Chapter

Economics

in Castles, Battles, & Bombs

Published by University of Chicago Press

Published in print May 2008 | ISBN: 9780226071633
Published online March 2013 | e-ISBN: 9780226071657 | DOI: http://dx.doi.org/10.7208/chicago/9780226071657.003.0001
Economics

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In 1914, one of the world's most famous war plans, the Schlieffen Plan, impelled Germany to turn a developing east European squabble into the greatest, most encompassing, and costliest war civilization had ever known: World War I. Almost a century later, the Schlieffen Plan still generates considerable debate. This book uses ideas from economics to help illuminate decision making in war. The Schlieffen Plan encapsulates the six principles of economics that this book employs to examine various episodes in military history, stretching over a thousand years, during the second millennium ad. This chapter is a primer on economics and economic theory. It begins by outlining the development of economic science and then discusses the principles applied in the book (opportunity cost, expected marginal costs and benefits, substitution, diminishing marginal returns, asymmetric information and hidden characteristics, and hidden actions and incentive alignments). It concludes by considering how these principles are mingled with military history.

Keywords: World War I; Germany; Schlieffen Plan; economics; economic theory; military history; decision making; opportunity cost; substitution; diminishing marginal returns

Chapter.  19790 words.  Illustrated.

Subjects: Military History

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