Is war good for the economy? According to Tyler Cowan writing in the New York Times on Friday, the lack of war may be hurting economic growth.
“The world just hasn’t had that much warfare lately, at least not by historical standards. Some of the recent headlines about Iraq or South Sudan make our world sound like a very bloody place, but today’s casualties pale in light of the tens of millions of people killed in the two world wars in the first half of the 20th century. Even the Vietnam War had many more deaths than any recent war involving an affluent country.
Counterintuitive though it may sound, the greater peacefulness of the world may make the attainment of higher rates of economic growth less urgent and thus less likely. This view does not claim that fighting wars improves economies, as of course the actual conflict brings death and destruction. The claim is also distinct from the Keynesian argument that preparing for war lifts government spending and puts people to work. Rather, the very possibility of war focuses the attention of governments on getting some basic decisions right — whether investing in science or simply liberalizing the economy. Such focus ends up improving a nation’s longer-run prospects.
It may seem repugnant to find a positive side to war in this regard, but a look at American history suggests we cannot dismiss the idea so easily. Fundamental innovations such as 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 was initially designed to help this country withstand a nuclear exchange, and Silicon Valley had its origins with military contracting, not today’s entrepreneurial social media start-ups. The Soviet launch of the Sputnik satellite spurred American interest in science and technology, to the benefit of later economic growth." NY Times
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Of course Tyler really means other peoples wars. For Americans by and large, war is something that happens overseas. European cities are destroyed or funny looking brown people die in their thousands. As far as the American economy is concerned, war is good for business says Tyler because there is nothing like the threat of imminent death to stimulate our creative juices.
We can sit comfortably at home and devise new and more lethal means for destroying the current “other”.This presupposes of course that ones country wins the war and has any prospects at all. How long has Britain taken to recover from WWII? France? Germany? Russia? The only economic victor of WWII was the United States for whom the costs of war, in terms of destroyed cities, poisoned countryside and shell shocked population was almost zero.
In addition according to Tyler “ war focuses the attention of governments on getting some basic decisions right — whether investing in science or simply liberalizing the economy. Such focus ends up improving a nation’s longer-run prospects.” I see no evidence for that whatsoever, quite the reverse. War is an excuse not to fix the health, education and welfare systems. War is simply another distraction, like Gay Marriage and Abortion law reform from what a real government agenda should be the provision of a decent standard of living for all its citizens.
To put that another way, if what Tyler said is true and considering the number and cost of Americas wars, then American standards of living should be much higher than their developed yet peaceful peers.
Why are these people allowed to write this rubbish?
http://www.nytimes.com/2014/06/14/upshot/the-lack-of-major-wars-may-be-hurting-economic-growth.html
