“War is the health of the state.”
A generation after Randolph Bourne coined this maxim, followers of John Maynard Keynes — the architect of peacetime over-spending by governments — pushed their master’s notions to their illogical conclusion, saying that “war gets a country out an economic slump.” Why? How? You see, only in wartime does government spend so much money, command so many resources.
But War Keynesianism makes little sense. Wars are actually quite bad for the economy — if economy is understood as “people in general.” And though we often hear that “World War II got us out of the Great Depression,” it’s worth noting that times were tight during the war, and that after VE and VJ Days, when the U.S. government pulled back on spending, Keynesian economists feared the country would spiral back into depression. To their surprise, after a short period of adjustment, the economy took off.
Indeed, not only does War Keynesianism make no sense “in theory,” the facts disprove it, as economic historian Robert Higgs has ably and repeatedly demonstrated. And yet, he recently lamented that the truth is just not getting out there: Intellectuals keep pushing the silly doctrine. Sad.
It’s easy to see why, though. Big governments are spinning out of control, and the intellectual case for them is as bankrupt as their own financials. Insider intellectuals are desperate.
War is the ultimate desperate measure.
Today the U.S. is at war in five different countries.*
This is Common Sense. I’m Paul Jacob.
* Afghanistan, Iraq, Libya, Pakistan (drone attacks), Yemen (drone attacks)
5 replies on “Desperate Times”
In 1946, the consequences coming due of all of the hyperspending by FDR with no help to the economy, the economy was in shambles with massive shortages, strikes, widespread inflation(the residue of FDR’s Keynesian spending, hitting as high as 6% in a single month). Common sense finally prevailed and an America, tired of the democratic fumbling, turned Congress over to the Repubs who cut taxes, spending, and price controls, these in spite of Truman’s resistance.
And it worked. Inflation lessened, the economy picked up. We avoided craching into another recession/depression.
‘Course, it MIGHT have been that all those years of hyperspending and borrowing that FDR did just finally showed results and the he was no longer around to take credit for it and that the reduction in spending, taxing and borrowing that presaged the turnaround was just coincidence.
Sure it was.
Wanna buy a bridge?
Did I say we are at war in 5 countries? Oops, I missed one. The Washington Post reports we have launched drone attacks in Somalia.
http://www.washingtonpost.com/national/national-security/us-drones-target-two-leaders-of-somali-group-allied-with-al-qaeda/2011/06/29/AGJFxZrH_story.html
[…] *** Desperate Times https://thisiscommonsense.org////?p=6463 […]
Are we not at war in Syria yet?
And Yemen?
Surely there is a “duty to protect” that would justify putting American lives in harm’s way and burning through our military stockpiles for those military dictators.
And would we be fighting to support or to overthrow the existing governments there? Really hard to keep track of who the “enemy” de jour is.
Kind of depends on how good a day on the links Presbo has had.
It’s good to see smoeone thinking it through.