There is a keynesian myth that perpetuates that war is "good" for an economy.
There is no way one can logically show that taxation, inflation, slavery, destruction, and mass murder (A.K.A. war) is good for an economy. Such a notion is usually based on some drawn out version of Bastiat's broken window fallacy. Or one might say war is good for an economy in the same way a hurricane or tsunami are good for an economy.
The usual line of reasoning is that war helps motivate "industry" by employing tank builders and gun makers. And that the aftermath of the destruction of private property results in new industry from the rebuilding.
This, as Bastiat said, is what is seen.
But consider what is not seen. Those tank builders and gun makers could have been bakers and cabinetmakers. They could have been producing for the economy in an industry that has actual consumer demand. Remember, those tanks and guns are funded my tax dollars, money extorted from the public at the point of a gun. That same money could have been used on cakes and kitchen cabinets if it was not necessary to steal it for corporate mass murder.
And what of the destruction and re-building? It is true that in the wake of destruction new construction will ensue. Clearly money is given to builders who are rewarded for their work. But at what cost? Couldn’t that money given to the builders just as easily be given to a different professional?
In other words the man whose house is destroyed by a stray bomb needs to use his own capital to replace his house. And while that money is given to the building industry, it could have just as easily been given to the auto industry. Isn’t it true that in the case of the house the man has gained no new pleasure or satisfaction from the house? Didn’t he have a house to start with and is now only wasting his capital to replace it? Couldn’t he have used it to purchase something new altogether to satisfy his needs and preferences? So we see that while this destruction may help one industry in particular it does not help industry in general.
War is the culmination of everything evil in Man. It is the absolute corporate failure of humanity. It is the death of reason, civility, and charity. It has no redeeming qualities.
No. Not. One.
We'd know all this if we taught Mises (who was right) in our schools instead of Marx and Keynes (who were wrong). But then the State tends to like schools of thought that perpetuate the myth that *WE* need *THEM*.
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11 comments:
Great post Mr. Scott. I was trying to repay the link you gave me with one to “The Cross and the Curve”, an article in The Intellectual Activist by Richard M. Salsman published back in 1997. It covers a lot of what you are discussing here, but alas with all the junk available on the net, this article seems unfortunately absent. It’s odd that we should have to point out something so obvious like “war is bad”. That we should speaks volumes to the level of apathy and disinformation prevalent in our world.
You are sooo right...and what about the innocents that get killed, plus our soldiers (that are also innocent)!
Excellent post. War profits create a false economy that collapses as soon as the war is over. And reconstruction...well, if that money was invested in our own countries instead of spent on the rebuilding of a country we've just decimated, wouldn't the benefit be even greater?
Keynesian economics need to be rejected. I'm no economist, but I say anything that doesn't work on the micro scale probably won't work on the macro scale, and if you applied Keyesian economics to your household budget you would be in DEEP TROUBLE. Long-term debt is never the way to prosperity.
Spoken like a true homeschooler!!
Excellent post.
Scott your writing skills amaze me and your mind amazes me more! Love you!
I'm no economist, but it seems the only way an economy might improve with a war is if we were back in colonial days and you gained land mass (and resources to exploit) through the spoils of war. And even that only benefited the wealthy and powerful. We seriously need to move on from that mindset.
Yeah, that's exactly right Laura. Since the Industrial Revolution production is MUCH more profitable than plunder. Not to mention much more ethical.
SME,
War profits create a false economy that collapses as soon as the war is over.
True, unless of course you can invent a vague and limitless enemy that needs to be defended against for a few decades. You think we would have learned this lesson from the Cold War, but apparently we'll have to waste a few more trillions for the War on Terror.
GW,
Can't find something on the Internet? Crazy.
Thanks for the kind words Crystal, UWL, TSHSMOM, and Mis.
Love this post!
War is the culmination of everything evil in Man. It is the absolute corporate failure of humanity. It is the death of reason, civility, and charity. It has no redeeming qualities.
No. Not. One.
Well said. I'm going to link it.
I always say that there are too damn many Keynesians in the world without even knowing they're Keynesians. In the long run, we may all be dead, but others will be left to fix whatever we messed up.
I won't argue Marx vs Mises with you, however.
Thanks for the mention Slayer.
Kathleen,
Thanks for stopping by.
"I always say that there are too damn many Keynesians in the world without even knowing they're Keynesians."
This is undoubtedly true. Mainstream economics settled the debate on this 80 years a go and hasn't looked back. My guess is that it is because Keynesian thinking fits so well in both the "left" and "right" way of thinking in the modern World.
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