《国际政治经济学》文献资料（International Political Economy and National Security）The Globalization of Production and the Changing Benefits of Conquest

③SAGE The Globalization of Production and the Changing Benefits of Conquest Author(s):Stephen G.Brooks Source:The Journal of Conflict Resolution,Vol.43,No.5(Oct.,1999),pp.646-670 Published by:Sage Publications,Inc. Stable URL:http://www.jstor.org/stable/174658 Accessed:20/08/201019:53 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use,available at http://www.jstor.org/page/info/about/policies/terms.jsp.JSTOR's Terms and Conditions of Use provides,in part,that unless you have obtained prior permission,you may not download an entire issue of a journal or multiple copies of articles,and you may use content in the JSTOR archive only for your personal,non-commercial use. Please contact the publisher regarding any further use of this work.Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=sage. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars,researchers,and students discover,use,and build upon a wide range of content in a trusted digital archive.We use information technology and tools to increase productivity and facilitate new forms of scholarship.For more information about JSTOR,please contact support@jstor.org. Sage Publications,Inc.is collaborating with JSTOR to digitize,preserve and extend access to The Journal of Conflict Resolution. STOR http://www.jstor.org

The Globalization of Production and the Changing Benefits of Conquest Author(s): Stephen G. Brooks Source: The Journal of Conflict Resolution, Vol. 43, No. 5 (Oct., 1999), pp. 646-670 Published by: Sage Publications, Inc. Stable URL: http://www.jstor.org/stable/174658 Accessed: 20/08/2010 19:53 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=sage. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Sage Publications, Inc. is collaborating with JSTOR to digitize, preserve and extend access to The Journal of Conflict Resolution. http://www.jstor.org

The Globalization of Production and the Changing Benefits of Conquest STEPHEN G.BROOKS Department of Political Science Yale University This article examines the conditions under which conquest is likely to reap significant economic rewards.Scholars have largely focused on how the level of popular resistance within the vanquished country influences the benefits of conquest.What needs to be scrutinized in greater depth is how post-World War II economic transformations within the most advanced countries affect the benefits of conquest.This article focuses on examining one particular economic change that has been neglected for the most part in the secu- rity and peace literature:the globalization of production.The article delineates four recent changes in the structure of global production and outlines how each of these economic transformations alters the benefits of conquest.The collective impact of the arguments strongly indicates that the benefits of conquest have declined significantly in recent years within the most economically advanced countries. The promise of capturingmbenefits from nqred territory historically has been a significant motivating force for war.Unfortunately,wars of conquest still occur,as Irag's recent invasion of Kuwait amply demonstrates.Yet,the conditions under which conquest can produce significant economic gains have not received much sustained analysis in recent years.There are a number of reasons for this neglect.The key reason likely is the widespread assumption that conquering a highly advanced state no longer can produce meaningful economic benefits due to high levels of mod- ern nationalism.In this"quagmire"perspective,conquering a highly advanced state is seen as producing few economic gains because it is assumed that the conqueror inevi- tably will have to devote great resources to suppressing nationalist uprisings and,in turn,that the defeated populace will actively seek to reduce the economic surplus available to the invader. In his recent provocative book,Does Conquest Pay?,Liberman (1996)directly challenges this conventional quagmire perspective and argues forcefully that it is inac- curate.Liberman's conclusion is that the conquest of modern societies still can pay so long as the conqueror is ruthless.Moreover,he asserts that economic modernization AUTHOR'S NOTE:This article is based on work supported by graduate fellowships from the National Science Foundation and the Institute for the Study of World Politics.I thank David Bach,Jon DiCicco, Daniel Markey,Geoffrey Garrett,Susan Rose-Ackerman,Allan Stam,Bradford Westerfield,William Wohlforth,the members of Yale University's International Relations Reading Group,and the anonymous reviewers for their helpful comments on earlier drafts. JOURNAL OF CONFLICT RESOLUTION,Vol.43 No.5,October 1999 646-670 1999 Sage Publications,Inc. 646

The Globalization of Production and the Changing Benefits of Conquest STEPHEN G. BROOKS Department of Political Science Yale University This article examines the conditions under which conquest is likely to reap significant economic rewards. Scholars have largely focused on how the level of popular resistance within the vanquished country influences the benefits of conquest. What needs to be scrutinized in greater depth is how post-World War II economic transformations within the most advanced countries affect the benefits of conquest. This article focuses on examining one particular economic change that has been neglected for the most part in the secu￾rity and peace literature: the globalization of production. The article delineates four recent changes in the structure of global production and outlines how each of these economic transformations alters the benefits of conquest. The collective impact of the arguments strongly indicates that the benefits of conquest have declined significantly in recent years within the most economically advanced countries. The promise of capturing economic benefits from conquered territory historically has been a significant motivating force for war. Unfortunately, wars of conquest still occur, as Iraq's recent invasion of Kuwait amply demonstrates. Yet, the conditions under which conquest can produce significant economic gains have not received much sustained analysis in recent years. There are a number of reasons for this neglect. The key reason likely is the widespread assumption that conquering a highly advanced state no longer can produce meaningful economic benefits due to high levels of mod￾ern nationalism. In this "quagmire" perspective, conquering a highly advanced state is seen as producing few economic gains because it is assumed that the conqueror inevi￾tably will have to devote great resources to suppressing nationalist uprisings and, in turn, that the defeated populace will actively seek to reduce the economic surplus available to the invader. In his recent provocative book, Does Conquest Pay?, Liberman (1996) directly challenges this conventional quagmire perspective and argues forcefully that it is inac￾curate. Liberman's conclusion is that the conquest of modern societies still can pay so long as the conqueror is ruthless. Moreover, he asserts that economic modernization AUTHOR'S NOTE: This article is based on work supported by graduate fellowships from the National Science Foundation and the Institute for the Study of World Politics. I thank David Bach, Jon DiCicco, Daniel Markey, Geoffrey Garrett, Susan Rose-Ackerman, Allan Stam, Bradford Westerfield, William Wohlforth, the members of Yale University's International Relations Reading Group, and the anonymous reviewers for their helpful comments on earlier drafts. JOURNAL OF CONFLICT RESOLUTION, Vol. 43 No. 5, October 1999 646-670 C 1999 Sage Publications, Inc. 646

Brooks CHANGING BENEFITS OF CONQUEST 647 actually enhances the profitability of conquest.If Liberman is correct,then the incen- tives for aggression in the developed world might actually be increasing over time. In this article,I further analyze the conditions under which conquest is likely to reap significant economic rewards.Because Liberman's (1996)book is the key work on this topic,I begin by reviewing the main elements of his analysis.I then argue that more extensive analysis of the economic benefits of conquest is greatly needed;in par- ticular,it is necessary to look at factors other than the level of popular resistance that may affect the benefits of conquest.Although it is abundantly clear that there have been dramatic economic transformations during the post-World War II period,espe- cially in the most advanced countries,scholars have so far failed to devote sustained attention to whether any of these economic changes can significantly alter the benefits of conquest.I analyze in detail how one recent economic change,the globalization of production,affects the benefits of conquest. I draw on analyses and findings from the recent literature on the globalization of production.This literature,developed primarily by economists and management scholars,has been neglected for the most part by security and peace scholars.I stress that the structure of global production has changed dramatically during the post-World War II period,especially over the past 25 years.Four economic transfor- mations are highlighted here:(a)the increased geographic dispersion of production, (b)the greatly enhanced significance of interfirm alliances,(c)the increased ease of engaging in foreign direct investment(FDI),and (d)the general shift toward "knowledge-based"economies in the most advanced countries.Only the last of these four changes has so far received much attention in the literature.The bulk of my analy- sis is not devoted to reviewing exactly how the structure of global production has changed in recent years.Rather,it advances a series of deductive arguments about why these transformations appear to have reduced the economic benefits of conquest. Although none of these individual arguments has a decisive impact,their collective impact strongly indicates that the benefits have significantly declined,but only among those highly advanced countries in which these economic transformations have so far had a substantial impact. WHY MORE STUDY OF THE ECONOMIC BENEFITS OF CONQUEST IS NEEDED What exactly do the"economic"benefits of conquest consist of?Liberman(1996) carves out a very useful definition in his book.He brackets all other factors that do not directly affect the economic benefits of conquest:"the balance sheets evaluated in this book do not consider the costs of military conflict or economic sanctions imposed by states outside the empire,the benefits of neutralizing potentially hostile neighbors,or the utility of strategic territory"(p.4).There are several reasons for not considering these four other factors.First,they do not affect the economic benefits of conquest; rather,all of them involve either costs associated with war or strategic benefits from seizing territory.Second,Liberman points out that scholars already have extensively studied how these four other factors affect the cost-benefit ratio for war.Third,bring-

Brooks / CHANGING BENEFITS OF CONQUEST 647 actually enhances the profitability of conquest. If Liberman is correct, then the incen￾tives for aggression in the developed world might actually be increasing over time. In this article, I further analyze the conditions under which conquest is likely to reap significant economic rewards. Because Liberman's (1996) book is the key work on this topic, I begin by reviewing the main elements of his analysis. I then argue that more extensive analysis of the economic benefits of conquest is greatly needed; in par￾ticular, it is necessary to look at factors other than the level of popular resistance that may affect the benefits of conquest. Although it is abundantly clear that there have been dramatic economic transformations during the post-World War II period, espe￾cially in the most advanced countries, scholars have so far failed to devote sustained attention to whether any of these economic changes can significantly alter the benefits of conquest. I analyze in detail how one recent economic change, the globalization of production, affects the benefits of conquest. I draw on analyses and findings from the recent literature on the globalization of production. This literature, developed primarily by economists and management scholars, has been neglected for the most part by security and peace scholars. I stress that the structure of global production has changed dramatically during the post-World War II period, especially over the past 25 years. Four economic transfor￾mations are highlighted here: (a) the increased geographic dispersion of production, (b) the greatly enhanced significance of interfirm alliances,(c) the increased ease of engaging in foreign direct investment (FDI), and (d) the general shift toward "knowledge-based" economies in the most advanced countries. Only the last of these four changes has so far received much attention in the literature. The bulk of my analy￾sis is not devoted to reviewing exactly how the structure of global production has changed in recent years. Rather, it advances a series of deductive arguments about why these transformations appear to have reduced the economic benefits of conquest. Although none of these individual arguments has a decisive impact, their collective impact strongly indicates that the benefits have significantly declined, but only among those highly advanced countries in which these economic transformations have so far had a substantial impact. WHY MORE STUDY OF THE ECONOMIC BENEFITS OF CONQUEST IS NEEDED What exactly do the "economic" benefits of conquest consist of? Liberman (1996) carves out a very useful definition in his book. He brackets all other factors that do not directly affect the economic benefits of conquest: "the balance sheets evaluated in this book do not consider the costs of military conflict or economic sanctions imposed by states outside the empire, the benefits of neutralizing potentially hostile neighbors, or the utility of strategic territory" (p. 4). There are several reasons for not considering these four other factors. First, they do not affect the economic benefits of conquest; rather, all of them involve either costs associated with war or strategic benefits from seizing territory. Second, Liberman points out that scholars already have extensively studied how these four other factors affect the cost-benefit ratio for war. Third, bring-

648 JOURNAL OF CONFLICT RESOLUTION ing in these four other factors would not leave much of a puzzle to be solved;even Liberman is perfectly willing to admit that conquest typically does not pay when the costs of seizing territory and the actions of rival states are factored in (p.4).He argues that what is a puzzle is"whether the conquest of industrial economies pays,aside from the costs of conquering territory and the costs imposed by retaliating third parties"(p.3). Liberman (1996)points out two key reasons why it is important to specifically study the economic benefits of conquest.First,if conquest does pay economically, then there will exist higher incentives for expansionist states to upset the status quo, and the system consequently will become more unstable and vice versa.Second,if conquest does pay economically,then the only thing that will keep the peace will be the other factors that he excludes from his study such as military deterrence,a willingness to balance against aggression,and the costliness of modern warfare.In short,the eco- nomic benefits of conquest directly affect(a)the degree to which there are incentives to upset the territorial status quo and (b)the degree to which states must be militarily vigilant to maintain the peace. Despite the substantive importance of the economic benefits of conquest,this topic has been relatively neglected in recent years.International relations scholars,of course,routinely discuss the cost-benefit ratio of war as a key parameter in interna- tional relations.Yet,the focus of analysis invariably is on the cost side of this equation, and little attention is paid to the benefit side (e.g.,Zacher 1992,67-71).In recent years, international relations scholars have paid great attention to a number of different fac- tors that have increased the costs of conflict facing leaders of advanced states during the post-World War II period.They include the greatly increased potential destruction of war due to vastly more powerful modern weapons,both nuclear(Waltz 1993;Gaddis 1987)and conventional(Mueller 1988);higher levels of resistance to war on the part of domestic publics (Russett 1993;Rosenau 1990);high potential losses of economic benefits due to increased levels of trade interdependence (Oneal and Russett 1997; Rosecrance 1986);stronger international norms against the use of force (Mueller 1989;Ray 1989);and the dominance of the defense over the offense due to factors such as greatly improved reconnaissance capabilities (Jervis 1978;Van Evera 1990-91).By comparison,scant few pages have been devoted to forwarding arguments about how the economic benefits of conquest might have changed among the most advanced states during the post-World War II period. One possible reason for this neglect is that this subject simply falls between the cracks of international political economy and security studies (Kirshner 1998).The most likely reason is that many international relations scholars simply accept the wide- spread argument that conquering an advanced state no longer pays due to increased levels of nationalism (Rosecrance 1986,34;Gilpin 1981,142;Knorr 1975).In this conventional view,which Liberman (1996)aptly labels the quagmire perspective, empire is now seen as unprofitable due to the costs associated with suppressing upris- 1.A good portion of the references on this topic are noted by Liberman(1996)in note 29 (pp.161- 62)of his book.In addition to these citations listed here by Liberman,see also Ullman(1991,23-25), Singer and Wildavsky (1993,15-16),Van Evera (1990-91,14-15),Jervis (1991-92,49-50),and Rose- crance(1996,48,56).Very few existing analyses devote more than a page or two to the economic benefits of conquest

648 JOURNAL OF CONFLICTRESOLUTION ing in these four other factors would not leave much of a puzzle to be solved; even Liberman is perfectly willing to admit that conquest typically does not pay when the costs of seizing territory and the actions of rival states are factored in (p. 4). He argues that what is a puzzle is "whether the conquest of industrial economies pays, aside from the costs of conquering territory and the costs imposed by retaliating third parties" (p. 3). Liberman (1996) points out two key reasons why it is important to specifically study the economic benefits of conquest. First, if conquest does pay economically, then there will exist higher incentives for expansionist states to upset the status quo, and the system consequently will become more unstable and vice versa. Second, if conquest does pay economically, then the only thing that will keep the peace will be the other factors that he excludes from his study such as military deterrence, a willingness to balance against aggression, and the costliness of modern warfare. In short, the eco￾nomic benefits of conquest directly affect (a) the degree to which there are incentives to upset the territorial status quo and (b) the degree to which states must be militarily vigilant to maintain the peace. Despite the substantive importance of the economic benefits of conquest, this topic has been relatively neglected in recent years. International relations scholars, of course, routinely discuss the cost-benefit ratio of war as a key parameter in interna￾tional relations. Yet, the focus of analysis invariably is on the cost side of this equation, and little attention is paid to the benefit side (e.g., Zacher 1992,67-71). In recent years, international relations scholars have paid great attention to a number of different fac￾tors that have increased the costs of conflict facing leaders of advanced states during the post-World War II period. They include the greatly increased potential destruction of war due to vastly more powerful modern weapons, both nuclear (Waltz 1993; Gaddis 1987) and conventional (Mueller 1988); higher levels of resistance to war on the part of domestic publics (Russett 1993; Rosenau 1990); high potential losses of economic benefits due to increased levels of trade interdependence (Oneal and Russett 1997; Rosecrance 1986); stronger international norms against the use of force (Mueller 1989; Ray 1989); and the dominance of the defense over the offense due to factors such as greatly improved reconnaissance capabilities (Jervis 1978; Van Evera 1990-91). By comparison, scant few pages have been devoted to forwarding arguments about how the economic benefits of conquest might have changed among the most advanced states during the post-World War II period.' One possible reason for this neglect is that this subject simply falls between the cracks of international political economy and security studies (Kirshner 1998). The most likely reason is that many international relations scholars simply accept the wide￾spread argument that conquering an advanced state no longer pays due to increased levels of nationalism (Rosecrance 1986, 34; Gilpin 1981, 142; Knorr 1975). In this conventional view, which Liberman (1996) aptly labels the quagmire perspective, empire is now seen as unprofitable due to the costs associated with suppressing upris- 1. A good portion of the references on this topic are noted by Liberman (1996) in note 29 (pp. 161- 62) of his book. In addition to these citations listed here by Liberman, see also Ullman (1991, 23-25), Singer and Wildavsky (1993, 15-16), Van Evera (1990-91, 14-15), Jervis (1991-92, 49-50), and Rose￾crance (1996, 48, 56). Very few existing analyses devote more than a page or two to the economic benefits of conquest

Brooks /CHANGING BENEFITS OF CONQUEST 649 ings by resistance fighters and a concomitant reduction in the extractable economic surplus in the conquered territory due to strikes,sabotage,and foot dragging by the defeated populace. Liberman (1996)directly confronts this conventional quagmire perspective and effectively shows that it is not nearly as compelling as many scholars currently assume. Liberman's first,essentially noncontroversial argument is that states with higher levels of economic development offer larger potential economic rewards to the conqueror; the richer a country,the more that can potentially be plundered from it.The key ques- tion then becomes whether the high levels of wealth in the most advanced countries can actually be extracted by the conqueror.If the quagmire view is correct,then these large levels of economic surplus in advanced states will not be available to the con- queror due to active resistance by the defeated populace.Liberman's key argument is that high levels of popular resistance are not a given in modern societies;rather,they vary inversely with the ruthlessness of the conqueror.He maintains that extremely ruthless conquerors,such as the Nazis in World War II,can effectively suppress popu- lar resistance and thereby are able to extract significant economic resources from the vanquished country.Liberman assesses his thesis through a detailed historical analysis of five occupations of industrial societies from the 20th century:Belgium and Luxem- bourg,1914-1918;Ruhr-Rhineland,1923-1924;the Japanese empire,1910-1945;the Nazi occupation of Western Europe,1940-1944;and the Soviet empire in Eastern Europe,1945-1989.He finds significant support for his argument that those invaders who are ruthless can suppress popular resistance and thereby make conquest pay.2 There are several reasons,however,to question Liberman's(1996)findings.Two issues in particular are worth highlighting.First,Liberman's study suffers from poten- tial selection bias in his cases.He limits his sample of cases to examples in which con- quest has occurred and"there is attempted extraction"(p.14).As a result,for a case to count in his sample,the conqueror not only has to be able to vanquish the opponent but also must establish sufficient territorial control that extraction can actually be attempted.Two key variables that affect whether a country can be successfully con- quered to this degree are(a)the extent to which the population is willing to make sacri- fices to repel the invader and (b)the level of resolve and effectiveness of the defender's military units on the battlefield.States with highly nationalistic populations willing to make significant sacrifices to reject an invader and,in turn,whose military forces ardently and effectively oppose the conqueror in battle (e.g.,Vietnam from 1946 to 1975,Britain in World War II,Afghanistan from 1979 to 1989)will be difficult to con- quer and even harder to establish sufficient territorial control for extraction to be attempted.The converse also will be true (e.g.,France in 1940). The key point is that some of the very factors that make societies easy to conquer (e.g.,lack of significant popular resistance,low levels of resolve and effectiveness on the battlefield)also will make them easier to subdue once they are occupied.Not sur- 2.To be clear,Liberman (1996)does not claim that conquest produced significant gains in all of the historical cases he examines.He maintains that conquest did not pay significant rewards in two of the cases he investigates:Belgium during World War I and the first phase of the Ruhr-Rhineland occupation.In cach of these cases,however,he argues that this ultimately can be traced to a lack ofruthlessness on the part of the conquering power

Brooks / CHANGING BENEFITS OF CONQUEST 649 ings by resistance fighters and a concomitant reduction in the extractable economic surplus in the conquered territory due to strikes, sabotage, and foot dragging by the defeated populace. Liberman (1996) directly confronts this conventional quagmire perspective and effectively shows that it is not nearly as compelling as many scholars currently assume. Liberman's first, essentially noncontroversial argument is that states with higher levels of economic development offer larger potential economic rewards to the conqueror; the richer a country, the more that can potentially be plundered from it. The key ques￾tion then becomes whether the high levels of wealth in the most advanced countries can actually be extracted by the conqueror. If the quagmire view is correct, then these large levels of economic surplus in advanced states will not be available to the con￾queror due to active resistance by the defeated populace. Liberman's key argument is that high levels of popular resistance are not a given in modern societies; rather, they vary inversely with the ruthlessness of the conqueror. He maintains that extremely ruthless conquerors, such as the Nazis in World War II, can effectively suppress popu￾lar resistance and thereby are able to extract significant economic resources from the vanquished country. Liberman assesses his thesis through a detailed historical analysis of five occupations of industrial societies from the 20th century: Belgium and Luxem￾bourg, 1914-1918; Ruhr-Rhineland, 1923-1924; the Japanese empire, 1910-1945; the Nazi occupation of Western Europe, 1940-1944; and the Soviet empire in Eastern Europe, 1945-1989. He finds significant support for his argument that those invaders who are ruthless can suppress popular resistance and thereby make conquest pay.2 There are several reasons, however, to question Liberman's (1996) findings. Two issues in particular are worth highlighting. First, Liberman's study suffers from poten￾tial selection bias in his cases. He limits his sample of cases to examples in which con￾quest has occurred and "there is attempted extraction" (p. 14). As a result, for a case to count in his sample, the conqueror not only has to be able to vanquish the opponent but also must establish sufficient territorial control that extraction can actually be attempted. Two key variables that affect whether a country can be successfully con￾quered to this degree are (a) the extent to which the population is willing to make sacri￾fices to repel the invader and (b) the level of resolve and effectiveness of the defender's military units on the battlefield. States with highly nationalistic populations willing to make significant sacrifices to reject an invader and, in turn, whose military forces ardently and effectively oppose the conqueror in battle (e.g., Vietnam from 1946 to 1975, Britain in World War II, Afghanistan from 1979 to 1989) will be difficult to con￾quer and even harder to establish sufficient territorial control for extraction to be attempted. The converse also will be true (e.g., France in 1940). The key point is that some of the very factors that make societies easy to conquer (e.g., lack of significant popular resistance, low levels of resolve and effectiveness on the battlefield) also will make them easier to subdue once they are occupied. Not sur- 2. To be clear, Liberman (1996) does not claim that conquest produced significant gains in all of the historical cases he examines. He maintains that conquest did not pay significant rewards in two of the cases he investigates: Belgium during World War I and the first phase of the Ruhr-Rhineland occupation. In each of these cases, however, he argues that this ultimately can be traced to a lack of ruthlessness on the part of the conquering power

650 JOURNAL OF CONFLICT RESOLUTION prisingly,conquerors often avoid targets that are hard to subdue.In the end,therefore, Liberman's (1996)sample of cases appears to be biased toward examining countries that are less likely to put up much active resistance both before and after conquest.For example,some of the very factors that made France easy for the Nazis to conquer in World War II likely also made it easy for the Nazis to occupy France.Consequently,it is not entirely surprising that Liberman finds that the Nazis were able to easily sup- press resistance and extract significant economic gains from France.By contrast,one wonders about the counterfactual example of how easy it would have been for the Nazis to suppress popular resistance in Britain if the Nazis had actually been able to successfully overcome stiff British opposition to invasion.One suspects that some of the very factors that made it possible for the British to resist Nazi aggression so suc- cessfully likely also would have translated into significant resistance efforts following a hypothetical Nazi conquest. In addition to concerns about potential selection bias,it is worth noting that although the evidence from World War II and earlier that Liberman(1996)examines matches up well with his underlying argument,his only case from the post-World War II period(the Soviet empire in Eastern Europe)is highly problematic for his thesis. Showing that the Soviets'East European empire was a net benefit obviously is a tough case to make given the predominant view that it was a huge drain on Soviet economic resources.For example,a prominent RAND study estimates that the costs of the Soviet empire reached as high as 3%of Soviet gross national product in 1980,of which 64% of this total was spent in Eastern Europe (Wolf 1987,134-35).The best researched account of Soviet-Warsaw Pact economic relations,which was published contempo- raneously with Liberman's study,concludes that"what had been a serious problem [for the Soviets]in the early 1970s had grown into a crisis of threatening proportions by the mid-1980s"(Stone 1996,43).Recent analysis also indicates that Soviet deci- sion makers themselves viewed the empire as an expensive burden (Levesque 1997). Liberman(1996)ultimately is forced to confront the Soviet case for two reasons. First,this case is essentially the only recent example of empire that he can discuss given that most of the colonial empires have long been dismantled.Certainly,it is the only recent example of conquest of any economically modern country,although East- ern Europe obviously lagged far behind the West in terms of economic modernization, and one certainly can question whether it is reasonable to classify certain parts of the Soviet empire,in particular Bulgaria and Romania,as"modern"during any point of the Soviet occupation.Second,it is exactly because of the widespread view that the Soviet empire was not profitable that Liberman must address this case and show that this conclusion is misguided.In the end,he does not succeed. Liberman(1996)does demonstrate that the Soviets were able to transfer substantial resources from East Germany immediately after World War II.But these short-term gains from East Germany seem to have been largely offset by the fact that the Soviets were not able to extract much of anything from the other East European countries they occupied after the war(p.129).In turn,Liberman shows that the Soviets generally were able to suppress popular resistance effectively and that East European workers did not engage in very many strikes.But this does not necessarily mean that we should

650 JOURNAL OF CONFLICTRESOLUTION prisingly, conquerors often avoid targets that are hard to subdue. In the end, therefore, Liberman's (1996) sample of cases appears to be biased toward examining countries that are less likely to put up much active resistance both before and after conquest. For example, some of the very factors that made France easy for the Nazis to conquer in World War II likely also made it easy for the Nazis to occupy France. Consequently, it is not entirely surprising that Liberman finds that the Nazis were able to easily sup￾press resistance and extract significant economic gains from France. By contrast, one wonders about the counterfactual example of how easy it would have been for the Nazis to suppress popular resistance in Britain if the Nazis had actually been able to successfully overcome stiff British opposition to invasion. One suspects that some of the very factors that made it possible for the British to resist Nazi aggression so suc￾cessfully likely also would have translated into significant resistance efforts following a hypothetical Nazi conquest. In addition to concerns about potential selection bias, it is worth noting that although the evidence from World War II and earlier that Liberman (1996) examines matches up well with his underlying argument, his only case from the post-World War II period (the Soviet empire in Eastern Europe) is highly problematic for his thesis. Showing that the Soviets' East European empire was a net benefit obviously is a tough case to make given the predominant view that it was a huge drain on Soviet economic resources. For example, a prominent RAND study estimates that the costs of the Soviet empire reached as high as 3% of Soviet gross national product in 1980, of which 64% of this total was spent in Eastern Europe (Wolf 1987, 134-35). The best researched account of Soviet-Warsaw Pact economic relations, which was published contempo￾raneously with Liberman's study, concludes that "what had been a serious problem [for the Soviets] in the early 1970s had grown into a crisis of threatening proportions by the mid-1980s" (Stone 1996, 43). Recent analysis also indicates that Soviet deci￾sion makers themselves viewed the empire as an expensive burden (Levesque 1997). Liberman (1996) ultimately is forced to confront the Soviet case for two reasons. First, this case is essentially the only recent example of empire that he can discuss given that most of the colonial empires have long been dismantled. Certainly, it is the only recent example of conquest of any economically modern country, although East￾ern Europe obviously lagged far behind the West in terms of economic modernization, and one certainly can question whether it is reasonable to classify certain parts of the Soviet empire, in particular Bulgaria and Romania, as "modern" during any point of the Soviet occupation. Second, it is exactly because of the widespread view that the Soviet empire was not profitable that Liberman must address this case and show that this conclusion is misguided. In the end, he does not succeed. Liberman (1996) does demonstrate that the Soviets were able to transfer substantial resources from East Germany immediately after World War II. But these short-term gains from East Germany seem to have been largely offset by the fact that the Soviets were not able to extract much of anything from the other East European countries they occupied after the war (p. 129). In turn, Liberman shows that the Soviets generally were able to suppress popular resistance effectively and that East European workers did not engage in very many strikes. But this does not necessarily mean that we should

Brooks CHANGING BENEFITS OF CONQUEST 651 conclude that the Soviet empire was profitable.For one thing,the East Europeans might have been fairly quiescent only because of the large Soviet troop presence in the region.The degree to which the Soviet forces in Eastern Europe were designed for external security rather than to preserve internal order (and hence should count as occupation costs)is very difficult to assess.Liberman cites the fact that large-scale Soviet military intervention in Eastern Europe was required only three times in support of the view that Soviet troops in the region were not significantly oriented toward pre- serving internal order(p.133).Looking at the same evidence,one can easily reach the opposite conclusion.Beyond total troop levels,Liberman states that"the number of administrators and spies remains uncertain but represented at most a small fraction of Soviet troops"(p.133).Why we should believe Liberman's assessment of the number of spies and administrators despite an admitted lack of data is unclear.Moreover,man- power figures only partially reflect total expenditures on monitoring and administra- tion.In the end,Liberman might be right that Soviet costs of control in Eastern Europe were"not great,"(p.126)but we cannot reach this conclusion on the basis of the avail- able evidence that he presents. Furthermore,the East Europeans might have been fairly complacent only due to the large inflow of subsidies,both explicit and implicit,from the Soviet Union(Bunce 1985).Although difficult to estimate with exactitude,the size of these subsidies remained stubbornly high even after the Soviets strove to reduce them during the 1980s.Stone (1996,45)reveals that"the Soviet premier,Nikolai Ryzhkov,had been shocked as late as 1988 by a report which estimated the Soviet subsidy to the East European allies at $17 billion per year."Liberman(1996,132)does recognize that Soviet subsidies were very significant in size,but he argues that"the subsidies did not represent a net imperial deficit for the Soviet Union"because they were significantly lower than the money spent on military expenditures by the East European countries. Whether these military expenditures by East European countries should fall under Liberman's restrictive definition of the "economic"benefits of conquest,however,is not entirely clear.Moreover,by Liberman's own earlier admission,the "reliability of these [East European]forces,and thus their contribution to Soviet power,is hard to judge"(pp.130-31).Past Soviet military interventions in Czechoslovakia and Hun- gary hardly ensured high levels of loyalty by these countries'military forces,and the same can be said about Polish military forces following the Soviet imposition of mar- tial law in 1981.Not only was the loyalty of these three countries highly suspect,but also the military capacity of East European military forces generally was relatively low.Within Eastern Europe,only the East German military might have been capable of effectively matching up against North Atlantic Treaty Organization (NATO)forces. But if a NATO-Warsaw Pact conventional war had ever occurred,it is unclear whether East German forces would have possessed sufficient loyalty to attack and kill their West German brethren. Ultimately,the East European armies might have contributed to Soviet security to some degree(although once the Soviets had an ensured"second strike"capability and mutual nuclear deterrence had developed,one certainly can question exactly how much of a contribution this might have entailed).But,it is hard to fathom that any con-

Brooks / CHANGING BENEFITS OF CONQUEST 651 conclude that the Soviet empire was profitable. For one thing, the East Europeans might have been fairly quiescent only because of the large Soviet troop presence in the region. The degree to which the Soviet forces in Eastern Europe were designed for external security rather than to preserve internal order (and hence should count as occupation costs) is very difficult to assess. Liberman cites the fact that large-scale Soviet military intervention in Eastern Europe was required only three times in support of the view that Soviet troops in the region were not significantly oriented toward pre￾serving internal order (p. 133). Looking at the same evidence, one can easily reach the opposite conclusion. Beyond total troop levels, Liberman states that "the number of administrators and spies remains uncertain but represented at most a small fraction of Soviet troops" (p. 133). Why we should believe Liberman's assessment of the number of spies and administrators despite an admitted lack of data is unclear. Moreover, man￾power figures only partially reflect total expenditures on monitoring and administra￾tion. In the end, Liberman might be right that Soviet costs of control in Eastern Europe were "not great;' (p. 126) but we cannot reach this conclusion on the basis of the avail￾able evidence that he presents. Furthermore, the East Europeans might have been fairly complacent only due to the large inflow of subsidies, both explicit and implicit, from the Soviet Union (Bunce 1985). Although difficult to estimate with exactitude, the size of these subsidies remained stubbornly high even after the Soviets strove to reduce them during the 1980s. Stone (1996, 45) reveals that "the Soviet premier, Nikolai Ryzhkov, had been shocked as late as 1988 by a report which estimated the Soviet subsidy to the East European allies at $17 billion per year." Liberman (1996, 132) does recognize that Soviet subsidies were very significant in size, but he argues that "the subsidies did not represent a net imperial deficit for the Soviet Union" because they were significantly lower than the money spent on military expenditures by the East European countries. Whether these military expenditures by East European countries should fall under Liberman's restrictive definition of the "economic" benefits of conquest, however, is not entirely clear. Moreover, by Liberman's own earlier admission, the "reliability of these [East European] forces, and thus their contribution to Soviet power, is hard to judge" (pp. 130-31). Past Soviet military interventions in Czechoslovakia and Hun￾gary hardly ensured high levels of loyalty by these countries' military forces, and the same can be said about Polish military forces following the Soviet imposition of mar￾tial law in 1981. Not only was the loyalty of these three countries highly suspect, but also the military capacity of East European military forces generally was relatively low. Within Eastern Europe, only the East German military might have been capable of effectively matching up against North Atlantic Treaty Organization (NATO) forces. But if a NATO-Warsaw Pact conventional war had ever occurred, it is unclear whether East German forces would have possessed sufficient loyalty to attack and kill their West German brethren. Ultimately, the East European armies might have contributed to Soviet security to some degree (although once the Soviets had an ensured "second strike" capability and mutual nuclear deterrence had developed, one certainly can question exactly how much of a contribution this might have entailed). But, it is hard to fathom that any con-

652 JOURNAL OF CONFLICT RESOLUTION ceivable security benefit these forces provided was worth the enormous long-term eco- nomic costs,in terms of both direct outlays and opportunity costs,that were associated with propping up the Soviet empire.This is,in fact,a principal reason why the Soviets decided to give up their East European empire during the late 1980s (Wohlforth 1994-95). In the end,Liberman's (1996)argument is simply not sufficient to reject the con- ventional wisdom that the Soviet empire was a huge economic albatross.This is a con- clusion that has only become stronger over time as evidence from Soviet sources has increased.3 Of course,the Soviet case is only one of five that Liberman examines.But the fact that this is his only case from the post-World War II period and is by far the weakest one for his thesis is very significant given that there are reasons to expect that the benefits of conquest might have declined during the post-World War II era. Despite these concerns,Liberman(1996)nevertheless has provided a very useful and compelling corrective to the quagmire view.Too many scholars have simply assumed that significant popular resistance will emerge following occupation in all modern states and,therefore,that conquest of such states by definition cannot be very profitable.Liberman clearly shows that whether popular resistance emerges and,in turn,whether it serves to constrain the gains from conquest are empirical questions that cannot simply be assumed away.In turn,he provides significant explanatory lev- erage in terms of understanding variation in the level of popular resistance.This is,in itself,an important contribution to the literature on resistance and collaboration. Where do we go from here?Liberman(1996)has effectively shown that the previ- ous conventional quagmire view is wanting.Does this mean that we should conclude that the conquest of a highly advanced state still can produce significant economic rewards?In Liberman's study,the degree to which the conquered population resists or collaborates is the essential determinant of the profitability of conquest (p.30).His focus on the level of popular resistance makes sense given the predominance of the quagmire perspective up to now in the literature.But increased nationalism is not the only change that has occurred in modern societies over the 20th century that might sig- nificantly reduce the benefits of conquest.In particular,might it be possible that the economies of the most advanced states have changed so much since World War II that conquest will not produce significant gains even if the vanquished country's populace does not engage in active popular resistance? Attention has so far been deflected away from this question because of the prevail- ing view that modern nationalism on its own greatly reduces the benefits of conquest. As a result,scholars so far have failed to pay much attention to how post-World War II economic transformations in the most advanced countries might lower the benefits of conquest.The principal arguments that have been advanced to this effect are so under- developed that Liberman (1996)not only is able to quickly reject most of them but actually ends up turning them on their heads.His other principal argument is that eco- nomic modernization during the post-World War II period has made it easier for con- 3.It should be noted that Liberman(1996,126)is very forthright that his conclusions about the prof- itability of the Soviet empire"can hardly be considered definitive since newly opened archives in the Soviet Union and Eastern Europe promise to shed further light

652 JOURNAL OF CONFLICT RESOLUTION ceivable security benefit these forces provided was worth the enormous long-term eco￾nomic costs, in terms of both direct outlays and opportunity costs, that were associated with propping up the Soviet empire. This is, in fact, a principal reason why the Soviets decided to give up their East European empire during the late 1980s (Wohlforth 1994-95). In the end, Liberman's (1996) argument is simply not sufficient to reject the con￾ventional wisdom that the Soviet empire was a huge economic albatross. This is a con￾clusion that has only become stronger over time as evidence from Soviet sources has increased.3 Of course, the Soviet case is only one of five that Liberman examines. But the fact that this is his only case from the post-World War II period and is by far the weakest one for his thesis is very significant given that there are reasons to expect that the benefits of conquest might have declined during the post-World War II era. Despite these concerns, Liberman (1996) nevertheless has provided a very useful and compelling corrective to the quagmire view. Too many scholars have simply assumed that significant popular resistance will emerge following occupation in all modern states and, therefore, that conquest of such states by definition cannot be very profitable. Liberman clearly shows that whether popular resistance emerges and, in turn, whether it serves to constrain the gains from conquest are empirical questions that cannot simply be assumed away. In turn, he provides significant explanatory lev￾erage in terms of understanding variation in the level of popular resistance. This is, in itself, an important contribution to the literature on resistance and collaboration. Where do we go from here? Liberman (1996) has effectively shown that the previ￾ous conventional quagmire view is wanting. Does this mean that we should conclude that the conquest of a highly advanced state still can produce significant economic rewards? In Liberman's study, the degree to which the conquered population resists or collaborates is the essential determinant of the profitability of conquest (p. 30). His focus on the level of popular resistance makes sense given the predominance of the quagmire perspective up to now in the literature. But increased nationalism is not the only change that has occurred in modern societies over the 20th century that might sig￾nificantly reduce the benefits of conquest. In particular, might it be possible that the economies of the most advanced states have changed so much since World War II that conquest will not produce significant gains even if the vanquished country's populace does not engage in active popular resistance? Attention has so far been deflected away from this question because of the prevail￾ing view that modern nationalism on its own greatly reduces the benefits of conquest. As a result, scholars so far have failed to pay much attention to how post-World War II economic transformations in the most advanced countries might lower the benefits of conquest. The principal arguments that have been advanced to this effect are so under￾developed that Liberman (1996) not only is able to quickly reject most of them but actually ends up turning them on their heads. His other principal argument is that eco￾nomic modernization during the post-World War II period has made it easier for con- 3. It should be noted that Liberman (1996, 126) is very forthrighthat his conclusions about the prof￾itability of the Soviet empire "can hardly be considered definitive since newly opened archives in the Soviet Union and Eastern Europe promise to shed further light

Brooks/CHANGING BENEFITS OF CONQUEST 653 querors to successfully reap economic gains in the most advanced countries.This argument is perhaps the most provocative in his book. A much more detailed analysis of how recent economic changes in the most advanced states affect the benefits of conquest is now required.Although many eco- nomic transformations are worthy of investigation in this regard,I focus on the globali- zation of production.I describe four recent changes in the structure of global produc- tion and outline why each of these economic transformations appears to have reduced the benefits of conquest within the most advanced countries.Although none of the deductive arguments presented necessarily has a decisive influence,their combined impact strongly indicates that the benefits of conquest have significantly declined within the most economically advanced countries.In this view,it likely is no accident that concerns about territorial revisionism have essentially vanished among the most economically advanced countries and that the only case of conquest of any moderately modern country during the post-World War II period,the Soviet empire,is by far the weakest case in Liberman's (1996)book. COMPARISON WITH LIBERAL AND TRANSNATIONALIST PERSPECTIVES Before proceeding with my argument,I should note briefly its distinction from two related literatures.First,liberal theorists have long stressed how increased trade link- ages make conquest less profitable.In the liberal view,engaging in conquest with a trading partner makes no sense because doing so destroys markets for the conqueror's exports and thereby reduces the conqueror's economic wealth (Rosecrance 1986; Oneal and Russett 1997;Angell 1910).Although my argument ultimately can be seen as complementary to the liberal perspective,it is important to recognize that my focus is on a different independent variable-changes in the structure of global production, not trade.My argument also does not focus on how conquest reduces consumer and firm welfare,as liberal arguments typically do;rather,it is concerned with the extent to which conquest has the capacity to increase the conqueror's relative power. It is interesting to speculate why liberal theory traditionally has focused on trade linkages while ignoring global production issues.The likely key reason is that there was very little FDI between the most economically advanced countries during the "golden age"of capitalism(1870-1914).5 Hence,the theorists writing at the time (e.g., Angell,Cobden)who developed the key liberal arguments about how international economic factors affect war and conflict had little reason to pay attention to global pro- duction issues. 4.Angell(1910,52-62)did not focus solely on trade interdependence;he also emphasized how capi- tal market interdependence reduces the benefits of conquest. 5.In 1914,76%of the foreign direct investment(FDI)stock was based outside of North America and Europe,with a scant 8%based in Western Europe itself (Jones 1996,31).By comparison,the geo- graphic distribution of FDI dramatically reversed itselfby 1993.The vast majority of FDI now is based in the developed world,with 43%of the total in Western Europe and 27%in North America (Jones 1996,54)

Brooks / CHANGING BENEFITS OF CONQUEST 653 querors to successfully reap economic gains in the most advanced countries. This argument is perhaps the most provocative in his book. A much more detailed analysis of how recent economic changes in the most advanced states affect the benefits of conquest is now required. Although many eco￾nomic transformations are worthy of investigation in this regard, I focus on the globali￾zation of production. I describe four recent changes in the structure of global produc￾tion and outline why each of these economic transformations appears to have reduced the benefits of conquest within the most advanced countries. Although none of the deductive arguments presented necessarily has a decisive influence, their combined impact strongly indicates that the benefits of conquest have significantly declined within the most economically advanced countries. In this view, it likely is no accident that concerns about territorial revisionism have essentially vanished among the most economically advanced countries and that the only case of conquest of any moderately modern country during the post-World War II period, the Soviet empire, is by far the weakest case in Liberman's (1996) book. COMPARISON WITH LIBERAL AND TRANSNATIONALIST PERSPECTIVES Before proceeding with my argument, I should note briefly its distinction from two related literatures. First, liberal theorists have long stressed how increased trade link￾ages make conquest less profitable. In the liberal view, engaging in conquest with a trading partner makes no sense because doing so destroys markets for the conqueror's exports and thereby reduces the conqueror's economic wealth (Rosecrance 1986; Oneal and Russett 1997; Angell 1910). Although my argument ultimately can be seen as complementary to the liberal perspective, it is important to recognize that my focus is on a different independent variable-changes in the structure of global production, not trade. My argument also does not focus on how conquest reduces consumer and firm welfare, as liberal arguments typically do; rather, it is concerned with the extent to which conquest has the capacity to increase the conqueror's relative power. It is interesting to speculate why liberal theory traditionally has focused on trade linkages while ignoring global production issues.4 The likely key reason is that there was very little FDI between the most economically advanced countries during the "golden age" of capitalism (1870-1914).5 Hence, the theorists writing at the time (e.g., Angell, Cobden) who developed the key liberal arguments about how international economic factors affect war and conflict had little reason to pay attention to global pro￾duction issues. 4. Angell (1910,52-62) did not focus solely on trade interdependence; he also emphasized how capi￾tal market interdependence reduces the benefits of conquest. 5. In 1914, 76% of the foreign direct investment (FDI) stock was based outside of North America and Europe, with a scant 8% based in Western Europe itself (Jones 1996, 31). By comparison, the geo￾graphic distribution of FDI dramatically reversed itself by 1993. The vast majority of FDI now is based in the developed world, with 43% of the total in Western Europe and 27% in North America (Jones 1996, 54)

654 JOURNAL OF CONFLICT RESOLUTION Global production issues no longer can be ignored.Internationalized production by multinational corporations(MNCs)now surpasses international trade as the most important integrating force in the international economy.Global sales in international markets associated with the various international production activities undertaken by MNCs"amounted to an estimated $7 trillion in 1992,compared to $3 trillion in arm's- length trade"(U.N.Conference on Trade and Development [UNCTAD]1995,xx).It is estimated that approximately one third of international trade now occurs within firms (Jones 1996,56).Hence,much of international trade in today's global economy is actually a direct byproduct of the globalization of production;the very nature and level of trade flows are increasingly the consequence of the locational decisions of global firms (UNCTAD 1996,95-125).Perhaps not surprisingly,these dramatic changes recently have prompted one leading liberal scholar to begin paying attention to how global production issues,and not just international trade flows,affect security affairs (Rosecrance 1996). Although recent changes in the structure of global production are highly significant in quantitative terms,of key importance is that the very nature of global production has undergone a qualitative change(Dunning 1993,128-31;UNCTAD 1993,113;Dicken 1998,5).Of the three globalization trends-increased integration of capital markets, increased trade linkages,and the globalization of production-the latter is the most historically unprecedented.This is not to say that the recent changes in international trade and global capital markets are"nothing new"or will not have important effects on states'security behavior.But if we want to figure out whether the benefits of con- quest are changing over time,then there are strong reasons to focus attention on the globalization of production. Although I emphasize how changes in the behavior of MNCs affect international security,it is important to recognize that my argument is distinct from the perspective advanced by the transnationalist literature during the 1970s(e.g.,Keohane and Nye 1972).This literature's general argument was that transnational actors,in particular MNCs,were rising to prominence and replacing states as the key actors in world politics. Although this literature did not directly address security issues very much,some tran- snationalists argued that the rise to prominence of MNCs would lead to foreign poli- cies within the most modernized societies that"are primarily nonconflictual"(Morse 1970,377,387). The argument I advance here is different from the transnationalist perspective in two important respects.First,the state occupies a much different role in my analysis.A principal reason why the transnationalist perspective disappeared from view after the 1970s is that the state never faded away as this literature had predicted.Rather than arguing,as the transnationalists did,that foreign policy is changing because the role of the state is being curtailed,I emphasize how the globalization of production is chang- ing the incentives facing states.Second,my focus is not on the mere fact that MNCs are becoming more important actors in the international economy.More specifically,I 6.To be clear,by multinational corporation,I mean a firm that owns,coordinates,or controls value- adding activities in more than one country.It should be noted that some economists and management schol- ars prefer the term transnational corporation.But there is no specific difference between the terms multina- tional and transnational,and they are used interchangeably in the literature

654 JOURNAL OF CONFLICTRESOLUTION Global production issues no longer can be ignored. Internationalized production by multinational corporations6 (MNCs) now surpasses international trade as the most important integrating force in the international economy. Global sales in international markets associated with the various international production activities undertaken by MNCs "amounted to an estimated $7 trillion in 1992, compared to $3 trillion in arm's￾length trade" (U.N. Conference on Trade and Development [UNCTAD] 1995, xx). It is estimated that approximately one third of international trade now occurs within firms (Jones 1996, 56). Hence, much of international trade in today's global economy is actually a direct byproduct of the globalization of production; the very nature and level of trade flows are increasingly the consequence of the locational decisions of global firms (UNCTAD 1996, 95-125). Perhaps not surprisingly, these dramatic changes recently have prompted one leading liberal scholar to begin paying attention to how global production issues, and not just international trade flows, affect security affairs (Rosecrance 1996). Although recent changes in the structure of global production are highly significant in quantitative terms, of key importance is that the very nature of global production has undergone a qualitative change (Dunning 1993, 128-31; UNCTAD 1993, 113; Dicken 1998, 5). Of the three globalization trends-increased integration of capital markets, increased trade linkages, and the globalization of production-the latter is the most historically unprecedented. This is not to say that the recent changes in international trade and global capital markets are "nothing new" or will not have important effects on states' security behavior. But if we want to figure out whether the benefits of con￾quest are changing over time, then there are strong reasons to focus attention on the globalization of production. Although I emphasize how changes in the behavior of MNCs affect international security, it is important to recognize that my argument is distinct from the perspective advanced by the transnationalist literature during the 1970s (e.g., Keohane and Nye 1972). This literature's general argument was that transnational actors, in particular MNCs, were rising to prominence and replacing states as the key actors in world politics. Although this literature did not directly address security issues very much, some tran￾snationalists argued that the rise to prominence of MNCs would lead to foreign poli￾cies within the most modernized societies that "are primarily nonconflictual" (Morse 1970, 377, 387). The argument I advance here is different from the transnationalist perspective in two important respects. First, the state occupies a much different role in my analysis. A principal reason why the transnationalist perspective disappeared from view after the 1970s is that the state never faded away as this literature had predicted. Rather than arguing, as the transnationalists did, that foreign policy is changing because the role of the state is being curtailed, I emphasize how the globalization of production is chang￾ing the incentives facing states. Second, my focus is not on the mere fact that MNCs are becoming more important actors in the international economy. More specifically, I 6. To be clear, by multinational corporation, I mean a firm that owns, coordinates, or controls value￾adding activities in more than one country. It should be noted that some economists and management schol￾ars prefer the term transnational corporation. But there is no specific difference between the terms multina￾tional and transnational, and they are used interchangeably in the literature