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In our attempt to study historical examples of the virtuous (or vicious) cycle of war and the economy, we have rejected abstract generalizations. This is because the economic systems and methods of war that we encounter vary with changes in the environment and historical periods. But neither do we intend to scrutinize each individual historical incident or to merge the findings of history, economics, and other disparate fields of study.
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Mineral products and handmade crafts are not themselves agricultural products. But since mineral products are an output from the primary sector of the economy just like agricultural products, they too are characterized by diminishing returns. In addition, people began tilling the earth around the same time that they started mining it. Handmade crafts involved modifying and combining agricultural products and mineral products to increase their utility and added value. As such, the productivity of these items can also be increased to a limited degree. But since the production of handmade crafts does not increase at an accelerating rate despite the technological innovation and mass production of industrial society, it can be categorized as a product of agricultural society.
Theodore W. Schultz, Transforming Traditional Agriculture (New Haven and London, 1964).
Richard A. Levins and Williard W. Cochrane, “The Treadmill Revisited,” Land Economics 74:4 (November 1996), pp. 550–553.
The claim that the critical path in the development of human civilization runs through the developmental history of Europe may sound Eurocentric. The comparison of Western development to Asian stagnation and the observation that capitalism emerged not in Asia but in Europe are familiar subjects to students of economic history. For example, eminent American economic historian David Landes has made the explicitly Eurocentric argument that Europe’s unique geography, cultural attitudes, and political and social organizations were factors that enabled its economic growth. Landes’ conclusion was that the poor countries (of Asia) must learn from the rich countries (of Europe) and follow in their footsteps if they are to enjoy economic growth. But Landes’ argument is only valid if we assume that the rich and poor states exist in a state of free competition. In other words, this argument does not take into account the international hierarchy imposed by European hegemony. In contrast with Landes, our starting point is acknowledging the existence of hegemonic states and an international hierarchy; our approach is examining the transfer of hegemony and changes in international relations; and our goal is attempting to deduce from this the principles by which individual states and human civilization as a whole have developed. Of course, it is undeniable that European states were the first to become industrial societies and that they have exercised global hegemony on this basis. That it is why it is not Eurocentric to acknowledge in our study of the principles of economic growth that the system of expansive reproduction inherent to industrial society came into being in Europe and has since spread around the world. Indeed, we intend to pay close attention to the decline of Western hegemony and the possibility of discovering new principles for the development of nations and of human civilization. David S. Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York, 1998).
Timothy H. Parsons, The Rule of Empires: Those Who Built Them, Those Who Endured Them, and Why They Always Fail (Oxford, 2010), pp. 111, 119.
This aspect is reminiscent of the theory of “military overstretch” proposed by Paul Kennedy, the theory that excessive expenditures exhaust the state’s coffers and lead to the state’s decline. But this theory only applies to agricultural empires. If a state is enjoying steady and endogenous technological advancement and capital accumulation (as in an industrial society), it is theoretically possible to reduce expenditures relative to production. And even if such a state runs out of money, it can raise the funds it needs to wage war through various financial products that are guaranteed by the huge profits the state is expected to earn in the future. The limits of the military overstretch theory have been demonstrated by Germany and Japan since World War II. The modern history of these two states makes clear that a state defeated in war can rise again as an economic power. Thus, the fact that Spain declined between the sixteenth and eighteenth centuries because of the “military overstretch” of unprofitable wars and was unable to rise again is evidence that it was a typical agricultural empire. At any rate, we will return to this argument in the section that deals with war and the economy in industrial society.
William H. McNeill, The Pursuit of Power (Chicago, 1982), p. 133.
John Brewer, The Sinews of Power: War, Money, and the English State, 1688– 1783 (London, 1989).
In this sense, nationalism can be said to have first developed in the Netherlands and England between the sixteenth and eighteenth centuries. It was previously thought that nationalism was born in the turmoil of the French Revolution at the end of the eighteenth century, but the prevailing view in recent years has been that nationalism appeared earlier than that in the Netherlands and in England. This is the background for Philip S. Gorski’s argument that nationalism developed as a political discourse during the period of the Dutch Revolt, a phenomenon that he called “early modern nationalism.” Even Anthony D. Smith, one of the leading scholars of nationalism today, acknowledges that the ideology of nationalism appeared not in France but rather in the Netherlands and England in the early modern period. Indeed, the social networks that formed at English coffeehouses, pubs, and churches during the seventeenth and eighteenth centuries stimulated lively debates about the meaning of the wars being fought with the Netherlands and France and of the national interest that they were supposed to protect. There is no doubt that this keen understanding of the national interest was a domestic source of energy that propelled England to global hegemony. Philip S. Gorski, “The Mosaic Moment: An Early Modernist Critique of Modernist Theories of Nationalism,” The American Journal of Sociology 105:5 (2000), pp. 1436–1438, 1458–1462; Anthony D. Smith, The Cultural Foundations of Nations: Hierarchy, Covenant, and Republic (Malden and Oxford, 2008), x.
Fernand Braudel, Civilization & Capitalism 15th–18th Century, Vol. 3: The Perspective of the World, trans. Siân Reynolds (New York, 1979), pp. 614–615.
The term “military-industrial complex” was originally coined after World War II to warn of the influence exercised by the political and financial interests shared by the defense industry, military leaders, and lawmakers. For this reason, the term’s connotations tend to be negative or even conspiratorial. In this book, however, we have used the term in a broader and more neutral sense to signify the close reciprocal relationship between war and industry.
Paul Kennedy, The Rise and Fall of the Great Powers: Change and Military Conflict from 1500 to 2000 (New York, 1987), p. 180.
McNeill, Pursuit of Power, pp. 251–252; the emphasis is ours.
Kennedy, Rise and Fall, p. 367.
A. F. K. Organski and Jacek Kugler, “The Costs of Major Wars: The Phoenix Factor,” The American Political Science Review, Vol. 71, No. 4. (December 1977), pp. 1347–1366; Tai-Yoo Kim et al., “War, Peace, and Economic Growth: The Phoenix Factor Reexamined,” mimeograph.
E. A. Wrigley, Energy and the English Industrial Revolution (Cambridge, 2010); for efforts to understand England’s Industrial Revolution through the lens of world history, see R. Bin Wong, China Transformed: Historical Change and the Limits of European Experience (Ithaca, 1997) and Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, 2000).
Jan de Vries, The Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present (Cambridge, 2008), p. 137.
François Crouzet, “Wars, Blockade, and Economic Change in Europe, 1792–1815,” The Journal of Economic History 24:4 (1964), pp. 567–588.
Charles H. Wilson, England’s Apprenticeship, 1603–1763 (London, 1971), pp. 267–269.
P. J. Cain and A. G. Hopkins, “The Political Economy of British Expansion Overseas, 1750–1914,” The Economic History Review, Second Series, 33:4 (November 1980).
Robert Kubicek, “British Expansion, Empire and Technological Change,” The Oxford History of the British Empire vol. 3: The Nineteenth Century (Oxford, 1999), p. 248.
Deirdre McCloskey, Enterprise and Trade in Victorian Britain: Essays in Historical Economics (London, 1981), p. 55.
- The Virtuous Cycle of War and the Economy: Theory and History
- Springer Singapore
- Chapter 1
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