War for Prosperity?

Economist Tyler Cowen always has an interesting view on things. He eschews the Austrian, deductive school in favor of a more data-driven approach. But he has sympathies for the heterodox view, and his own politics are described as generally libertarian. He teaches at George Mason University, which is known as a hub for free market economics. Cowen is famously regarded as well-read, and has a deserved erudite reputation.One recent article of his brings up an interesting dilemma: does increased peace in the world mean we are due for economic stagnation?Writing in the New York Times, Cowen seriously considers the prospect of less war equaling less market innovation. The hypothesis is a radical one. Cowen spends much of the piece asserting his preference for peace over war. He writes that the diminished prospect of major conflict in the near future is a “good thing,” but that means we must accept less technological innovation.Cowen thankfully makes his argument distinctive from other economic thinkers who opine for the next war to end all wars. He dismisses the insane idea that death and destruction aid growth. And he also waves his hand at the simplistic Keynesian prescription of government-financed demand bursts. Cowen’s focus is the kind of economic environment created by governments desperate to preserve themselves. War, he writes, often forces politicians and bureaucrats into “getting some basic decisions right — whether investing in science or simply liberalizing the economy.”That claim is not altogether wrong. As hard as it is for free market libertarians to accept, some of the great material breakthroughs we enjoy can be traced back to the threat of impending war. As Cowen writes, “nuclear power, the computer and the modern aircraft were all pushed along by an American government eager to defeat the Axis powers or, later, to win the Cold War.” The internet, which is perhaps the greatest tool for learning and business since Gutenberg’s printing press, was fostered by the possibility of nuclear annihilation. Since major world wars are likely a thing of the past, government won’t be playing the role as prime economic director any time soon.Unlike Paul Krugman who would shed tears of joy for another large-scale conflict, Cowen is relatively pleased about the tradeoff between peace and economic growth. He states plainly: “Our more peaceful and — yes — more slacker-oriented world is in fact better than our economic measures acknowledge.” Lazily watching Netflix on a Saturday afternoon may not provide the creative spark needed to cure cancer, but it’s certainly better than being a field doctor improvising medical solutions as bloodied and dismembered men await treatment.The problem with much of Cowen’s analysis is that it relies heavily on statistics to make his overall case. He cites the downward trend of gross domestic product (GDP) to claim that real economic growth is faltering. But GDP stats don’t account for increased living standards brought on by material abundance. They account for money spent by individuals and government. This has always been the flaw of counting on empirical data to measure economic utility and living standards in society.From a value-free perspective, there is some merit to Cowen’s argument. Incentives that push for government to liberalize markets are a great thing when it comes to growing the economy. Sometimes the impending threat of destruction is the catalyst needed for the state to relax its grip on entrepreneurs.Even so, there is something grossly inhuman about needing war to engender capitalist invention. War is called hell for a reason. It’s murderous on a massive scale, and the only winners are state leaders who issue threats from afar while sending poor men off to die. In the passion of conflict, soldiers are treated as less than human by both their enemies and their superiors. The grunt on the front lines is viewed as an impediment to domination – not an individual with agency and many loved ones.The horrors of war may be documented in history books, but they don’t compare to the visible destruction of lives and dignity that is an inevitable part of mass, government-enabled conflict. Men and women jumping to their death as the World Trade Center collapsed; children being burnt alive when nuclear bombs were dropped on the cities of Hiroshima and Nagasaki; the peeling flesh and humans melting “into thick pools of liquid” caused by the Dresden bombings;reports of rape and wanton destruction during the Civil War; the face of war is vile, evil, and without morals.A photo gallery assembled by journalist Lalage Snow really brings the cost of war to life through individuals who saw combat. Her series of portraits gathers the faces of British soldiers before, during, and after their deployment to the war in Afghanistan. The difference in facial features over time is remarkable. In the span of less than a year, anxious but cheery innocence devolves into a hardened countenance. Their eyes, sunken in, have a more empty look than before deployment. The atrocities witnessed can be seen in the marks and subtle scars dotting their visage.Looking back, we must ask: what were the millions of deaths in the twentieth century really for? To make the world safe for a fascist economic system laughably called democracy? To be able to watch online videos on cell phones? To be able to order takeout food on the internet?If war is the only way to rejuvenate the modern industrial economy, I say forget about growth and innovation if it comes at the expense of lost, innocent life. Thankfully, that’s not the only available option. Humans will never stop trying to improve their lives. There is no need to engage in armed combat just to juice the effort. People are naturally innovating for its own sake. They will continue to build solutions to problems, whether in tranquility or with barbarians at the gate.It’s a false choice to say that we can either have war or growth. Economies expand when more goods and services are produced. That can occur in many forms, the least of which includes research for weapons of mass destruction. Did the development of the atom bomb lead to greater innovation? Certainly, but it’s delusional to think that without it, we wouldn’t enjoy the digital age that exists today. Possible technological achievements shouldn’t necessitate the wholly immoral construction of tools used for indiscriminate ruination.

James E. Miller is editor-in-chief of the Ludwig von Mises Institute of Canada.

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