or: How I Learned to Stop Worrying and Love the Bomb
Per il New York Times l’Assenza di Grandi Guerre Può Nuocere alla Crescita Economica
Da Zero Hedge un commento a un articolo comparso sul New York Times che anticipa lo spaventoso frame dentro il quale ci faranno apparire la guerra come un ineluttabile destino dell’umanità, foriero, alla fin fine, di evoluzione e progresso! A parte la grave confusione tra Keynesismo e shock economy, l’articolo merita di esser letto, ma si raccomanda di farlo a stomaco pieno e dopo aver respirato profondamente…
Submitted by Tyler Durden on 06/14/2014
( Traduzione in Italiano in fondo )
It is no secret that as the Fed’s centrally-planned New Normal has unfolded, one after another central-planner and virtually all economists, have been caught wrong-footed with their constant predictions of an “imminent” economic surge, any minute now, and always just around the corner. And yet, nearly six years after Lehman, five years after the end of the last “recession” (even as the depression for most rages on), America is about to have its worst quarter in decades (excluding the great financial crisis), with a -2% collapse in GDP, which has been blamed on… the weather.
That’s right: economists are the only people who will look anyone in the eye, and suggest that it was harsh weather that smashed global trade, pounded retail sales (in the process freezing the internet because people it was so cold nobody shopped online), and even with soaring utility usage and the Obamacare induced capital misallocation still led to world’s largest economy to a 5% plunge from initial estimates for 3% growth in Q1.
In other words, a delta of hundreds of billion in “growth lost or uncreated” due to, well, snow in the winter.
Sadly for the same economists, now that Q2 is not shaping up to be much better than Q1, other, mostly climatic, excuses have arisen: such as El Nino, the California drought, and even suggestions that, gasp, as a result of the Fed‘s endless meddling in the economy, the terminal growth rate of the world has been permanently lowered to 2% or lower.
What is sadder for economists, even formerly respectable ones, is that overnight it was none other than Tyler Cowen who, writing in the New York Times, came up with yet another theory to explain the “continuing slowness of economic growth in high-income economies.”
In his own words: “An additional explanation of slow growth is now receiving attention, however. It is the persistence and expectation of peace.”
That’s right – blame it on the lack of war!
The world just hasn’t had that much warfare lately, at least not by historical standards. Some of the recent headlines about Iraq or South Sudan make our world sound like a very bloody place, but today’s casualties pale in light of the tens of millions of people killed in the two world wars in the first half of the 20th century. Even the Vietnam War had many more deaths than any recent war involving an affluent country.
Keynesianism 101 continues:
Counterintuitive though it may sound, the greater peacefulness of the world may make the attainment of higher rates of economic growth less urgent and thus less likely. This view does not claim that fighting wars improves economies, as of course the actual conflict brings death and destruction. The claim is also distinct from the Keynesian argumentthat preparing for war lifts government spending and puts people to work. Rather, the very possibility of war focuses the attention of governments on getting some basic decisions right — whether investing in science or simply liberalizing the economy. Such focus ends up improving a nation’s longer-run prospects.
To be sure, Cowen is quick covers his ass with some quick diplomacy.
After all how dare he implicitly suggest that the only reason the US escaped the Great Depression is what some say was its orchestrated entry into World War 2:
It may seem repugnant to find a positive side to war in this regard, but a look at American history suggests we cannot dismiss the idea so easily. Fundamental innovations such as nuclear power, the computer and the modern aircraft were all pushed along by an American government eager to defeat the Axis powers or, later, to win the Cold War. The Internet was initially designed to help this country withstand a nuclear exchange, and Silicon Valley had its origins with military contracting, not today’s entrepreneurial social media start-ups. The Soviet launch of the Sputnik satellite spurred American interest in science and technology, to the benefit of later economic growth.
So what is it about war that makes economic “growth” that much greater. Apparently it has to do with an urgency in spending. As in urgently spending more than the trillions of dollars needed to support the US welfare state now, and spending even more trillions in hopes of, you guessed it, stumbling on the next “Internet” (which apparently wasn’t created by Al Gore).
War brings an urgency that governments otherwise fail to summon. For instance, the Manhattan Project took six years to produce a working atomic bomb, starting from virtually nothing, and at its peak consumed 0.4 percent of American economic output. It is hard to imagine a comparably speedy and decisive achievement these days.
Ian Morris, a professor of classics and history at Stanford, has revived the hypothesis that war is a significant factor behind economic growth in his recent book, “War! What Is it Good For? Conflict and the Progress of Civilization From Primates to Robots.” Morris considers a wide variety of cases, including the Roman Empire, the European state during its Renaissance rise and the contemporary United States. In each case there is good evidence that the desire to prepare for war spurred technological invention and also brought a higher degree of internal social order.
Another new book, Kwasi Kwarteng’s “War and Gold: A 500-Year History of Empires, Adventures, and Debt,” makes a similar argument but focuses on capital markets. Mr. Kwarteng, a Conservative member of British Parliament, argues that the need to finance wars led governments to help develop monetary and financial institutions, enabling the rise of the West. He does worry, however, that today many governments are abusing these institutions and using them to take on too much debt. (Both Mr. Kwarteng and Mr. Morris are extending themes from Azar Gat’s 820-page magnum opus, “War in Human Civilization,” published in 2006.)
Yet another investigation of the hypothesis appears in a recent working paper by the economists Chiu Yu Ko, Mark Koyama and Tuan-Hwee Sng. The paper argues that Europe evolved as more politically fragmented than China because China’s risk of conquest from its western flank led it toward political centralization for purposes of defense. This centralization was useful at first but eventually held China back. The European countries invested more in technology and modernization, precisely because they were afraid of being taken over by their nearby rivals.
The fun part will be when economists finally do get their suddenly much desired war (just as they did with World War II, and World War I before it, the catalyst for the creation of the Fed of course), just as they got their much demanded trillions in monetary stimulus. Recall that according to Krugman the Fed has failed to stimulate the economy because it simply wasn’t enough:
apparently having the Fed hold 35% of all 10 Year equivalents, injecting nearly $3 trillion in reserves into the stock market, and creating a credit bubble that makes the 2007 debt bubble pale by comparison was not enough. One needs moar!
And so it will be with war. Because the first war will be blamed for having been too small – it is time for a bigger war. Then an even bigger war. And so on, until the most worthless human beings in existence – economists of course – get their armageddon, resulting in the death of billions. Perhaps only then will the much desired GDP explosion finally arrive?
Luckily for Cowen, he stops from advocating war as the ultimate panacea to a slow growth (at least for now: once the US enters a recession with a nother quarter of negative growth, one can only imagine what lunacy Krugman columns will carry). Instead he frames it as an issue of trade offs: “We can prefer higher rates of economic growth and progress, even while recognizing that recent G.D.P. figures do not adequately measure all of the gains we have been enjoying. In addition to more peace, we also have a cleaner environment (along most but not all dimensions), more leisure time and a higher degree of social tolerance for minorities and formerly persecuted groups. Our more peaceful and — yes — more slacker-oriented world is in fact better than our economic measures acknowledge.”
And let’s not forget that GDP is nothing but economic bullshit,
confirmed when in recent weeks Europe – seemingly tired of waiting for war – arbitrarily decided to add the “benefits” of prostitution and narcotics.And there you have all the meaningless growth you can dream of. If only on paper.Because hundreds of million of people in the developed world, without a job, out of the labor force, can only be placated with dreams of “hope and change” for so long.
And certainly not once they get hungry, or realize that the biggest lie of all in the Bismarckian welfare state – guaranteed welfare – is long broke.
Cowen‘s conclusion:
Living in a largely peaceful world with 2 percent G.D.P. growth has some big advantages that you don’t get with 4 percent growth and many more war deaths. Economic stasis may not feel very impressive, but it’s something our ancestors never quite managed to pull off. The real questions are whether we can do any better, and whether the recent prevalence of peace is a mere temporary bubble just waiting to be burst.
That’s great. Now all we need is some economist and/or central-planner who actually gets top billing and determines policy to have a different conclusion, and decide that 4% growth is actually worth m(b)illions of dead people.
Judging by recent events in Ukraine and the middle-east that announcement may be just around the corner.
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Traduzione italiana
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Il mondo non ha vissuto così tante guerre ultimamente, almeno non secondo gli standard della storia. Alcuni dei recenti titoli di giornale sull’Iraq o il Sud del Sudan fanno sembrare il nostro mondo un posto molto cruento, ma le vittime di oggi impallidiscono alla luce delle decine di milioni di persone uccise nelle due guerre mondiali nella prima metà del 20° secolo. Anche la guerra del Vietnam ha avuto molti più morti di qualsiasi guerra recente che coinvolga un paese ricco.
Beh, questo è semplicemente inaccettabile: sicuramente il bisogno di crescita in tutto il mondo richiede che le vittime di guerra siano nell’ordine dei miliardi, non di misere centinaia di migliaia!
Anche se può sembrare controintuitivo, il maggior pacificismo del mondo può rendere meno urgente, e quindi meno probabile, il raggiungimento di alti tassi di crescita economica. Questo punto di vista non vuol dire che combattere delle guerre migliora l’economia, perché naturalmente il conflitto porta morte e distruzione. L’argomento è anche diverso dalla tesi keynesiana che la preparazione della guerra fa aumentare la spesa pubblica e mette le persone al lavoro. Piuttosto, la possibilità stessa di una guerra focalizza l’attenzione dei governi su come prendere correttamente alcune decisioni fondamentali – come investire nella scienza o semplicemente liberalizzare l’economia. Questa attenzione finisce per migliorare le prospettive a più lungo termine di una nazione.
Può sembrare ripugnante trovare un lato positivo alla guerra in questo senso, ma uno sguardo alla storia americana suggerisce che non possiamo respingere l’idea così facilmente. Innovazioni fondamentali come l’energia nucleare, il computer e l’aviazione moderna sono state tutte spinte da un governo americano desideroso di sconfiggere le potenze dell’Asse o, più tardi, di vincere la Guerra Fredda. Internet è stato inizialmente progettato per aiutare questo paese a resistere ad uno scontro nucleare, e la Silicon Valley deve le sue origini alle forniture militari, non alle start-up imprenditoriali di oggi. Il lancio sovietico del satellite Sputnik ha stimolato l’interesse americano nel campo della scienza e della tecnologia, a beneficio della conseguente crescita economica.
La guerra porta con sé un’urgenza a cui i governi altrimenti non riescono ad appellarsi. Per esempio, il progetto Manhattan ha impiegato sei anni per produrre una bomba atomica funzionale, partendo praticamente dal niente, e al suo apice ha consumato lo 0,4 per cento della produzione economica americana. In questi giorni è difficile immaginare un risultato rapido e decisivo comparabile a quello.
Ciò che troviamo sorprendente è che ci sia voluto così tanto perché questi economisti fraudolenti individuassero quest’ultimo capro espiatorio fasullo – l’assenza di guerra – per la mancanza di crescita. Ma finalmente eccoli intenti a istigare alla guerra:
Ian Morris, professore di letteratura e storia a Stanford,nel suo recente libro, “Guerra! A che cosa serve? Il Conflitto e il Progresso della Civiltà dai Primati ai Robots” ha riproposto l’ipotesi che la guerra sia un fattore importante di crescita economica. Morris considera una grande varietà di casi, tra cui l’impero romano, l’Europa del Rinascimento e gli Stati Uniti contemporanei. In ogni caso esaminato ci sono prove che l’intenzione di prepararsi alla guerra abbia spinto l’invenzione tecnologica e portato anche un certo maggior grado di ordine sociale. Un altro nuovo libro, “Guerra e Oro: una storia di 500 anni di Imperi, Avventure, e Debito” di Kwasi Kwarteng fa un ragionamento simile, ma si concentra sui mercati dei capitali. Mr. Kwarteng, un membro conservatore del Parlamento britannico, sostiene che la necessità di finanziare le guerre ha portato i governi a sviluppare le istituzioni monetarie e finanziarie, consentendo l’ascesa dell’Occidente. Egli si preoccupa, però, che oggi molti governi stanno abusando di queste istituzioni e le stanno utilizzando per indebitarsi troppo. (Sia Kwarteng che Morris stanno riprendendo questi temi dalla voluminosa opera di Azar Gat, di 820 pagine “La guerra nella civiltà umana”, pubblicata nel 2006.)
Ancora un’altra indagine su questa ipotesi appare in un recente working paper degli economisti Chiu Yu Ko, Mark Koyama e Tuan-Hwee Sng. Il paper sostiene che l’Europa si è evoluta politicamente in maniera molto più frammentata rispetto alla Cina, perché il rischio di invasioni della Cina dal lato occidentale ha portato il paese verso la centralizzazione politica per finalità di difesa. Tale accentramento è stato utile in un primo momento, ma alla fine ha fatto arretrare il paese. I paesi europei hanno investito di più in tecnologia e modernizzazione, proprio perché avevano sempre paura di essere conquistati dai vicini loro rivali.
Vivere in un mondo pacifico con una crescita del PIL del 2 per cento ha alcuni grandi vantaggi che non si ottengono con una crescita del 4 per cento e molti più morti in guerra. La stagnazione economica può non fare molta impressione, ma è un qualcosa che i nostri antenati non sono mai del tutto riusciti a eliminare. La vera domanda è se possiamo fare di meglio, e se la recente diffusione della pace è una semplice bolla temporanea che aspetta solo di essere fatta scoppiare.