Economic Expansion and Security in Pre-WWI Europe 201 Abundant in labor Land poor Land rich Capital locally abundant Britain,France, Germany None Capital locally scarce Austria-Hungary Russia Source:Rogowski 1989. FIGURE 3.Economic endowments of the European great powers grew by nearly half again.10 This expansion of trade led to the growing exposure of regional and national markets to the world economy-a development that pro- foundly affected almost every aspect of European economic,social,and political life. To generate specific predictions about this development for the security politics of the European great powers requires a model of the economy and knowledge about the importance and substitutability of various resources in European military compe- tition.To address the first issue,I follow Ronald Rogowski's study on the effects of trade on domestic political alignments and classify each power according to its rela- tive endowment in a three-factor model of land,labor,and capital,yielding a pattern in which the European powers occupied three niches in the world economy.2 Britain, France,and Germany were abundant in labor and capital but scarce in land relative to the rest of the world;Russia was abundant in labor and land but scarce in capital;and Austria-Hungary was abundant in labor but scarce in land and capital(see Figure 3).3 Second,each of these economic factors differed in its importance to military com- petition in Europe.Land was the least valuable factor and,except for the peasantry (the intensive users of this resource)as a source of military labor,contributed little to the military strength of a great power.4 More important were capital and labor,al- though the relative weight of each varied as to whether the issue was one of naval or land warfare.Key to naval competition was the state's ability to muster the eco- nomy's industrial capacity to build heavier,faster,and ever more technologically 10.Rogowski 1989,21. 11.Gourevitch 1986,chap.3. 12.Rogowski 1989.Modeling always involves a tradeoff between parsimony and accuracy.I believe the advantages provided by a three-factor model-parsimony.simplicity,and tractability-outweigh any potential loss in accuracy.Midford seeks to improve the accuracy of Rogowski's work by using a more disaggregated model.Midford 1993. 13.Rogowski1989,25-30. 14.Clearly,land and geography matter in military competition.States that possess vast swaths of land can use it as a defensive strategic asset.But given the perceived advantages of offensive warfare in the nineteenth century,land mattered less than either capital or labor,which were key to building and pro- jecting mobile armies.grew by nearly half again.10 This expansion of trade led to the growing exposure of regional and national markets to the world economy—a development that pro￾foundly affected almost every aspect of European economic, social, and political life.11 To generate speciŽ c predictions about this developmentfor the security politics of the European great powers requires a model of the economy and knowledge about the importance and substitutabilityof variousresources in European military compe￾tition. To address the Ž rst issue, I follow Ronald Rogowski’s study on the effects of trade on domestic political alignments and classify each power according to its rela￾tive endowment in a three-factor model of land, labor, and capital, yielding a pattern in which the European powers occupied three nichesin the world economy.12 Britain, France, and Germany were abundant in labor and capital butscarce in land relative to the rest of the world; Russia was abundant in labor and land butscarce in capital; and Austria-Hungary was abundant in labor butscarce in land and capital(see Figure 3).13 Second, each of these economic factors differed in its importance to military com￾petition in Europe. Land was the least valuable factor and, except for the peasantry (the intensive users of thisresource) as a source of military labor, contributed little to the military strength of a great power.14 More important were capital and labor, al￾though the relative weight of each varied as to whether the issue was one of naval or land warfare. Key to naval competition was the state’s ability to muster the eco￾nomy’s industrial capacity to build heavier, faster, and ever more technologically 10. Rogowski 1989, 21. 11. Gourevitch 1986, chap. 3. 12. Rogowski 1989. Modeling always involves a tradeoff between parsimony and accuracy. I believe the advantages provided by a three-factor model—parsimony, simplicity, and tractability—outweigh any potential loss in accuracy. Midford seeks to improve the accuracy of Rogowski’s work by using a more disaggregated model. Midford 1993. 13. Rogowski 1989, 25–30. 14. Clearly, land and geography matter in military competition. States that possess vast swaths of land can use it as a defensive strategic asset. But given the perceived advantages of offensive warfare in the nineteenth century, land mattered less than either capital or labor, which were key to building and pro￾jecting mobile armies. FIGURE 3. Economic endowments of the European great powers Economic Expansion and Security in Pre–WWI Europe 201