

The Age of Big War Has Passed - andreyf
http://dilbert.com/blog/entry/economics_and_war/

======
mdasen
_Mercantilism and War_

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.

~~~
yters
The ranking should make allowance for post length: a long post with a
relatively high score is usually much better quality than a short, pithy
phrase with massive karma.

------
pg
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.

~~~
LogicHoleFlaw
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.

~~~
pg
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.

~~~
prospero
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.

~~~
pg
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.

~~~
prospero
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.

~~~
asdflkj
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.

~~~
prospero
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.

------
Retric
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.

~~~
gaius
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_.

~~~
hugh
_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.

~~~
gaius
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..

------
niels_olson
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.

------
LostInTheWoods
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.

------
marvin
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.

------
karzeem
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.

------
MikeCapone
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.

------
rgrieselhuber
If this is not a big war, it's pretty f*cking expensive for a small one.

------
nazgulnarsil
the move towards ever larger wars has gone hand in hand with the populist
movements of the 20th century.

------
kingkongrevenge
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."

~~~
Prrometheus
Our economies are much more interconnected than in the 1910's, and we have the
bomb.

~~~
kingkongrevenge
> 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.

------
Fuca
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

~~~
ars
Are you posting that to laugh at 'carlos', or are you carlos?

~~~
Fuca
Thats my name, laugh all you what but still those building exploded.

