Immanuel Kant and more recent expositors of the democratic peace thesis suggest that citizens in a republic sanction leaders for resorting to war because, in part, citizens are loath to shed their own blood. This Kantian thesis in turn implies substitution. Just as consumers confronted with price shocks shift consumption to less affected goods rather than simply curtailing consumption, democratic leaders facing retribution for casualties can limit losses, not just by avoiding military contests, but also by substituting capital (ships, tanks, aircraft) for labor (soldiers, sailors, airmen) in the provision of security. A simple consumer choice model shows that citizens' leverage over leaders implies that democracies should consume disproportionately more capital in preparing for—and conducting—defense. Numerous anecdotes assert that democracies do shelter labor with capital, especially during war, but tests of defense-factor allocations on factor endowments, regime-type, and other variables show that defense-factor usage is explained by basic economic theory and not by democracy.