-called followers, can benefit from greater investments in other areas of economic activity. Therefore, the follower states act as free-riders in the international system stabilized by the hegemon. A built-in assumption in this hypothesized development pattern is that military spending eventually becomes harmful for economic development; a notion that has often been challenged based on empirical studies.[13]

Overall, the assertion arising from such a framework is that economic development and military spending are closely interdependent, with military spending being the driving force behind economic cycles. Moreover, based on this development pattern, it has been suggested that a country’s poor economic performance is linked to the “wasted” economic resources represented by military expenditures. However, as recent studies have shown, economic development is often more significant in explaining military spending rather than vice versa. The development of the U.S. economy since the Second World War certainly does not the type of hegemonic decline as predicted by Kennedy.[14] The aforementioned development pattern can be paraphrased as the so-called war chest hypothesis. As some of the hegemonic theorists reviewed above suggest, economic prosperity might be a necessary prerequisite for war and expansion. Thus, as Brian M. Pollins and Randall L. Schweller have indicated, economic growth would induce rising government expenditures, which in turn would enable higher military spending — therefore military expenditures would be “caused” by economic growth at a certain time lag.[15] In order for military spending to hinder economic performance, it would have to surpass all other areas of an economy, such as is often the case during wartime.

There have been relatively few credible attempts to model the military (or budgetary) spending behavior of states based on their long-run regime characteristics. Here I am going to focus on three in particular: 1) the Webber-Wildawsky model of budgeting; 2) the Richard Bonney model of fiscal systems; and 3) the Niall Ferguson model of interaction between public debts and forms of government. Caroly Webber and Aaron Wildawsky maintain essentially that each political culture generates its characteristic budgetary objectives; namely, productivity in market regimes, redistribution in sects (specific groups dissenting from an established authority), and more complex procedures in hierarchical regimes.[16] Thus, according to them the respective budgetary consequences arising from the chosen regime can be divided into four categories: despotism, state capitalism, American individualism, and social democracy. All of them in turn have implications for the respective regimes’ revenue and spending needs.

This model, however, is essentially a static one. It does not provide clues as to why nations’ behavior may change over time. Richard Bonney has addressed this problem in his writings on mainly the early modern states.[17] He has emphasized that the states’ revenue and tax collection systems, the backbone of any militarily successful nation state, have evolved over time. For example, in most European states the government became the arbiter of disputes and the defender of certain basic rights in the society by the early modern period. During the Middle Ages, the European fiscal systems were relatively backward and autarchic, with mostly predatory rulers (or roving bandits, as Mancur Olson has coined them).[18] In his model this would be the stage of the so-called tribute state. Next in the evolution came, respectively, the domain state (with stationary bandits, providing some public goods), the tax state (more reliance on credit and revenue collection), and finally the fiscal state (embodying more complex fiscal and political structures). A superpower like Great Britain in the nineteenth century, in fact, had to be a fiscal state to be able to dominate the world, due to all the burdens that went with an empire.[19]

While both of the models mentioned above have provided important clues as to how and why nations have prepared fiscally for wars, the most complete account of this process (along with Charles Tilly’s framework covered earlier) has been provided by Niall Ferguson.[20] He has maintained that wars have shaped all the most relevant institutions of modern economic life: tax-collecting bureaucracies, central banks, bond markets, and stock exchanges. Moreover, he argues that the invention of public debt instruments has gone hand-in-hand with more democratic forms of government and military supremacy – hence, the so-called Dutch or British model. These types of regimes have also been the most efficient economically, which has in turned reinforced the success of this fiscal regime model. In fact, military expenditures may have been the principal cause of fiscal innovation for most of history. Ferguson’s model highlights the importance, for a state’s survival among its challengers, of the adoption of the right types of institutions, technology, and a sufficient helping of external ambitions. All in all, I would summarize the required model, combining elements from the various frameworks, as being evolutionary, with regimes during different stages having different priorities and burdens imposed by military spending, depending also on their position in the international system. A successful ascendancy to a leadership position required higher expenditures, a substantial navy, fiscal and political structures conducive to increasing the availability of credit, and reoccurring participation in international conflicts.

Military Spending and the Early Empires

For most societies since the ancient river valley civilizations, military exertions and the means by which to finance them have been the crucial problems of governance. A centralized ability to plan and control spending were lacking in most governments until the nineteenth century. In fact, among the ancient civilizations, financial administration and the government were inseparable. Governments were organized on hierarchical basis, with the rulers having supreme control over military decisions. Taxes were often paid in kind to support the rulers, thus making it more difficult to monitor and utilize the revenues for military campaigns over great distances. For these agricultural economies, victory in war usually yielded lavish tribute to supplement royal wealth and helped to maintain the army and control the population. Thus, support of the large military forces and expeditions, contingent on food and supplies, was the ancient government’s principal expense and problem. Dependence on distant, often external suppliers of food limited the expansion of these empires. Fiscal management in turn was usually cumbersome and costly, and all of the ancient governments were internally unstable and vulnerable to external incursions.[21]

Soldiers, however, often supplemented their supplies by looting the enemy territory. The optimal size of an ancient empire was determined by the efficiency of tax collection and allocation, resource extraction, and its transportation system. Moreover, the supply of metal and weaponry, though important, was seldom the only critical variable for the military success an ancient empire. There were, however, important changing points in this respect, for example the introduction of bronze weaponry, starting with Mesopotamia about 3500 B.C. The introduction of iron weaponry about 1200 B.C. in eastern parts of Asia Minor, although the subsequent spread of this technology was fairly slow and gathered momentum from about 1000 B.C. onwards, and the use of chariot warfare introduced a new phase in warfare, due to the superior efficiency and cheapness of iron armaments as well as the hierarchical structures that were needed to use them during the chariot era.[22]

The river valley civilizations, nonetheless, paled in comparison with the military might and economy of one of the most efficient military behemoths of all time: the Roman Empire. Military spending was the largest item of public spending throughout Roman history. All Roman governments, similar to Athens during the time of Pericles, had problems in gathering enough revenue. Therefore, for example in the third century A.D. Roman citizenship was extended to all residents of the empire in order to raise revenue, as only citizens paid taxes. There were also other constraints on their spending, such as technological, geographic, and other productivity concerns. Direct taxation was, however, regarded as a dishonor, only to be extended in crisis times. Thus, taxation during most of the empire remained moderate, consisting of extraordinary taxes (so-called liturgies in ancient Athens) during such episodes. During the first two centuries of empire, the Roman army had about 150,000 to 160,000 legionnaires, in addition to 150,000 other troops, and during the first two centuries of empire soldiers’ wages began to increase rapidly to ensure the army’s loyalty. For example, in republican and imperial Rome military wages accounted for more than half of the revenue. The demands of the empire became more and more extensive during the third and fourth centuries A.D., as the internal decline of the empire became more evident and Rome’s external challengers became stronger. For example, the limited use of direct taxes and the commonness of tax evasion could not fulfill the fiscal demands of the crumbling empire. Armed forces were in turn used to maintain internal order. Societal unrest, inflation, and external incursions finally brought the Roman Empire, at least in the West, to an end.[23]

Warfare and the Rise of European Supremacy

During the Middle Ages, following the decentralized era of barbarian invasions, a varied system of European feudalism emerged, in which often feudal lords provided protection for communities for service or price. Since the Merovingian era, soldiers became more specialized professionals, with expensive horses and equipment. By the Carolingian era, military service had become largely the prerogative of an aristocratic elite. Prior to 1000 A.D., the command system was preeminent in mobilizing human and material resources for large-scale military enterprises, mostly on a contingency basis.[24] The isolated European societies, with the exception of the Byzantine Empire, paled in comparison with the splendor and accomplishment of the empires in China and the Muslim world. Also, in terms of science and inventions the Europeans were no match for these empires until the early modern period. Moreover, it was not until the twelfth century and the Crusades that the feudal kings needed to supplement the ordinary revenues to finance large armies. Internal discontent in the Middle Ages often led to an expansionary drive as the spoils of war helped calm the elite — for example, the French kings had to establish firm taxing power in the fourteenth century out of military necessity. The political ambitions of medieval kings, however, still relied on revenue strategies that catered to the short-term deficits, which made long-term credit and prolonged military campaigns difficult.[25]

Innovations in the ways of waging war and technology invented by the Chinese and the Islamic societies permeated Europe with a delay, such as the use of pikes in the fourteenth century and the gunpowder revolution of the fifteenth century, which in turn permitted armies to attack and defend larger territories. This also made possible a commercialization of warfare in Europe in the fourteenth and fifteenth centuries as feudal armies had to give way to professional mercenary forces. Accordingly, medieval states had to increase their taxation levels and tax collection to support the growing costs of warfare and the maintenance of larger standing armies. Equally, the age of commercialization of warfare was accompanied by the rising importance of sea power as European states began to build their overseas empires (as opposed to for example the isolationist turn of Ming China in the fifteenth century). States such as Portugal, the Netherlands, and England, respectively, became the “systemic leaders” due to their extensive fleets and commercial expansion in the period before the Napoleonic Wars. These were also states that were economically cohesive due to internal waterways and small geographic size as well. The early winners in the fight for world leadership, such as England, were greatly influenced by the availability of inexpensive credit, enabling them to mobilize limited resources effectively to meet military expenses. Their rise was of course preceded by the naval exploration and empire-building of many successful European states, especially Spain, both in Europe and around the globe.[26]

This pattern from command to commercialized warfare, from short-term to more permanent military management system, can be seen in the English case. In the period 1535-1547, the English defense share (military expenditures as a percentage of central government expenditures) averaged at 29.4 percent, with large fluctuations from year to year. However, in the period 1685-1813, the mean English defense share was 74.6 percent, never dropping below 55 percent in the said period. The newly-emerging nation states began to develop more centralized and productive revenue-expenditure systems, the goal of which was to enhance the state’s power, especially in the absolutist era. This also reflected on the growing cost and scale of warfare: During the Thirty Years’ War between 100,000 and 200,000 men fought under arms, whereas twenty years later 450,000 to 500,000 men fought on both sides in the War of the Spanish Succession. The numbers notwithstanding, the Thirty Years’ War was a conflict directly comparable to the world wars in terms of destruction. For example, Charles Tilly has estimated the battle deaths to have exceeded two million. Henry Kamen, in turn, has emphasized the mass scale destruction and economic dislocation this caused in the German lands, especially to the civilian population.[27]

With the increasing scale of armed conflicts in the seventeenth century, the participants became more and more dependent on access to long-term credit, because whichever government ran out of money had to surrender first. For example, even though the causes of Spain’s supposed decline in the seventeenth century are still disputed, nonetheless it can be said that the lack of royal credit and the poor management of government finances resulted in heavy deficit spending as military exertions followed one after another in the seventeenth century. Therefore, the Spanish Crown defaulted repeatedly during the sixteenth and seventeenth centuries, and on several occasions forced Spain to seek an end to its military activities. Spain still remained one of the most important Great Powers of the period, and was able to sustain its massive empire mostly intact until the nineteenth century.[28]

What about other country cases – can they shed further light into the importance of military spending and warfare in their early modern economic and political development? A key question for France, for example, was the financing of its military exertions. According to Richard Bonney, the cost of France’s armed forces in its era of “national greatness” were stupendous, with expenditure on the army by the period 1708-1714 averaging 218 million livres, whereas during the Dutch War of 1672-1678 it had averaged only 99 million in nominal terms. This was due to both growth in the size of the army and the navy, and the decline in the purchasing power of the French livre. The overall burden of war, however, remained roughly similar in this period: War expenditures accounted roughly 57 percent of total expenditure in 1683, whereas they represented about 52 percent in 1714. Moreover, as for all the main European monarchies, it was the expenditure on war that brought fiscal change in France, especially after the Napoleonic wars. Between 1815 and 1913, there was a 444 percent increase in French public expenditure and a consolidation of the emerging fiscal state. This also embodied a change in the French credit market structure.[29]

A success story, in a way a predecessor to the British model, was the Dutch state in this period. As Marjolein ‘t Hart has noted, the domestic investors were instrumental in supporting their new-born state as the state was able to borrow the money it needed from the credit markets, thus providing a stability in public finances even during crises. This financial regime lasted up until the end of the eighteenth century. Here again we can observe the intermarriage of military spending and the availability of credit, essentially the basic logic in the Ferguson model. One of the key features in the Dutch success in the seventeenth century was their ability to pay their soldiers relatively promptly. The Dutch case also underlines the primacy of military spending in state budgets and the burden involved for the early modern states. As we can see in Figure 1, the defense share of the Dutch region of Groningen remained consistently around 80 to 90 percent until the mid-seventeenth century, and then it declined, at least temporarily during periods of peace.[30]

Figure 1

Groningen’s Defense Share (Military Spending as a Percentage of Central Government Expenditures), 1596-1795

Source: L. van der Ent, et al. European State Finance Database. ESFD, 1999 [cited 1.2.2001]. Available from: http://www.le.ac.uk/hi/bon/ESFDB/frameset.html.

Respectively, in the eighteenth century, with rapid population growth in Europe, armies also grew in size, especially the Russian army. In Western Europe, a mounting intensity of warfare with the Seven Years War (1756-1763) finally culminated in the French Revolution and Napoleon’s conquests and defeat (1792-1815). The new style of warfare brought on by the Revolutionary Wars, with conscription and war of attrition as new elements, can be seen in the growth of army sizes. For example, the French army grew over 3.5 times in size from 1789 to 1793 – up to 650,000 men. Similarly, the British army grew from 57,000 in 1783 to 255,000 men in 1816. The Russian army acquired the massive size of 800,000 men in 1816, and Russia also kept the size of its armed forces at similar levels in the nineteenth century. However, the number of Great Power wars declined in number (see Table 1), as did the average duration of these wars. Yet, some of the conflicts of the industrial era became massive and deadly events, drawing in most parts of the world into essentially European skirmishes.

Table 1

Wars Involving the Great Powers

Century Number of wars Average duration of wars (years) Proportion of years war was underway, percentage
16th 34 1.6 95
17th 29 1.7 94
18th 17 1.0 78
19th 20 0.4 40
20th 15 0.4 53

Source: Charles Tilly. Coercion, Capital, and European States, AD 990-1990. Cambridge, Mass: Basil Blackwell, 1990.

The Age of Total War and Industrial Revolutions

With the new kind of mobilization, which became more or less a permanent state of affairs in the nineteenth century, centralized governments required new methods of finance. The nineteenth century brought on reforms, such as centralized public administration, reliance on specific, balanced budgets, innovations in public banking and public debt management, and reliance on direct taxation for revenue. However, for the first time in history, these reforms were also supported with the spread of industrialization and rising productivity. The nineteenth century was also the century of the industrialization of war, starting in the mid-century and gathering breakneck speed quickly. By the 1880s, military engineering began to forge ahead of even civil engineering. Also, a revolution in transportation with steamships and railroads made massive, long-distance mobilizations possible, as shown by the Prussian example against the French in 1870-1871.[31]

The demands posed by these changes on the state finances and economies differed. In the French case, the defense share stayed roughly the same, a little over 30 percent, throughout the nineteenth and early twentieth centuries, whereas its military burden increased about one percent to 4.2 percent. In the UK case, the defense share mean declined two percent to 36.7 percent in 1870-1913, compared to early nineteenth century. However, the strength of the British economy made it possible that the military burden actually declined a little to 2.6 percent, a similar figure incurred by Germany in the same period. For most countries the period leading to the First World War meant higher military burdens than that, such as Japan’s 6.1 percent. However, the United States, the new economic leader by the closing decades of the century, averaged spending a meager 0.7 percent of its GDP for military purposes, a trend that continued throughout the interwar period as well (military burden of 1.2 percent). As seen in Figure 2, the military burdens incurred by the Great Powers also varied in terms of timing, suggesting different reactions to external and internal pressures. Nonetheless, the aggregate, systemic real military spending of the period showed a clear upward trend for the entire period. Moreover, the impact of the Russo-Japanese was immense for the total (real) spending of the sixteen states represented in the figure below, due to the fact that both countries were Great Powers and Russian military expenditures alone were massive. The unexpected defeat of the Russians unleashed, along with the arrival of dreadnoughts, an intensive arms race.[32]

Figure 2

Military Burdens of Four Great Powers and Aggregate Real Military Expenditure (ME) for Sixteen Countries on the Aggregate, 1870-1913

Sources: See Jari Eloranta, “Struggle for Leadership? Military Spending Behavior of the Great Powers, 1870-1913,” Appalachian State University, Department of History, unpublished manuscript 2005b, also on the constructed system of states and the methods involved in converting the expenditures into a common currency (using exchange rates and purchasing power parities), which is always a controversial exercise.

With the beginning of the First World War in 1914, this military potential was unleashed in Europe with horrible consequences, as most of the nations anticipated a quick victory but ended up fighting a war of attrition in the trenches. Mankind had finally, even officially, entered the age of total war.[33] It has been estimated that about nine million combatants and twelve million civilians died during the so-called Great War, with property damage especially in France, Belgium, and Poland. According to Rondo Cameron and Larry Neal, the direct financial losses arising from the Great War were about 180-230 billion 1914 U.S. dollars, whereas the indirect losses of property and capital rose to over 150 billion dollars.[34] According to the most recent estimates, the economic losses arising from the war could be as high as 692 billion 1938 U.S. dollars.[35] But how much of their resources did they have to mobilize and what were the human costs of the war?

As Table 2 displays, the French military burden was fairly high, in addition to the size of its military forces and the number of battle deaths. Therefore, France mobilized the most resources in the war and, subsequently, suffered the greatest losses. The mobilization by Germany was also quite efficient, because almost the entire state budget was used to support the war effort. On the other hand, the United States barely participated in the war, and its personnel losses in the conflict were relatively small, as were its economic burdens. In comparison, the massive population reserves of Russia enabled fairly high personnel losses, quite similar to the Soviet experience in the Second World War.

Table 2

Resource Mobilization by the Great Powers in the First World War

Country and years in the war Average military burden (percent of GDP) Average defense share of government spending Military personnel as a percentage of population Battle deaths as a percentage of population
France

1914-1918

43 77 11 3.5
Germany

1914-1918

.. 91 7.3 2.7
Russia

1914-1917

.. .. 4.3 1.4
UK

1914-1918

22 49 7.3 2.0
US

1917-1918

7 47 1.7 0.1

Sources: Historical Statistics of the United States, Colonial Times to 1970, Washington, DC: U.S. Bureau of Census, 1975; Louis Fontvieille. Evolution et croissance de l’Etat Français: 1815-1969, Economies et sociëtës, Paris: Institut de Sciences Mathematiques et Economiques Appliquees, 1976 ; B. R. Mitchell. International Historical Statistics: Europe, 1750-1993, 4th edition, Basingstoke: Macmillan Academic and Professional, 1998a; E. V. Morgan, Studies in British Financial Policy, 1914-1925., London: Macmillan, 1952; J. David Singer and Melvin Small. National Material Capabilities Data, 1816-1985. Ann Arbor, MI: Inter-university Consortium for Political and Social Research, 1993. See also Jari Eloranta, “Sotien taakka: Makrotalouden ongelmat ja julkisen talouden kipupisteet maailmansotien jälkeen (The Burden of Wars: The Problems of Macro Economy and Public Sector after the World Wars),” in Kun sota on ohi, edited by Petri Karonen and Kerttu Tarjamo (forthcoming), 2005a.

In the interwar period, the pre-existing tendencies to continue social programs and support new bureaucracies made it difficult for the participants to cut their public expenditure, leading to a displacement of government spending to a slightly higher level for many countries. Public spending especially in the 1920s was in turn very static by nature, plagued by budgetary immobility and standoffs especially in Europe. This meant that although in many countries, except the authoritarian regimes, defense shares dropped noticeably, their respective military burdens stayed either at similar levels or even increased — for example, the French military burden rose to a mean level of 7.2 percent in this period. In Great Britain also, the defense share mean dropped to 18.0 percent, although the military burden mean actually increased compared to the pre-war period, despite the military expenditure cuts and the “Ten-Year Rule” in the 1920s. For these countries, the mid-1930s marked the beginning of intense rearmament whereas some of the authoritarian regimes had begun earlier in the decade. Germany under Hitler increased its military burden from 1.6 percent in 1933 to 18.9 percent in 1938, a rearmament program combining creative financing and promising both guns and butter for the Germans. Mussolini was not quite as successful in his efforts to realize the new Roman Empire, with a military burden fluctuating between four and five percent in the 1930s (5.0 percent in 1938). The Japanese rearmament drive was perhaps the most impressive, with as high as 22.7 percent military burden and over 50 percent defense share in 1938. For many countries, such as France and Russia, the rapid pace of technological change in the 1930s rendered many of the earlier armaments obsolete only two or three years later.[36]

Figure 3
Military Burdens of Denmark, Finland, France, and the UK, 1920-1938

Source: Jari Eloranta, “External Security by Domestic Choices: Military Spending as an Impure Public Good among Eleven European States, 1920-1938,” Dissertation, European University Institute, 2002.

There were differences between democracies as well, as seen in Figure 3. Finland’s behavior was similar to the UK and France, i.e. part of the so-called high spending group among European democracies. This was also similar to the actions of most East European states. Denmark was among the low-spending group, perhaps due to the futility of trying to defend its borders amidst probable conflicts involving giants in the south, France and Germany. Overall, the democracies maintained fairly steady military burdens throughout the period. Their rearmament was, however, much slower than the effort amassed by most autocracies. This is also amply displayed in Figure 4.

Figure 4
Military Burdens of Germany, Italy, Japan, and Russia/USSR, 1920-1938

Sources: Eloranta (2002), see especially appendices for the data sources. There are severe limitations and debates related to, for example, the German (see e.g. Werner Abelshauser, “Germany: Guns, Butter, and Economic Miracles,” in The Economics of World War II: Six Great Powers in International Comparison, edited by Mark Harrison, 122-176, Cambridge: Cambridge University Press, 2000) and the Soviet data (see especially R. W. Davies, “Soviet Military Expenditure and the Armaments Industry, 1929-33: A Reconsideration,” Europe-Asia Studies 45, no. 4 (1993): 577-608, as well as R. W. Davies and Mark Harrison. “The Soviet Military-Economic Effort under the Second Five-Year Plan, 1933-1937,” Europe-Asia Studies 49, no. 3 (1997): 369-406).

In the ensuing conflict, the Second World War, the initial phase from 1939 to early 1942 favored the Axis as far as strategic and economic potential was concerned. After that, the war of attrition, with the United States and the USSR joining the Allies, turned the tide in favor of the Allies. For example, in 1943 the Allied total GDP was 2,223 billion international dollars (in 1990 prices), whereas the Axis accounted for only 895 billion. Also, the impact of the Second World War was much more profound for the participants’ economies. For example, Great Britain at the height of the First World War incurred a military burden of about 27 percent, whereas the military burden level consistently held throughout the Second World War was over 50 percent.[37]

Table 3

Resource Mobilization by the Great Powers in the Second World War

Country and years in the war Average military burden (percent of GDP) Average defense share of government spending Military personnel as a percentage of population Battle deaths as a percentage of population
France

1939-1945

.. .. 4.2 0.5
Germany

1939-1945

50 .. 6.4 4.4
Soviet Union

1939-1945

44 48 3.3 4.4
UK

1939-1945

45 69 6.2 0.9
USA

1941-1945

32 71 5.5 0.3

Sources: Singer and Small (1993); Stephen Broadberry and Peter Howlett, “The United Kingdom: ‘Victory at All Costs’,” in The Economics of World War II: Six Great Powers in International Comparisons, edited by Mark Harrison (Cambridge University Press, 1998); Mark Harrison. “The Economics of World War II: An Overview,” in The Economics of World War II: Six Great Powers in International Comparisons, edited by Mark Harrison (Cambridge: Cambridge University Press, 1998a); Mark Harrison, “The Soviet Union: The Defeated Victor,” in The Economics of World War II: Six Great Powers in International Comparison, edited by Mark Harrison, 268-301 (Cambridge: Cambridge University Press, 2000); Mitchell (1998a); B.R. Mitchell. International Historical Statistics: The Americas, 1750-1993, fourth edition, London: Macmillan, 1998b. The Soviet defense share only applies to years 1940-1945, whereas the military burden applies to 1940-1944. These two measures are not directly comparable, since the former is measured in current prices and the latter in constant prices.

As Table 3 shows, the greatest military burden was most likely incurred by Germany, even though the other Great Powers experienced similar levels. Only the massive economic resources of the United States made possible its lower military burden. Also the UK and the United States mobilized their central/federal government expenditures efficiently for the military effort. In this sense the Soviet Union fared the worst, and additionally the share of military personnel out of the population was relatively small compared to the other Great Powers. On the other hand, the economic and demographic resources that the Soviet Union possessed ultimately ensured its survival during the German onslaught. On the aggregate, the largest personnel losses were incurred by Germany and the Soviet Union, in fact many times those of the other Great Powers.[38] In comparison with the First World War, the second one was even more destructive and lethal, and the aggregate economic losses from the war exceeded even 4,000 billion 1938 U.S. dollars. After the war, the European industrial and agricultural production amounted to only half of the 1938 total.[39]

The Atomic Age and Beyond

The Second World War brought with it also a new role for the United States in world politics, a military-political leadership role warranted by its dominant economic status established over fifty years earlier. With the establishment of NATO in 1949, a formidable defense alliance was formed for the capitalist countries. The USSR, rising to new prominence due to the war, established the Warsaw Pact in 1955 to counter these efforts. The war also meant a change in the public spending and taxation levels of most Western nations. The introduction of welfare states brought the OECD government expenditure average from just under 30 percent of the GDP in the 1950s to over 40 percent in the 1970s. Military spending levels followed suit and peaked during the early Cold War. The American military burden increased above 10 percent in 1952-1954, and the United States has retained a high mean value for the post-war period of 6.7 percent. Great Britain and France followed the American example after the Korean War.[40]

The Cold War embodied a relentless armaments race, with nuclear weapons now as the main investment item, between the two superpowers (see Figure 5). The USSR, according to some figures, spent about 60 to 70 percent of the American level in the 1950s, and actually spent more than the United States in the 1970s. Nonetheless, the United States maintained a massive advantage over the Soviets in terms of nuclear warheads. However, figures collected by SIPRI (Stockholm International Peace Research Institute), suggest an enduring yet dwindling lead for the US even in the 1970s. On the other hand, the same figures point to a 2-to-1 lead in favor of the NATO countries over the Warsaw Pact members in the 1970s and early 1980s. Part of this armaments race was due to technological advances that led to increases in the cost per soldier — it has been estimated that technological increases have produced a mean annual increase in real costs of around 5.5 percent in the post-war period. Nonetheless, spending on personnel and their maintenance has remained the biggest spending item for most countries.

Figure 5

Military Burdens (=MILBUR) of the United States and the United Kingdom, and the Soviet Military Spending as a Percentage of the US Military Spending (ME), 1816-1993

Sources: References to the economic data can be found in Jari Eloranta, “National Defense,” in The Oxford Encyclopedia of Economic History, edited by Joel Mokyr, 30-33 (Oxford: Oxford University Press, 2003b). ME (Military Expenditure) data from Singer and Small (1993), supplemented with the SIPRI (available from: http://www.sipri.org/) data for 1985-1993. Details are available from the author upon request. Exchange rates from Global Financial Data (Online databank), 2003. Available from http://www.globalfindata.com/. The same caveats apply to the underlying currency conversion methods as in Figure 2.

The one outcome of this Cold War arms race that is often cited is the so-called Military Industrial Complex (MIC), referring usually to the influence that the military and industry would have on each other’s policies. The more nefarious connotation refers to the unduly large influence that military producers might have over public sector’s acquisitions and foreign policy in particular in such a collusive relationship. In fact, the origins of this type of interaction can be found further back in history. As Paul Koistinen has emphasized, the First World War was a watershed in business-government relationships, since businessmen were often brought into government, to make supply decisions during this total conflict. Most governments, as a matter of fact, needed the expertise of the core business elites during the world wars. In the United States some form of an MIC came into existence before 1940. Similar developments can be seen in other countries before the Second World War, for example in the Soviet Union. The Cold War simply reinforced these tendencies.[41] Findings by, for example, Robert Higgs establish that the financial performance of the leading defense contracting companies was, on the average, much better than that of comparable large corporations during the period 1948-1989. Nonetheless, his findings do not support the normative conclusion that the profits of defense contractors were “too high.”[42]

World spending levels began a slow decline from the 1970s onwards, with the Reagan years being an exception for the US. In 1986, the US military burden was 6.5 percent, whereas in 1999 it was down to 3.0 percent. In France during the period 1977-1999, the military burden has declined from the post-war peak levels in the 1950s to a mean level of 3.6 percent at the turn of the millennium. This has been mostly the outcome of the reduction in tensions between the rival groups and the downfall of the USSR and the communist regimes in Eastern Europe. The USSR was spending almost as much on its armed forces as the United States up until mid-1980s, and the Soviet military burden was still 12.3 percent in 1990. Under the Russian Federation, with a declining GDP, this level has dropped rapidly to 3.2 percent in 1998. Similarly, other nations have downscaled their military spending since the late 1980s and the 1990s. For example, German military spending in constant US dollars in 1991 was over 52 billion, whereas in 1999 it declined to less than 40 billion. In the French case, the decline was from little over 52 billion in 1991 to below 47 billion in 1999, with its military burden decreasing from 3.6 percent to 2.8 percent.[43]

Overall, according to the SIPRI figures, there was a reduction of about one-third in real terms in world military spending in 1989-1996, with some fluctuation and even small increase since then. In the global scheme, world military expenditure is still highly concentrated on a few countries, with the 15 major spenders accounting for 80 percent of the world total in 1999. The newest military spending estimates (see e.g. http://www.sipri.org/) put the world military expenditures on a growth trend once again due to new threats such as international terrorism and the conflicts related to terrorism. In terms of absolute figures, the United States still dominates the world military spending with a 47 percent share of the world total in 2003. The U.S. spending total becomes less impressive when purchasing power parities are utilized. Nonetheless, the United States has entered the third millennium as the world’s only real superpower – a role that it embraces sometimes awkwardly. Whereas the United States was an absent hegemon in the late nineteenth and first half of the twentieth century, it now has to maintain its presence in many parts of the world, sometimes despite objections from the other players in the international system.[44]

Conclusions

Warfare has played a crucial role in the evolution of human societies. The ancient societies were usually less complicated in terms of the administrative, fiscal, technological, and material demands of warfare. The most pressing problem was commonly the maintenance of adequate supply for the armed forces during prolonged campaigns. This also put constraints on the size and expansion of the early empires, at least until the introduction of iron weaponry. The Roman Empire, for example, was able to sustain a large, geographically diverse empire for a long time period. The disjointed Middle Ages splintered the European societies into smaller communities, in which so-called roving bandits ruled, at least until the arrival of more organized military forces from the tenth century onwards. At the same time, the empires in China and the Muslim world developed into cradles of civilization in terms of scientific discoveries and military technologies.

The geographic and economic expansion of early modern European states started to challenge other regimes all over the world, made possible in part by their military and naval supremacy as well as their industrial prowess later on. The age of total war and revolutions in the nineteenth and twentieth centuries finally pushed these states to adopt more and more efficient fiscal systems and enabled some of them to dedicate more than half of their GDP to the war effort during the world wars. Even though military spending was regularly the biggest item in the budget for most states before the twentieth century, it still represented only a modest amount of their respective GDP. The Cold War period again saw high relative spending levels, due to the enduring rivalry between the West and the Communist bloc. Finally, the collapse of the Soviet Union alleviated some of these tensions and lowered the aggregate military spending in the world, if only temporarily. Newer security challenges such as terrorism and various interstate rivalries have again pushed the world towards a growth path in terms of overall military spending.

The cost of warfare has increased especially since the early modern period. The adoption of new technologies and massive standing armies, in addition to the increase in the “bang-for-buck” (namely, the destructive effect of military investments), have kept military expenditures in a central role vis-à-vis modern fiscal regimes. Although the growth of welfare states in the twentieth century has forced some tradeoffs between “guns and butter,” usually the spending choices have not been competing rather than complementary. Thus, the size and spending of governments have increased. Even though the growth in welfare spending has abated somewhat since the 1980s, according to Peter Lindert they will most likely still experience at least modest expansion in the future. Nor is it likely that military spending will be displaced as a major spending item in national budgets. Various international threats and the lack of international cooperation will ensure that military spending will remain the main contender to social expenditures.[45]


[1] I thank several colleagues for their helpful comments, especially Mark Harrison, Scott Jessee, Mary Valante, Ed Behrend, David Reid, as well as an anonymous referee and EH.Net editor Robert Whaples. The remaining errors and interpretations are solely my responsibility.

[2] See Paul Kennedy, The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 (London: Fontana, 1989). Kennedy calls this type of approach, following David Landes, “large history.” On criticism of Kennedy’s “theory,” see especially Todd Sandler and Keith Hartley, The Economics of Defense, ed. Mark Perlman, Cambridge Surveys of Economic Literature (Cambridge: Cambridge University Press, 1995) and the studies listed in it. Other examples of long-run explanations can be found in, e.g., Maurice Pearton, The Knowledgeable State: Diplomacy, War, and Technology since 1830 (London: Burnett Books: Distributed by Hutchinson, 1982) and William H. McNeill, The Pursuit of Power: Technology, Armed Force, and Society since A.D. 1000 (Chicago: University of Chicago Press, 1982).

[3] Jari Eloranta, “Kriisien ja konfliktien tutkiminen kvantitatiivisena ilmiönä: Poikkitieteellisyyden haaste suomalaiselle sotahistorian tutkimukselle (The Study of Crises and Conflicts as Quantitative Phenomenon: The Challenge of Interdisciplinary Approaches to Finnish Study of Military History),” in Toivon historia – Toivo Nygårdille omistettu juhlakirja, ed. Kalevi Ahonen, et al. (Jyväskylä: Gummerus Kirjapaino Oy, 2003a).

[4] See Mark Harrison, ed., The Economics of World War II: Six Great Powers in International Comparisons (Cambridge, UK: Cambridge University Press, 1998b). Classic studies of this type are Alan Milward’s works on the European war economies; see e.g. Alan S. Milward, The German Economy at War (London: Athlon Press, 1965) and Alan S. Milward, War, Economy and Society 1939-1945 (London: Allen Lane, 1977).

[5] Sandler and Hartley, The Economics of Defense, xi; Jari Eloranta, “Different Needs, Different Solutions: The Importance of Economic Development and Domestic Power Structures in Explaining Military Spending in Eight Western Democracies during the Interwar Period” (Licentiate Thesis, University of Jyväskylä, 1998).

[6] See Jari Eloranta, “External Security by Domestic Choices: Military Spending as an Impure Public Good among Eleven European States, 1920-1938″ (Dissertation, European University Institute, 2002) for details.

[7] Ibid.

[8] Daniel S. Geller and J. David Singer, Nations at War. A Scientific Study of International Conflict, vol. 58, Cambridge Studies in International Relations (Cambridge: Cambridge University Press, 1998), e.g. 1-7.

[9] See e.g. Jack S. Levy, “Theories of General War,” World Politics 37, no. 3 (1985). For an overview, see especially Geller and Singer, Nations at War: A Scientific Study of International Conflict. A classic study of war from the holistic perspective is Quincy Wright, A Study of War (Chicago: University of Chicago Press, 1942). See also Geoffrey Blainey, The Causes of War (New York: Free Press, 1973). On rational explanations of conflicts, see James D. Fearon, “Rationalist Explanations for War,” International Organization 49, no. 3 (1995).

[10] Charles Tilly, Coercion, Capital, and European States, AD 990-1990 (Cambridge, MA: Basil Blackwell, 1990), 6-14.

[11] For more, see especially ibid., Chapters 1 and 2.

[12] George Modelski and William R. Thompson, Leading Sectors and World Powers: The Coevolution of Global Politics and Economics, Studies in International Relations (Columbia, SC: University of South Carolina Press, 1996), 14-40. George Modelski and William R. Thompson, Seapower in Global Politics, 1494-1993 (Houndmills, UK: Macmillan Press, 1988).

[13] Kennedy, The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000, xiii. On specific criticism, see e,g, Jari Eloranta, “Military Competition between Friends? Hegemonic Development and Military Spending among Eight Western Democracies, 1920-1938,” Essays in Economic and Business History XIX (2001).

[14] Eloranta, “External Security by Domestic Choices: Military Spending as an Impure Public Good among Eleven European States, 1920-1938,” Sandler and Hartley, The Economics of Defense.

[15] Brian M. Pollins and Randall L. Schweller, “Linking the Levels: The Long Wave and Shifts in U.S. Foreign Policy, 1790- 1993,” American Journal of Political Science 43, no. 2 (1999), e.g. 445-446. E.g. Alex Mintz and Chi Huang, “Guns versus Butter: The Indirect Link,” American Journal of Political Science 35, no. 1 (1991) suggest an indirect (negative) growth effect via investment at a lag of at least five years.

[16] Caroly Webber and Aaron Wildavsky, A History of Taxation and Expenditure in the Western World (New York: Simon and Schuster, 1986).

[17] He outlines most of the following in Richard Bonney, “Introduction,” in The Rise of the Fiscal State in Europe c. 1200-1815, ed. Richard Bonney (Oxford: Oxford University Press, 1999b).

[18] Mancur Olson, “Dictatorship, Democracy, and Development,” American Political Science Review 87, no. 3 (1993).

[19] On the British Empire, see especially Niall Ferguson, Empire: The Rise and Demise of the British World Order and the Lessons for Global Power (New York: Basic Books, 2003). Ferguson has also tackled the issue of a possible American empire in a more polemical Niall Ferguson, Colossus: The Price of America’s Empire (New York: Penguin Press, 2004).

[20] Ferguson outlines his analytical framework most concisely in Niall Ferguson, The Cash Nexus: Money and Power in the Modern World, 1700-2000 (New York: Basic Books, 2001), especially Chapter 1.

[21] Webber and Wildavsky, A History of Taxation and Expenditure in the Western World, 39-67. See also McNeill, The Pursuit of Power: Technology, Armed Force, and Society since A.D. 1000.

[22] McNeill, The Pursuit of Power: Technology, Armed Force, and Society since A.D. 1000 , 9-12.

[23] Webber and Wildavsky, A History of Taxation and Expenditure in the Western World.

[24] This interpretation of early medieval warfare and societies, including the concept of feudalism, has been challenged in more recent military history literature. See especially John France, “Recent Writing on Medieval Warfare: From the Fall of Rome to c. 1300,” Journal of Military History 65, no. 2 (2001).

[25] Webber and Wildavsky, A History of Taxation and Expenditure in the Western World, McNeill, The Pursuit of Power. Technology, Armed Force, and Society since A.D. 1000. See also Richard Bonney, ed., The Rise of the Fiscal State in Europe c. 1200-1815 (Oxford: Oxford University Press, 1999c).

[26] Ferguson, The Cash Nexus: Money and Power in the Modern World, 1700-2000, Tilly, Coercion, Capital, and European States, AD 990-1990, Jari Eloranta, “National Defense,” in The Oxford Encyclopedia of Economic History, ed. Joel Mokyr (Oxford: Oxford University Press, 2003b). See also Modelski and Thompson, Seapower in Global Politics, 1494-1993.

[27] Tilly, Coercion, Capital, and European States, AD 990-1990, 165, Henry Kamen, “The Economic and Social Consequences of the Thirty Years’ War,” Past and Present April (1968).

[28] Eloranta, “National Defense,” Henry Kamen, Empire: How Spain Became a World Power, 1492-1763, 1st American ed. (New York: HarperCollins, 2003), Douglass C. North, Institutions, Institutional Change, and Economic Performance (New York.: Cambridge University Press, 1990).

[29] Richard Bonney, “France, 1494-1815,” in The Rise of the Fiscal State in Europe c. 1200-1815, ed. Richard Bonney (Oxford: Oxford University Press, 1999a). War expenditure percentages (for the seventeenth and eighteenth centuries) were calculated using the so-called Forbonnais (and Bonney) database(s), available from European State Finance Database: http://www.le.ac.uk/hi/bon/ESFDB/RJB/FORBON/forbon.html and should be considered only illustrative.

[30] Marjolein ’t Hart, “The United Provinces, 1579-1806,” in The Rise of the Fiscal State in Europe c. 1200-1815, ed. Richard Bonney (Oxford: Oxford University Press, 1999). See also Ferguson, The Cash Nexus..

[31] See especially McNeill, The Pursuit of Power..

[32] Eloranta, “External Security by Domestic Choices: Military Spending as an Impure Public Good Among Eleven European States, 1920-1938,” Eloranta, “National Defense”. See also Ferguson, The Cash Nexus.. On the military spending patterns of Great Powers in particular, see J. M. Hobson, “The Military-Extraction Gap and the Wary Titan: The Fiscal Sociology of British Defence Policy 1870-1914,” Journal of European Economic History 22, no. 3 (1993).

[33] The practice of total war, of course, is as old as civilizations themselves, ranging from the Punic Wars to the more modern conflicts. Here total war refers to the twentieth century connotation of this term, embodying the use of all economic, political, and military might of a nation to destroy another in war. Therefore, even though the destruction of Carthage certainly qualifies as an action of total war, it is only in the nineteenth and twentieth centuries that this type of warfare and strategic thinking comes to full fruition. For example, the famous ancient military genius Sun Tzu advocated caution and planning in warfare, rather than using all means possible to win a war: “Thus, those skilled in war subdue the enemy’s army without battle. They capture his cities without assaulting them and overthrow his state without protracted operations.” Sun Tzu, The Art of War (Oxford: Oxford University Press, 1963), 79. With the ideas put forth by Clausewitz (see Carl von Clausewitz, On War (London: Penguin Books, 1982, e.g. Book Five, Chapter II) in the century century, the French Revolution, and Napoleon, the nature of warfare began to change. Clausewitz’s absolute war did not go as far as prescribing indiscriminate slaughter or other ruthless means to subdue civilian populations, but did contribute to the new understanding of the means of warfare and military strategy in the industrial age. The generals and despots of the twentieth century drew their own conclusions, and thus total war came to include not only subjugating the domestic economy to the needs of the war effort but also propaganda, destruction of civilian (economic) targets, and genocide.

[34] Rondo Cameron and Larry Neal, A Concise Economic History of the World: From Paleolithic Times to the Present, 4th ed. (Oxford: The Oxford University Press, 2003), 339. Thus, the estimate in e.g. Eloranta, “National Defense” is a hypothetical minimum estimate originally expressed in Gerard J. de Groot, The First World War (New York: Palgrave, 2001).

[35] See Table 13 in Stephen Broadberry and Mark Harrison, “The Economics of World War I: An Overview,” in The Economics of World War I, ed. Stephen Broadberry and Mark Harrison ((forthcoming), Cambridge University Press, 2005). The figures are, as the authors point out, only tentative.

[36] Eloranta, “External Security by Domestic Choices: Military Spending as an Impure Public Good Among Eleven European States, 1920-1938″, Eloranta, “National Defense”, Webber and Wildavsky, A History of Taxation and Expenditure in the Western World.

[37] Eloranta, “National Defense”.

[38] Mark Harrison, “The Economics of World War II: An overview,” in The Economics of World War II: Six Great Powers in International Comparisons, ed. Mark Harrison (Cambridge, UK: Cambridge University Press, 1998a), Eloranta, “National Defense.”

[39] Cameron and Neal, A Concise Economic History of the World, Harrison, “The Economics of World War II: An Overview,” Broadberry and Harrison, “The Economics of World War I: An Overview.” Again, the same caveats apply to the Harrison-Broadberry figures as disclaimed earlier.

[40] Eloranta, “National Defense”.

[41] Mark Harrison, “Soviet Industry and the Red Army under Stalin: A Military-Industrial Complex?” Les Cahiers du Monde russe 44, no. 2-3 (2003), Paul A.C. Koistinen, The Military-Industrial Complex: A Historical Perspective (New York: Praeger Publishers, 1980).

[42] Robert Higgs, “The Cold War Economy: Opportunity Costs, Ideology, and the Politics of Crisis,” Explorations in Economic History 31, no. 3 (1994); Ruben Trevino and Robert Higgs. 1992. “Profits of U.S. Defense Contractors,” Defense Economics Vol. 3, no. 3: 211-18.

[43] Eloranta, “National Defense”.

[44] See more Eloranta, “Military Competition between Friends? Hegemonic Development and Military Spending among Eight Western Democracies, 1920-1938.”

[45] For more, see especially Ferguson, The Cash Nexus, Peter H. Lindert, Growing Public. Social Spending and Economic Growth since the Eighteenth Century, 2 Vols., Vol. 1 (Cambridge: Cambridge University Press, 2004). On tradeoffs, see e.g. David R. Davis and Steve Chan, “The Security-Welfare Relationship: Longitudinal Evidence from Taiwan,” Journal of Peace Research 27, no. 1 (1990), Herschel I. Grossman and Juan Mendoza, “Butter and Guns: Complementarity between Economic and Military Competition,” Economics of Governance, no. 2 (2001), Alex Mintz, “Guns Versus Butter: A Disaggregated Analysis,” The American Political Science Review 83, no. 4 (1989), Mintz and Huang, “Guns versus Butter: The Indirect Link,” Kevin Narizny, “Both Guns and Butter, or Neither: Class Interests in the Political Economy of Rearmament,” American Political Science Review 97, no. 2 (2003).

Citation: Eloranta, Jari. “Military Spending Patterns in History”. EH.Net Encyclopedia, edited by Robert Whaples. September 16, 2005. URL http://eh.net/encyclopedia/military-spending-patterns-in-history/

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Karmel, James
Kasper, Sherry Davis
Kates, Steven
Kaukiainen, Yrjö
Kay, Alison C.
Keech, William
Keech, William R.
Keefer, Philip
Keehn, Richard H.
Keeling, Drew
Keen, Steve
Kenen, Peter B.
Kennedy, Michael V.
Kenzer, Robert C.
Kerr, K. Austin
Khan, B. Zorina
Khula, Bruce A.
Kiefer, Kay
Kiesling, Lynne
Kim, Sukkoo
Kimura, Mitsuhiko
Kindleberger, Charles P.
King, Julia A.
King, Steve
Kirby, Maurice
Kitsikopoulos, Harry
Kleer, Richard A.
Klemann, Hein A.M.
Knaap, Gerrit
Knodell, Jane
Knoedler, Janet T.
Kolenda, Stephen A.
Kontorovich, Vladimir
Koot, Christian J.
Kostal, Rande W.
Kraft, Jeff
Kragh, Martin
Kristjanson-Gural, David
Kulikoff, Allan
Kurtz, Royce
Kuziemko, Ilyana
Kwan, Man Bun
Köll, Elisabeth
La Croix, Sumner
Lai, Cheng-chung
Laird, Pamela W.
Lal, Deepak
Landes, David S.
Landry, Michael
Langdon, John
Langlois, Richard N.
Larson, Bruce
Laurent, Jerome K.
Law, Marc
Lawlor, Michael S.
Lazarev, Valery
Lazarev, Valéry
Lee, Chulhee
Lee, Ming-Hsuan
Leeson, Peter T.
Leonard, Carol
Lester, Richard
Levenstein, Margaret
Levenstein, Margaret C.
Levy, Barry
Levy, David M.
Lewis, Frank D.
Libecap, Gary
Libecap, Gary D.
Licht, Walter
Lichtenstein, Nelson
Liebowitz, Jonathan
Liebowitz, Jonathan J.
Liggio, Leonard P.
Lin, Rachel Chernos
Lindert, Peter H.
Lindo-Fuentes, Héctor
Lindstrom, Diane
Lipartito, Kenneth
Logan, Trevon D.
Lufrano, Richard
Lydon, Ghislaine
Lyons, Thomas
Ma, Debin
MacDonald, John A.
MacKinnon, Mary
MacLeod, Christine
Macesich, George
Madison, James H.
Maharajh, Rasigan
Main, Gloria L.
Majewski, John
Mak, James
Makasheva, Natalia A.
Makinen, Gail
Malone, Laurence J.
Maloney, Thomas N.
Mancall, Peter C.
Mandell, Nikki
Mann, Ralph
Manning, Jason
Margo, Robert A.
Marichal, Carlos
Marr, Bill
Marr, William
Martínez Fritscher, André
Mason, David L.
Mason, Joseph R.
Masschaele, James
Matthews, Jeffrey J.
Maurer, Noel
Mayhew, Anne
Mazzoleni, Roberto
McAvoy, Michael R.
McCalla, Douglas
McCannon, Bryan C.
McCants, Anne E. C.
McCants, Anne E.C.
McClenahan, William M.
McCraw, Thomas K.
McCusker, John J.
McElderry, Andrea
McGreevey, William
McGuire, Mary K.
McGuire, Robert A.
McInnis, Marvin
McNamara, Peter
McSwain, James B.
Meardon, Stephen
Meissner, Christopher M.
Melosi, Martin V.
Menard, Russell R.
Menes, Rebecca
Metcalf, Michael F.
Metzler, Mark
Meulen, Jacob Vander
Meyer, David R.
Michener, Ron
Michie, Ranald C.
Middleton, Roger
Mierzejewski, Alfred C.
Miller, Karen S.
Miller, Marla R.
Mills, Geofrey T.
Miranti, Paul
Mirás-Araujo, Jesús
Misevich, Philip
Mitch, David
Mitchener, Kris James
Miyajima, Hideaki
Moehling, Carolyn M.
Moeller, Astrid
Moen, Jon
Moen, Jon R.
Moggridge, D. E.
Mokyr, Joel
Mongiovi, Gary
Montes, Leonidas
Moreno, Paul
Morris, Clair E.
Morris, Cynthia Taft
Mosk, Carl
Moss, Laurence S.
Mullin, Debbie
Munger, Michael
Munro, John
Munro, John H.
Murphy, Sharon Ann
Murray, James M.
Murray, John
Murray, John E.
Musacchio, Aldo
Mushin, Jerry
Muzhani, Marin
Nafziger, Steven
Namorato, Michael V.
Nance, Susan
Naseem, Anwar
Nawiyanto, S.
Neal, Larry
Neill, Robin
Neill, Robin F.
Nelson, Daniel
Nelson, Heather
Nelson, Jon P.
Neufeld, John
Nickless, Pamela
Nickless, Pamela J.
Noell, Edd
Noll, Franklin
Nonnenmacher, Tomas
Nunn, Nathan
Nuvolari, Alessandro
Nye, John
Nye, John V.C.
O’Brien, Anthony P.
O’Brien, Anthony Patrick
O’Connor, Alice
O’Driscoll, Gerald P.,Jr.
O’Rourke, Kevin H.
Oakes, James
Oberly, James
Odell, Kerry
Ofek, Haim
Offer, Avner
Officer, Lawrence
Officer, Lawrence H.
Olds, Kelly
Olsen, Randall J.
Olson, Keith W.
Oosterlinck, Kim
Otoo, Sharon
Owen, Laura J.
Pack, Spencer J.
Paganelli, Maria Pia
Palairet, Michael
Pamuk, Sevket
Pamuk, Şevket
Pandya, Sachin S.
Parente, Stephen L.
Parker, Randall E.
Parkerson, Donald
Parthasarathi, Prasannan
Paterson, Donald G.
Patterson, Perry L.
Peart, Sandra
Peart, Sandra J.
Pemberton, Hugh
Perdue, Peter
Perelman, Michael
Perez, Stephen J.
Perkins, Edwin
Perkins, Edwin J.
Perlman, Mark
Perren, Richard
Persson, Karl Gunnar
Peskin, Lawrence A.
Phillips, Jim
Phillips, William H.
Pilbeam, Pam
Pincus, Jonathan
Poitras, Geoffrey
Pokorny, Michael
Pomeranz, Kenneth
Pomfret, Richard
Poole, Keith T.
Porter, Theodore M.
Prakash, Om
Pritchett, Jonathan
Pritchett, Jonathan B.
Pryor, Frederic L.
Quinn, Stephen
Ramirez, Carlos D.
Ramrattan, Lall B.
Ranieri, Ruggero
Ransom, Roger
Ransom, Roger L.
Rashid, Salim
Rauchway, Eric
Ray, Himanshu Prabha
Reagan, Patrick D.
Redenius, Scott A.
Redish, Angela
Redmount, Esther
Reed, Barbara Straus
Rei, Claudia
Reid, Joseph D.,Jr.
Reis, Jaime
Reiss, Julian
Rhode, Paul
Richards, Lawrence
Richardson, David
Richardson, Gary
Richardson, Mike
Riello, Giorgio
Rima, Ingrid H.
Ringrose, David
Ritschl, Albrecht
Robertson, Andrew
Robertson, Paul
Robertson, Paul L.
Rock, David
Rockoff, Hugh
Roehner, Bertrand M.
Rollings, Neil
Romani, Roberto
Ronning, Gerald
Ros, Jaime
Rose, Clare
Rosenbloom, Joshua L.
Rosenthal, Jean-Laurent
Rossi, John Paul
Rothenberg, Winifred B.
Rothenberg, Winifred Barr
Rousseau, Peter L.
Roy, Tirthankar
Rubin, Jared
Russell, Malcolm
Ryan, Paul
Ryden, David
Ryden, David B.
Saito, Osamu
Salvucci, Linda K.
Salvucci, Richard
Salvucci, Richard J.
Samuels, Warren J.
Sanderson, Michael
Santoni, Gary
Santoni, Gary J.
Santos, Joseph M.
Santos-Redondo, Manuel
Saunders, Dawn
Sautet, Frederic
Schachter, Hindy Lauer
Schaefer, Donald F.
Schaps, David M.
Schell, William ,Jr.
Schenk, Catherine
Schenk, Catherine R.
Scherner, Jonas
Schiffman, Daniel A.
Schiltz, Michael
Schneirov, Richard
Schramm, Jeff
Schuler, Kurt
Schulze, Max-Stephan
Schwab, Robert M.
Schwartz, Anna J.
Schweikart, Larry
Schwekendiek, Daniel
Scott, Carole E.
Scott, Peter
Scranton, Philip
Self, James K.
Selgin, George
Sent, Esther-Mirjam
Sexton, Terri A.
Shammas, Carole
Shanor, Charles A.
Sharpe, Pamela
Shearer, Ronald A.
Shepherd, James F.
Sheridan, George J.,Jr.
Sheriff, Abdul
Shiue, Carol H.
Short, Joanna
Shubik, Martin
Shughart, William F.,II
Shy, John
Sicilia, David B.
Sicotte, Richard
Sicsic, Pierre
Siklos, Pierre
Silva, Jonathan
Silver, Morris
Simons, Kenneth L.
Simpson, James
Singleton, John
Sivin, Nathan
Sjostrom, William
Skemp, Sheila L.
Smil, Vaclav
Smiley, Gene
Smith, Daniel Scott
Smith, Fred H.
Smith, John K.
Smitka, Michael
Snooks, Graeme D.
Snowden, Kenneth A.
Snyder, D. Jonathan
Snyder, Jonathan
Sokoloff, Kenneth L.
Sorensen, Todd
Southall, Roger
Spechler, Martin C.
Spoerer, Mark
Spolaore, Enrico
Squatriti, Paolo
St. Clair, David J.
Stabile, Donald
Stabile, Donald R.
Stallbaumer-Beishline, L. M.
Stanciu Haar, Laura N.
Stanger, Howard R.
Stead, David
Stebenne, David
Steckel, Richard H.
Steeples, Douglas
Steindl, Frank
Stewart, Larry
Stitt, James W.
Stobart, Jon
Subramanian, Lakshmi
Sullivan, Richard J.
Sullivan, Timothy E.
Sumida, Jon
Sundstrom, William A.
Surdam, David
Surdam, David G.
Sutherland, Heather
Suzuki, Masao
Swearingin, Steven D.
Sylla, Richard
Szenberg, Michael
Szostak, Rick
Tabak, Faruk
Tallman, Ellis W.
Tandy, David
Tarry, Scott E.
Tassava, Christopher
Tauger, Mark B.
Taylor, Alan M.
Taylor, Christiane Diehl
Taylor, Graham D.
Taylor, Ranald
TeBrake, William
Teagarden, Ernest
Tebeau, Mark
Teichgraeber, Richard F.
Temin, Peter
Thomasson, Melissa A.
Thomson, Ross
Thornton, Mark
Tiffany, Paul
Tilly, Richard
Tolliday, Steven
Tollison, Robert D.
Toma, Mark
Tomlinson, Jim
Toninelli, Pier Angelo
Toniolo, Gianni
Touwen, Jeroen
Traflet, Janice M.
Trescott, Paul B.
Triner, Gail D.
Troesken, Werner
Tulchin, Joseph S.
Tuttle, Carolyn
Tweedale, Geoffrey
Twomey, Michael J.
Tympas, Aristotle
Ugolini, Laura
Vedder, Richard
Vedder, Richard K.
Velde, François R.
Ventry, Dennis J.
Verdon, Nicola
Ville, Simon
Virts, Nancy
Vitell, Scott J.
Vivenza, Gloria
Volckart, Oliver
Voth, Hans-Joachim
Vries, Peer
Wahl, Jenny
Wahl, Jenny B.
Wale, Judith
Wallis, John J.
Wallis, John Joseph
Wallis, Patrick
Walsh, Lorena S.
Walsh, Margaret
Walvin, James
Wanamaker, Marianne
Ward, Marianne
Wardley, Peter
Waterman, A. M. C.
Weber, Cameron M.
Wegge, Simone A.
Weidenmier, Marc D.
Weiher, Kenneth
Weir, Robert E.
Weir, Ron
Weiss, Thomas
Wells, Wyatt
Wendt, Ian C.
West, Martin
Westerman, Thomas D.
Whaples, Robert
Whatley, Christopher A
Whatley, Warren C.
Wheatcroft, Stephen
Wheeler, Hoyt N.
Wheelock, David C.
White, Eugene N.
White, Michael V.
White, Nicholas J.
Whitehead, John C.
Whitman, T. Stephen
Wicker, Elmus
Wilkins, Mira
Will, Pierre-Étienne
Williamson, Samuel H.
Wilson, John
Wilson, John F.
Winpenny, Thomas
Winpenny, Thomas R.
Wishart, David M.
Woeste, Saker
Wolcott, Susan
Wolf, Nikolaus
Wolff, Robert
Wood, Geoffrey
Wood, John
Wood, John H.
Woodward, Ralph Lee
Worden, Nigel
Wright, Gavin
Wright, Robert E.
Wright, Tim
Wuthrich, Bryan
Wynne, Ben
Yeager, Mary A.
Young, Garry
Young, Jeffrey T.
Zalewski, David A.
Zamagni, Vera
Zeiler, Thomas W.
Zevin, Robert
Zieger, Robert H.
Ziliak, Stephen
Ziliak, Stephen T.
de Fátima Brandão, Maria
del Mar Rubio, M.
van der Beek, Karine
van der Eng, Pierre
Álvarez-Nogal, Carlos
Ó Gráda, Cormac

The Size of Nations

Author(s):Alesina, Alberto
Spolaore, Enrico
, Enric

Published by EH.NET (February 2004)

Alberto Alesina and Enrico Spolaore, The Size of Nations. Cambridge, MA: MIT Press, 2003. x + 261 pp. $35 (cloth), ISBN: 0-262-01204-9.

Reviewed for EH.NET by Leonard Dudley, Economics Department, Universite de Montreal.

Nations tend to develop myths that attribute positive qualities to their founders and uniqueness to their political institutions. However, there is a quip attributed to Bismarck, “People will sleep better not knowing how their sausage and politics are made.” In this book, Alberto Alesina and Enrico Spolaore deconstruct the Bismarckian sausage factory in order to show us how states are made. They present their theoretical argument in eight steps, each beginning with a verbal outline followed by a formal model. Asterisks guide the non-technical reader around the algebraic danger zones. The result is a remarkable set of propositions that leaves little place for individual leaders, heroism, uniqueness, or even a subtitle.

The authors begin by discussing the simplest kind of law-making factory, a unitary state with pluralistic political institutions. They argue that in deciding where to place their political boundaries, voters trade off the advantage of a larger state in providing public goods at lower cost against the disadvantage of increased heterogeneity of preferences that would result. The authors show that total welfare is maximized when the world is divided into an optimal number of identical states.

Subsequent chapters add complexity to this initial core. A first modification allows for unilateral secession of border regions. Since residents of peripheral areas are more distant from the capital, where the public good is assumed to be produced, they receive fewer benefits for their taxes and therefore have an incentive to secede. As a result, under these more realistic assumptions, the equilibrium number of states is greater than the number that maximizes total welfare.

A second modification of the initial structure permits transfer payments that compensate potential secessionists in peripheral regions for the low benefits that they receive. If such schemes are feasible, then the equilibrium number of regions approaches the optimum. However, as the authors demonstrate in an elegant algebraic proof, if a border region agrees to join a larger state, there is a time-inconsistency problem. Once unification has occurred, since the median voter of the new state pays in taxes more than she receives in transfers, she will approve a decision to eliminate the transfer payments.

As Frederic Lane (1958) argued in a seminal paper, the vast majority of historical states do not fit the democratic model preferred by Western political economists. Rather, actual political decision-making has tended to be monopolized by a minority of citizens who provide protection in return for tax revenues. Alesina and Spolaore therefore devote a chapter to states ruled by a monopolizer of power. Their Hobbesian “Leviathan” is a ruler who need consider the welfare of only the fraction delta of his subjects. They demonstrate that when delta is equal to one-half, the result is the optimal number of states. More generally, with delta smaller than one-half, the outcome is a set of large states that are too few in number.

So far, the model predicts that actual democratic states will be too small to maximize the welfare of their citizens. How then can they account for evidence that the wealthiest states in terms of per-capita GDP tend to be small in terms of population? The authors devote a chapter to commercial policy, arguing that if trade barriers are lowered, it is easier for small states to be viable since they can reap scale economies by selling in foreign markets. As the authors recognize, however, trade policy is itself a function of country size, since smaller states will tend to favor freer trade.

The last three steps in the discussion deal with conflict, generalized war and federalism. The reader learns that there is also a two-way relationship between country size and conflict. For a given probability of conflict, a large country offers advantages to its citizens because it can produce the public good of protection more cheaply than a smaller country. However, since larger countries are less dependent on trade than smaller ones, a world of larger states can afford to have more frequent trade-disturbing international conflicts. As for the degree of decentralization, it depends on the extent of democracy. The higher the percentage of the population to be considered in political decisions, the greater is the optimal degree of decentralization.

An empirical chapter puts some of the authors’ principal hypotheses to the test. Are actual states too small for the efficient provision of public goods? Evidence that the public share is larger in small states than large states (with size measured by population), suggests that the cost of public goods is higher in the former. Does having too many states lower individual welfare? The higher per-capita GDP and faster per-capita economic growth in large states compared to small states in the postwar period again supports the theoretical result that the number of states is great than optimal from a welfare standpoint.

Finally, in an historical chapter, the authors apply their theoretical model to explain systematic changes in state size since the mosaic of small political units in medieval Europe. After 1500, they argue, the number of states declined, because an increase in trade restrictions and a greater frequency of international conflict made small states nonviable. Outside Europe, the movement to large empires was excessive, owing to the dictatorial nature of political power in these regions. In the late eighteenth and nineteenth centuries, rising external threats and a desire to have more weight in commercial disputes led to unification in the United States, Italy and Germany. Then, increasing protectionism in the late nineteenth century caused the industrialized countries to search for colonies as a vent for surplus production. Finally, a movement to free trade after World War II favored the breakup of colonial empires, including that of the Soviet Union, into a large number of small, open economies.

This book is a tour de force, offering a highly original synthesis of political science, economics, contemporary statistics, and historical facts. The argument is crystal-clear. And the authors succeed in building an inexorable momentum as they proceed step by step from the simplest model to the complexities of the real world. Their thesis that first, voters trade off the lower cost of public goods against increased heterogeneity in determining their state’s borders and second, this decision is sensitive to the probability of conflict and the cost of exporting to foreign markets, provides a powerful tool for explaining historical change.

But do the primary forces that determine state size lie on the demand side? For William McNeill (1982), it has been primarily military technology — a supply-side factor — that has determined state size. When military scale economies increased, he argued, it became less costly for centralized rulers to put down revolts in outlying regions. While the authors cite McNeill’s work, they fail to take into account that it implies a completely different vision of international conflict from the one they model. When military technology is stable over long periods, state borders will tend to remain in equilibrium and major conflicts should be the exception. Such was arguably the case for long periods of Chinese and Roman history, for the first part of the nineteenth century and for the last half of the twentieth century. Systematic conflict will then arise when the cost of providing protection changes, as occurred in the early modern period and between 1850 and 1950. In short, if we drop the assumption that the probability of conflict is exogenous, we need a theory that deals explicitly with changes in the cost of providing protection.

Moreover, on the demand side, can we assume that the willingness to trade. Too, is essentially exogenous? In his 1948 Beit lectures at Oxford University, Harold Innis (1950) argued that the size of nations was determined by the relative costs of storing, decoding and transmitting information. With the diffusion of standardized Latin and Carolingian script in the centuries preceding the high Middle Ages, he suggested, the cost of storing information in multiple copies fell. As a result, European states declined in size, and there arose considerable trade across political boundaries. In the early modern period, the diffusion of printing in the vernacular led a movement in the opposite direction, with the formation of large nation states and growing barriers to trade across linguistic borders. More recently, with a return toward the medieval pattern in many parts of Europe, can we ignore the decentralizing effects of the microelectronics revolution?

These considerations of military and informational technology suggest an alternative interpretation for the authors’ statistical results from the most recent period. The negative correlation between country size and the public share could reflect not the cost of public goods but the formation in the past of linguistic zones of different sizes. Voters today in large, heterogeneous states may simply be less willing to share their income than those in small, homogeneous states. If so, the negative correlation between the public share and country size need not be a sign that small states are inefficient.

The positive sign of country size in the income and growth regressions is also problematic. Here the effect of low income on the diffusion of military innovations is important. In the nineteenth century, the poverty of Africa and Asia made these regions easy prey for the colonial powers that conquered them in bits and pieces. When these powers subsequently retreated under pressure from nationalist movements, they left a large number of poor, small states whose boundaries bore no relationship to voter choice as modeled by the authors. Yet these states arguably dominate the authors’ regressions. Might causality not go from poverty to state size?

In short, by the end of the tour of the Bismarckian sausage factory, the reader will have satisfied her immediate hunger to understand how states are formed. Nevertheless, she will likely put the book down with the feeling that there is more to the question of the size of nations than the standardized frankfurters cranked out by Alesina and Spolaore. Of course, provoking the reader in this way may be precisely their intention. They have provided us with what will surely become a standard reference point for speculation about historical change.

References

Innis, Harold A., Empire and Communications (Oxford: Clarendon, 1950).

Lane, Frederic C., “Economic Consequences of Organized Violence,” Journal of Economic History, 18 (December 1958), pp. 401-417.

McNeill, William H., The Pursuit of Power (Chicago: University of Chicago Press, 1982).

Leonard Dudley is the author of The Word and the Sword: How Informational and Military Technology Have Shaped Our World (Oxford: Blackwell, 1991).

Subject(s):Urban and Regional History
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII

No Ordinary Academics: Economics and Political Science at the University of Saskatchewan, 1910-1960

Author(s):Spafford, Shirley
Reviewer(s):Neill, Robin F.

Published by EH.NET (September 2000)

Shirley Spafford, No Ordinary Academics: Economics and Political Science at

the University of Saskatchewan, 1910-1960. Toronto: University of Toronto

Press, 2000. ix + 272 pp. $45 (cloth), ISBN: 0-8020-4437-9.

Reviewed for EH.NET by Robin F. Neill, Department of Economics, University of

Prince Edward Island and Carleton University.

In the words of W. C. Murray, President of the University of Saskatchewan from

its founding in 1910 until his retirement in 1937, his economists were to be

“no ordinary academics” because, following practice at the University of

Wisconsin (as Murray saw it), they were to serve the economic and political

interests of the farmers who, ultimately, paid the university’s bills. There

was little, if any, institutional and personnel difference between economics

and political science at the university, in part because political science had

yet to identify itself as a separate social science, and in part because the

mission of economics at Saskatchewan was to shape national and provincial

policy in the interests of Western Canada.

No Ordinary Academics is well written in the tradition of Canadian

academic biography. Shirley Spafford is to be congratulated on a contribution

to the field of Canadian Intellectual History. Still, some caveats for the

would-be reader are in order.

The book is not a work in the history of ideas. Its approach is personal and

institutional. With the exception of a few pages describing a strong element in

the historiographical stance of Vernon Fowke, the reader is left with just a

suggestion of what the content of Economics and Political Science was on the

Saskatoon campus. Classroom economics was what it was elsewhere, but what it

was elsewhere is not revealed. It seems to have been unimportant to the people

involved. Having the correct policy stance, one consistent with the views of

the agrarian community to be served, was more important. Political science was

constitutional history and a smattering of the classics in political

philosophy. Competence in advanced neoclassical theory, or, later, in Keynesian

theory, in mathematical economics, or econometrics was not a requirement,

though it was increasingly present in the department. Of course, there were

courses in introductory economics, money and banking, international trade, and

public finance.

It was important for the faculty to be adequately schooled in economics. Until

Murray resigned in 1937, to be Scots was also important. To be Scots and

Presbyterian was to be among the chosen.

Murray, in the course of a long interview, showed only lukewarm interest in

hiring him until it came out that [R. McG.] Dawson was Nova Scotian, and proud

of it, at which point Murray, whose fondness for Nova Scotia had never

diminished, was completely won over (p. 115).

The book has some tantalizing interest for the historian of economic thought in

Canada. For example, we all know that H. A. Innis, at Toronto in the 1930s, was

less than accepting of the socialist historian, Frank Underhill. What I expect

few of us knew, and Spafford has revealed, is that Underhill, while a member of

the Department of Economics and Political Science at Saskatchewan, “published a

searing criticism of Innis’s book on the fur trade.” But here we experience the

shortcoming of Spafford’s book. She offers not a clue as to the views expressed

by Innis or Underhill in this matter, and she does not provide detailed

bibliographical references to the literature in question. Indeed, the book has

thirty-nine pages of endnotes, citing mostly other biographies, personal

papers, and letters, and it has an excellent nineteen-page index, but it has no

bibliography or list of references. The present reviewer would have benefited

from the in-text, general references to the works of Fowke and Timlin in the

chapter dealing with their contributions, but considerable additional digging

would have been necessary before the newly revealed items could have been added

to attempted definitive lists of their publications. Spafford recounts in some

detail the personal conflicts and power struggles in the department, but, some

intriguing clues aside, she throws no light on their doctrinal dimensions.

Weak with respect to ideas and bibliography, No Ordinary Academics is

strong with respect to personal, social, and institutional history. Economics

at Saskatchewan was heavily influenced by the preferences of the self-selecting

elite that shaped Canadian universities, especially between 1910 and 1940. The

account presents an impressive list of outstanding Canadian social scientists

(which is not to say economists, as that term is now understood) whose early

careers included a stay in the department at Saskatchewan. In the end, however,

given the financial constraints on the university in the 1930s, it was

home-grown scholars, influenced by conditions on the Prairies, that made a

distinctively western contribution to economic analysis of the Canadian case.

(For the intellectual substance of their contribution see R. F. Neill,

“Economic Historiography in the 1950s: the Saskatchewan School,” Journal of

Canadian Studies, Vol. 34, 1999, pp. 243-260.)

No Ordinary Academics is an account of selected external factors shaping

economics at the University of Saskatchewan between 1910 and 1960. The

principal members of what elsewhere has been called the Saskatchewan School —

Vernon Fowke, George Britnell, Mabel Timlin, and Ken Buckley — were no

ordinary academics. From Spafford’s history we know that they were idealists,

even romantics, who put economics at the service of their altogether honorable

social goals. Their rewards were largely non-monetary; working as they did for

their students, their associations, and their governments, provincial and

national, frequently at their own expense, and despite appallingly low

remuneration.

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII