The Economics of Violence: A Short Introduction

The simplistic declarations about violence heard after the “insurrection” of January 6 at the Capitol invite a reflection on the economics of violence. The economist’s starting point is that an individual uses violence when it is in his personal interest to do so—when, given his circumstances and constraints (including subjective moral constraints or the lack thereof), he finds the net expected benefit of violence greater than the net expected benefit of peaceful exchange for him. This is a positive observation about what is, not a normative statement about what ought to be, an important distinction to always keep in mind.

As the late UCLA professor Jack Hirshleifer argued, we must not overlook “the dark side of the force” (of the force of self-interest), which includes “crime, war, and politics.” (I am quoting from the mimeographed July 28, 1993 version of his article “The Dark Side of the Force.”) Cooperation (such as trade) happens but “with a few obvious exceptions, occurs in the shadow of conflict.” Hirshleifer wrote. In positive economics, violence is important:

All aspects of human life are responses not to conflict alone, but to the interaction of the two great life-strategy options: on the one hand production and exchange, on the other hand appropriation and defense against appropriation.

Which strategy one individual chooses depends on his preferences, his abilities in voluntary cooperation, the defensive or offensive production technologies available to him and to others, and his evaluation of the future. But how should we think about political violence?

Open violence—“the war of all against all”—has dire consequences for prosperity. Virtually all individuals have good reasons to want it minimized. Thomas Hobbes formalized the idea that such minimization is what gives legitimacy to the state. Populations accepted the burden of the Roman Empire or the medieval lords or the king or the modern democratic state because these governments were deemed not as bad as attacks from the “roving bandits,” private or governmental, who would have otherwise proliferated and attacked them. The “roving bandit” concept belongs to the theory of economist Mancur Olson, notably in his article “Dictatorship, Democracy, and Development” (American Political Science Review 87:3 [September 1993], 567-576).

Governments do not abolish violence as its threat underlies their injunctions and bans. But the most useful governments prevent violence from degenerating into open violence. They replace the latter with a more subdued, formal, and at least partly constrained form of violence.

This does not mean that revolution is never in the interest of some or many or even—under the worst governments—a majority of the ruled. The collective action necessary to organize a revolution, however, faces daunting problems. Which individuals will start the revolution and pay the necessary personal costs, often with their lives? (On the theory of collective action, a milestone in economics, see Olson’s book The Logic of Collective Action: Public Goods and the Theory of Groups, 1966].)

Revolutions do occasionally happen, though. At some tipping point, the National Guard or other praetorians do not shoot on demonstrators or on the mob attacking the “City of Command,” as political theorist Bertrand de Jouvenel called the center of government power (in his book On Power [1945 for the original French edition]). Bodyguards decamp where the signs become unmistakable that the regime is crumbling, because it is in the private interest of each of them to not be on the losing side. In Romania, Nicolae Ceausescu had no more praetorians when he was arrested by revolutionaries and executed with his wife. In different circumstances, Saddam Hussein was found in a rabbit hole, alone. Syrian ruler Bashar al-Assad did crush the revolution by shooting on the crowds but, perhaps most importantly, by becoming a vassal of the Russian government.

The threat of revolution or revolt can lead some governments to rule by terror, but it can also exert a restraint on state power. The factors at play include the technology (guns and such), the propensity to violence on both sides, and the existing political institutions. Olson provides a historical example of how the threat of revolution can be useful:

In Venice, after a doge who attempted to make himself autocrat was beheaded for his offense, subsequent doges were followed in official processions by a sword-bearing symbolic executioner as a reminder of the punishment intended for any leader who attempted to assume dictatorial power.

Thomas Jefferson would have agreed. He famously wrote:

I hold it that a little rebellion now and then is a good thing.

Interestingly, once he was president, he did not even support ordinary smugglers.

One problem with revolutions, illustrated by the 1789 French revolution and the 1917 revolution in Russia, is that they can strengthen power instead of limiting it. In America, the jury may still be deliberating. Many thinkers, including most economists of the public choice school as well as Anthony de Jasay, have argued that the state as an institution has a logic that leads to growing power.

Even a liberal social contract as Nobel economist James Buchanan theorized it is ultimately based on threats of violence. When some individuals think that the contract is not in their best individual interests and that they would fare better in anarchy, they will want to renegotiate the deal or walk out of it. Only new rules and/or some bribes can prevent a civil war or a revolution. As Hirshleifer said, the option of violence is always lurking in the background.

Classical liberalism claims that individual liberty under the rule law and the prosperity that follows are the best set of institutions to minimize violence—a potent argument. However, Anthony de Jasay, a liberal anarchist (or perhaps a conservative anarchist), has dampened the liberal enthusiasm by emphasizing the need for an effective balance of power between the ruler and the ruled:

Self-imposed limits on sovereign power can disarm mistrust, but provide no guarantee of liberty and property beyond those afforded by the balance between state and private force.


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The “mad scientist” problem

Matt Yglesias has an interesting tweet:

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Last May, I said the following:

Occam’s Razor also applies to the lab release theory. We know that dozens of epidemics have come from viruses jumping from animals to humans without any “lab” being involved. Why construct an entirely new theory for this epidemic?

. . . Actually, the CCP would look far better (in a ethical sense) if the virus accidentally escaped from a lab doing valid and useful scientific research, rather than from disgusting “wet markets” that the CCP refused to shutdown. . . .

Of course it’s certainly possible the virus did escape from a lab during research on bat coronaviruses. I really don’t care.

In retrospect, that wasn’t my finest moment. I meant that I don’t care in an ethical sense, and I still hold that view. But Yglesias’s tweet raises an interesting issue. If it was a lab escape, then what are the public policy implications, if any? And I don’t know how to answer that question.

Over the years, I’ve argued that things like accidental nuclear war and bioterrorism were much bigger threats than global warming. (And I view global warming as a fairly big threat.) But I don’t know enough about science to know how policymakers should respond to the risk of bioterrorism.

However, I do know more about science than I did two years ago. As an analogy, before 2009 I thought Western policymakers knew how to handle the zero lower bound problem for interest rates. In 2009, I discovered that they did not, or at least there wasn’t a critical mass that knew what to do. Similarly, last year I found out that we were far less prepared for a pandemic than I had thought. Indeed, my perception of our preparedness seems to fall almost by the day, as I recently discovered our inability to deliver a vaccine to the public that has already been invented, tested, manufactured and distributed to states.

In the past, people who know more than I do told me not to worry about bioterrorism. But their arguments were not persuasive. Now I have zero trust in the public health establishment. I see no reason at all not to fear a “mad scientist” creating a virus 50 times more deadly than Covid-19, and letting it loose.

So to answer Yglesias’s question, it seems to me that if the virus escaped from a lab, then we should conclude that a future scientist with the same sort of psychological problem as that rogue Malaysian Airline pilot might someday unleash another Black Death. Say something as deadly as HIV, where symptoms show up with a long delay (as with HIV), and as easily transmitted as the flu. If you think I am wrong and are able to explain why this cannot happen, I’d love to be reassured on this point.

One thing I know for sure; if something bad can happen, at some point it almost certainly will happen.


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Life, Liberty, and M*A*S*H: Anti-Draft

This fall, LIFE magazine has published a special issue commemorating the 50th anniversary of the movie M*A*S*H. Despite the hook, the issue focuses on the ensuing TV series, which ran from 1972 to 1983. Though the show has often been characterized as being politically left-wing, it actually is heavily classically liberal, celebrating the individual, civil liberties, and the market, and harshly criticizing anti-individualism, government compulsion, and government decision-making. In a series of essays, I examine the classical liberalism of M*A*S*H. This is Part 4. Part 1 is here. Part 2 is here. Part 3 is here.


When M*A*S*H debuted, the U.S. armed forces still used conscription to fill out its ranks. The peacetime draft began in 1948, following the expiration of World War II conscription, and included a special “doctor’s draft” for medical personnel. Selective service was vital to staffing up the U.S. military for both the Korean and Vietnam wars and was particularly despised by Vietnam protesters. Partway through M*A*S*H’s first season, the Pentagon announced that it would shift to an all-volunteer force, with the last inductions occurring before the TV season ended.

Among government institutions, conscription is one of the most disturbing. People of a particular demographic group — young men — are taken from their private lives and forced to work and live under strict government direction, at great risk to life and limb. The draft is regularly derided on M*A*S*H; as Hawkeye explains about his draft board in “Yankee Doodle Doctor” (s. 1), “When they came for me, I was hiding, trying to puncture my eardrum with an ice pick.”

No element of the show better represents opposition to the draft than the character Klinger. The show’s first seven seasons depict his many schemes to get discharged from the Army: trying to hang-glide out of Korea (“The Trial of Henry Blake,” s. 2), preparing to raft across the Pacific to California (“Dear Peggy,” s. 4), threatening to immolate himself (“The Most Unforgettable Characters,” s. 5), attempting to eat a jeep (“38 Across,” s. 5), pretending to believe he’s back home in Toledo (“The Young and the Restless,” s. 7). In “Mail Call” (s. 2), he claims his father is near death, hoping for a hardship discharge. Blake then flips through Klinger’s file:


Father dying last year.

Mother dying last year.

Mother and father dying.

Mother, father and older sister dying.

Mother dying and older sister pregnant.

Older sister dying and mother pregnant.

Younger sister pregnant and older sister dying.

Here’s an oldie but a goody: half of the family dying, other half pregnant.

Klinger, aren’t you ashamed of yourself?


Yes, sir. I don’t deserve to be in the Army.

Klinger’s longest-running scheme is pretending to be a transvestite in the hope of earning a “Section 8” psychiatric discharge. Among the outfits from 20th Century Fox’s wardrobe shop that Farr wore (sometimes while puffing on a stogie) were Ginger Rogers’ Cleopatra costume (“April Fools,” s. 8) and a woolen coat of Betty Grable’s (“Major Ego,” s. 7), as well as reproductions of Dorothy’s pinafore dress from the Wizard of Oz and a Scarlett O’Hara gown from Gone With the Wind (“Major Ego,” s. 7), and a flare-torched Statue of Liberty get-up (“Big Mac,” s. 3).

Klinger usually provides comic relief, but in “War of Nerves” (s. 6) he delivers a serious condemnation of the draft. Confiding in Sidney, who previously knocked down several of Klinger’s Section 8 schemes, he says he really does fear he’s going crazy because of his attempts to get out of the Army. Sidney asks Klinger why he wants out:


Why? Well, there’s — there’s lots of reasons.

I guess death tops the list. I don’t want to die.

And I don’t want to look at other people while they do it.

And I don’t want to be told where to stand while it happens to me.

And I don’t want to be told how to do it to somebody else.

And I ain’t gonna. Period. That’s it. I’m gettin’ out.


You don’t like death.


Overall, I’d rather lay in a hammock with a couple of girls than be dead — yes.


Listen, Klinger. You’re not crazy.


I’m not? Really?


You’re a tribute to man’s endurance. A monument to hope in size-12 pumps.

I hope you do get out someday. There would be a battalion of men in hoopskirts right behind you.


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