E arly Austrian economists, exemplified by Menger, Böhm-Bawerk, and Wieser, were known for their emphasis on marginal analysis, money, capital structure, time horizons, and alternative cost. A subsequent generation, led by Mises and Hayek, enriched that analysis in myriad ways, including an increased focus on the structure of production, the distorting effects of monetary policy, and an understanding of the role played by societal and governmental institutions. These key scholars and their

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... play an important role in understanding the Austrian school's views on both the economics of war and the economic consequences of war. 1 What's more, the Austrians see effects emanating from the structure of production not only on an economy but on civilization itself, as well as on specific cultures. As noted by Menger, Böhm-Bawerk, Hoppe, and others, economic development is a civilizing force. As entrepreneurs expand the matrix of capital and increase infrastructure, they extend the range over which trade occurs. Further, by necessity, economic development extends the time horizons of entrepreneurs who look ever farther into the future to project consumer demand, production methods, costs, and revenues. This leads to a better understanding of the societies and cultures involved in trade, thereby reducing overall tensions. Thus, the expansion of trade drives both a higher standard of living at home and an increased awareness of the abroad. Hence, trade is a civilizing force. During war, the emphasis on short-term destruction rather than long-term production has exactly the opposite set of effects. Instead of entrepreneurs concerning themselves with how best to meet the future needs of domestic and foreign markets and, hence, how best to structure the matrix of capital to maximum productive capacity in the long term, the focus is on how to force the existing matrix of capital to fit a short-term goal of maximum destruction. Instead of consumers and entrepreneurs looking after their own long-term goals, they look after the short-term ends of political and military leaders. Likewise, rather than being concerned about what other cultures believe and want, entire societies become concerned with destroying those other cultures and their beliefs. In other words, in the Austrian view, war is destructive to civilization itself, as well as to local cultures. Since World War II, a third generation of Austrian economists has continued to develop and expand these Austrian ideas, often in ways even more explicitly antiwar than did the previous generations. This is not to say that Austrians are necessarily pacifists. No less an antiwar activist than Murray N. Rothbard believed in "just war" theory. However, the literature since World War II makes clear that Austrians do not hesitate to criticize governments for engaging in warfare. This article discusses examples of relevant contributions made by this third generation of Austrians. This article is the third in a trilogy on the Austrian school of economics and its views of questions of war and peace. Although not necessarily pacifist, modern Austrians view war as destructive to civilization itself as well as to local cultures. Thus, modern Austrians do not hesitate to criticize governments for engaging in warfare.