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Brauer and van Tuyll, Castles, Battles and Bombs: How Economics Explains Military History

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Economic can help explain choices, even if the thought process is not conscious it is there in the background.

Need an interdisciplinary approach to war and conflicts.

Sunk Cost; Irrevocable cost, cannot get it back, must forget it and move on.

Opportunity Costs; The money spent on an item could have been used for something else. Which is the best choice/best outcome and results?

Marginal Cost and Benefits; How important is each added item giving you. 1 million guns, what is one more giving you. But 1 gun more, when you have only 2=Much more effect.

Lemay's pursuit of Nuclear Weapons is a good example of Marginal costs and Benefits which was ultimately stopped by Kennedy. The underlying issue is the number of nuclear weapons for deterrence.

Substitution; Use the item with the highest benefit (if cost is the same) or choose the cheapest if you can live with the benefit.

Diminishing Marginal Return; Too much will not give the added value, more men into battle= more men lost ≠ wining.

Asymmetric Info and Hidden Characteristics; Info is essential and holders have power over outcome.

Hidden Actions and Inceptive Alignments; This is about acting truthfully, rather than having the truth.


Sugar's Tips on Brauer and van Tuyll


Interesting read, and yet another example of one of the many “lenses” we can use to examine the operational environment to try and gain fresh insights, even on problems we’ve been looking at for years. Add this to your toolkit in addition to the upcoming Essence of Decision models, Clausewitz’s trinity (and his “triangle”- we’ll discuss the distinction later), and the international relations models we already discussed.



I think there’s some real value in focusing on the economic aspects of conflict themselves - if math is the language of nature, then economics are the language of human interaction, and I’d also argue the “universal religion” to which we all bend knee second only to our personal concepts of God (and only for some). We definitely saw some good results in Kosovo when we started hitting up the economic holdings of Milosevic’s cronies – he didn’t value his own troops very much, but he definitely valued his cash flow http://aupress.maxwell.af.mil/SAAS_Theses/Tolbert/Tolbert.pdf . Still not decisive on its own (discussion for another day), but it definitely gets anyone’s attention when you start taking away their Benjamins ($$$)...




What this book proposes, though, is not to focus purely on the economic aspects of warfare, but rather to use analogies from the economic world to gain greater context on “military” decision making. If you substitute “risk” in most places where they discuss “opportunity cost”, it shouldn’t be too much of a stretch, although admittedly estimation of risk has played a less prominent role in our planning processes than it should (I’d argue that any strategy implies a certain level of acceptable risk, and relative levels of risk are what define the acceptability of one strategy over another).




I liked how they discussed the different levels of opportunity costs between different echelons from the same event. For example, there are very different opportunity costs for dropping a JDAM on a house where insurgents are hiding depending on if you’re the one who otherwise has to clear the building room by room, or if you’re the ISAF spokesman that has to answer why civilians you didn’t know about were killed yet again…"where you stand" depends on "where you sit".

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