There is an old story that many years ago, Khrushchev was reviewing the Soviet Armed Forces on May Day. It was a very impressive turnout. The Army marched by goosestepping in their polished jack boots, motorized infantry units drove by, the soldiers sitting at attention in their armored personnel carriers, the tank battalions rumbled past and the Strategic Rocket Forces displayed the latest missiles. After this impressive display of Soviet might came a few hundred middle-aged men. They were a scruffy-looking lot, their shoes weren't polished, some were overweight and balding, their suits looked as if they had been slept in, and there were soup stains on some of their ties. Shocked, Khrushchev turned to Brezhnev and asked, “Who are these people and what are they doing in our parade?” “Comrade, ” Brezhnev replied, “these are our economists. Never underestimate the damage they can do.”
Having warned you, we would like to explain why economists and economics have anything to say about the subject of nuclear proliferation. Economists are trained to make reasonable assumptions about the objectives of economic agents and about the technology and resources at the disposal of these agents and then to work out the logical implications of these assumptions in order to analyze the workings of an economic system. Let us illustrate by example. Economics is known as the “dismal science, ” thanks to the work of the Reverend Thomas Robert Malthus. In 1798, he wrote an essay in which he predicted that the population would outstrip the supply of food. Malthus made two basic assumptions based on his observations of the world and then made a prediction. He assumed that the human population, if unchecked, would continue growing at a geometric rate so as to double every 25
This paper was written in 1985 and revised to reflect events that occurred in the spring of 1986. Our research on the arms race and the outbreak of war was supported by the National Science Foundation.