source: Why We Fight (Chapter 1) by Christopher Blattman

War is expensive. Rivals have incentives to bargain instead of going to war

  • war is the exception, not the rule
  • We see this same logic play out in other parts of life
    • labor strikes
    • court battles

Thomas Schelling Harvard economist, started applying this logic to wars between nations

So why do we still have wars?

  • Unchecked interests, when rulers don’t incur the costs of the war
  • Intangible incentives, when a society is driven by values that are unrelated to profit
  • Uncertainty, when rivals don’t fully understand their rival’s bargaining power
  • Commitment problems, when the share of power between rivals changes
  • misperceptions, because people aren’t always rational

Case Study: Combos in Medellin

A combo is a street gang. They make a profit from the neighborhoods they control

  • does drug retailing & protection rackets
  • sets moneylending rates (takes a cut)
  • sells licenses to sell staples

Pachelly and El Mesa are rival gangs in a neighborhood called Bello. They control prisons as well as neighborhoods

  • After a bloody fight broke out in Bellavista, a prison in Medellin, the violence started spreading and the two gangs started gearing up for a war

They decided to compromise instead of going to war

  • War is expensive. They would have lost revenue
  • The majority of gang wars are negotiated away before they even start

A closer look at the math

Thought experiment:

  • Bello represents a $100 pie
  • Pachelly and El Mesa are evenly matched, so they both have a 50% chance of winning a gang war
  • let’s assume that the winner of the war would get all the winnings

War is costly. Although the Combo leaders don’t care about civilian casualties, the war hurts their bottom line

  • let’s assume that a gang war destroys 20% of the pie
  • now both gangs have a 50% chance of getting an $80 prize
  • that’s an expected prize of $40 if they go to war

bargaining range the amount of territory that doesn’t get destroyed if no one goes to war

  • this creates an incentive not to go to war

As long as both sides get more than $40, they’re getting more than their expected war prize

  • crucially, these incentives are transparent. El Mesa knows Pachelly faces the same incentives as them
  • Neither side fears an attack because they know they other side is incentivized to maintain the peace

Each side’s bargaining power comes from its ability to threaten the enemy

  • as long as war is more costly for both sides, we can expect peace
  • counterintuitive phenomenon: the more destructive our weapons, the easier it is to find peace
  • throughout history, the more powerful our weapons got the less frequent the wars were (although when wars to happen, they’re doozies)

Question: What if one of the rivals becomes weaker?

  • for example, what if the feds captures some of El Mesa’s leaders, so that their chance of winning falls to 20%

Answer: El Mesa can expect to loose territory, but not go to war. war is prevented by the Bargaining Range, as before, but the amount of the prize El Mesa can expect to get is diminished.

  • El Mesa’s expected winnings from a war would be $16 so anything more than that is good
  • Pachelly’s expected winnings is $64, so anything more than that is good