News & Analysis
Perpetual War for Perpetual Employment?
Here at the Daily Bell, we remain convinced that America's serial wars have continually deepened that great country's economic crisis. And this gives rise to a peculiar dilemma that we don't usually point out, but which will be the purpose of this article. It may even explain the reluctance of the US to leave Afghanistan and to generally disengage from overseas violence.
This is the issue: "How can the US cease its warring when so many people in that beleaguered country depend on conflict for their employment?"
The US unemployment or under-employment rate (the real one) is somewhere between 25 and 30 percent. To reduce or eliminate garrisons in both Iraq and Afghanistan would inject hundreds of thousands of additional individuals into an economy that is struggling to provide employment to available workers. (Not to mention the private-sector "defense" jobs that would be made redundant.) And assuming that the additional workers find jobs; wouldn't they be at substantially lower salaries than their existing military compensations?
(Ed Note: The Daily Bell is aware of "the broken window" fallacy regarding the profitability of war; and this has been a subject of discussion previously. In the long term, war creates nothing but misery and debt. But in the short-term it is indisputable that it can provide a temporary wealth-effect – as well as a diversion – especially if the country in question controls the world's reserve currency. See additional comments in feedback thread below.)
It is certainly easier to get into a war than to get out of one. Of course, here I am referring to the visible wars only, those which comprise millions of Americans who are earning wages that would otherwise not exist and for whom many would find their current skills not in great demand in peacetime.
It appears on surface that the US could not afford this influx of unemployed and any reigning political body would be committing domestic economic suicide should they chose to truly adopt a non-aggressive foreign policy and return America to protecting its own shores rather than spreading "democracy" all over the world. And here clearly we at the Bell believe that is ALL the US military should be doing. And we also believe that would require a personnel effort of much smaller numbers than taxpayers are currently supporting.
Were the US to suffer such an influx of unemployed as a result of adopting a sensible foreign policy rather than acting as the policemen for global morality, it is likely that trade unions and other leftist organizations would demand the existing wages of the military workers be maintained at current levels. Of course Congress would attempt to pass wage support legislation to ensure that standards of living didn't suffer in the new careers sought but to what overall detriment to the value of the dollar?
The bottom line is that the US economy cannot handle a peaceful withdrawal from active combat without causing even further unemployment, not just to those on the front lines but to all the industries who comprise the vertical support network which keeps the whole clock ticking. And for politicos intent on battling an already raging domestic unemployment crises, caused primarily by the country's out-of-control Federal Reserve, it is ironic that the current and future administrations of the US have no way out of this mess.
If the US doesn't stop the spending insanity of supporting multi war fronts, the monetary base will continue to expand and the dollar's value will continue to plunge toward its true nominal worth – which is surely zero, the inevitable graveyard for all fiat currencies. But should America's leaders decide to withdraw, unemployment will surely deepen, perhaps considerably, and the economy will tumble deeper into depression, causing the Fed to inflate even faster – thus sending the dollar to its fiat funeral, anyway.
It is a sad testament that there appears to be no way out: The US dollar and the US economy are in for further suffering whether the wars continue or not. Millions of lives will continue to be disrupted and many more will die to support the borders of empire and the value of an already dead currency.
America's founding fathers knew that war was a terrible venture and one that should only be entered into with utmost's seriousness, in order to defend the very existence of the country itself. By constantly pursuing wars and allowing Congress to abrogate its duty as the final arbitrator, the American powers-that-be have placed the country in a perilous economic condition.
If troops return home, the already weakened economy will suffer further; if the fighting continues, the economy will suffer as well – and most seriously (in part because the US military industrial complex doesn't wish for a reversion to a peacetime economy). Wars are a last resort, and not to be entered into lightly. Leaving aside the moral issues and the terrible loss of life, and looked at from a purely economic perspective (as the elite apparently tends to do) there are no easy answers and plenty of painful days ahead for those unprepared.
Editor's Observations: During the past week I have been travelling in the United States. In particular, the affluent regions of Palm Beach, Florida and coastal communities just south of Los Angeles. It was the first time I ventured back to those areas in more than five years. What I saw was, while unfortunate, not unexpected. The financial hurricane predicted in High Alert has certainly started to wash ashore and the initial damage is obvious. The posh Boca Raton Town Center Mall had vacant storefronts and many stores with half-empty shelves (not as a result of rampant consumer demand). Many of the usual well kept estates and mansions behind the walls of the gated private country clubs looked tired and neglected; an abundance of for-sale signs dotted front lawns. Everything looks tired and strained. Perhaps instead of naming this article "Perpetual War for Perpetual Employment" I should have used "Perpetual War for Perpetual Impoverishment."
Edited on date of publication.
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Posted by Michael Allard on 02/26/11 09:54 PM
Wow! Just stumbled onto your interview on RT! Anthony YOU are the man. I have never heard so much truth put so eloquently.
I know there are kazillions of people that agree with your analysis. I would love to hear you on FAUX debating the NeoCon war-mongers...
You would tear them to shreds. Wow! I have added this site to my favorites and I will be sure to visit every day and will pass the word on to my friends.
Ron Paul 2012 ...the change you wanted.
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Posted by Pete McCormack on 01/24/11 04:38 PM
Hey Anthony,
Really interesting and urgent essay. Thanks. The system becomes utterly parasitic. Although not in your political spectrum per se, I just commented on an interview from Democracy Now and added a comment from you at the end. The DN story was about the endless Military Industrial Complex web woven by Lockheed Martin. Utterly staggering, dangerous, and ultimately counter-freedom, it would seem.
Click to view link
All the best,
Pete
Reply from The Daily Bell
Thanks for the link and kind words ...
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Posted by Gray Lance on 01/18/11 04:31 PM
I live in the Pacific Northwest of the United States. Your article is so very 'right on' that it is scary. It is doubtful that my country will cease its war-mongering – unfortunately.
There are Americans who do not support the Military Industrial Complex, but we are the minority and our voices are like fading cries in the wilderness.
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Posted by Heuristic on 01/17/11 01:51 PM
@Ron
"Why not use the returning troops to secure our borders and return illegals to their home countries? That would create employment."
Why not leave people alone?
Why not stop looking for solutions to non-existent problems and shoving around people who didn't do anyone any harm?
Why not mind your own business instread of ordering people around at gunpoint?
Why don't you get a life instead of dreaming up some new "war" on this that and the other thing?
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Posted by Carpenter on 01/17/11 11:27 AM
Clearly there is one perfect solution: that the soldiers be sent out to the combat zone over and over until they are all dead.
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Posted by Ron on 01/17/11 07:28 AM
Why not use the returning troops to secure our borders and return illegals to their home countries?
That would create employment.
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Posted by AmanfromMars on 01/17/11 04:31 AM
"Thank you John, My friend is a Lady who left Oxford University at age 19 with a degree in English, flew Spitfires and Lancasters during WW2, became the BBC's leading Director and Producer of wildlife TV films and today, now aged over 80, still flies gliders. So helping her to get organised for a hip operation Tuesday has been a great honour." ....
Wow, well done that Ab Fab Lady, whose obvious modesty is crushingly overwhelming, and well done you too, CC, for being good enough and willing enough to do what you can, whenever it is needed.
An object lesson to all from two unsung heroes who probably definitely know more than most about what life, and what drivers it, is all about.
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Posted by Chris Coles on 01/17/11 02:51 AM
@ John Danforth
Thank you John, My friend is a Lady who left Oxford University at age 19 with a degree in English, flew Spitfires and Lancasters during WW2, became the BBC's leading Director and Producer of wildlife TV films and today, now aged over 80, still flies gliders. So helping her to get organised for a hip operation Tuesday has been a great honour.
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Posted by Sean on 01/17/11 01:16 AM
The fear of returning troops will greatly add to the unemployment problem was a prevalent theme at the end of WWII. The expectant result was completely opposite to what actually happened.
The big difference between then and now is the government reverted to a consumer, mostly private economy. And 1946 proved to be a banner year for economic growth.
Contrast that with today's economy, with 80,000 pages of regulation and government intervention into virtually ever area of business and private life resulting in a migration of businesses off-shore to eliminate those effects and the relatively high business taxes.
And the other big difference of tremendous pent up demand for all kinds of consumer goods at the end of the "great war" and, according to Click to view link an over 20 percent unemployment rate. It seems like it would be difficult to absorb the returning soldiers to private life.
The implications are that a massive reduction in taxes, spending and regulation are necessary to propelling the economy. It is obvious that the Fed is impotent in anything except inflating the money supply. Couple that with the federal government's stimulus' failure to increase employment (except in the case of hiring temp employees to conduct a needless census).
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Posted by Zenbillionire on 01/16/11 09:31 PM
@ Fred Quimby
Thanks for the link. Quite a teaser...
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Posted by Howard Roark on 01/16/11 08:58 PM
What about the angle that having a couple million more troops at home exponentially increases the chances of martial law and/or a military coup?
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Posted by Bob on 01/16/11 06:58 PM
I congratulate people of Tunisia. Thank you and your armed forces who refused to support the country corrupt elite and open fire on its people.
Consequences of this historical event will be felt all over the entire world including the Middle East and the USA. The US Ruling Elite & Oligarchy must realize that the Patriot Act will not do much to save and protect them if the US Armed Forced will join the people.
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Posted by David on 01/16/11 02:15 PM
Lots of interesting discussions.
One would have hoped that decisive discussions of this sort would play out on Capitol Hill " why is this no longer the case?
In the old days, before political correctness crippled everything, "to the Victor belonged the spoils".
Today, we are waging unwinnable wars that are unaffordable and there is no return to be had: no land, no oil, no gold.
It is illogical and illusory to conduct such an action with a view to maintaining specialized employment and related production. Employment is short term and much of the production is destroyed.
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Posted by Sebaneau on 01/16/11 01:28 PM
The demobilization and decrease in government spending was relatively much larger in 1945-46 and there was no depression nor social unrest.
The rationale for going to war and for ending it may be debated endlessly, but to describe those peripheral issues as central disregards the availability of alternative investments and the forecasting ability of entrepreneurs. It is poor economics.
And it is even poorer political analysis.
To discuss the issues of war and peace, a thorough knowledge of foreign and international political societies is in order, and economists who dabble in such matters without having availed themselves of the relevant knowledge are by definition incompetent.
And that way of discussing only the aspects of the problem they understand, or believe they understand, only serves to highlight such incompetence.
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Posted by Davidus Romanus on 01/16/11 01:24 PM
It's the same choice as always. Take your medicine now, or wait til later and let it get worse. Remember, there were two depressions in the early part of last century. In 1920-21, they took their medicine, even though it was unpleasant for a time, but the economy bounced back soon after. In the thirties, they tried to prop up the economy with the results being worse and lasting longer.
If TPTB ended all of US involvement in foreign wars and closed all the bases in foreign countries, that would indeed add a large number of workers to the work force, but you have to add in the trillion or so dollars/year saved that could then be taken out of the budget and taxes lowered. (We ARE speaking hypothetically here.)
The burden on taxpayers would be less, and there would be money to start new businesses and pay more workers. You could probably balance the budget if you stopped spending anything on overseas adventurism. All the scientists and engineers that waste their efforts producing only destruction would then be paid to produce productive things.
It might look bad in the short term, but in the long term, it would be a huge improvement. And that's not even discussing what peace would do to our standing in the world and how trade and commerce would improve internationally.
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Posted by Jack Swift on 01/16/11 12:55 PM
It seems to me that the whole issue of the value of a particular war could be resolved simply by the people if the government were constrained to finance it via war sur-taxes, with a particular war industries windfall profits tax.
I think that worked quite well for Great Britain back in WWI.
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Posted by Fred Quimby on 01/16/11 12:25 PM
@Zennilionaire & DB
"But there is still a frontier here on Earth that we might consider. We have some experience with deep sea exploration. There are resources there. There could be cities there."
You might find this a good watch. A pity it is not being released in CH...
Click to view link
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Posted by Ralph Tamm on 01/16/11 11:46 AM
Add the War on Drugs to the list of wars.
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Posted by Freeman on 01/16/11 11:39 AM
I may be accused of oversimplification but the answer to the present problem is easily understood. All employment falls into one of three categories.
A) That which creates wealth by adding value to raw material,
B) That which adds to the cost of the finished product, and
C) That which only recycles the wealth created by A and B.
The true wealth of a nation rests entirely in the hands of A. The workers in B help a bit, but not much. It is those 70% of the "workforce" that are in C, and who only re-chew other people's gum that are the true cause of a national defecit. There are many examples but this group is typified by the government clerk who spends 35 years shuffling meaningless papers and then retires on a comfortable pension. He has obtained over a milliom dollars but created no wealth.
The solution to our problem is to drastically reduce the number of "workers" in group C, and that includes all military personnel whi are not genuinely protecting our country's interests.
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Posted by George Owens on 01/16/11 10:15 AM
What is the Hx after WWII?
Yes, Eisenhower did warn us of the Military-Industrial complex, which we have built. Asian peoples have not always been as successful as they are today, but they have been planning in years, not months.
Unfortunately, our politics are election-driven, as many aspects of America have become effectively special interest. The problems have become systemic and speak to the very heart of America.
As you well know, it is not the only huge problem, as healthcare has become "reimbursement-driven." I could write and document volumes on Healthcare and demonstrate that our system is not competitive on the international market, except for our schools and research labs.
How many problems of this magnitude can a country deal with at one time?? It is not a joking matter, however, the QE or simply inflation of our money may bring everything to a point where we must rebuild. Something of a frightening thought, to force such a radical solution.
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