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A rational calculus of war and peace: Applying the ROI objective function to military strategy

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  • Steele, Brett D

Abstract

This article furnishes an analytical approach to military strategy by applying a return-on-investment (ROI) model of a commercial industrial firm. A fundamental relationship thus emerges between a military campaign’s profitability and (1) the lethality level and frequency of its discrete attacks, (2) demand-side investments in propaganda design and distribution processes, and (3) supply-side investments in operational design and tactical processes. While presenting the common analytical foundation of military and business strategies, the significant differences between their output’s average-benefit and average- cost functions are revealed. As a result, a systematic means is furnished for analyzing military strategy of both conventional and irregular warfare.

Suggested Citation

  • Steele, Brett D, 2014. "A rational calculus of war and peace: Applying the ROI objective function to military strategy," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 4(1), pages 1-34.
    • Handle: RePEc:gok:ijdcv1:v:4:y:2014:i:1:p:1-34
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    References listed on IDEAS

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    1. Yasmine M. Abdelfattah & Aamer S. Abu-Qarn & J. Paul Dunne & Shadwa Zaher, 2014. "The Demand for Military Spending in Egypt," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(3), pages 231-245, June.
    2. Ralph Rotte & Christoph Schmidt, 2003. "On the production of victory: Empirical determinants of battlefield success in modern war," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(3), pages 175-192.
    3. Efraim Benmelech & Claude Berrebi, 2007. "Human Capital and the Productivity of Suicide Bombers," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 223-238, Summer.
    4. repec:uwe:journl:v:2:y:2006:i:1:p:45-50 is not listed on IDEAS
    5. Ron Smith, 2009. "Power and Money," Palgrave Macmillan Books, in: Military Economics, chapter 2, pages 19-53, Palgrave Macmillan.
    6. Keith Hartley, 2007. "Defense economics: Achievements and challenges," Economics of Peace and Security Journal, EPS Publishing, vol. 2(1), pages 45-50, January.
    7. Brauer, Jurgen & van Tuyll, Hubert, 2008. "Castles, Battles, and Bombs," University of Chicago Press Economics Books, University of Chicago Press, number 9780226071633.
    8. Paul Hallwood, 2013. "Quantifying Greed And Grievance In Civil War: The American War Of Independence," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(5), pages 449-463, October.
    9. Brett D. Steele, 2013. "Unifying the supply-side and demand-side of business strategy with an ROI objective function," International Journal of Engineering Management and Economics, Inderscience Enterprises Ltd, vol. 4(1), pages 18-53.
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