Peace economics

Peace economics is a specialized branch of economics. Peace economics focuses on the design of the sociosphere's political, economic, and cultural institutions and their interacting policies and actions with the goal of preventing, mitigating, or resolving violent conflict within and between societies. This violent conflict could be of any type and could involve either latent or actual violence. Presuming knowledge of the cost of violence, it focuses on the benefits of (re)constructing societies with a view toward achieving irreversible, stable peace. Together with approaches drawn from disciplines such as anthropology, sociology, psychology and cognitive science, geography and regional science, and political science and international relations, peace economics forms part of peace science, an evolving part of peace and conflict studies. Peace economics is a specialized branch of economics. Peace economics focuses on the design of the sociosphere's political, economic, and cultural institutions and their interacting policies and actions with the goal of preventing, mitigating, or resolving violent conflict within and between societies. This violent conflict could be of any type and could involve either latent or actual violence. Presuming knowledge of the cost of violence, it focuses on the benefits of (re)constructing societies with a view toward achieving irreversible, stable peace. Together with approaches drawn from disciplines such as anthropology, sociology, psychology and cognitive science, geography and regional science, and political science and international relations, peace economics forms part of peace science, an evolving part of peace and conflict studies. Peace economics is distinct from both war economics and military economics, even though there may be substantial overlap between these disciplines. Peace economics is also distinct from conflict economics, and it is distinct from security economics. A key difference between peace economics and these related fields is that peace economics emphasizes a study of the presence of peace, as distinct from studying the absence or presence of conflict, violence, war, or insecurity. Peace economics has also been defined as 'the use of economics to understand the causes and effects of violent conflict in the international system and the ways that conflict can be avoided, managed, or resolved.' This restricts the subject matter to the international realm and leaves out the study of peace itself. Walter Isard defines peace economics as 'generally concerned with: (1) resolution, management or reduction of conflict in the economic sphere, or among behaving units in their economic activity; (2) the use of economic measures and policy to cope with and control conflicts whether economic or not; and (3) the impact of conflict on the economic behavior and welfare of firms, consumers organizations, government and society.' The notion of violence is absent and peace itself is not studied, but the level of analysis can be other than conflict between states. In a context restricted to international trade, another author writes that 'Peace economics studies ways to eradicate and control conflict as well as to assess conflict's impact on society.' The notion of violence is not explicit and the benefits of peace are seen only inasmuch as a reduction of conflict may improve opportunities for expanded global trade. Others make a distinction between 'productive' and 'unproductive' or 'appropriative' economic activities their starting point of analysis in peace economics. Economics Nobelist Jan Tinbergen defines peace economics as 'economic science used for prohibits as an instrument of settling conflicts between nations and the world in a way that warfare is punished'. Violence is addressed only at the level of sovereigns, not dealing with civil war or debilitating organized or individual-level criminal violence. In related work, Tinbergen writes about a world order that would inhibit violence and permit peace between and among states. In his view, this requires a 'world government', a sentiment not now commonly agreed among economists. These definitions of peace economics all share Johan Galtung's characterization of negative peace (the absence of violent conflict) as opposed to positive peace (the presence of peace-enabling structures). A number of peace economists are explicit about the use of particular explanatory schema to be applied in peace economics, e.g., rational choice theory. In contrast, the main definition of peace economics is open to a variety of approaches. Virtually all authors acknowledge that peace economics is part of both positive economics and normative economics. While for most contemporary economists, work in positive economics may lead them to lay out a descriptive array or evaluation of policy choices from which one that is most valued is recommended to or chosen by policy makers, in peace economics, in contrast, it is the norm of peace to be achieved that inspires the search for a system design that can reliably deliver on the desired norm. Peace economics is built on general systems theory exemplified by the work of Kenneth Boulding. Earth may be viewed as a self-regulating (homeostatic) system, consisting of natural and social subsystems. In each, deviation from a set goal is self-corrected through feedback loops. Homeostatic systems are commonly observed in nature, such as in ecology and in the physiology of organisms (e.g., self-regulation of population sizes, self-regulation of body heat). The systems concept has been adopted in the engineering sciences, for example in designing thermostats. The user sets a desired goal state (temperature), the instrument measures the actual state, and for a deviation of sufficient degree a corrective action is taken (heating or cooling). Relatively new is the insight that social systems designed to achieve certain purposes (e.g., the retirement or pension system) imply a choice architecture that may permit failed or failing social systems to persist. Similarly, choice architecture may facilitate the (re)design of institutions aimed at securing beneficial social outcomes such as peace. This is social engineering applied to the problem of peace (peace engineering) and overlaps with ideas of mechanism design (reverse game theory) in which a solution is stipulated a priori and the structure of the game that would bring about the desired outcome is inferred. In this way, system design links back to normative economics. The classical English liberals of the 19th century largely believed that free trade promoted peace. This view, attributed to Adam Smith and Edmund Burke, was evident in the advocacy of Richard Cobden and John Bright, and in the writings of the most prominent English economists and political thinkers of the 19th and early 20th centuries, such as John Stuart Mill and Alfred Marshall. John Maynard Keynes said that he was 'brought up' on this idea. A prominent 20th century US exponent of this idea was the Secretary of State under President Franklin Delano Roosevelt, Cordell Hull. Upon resigning from the United Kingdom's Treasury team at the Paris Peace Conference in June 1919, John Maynard Keynes penned a small book. Published in 1920, The Economic Consequences of the Peace famously lays out his case for why the allies' Terms of Peace to be imposed on Germany were physically and financially impossible to fulfill and how they would encourage Germany to rise up again. Predicting a coming World War II, Keynes wrote: '... if this view of nations and of their relation to one another (i.e., a Carthaginian Peace) is adopted by the democracies of Western Europe, and is financed by the United States, heaven help us all. If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp. Nothing can then delay for very long that final civil war between the forces of Reaction and the despairing convulsions of Revolution, before which the horrors of the late German war will fade into nothing, and which will destroy, whoever is victor, the civilisation and the progress of our generation.' Although Keynes' effort to change the treaty terms failed, it is a dramatic demonstration of what peace economics is about: the creation of a mutually reinforcing structure of political, economic, and cultural systems to achieve peace such that reversal to violence is unlikely.