Perpetual War for Perpetual Employment?
By Anthony Wile - January 15, 2011

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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