Paul A. C. Koistinen has done a great service to economic historians and other scholars with his five-volume study of the political economy of American warfare. With painstaking attention to detail, the series follows the evolution of the institutions underlying American war making since before the country's founding. The latest and final addition, State of War: The Political Economy of American Warfare, 1945–2011, provides an overview of the period from the end of World War II to the present. State of War is focused more on the “big picture” than its predecessors, which placed greater emphasis on the details of institutional development. This is a benefit; it leads to greater clarity on what Koistinen sees as the key outcomes of the centuries-long journey of the United States to acquire state and military capacity.

The earlier volumes, based on extensive archival research, are essential guides for economists, historians, and political scientists, interested in the political development of the American state and the role mobilization for war has played in shaping government's intervention in the economy. Little research has been done on the economic impact of war. This stems mainly from the maze of institutions that are erected to manage any war effort, what remains of these institutions in the transition from war, and how they are altered in peacetime. In these volumes, Koistinen has gone a long way to clarifying how these institutions worked and how they changed.

In State of War, Koistinen shows us how war shaped American politics and the economy in the second half of the twentieth and the early twenty-first centuries. The first two chapters address the state of the executive branch during each postwar presidency and the evolution of congressional support. Chapters 3 through 4 deal with the military-industrial complex since World War II, including the advent of a large, permanent military and defense industry. Chapter 5 describes the reorientation of R&D and scientific research toward the military and, more generally, the federal government. Chapter 6 concerns the wider community (e.g., think tanks, public intellectuals, and academics) that grew up to hone Cold War-era policy, either through support or opposition. Chapters 7, 8, and 9 assess the state of weapons technology, the political technology (e.g., non-proliferation treaties) aimed at limiting access, and the implications of national security policy for the postwar economy.

Among these, Koistinen's discussion of the defense industry and “big science” hold the most direct interest for economic historians. How has military contracting altered competition and market structure in, for example, the aircraft, aerospace, and shipbuilding industries? Does military R&D spending reflect a public good (e.g., through interindustry spillovers) or a concentrated private benefit? And, to what extent did mobilization for World War II, the Korean War, and the Cold War shape postwar regional economic development?

For the most part, the answers given to these and other questions in State of War suggest skepticism of the widespread benefits of the postwar military-industrial complex. Sometimes the magnitude of the costs are obviously large: “Of the eleven major aircraft manufacturers in existence during [World War II] hostilities…seven of them, or their merged entities, were among the top twenty DOD contractors in 1958…” (p. 92). In other places, the magnitudes appear smaller; but as Robert Higgs has emphasized in the American context (Crisis and Leviathan: Critical Episodes in the Growth of American Government. Oxford: Oxford University Press, 1987) political economy can turn small costs into big ones over time.

In some cases, the direction of causality is not clear. For example, can the postwar development of the American South be closely connected to the location of facilities and contracts during World War II or did other factors (low wages, changing regional demographics, etc.) cause both? Nevertheless, with the economic historians’ penchant for combining data with economic theory and healthy respect for the role of institutions, Koistinen points us in the direction of fruitful questions.