I take the previous chapter's empirical insight of foreign policy as redistribution to examine the roles of inequality and, most especially, capitalization in allowing democracies to act quite boldly to change the international status quo. To do so, I have developed a new data set incorporating three new measurements of the state's ratio of military capital stock and military personnel.

In spite of recent strides (Signorino and Tarar, 2006; Signorino, 1999), the challenges inherent to statistical analysis of strategic behavior are by now well known, particularly when exploring the factors leading to war or successful deterrence (Fearon, 2002; Schultz, 1999). To paraphrase Mark Twain, often the best a substantive researcher can achieve is to find estimators that rhyme with rather than replicate the formalized relationships between the variables. For this reason and that of data availability, I do not test all the theory's empirical implications. For example, while cost distribution theory suggests that in important conflicts a democracy can experience incentives to fight in a suboptimal manner, the formal model shows that the relationships between capitalization and “winning” or “losing” a conflict are far from straightforward, and are therefore better tested in case studies. Testing whether democracies try harder in terms of defense spending is marred by the non-stationary nature of the data (Lin and Ali, 2009).

When Robert Cecil, the future Lord Salisbury and Conservative prime minister, infamously referred to India in 1867 as an “English Barrack in the Oriental seas” he was not suggesting this arrangement's desirability. The less well-known portion of his speech proved as pessimistic as it was prophetic, “it is always bad for us not to have a check upon the temptation to engage in little wars which can only be controlled by the necessity of paying for them.” Cost distribution theory ties together two historical developments that cannot be explained by existing explanations in IR and historiography: the expansion of the British franchise deep into the middle class in 1867 and into the working class in 1884, and the explosion of imperial military campaigns (often against the better judgment of the government) over the same period of time. The two Reform Acts' large and sudden reductions in the wealth requirements for voting represent clear and discrete changes in the value of my key explanatory variable, the relative income of the median voter. It is therefore a natural case for establishing both the plausibility of the book's causal mechanism and the theory's usefulness in explaining important cases of democratic militarism, among which the late Victorian British Empire surely belongs.

More specifically, cost distribution theory sheds light on the links between a number of important developments occurring during this period, including:

1. (i) Massive increases in suffrage and corresponding decreases in the wealth of the average voter in Britain.

2. (ii) The growing obsession with the defense of India even as it developed into a strategic liability.[…]

Maxwell Taylor, an architect of US Cold War grand strategy in general and the Vietnam War in particular, observed in that war's aftermath that “When one considers the vast resources committed to carrying out our Vietnam policy, the effective power generated there from seems to have been relatively small” (Taylor, 1972,402). What would cause a democracy to spend such vast resources to conduct a flawed counterinsurgency campaign? Why would leaders choose war despite intending to fight in a manner making failure more likely? This book's theory, illustrated in Figure 2.1, argues that civilian leaders, anticipating voter preferences, will deploy an inefficient strategy against an unconventional opponent in pursuit of moderate aims because the reduction in costs outweighs the sacrifice in expected value.

The case is an important one. Like the British Empire, Vietnam represents an “anomalous case,” for democratic exceptionalism (Downes, 2009). Many consider it as a paradigmatic example of capture of a state's grand strategy by an elite, in this case a myopic military obsessed with technology and firepower. Finally, interpretations of Vietnam continue to influence contemporary American strategic debates.

This chapter examines the development of American counterinsurgency strategy before and during the Vietnam War to competitively test my theory of moral hazard against other explanations for aggression from IR, historical, and policy-oriented research.

In wealthy democracies, the preparation for and conduct of military conflict has largely become an exercise in fiscal, rather than social, mobilization. How does this development influence when democracies choose violence as their preferred tool in international politics? When do voters have a moderating influence on foreign policy, and when do they allow or even encourage their leaders to pursue gains through military coercion, even at the risk of overstretch? Why do democracies often pursue a military doctrine ill-suited for the war at hand?

Contemporary political scientists appear optimistic that democracies pursue grand strategies enabling them to be, like George Washington, first in both war and peace. Yet confidence in democracy's superiority at international politics is a relatively recent development. One does not have to look far into the past to see that the current consensus would surprise the more pessimistic appraisals of Cold War thinkers such as Raymond Aron, George Kennan, Walter Lippmann, and Hans Morgenthau. Nor do the classic works of Machiavelli, Rousseau, Kant, and de Tocqueville agree on democracies' relative peacefulness or their ability in war.

Democracies have fought foolish wars, built massive militaries, and have shown a remarkable enthusiasm for imperialism. Democracies account for 17 of the world's 20 largest defense budgets (not counting Russia), with the United States alone responsible for 40 percent of the world's defense spending (SIPRI, 2013b). While these democracies' expenditures remain “affordable” based on the size of their economies, they represent enormous opportunity costs in terms of the provision of domestic public goods or private consumption.

War is horror. Small wars, no matter how capitalized, involve death as well as taxes. But the balance of these costs matters greatly to war's initiation and conduct. American forces in Vietnam, which I presented as a model of capital-intensive small warfare, nonetheless sustained over 47,000 combat fatalities. North Vietnam and the Viet Cong lost roughly the same number during the Tet Offensive alone. Approximately a million Vietnamese (many civilians) died in the war. As of early 2013, in Iraq and Afghanistan, the United States suffered 5,242 persons “killed in action.” Then again, the Soviets lost 13,310 only in Afghanistan (Taubman, 1988). One relatively conservative estimate places Afghan, Iraqi, and Pakistani civilian deaths in excess of 150,000 (Crawford, 2011). The relative lack of casualties for the third-party force is one of the reasons making these wars possible in the first place, and helps explain why these conflicts have lasted so long. After World War II, George Marshall famously observed that “a democracy cannot fight a Seven Years' War,” but the experience of the United States (and its allies) in Vietnam, Iraq, and Afghanistan suggests otherwise.

The copious use of capital in the pursuit of small marginal gains typifies the democratic way of war. British soldiers refer to firing a Javelin, a shoulder-fired anti-tank missile that has been used over 2,000 times in the largely tank-free environments of Afghanistan and Iraq, as “throwing a Porsche” due to its expense (Jacob and Benzkofer, 2012).

What are the consequences for Israel's security of the many changes occurring in its society, its threat spectrum, and its military doctrine? How did these changes contribute to the flawed reconciliation of Israel's strategic ends and means in its fight against Hezbollah during the Second Lebanon War of 2006? What can we learn about the democratic way of war from Israel's recent experience?

Students of democratic grand strategy and civil-military relations often treat Israel as an exceptional case because of its sizable military, compulsory draft, reliance on reserves, strong war industry, and largely military-based national culture (Peri, 2006, 22). Israel is, however, undergoing profound and related shifts in its society, politics, and military. These shifts appear to draw it closer in line with other developed and well-established democracies due to reductions in threat levels, increases in liberalism and economic inequality among its citizens, and an increasingly professionalized military (Bar-Joseph, 2001).

Since the Cold War's end, Israel's perceived security problems have changed, even as many other democracies such as the United States have focused on threats – terrorism and missiles – that more closely resemble Israel's. The traditional fear of a conventional attack on Israel's “wasp-waisted” mid-section has largely disappeared. On the other hand, Israel faces ballistic missile threats from neighboring state and non-state actors, and a potentially nuclear Iran in the future. It has experienced sporadic terrorism, rocket fire, and insurgency from the occupied Palestinian territories.