Beyond rearmament: Europe’s defence crisis as a knowledge problem
European defence debates are increasingly framed around spending targets, industrial capacity, procurement volumes, and strategic autonomy. These questions matter. Yet they risk obscuring a deeper problem: defence capability is not only a matter of resources, but also of knowledge. Drawing on Hayek’s theory of dispersed knowledge and competition as a discovery procedure, this lecture argues that modern defence systems face a distinct epistemic challenge. In the absence of real operational selection pressure, peacetime militaries rely on proxies such as exercises, readiness indicators, certification procedures, interoperability targets, and procurement benchmarks. These instruments are necessary, but they are imperfect substitutes for battlefield discovery.
The war in Ukraine illustrates this problem with unusual clarity. Ukraine’s defence effort has generated rapid learning through frontline feedback, decentralized experimentation, improvisation under scarcity, and short loops between soldiers, engineers, firms, and decision-makers. Such knowledge is not easily codified, simulated, or purchased. It is tacit, local, and revealed under pressure. By contrast, many European armed forces have long operated in a peacetime environment in which formal preparedness can be mistaken for combat-tested competence.
The lecture finally considers the uncomfortable case of mercenaries and private military actors. While normatively problematic, they raise an analytically important question: do organizations exposed to repeated operational testing and competitive pressure accumulate combat knowledge differently from bureaucratic peacetime forces? The argument is not a defence of privatised violence, but a Hayekian inquiry into how military organisations discover, process, and act upon knowledge. Europe’s defence problem is not merely a spending problem. It is, more fundamentally, a knowledge problem.
About the speaker
Wolfgang Benedikt Schmal is a competition economist with a PhD from the Düsseldorf Institute for Competition Economics at Heinrich Heine University Düsseldorf. His research sits at the intersection of political economy, competition economics, and institutional analysis, with a particular focus on cartels, collective governance, and commons-related questions. He studied economics at Free University Berlin and University College Dublin. During his PhD, he held research stays at KU Leuven in Belgium and the University of Reading in the UK.
He was twice awarded an Oskar Morgenstern Fellowship at the Mercatus Center at George Mason University in Fairfax, Virginia. He is an affiliated researcher at the Economic Theory Group at Ilmenau University of Technology and co-founder of FORMOE, the Research Forum for Transportation Economics. His work has been published in numerous peer-reviewed journals and has received several awards, including two Antitrust Writing Awards from Concurrences and the George Washington University Competition Law Center. He is regularly featured in the media, among others in The Economist, The Times, The Guardian, Table.Media, Sky, and Frankfurter Allgemeine.
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