journal:

Does War Mean Prosperity?

By Jonathan Feaster

2006-10-16

Recently on a forum at The Houston Chronicle I came across an interesting thread a caring citizen had started with the subject title "Iraq war is a good thing". In this discussion the author of the subject contends that U.S. military actions have been good for the country and that "The alternative is a non-sustainable service economy". By making this statement the author seems to imply that U.S. military actions are the cause of our prosperous economy.

Does war mean prosperity? Take a look at some excerpts from the discussion and see what you think:

loveyabluelosers (the author):

"War is the industry of empires."

No matter how you come down on the Iraq war, you have to agree that it's good for the country, being that it 1) it's our last bastion of manufacturing, 2) it demands technological innovation which requires tremendous and continuous research & development, and 3) the intellectual capital gained from the R & D can be protected in perpetuity in the interests of national security.

The alternative is a non-sustainable service economy. Virtually everything you're wearing, driving, watching or typing on came from overseas. Ordnance, munitions and the war-fighting conglomerate in general is super-big business for us, with domestic sales being only a fraction of the revenue. Although not it's intention, the documentary "Why We Fight" illustrates this quite clearly.

Without war, the bulk of jobs left will be in the service industry. Those who aren't willing or able to undergo years of education and training in order to become attorneys, engineers, accountants and physicians (all service jobs) will be relegated to working at big-box retailers.

Palladio:

Where did you get your economic "education" from? The great economist, Ludwig von Mises, once said "War prosperity is like the prosperity that an earthquake or a plague brings." I'm sorry to be so blunt but only a lunatic would actually believe what little "positives" war may bring would alone make it just; let alone bring prosperity. Furthermore, if you think The Congress should go to war in the name of economic prosperity alone you are sadly mistaken as it is arguably a clear violation of the Constitution. Article I Section 8 of the U.S. Constitution states:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;" - URL: http://www.usconstitution.net/const.html#A1Sec8

If you look back through history the most feared tyrants in history started wars with the idea of prosperity in mind. This idea of prosperity from war is very dangerous, untrue and un-American. War itself exists because of the belief in prosperity from war. The only reason why free states should fight wars is to objectively defend themselves. I'm not advocating pacifism...of everything I know pacifism means not fighting no matter what. I hate war like everyone should but because of aggressors it is a matter of pacifism versus peace and I choose peace. As an advocate of individual rights I strongly believe in self-defense...objective self-defense.

loveyabluelosers (the author):

Thanks for calling me a lunatic. People like me need to be corrected by those like yourself every so often. And wherever I studied ecomonics was no doubt inferior to your education, I'm sure as well.

Without getting into too much rhetoric (or aligning myself with the author of "the Anti-Capitalistic Mentality" -- we've seen how well that theory panned out) I have to ask, if I'm wrong, then why are we simultaneously 1) the strongest ecomony to come out of WWII up till the present, and 2) constantly on a war footing since the end of WWII? (just under 80 separate instances of military intervention since 1945).

http://academic.evergreen.edu/g/grossmaz/interventions.html

Palladio:

Like I said, I'm sorry to be so blunt but you can't actually be justifying our military operations on the grounds of economic prosperity...can you? Also , when I meant "economic education" I should have made it more clear about what I meant by "education". The "education" I was referring to didn't necessarily mean formal education such as a college or high school education. Heck, I don't even have a formal education in economics...but I do consider myself to have at least a decent informal education in economics from many credible sources. I don't think you're inferior and I'm sorry I came across that way. I hate elitists too!

To answer your questions I'm afraid I would have to write quite a book to really give you a good idea of what I mean and many people have written books about this subject. I'll try my best to sum it up and I'll point you towards some good books that I bet your teachers in school wouldn't have talked about. Please remember the name's Palladio not Dr. Palladio. :)

Let's start with the questions themselves:

"I have to ask, if I'm wrong, then why are we simultaneously 1) the strongest economy to come out of WWII up till the present, and 2) constantly on a war footing since the end of WWII? (just under 80 separate instances of military intervention since 1945)." - loveyabluelosers

First of all, what you seem to be suggesting is that because we are "the strongest economy to come out of WWII up till the present and constantly on a war footing since the end of WWII" that there is a correlation between a strong economy and war. While I do agree that there seems to be a correlation between a strong economy and war in the U.S.'s case I have to disagree that correlation is causation. Just because we may have a strong economy since WWII up till the present and have been constantly on a war footing since the end of WWII doesn't mean, logically, that we may have a strong economy since WWII up till the present because we have been constantly on a war footing since the end of WWII. I know what I'm saying seems to be just rhetorical book knowledge with no "real world application" but, as a business professional in a math intensive field, I can tell you that it is the truth, at least in my world.

The best definition of economics, in my opinion, is the definition by economist Lionel Robbins which economist, Thomas Sowell, loves to use:

"Economics is the study of the use of scarce resources which have alternative uses."

Scarce resources are anything that has a use and are finite in supply. Scarcity, alone, is not the only part of economics. Alternative uses play a huge part as well:

"If each resource had only one use, economics would be much simpler. But water can be used to produce ice or steam by itself or innumerable other mixtures and compounds in combination of other things." (1) p. 2

The million dollar question is, "How much of each resource should be allocated to each of its many uses?" (1) pp. 2-3

If the U.S. is using most of its labor force, a scarce resource, to produce military items for military uses and thus less labor force to produce other goods/services, such as housing people may want, then do we necessarily have a better material standard of living?

"Economics is not about the financial fate of individuals. It is about the material well-being of society as a whole." (1) p.3

I'm not saying we shouldn't allocate any of our resources to defense. I'm asking how much should we allocate to defense. I believe that in an aggressive world we should make defense a big priority. One thing we shouldn't do is trade off defense for aggression. I don't belive it is moral, economically wise or legal for the U.S. to allocate resources to military aggression for the purpose of economic prosperity.

As for your particular interest about our military intervention and economic prosperity, conventional wisdom among people is that WWII was a great time of economic prosperity in the U.S. or that it delivered us from the Great Depression. Another good book summarizes WWII economics in the manner of scarce resources with alternative uses in short and simple terms most easily (especially for the available space here).

"Think of all the people we'd put to work producing raw materials, building planes, and assembling missiles. Historians have made much of the substantial production figures that were attained during the war. But most of this increase was due to the construction of armaments and military personnel. This production was not geared toward things that ordinary people needed. It made consumers worse off by diverting capital and other resources to goods that no consumer would want to buy." (2) pp.154-155

The author later states "All of this amounted to a dramatic loss of material wealth." (2) p.155

If war brings prosperity then why did Hitler's Third Reich fall? If you answered, "because they were militarily defeated", that may be true, but some would say the U.S. suffered military defeat with the Vietnam War...yet we are still here, aren't we? Why did the Soviet Union Fall? The Soviet Union, even with all of its vast resources, fell because it failed to allocate scarce resources to alternative uses in a free and efficient way. The U.S. has "the strongest economy to come out of WWII" not because of our military aggression but because we are still the freest nation that has ever graced our Earth and because we defend our freedom.

(1) Basic Economics: A Citizens Guide to the Economy - by Thomas Sowell (2000)
(2) The Politically Incorrect Guide to American History - by Thomas E. Woods Jr. (2004)

While The Politically Incorrect Guide to American History is a good one I would recommend Thomas Sowell's Basic Economics: A Citizens Guide to the Economy and any of his other books for a more in depth approach.