The Economics of Fear

V ICTORIOUS generals, it has often been observed, lose a second war because they have shaped their plans after the patterns of past campaigns; victorious statesmen might lose the peace by adopting similar methods. They tacitly assume that history always repeats itself and that they can secure peace in the future by doing what they left undone in the pastwithout giving much thought to changes that war has brought about. They try to save their countries from dangers which are no longer alive. They are unwilling to visualize novel risks inherent in a great upheaval. They look for safety to mechanical arrangements which can easily be made by victors, and will not realize that even in the

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