To be presented by:

JANMEJAYA PANDA

Under the guidance of

Dr. Gopal Sharan Parashari

DEPARTMENT OF HUMANITIES AND SOCIAL SCIENCES

INDIAN INSTITUTE OF TECHNOLOGY, DHARWAD
 Contents
1.Introduction
2.Origin and Evolution
3.Scope
4.Basic questions
5.Basic concepts
 INTRODUCTION
Economics literally means to manage a household.
To manage a household, there is the need to earn living.
To earn living two ways may be followed;
To produce more and exchange with others (Technology of
production)
To predate and have conflict (technology of struggle)
Thus we have either to run fast or to trip up our competitor, we have either to
yield more or to snatch others’ shares.
First one boosts social total of wealth, whereas the later one, falling under the
category of Economics of conflict, redistributes the total.
 ORIGIN AND EVOLUTION
 The Wealth of Nations (1776) has ample evidences of war and adequate
references of political quarrel. But Smith never systematically said anything
about conflict.
 The drastic progress of economic thought during the era of Marshall did not
witness conflict at all.
 The systematic analysis of conflict was seen for the first time in Das Kapital
(1867) by Marx in the form of class struggle.
 The theory of conflict gained popularity with the works of Schelling (1960),
Boulding (1962), Tullock (1974), Usher (1992).
 The recent works by Anderton, Helly and Sandler etc. has answered various
topics like intra and inter group conflicts, the condition giving rise to
compromise and settlement the warfare and other forms of struggle etc.
 Recent works have also witnessed the popularity of the theory among political
scientists and sociologists.
 SCOPE
The production and exchange form the part of the traditional economics.
But the way of predation and conflict can be credited to be a new branch as
they seem equally “economic” as they answer the rational choce of a
decision making agent on the verge of scarcity.
The subject matter can develop as a separate field though it seems to lack
any recognition with the common foundation of economics.
The subject may be applied to provide an appropriate teory of struggle that
will be applicable to all the specifiv areas like warfare, litigation, stikes etc.
Ultimately it may lead to the formulation of a unified economic theory that
may cause interaction between these two main forms of social action;
production in one hand,predate in the other.
 Basic questions
What leads to conflict?
I. No agreed settlement.
II. Lack of interpersonal sympathy, economic interdependence, productive
opportunities.
III. Equally matched contestants.
How does it help ?
I. The winner gets how much?
II. Does the rich become richer and poor become poorer.
III. Do risk aversion matters.
Is conflict a mistake?
 BASIC CONCEPTS
 Conflict theory also undertakes optimisation on the individual and societal equilibrium on
the aggregate level.
 It deviates from the exchange theory as it is against the mutual advantage and allows any
gain of advantage by one party only in the expense of the rival.
 Any settlement achieved , even under exchange, is under the conflict situations.