New York Times Says "Lack Of Major Wars May Be Hurting Economic Growth"

Tyler Durden's picture

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.

Well, that's just unacceptable: surely all the world needs for some serious growth is for war casualties to be in the billions, not in the paltry hundreds of thousands.

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 argument that 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.

What we find surprising is that it took the econofrauds this long to scapegoat that last falsifiable boundary - the lack of war - for the lack of growth. But they are finally stirring:

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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johngaltfla's picture

I think the NY TImes "wish" along with the desire of the banksters to thin the heard is about to be cured on many fronts. The latest:


06.14 1600 ET – New Video Purports to Show ISIL (ISIS) Terrorists Entering Baghdad
max2205's picture

Peace train keeps rolling....come on peace train.


Libs.  First they hate war. Then they ignore war.  Then they love war.








........('(...´...´.... ¯~/'...') 


..........''...\.......... _.·´ 





graneros's picture

I suggest we all top off our tanks and fill all fuel containers. Just sayin'.

BurningFuld's picture

Forget the war. Just randomly blow things up then fix them. That is exactly the same isn't it?

SRSrocco's picture

NEW YORK TIMES BECAME BRAIN-DEAD SEVERAL YEARS AGO.  It's nothing more than one of the U.S. Govt political rags.


svayambhu108's picture

They blow things up then fix them, I think the people are bodering them.

Gaius Frakkin' Baltar's picture

GOD have mercy on the Congressman or Senator who votes to draft my son into WWIII.

Anusocracy's picture

Against the cost of massive destruction and waste of war is the benefit of hastening the realization of applications and inventions that were already under development.

Very little gain for very great costs.

TeamDepends's picture

Poor MIC, not moving enough shrapnel to keep things interesting.

eclectic syncretist's picture

Who would have foreseen that printing a bunch of pieces of paper and IOU's wasn't all there was to jump-starting the economy?

economics9698's picture

The next war we draft all the tribe member kids between 17-35 and put them on the front line. 


Result, no more war.

COSMOS's picture

When your economy doesnt grow without wars you are oficially an 'EMPIRE'

We need a new economical index, like Kinetic Strikes on Children that will be the best economic indicator for this nation.

Chief Wonder Bread's picture

OR, the War Party could just stage an EMP event.

Nobody would be any the wiser; it would be easy to subsequently seize control of most communications channels.


The referenced article by Tyler Cowen appears to be the first salvo in a propaganda campaign to sway public sentiment into support for the next phase of the Iraq War.

This link to a piece by Justin Raimondo explains why.

MeMadMax's picture

War works because you take all the crybabies that don't have a job and send them off to die in a foreign country...


asdasmos's picture

Posted Elsewhere:


1) The taxes are not worth the value being returned.

I don't have a problem paying taxes, so long as they go to something worthwhile. I will end up paying around 33% - an entire 1/3rd of my income - in my 2013 tax return. Yes, I am getting a refund, but when I am paying tens of thousands of dollars and not getting the services I should receive for that investment in my country, celebrating the return of a few hundred dollars seems absurd.

Where is my benefit from my government for all of this? Do I have free healthcare? No. Do I have a world class education for my child? No. Do I have any kind of guaranteed income should I lose my job? No.

No, instead, I have a country which is the only one in the world to tax its overseas citizens. A country that bails out banks who prey on those who just want a home to raise a family when they become insolvent - but when it happens to me, and I short sell my home, the IRS is there, ready to tax me on "phantom income" - forgiven debt.

I have a country that spends billions on fighting wars for political gain, but does nothing when there actually is evidence of WMD use against others. A country that hemorrhages so much money on military spending, it must turn around and take loans against my child's future - her income - in order to continue to pay for programs we don't need.

2) I'm tired of people being surprised that I'm American because I have manners, common courtesy, and the ability to see the other side of issues.

Seriously, the number of people I meet who think Americans are rascal-riding land whales (like in the movie Wall-E) with handle-bar mounted machine guns, a sack of Big Macs in the front basket, a clinical addiction to NASCAR, and a passion for the modern day artist that is Jerry Springer - it's just too much. I've been introducing myself as Canadian because apparently I'm so polite, that's where they mostly assume I'm from.

3) The fact that none of this is ever going to change, regardless of what party is in charge, and the fact that the American government continues to shred the constitution a little more each year, until it doesn't even matter anymore.

You may not think of America as a police state, but it is. Nobody's going to come grab you in the middle of the night, unless you're reported as a terrorist of some kind. At that point, just forget about "police work" and get ready for the SWAT team.

Nobody is going to take your children way from you, unless Child Protective Services is called, and someone decides - for whatever reason - that it's "in the child's best interest" to be removed.

Nobody is ever going to interfere with your access to medicine, unless you're trying to get something that isn't ridiculously expensive from another country; in that case, get ready for being charged as a drug trafficker.

Nobody is going to freeze your bank accounts, passport, and other means of movement, unless the IRS believes you haven't given them enough money. Suddenly you have debt to prove isn't there, and it will all get "sorted out" at the blistering fast speed of government efficiency. Or you could just pay the amount they say and it all ends quickly.

4) The fact that the future for my child in the US is so dark.

All this debt, and it's going to fall on her and her children. She's broke, and she doesn't even know it yet. Disgusting.

Well, I count myself fortunate that I don't own a home in the US - it affords me the ability to even consider leaving it all behind. There's so much propaganda about how wonderful America is but, when you look at it without those rosy lenses on, what you really see is horrifying.




SMG's picture

Start identifying the Luciferian Oligarchs and fighting them now,  or we'll be too busy fighting for survival if they get away with WWIII.


"Let's Have A War"

There's so many of us,
So many of us,
So many, there's so many, there's so many

Let's have a war,
So you can go and die,
Let's have a war,
We could all use the money,
Let's have a war,
We need the space,
Let's have a war,
Clean out this place

It already started in the city,
Suburbia will be just as easy

Let's have a war,
Jack up the Dow Jones,
Let's have a war,
It can start in New Jersey,
Let's have a war,
Blame it on the middle-class,
Let's have a war,
We're like rats in a cage

It already started in the city,
Suburbia will be just as easy

Let's have a war,
Sell the rights to the networks,
Let's have a war,
Let our wallets get fat like last time,
Let's have a war,
Give guns to the queers,
Let's have a war,
The enemy's within

It already started in the city,
Suburbia will be just as easy
MeMadMax's picture

All I read in that post was "gimmy gimmy gimmy moar free stuff"...


Gimmy free healthcare, gimmy free education, hell, gimmy free prostitutes... AFTER the free healthcare kicks in of course...



Frankie Carbone's picture

Maritimine Body County Index: How many kids in black glad bags returning home on freighters indicates the momentum and direction of economic activity according to the NYT. 

sessinpo's picture

economics9698      The next war we draft all the tribe member kids between 17-35 and put them on the front line. 

 Result, no more war.


I wonder why people say things like this. Yes, it gets a great emotional response. It's like saying cancer is bad. You bet.

But election after election, the majority of incumbents are voted in. And are their kids going to the front line? No.


So rah rah, I cheer you on for your wishful thinking. Your realism leaves lots to be desired. How about planning and executing a life based on what is real, not what is wishful just to be emotionally correct and get gratification for it. Yea, I'm a downer and deserve the down votes. But I say it like it is.

And BTW, where are all the leftist talking about how the right wing are the war mongerers (not directed at economics9698)?

My point: It's not about left or right. Whomever is in power wants to keep power.

darkpool2's picture

And the rest stay home and.........subvert.

Greyhat's picture

They are playing on that trumpet at least since Broders "Look back at FDR and the Great Depression. What finally resolved that economic crisis? World War II" war mongering in 2010. :)

This time shrink wrapped as an economic professors witzdom. They wanted seven countries in five years. Since 9/13.


disabledvet's picture

"They have no plan...and their ideas are madness!"

Of course...they were not prepared for GrosAdmiral Raeder either.

"He was surprised after his capture in Berlin by the Russians that he wasn't sentenced to death at Nuremberg but mere life in Prison."

Due to ill health he was released and lived well into his 90's.

The Soviets were very interested in his "U Boats" after the War.

Unfortunately all the good...indeed GREAT chemists...were Americans.

"Building a bomb" and "building an engine" are two very different things.

Greyhat's picture

You are right, it's all about the chemistry of great steel. U-Boats, Towers, aircraft carriers...

Bethlehem Steel lost its bid to provide the steel for the WTC. But even 9/11 didn't save them in Oct. 2001.

But the Joint Strike Fighter and CVX aircraft carrier programs survived the PNAC cancellation plans.


And of cause it's about money to, old money, new money. And about doing gods work. And so on.

Bunga Bunga's picture

Tyler Cowen, proudly sponsored by the Koch brothers.

Cowen is director of the Mercatus Center. Main sponsors are no others than the Koch brothers.



cpnscarlet's picture

Just did some due diligence, and yup, there they are.

it's the "Give War a Chance" a crowd. Remember the days when that was the title of a HUMOR book.

illyia's picture

I believe that this was the conclusion drawn by the "Report from Iron Mountain" - and pardon my vagueness, it's been a while.

Basically, from what I recall, war is necessary for maintaining the cohesion of the nation. Without it, ie., if peace were to break out, there would be little to hold the peoples together as a unit (recall the unity produced from 911). The conclusion was that, if people were allowed too much leisure without a pressing war to unify them, they will not be herdable - from the nationalist viewpoint.

Furthermore, this was the conclusion of non-aligned members appointed to foresee outcomes without reservation (no pun intended) during the Kennedy administration.

Of course, this whole thing was denied and was condemned as a stupid prank. Anyone who believes this stuff to be true is just a conspiracy theorist and should be disregarded (or removed)....


MontgomeryScott's picture

For your refreshment, here is the movie made regarding 'The Report From Iron Mountain'.

It is 2 hours 21 minutes long.

It's about a lot more than war, though. There has to be some unifying enemy, either real or imagined, artificially created or not, that will keep the masses enslaved and beholden to the 'Masters of the Universe' (couldn't help using the Jules Verne reference. Have you ever read his writings?).

They had REAL issues after the Soviet Union collapsed. Without an enemy to fight, everything was done to create another one. The WTC bombing in '93, the startup of comprehensive stratospheric geoengineering to try the 'climate change' thing, the shootdown of the Pan Am over Lockerbie, the various false flags like Waco, Ruby Ridge and OKC, and so many other incidents; none of them had enough cohesiveness behind them to stir the pot sufficiently. What about the PNAC, calling for another 'Pearl harbor'? GREAT IDEA! Let's try THAT one, they said...

"Let us not entertain wild conspiracy theories regarding the attacks of 9/11." ('My Pet Goat')

Seeing Red's picture

I've read some of the "Report from Iron Mountain" ... and I after a very brief skimming of that video, I do not see any relationship whatsoever.

sessinpo's picture

cpnscarlet    Just did some due diligence, and yup, there they are.


then do some more due diligence. The Koch brothers donated to Mercatus in support of less regulation from Washington. The overwhelming support for other activities comes from the left.

soontobeblocked's picture

"GOD have mercy on the Congressman or Senator who votes to draft my son into WWIII.

May I suggest using their own pre-emptive war doctrine, and that you take a few* of them out now?

I'll cheerfully vote "not guilty" at your trial.

The logic is there, and yours wouldn't be a big freaking lie as theors have been.  We all know where this ends for us; might as well start now.

* "few" is left to your own judgement.  1, 2, 500, I'm ok with your judgement

economics9698's picture

Everyone is a bad ass until it's time to throw down.

smlbizman's picture

i guess being at war for 214 years of this countrys 232 yr history just aint enough....and what the fuck have we been doing for the last 12 yrs and counting....send these cocksuckers and their wives kids and dogs into iraq to help us out...

StormShadow's picture

Yes, and all wiped away in one week by 7000-10000 rebels! Seriously! It's hard to admit but Iraq would've been better off with Saddam still in power. We created a vacuum of power and now these brainwashed, well armed, well funded rebels have filled it. I cannot believe we've spent a trillion FRNs and countless lives and wounded souls only to have it erased by a few barbarians.

sessinpo's picture

smlbizman    i guess being at war for 214 years of this countrys 232 yr history just aint enough....and what the fuck have we been doing for the last 12 yrs and counting....send these cocksuckers and their wives kids and dogs into iraq to help us out...


America has not been in a real war for decades. They were conflicts. And before you blow your top let me explain. Leftist redefined war to conflict to soften the tone, the sound of it and make it more acceptable. Everyone gets a trophy.

How long are you gonna say, "send these cocksuckers and their wives kids and dogs into iraq to help us out..." before you realize that the odds are more that you or your kids will be sent over there? It's called being realistic, not wishful.

Serfs Up's picture


It's not really that hard to understand people at the NYTimes.  The economy is a freakin' abstraction.  High net energy is the real deal.  Surplus energy allows all organisms to expand at a fast rate.

Humans are organisms.   The economy is our fancy way of counting our growth.  No more easy oil = no more easy growth.

What the interminably stupid Cohen at the NYT has missed, then, is the idea that prior wars were all conducted during times of expanding net energy.  the next one will be conducted during a time of contracting net energy.  

Thus, the next war is likely to only be destructive, not stimulative.  Break it and it's gone.  No more rebuilding the great works of the past, just cheap facsimilies if we can even be bothered to clear the rubble.

deflator's picture

 Maybe they are construeing a great increase in deaths as a decrease in demand restoring the past 150 years of excess energy and abundance of growth from its excess. Here I go again, getting drunk and posting stupid shit on ZH.

what's that smell's picture

fat finger, cold and snow in winter, too much peace, rogue trader, black swan, blah blah blah.

the economic cycle she goes up and down, up and down, up and down.

the economic cycle she goes up and down you silly blogging clowns.

rbg81's picture

The other thing is nukes.  Luckily, the last big "stimulative" war (WWII) only saw nukes introduced in the final act--and only our side possessed them.  Now lots of actors have nukes, so the destructive potential of war is much greater.  So the next BIG WAR is likely to be nuclear, which would be an absolute disaster for everyone.

Ultimately, what makes BIG WAR stimulative, is the fact that it drastically alters the competitve landscape.  At the end of WWII, America was the only country whose industrial might been enhanced (vs. degraded) and had not suffered signficant manpower losses.  In contrast, German and Japanese factories were almost totally decimated.  As a result, those countries had much greater rates of economic growth over the next 30-40 years than even America.  It was the fact that they had to rebuild their industries from scratch that helped make them more competitive.  In contrast, America got the Rust Belt.

My two cents:  the only way to get the levels of growth of yesteryear is to start colonizing other planets.

NidStyles's picture

I agree with that last sentence so emphatically. 

StormShadow's picture

Why do you think Bush II was so big on going to Mars! :)

August's picture

I up-voted you, but please look up "decimated" when you get a chance.

_ The Dictionary Police

rbg81's picture

I was referring to the contemporary meaning, not the Roman meaning (e.g., kill every 10th).  Geeze.....

MontgomeryScott's picture

When did the meaning of 'decimate' change? I must have missed that one. I MUST go back and read Alinsky. HE can tell me.

It depends on what the definition of 'IS' is.

Wiped out, made impotent, destroyed, eradicated, annialated, flattened, subsumed, made of no effect, wiped off the face of the map... Is THAT what you meant?

Yeah, the term 'decimate' has been rendered impotentent as of late (that was the whole idea behind the Tribe taking control of education in the first place).

Now, you two kiss and make up, will you? There are more important things to consider.

rbg81's picture

I am convinced that nukes DO act as a deterrent against "casual" war.  Of course, maybe that's why Obama really wants to go to zero nukes?  The resulting economic growth from all the resulting wars would be stupendous!

TahoeBilly2012's picture

Protocols of Elders of Zion states all nation states to be destroyed. So much for the rebuilding of Iraq, Libya, you name it. Progress!

Riprake's picture

Yeah, yeah. That Czarist anti-Semitic propaganda crap isn't even fit to use for toilet paper. Here's my response to all you farm-animal-humping pole-smoking brain-dead goose-steppers who fill your empty craniums with blatant forgeries like that:






('(...´...´.... ¯~/'...') 


..''...\.......... _.·´ 



Same goes for the Turner Diaries, Mein Kampf, and all the other racist garbage you goat-blowing Stormfronter trolls believe in.