The Age of Big War Has Passed(dilbert.com)
dilbert.com
The Age of Big War Has Passed
http://dilbert.com/blog/entry/economics_and_war/
53 comments
War stopped being immediately profitable (in the pillaging and slavery sense) a long time ago. In the west the Napoleonic wars were the last I know of in which commanders got rich. And yet the biggest wars were still to come. Which implies immediate profit was not what drove them, and thus war becoming unprofitable will not cause it to stop.
I'd argue that the biggest cause of war in the last 200 years has been power struggles between politicians. Sadly I doubt we've seen the last of that.
I'd argue that the biggest cause of war in the last 200 years has been power struggles between politicians. Sadly I doubt we've seen the last of that.
War is immensely profitable today. For the contractors and civilian service-providers who live off the military-industrial complex.
It's just that the coffers they're plundering are our national budget and future debt, rather than some combatant nation.
It's just that the coffers they're plundering are our national budget and future debt, rather than some combatant nation.
As a way of funneling public money to one's supporters, starting a war is much more work than the usual peacetime appropriations route. For defense contractors, an arms race is just as good as an actual war.
I'd argue that peacetime appropriations and a true arms race are separated by an order of magnitude. And now that Russia's gone and China's at least a decade out, a straightforward war's the only game in town.
You underestimate the military-industrial complex. All you need to drive appropriations is some form of fear. Iran or China or "terrorists" will do fine.
In some cases unsophisticated opponents are better. If eggheads argue your expensive missile-defense shield won't work, you can argue that it will against crappy missiles launched by Iran.
In some cases unsophisticated opponents are better. If eggheads argue your expensive missile-defense shield won't work, you can argue that it will against crappy missiles launched by Iran.
I looked up US defense spending since WWII, adjusted for inflation: http://www.infoplease.com/ipa/A0904490.html
One the one hand, you're right in that the spending never really dips below $250 billion, except from 1945-1950. On the other hand, defense spending has doubled in recent years, and there is noticeable growth historically whenever we actually used our military.
War isn't necessary for the military-industrial complex to get rich, but it helps. I don't think the logistical complications of war are a very meaningful deterrence for the people who stand to profit from it.
One the one hand, you're right in that the spending never really dips below $250 billion, except from 1945-1950. On the other hand, defense spending has doubled in recent years, and there is noticeable growth historically whenever we actually used our military.
War isn't necessary for the military-industrial complex to get rich, but it helps. I don't think the logistical complications of war are a very meaningful deterrence for the people who stand to profit from it.
Defense spending has increased (not really doubled, though, according to those numbers), but much of that increase was poured down the drain actually making the war happen. Defense contractors' profits probably don't scale linearly with defense spending in times of war.
At the bottom it says that these figures don't include the costs for the day-to-day expenses of Iraq or Afghanistan. Those costs, if my cursory Google search is to be believed, are around $9 billion a month. All told, that's about $600 billion a year, or twice the "peacetime" average of $300 billion.
War profiteering blows away peacetime defense systems. The post 2001 defense spending boom has dwarfed the cold war at minting billionaires. Vietnam also produced stupendous profits that were not matched by the 80s spending surge.
The post 2001 defense spending boom has dwarfed the cold war at minting billionaires.
Really? I haven't heard of that many people becoming billionaires off the defense industry, given that it's dominated by giant decades-old conglomerates. But then again, maybe I haven't been paying attention. Got some names for me?
Really? I haven't heard of that many people becoming billionaires off the defense industry, given that it's dominated by giant decades-old conglomerates. But then again, maybe I haven't been paying attention. Got some names for me?
Most are probably not direct profiteers, like CEOs, they're mainly shareholders. But I'm sitting at Bethesda Naval Hospital right now, a nearly empty hospital with entirely too many staff, watching billion dollar buildings be built for patients that will never come (thanks to the admittedly much more humane TriCare system that allows retirees and dependents to be treated in their hometown civilian facilities). I have spent the last month learning about the desperately failed suite of electronic medical record apps that DoD has paid Lockheed Martin $20 billion dollars to develop (they fail on so many levels I don't know where to begin, just search for AHLTA).
Huh? That seems pretty irrelevant to my question.
Relevance to your question: providing supporting evidence. Citing two specific examples of DoD spending that appear to out of proportion to either need or benefit, but which sent billions to the conglomerates you mention. Both examples based on personal experience.
Large defense contractors are notorious for buying up small business with a majority stake held by a minority female Alaskin sled dog racer.
Hahaha, this is so true. Contractors owned by minorities get preferential treatment on bids, so there are tons of tiny minority-owned subcontracting companies which happen to be owned by larger conglomerates. I personally know some folks here in St. Louis (there is a lot of defense contracting here) who work for such companies.
You're generally correct, but you're conflating different parties. Contractors in war time are very different than the companies that build war tech. Haliburton makes money by managing thousands of people in Iraq. Boeing makes money in building a new plane. The latter is easy to get money for in peace time.
The major defense contractors all serve in the field. Boeing has loads of people in Iraq. There's no conflation. All the big defense tech players have seen big increases in profitability since the war.
War is immensely profitable today. For the contractors and civilian service-providers who live off the military-industrial complex.
That is besides the point made here. War may be good for some parties. I am sure that if we hit a depression, that will also benefit certain parties.
The point is that for either side, it is a negative sum game. So the idea is that to the extent that the macro effect is represented in decision making, wars shouldn't happen. The military-industrial complex may be an example of a failure in representing the public good. In contrast, War may have been for for Rome under Ceasar or Persia under Darios.
The second point is that economic warfare might be more efficient then actual warfare.
That is besides the point made here. War may be good for some parties. I am sure that if we hit a depression, that will also benefit certain parties.
The point is that for either side, it is a negative sum game. So the idea is that to the extent that the macro effect is represented in decision making, wars shouldn't happen. The military-industrial complex may be an example of a failure in representing the public good. In contrast, War may have been for for Rome under Ceasar or Persia under Darios.
The second point is that economic warfare might be more efficient then actual warfare.
It is overwhelmingly unproductive profit. Which really isn't profit in the long run. A few great boosts to our general standard of living have come from military research during wars and arms races, but most of the money is spent foolishly. Eventually everyone pays the piper for that kind of mis-allocation, so in a way it is anti-profit.
Well, yes and no. Has anyone ever added up radar, jet engines, satellite communications (etc etc etc - all the technologies rooted in military applications) and is it more or less than the defence budget?
Your argument rests on the notion that politicians are not representative of their cultures. Clausewitz defined war as politics by another means, but he never said politics is independent of culture. Whether intentionally or not, a country's culture and value system gives rise to it's political system which in turn gives rise to it's foreign policy. I would argue that the major wars are the result of incompatible value systems growing into each other. When one culture values something enough to die for it, and the other culture despises that thing and is willing to die to prevent it, there is not much that can be done. It's like icebergs colliding. The most deft political maneuvering will not stop two immovable forces from bearing down on one another.
The Confederacy was a largely grass roots movement. It did not rise out of a squabble between Lincoln and Jefferson Davis. They died in enormous numbers because they believed that their economic future depended on slavery. Southern farmers risked their lives and livelihood to quarter Confederate soldiers and pass them intelligence on Union positions. It was not a political squabble that caused this. It was a deeply held belief that they were right and the other was wrong.
The Bolsheviks were disgusted with the ruling order and millions laid down their lives to change it. Sure Lenin was a clever old dog but it's not like he created something that wasn't already there. He merely capitalized on existing forces. Whether they knew it or not a the time the Russians chose the Soviet Union. Perhaps they didn't hold elections but they voted with their blood.
Hitler was the most effective manipulator of all but even he did not cause WW-II. German bitterness over WW-I and their sense of racial superiority caused WW-II. Hitler just really understood the German conscious and captured the mood. Hitler would not have been possible in England.
I'm reminded of the Sequoia slide show at startup school. "An entrepreneur can't create a wave but he can ride one." I think the same is true of politicians. There cultural forces that form a society are the politicians raw materials. If they are diametrically opposed to those of their neighbors then war is a likely outcome no matter who the politicians are.
An economy where grain is distributed from Moscow cannot coexist with an economy where grain is distributed by farmers and businesses. A culture where slaves are as important to them as laptops are to Silicon Valley will not be able to co-exist with a more industrialized culture who no longer needs slaves and simultaneously values human rights. And a culture that believes that they are the master race sent to purge the impure from the world can't co-exist with anyone at all. The politicians are just enablers. Diabolical and brilliant, to be sure, but they can't conjure what they steer.
The Confederacy was a largely grass roots movement. It did not rise out of a squabble between Lincoln and Jefferson Davis. They died in enormous numbers because they believed that their economic future depended on slavery. Southern farmers risked their lives and livelihood to quarter Confederate soldiers and pass them intelligence on Union positions. It was not a political squabble that caused this. It was a deeply held belief that they were right and the other was wrong.
The Bolsheviks were disgusted with the ruling order and millions laid down their lives to change it. Sure Lenin was a clever old dog but it's not like he created something that wasn't already there. He merely capitalized on existing forces. Whether they knew it or not a the time the Russians chose the Soviet Union. Perhaps they didn't hold elections but they voted with their blood.
Hitler was the most effective manipulator of all but even he did not cause WW-II. German bitterness over WW-I and their sense of racial superiority caused WW-II. Hitler just really understood the German conscious and captured the mood. Hitler would not have been possible in England.
I'm reminded of the Sequoia slide show at startup school. "An entrepreneur can't create a wave but he can ride one." I think the same is true of politicians. There cultural forces that form a society are the politicians raw materials. If they are diametrically opposed to those of their neighbors then war is a likely outcome no matter who the politicians are.
An economy where grain is distributed from Moscow cannot coexist with an economy where grain is distributed by farmers and businesses. A culture where slaves are as important to them as laptops are to Silicon Valley will not be able to co-exist with a more industrialized culture who no longer needs slaves and simultaneously values human rights. And a culture that believes that they are the master race sent to purge the impure from the world can't co-exist with anyone at all. The politicians are just enablers. Diabolical and brilliant, to be sure, but they can't conjure what they steer.
Not to mention the ever-popular "millions of hungry and homeless people whipped into a nationalistic frenzy by sociopathic zealots"...
Japan and Germany gained a lot at the start of WWII, but they failed to quit while they where ahead.
They only made gains because they were mobilized for war and their enemies weren't. That means they had an advantage for a little while, but they lacked the ability to completely defeat the US, USSR, and UK, so they were bound to be defeated once those three countries converted the full weight of their economies to military purposes. Quitting while they were ahead was not an option, unless by "quitting" you mean "surrender."
Japan and Germany were economic basket cases at the start of WWII. They acted out of desperation and probably would have crumbled purely from macroeconomic problems without any outside intervention. Germany had bread riots in the weeks before rolling on Poland. Japan was being crushed by the costs of maintaining the empire they had already built.
Yes, but let's add 1 year to the time line. Poland was quickly crushed and was adding a lot of resources to the German economy. [Edit: I don't know a lot of the details but I think Germany could have consolidated power in Poland and then stooped. I mean the ultimatum was one thing, but they had yet to start fighting and by giving up a little land or trying to stall etc they could have still gained land with little cost. The secret would have been for them to "stop" soon enough.] Germany would have probably failed much like the USSR and for similar reasons, but who knows.
Japan - I don't know much about their economy but having industrialized they had a significant advantages. Attacking China was probably a bad idea due to it's size, but there where plenty of local countries they could have absorbed with little difficulty.
Japan - I don't know much about their economy but having industrialized they had a significant advantages. Attacking China was probably a bad idea due to it's size, but there where plenty of local countries they could have absorbed with little difficulty.
>Germany had bread riots in the weeks before rolling on Poland.
I've never heard of that.. the closest thing I've heard of was riots by the German minority in Poland. Cite?
I've never heard of that.. the closest thing I've heard of was riots by the German minority in Poland. Cite?
> I'd argue that the biggest cause of war in the last 200 years has been power struggles between politicians. Sadly I doubt we've seen the last of that.
Maybe we can have them duke it out in second life or something :-).
Maybe we can have them duke it out in second life or something :-).
> the biggest cause of war in the last 200 years has been power struggles between politicians
Putting it this way ignores the very real popular backing the politicians have usually had. The zeitgeist swings towards militarism and then the politicians follow their cue, not the other way around. It's deep in human nature.
Wars usually happen in the context of declining living standards. When peoples perceive a shrinking pie they suddenly become very willing to explore military options.
Putting it this way ignores the very real popular backing the politicians have usually had. The zeitgeist swings towards militarism and then the politicians follow their cue, not the other way around. It's deep in human nature.
Wars usually happen in the context of declining living standards. When peoples perceive a shrinking pie they suddenly become very willing to explore military options.
I'm increasingly coming to believe that the worst wars - French Revolution Wars, US Civil War, World War I and World War II - were caused by the rise of universal suffrage. The decline of war is a result of the United States establishing a hegemony over the democratic part of the world.
I think war can still be profitable, but you need to carry it out. If we showed up and killed everyone in Iraq taken the oil and left we could have made money. (And pissed off a lot of people.) However, we have started calling police actions / occupations like Iraq "war" without treating them like war which is just going to fail slowly.
Most of the world does not think like us so the idea of spreading democracy in societies that are ill equipped to handle it is a stupid idea. As is propping up petty dictators who do things we like. But, such actions might be profitable for some people in terms extracting money from US taxpayers. So pseudo war can make some people a lot of money.
PS: South America and Africa over the last 100 years have been vary profitable for the US even as we used military force to persuade people to do what we wanted. Now what the long term results of this are is hard to say but it's an approach that has worked in the past.
Most of the world does not think like us so the idea of spreading democracy in societies that are ill equipped to handle it is a stupid idea. As is propping up petty dictators who do things we like. But, such actions might be profitable for some people in terms extracting money from US taxpayers. So pseudo war can make some people a lot of money.
PS: South America and Africa over the last 100 years have been vary profitable for the US even as we used military force to persuade people to do what we wanted. Now what the long term results of this are is hard to say but it's an approach that has worked in the past.
If the Coalition had just been after the oil, the Iraq situation would look very different. The oilfields aren't in Baghdad or Sadr City, after all. It would have been straightforward enough to seize the oilfields, staff them with Western engineers, patrol just the pipelines and leave the rest of the country completely alone. That scenario is a perfectly plausible one. So the age of economic war is not over per se, it just doesn't happen to be en vogue right now.
It would have been straightforward enough to seize the oilfields, staff them with Western engineers, patrol just the pipelines and leave the rest of the country completely alone.
Leaving the rest of the country completely alone? So you'd still have Saddam Hussein's 200,000-man army intact, and you'd be trying to defend the oil infrastructure against random attacks by it? That sounds much harder than just marching into Baghdad.
Leaving the rest of the country completely alone? So you'd still have Saddam Hussein's 200,000-man army intact, and you'd be trying to defend the oil infrastructure against random attacks by it? That sounds much harder than just marching into Baghdad.
Well, that's not difficult to do if you simply adopt the policy that anyone you don't know approaching within n miles of any asset you care about gets immediately hit from the air. The reason Gulf 1 went so well is that the Coalition played to its strengths: air and armour in open country. Gulf 2 is going badly because the Coalition is dancing to its enemies urban guerilla warfare tune..
What's really pathetic is that Colin Powell described the future of asymmetric warfare in "Forward, from the Sea" in the early 90s. General Carl Stiner wrote how JFK founded the spec war community in the 60s to deal with the future assymetry of warfare. Note, JFK also founded the Peace Corps, no doubt to help with international relations before the warfare part of asymmetric relations kicked in.
And, as in every war, most people will forget about all of this. Most people who read this comment will forget about it. And the only thing anyone will remember is that war is bad. And they will forget that too. And then there will be another war. Most likely for treasure, almost certainly not for a anything that rises to the level of jus ad bellum.
And, as in every war, most people will forget about all of this. Most people who read this comment will forget about it. And the only thing anyone will remember is that war is bad. And they will forget that too. And then there will be another war. Most likely for treasure, almost certainly not for a anything that rises to the level of jus ad bellum.
Those who forget history are doomed to repeat it. And those who don't understand history are doomed to be killed by it.
History, the way I see it, seems to indicate that there will be another World War, and it will be brutal beyond compare. It is just a matter of time.
History, the way I see it, seems to indicate that there will be another World War, and it will be brutal beyond compare. It is just a matter of time.
The main reason the Iraq war is so expensive is that the US refuses to massacre the suspected supporters of guerrilla operations. Thankfully, terror tactics aren't accepted today as they were 500 years ago (or even 60 years ago).
Say what you will of war crimes and illegal/immoral tactics today, but in the middle ages whole cities were leveled to root out enemies.
The US would save billions by just killing the family of every suspected insurgent and blindly bombing their suspected locations.
Say what you will of war crimes and illegal/immoral tactics today, but in the middle ages whole cities were leveled to root out enemies.
The US would save billions by just killing the family of every suspected insurgent and blindly bombing their suspected locations.
Robert Wright wrote a book called Nonzero a few years back that goes into this in more depth. The idea is that civilization's advance is defined by finding ways to turn zero-sum games (e.g. we kill you and take your resources for ourselves) into non-zero-sum games (e.g. we trade with you). War, as Scott Adams says in this post, isn't all that efficient a way of advancing your aims, especially as a developed country.
AS long as central banks can just print money, big wars will be possible. It'll still be as economically painful in the mid-term because of inflation, but they don't have to tax people to pay for the war, so it's much easier.
If this is not a big war, it's pretty f*cking expensive for a small one.
the move towards ever larger wars has gone hand in hand with the populist movements of the 20th century.
The 1910s saw loads of books published detailing empirically how war between great powers could never make economic sense, so it would never happen again. The Franco-Prussian war certainly didn't get anyone ahead. Then August 1914 happened.
"Only the dead have seen the end of war."
"Only the dead have seen the end of war."
Our economies are much more interconnected than in the 1910's, and we have the bomb.
Many (perhaps most) respectable economic historians would disagree with the first half of your statement. Between the later part of the 19th century and 1914, nearly every economically significant country was on the gold standard, and international investment, trade, and immigration were at enormous unprecedented levels. Industrialized countries in Europe were wholly dependent on foreign sources of raw materials (not to mention food), and countries worldwide specialized to a remarkable degree.
There are many other factors making a world war now less likely than in 1914, though.
There are many other factors making a world war now less likely than in 1914, though.
Why should interconnected economies matter anyways? In fact, that would increase the economic incentive for war: if your livelihood depend on people you don't control, you can get the goods much more efficiently and cheaply if you control them.
> Our economies are much more interconnected than in the 1910
I wouldn't overstate that point. Global trade was huge and economies were highly inter-dependent in 1910. Arguably more-so than for rest of the century up until the 1990s.
I wouldn't overstate that point. Global trade was huge and economies were highly inter-dependent in 1910. Arguably more-so than for rest of the century up until the 1990s.
[deleted]
Scott,
War is a hell of a business for the military industry, and that is why there will always be wars.
If you like science and are not afraid of what the truth maybe I dare you to do this: watch on youtube videos of the collapse of the WTC on 9/11 and explain how can fire cause it to explode? Why it turns to dust? Why the second building to collapse starts doing it from the top (can the sky put pressure on a building so it crash itself from the top, instead of on the dent that the plane made)?
I do not know either the answer to this, but as you point out in Gods Debris: "Just because I do not know how a magician makes his tricks does not make it magic", but those buildings exploded.
Thanks for all the laughs, yesterday comic was great.
Regards, Carlos
War is a hell of a business for the military industry, and that is why there will always be wars.
If you like science and are not afraid of what the truth maybe I dare you to do this: watch on youtube videos of the collapse of the WTC on 9/11 and explain how can fire cause it to explode? Why it turns to dust? Why the second building to collapse starts doing it from the top (can the sky put pressure on a building so it crash itself from the top, instead of on the dent that the plane made)?
I do not know either the answer to this, but as you point out in Gods Debris: "Just because I do not know how a magician makes his tricks does not make it magic", but those buildings exploded.
Thanks for all the laughs, yesterday comic was great.
Regards, Carlos
So, there was this economic theory called mercantilism. Basically, it said that the wealth of the world is a fixed value (cannot be created nor destroyed) and that a country's wealth was measured by the amount of gold it controlled. Now, people on this site should instantly say, "but startups are increasing the wealth of the world all the time." Yes. Mercantilism was just flat out wrong, but it did influence a lot of international politics for a while.
So, if you believe mercantile economics to be correct: * Spending money on war isn't actually wasting wealth since wealth cannot be destroyed. * The only way for you to gain more wealth is to take it from someone else (another country). * The only risk in war is that you might loose. Baring loosing the war, you have gained wealth. There cannot be a situation where both sides loose wealth. * Gold is f'in magic!
So, if you can't make wealth, you should set your sights on taking it from someone else. The problem is that mercantile economics is flat out false and that it's often easier to create wealth than to steal it.
To put it in math terms:
Mercantalism = Profits stolen. Modern Economics = Profits stolen - cost to wage the war.
--
That still means that war can be profitable, but it severely decreases the likelihood. What makes it unprofitable is the value of human life. Yes, human life has a value. That value is not static. For example, I have a pretty awesome life (by historical standards). I have awesome American healthcare, a job that doesn't hurt me physically or emotionally, etc. You get the point. If I had lived 500 years ago, my life would not have been worth as much because it would have sucked more.
It's not that it should be worth less. Everyones' lives should have equal value. But that isn't the case. In fact, the actions that people take show that they value themselves differently. For example, if I expected to die of a plague, I would probably act very differently - taking way more risks with my life because it's cheap; it's going to be gone soon with little fanfare.
We should, as a matter of policy, treat everyone equally.
So how does that impact war? Well, as the average value of human life increases, the cost of war goes up in a very intangible way. 500 years ago, we would just let soldiers die. Today, even a small number (by historical standards) of casualties is cause for anger. Why? Human life is worth more than it used to be. It also means that a lower percentage of the population is probably willing to risk their lives. It also means that we spend a ton more money on protective things. "Well, that thing by the road could be a bomb. Let's use the $50,000 robot to see if it gets blown to bits."
This is a good thing! At least I think it is. But if you're into war, it kinda makes it undoable. 500 years ago, letting a soldier die didn't cost you anything and, in fact, many generals would send their highest-paid soldiers on the riskiest missions so that they would die and stop costing them salary money. Today, we would rather sacrifice lots of money than let that soldier die. That's awesome, but expensive when your business is war.