Capitalism at War Mark Harrison* Department of Economics and CAGE, University of Warwick Centre for Russian and East European Studies, University of Birmingham Hoover Institution on War, Revolution, and Peace, Stanford University Abstract The nineteenth century witnessed the triumph of capitalism; the twentieth century saw the bloodiest wars in history. Is there a connection? The paper reviews the literature and evidence. It considers first whether capitalism has lowered the cost of war; then, whether capitalism has shown a preference for war. Both questions are considered comparatively. Neither question receives a clear cut answer, but to simplify: Yes; No. Keywords: Capitalism, Corporate Political Action, Keynesianism, Public Finance, State Capacity, Trade, War. JEL Codes: N4, P1. * Mail: Department of Economics, University of Warwick, Coventry CV4 7AL, United Kingdom. Email:
[email protected]. This paperis in preparation for The Cambridge History of Capitalism, edited by Larry Neal and Jeff Williamson. Earlier versions were presented at the German Historical Institute in Moscow as one of “Ten Lectures about the War,” June 17 and 18, 2011, the XVI World Economic History Congress, Stellenbosch University, South Africa, July 9 to 13, 2012, and a conference on the Economic History of Capitalism, BBVA, Madrid, November 14 to 16, 2012. I thank Hein Klemann, Sergei Kudriashov, Andrei Markevich, Richard Overy, Leandro Prados de la Escosura, James Robinson, and other participants for discussion; Sascha O. Becker, Michael S. Bernstam, Nick Crafts, Erik Gartzke, and Vasily Zatsepin for comments and advice; Jari Eloranta for access to data; Larry Neal and Jeff Williamson for inspiration and guidance; the University of Warwick for research leave and financial support; and the Hoover Institution for generous hospitality.