Abstract: From Soldier to Salaryman: How A Change in Military Compensation Revolutionized Warfare

Michael Keane

Abstract

Perhaps the most unheralded yet most significant revolutionary in military affairs is the change in the compensation of military professionals. For hundreds of years soldiers and navies were compensated on a profit participation system. They were effectively entrepreneurs of conflict. With the development of the modern state, this compensation scheme came to an end, and soldiers were provided with steady incomes and pensions. At the same time medals were invented to replace profits in order to incentivize and reward soldiers for bravery. The new compensation scheme would, however, radically alter the behavior of soldiers and the nature of warfare. Whereas in earlier times battles would be limited by the calculation of profits, today medals reward risk-taking and bravery independently of success on the battlefield.