“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)