18
Private Property and Peace
The effect of capitalism on foreign policy can be illustrated by again focusing on
the state’s mobilizational capacity. The quantity or scope of private property in an
economy plays a critical role in this process by determining the size of the effort that the
state must undertake to build its war machine. If a state owns all of the resources within
an economy, it can simply shift resources to the defense sector, as the manager of a firm
may adjust budget priorities in favor of some activities over others.
31
In this light, public
property can serve as a revenue source for the state that is acquired independently of
societal oversight. Privatization necessarily reduces the amount of resources owned by
the state. As public property decreases, the state must purchase or confiscate more
private assets and run greater risks of alienating societal support as consumption is
sacrificed to prepare for war.
Many scholars have noted how the state’s bargaining position vis-à-vis society is
strengthened when it does not rely on the wealth of private citizens within its polity to
fund public policies such as war. For example, Barnett (1990, 538) writes:
Because the state is institutionally separated from organized production, it does
not produce its own source of revenue. Therefore, all state managers must be
attentive to and are constrained by the flow of resources upon which the
deployment of the state’s means depends. The state’s ability either to develop
alternative sources of financial means or to loosen its dependence on the capitalist
class substantially increases its autonomy.
Examining the absolutist era in European history, Kiser (1986/87) claims that relative
distribution of resources between public and private actors is the crucial determinant of
state autonomy. An expansion in public property increased the independence of
monarchs in formulating policy. As they simply did not need to call parliaments into
session to approve new taxation policies, both the landed aristocracy and the rising
merchant class that populated these legislative bodies were deprived of opportunities for
political influence created by threatening to withhold their financial support.
32
States that
rely heavily on natural resource endowments, such as oil and minerals, are often able to
derive substantial revenues from these assets and avoid societal resistance and the
demands for accountability following from the imposition of taxes.
33
Levi (1988, 19)
echoes the logic of these arguments by noting the relative bargaining power of a ruler
31
It would be wrong to assert that the state does not suffer some set of opportunity costs by moving public
industries from civilian to military production. However, I think it is fair to assume that these opportunity
costs are less than the costs that would be incurred by maintaining civilian production in public industries
and then purchasing additional assets to augment defense industries from the private sector. Moreover, this
assumption finds support in recognizing that publicly owned firms are “political firms” and thus do not
possess the same utility function as privately held firms. Along these lines, the state is less concerned
about the relative profitability of military versus civilian production while it pursues other goals like
maximizing employment.
32
He examines how the Reformation allowed the Tudors, and in particular Henry VIII, to confiscate church
lands. These church lands then reduced the monarch’s dependence on parliament to appropriate funds.
Kiser also characterizes Henry VIII as the most violent, in terms of fighting wars, of the English monarchs
and correlates this war propensity with the autonomy created by confiscated church property.
33
These are the some of the general conclusions from the literature on the ‘rentier’ state, which has
traditionally focused on how substantial natural resources decrease the likelihood of democratization. For a
recent review of this literature, see Ross (2001). For an argument that links the rentier state to the problem
of war in the Middle East see Anderson (1995).
Convention