This book is a detailed analysis of British defense policy from the beginning of the twentieth century to 1969. G. C. Peden's goal is to interpret and analyze British defense policy broadly, thus including a review of the main technological advances, military spending patterns, and the major changes in strategy. First of all, this approach is a fruitful one and mirrors closely the analytical trends among economically minded military historians in the last few decades. His main conclusion is that cost of weapons systems and military spending overall rose faster than national income, which forced the British decision makers to compromise and to adopt more cautious strategic goals, in particular during the post-Second War nuclear age. He also points out that Britain utilized a free-riding approach during this latter period. However, he also asserts that the British military and political power did not decline in the twentieth century, at least as much as is commonly assumed. Finally, he concludes that the British grand strategy on the world stage was much more assertive and ambitious than many have argued previously.

Peden's study proceeds on a rather chronological basis, by starting with the arrival of dreadnoughts and the First World War, then he recounts the British interwar experience (on which topic he has published plenty before), the Second World War, and concludes with a two-part analysis of the nuclear age (atomic bomb era, and then the hydrogen bomb period). In addition to these sections, the author offers the readers fairly comprehensive introductory and concluding chapters.

Peden tackles many “hot” topics in his book, including the debate about imperial overreach and the cost of the empire, analysis of the military spending patterns over time and the issue of “bang for buck,” the economic impact of military expenditures, and the overall methodological challenges involved in combining political history, military history, and economics in a functional analytical framework. In regards to the first issue, Peden argues that the overarching decline of the British economy in the twentieth century was interlinked with the ambitious British military strategy on the world stage. Similar to Paul Kennedy and others, Peden maintains that the link between military spending, as well as the rising costs of military technology, and economic decline was strong, but argues that the causation ran the other way: The long-run decline of the British economy (and empire) constrained the British military spending choices and, ultimately, her strategic options.

While this argument may be persuasive on the basis of a broad qualitative analysis such as in this book, the actual proof of this would require serious quantitative testing. And, similar to Kennedy's various works on this subject, the data underlying such tests would have to be much more credible than in this book. Peden does not delve deep enough into the methodological problems involved in probing such development patterns. In terms of data weaknesses, a couple of examples will suffice to illustrate this point. In terms of comparative national income figures, Peden uses the outdated figures produced by Angus Maddison in the 1980s (Phases of Capitalist Development. Oxford: Oxford University Press, 1982) instead of his newer data. Or, he utilizes only superficially the new quantitative chapters and data contained in the two recent volumes on the economics of the world wars (The Economics of World War II. Edited by Mark Harrison. Cambridge: Cambridge University Press, 1998; The Economics of World War I. Edited by Stephen Broadberry and Mark Harrison. Cambridge: Cambridge University Press, 2005).

In terms of the analysis of long-run military spending patterns and the rising cost of technologies, Peden's insights are rather simplistic. For example, his analysis of the costs of various types of armaments systems are usually based on the straightforward costs involved in producing the weapons. He, by and large, ignores the perspective of “bang for buck”—i.e., taking into account the end use of the weapon in question, like Niall Ferguson has done in his various publications. Similarly, the efforts in the book to take into account inflation are crude at best, although many of these problems are difficult to overcome in a satisfactory manner. For example, the construction of weapon-specific price indices is laborious. I also find it curious that he ignores some of the relevant literature on these issues, including Ferguson's The Cash Nexus: Economics and Politics from the Age of Warfare Through the Age of Welfare, 1700–2000 (New York: Basic Books, 2001). Moreover, Peden offers a curiously British-centered view of military spending patterns in some chapters and a (limited) comparative view in others. It is very difficult to analyze British military spending patterns from a domestic perspective alone. This is a shortcoming particularly in the earlier chapters dealing with the two world wars and the interwar period. There is now fairly abundant research on the comparative military spending patterns in these periods, some of which Peden actually references.

While these criticisms may seem rather serious, this study is nonetheless worth reading. It is a concise and cogent review of the British defense policies in the twentieth century, and it offers a refreshingly interdisciplinary take on these processes. Even though an economic historian specializing on these issues may find such issues as those listed above slightly disappointing, this book definitely adds to our knowledge of British military power and its interpretations in the twentieth and twenty-first centuries.