Since it is ˜forced possession’, wars do not come within the ambit of standard economic theory which is based on ˜voluntary exchange’. It should rather be studied in a new branch of economics known as ˜economics of violence’.
Voluntary exchange leads to a ˜win-win’ situation
An exchange effected by means of violence is also an exchange. But unlike a voluntary exchange, it lacks the ability to perpetuate and sustain itself. This is because, in a forced exchange, one party wins, while the other loses. In contrast, in voluntary exchanges, both parties end up in a ˜win-win’ situation. Hence, only such exchanges could thrive and sustain, because the parties have incentives to continue for mutual benefit.
But forced exchanges have no such salutary features. For ins