Economic Growth and Military Expenditure: R&D, Consumption, Capture – What Future for Europe?

Before anything else, I want to start by acknowledging the fact that the focus of this article represents a relatively narrow section of what is an enormously interesting, fertile and relevant field of economics with much to contribute to societal welfare and development. I refer the reader to the section of this website with a list of selected references on economic growth, covering Sollow-growth theory, Ramsey models, overlapping generations, endogenous growth and institutional economic contributions to the field.

Perhaps the topic of this post section can be argued to fit within the endogenous institutional growth theory section. Nevertheless, the role of military-supported R&D in driving technological and by association real economic growth appears to me as being underestimated in the public consciousness and often ignored in supply-side debates of long term economic growth particularly in Europe. It appears to me that this is an unfortunate oversight both for its positive and negative potential. I offer a very short discussion of these issues below by emphasizing the appeal of the implications for economic growth and dangers of government capture and militarism.

In summary, it appears that there are four important factors behind the effect that government military expenditure has on economic growth: Scope, scale and how it is funded. The main strains of literature informing the considerations below stem from Ruttan (2006), Barro and Redlick (2011)Ilzetzki et al (2010) and Acemoglu et al. (2010.b).

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Posted in Economic Concepts, European History, European Integration, Political Concepts, Visions of the Political Future of Europe | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

A note on the Feasibility ECB Quantitative Easing

Recent comments from the ECB about potential attempts to mitigate a decrease in inflation through QE have led to an increased interest in the articles posted on this website about the SMP and the CBPP. However, such interventions were pursued for different purposes and as such may offer only partial insight into what the ECB may do. I take this opportunity to briefly review some of the alternatives available to the ECB. I also offer a belated apology and explanation for the decreased posting over the last six months, for those interested.

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Posted in Current Events, ECB, Euro-zone Update, Inflation, Sovereign debt Crisis | Tagged , , , , , , , , , , , , | 2 Comments

How Income Inequality Leads to and Supports Political Capture

As can be seen in posts pondering the past, present and or future nature of the Chinese, Brazilian or Ancient Roman political economy, capture is inevitably a recurring theme in my analyses. More specifically, I have recently found myself leaning towards reviewing income inequality as an intermediary step between macroeconomic and institutional variables. However I’ve long struggled to explain the logical steps behind this otherwise instinctively true fact. This post hopes to address that shortcoming.

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Posted in Aides Memoire, Political Concepts, Risk Scenario Analysis | Tagged , , , , , , , , , , , | Leave a comment

The Rise and Fall of the Roman Republic – Citizenship, Expansion, Income Inequality and Empire

This post is not supposed to offer a formal and authoritative or complete account, description or thesis of the rise and fall of the Roman Republic. Instead, it rather quickly and incompletely summarises what small and insignificant information I gathered in a relatively informal manner for the simple purpose of explaining it to myself. The degree of complexity is completely arbitrary and set to satisfy my heterogenous and idiosyncratic intellectual criteria. This post does not claim to be a rigorous work of history, geography, economics, politics or any other mix thereof of a standard to be published. However, it does make use of all of them, if only as sources and as a buffer between what strikes me as relevant and that which does not.

The success of the Roman Republic, as I understand it, was the result of a number of features that made that polity more adaptable than many of its neighbours and opponents, be it politically, legally or militarily. Checks and balances created competition for leadership that was not necessarily adversarial. Conquest and a degree of economic flexibility created the necessary income inequality to eliminate collective action problems, the abuses from which were at least partially mitigated by increasing legal equality of opportunity that extended the political franchise. Supported by what strikes me as a fortuitous order of conquest, which allowed it to build momentum at a manageable pace, these facts seem to have been the driving impetus for Rome’s success. However, the burden of conquest eventually became too much to bear and led to the Marian reforms, which although successful at guaranteeing military success undermined the Republic’s checks and balances, exacerbated the agency of the few against the collective action problems of the many, and facilitated its eventual capture and reform into the Roman Empire.

The post is divided into four sections. The first focuses on the Republic’s military adaptability. The second considers some secondary features of the Roman state, beyond military adaptability, that also helped its expansion, what I term loyal competition, adaptability of legal franchise and the location, timing and sequencing of conquest. The third part considers the self-reinforcing effect of military conquest as a fuel of economic inequality, the evidence of this fact, both statistical and some telling testimonies. It argues that this economic inequality funded the military agency introduced by the Marian reforms to facilitate the capture of government by the few in a manner that institutionally crystallized political autocracy as the defining feature of the Roman Empire.

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Posted in European History, History, Political Concepts | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 3 Comments

German Elections – Voter Intention Polls and FDP Blunders

This post reviews the recent voter intention polls in Germany,  the trends over the last 4 years,  the loss of popularity of the FDP and the pyrrhic success of the Greens.

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Posted in Current Events, European National Politics, Sovereign debt Crisis, Uncategorized | Tagged , , , , , , , , , , , , | Leave a comment