Introduction

Money matters to the military; it is needed to finance fighting, and desire to acquire it is often the motive for fighting. Fighting matters for the economy, since military power and conflict have shaped economic development. Both fighting and finance are often driven by the same basic human motives: fear and greed. This book examines the inter-action of economics and conflict. There is a large economic literature devoted to conflict and to finance and resource allocation by the military, which is known either as defence (or defense) economics or as peace economics. The journal of the subject is called Defence and Peace Economics. Economists are the specialists in studying money, though not usually in making it, and they have contributed much to military analysis. For instance, Thomas Schelling gained a Nobel Prize in Economics for his game-theory analysis of strategy, particularly nuclear strategy. Since defence economics is often about attack and peace economics is often about war, I have used the title military economics: the economics of the use of organised force.