The article introduces the “Victim’s Dilemma,” arguing that societies under existential threat may expand centralized state power for wartime mobilization in ways that ultimately weaken the economic base needed for resistance.

It contends that price controls on scarce goods can turn temporary shortages into prolonged ones by reducing recovery revenue, discouraging external suppliers, and amplifying regulatory barriers, while centralized allocation cannot match dispersed local knowledge as described by F. A. Hayek.

Drawing on self-ownership principles, the piece rejects conscription as a violation of individual labor rights and proposes voluntary military service, contractual security, and market-based defense as alternatives that better preserve adaptability and incentives.

Aggressive interstate war aims at seizing territory, subjugating populations, and establishing political control. By destroying physical capital, war inflicts immense economic damage. Yet one of the most consequential effects of war can occur within the institutional framework of the victim society itself. This phenomenon can be termed the Victim’s Dilemma.

Imagine an individual operating a small shop in a neighborhood controlled by a protection racket. When a rival gang attacks the shop to expand its territory, the defenseless shopkeeper turns to his original extortionist, begging for greater protection in exchange for higher tribute and greater control over his business. Driven by fear, the victim strengthens the very coercive power from which he was previously seeking protection in order to survive an external aggressor.

In times of existential threat, modern societies can commit the same error. Under the pressure of war, citizens and policymakers may demand a larger, more centralized state, assuming that top-down decrees and economic command are necessary for effective wartime mobilization. However, the fundamental principles of economics do not cease to operate during wartime. Expanding state power, imposing price controls, and reinforcing bureaucratic monopolies can weaken a society’s economic base and its capacity to resist the external aggressor.

The Fallacy of Price Controls: Destroying Capital When It Is Needed Most

A common response to wartime shortages is to demand price ceilings on essential goods such as food, bottled water, and fuel. When enemy strikes destroy critical infrastructure, available supply can fall sharply while demand remains high. Under ordinary market conditions, prices rise in response to increased scarcity. Governments may then impose price ceilings in an attempt to make essential goods more affordable.

This policy does not eliminate scarcity. Instead, it can transform a temporary supply shock into a prolonged shortage and impede recovery for several reasons.

First, price controls can reduce the revenue available to damaged enterprises for rapid recovery. Rebuilding warehouses, replacing machinery, and securing high-risk logistics require substantial expenditure. By forcing a business to sell diminished stock at a........

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