Sunday, October 18, 2009

The Economic Equivalent of War

"The Moral Equivalent of War" is one of William James’s best known essays (much more so than his “A Culinary Equivalent of War,” a meditation on Mother James’s appallingly bad meatloaf that William and his brother Henry suffered through as children).

In it, James notes that war is horrific, despicable, sinful, and evil, as are most of the things it brings out of people who participate in it directly or indirectly. But it also elicits bravery, sacrifice, and a commitment to something greater than the self.

How wonderful it would be, mused James, if we could do away with militarism altogether, but find something that could elicit the selflessness and will to collective action that war did.

Even James, a psychologist of the first order, had difficulty coming up with a concrete vision of what a moral equivalent of war would be. Perhaps we’ve made some steps in that direction with the Peace Corps and Teach for America, but James’s search continues.

A more modest quest we might have more luck with is to find an economic equivalent of war.

A few weeks ago as I drove home after work, I listened to a gentleman on the radio railing against what he saw as the mistaken economics of John Maynard Keynes (and, by association, the Keynesian aspects of Obama’s economic policies).

This wasn’t Rush, Hannity, or any of those guys. Oddly enough, it seemed to be some church service. At any rate, the preacher/economic guru was talking about what a mistake it was to praise the ideas of Keynes (specifically the use of government spending to spur the economy) as what lifted the U.S. out of the Great Depression. With a great deal of self-satisfaction, he said something along the lines of, “Perhaps those who think government spending was the solution should pay more attention to their history. After all, the nation didn’t truly come out of the Depression until late 1941. This might be news to some folks, but that’s when something called the Second World War started. And the government wasn’t spending money paying government employees or creating ‘infrastructure.’ No, America was equipping G.I.s, building tanks, planes, and ships to fight fascism.”

This line drew appreciative cheers and applause from the congregation, apparently sincere.

I found it a bit hard to take this all with much seriousness. From a purely economic perspective, what, I wondered, were G.I.s, but government employees? What would you call tanks, planes, and ships if not infrastructure? Heck, the Manhattan Project was the biggest “make work” government investment in history.

Among those who like denigrating FDR’s fiscal policies during the Great Depression, it’s taken as an article of faith that it was WWII that actually brought the economy back. What these people seem not to realize is that to the extent this might be true, it’s true because it radically expanded and accelerated government spending beyond FDR’s wildest dreams.

There is nothing magical about spending money to kill human beings that makes it more economically stimulating than spending money to heal, educate, house, or feed them. To the contrary, war is inherently (and obviously) destructive. You’re building stuff that won’t be used for anything other than to obliterate things and people.

Take a moment to imagine what the world might be like if the United States (and everyone else involved in WWII for that matter) had been in a position to spend all the money that was spent on bombs, bullets, and planes on things like houses, trains, roads, power plants, medical research, etc. What if we’d managed to take the Great Depression as seriously as a threat to the national welfare as we did Pearl Harbor?

We’d have had the post-war “boom” without the war, without the destroyed cities, without so much brainpower spent on ways to kill rather than heal, without the tens of millions of human beings killed. Talk about a peace dividend.

I’m no economist myself, but it seems a difficult argument to make that government spending is a boondoggle, and use as proof of this is the fact that massive government spending in the fighting of WWII was what “really” got us out of the Great Depression.

Unfortunately, just as it’s difficult to evoke the degree of bravery and self-sacrifice from an individual as one finds in war, it’s also difficult to evoke the commitment to collective investment in our national well-being as one finds in war.

More’s the pity.


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