Michelle R. Garfinkel examines some issues that have been overlooked by those searching for ways to use the peace dividend. Garfinkel attempts to answer two important economic questions: How can the resources from reduced military spending be reallocated efficiently to nonmilitary uses, and how can we identify what these uses should be? While the recent course of events in the Middle East might appear to detract from the prospects of a large dividend in the near future, it does not detract, the author says, from the relevance of these questions. Assuming that conflict is not a permanent obstacle to realizing a large dividend later, it provides us with more time now to evaluate the various options associated with future defense cuts.