TO THE ECONOMIC THEORY OF INTERNATIONAL CONFLICT

Abstract

The category of conflict refers to not only war, but also crime, litigation, labor disputes (including strikes and lockouts). Exchange theory and conflict theory are equivalent branches of economic analysis: exchange theory is based on contractual and mutual gains, and conflict theory is based on competition for asymmetric advantage. Various analytical options for modeling the conflict equilibrium (for example, the balance between actual military action and armed peaceful coexistence) deserve attention. It can be shown that the choice between deployment and settlement of the conflict is determined by preferences, opportunities and perceptions. The technology of conflict can be viewed a factor of economic activity. Living beings everywhere compete for the means of subsistence. Competition that becomes intense enough is called conflict, when rivals try to harm, disable, or destroy each other. Conflict theory should apply not only standard technology of production (use of resources available for production or consumption purposes), but also technology of fight: there is land cultivation technology, but there is also other land capture and protection technology. The conflict includes not only military actions, but also activities that do not necessarily involve physical violence. Commercial competition becomes a conflict when firms begin to act to increase the costs of rivals or hinder their access to the market instead of simply acting in favor of consumers. Although market exchange is a traditional way of social interaction, any exchange, any cooperation, any compromise takes place in the shadow of the conflict. What a nation can achieve through diplomacy depends on the damage the nation can suffer otherwise (in the event of war). The amount a person has to pay for a share of property depends on his or her (il)legal chances of seizing that property without payment. In general, decision makers take other people’s wishes into account as much as they fear the consequences of such disregard. Although the economy focused on many topics in the field of conflict (such as crime, litigation, rent-seeking behavior, labor disputes, military actions, redistribution strategies), these topics have hardly been studied from a generalized uniform point of view. It can be shown that these topics have logical parallels and common basic principles applicable to all conflict interactions. Conflict analysis provides common intellectual principles or microeconomic foundations that have international trade, industrial organization, resource economics, public finance and other areas of financial and economic theory.