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Webpondo: Recently you published a book called The dark side of the force: Economic foundations of conflict theory. Could you please explain us a little bit of your view on the economics of conflicts?

Jack Hirshleifer: Here's the way I think of the economics of conflict. Basically, there are two ways of making a living (the problem of making a living faces not only human beings but also animals). One way is by exchange: I provide something you want, you provide something I want, we're both better off. That's very, very nice. But, there's another way of making a living. Instead of giving you something in exchange, I just try to take away from you what you have that I would like. Now, that's practical economics too, and we see it taking place in the animal kingdom and among humans as well. So, we have crime, we have exploitation in various ways. The classical model of course is warfare, though not all warfare is motivated by the desire to achieve material income. Conflict is a very important economic activity, as important as exchange. I won't try to say which is more important, but it is comparable in importance to exchange. And yet, if you look at what the economists have done, this economic activity has had maybe, one tenth of one percent of the attention that has been devoted to exchange. So, as a result, this is a great understudied area. Now, it has been studied by other people…, philosophers, historians, political scientists, and sociologists, and so forth, and, of course, a lot of them have done some good work, but there's room for economic analysis too. Economists can bring our special angle. So what's our special angle? We generally assume that people are trying to maximize utility, or firms maximize income or a nation state maximizes some kind of national welfare; anyway, we have the principle of maximization and rational behavior (well, maybe not always strictly rational, but still that's the main line of thinking). And then finally, that there's some kind of an equilibrium, that the interactions of all these private motivations come together and determine a balance among the activities. So, these concepts are natural to the economists. For historians of course, it would be strange and novel as applied to warfare, but still we can do it and I think there already are a good number of studies that show how it can be done.