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<font color="#002864" size="1" face="Verdana">http://www.mises.org/fullstory.asp?control=1194</font>
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<font face="Verdana" size="2"><font color="#002864" size="5"><strong>War's Winners and Losers</strong></font>
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Â
<p align="left"><font size="4">By Christopher Westley</font>
<p align="left">[Posted April <span class="352180314-04042003">4</span>,
2003]
<blockquote dir="ltr">
<p align="left">"The way to eternal peace does not lead through
strengthening state and central power, as socialism strives for."Â Â Ludwig
von Mises, Nation, State, and Economy, p. 96.
[/i]
The market system is based on voluntary exchanges that result in
interdependencies that, over time, make war all but impossible. This is why
governments that intend to bring about war work to isolate the targeted
country economically as a prelude to the infliction of directly destructive
violence. A decade of economic sanctions in Iraq has served the purpose of
making some sort of war in Iraq possible, even inevitable.Â
When assessing the costs of this war, the full costs, including the costs
on the home front, must be considered every bit as much as the money costs.
Sadly, the most expensive aspects of war involve damage done to the culture.
These costs are the least understood and the hardest to measure, and are
therefore more easily ignored.Â
Voice
of America,"the proposed budget includes a request for nearly $63
billion to cover actual war costs as well as the global war on terrorism. It
also allots about $4 billion for increased homeland security and roughly $8
billion for humanitarian aid and reconstruction in Iraq."
However, this funding request is merely a down payment. While most now
agree that the minimum estimated cost will greatly exceed $100 billion, no one
is sure what the maximum cost may reach.Â
Even taking into consideration the eventual contribution of Iraqi oil
profits toward reducing the final bill, Yale professor William Nordhaus
estimated a worst case scenario costing $1.2 trillion, which includes the
effects of possible war-related shocks to the economy. Nordhaus' research is
supported by a Council of Foreign Relations study that estimates that the U.S.
may need to station 75,000 troops in Iraq and spend $20 billion a year
"for several years."
[img]" alt="[image]" style="margin: 5px 0px 5px 0px" /> This
spending amounts to wealth transfers from the private uses to those approved
by the state, with all of its attendant waste and fraud. As the economy struggles
to emerge from one of the worst economic downturns since the Great
Depression, billions of dollars of what otherwise could have been used for
private investment will be used to prop up governments in the Middle East,
hindering the ability of markets to maintain their current meager growth
levels. All the while, the sphere of socialism will grow. Is regime change in
Iraq worth it? Â
A much bigger threat to our freedom is an overweening state that plays on
our fears to justify the appropriation of even more money to special interests,
the mobilization of which will ensure that it stays in power. It is no
accident that much of the president's proposed supplementary budget request
will direct funds to firms that played a crucial role in his election and
whose support is essential to his reelection next year.Â
These firms, some of which are listed below, would be much smaller in size
and profitability today if they had not become so dependent on decades of
government contracts. Directing tax dollars their way allows the political
class to achieve dual goals of buying crucial political support while also
increasing the government sector's contribution to GDP growth.Â
Â
<table cellSpacing="0" cellPadding="0" border="1">
<tbody>
<tr>
<td vAlign="top" width="106" bgColor="transparent">
<font size="2">Company </font>
</td>
<td vAlign="top" width="138" bgColor="transparent">
<font size="2">Total Contributions* (1999-2002)Â </font>
</td>
<td vAlign="top" width="114" bgColor="transparent">
<font size="2">Percent to Democrats*Â </font>
</td>
<td vAlign="top" width="122" bgColor="transparent">
<font size="2">Percent to Republicans*Â </font>
</td>
<td vAlign="top" width="98" bgColor="transparent">
<font size="2">Total to George W. Bush*^
(1999-2000)Â </font>
</td>
</tr>
<tr>
<td vAlign="top" width="106" bgColor="transparent">
<font size="2">Bechtel Group</font>
</td>
<td vAlign="top" width="138" bgColor="transparent">
<font size="2">$1,297,465Â </font>
</td>
<td vAlign="top" width="114" bgColor="transparent">
<font size="2">41Â </font>
</td>
<td vAlign="top" width="122" bgColor="transparent">
<font size="2">59Â </font>
</td>
<td vAlign="top" width="98" bgColor="transparent">
<font size="2">$6,250Â </font>
</td>
</tr>
<tr>
<td vAlign="top" width="106" bgColor="transparent">
<font size="2">Halliburton Co. </font>
</td>
<td vAlign="top" width="138" bgColor="transparent">
<font size="2">$709,320Â </font>
</td>
<td vAlign="top" width="114" bgColor="transparent">
<font size="2">5Â </font>
</td>
<td vAlign="top" width="122" bgColor="transparent">
<font size="2">95Â </font>
</td>
<td vAlign="top" width="98" bgColor="transparent">
<font size="2">$17,677Â </font>
</td>
</tr>
<tr>
<td vAlign="top" width="106" bgColor="transparent">
<font size="2">Fluor Corp. </font>
</td>
<td vAlign="top" width="138" bgColor="transparent">
<font size="2">$482,778Â </font>
</td>
<td vAlign="top" width="114" bgColor="transparent">
<font size="2">43Â </font>
</td>
<td vAlign="top" width="122" bgColor="transparent">
<font size="2">57Â </font>
</td>
<td vAlign="top" width="98" bgColor="transparent">
<font size="2">$3,500Â </font>
</td>
</tr>
<tr>
<td vAlign="top" width="106" bgColor="transparent">
<font size="2">Parsons Corp. </font>
</td>
<td vAlign="top" width="138" bgColor="transparent">
<font size="2">$249,401Â </font>
</td>
<td vAlign="top" width="114" bgColor="transparent">
<font size="2">39Â </font>
</td>
<td vAlign="top" width="122" bgColor="transparent">
<font size="2">61Â </font>
</td>
<td vAlign="top" width="98" bgColor="transparent">
<font size="2">$2,000Â </font>
</td>
</tr>
<tr>
<td vAlign="top" width="106" bgColor="transparent">
<font size="2">Louis Berger Group</font>
</td>
<td vAlign="top" width="138" bgColor="transparent">
<font size="2">$70,500Â </font>
</td>
<td vAlign="top" width="114" bgColor="transparent">
<font size="2">63Â </font>
</td>
<td vAlign="top" width="122" bgColor="transparent">
<font size="2">37Â </font>
</td>
<td vAlign="top" width="98" bgColor="transparent">
<font size="2">$0Â </font>
</td>
</tr>
<tr>
<td vAlign="top" width="106" bgColor="transparent">
<font size="2">TOTALÂ </font>
</td>
<td vAlign="top" width="138" bgColor="transparent">
<font size="2">$2,809,464Â </font>
</td>
<td vAlign="top" width="114" bgColor="transparent">
<font size="2">32Â </font>
</td>
<td vAlign="top" width="122" bgColor="transparent">
<font size="2">68Â </font>
</td>
<td vAlign="top" width="98" bgColor="transparent">
<font size="2">$29,427Â </font>
</td>
</tr>
</tbody>
</table>
<em><font size="2">* Based on data released by the Federal Election
Commission on March 5, 2003. Totals include PAC, soft money and individual
contributions to federal candidates, party committees and leadership PACs,
1999-2002. ^ These figures are included in the total contributions,
1999-2002. Source: The Capital Eye.</font></em>
<font size="2">Firms such as these represent a sliver of the groups in
society that benefit from large government and have an incentive to maintain
it. They are the net tax consumers. Their very presence institutionalizes
divisiveness in society by pitting the anointed (who get benefits) against the
un-anointed (who are forced to fund them). The results are destructive to
civilization and demeaning to our culture.</font>
<font size="2">As Ludwig von Mises noted in Liberalism,"The
parties of special interests, which see nothing more in politics than the
securing of privileges and prerogatives for their own groups, not only make
the parliamentary system impossible, they rupture the unity of the state and
of society."Â Â Indeed, they create incentives for the state to
become aggressive against those segments of society that do not help it remain
in power.</font>
<font size="2">These segments are much more easily belittled and
discredited during wartime, which explains much of the drive to war in Iraq.
In an era in which big government has been under serious intellectual and
cultural attack, war is a tool that unites the country around the state.
Absent war, the raison d'tre of the Leviathan state is lost. </font>
<font size="2">When a culture treats any action that involves the grave act
of killing in such a manner, it is in serious trouble, because it implies that
it has become less vigilant in restraining the state's natural tendency toward
aggression. By legitimizing aggression abroad, culture becomes more aggressive
at home. This implies that when governments engage in slaughter, children are
taught to settle conflicts violently and the primacy of the human person is
devalued. Many soldiers find returning to civilian life too difficult after
being desensitized and demoralized in order to survive on the battlefield.
These are cultural costs that should be included in economic assessments of
the war in Iraq.</font>
<font size="2">The manifest lesson of the previous and bloodiest century is
that large centralized states tend toward socialism at home and aggression
abroad, while small decentralized states respect individual liberties while
tending toward peaceful relations with other countries based on trade. In this
light, Operation Iraqi Freedom may be more aptly labeled Operation More
Socialism at Home.</font>
<font size="2">These are some of the reasons why many who write in the
classical liberal tradition are so concerned about the war in Iraq. It
portends to divide the country economically (favoring the expansion of the
public sector over the private) and to weaken it culturally. Victory in this
war and those that follow will prove to be Pyrrhic ones if Western culture
becomes collectivist in the process.</font>
<font size="2">Indeed, fights such as that are not worth engaging. </font>
<font size="2">
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Christopher Westley, Ph.D., is an assistant professor of economics at
Jacksonville State University. See his Mises.org Daily
Articles Archive. Send him MAIL.
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