ABSTRACT
Most economists, including those specializing in the economics of peace and conflict, have missed a crucial point. Yes, the use of resources for creating or defending against appropriation can be studied within the analytical categories of economics (Hirshleifer, 1988, 1989, 1991, 1994). It is true — crime, corruption, terrorism, warfare, and arms races are microeconomic choice problems (Becker, 1968; Usher, 1989; Lapan and Sandler, 1988; Wittman, 1979; McGuire, 1965). Moreover, weapons production and war produce major economic impacts and conflict is often associated with dramatic declines in human welfare (Boulding, 1978; Tinbergen, 1990). Although these topics make up the subject matter of conflict economics and researchers should continue to investigate them, a crucial point is being overlooked. The point is this: the use of resources for creating or defending against appropriation is intertwined with production and exchange (and therefore consumption) and none of these major areas of economic analysis can be adequately understood apart from the others.
