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Koch 'Scholar' Makes Case For War As Economic Boon

Just as Iraq melted down, a convenient editorial from Mercatus Center appeared in the New York Times arguing for war as an economic stimulus.
Koch 'Scholar' Makes Case For War As Economic Boon

An editorial in the New York Times from Tyler Cowen, Chairman and General Director of the Koch-funded Mercatus Center largely flew under the radar last week as the situation in Iraq degenerated. In one of the most cynical efforts to justify war, Cowen argued that the economy is sluggish because there just aren't enough major wars to force governments to make the 'right decisions,' which has led to a slacker economy.

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.

The fierce urgency of war? Cowen argues that wars push invention and commercial innovation:

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.

War brings an urgency that governments otherwise fail to summon. For instance, the Manhattan Project took six years to produce a working atomic bomb, starting from virtually nothing, and at its peak consumed 0.4 percent of American economic output. It is hard to imagine a comparably speedy and decisive achievement these days.

I'm wondering if he allows for the fact that some of what he cites would have been better off remaining 'uninvented,' like nuclear weapons. Might we have developed computers and aircraft sooner rather than later without wars driving it? It's likely, if for no other reason than corporate need. Would the Internet and space travel have happened whether or not the original design was driven by defense concerns? Probably.

Cowen closes his essay with the suggestion that perhaps we should simply live with slower growth as a tradeoff for living without being blown off the planet in some stupid and unnecessary war, even if it does mean we're all a bunch of slackers.

We can prefer higher rates of economic growth and progress, even while recognizing that recent G.D.P. figures do not adequately measure all of the gains we have been enjoying. In addition to more peace, we also have a cleaner environment (along most but not all dimensions), more leisure time and a higher degree of social tolerance for minorities and formerly persecuted groups. Our more peaceful and — yes — more slacker-oriented world is in fact better than our economic measures acknowledge.

Living in a largely peaceful world with 2 percent G.D.P. growth has some big advantages that you don’t get with 4 percent growth and many more war deaths. Economic stasis may not feel very impressive, but it’s something our ancestors never quite managed to pull off. The real questions are whether we can do any better, and whether the recent prevalence of peace is a mere temporary bubble just waiting to be burst.

Of course, Cowen omits any serious suggestion that wealth and income inequality has anything at all to do with the sluglike movement of economic indicators. That would be far too populist for someone on the Koch payroll.

Also, a note for the New York Times. Referring to Cowen as a professor at George Mason University is inadequate to properly inform readers of his background. Lack of a Mercatus mention is a critical omission.

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