Peace economics

J Brauer | © Stone Garden Economics

A couple of days ago, on 17 August 2012, my colleague Prof. Raul Caruso of the Università Cattolica del Sacro Cuore in Milan, Italy, and I completed work on a peace economics entry for wikipedia, the online encyclopedia.

The idea to create such an entry had been on my mind for some time. The final spur was provided late in 2011 by Prof. Roger MacGinty, now at the University of Manchester, United Kingdom, when he asked me to contribute a chapter to his forthcoming handbook on peace building (London: Routledge, 2012). After crafting a first draft, I invited Raul to co-author the chapter. (I am a happy camper thinking alone, but my work gets better when colleagues join as co-authors and bring their own expertise to bear.)

For Roger’s book, Raul and I defined peace economics as “the branch of economics that studies the design of the sociosphere’s political, economic, and cultural institutions and their interacting policies and actions to prevent, mitigate, or resolve any type of latent or actual violent conflict within and between societies.” This definition became the basis for the wiki entry.

Taking aspects from Johan Galtung (positive peace) and Kenneth Boulding (stable peace), we write that peace economics “focuses on the benefits of (re)constructing societies with a view toward achieving irreversible, stable peace.” The design aspect in our definition links to work done by economists in mechanism design, a field of study recently popularized in Richard Thaler’s and Cass Sunstein’s book Nudge. Mechanism design addresses the question of how to design a social system such that a desired outcome will in fact be achieved.

A key insight here, from behavioral economics, is to work with human nature, not against it: Focus not on how humans “should” behave but on how humans do behave, and then see what it takes to change the social structure within which the behavior takes place. The logic is clear: Structure -> behavior -> outcome. “Fix” the structure and observe the outcome obtained. In the past, many peace treaties failed (unstable peace), presumably because the new social structure merely reinvented the old one. If one wants stable peace, fiddle with the underlying conditions, not with the humans.

In our wiki piece, Raul and I distinguish peace economics from war economics, defense (or even military) economics, conflict economics, and security economics. The fields overlap, yet each is distinct in its subject matter. We were concerned with the focus now given to security—especially in the post-9/11 world—whereby everything becomes “securitized,” and with huge (read: costly) implications. It seemed someone should say loudly that security and peace are different things, that peace is security but security is not peace, that security is costly and that peace is in fact cheap. I also make this point in my new book, Peace Economics (US Institute of Peace Press, 2012), written with Prof. Paul Dunne of the University of Cape Town.

Raul and I point to alternative definitions of peace economics in our wiki peace, and we also discuss three examples of applying peace economics in the “real world,” one that ended in a clear failure—the post-WW I peace treaty—and two that ended in relative success—the post-WW II peace arrangements and the founding of what has become the EU (the eurozone part of which is now in deep trouble, in large part because of design flaws).

While we hope that you read and widely share the wiki link, note that wikipedia is an open edit platform: Anyone can edit any entry. By the time you try to read or reread the peace economics entry, it may already have changed from the original that Raul and I contributed. (And I can certainly imagine changes, for example including more history both of peace economics and of peace economists.)

Once upon a time, peace was viewed as belonging to the mental world of “idealists.” This has changed. Because war, violence, and security are costly—and because the violence is often severe, widespread, and long-lasting—local and global business would rather have peace than violence and war. Consequently, peace, peace economics, and the business of peace now are topics entirely suitable for business schools, management consultancies, and state and private corporations.

Just as business school curricula and corporate management eventually reacted to global concerns about issues such as environmental destruction, sweat shops, and gender discrimination, they now have but little choice and must deal with the increasingly costly issues of violence and security (for example, loss of markets; supply-chain disruptions; high employee turnover; employee and facilities security). For some, violence still pays of course but for the vast majority of people, businesses, and societies, peace is preferred.

In the end, it is not war and profit that go together. Instead, peace and profit is the new mantra. As a field of research, peace economics explores and specifies the link and can help with the design of stable, peaceful societies.

J Brauer is Professor of Economics, James M. Hull College of Business, Augusta State University, Augusta, Georgia, USA.

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