War was good

Today, many countries celebrate the armistice, contemplating the contributions of their veterans and the losses and gains imposed by war. I want to reflect here on how internal wars may have contributed to the rise of Europe over the past millenum.

I have already reported how the steady competition among European powers forced them to keep taxes low and guarantee property rights in order to prevent emigration and how this helped Europe to grow faster than the Asian hegemonic empires. Nico Voigtländer and Joachim Voth have a different angle on this point. They claim that the competition among European states lead to sufficiently many wars to keep population from growing. In a Malthusian economy this is a particularly important point: With lower population and decreasing returns to labor, people are living above subsistence levels, which means longer lives, added incentives to save, and the ability to think beyond subsistence and innovate.

In those days, wars were horrible as they are today, but they may have left the foundations of today's wealth. Who knew then?