Swords or Plowshares? A Theory of the Security of Claims to Property

This paper develops a general equilibrium model of the allocation of resources among appropriative and productive activities. The model emphasizes the distinction between offensive weapons, which are the instruments of predation, and fortifications, which provide defense against predation. The analysis of this model shows how the equilibrium security of claims to property is determined. The analysis focuses on the possibility of a nonaggressive equilibrium, in which no resources are allocated to offensive weapons and claims to property are fully secure. We also analyze the complex relation between economic welfare and the security of claims to property. We find, for example, that a relatively poor agent could be better off in an equilibrium with less secure claims to property.