Militärökonomische Forschung und Lehre
Research and Courses in Economics of Defense
PD Dr. Peter T. Baltes
To my wife, my (academic & military) teachers, my family and my friends
First Version: August 2012
This Version: December 2012
Every art has its rules and maxims.
One must study them: theory facilitates practice.
The lifetime of one man is not long enough to enable him to acquire knowledge and experience.
Theory helps to supplement it, it provides a youth with premature experience and makes him skillful also through the mistakes of others.
Frederick II. (1999, p. 54), King of Prussia
The economics of defense, also called military economics, represents the part of
general economics investigating the economic dimension of military decisions / actions:
So this approach analyzes the procurement costs of weapon systems or the (pecuniary)
costs of levying a certain unit? Yes, that is ─ following Staffelbach (2006) and
others ─ how military economics started as a scientific discipline under the label
“oeconomia militaria“ in the 17th / 18th century. But actually the first defense
economist, Niccolò Machiavelli (1521), had already a much broader perspective in
mind: The economics of defense stands for applying the economic perspective when
analyzing how armed forces should be embedded in their society. For example, should
the military be organized as a militia, as a professional army or even as mercenaries?
While many costs of providing the good “national security” are not immediately visible
even to defense specialists, the importance of the topics discussed in military economics
for the performance of societies can not be underestimated ─ for example, take the
current debate in the USA about how cutting the defense budget may help to stabilize
the governmental debts that increased dramatically after 9/11.
Niccolò Machiavelli (*1469†1527)
Frederick II. (*1712†1786)