Re: [A-List] Fw: Ari Fleischer laughed off the stage.

["annewilliamson" <annewilliamson@xxxxxxx>]

A-Listers, though many of you will agree with much of what Lew
writes - and probably will disagree with much too -  I thought it might
be encouraging to all to know that an anti-war position from another
part of the political spectrum will be receiving attention in a national
forum.  It is especially good that Lew apparently hopes to address
the absurd notion that the Bush campaign will be "good for the
economy," which is not only false but amounts to a particularly cheap
and cynical attempt to manipulate an increasingly worried citizenry. -A.


What You Should Know About War and the Economy
by Llewellyn H. Rockwell, Jr.



There's something about the prospect of an interview that focuses the mind.
I write as I prepare to leave for an extended interview with Bill Moyers for
PBS. He wants to know how it is possible to be against this war, and the
policies of the Bush administration, and also be for a free and globally
engaged commercial republic. To put it more crudely, how can we make sense
of the phenomenon of right-wing anti-war theory and practice?

Behind the query is the longstanding canard that war is good for the
economy. If what you care about is a prosperous economy, why wouldn't it
make sense to spend hundreds of billions on huge industrial products like
military planes and tanks? Why not employ hundreds of thousands in a great
public-works program like war? Why not destroy a country so that money can
funnel to American companies in charge of rebuilding it? Doesn't all of this
help us out of the recession?

All these questions somehow come back to Bastiat's "Broken Window" fallacy.
In the story, a boy throws a rock through a window. Regrets for this act of
destruction are all around. But then a confused intellectual pops up to
explain that this is a good thing after all. The window will have to be
fixed, which gives business to the glazier, who will use it to buy a suit,
helping the tailor, and so on. Where's the fallacy? It comes down to
focusing on the seen (the new spending) as versus the unseen (what might
have been done with the resources had they not had to be diverted to window
repair).

Let us never forget that the military is the largest single government
bureaucracy. It produces nothing. It only consumes resources which it takes
from taxpayers by force of law. Making matters worse, all these resources
are directed toward the building and maintenance of weapons of mass
destruction and those who will operate them. The military machine is the boy
with the rock writ large. It does not create wealth. It diverts it from more
productive uses.

How big is the US military? It is by far the largest and most potentially
destructive in the history of the world. The US this year will spend in
excess of $400 billion (not including much spy spending). The next largest
spender is Russia, which spends only 14% of the US total. To equal US
spending, the military budgets of the next 27 highest spenders have to be
added together. If you consider this, and also consider the disparity of the
US nuclear stockpile and the 120 countries in which the US keeps its troops,
you begin to see why the US is so widely regarded as an imperialist power
and a threat to world peace.

This is very hard for Americans to understand. We tend to think of the
American nation as a mere extension of our own lives. We all work hard. We
mind our own business. We tend to our families and involve ourselves in
local civic activities. We love our history and are proud of our founding.
We are pleased by our prosperity (even if we don't know why it exists). We
think most other Americans live the way we do. We tend think our government
(if we think about it at all) is nothing but an extension of this way of
life.

A deadly military empire? Don't be ridiculous. The military is just
defending the country. Bush is a potential tyrant? Get real! He's a good
man. Those crazy foreigners who resent the US are really no better than
those people who attacked us on September 11, 2001: they envy our wealth and
hate us for our goodness. We are a godly people, which makes our enemies
ungodly, even demonic. This is a short summary of a widely held view, one
that those who seek a government-dominated society use to build their
public-sector empire.

What most Americans refuse to face is that what the government does day to
day, and in particular its military arm, is not an extension of the way the
rest of us live. Government knows only one mode operation: coercion. It does
not cooperate; it coerces. Because it is constantly overriding human
choices, it makes unrelenting error, most often producing consequences
opposite of the stated intention. This is no less true in its foreign
operations than it is in its domestic ones.

Consider the most recent military action in Afghanistan. The Taliban was
nothing but a reincarnation of the opposition tribes the US supported when
the country was being run by the Soviets in the 1980s. Back then we called
them freedom fighters. When the Taliban fled the capital city last year, the
US knew where to look for them because the US assisted in building their
hideouts during the last war.

What did the war do to the country? All hoopla aside, it is no freer, no
more democratic, and no more prosperous. The warlords are running the
country and women are still subject to fundamentalist Islamic dictate. How
many civilians did the US kill? Thousands, perhaps many thousands. During
the war, every day brought news of a few dozen innocent dead, all verified
by humanitarian organizations monitoring the situation. We don't have a
definitive final tabulation because the US bombed radio and TV stations and
worked to keep news of the dead from leaking.

The New York Times reports concerning the newest proposed war: "General
[Richard] Myers gave a stark warning that the American attack would result
in Iraqi civilian casualties despite the military's best efforts to prevent
them." Americans don't like to think about this, but it is a reality
nonetheless. As for best efforts, one would have to turn a blind eye to the
history of US warfare to believe it.

With regard to Iraq in particular, let us remember that the US has waged
unrelenting war on that country for twelve years, with bombings and
sanctions that the UN says have killed millions. The entire fiasco began
with the Iraq invasion of its former province, Kuwait, which the US
ambassador was warned about in advance and responded that the US took no
position on the border-oil dispute then brewing.

But let's return to the economic costs associated with war. It does not
stimulate productivity. It destroys capital, in the same sense that all
government spending destroys capital. It removes resources from where they
are productive - within the market economy - and places them in the hands of
bureaucrats, who assign these resources to uses that have nothing to do with
consumer or producer demand. All decisions made by government bureaucrats
are economically arbitrary because the decision makers have no access to
market signaling.

What's interesting this time around is how the markets seem to have caught
on. The prospect of war is inhibiting recovery. The stock market is now at
1998 levels, with five years of increased valuations wiped out. The
recession itself, the longest in postwar history, may have been the
inevitable response to the economic bubble that preceded it, but the drive
to war is prolonging it. It could get worse and likely will. Consumer
confidence is falling, as is consumer spending. Unemployment is rising. The
dollar is falling. Commodity prices are rising. All signs point to a
man-made economic calamity.

The deficit is completely out of control. It will soar past $400 billion in
short order. The idea of tax cuts is fine, but let's not pretend as if the
bill for government spending doesn't need to be paid by someone at some
point. It will be paid either through inflation or higher taxes later. In
the meantime, deficits crowd out private production because they need to be
financed through bond holdings. War will only make the problem worse. From
time immemorial, war has gone along with fiscal irresponsibility.

War also goes hand in hand with government control of the economy. Bush has
increased spending upwards of 30 percent since he took the oath of office.
He has imposed punishing tariffs on steel and hardwood. He has created the
largest new civilian bureaucracy erected since World War II. He has
unleashed the federal police power against the American people in violation
of the constitution. All of this amounts to a war on freedom, of which
commercial freedom is an essential part. This is why no true partisan of
free enterprise can support war.

But what about September 11? Doesn't that event justify just about anything?
Let us not forget that this was a multiple hijacking, of which there have
been hundreds over the decades since commercial flight became popular. The
difference this time was that the hijackers gave up their lives rather than
surrender. It was a low-budget operation, and needed no international
conspiracy to bring it about. It was easily prevented by permitting pilots
to protect their planes and passengers by force of arms, but federal
bureaucrats had a policy against this.

In any case, there is no evidence that Iraq had anything to do with 9-11.
The Iraqi regime is liberal by Muslim standards and for that reason hated by
Islamic fundamentalists. Unlike Saudi Arabia, it tolerates religious
diversity, permits gun ownership, and allows drinking. It has a secular
culture, complete with rock stars and symphony halls, that few other Muslim
states have. Yes it is a dictatorship, but there are a lot of these in the
world. Many of them are US allies.

The focus of the Bush administration on Iraq has more to do with personal
vendettas and Iraqi oil. In waging war, the Bush administration proposes to
spend twice the annual GDP of the entire Iraqi economy! The US will spend $2
for every $1 it will destroy - the very definition of economic perversity.
What's more, an attack will only further destabilize the region and recruit
more terrorists intent on harming us.

Meanwhile, the prospect of war has markets completely spooked. Is this a
narrow economic concern? Not in any way. Prosperity is an essential partner
in civilization itself. It is the basis of leisure, charity, and a hopeful
outlook on life. It is the means for conquering poverty at the lowest rung
of society, the basis on which children and the elderly are cared for, the
foundation for the cultivation of arts and learning. Crush an economy and
you crush civilization.

It is natural that liberty and peace go together. Liberty makes it possible
for people from different religious traditions and cultural backgrounds to
find common ground. Commerce is the great mechanism that permits cooperation
amidst radical diversity. It is also the basis for the working out of the
brotherhood of man. Trade is the key to peace. It allows us to think and act
both locally and globally.

What makes no sense is the belief that big government can be cultivated at
home without the same government becoming belligerent broad. What also makes
no sense is the belief that big- government wars and belligerent foreign
policies can be supported without creating the conditions that allow for the
thriving of big government at home. The libertarian view that peace and
freedom go together may be the outlier in current public opinion. But it is
a consistent view, the only one compatible with a true concern for human
rights, and for social and global well being.


March 6, 2003

Llewellyn H. Rockwell, Jr. is president of the Ludwig von Mises Institute in
Auburn, Alabama, and editor of LewRockwell.com.

Copyright © 2003 LewRockwell.com