Useful Enemies: When Waging Wars is More Important than Winning Them, by David Keen. Yale University Press, 2012, 304 pp. $38.

"War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives."

So begins U.S. Marine Corps Major General Smedley Butler's 1935 pamphlet War is a Racket. Butler, who had participated in many military interventions, came to realize that war allowed elites to gain while less powerful citizens and foreigners bore the conflict's financial, physical, and emotional costs. Citizens, policymakers, pundits, and scholars have yet to internalize Butler's warning. Hence the importance of David Keen's Useful Enemies.

Keen, a professor of conflict studies at the London School of Economics, investigates why wars last as long as they do despite the significant costs associated with fighting and despite western governments' supposed efforts to minimize the violence. To address this issue, Keen argues, we need to go beyond the basic "contest model" of conflict, which holds that war is a fight between two sides who seek victory and, with it, an end to violence. War, he argues, serves economic, political, and psychological functions that, taken together, can lead to long, persistent conflicts. To demonstrate this, he explores a wide range of cases: Afghanistan, Sierra Leone, Sudan, Uganda, Vietnam, and more.

The economic functions of war include control of natural resources, steady employment for soldiers and rebels, and continued flows of international aid from outside governments, who tend to throw significant amounts of money at conflict situations. The aid has several perverse effects: propping up regimes that violate basic human rights, distorting the local economy, contributing to corruption, and funding the purchases of weapons and other resources that perpetuate conflict. Keen points out how supposed enemies often avoid direct conflict and work together to secure and divide resources while harming innocent civilians. In Sierra Leone, for example, government forces colluded with rebels to minimize conflict and share in the spoils of diamond mining. Part of this arrangement involved soldiers providing weapons to rebels who, in some instances, used them against citizens. The basic contest model overlooks these dynamics because it assumes that two clearly defined "sides" are fighting each other with the goal of victory.

The political functions of war include consolidating power while weakening the opposition, gaining advantages in elections, rallying support from citizens in the fight against the enemy, and destabilizing rival regimes. Although many view conflict as a problem plaguing poor counties, Keen points out that these political functions apply to both developed and underdeveloped nations. Indeed, as the economic historian Robert Higgs has demonstrated in his research on the political economy of crisis and fear, governments invest significant resources creating a culture of apprehension among its citizens in order to create a demand for its various interventions at home and abroad. The ongoing War on Terror is but one example of this logic at work, and Keen dedicates a powerful chapter to demonstrating how the state of "permanent emergency" in the U.S. is driven by a variety of vested interests who benefit from the perpetuation of fear of a faceless enemy. The military benefits directly because a permanent state of emergency serves as an ongoing justification for high levels of spending. Industry benefits too, be it the firms with lucrative contracts to supply bases abroad or the information technology companies that receive federal funds to develop surveillance equipment. One oversight in this chapter is the neglect of James Mueller's important work on the terrorism industry and the political economy of homeland security.

Finally, conflict can serve a psychological function for those involved. For example, war is one means of remedying feelings of injustice and powerlessness. Further, initial violence can lead to retaliatory violence by victims who seek to restore some sense of control. Those who wish to orchestrate conflict often manipulate feelings of shame in order to attract soldiers and to give violence some sense of legitimacy.

Keen concludes that many of the standard policy tools for solving conflicts—foreign aid, counterinsurgency, counterterrorism—actually extend a war's duration. He also makes it clear that violence is often easier to begin than to end. Though Keen does not say so, this implies that we should have a default foreign policy of non-intervention, in terms of both direct military engagement and indirect interference such as foreign aid. If we take seriously the idea that most wars are characterized by actors who benefit from the continuation of conflict, than we should strive to avoid intervention in the first place.

Granted, that's easier said than done. While Keen's analysis highlights the various functions of war, it also makes clear why policies based on those insights are unlikely to be adopted. The massive existing edifice that benefits from a permanent state of conflict will also work against non-interventionist policies. This edifice includes the array of bureaucracies, contractors, consultants, and international organizations whose very existence is predicated on the continuation of conflict.

The way out of this situation is by no means simple or clear. But it will surely help for citizens to become more skeptical of governments' intentions when it comes to war. This would require the realization that international interventions, more often than not, do more to undermine citizen safety than to enhance it. Shifting public opinion requires the reiteration of Smedley Butler's message, and Useful Enemies does that nicely.

Christopher J. Coyne is F.A. Harper Professor of Economics at George Mason University. His website is ccoyne.com.