The invisible hand of peace: Capitalism, the war machine, and liberal international relations theory

The debate over whether and how the spread of democracy, trade, and international organizations enhance peace has long played a central role in international relations theory. My dissertation critiques this literature on the “liberal peace” for its failure to ask whether capitalism extends, limits, or causes this peace. Drawing on classical liberal theory and neo-institutional economics, I argue that private property, competitive market structures, and mobile wealth generate additional mechanisms outside the ballot box by which society, and in particular a strong business class, can sanction state behavior and constrain its decision for war.; By exploring the dilemma of resource mobilization, or the process by which the state gains access to private sector wealth and builds domestic coalitions in support of war, I deduce a series of hypotheses about how the institutions of capitalism shape two dimensions of the decision for war. First, the institutions of capitalism alter the domestic economics of war . The expansion of private property, competitive markets, and mobile forms of wealth increase both the quantity and price of resources that the state must extract from its citizens to build its war machine and prosecute a war with another state. Second, these same institutions alter the domestic politics of war. By limiting the state's ability to intervene in the domestic economy, capitalism strengthens the political power of domestic constituencies opposed to war and erodes the state's ability to redistribute income while building domestic coalitions in support of war.; These hypotheses are tested using statistical and historical case analysis. First, I statistically test how variations in domestic economic structure—operationalized as the quantity of private property in an economy and tariff levels—condition the probability of international conflict. Greater levels of private property and lower tariff levels both reduce the probability of military conflict between states. Second, I explore the conditions under which globalization prior to World War I both hindered and supported peace. In particular, I trace how the continental governments used tariffs, capital controls, and state-owned assets to conduct an arms race that ultimately led to the outbreak of World War I.