War is Bad for the Economy

It seems to be common knowledge that war is good for the economy. After all, following World War II the US was no longer in a recession. However, this view is false. War is actually bad for the economy. The reasons that destruction is bad for the economy is explained in Economist Claude Frédéric Bastiat’s broken window fallacy. The broken window fallacy explains that destruction does not benefit the economy. Bastiat explains this by providing the example of someone breaking a window.

An excerpt from Bastiat’s work “That Which Is Seen, and That Which Is Not Seen:”

Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation: “It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?

The spectators in Bastiat’s example are explaining that the shopkeeper’s broken window provides the glazier with an increase in income. The spectators believe that this increase in income benefits society. Bastiat goes onto explain that the spectators are ignoring the fact that the broken window causes the shopkeeper to lose money. What results from the broken window is an exchange of money between the shopkeeper and the glazier, as a result, society is no better off with the broken window. Society is actually worse off since the window lost value.

The belief that war is good for the economy is another version of the broken window fallacy. How can deaths of thousands of people and the destruction of infrastructure be good for the economy? It isn’t good for the economy. During wartime, the economy loses labor, resources, and infrastructure. These losses can never be recuperated.

When looked at from a global perspective, war in one country means that the global economy will be working less efficiently. While one country may experience a boom after war, another country will be experiencing the impacts of destroyed infrastructure and resources. In fact, all countries that were involved in war will at least have to deal with the impact of the loss of labor. Additionally, during wartime economies shift towards producing more wartime materials that do not promote economic well being, such as weapons. As a result, resources that could have been used to promote well being are wasted on the production of wartime materials. As Bastiat would say “if that which is not seen is taken into consideration,” then war would obviously be considered bad for the economy.

Image Source: Life Magazine

Are Sanctions Making Russia Stronger?

The US and many European countries have placed sanctions on Russia in response to Russia’s aggression in Ukraine. However, the current sanctions on Russia may actually be increasing group solidarity, the cohesiveness of the Russian population. By increasing group solidarity, sanctions on Russia are actually having unintended consequences.

According to the Pew Research Center, Russians have record high confidence in President Putin’s ability to handle international affairs, while the Russian population’s view of foreign world leaders has plummeted. There are several possible reasons for this. One possible reason is that the state-run news media in Russia may broadcast international events in a way that favors Putin and the Russian government. Another possible reason is that the Russian government has been promoting a narrative that says that the west is trying to hurt Russia.

In light of the Russian government’s narrative, sanctions may be perceived simply as a way to hurt Russia and not as a way to force Russia to move troops out of Ukraine. When the narratives of the state-run news media and Russian sanctions are combined, this results in the Russian population displaying more support for their leaders and less support for foreign world leaders. Therein solidarity is displayed. Why would I support someone that wants to harm my country? This is the question members of the Russian population are forced to ask when they are convinced by the Russian government’s narrative and see that European countries and the US placed sanctions on Russia which in turn hurt the Russian economy.

SanRDue to the group solidarity created by sanctions and the Kremlin’s narrative, Putin may not succumb to the pressures of sanctions. This is what we have seen thus far. So far the sanctions have increased political support for Putin. Sure 73% of Russians say the economy is in poor shape, but Putin’s approval rating is 82%. His approval rating even increased during the Ukraine crisis and sanctions have failed to bring his approval rating below 80%. So sanctions are not really placing pressure on Putin. In fact, withdrawing troops from Ukraine may hurt his approval rating since it could be seen as succumbing to the wills of the nations that are trying to hurt Russia. If Putin wants to be elected, and what politician doesn’t want to be elected, then he doesn’t need to change anything he’s doing. This is true as long as solidarity in Russia is high.

As long as solidarity in Russia increases, the use of sanctions on Russia will be largely ineffective. The only way for sanctions to become effective would be for the Russian population to understand or believe that the Russian government is lying about the motives and actions of the US and other nations. This would lead to the Russian population no longer supporting President Putin.

Image: War in Donbass, By ВО «Свобода» [CC BY 3.0], via Wikimedia Commonshttps://picasaweb.google.com/102652274152528116947/12062014#6024400883891185522

Leaving American Troops in Afghanistan

On Thursday July 6, President Barack Obama announced that he will leave 8,400 American troops in Afghanistan when his term as president ends, instead of his previous promise of 5,500 American troops. Obama says that he came to this decision after consulting with military experts in Afghanistan. At first glance, it may seem like this is a terrible idea. After all, more American lives will be at risk in a foreign country. However, I think slowing the American troop removal from Afghanistan is a good idea.

Slowing the American troop withdrawal from Afghanistan would help ensure a situation similar to the current situation in Iraq doesn’t happen in Afghanistan. Although a lot of factors besides the withdrawal of troops have contributed to ISIS’ stronghold in Iraq, such as systemic disenfranchisement and political corruption, slowing troop withdrawal in Iraq could have slowed the growth of ISIS in Iraq in Syria. The main reason for this is that American troops could have supported ISIS’ opponents and possibly stopped ISIS from spreading into Syria.

Slowing the American troop presence in Afghanistan is a good and safe decision. It would help ensure that extremist organizations are not able to gain a stronghold in Afghanistan and it would allow the US to have more accurate intelligence information pertaining to Afghanistan. More information about the withdrawal of American troops from Afghanistan can be found at the Associated Press.

Image: www.defense.gov