Economic Expansion and Security in Pre-WWI Europe 197 constraints are the only,or even the most important,factor in determining the secu- rity politics of states or that I offer a general explanation of international security and conflict.Yet the ability of this theory to link important empirical and theoretical issues-ranging from the growing fragility of the European state system prior to World War I,to the impact of trade on international stability,to the dynamics of hegemonic theory-suggests that it taps a rich vein of inquiry of central relevance to scholars of international affairs. The Economics of Security and Changing National Exposure to the International Economy All states confront a significant economic problem.Security is costly.To build mili- tary establishments capable of defending vital national interests,states must draw resources out of the national economy and employ them in the security sector.3 For example,industrial capital is necessary to build warships,tanks,and aircraft;human capital is necessary to develop new military technologies and the doctrines that gov- ern the use of military force;labor is necessary for troops.This economic aspect of security implies that states may be vulnerable to externally induced changes in the costs and risks of international exchange.Because these changes alter the relative prices of domestic economic resources,they also alter the cost of using these re- sources for security purposes.In this way,a changing world economy may fundamen- tally shape the economic constraints on a state's security policies. To explore this idea,I develop a simple framework that builds on the Stolper- Samuelson theorem from international trade theory.This theorem holds that increas- ing exposure of the national economy to international trade benefits the owners and intensive users of those resources in which the economy is abundantly endowed relative to the rest of the world,while harming the owners and intensive users of those resources in which the economy is poorly endowed.For example,in an economy abundant in labor but scarce in capital,increasing exposure to international trade benefits labor and harms capital.Decreasing exposure to the international economy reverses these effects,so that owners and users of the economy's abundant resources suffer,while the owners and users of the economy's scarce resources gain. I link these domestic consequences of a changing world economy to changes in the underlying economic constraints on a state's security behavior by making two assump- tions.I assume,first,that the state's difficulty in mobilizing specific resources for security purposes will be directly related to the returns that those resources earn elsewhere in the national economy.The more that resources eamn in nonsecurity sectors of the national economy,the more difficult it becomes for the state to use them for security.This assumption follows directly from the fact that scarcity is 3.Tily1990. 4.Although built on assumptions that almost never hold,the theorem's central insight appears robust. See Corden 1974,93-104;Leamer 1984;Ethier 1984;and Rogowski 1989,16-20.constraints are the only, or even the most important, factor in determining the secu￾rity politics of states or that I offer a general explanation of internationalsecurity and con ict. Yet the ability of this theory to link important empirical and theoretical issues—ranging from the growing fragility of the European state system prior to World War I, to the impact of trade on international stability, to the dynamics of hegemonic theory—suggests that it taps a rich vein of inquiry of central relevance to scholars of international affairs. The Economics of Security and Changing National Exposure to the International Economy All states confront a signiŽ cant economic problem. Security is costly. To build mili￾tary establishments capable of defending vital national interests, states must draw resources out of the national economy and employ them in the security sector.3 For example, industrial capital is necessary to build warships, tanks, and aircraft; human capital is necessary to develop new military technologies and the doctrinesthat gov￾ern the use of military force; labor is necessary for troops. This economic aspect of security implies that states may be vulnerable to externally induced changes in the costs and risks of international exchange. Because these changes alter the relative prices of domestic economic resources, they also alter the cost of using these re￾sources for security purposes.In this way, a changingworld economy may fundamen￾tally shape the economic constraints on a state’s security policies. To explore this idea, I develop a simple framework that builds on the Stolper￾Samuelson theorem from internationaltrade theory.4 Thistheorem holdsthat increas￾ing exposure of the national economy to international trade beneŽ ts the owners and intensive users of those resources in which the economy is abundantly endowed relative to the rest of the world, while harming the owners and intensive users of those resourcesin which the economy is poorly endowed. For example, in an economy abundant in labor but scarce in capital, increasing exposure to international trade beneŽ ts labor and harms capital. Decreasing exposure to the international economy reverses these effects, so that owners and users of the economy’s abundantresources suffer, while the owners and users of the economy’s scarce resources gain. I link these domestic consequences of a changingworld economy to changesin the underlying economic constraints on a state’ssecurity behavior by making two assump￾tions. I assume, Ž rst, that the state’s difficulty in mobilizing speciŽ c resources for security purposes will be directly related to the returns that those resources earn elsewhere in the national economy. The more that resources earn in nonsecurity sectors of the national economy, the more difficult it becomes for the state to use them for security. This assumption follows directly from the fact that scarcity is 3. Tilly 1990. 4. Although built on assumptions that almost never hold, the theorem’s central insight appears robust. See Corden 1974, 93–104; Leamer 1984; Ethier 1984; and Rogowski 1989, 16–20. Economic Expansion and Security in Pre–WWI Europe 197