The mirage of military prosperity: why war economies inevitably consume national wealth

“ State intervention is needed in order to restart the economy. An injection of money through a fiscal stimulus, a monetary expansion, a lowering of interest rates, firm support of the financial system, tax and other incentives to consume and to import. Unfortunately, all these goals are best achieved by engaging in warfare. It is often the case: a convenient war reflates the economy, re-ignites the economic engine, generates employment, and increases consumption, innovation and modernization. ”

“ We'd created the greatest economy in history. We re-built our military. We get you the biggest tax cuts in history, right? We got you the biggest regulation cuts. There's no President, whether it's four years, eight years, or in one case more, got anywhere near the regulation cuts. ”

“ Today, I’m announcing several critical actions that my administration has taken to confront a problem that we have right here at home. We fight wars that are 6,000 miles away; wars that we should have never been in, in many cases. But we don’t control our own border.
So we’re going to confront the national security crisis on our southern border. And we’re going to do it one way or the other — we have to do it — not because it was a campaign promise, which it is. It was one of many, by the way; not my only one. We’re rebuilding the military, our economy is thriving like never before. ”

“ In just 3 short years, we have shattered the mentality of American decline, and we have rejected the downsizing of America’s destiny. We are moving forward at a pace that was unimaginable just a short time ago, and we are never going back!
I am thrilled to report to you tonight that our economy is the best it has ever been. Our military is completely rebuilt, with its power being unmatched anywhere in the world — and it is not even close. Our borders are secure. Our families are flourishing. ”

“ We also know that American prosperity is the bedrock of freedom and security all over the world. In three short years, we built the greatest economy in history, and we are quickly doing it again. Our military has increased substantially in size. We spent $2.5 trillion over the last four years on our military. We have the most powerful military anywhere in the world, and it’s not even close.
We stood up to decades of China’s trade abuses. ”

“ We have given him a clue to the whole difference between productive and unproductive labour, between waste and economy, between taxes and no taxes, between a war-expenditure and what ought to be a peace-establishment, between money laid out and debts contracted in gunpowder, in cannon, in ships of war, in scattering death, and money laid out in paying for food, furniture, houses, the comforts, necessaries, and enjoyments of life. ”

“ It is an historical and invariable truth, that excessive luxury has always been the harbinger of the destruction of a state. I may add, it has always been the fatal cause. Labor and economy are the principles of true prosperity—the eclat of pomp and magnificence without them, is only a false splendor, which conceals inward misery. But it is here, we must stop for a moment, before we further advance, in order to have a precise idea, of what we understand by the word luxury. ”

“ Nor have we the least right to complain of our governments being expensive, so long as we set the government to do precisely the work which brings no return. If our present doctrines of political economy be just, let us trust them to the utmost; take that war business out of the government's hands, and test therein the principles of supply and demand. ”

“ Without constructive economy in Government expenditures we should not now be enjoying these results or these prospects. Because we are not now physically at war, some people are disposed to forget that our war debt still remains. The Nation must make financial sacrifices, accompanied by a stern self-denial in public expenditures, until we have conquered the disabilities of our public finance. While our obligation to veterans and dependents is large and continuing, the heavier burden of the national debt is being steadily eliminated. ”

“ The prosperity of money and prices is a hallucination, a nightmarish dream resulting from the scarcity of commodities and the influx of half a billion dollars of troop money. Soon, very soon, we must awake from that dream. ”

“ Are the axioms set out in the last chapter unchallengeable?
Is it true that the wealth, prosperity and well-being of a nation depend upon its military power, or have necessarily anything whatever to do therewith?
Can one civilized nation gain moral or material advantage by the military conquest of another?
Does conquered territory add to the wealth of the conquering nation?
Is it possible for a nation to "own" the territory of another in the way that a person or corporation would "own" an estate?
Could Germany "take" English trade and Colonies by military force? ”

“ And yet, (however much we must still qualify the possession of the meek upon earth) still more must we qualify the possession of the overbearing and the proud, when we realise what true possession should be. A modern writer has described war as "the great illusion," and has set himself to show that all those advantages at which the State aims when it turns to military operations, become as dust in the balance if compared to the real cost in treasure which war entails even for those who are nominally the victors. ”

“ Unemployment is at a 17 year low, the stock market is at an all-time high and continues to go up, up, up. We want to keep it going.
We’ve liberated the American economy from the Washington overreach, cutting 22 regulations for every one new regulation – the most in the history of our country by far; and, just last week we delivered a big beautiful Christmas present to the American people. Congress passed massive tax cuts for millions of working American families and small businesses and large businesses ”

“ African American unemployment has reached the lowest rate ever recorded in the United States, and so has unemployment among Hispanic Americans.
The world is witnessing the resurgence of a strong and prosperous America. I’m here to deliver a simple message: There has never been a better time to hire, to build, to invest, and to grow in the United States. America is open for business, and we are competitive once again.
The American economy is by far the largest in the world, and we’ve just enacted the most significant tax cuts and reform in American history. ”

“ It is science above all that has determined the importance of raw materials in international competition. Coal and iron and oil, especially, are the bases of power, and thence of wealth. The nation which possesses them, and has the industrial skill required to utilize them in war, can acquire markets by armed force, and levy tribute upon less fortunate nations. Economists have underestimated the part played by military prowess in the acquisition of wealth. ”

“ Our economy offers greater prosperity for more of our people than ever before. Real per capita income and real business profits have risen substantially in the last 2 years. Farm exports are setting an all-time record each year, and farm income last year, net farm income, was up more than 25 percent.
Our liberties are secure. Our military defenses are strong and growing stronger. And more importantly, tonight, America-our beloved country—is at peace. ”

“ Extending this notion that exertion for the sake of exertion is the way to prosperity, then a people would be most prosperous if they all labored on projects with no reference to their individual sense of value. What is euphemistically called "war production" is a case in point; there is in fact no such thing, since the purpose of production is consumption; and it is not on record that any worker built a battleship because he wanted it and proved his craving by willingly giving up anything in exchange for it. ”

“ Of course, the richer classes can buy what they need, therefore the ultimate and destructive burden of militarism falls upon the poor and the incapable. I think it cannot fail to be admitted that by so much as products are taken by the government for consumption outside the civil service, mainly for military purposes, in the form of food, fuel, metal, timber and the like, by so much is there less of these materials to be expended for subsistence and for the construction of dwelling houses, factories, workshops and the mechanism of productive industry. ”

“ However, it is still de rigueur for the victorious State to add to its exploitable territory at the expense of the conquered. But we are not here concerned with the aims of war, nor with its causes or its avoidability; what interests us is the effect on Society's economy. Does the housewife have more in her pantry, or less, as a result of the glorious adventure? Does Society acquire shortages or abundances? What is the economic profit of the military protection afforded by the State? ”

“ It is especially necessary that the reader should keep his mind fixed on the methods of consumption and destruction, as the true sources of national poverty. Men are apt to call every exchange "expenditure," but it is only consumption which is expenditure. A large number of the purchases made by the richer classes are mere forms of interchange of unused property, wholly without effect on national prosperity. It matters nothing to the state whether, if a china pipkin be rated as worth a hundred pounds, A has the pipkin and B the pounds, or A the pounds and B the pipkin. ”

“ But there is a distinction to be made between industrial efficiency and business prosperity. Americans have hitherto identified prosperity with a furious economic activity, and an ever-increasing economic product—regardless of genuine economy of production and any proper distribution of the fruits. ”

“ If, on the contrary, you look upon an abundance of useful things, fit for satisfying our wants and our tastes, as true riches, you will see that simultaneous prosperity is possible. Cash serves only to facilitate the transmission of these useful things from one to another, which may be done equally well with an ounce of rare metal like gold, with a pound of more abundant material as silver, or with a hundred-weight of still more abundant metal, as copper. ”

“ It was the unremitted industry of the settlers and their descendants, the hard labor and toil of persevering fortitude, that were the true causes of the prosperity of America. The former tyranny of England served to people it, and the virtue of the adventurers to improve it. Ask the man, who, with his axe, has cleared a way in the wilderness, and now possesses an estate, what made him rich, and he will tell you the labor of his hands, the sweat of his brow, and the blessing of heaven. ”

“ We can only make good the ravages of war by activity in production and strict economy in consumption. What we want to do is to stimulate the people of this country to work as hard as they can, to produce as much as possible, to consume as little as possible on unnecessary enjoyment and luxury, and, so, by procuring a big balance of production over consumption, to have the largest possible volume of available goods for sale to the rest of the world, in order to rebuild our position as a creditor country, which the war's demands upon us have to some extent impaired. ”

“ Nay, sir, it is better to expend the thirty millions of dollars (even if that sum was necessary) so repeatedly spoken of on the other side of the House as the cost of the war for two years, to accomplish our object, than to expend the same sum in five years, even if we could effect our object with equal certainty.
However commendable economy may be in every other situation in life, in war it is inadmissible; it loses its character; it becomes parsimony: you might as well attempt to unite profusion and avarice as war and economy. ”

“ Russia's is a primitive economy, based on commodities - especially energy products - and an over-developed weapons industry. Its fortunes fluctuate with the price of oil, of agricultural produce and with the need for arms, driven by regional conflicts.
Should the price of oil collapse, Russia may again be forced to resort to multilateral financing, a virtual monopoly of the long arms of US foreign policy, such as the International Monetary Fund (IMF) . The USA also has a decisive voice in the World Trade Organization (WTO) , membership thereof being a Russian strategic goal. ”

“ Our current economy still reflects the major flaw of the Soviet system: it largely ignores individual needs. With a few exceptions domestic business does not invent nor create the necessary things and technology that people need. We sell things that we have not produced, raw materials or imported goods. Finished products produced in Russia are largely plagued by their extremely low competitiveness.
This is why production declined such much, more than in other economies, during the current crisis. ”

“ The field for exertion is fruitful and vast, and if peace and good government should be preserved, the acquisitions of our citizens are not so pleasing as the proofs of their industry—as the instruments of their future success. The rewards of exertion go to augment its power. Profit is every hour becoming capital. The vast crop of our neutrality is all seed-wheat, and is sown again to swell, almost beyond calculation, the future harvest of prosperity. ”

“ But if we change terms, and rejecting this equivocal and fluctuating idea of a balance of trade, consider whether commerce has contributed to the wealth and prosperity of the United States, or has been the cause of the distress they are now enduring, the evidence will at once strike us as more intelligible, and the conclusion as more certain. Agricultural improvements, building houses and raising up cities, manufacturing improvements and ship building, are among the strongest proofs of a permanent increase of national wealth and prosperity. ”

“ If the credit of the government is good, if the emergency is of short duration, matters right themselves and the economy survives without serious derangements. But war-emergency disrupts and sometimes destroys an economy. This outcome often results from military defeat. ”

“ In general, the drastic cut in war programs has thrown the economy into lower gear; it has not thrown it out of gear. Our economic machine demonstrates remarkable resiliency, although there are many difficulties that must still be overcome. The rapid termination of war contracts, prompt clearance of unneeded Government-owned equipment from private plants, and other reconversion policies have greatly speeded up the beginning of peacetime work in reconverted plants. ”

“ We are having the need for economy preached and shouted at us from every quarter. Surely it is right to think about this wild spending on adornment, and give at least a few glances to the future.
What is likely to happen now when the full years of war change to empty years of peace? No longer able to spend in the way to which their high wages have made them accustomed, girls will seek to get presents from men; they will want excitement and the dress and pleasures to satisfy that need, also to hold the envy of their friends. This must lead to prostitution. ”

“ As 'war economy' teaches us, even a rather fragmentary planning is sufficient to overcome unemployment and the intentional destruction of goods. Many understand now that by a simple continuation of this war pattern, amenities of life, schools and hospitals, settlements and libraries could be procured; instead of producing war materials, one would improve the standard of living. ”

“ Why do we as a nation expend five hundred million dollars annually for the development of the army and navy, and only fifteen millions for agriculture, the one industry whose ultimate prosperity must measure the destiny of the nation? ”

“ The vital interest of the whole community in the success of agriculture as the great basal industry has been distinctly recognized during the nineteenth century by the widespread establishment of governmental agencies for its promotion. Agriculture has now a definite place in the ministries of almost all the civilized nations of the globe. In Great Britain the government fosters agricultural interests through a Board of Agriculture (q.v.) . In the United States the Federal Government maintains a Department of Agriculture (q.v.) ”

“ We arrive, then, at the conclusion that domination by labour is impossible, and a contradiction in terms, seeing that all superiority which manifests itself among a people means cheapness, and tends only to impart force to all other nations. Let us banish, then, from political economy all terms borrowed from the military vocabulary: to fight with equal weapons, to conquer, to crush, to stifle, to be beaten, invasion, tribute, etc. ”

“ Let us give up, then, the puerility of applying to industrial competition phrases applicable to war,—a way of speaking which is only, specious when applied to competition between two rival trades. The moment we come to take into account the effect produced on the general prosperity, the analogy disappears.
In a battle, every one who is killed diminishes by so much the strength of the army. In industry, a workshop is shut up only when what it produced is obtained by the public from another source and in greater abundance. ”

“ Is not the condition one where surviving "militancy" is impeding that "industrial" growth in which alone civilized prosperity can be found? Then the only remedy for European poverty and distress is plain. The disappearance of autocratic governments, the disbandment of armies, the repeal of artificial restrictions on trade imposed to raise the revenues of war; in a word, the removal of all that has its roots in "militancy." Slowly, indeed, will this great, far-reaching change come about, but with it alone can the growth of what we call prosperity proceed. ”

“ This general truth has two facets: if long warfare diverts a people from the capacity for industry, so in the long run economic pressure—the influences, that is, which turn the energies of people to preoccupation with social well-being—is fatal to the military tradition. Neither tendency is constant; warfare produces poverty; poverty pushes to thrift and work, which result in wealth; wealth creates leisure and pride and pushes to warfare. ”

“ Here, as always, it is shown that, in considering national efficiency, even as expressed in military power, the economic problem cannot be divorced from the military, and that it is a fatal mistake to suppose that the power of a nation depends solely upon the power of its public bodies, or that it can be judged simply from the size of its army. ”

“ Let us not make the same kind of mistake in another field, by failing to anticipate the much more serious impact of the Soviet economic offensive.
As with our military potential, our economic assets are more than equal to the task. Our independent farmers produce an abundance of food and fibre. Our free workers are versatile, intelligent, and hardworking. Our businessmen are imaginative and resourceful. The productivity, the adaptability of the American economy is the solid foundation-stone of our security structure. ”

“ True economy consists in the drawing out of one’s subject of every drop of significance it can give, true expenditure in devoting time, meditation and patient labour to the process of extraction and representation. ”

“ A political economy for securing and increasing our gratifications, as we pass through this world, is exactly the adversary of a political economy for inflicting and increasing privations. One must therefore be a true, and the other a false, species of political economy. We have only to ask ourselves whether our gratifications or privations have been increased by commercial restrictions, to discover the species of political economy to which they belong. ”

“ I dwell on this prospect with every satisfaction which an ardent love for my country can inspire, since there is no truth more thoroughly established than that there exists in the economy and course of nature an indissoluble union between virtue and happiness; between duty and advantage; between the genuine maxims of an honest and magnanimous policy and the solid rewards of public prosperity and felicity; ”