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Crude Calculations: Productivity and the Profitability of Conquest

Published online by Cambridge University Press:  09 June 2021

Andrew J. Coe Open the ORCID record for Andrew J. Coe [Opens in a new window]  and
Jonathan N. Markowitz Open the ORCID record for Jonathan N. Markowitz [Opens in a new window]
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Abstract

For many centuries, conquest was commonplace, and its attractiveness was central to the character of international politics. Why has it declined? Existing theories cannot explain why powerful countries no longer conquer states with easily extractable wealth. We develop an explanation based on the relationship between a potential conqueror's economic productivity and its ability to profit from conquest. Productivity has opposing effects on conquest's profitability: it raises the opportunity cost of each asset diverted to conquest, but also reduces the quantity of assets required for conquest. The net effect is determined by the composition of investment in innovation. We document that since at least 1950 investment has been predominantly aimed at civilian, not military innovations, so that rising productivity should reduce conquest's net profitability. Using cost analyses of comparable wars, we estimate bounds on the profitability of conquering the oil and gas reserves of the Persian Gulf, a very tempting target, for the United States and Iraq, two potential conquerors of widely differing productivity. Though both mechanisms operate, we find that the net effect of higher productivity is to reduce the profits from conquest. Moreover, this net effect is large enough to render conquest generally unprofitable for contemporary high-productivity states.

Keywords

Conquesteconomic productivitycost of warterritorial conflictoil warsinternational norms
Type
Research Article
Information
International Organization , Volume 75 , Issue 4 , Fall 2021 , pp. 1058 - 1086
Copyright
Copyright © The IO Foundation, 2021

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