Adam Smith's Theory of the State: The Logic of Military Competition and Its Implications for State Capacity
14 Pages Posted: 11 Sep 2018
Date Written: April 13, 2018
International security in a competitive militarized environment requires that states have the capacity to defend themselves. The effects of this competition can be summarized with an equilibrium-comparative statics logic: (i) at any given moment in time, for a type of state to survive, it must have the financial, material, organizational, and military means to defend itself against other states with possibly different forms of government and territorial organization. (ii) As the nature of military (and financial and organizational) competition changes, so too does the form of the state.
Adam Smith appeals to this logic again and again in his corpus to explain why, in a particular era, one type of state out-competes another. For example, Smith uses this logic to explain the equilibrium structure of feudalism; how the trading towns emerged to out-compete locally feudalism’s military organization; that the town’s militias later proved no match for the professional standing armies of authoritarian monarchies; and how intense military competition for markets and territory around the world led large nation-states to foster forms of liberty or limited government so as to grow and finance longer and larger wars.
Keywords: Adam, Smith, theory of the state, international relations, military competition, game theory models of adam Smith
JEL Classification: H1, N4, O1, P5
Suggested Citation: Suggested Citation