On Tyler Cowen's "Comical" 'War-Is-Good' Memo

Tyler Durden's picture

Submitted by Jo Salerno via Mises Economic blog,

Forbes’ columnist John Tamny executes an inspired and wonderfully savage critique of GMU economist Tyler Cowen’s dotty blog post touting the positive effects of war on economic growth.  Tamny takes his cue from Henry Hazlitt and writes in plain and muscular language.

“Economics is haunted by more fallacies than any other study known to man.” – Henry Hazlitt, Economics In One Lesson, p. 15


The great Henry Hazlitt’s wise words came to mind while reading a recent New York Times post by George Mason economist Tyler Cowen. Fresh off of his unfortunate assertion (one that Hazlitt would have had a field day with) from a few years ago that economic growth has become difficult to achieve, Cowen strangely observed that “The world just hasn’t had that much warfare lately, at least not by historical standards,” and “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.”


They’re ultimately only words, but Cowen’s about war theoretically boosting animal spirits are pretty disturbing ones, and that’s truly saying something when we consider past mutterings from the economics professor about a supposed lack of “low-hanging fruit” rendering future growth a distant object.

Here is a juicy sampler that should whet your appetite for the full meal:

[T]o clarify Cowen’s views to readers, he writes that “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.” His first example is laughable, and his second easily disprovable.


Government spending on science presumes that politicians can better allocate capital than can private actors operating under market discipline. To believe what Cowen is offering up, the lack of a war threat today is depriving Harry Reid, Mitch McConnell, Nancy Pelosi and John Boehner of the opportunity to expertly invest the money of others in the killing machines of the future; the knowledge gained from those investments eventually migrating to commercial ideas that would boost growth. You can’t make this up. Cowen is serious.


As for the notion that countries somehow need the threat of war to achieve great scientific advances, or better yet, liberalize their economies, apparently Switzerland, Hong Kong, and New Zealand (among many others) didn’t get Cowen’s comical memo. With all three, no credible voice in modern times has argued that either faced war or imminent attack that would have “focused” the attention of their politicians on the way to economy-boosting liberalization, or, if Cowen is to be believed, political advancement of “technological invention” and greater “internal social order” supposedly needed for major expansion.


Indeed, what all three remind us, and it’s something seemingly lost on Cowen, is that economic growth is really very simple. We all have myriad wants and needs, our production is our demand, so when governments remove the barriers to production, the individuals who comprise any economy tend to thrive.


Thinking about the U.S. economy with the latter in mind, our economy is presently limp not because we lack some national, war-mongering purpose (apparently Cowen forgot all the national initiatives of the 20th century that robbed the world of well over 100 million people), but precisely because our political class has violated the four basics (taxes, regulation, trade, and money) to economic growth.

Read Tamny's full 'attack' here

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buzzsaw99's picture

the real problem with the "war is good for the economy" fallacy is that so many powerful people believe it and thus make it so

Quinvarius's picture

Well.  That ends the stupid ass ghost city meme.  On one hand you have real estate prices high in China.  On the other you are told no one wants to live in a brand new city.  And now you see the cities are actually filling up with some percentage of the billion Chinese that live in the country.  Meanwhile, Detroit can't even keep the water running.  Americans don't register how low they have fallen in so many ways.  And then we have Obama.

Freddie's picture

It might help if those feral people paid their water bill.  Endless welfare and dependency.  Like banksters and corporations.

Escrava Isaura's picture

buzzsaw99  …. war is good for the economy" fallacy is that so many powerful people believe”

Buzz, sorry, but I believe you’re wrong.

Powerful people ‘smart-class’ don’t believe wars are good. It scares them to death. What they believe is that, the American people are too fucking dumb.

The ‘War’ propaganda machine started by England on the ‘American Intellectual’ class during Woodrow Wilson’s presidency. The British needed American involvement. That PR was a great success. It got US on WW-1. And the dumb Americans went along with. It’s very easy to manipulate ill informed, self-delusional.

Tyler Cowen is just using the same strategy [PR]. And he’s not targeting the ill informed masses. He’s targeting the self-delusional elites.

Urban Roman's picture

It might also help if fhose feral people didn't rip the water pipes out of their houses and sell them for scrap.

There's a popular meme running around about 'private ownership', which has metastasized into bankster ownership of a large hunk of all real estate. Well, private ownership is good, but foreclosure and possession by megabanks is not private ownership. And, not having any skin in the game, these feral humans simply scavenge.

Therefore, no water. Soon no city.

buzzsaw99's picture

Detroit has a superabundance of both water AND deadbeats.

Antifaschistische's picture

Put it in this very simple way....

If you live on a 50 acre island with 20 people...and limited resources (including water), it is theoretically possible to increase your own family (of 5) "wealth" by crushing the demand of the other 15 people.   On the island, this is more difficult without just killing 1/2 of them, but that works too.

In modern economies it's easier to kill demand through economic destruction...this will free up more of the worlds resources for the one left less destroyed (e.g. oil, steel, cement, lumber).

It is this economic destruction which is beneficial for the minority.  At a macro level...destruction by definition can't produce wealth...but in a world where no one cares about macro, and we only care about the cubic footage in our own homes....destruction works.  (sanctions, boycotts, restricted trade, and bombs)

NOTaREALmerican's picture

China has to be seen to be believed.   I was there two years ago.   Most Americans can't wrap their brains around the how modern Chinese cities are.  

Good link.  

NoPension's picture

I'm curious. When these cities are built, quickly by our standards, is adequate infrastructure ( water,wastewater, power plants ) also built? And do these plants sit idle, while the cities are relatively vacant?

messystateofaffairs's picture

Good link, thanks, I just got an education.

NidStyles's picture

I think it's more that they believe their positions are threatened with more peasants around than normal and a less than competent policing force. Gotta thin the herd a bit you know ;-)

LetThemEatRand's picture

The fundamental problem with the war is good memo is lost on the Mises Institute.  The fundamental problem is anyone who believes that the starting and ending point for discussion about how humanity should interact is based in economics.   

Hugh G Rection's picture

War IS good... For Israel, when they manipulate the USA into fighting their enemies for them after using Mossad and their sayanim to blow up a few skyscrapers.


NidStyles's picture

It's is more than plainly obvious you have never touched a single page that Mises ever wrote, much less so for Rothbard, Menger, or Hoppe. 


LetThemEatRand's picture

Always the comeback for you guys as with all religions.  And didn't I see you on an earlier thread claiming martyr status for having joined the U.S. military and fighting terr'ists?  And yet I seem to recall you said in other threads that you only joined for the free training (that we taxpayers funded) and never believed in the fight.  You're welcome for funding your free training.  I am quite sure you read these guys, because they are expert at covering the kind of utter hypocrisy that defines you.

NidStyles's picture

See there you go straight to the Ad-Homs while professing intimate knowledge of Austrian School and what Mises said while demonstrating obvious ignorance on what Mises actually said about  the "war is good" topic of the article.


You continually display this fallacy based approach by using personal attacks to cement your position that is already on shaky ground without close examination, do you really want me to drag you out onto the street and display your real motivations for commenting the way you do? Would you be embarrassed by further continuing this exchange? 

Just remember, you are the one lying about me and your knowledge of the work done by the Austrian School economists. 


Also, comebacks are what children do. This is called a discussion. Well at least on my side it is. 


LetThemEatRand's picture

Okay, Nid.  I'm lying and using ad homs and I obviously just haven't read the good books closely enough.  

NidStyles's picture

I doubt you've ever picked up a single copy of Human Action and read it completely through. If you had, you would be aware that the answer to your question was in the first, second, and fourth chapters. 

NidStyles's picture

You can do whatever you wish. It's none of your business what I will be doing.

Funny considering Mises made a great argument against the religious pre-case for the state. I forgot though, you support the actions of the state as long as it is acting in your best interest. BTW that is another aspect of discussion of what Mises wrote about in Human Action.


If you want I could tell you about Einstein's work as well. He was a very prolific writer for an Empiricist. 

Escrava Isaura's picture

“Religion is a system of wishful illusions together with a disavowal of reality, such as we find nowhere else but in a state of blissful hallucinatory confusion. Religion's eleventh commandment is "Thou shalt not question."

The Future of an Illusion, by Sigmund Freud — 1927

nmewn's picture

You do realize, Freud was a coke head right? ;-)

LetThemEatRand's picture

Freud ad hominem.  Excellent.  :) (: ... ///

nmewn's picture

Mmm, no doubt something to do with his mother relationship.

Too coy?

Chaffinch's picture

If you measure everything is terms of "economic growth" then I can see how war 'works': massive demolition projects with no expensive health and safety issues and no long expensive public enquiries about whether it is going to be bad for the environment or whether we are blowing up national monuments which should be preserved for all time; kill a high number of young relatively unskilled members of the population (it used to be young soldiers in the front line but now it is more likely to be civilian 'colateral damage') avoiding high levels of youth unemployment; have medicine practiced in field hospitals where patients consider themselves lucky to be bandaged and on a stretcher in a long line waiting to be seen; avoid the expense of having too many people living into their 90s with all sorts of expensive illnesses; businesses all turn to production for the war and make profits, using cheap labour prepared to work double-shifts for low pay because they want to do their patriotic duty; fund such businesses by getting savers to accept long term low interest rates for War Bonds because that is the patriotic thing to do; have everyone accept austerity because it is necessary to defeat 'the enemy' - pure Orwellian nightmare...

deflator's picture

 yep, WAR = power grab

 I think Oligarchs bet each other a dollar that they could elect a U.S. President from bumfucked Nairobi and still push markets to all time highs.

goldsansstandard's picture

Nasem Taleb in his book anti fragile makes the case for decentralized everything.

Reluctantly he conceded that the anti fragile thesis included the advantage of many small wars as being perhaps better in the long run than a centrally imposed peace that eventually collapses into a conflagration.
Interesting anti empire thought

centerline's picture

And they are both wrong. Perhaps someone should investigate the simple concept of "growth."  Hmm... and draw some parallels to oil/gas.

cougar_w's picture

Because of its tie to the intersection of money and governance, all of economics equates to criminality in one form or another.

Waging war for profit is just removing the window dressing, is all.

robnume's picture

Read Chris Hedges, "War is a Force Which Gives Us Meaning".

NOTaREALmerican's picture

Don't forget that war makes the male's dicks swell.   And swelling dicks make for confidence.   And confidence causes optimism.   And optimism is just a hopium particle dedected.   And the 2nd law of bullshit tells us:

When two hopium particles fuse it results in bullshit.     And,  just looking at economics, we can all see the power of bullshit.   It's unlimited!  

HoleInTheDonut's picture

What part of a female swells with war?  Just wanna know in case Hillary actually becomes president.  Ass? Boobs?  If she developed something like a J-cup, I might not be able to resist voting for her.

Miffed Microbiologist's picture

Sorry but that just made me ill and I was looking forward to a nice dinner. As a female, my war inclinations lean toward defensive which I believe is normal for my sex. If Hitlery "swells" for war, she could play a part in the remake of The Crying Game.


deflator's picture

 yeah all defensive with stop, don't. I mean it stop! Don't! Stop! don't stop...

Colonel Walter E Kurtz's picture

Crap...and here I was hoping for more peace dividends in my investment account!

Atomizer's picture

Surprised that he didn't have time to hashtag the message with FOTUS.

ebworthen's picture

O.T. - but ABC Evening News reporting:

"Good news for your 401K!  Markets hitting all time highs!"

Yeah, sure; everything is fine, go buy something, and let's start another war!

To the moon!  Only growth and consumption and more growth!

Never-mind the Constitution!  Forget the bailout retribution!

Borrow!  Spend!  CONSUME!

Reaper's picture

The NYT is an official government apologist. Krugman wanted aliens to attack so as to grow the economy, but Cowen will settle for a common war. Lots of broken windows, injured and dead humans, and lots of military equipment destroyed and replaced. Is this is a trial balloon to justify Obama's coming new war? Cowen is a demented economist trying to revive the Obama/Bernanke/Yellin failed economy.

magpie's picture

The USA still has a lot of equipment to gift the Caliphate with...outright war ? Perhaps over Ukraine, perhaps over Mexico to get more citizenismo...

DC Exile's picture

Cowen is based out of George Mason Univeristy Mercatus Center near Washington, DC. A supposedly proto-libertarian think tank heavily funded by Koch money.

Is this the best economics Koch money can buy? There must be a good reason he wrote this. Something big is brewing on the war front.

Offthebeach's picture

We had The War On Hunger, now the sheeple are fat diabetics wallowing to the dialysis clinic twice a week.
We had The War On Urban Blight, but there is only so much Union Mafi Contractor $3,000 replacement windows and 10x10 $100k kitchen cabinet jobs to go around.plus whitey left for the burbs leaving justSSoweto riot cop jobs, hack pill doc clinics clearing 10 mil a year, and minority used-to-do-nails-but now-bee-stabbing fleebottomus jobs.

Commies all went Crony Capitalist.
Muzzies just be jacked.
War on Global Warming has flopped.


Layoffs at Milo Minderbinder Industries!

Wait What's picture

i guess this is the point where questions of economics (its utilitarian-behaviorist philosophy) vs morality (just cuz it's logical doesn't mean its right) start jumping to the fore. it's not just about having a lot of 'wealth', but allocating it in such as way as to increase it further while maintaining its heirarchy.

like anything that grows on earth, a wealth tree too top heavy will soon topple over.

quikwit's picture

What is it good for? Absolutely nothing!  Ahan...



American exceptionalism certainly worked out for Iraq and I hear that the Pentagon made so much money that they could not account for $1.3 Trillion of it and seemed to not know where it went?


p.s. If American wars are so profitable then why are you so immersed in DEBT? Just try selling us on another war and see what happens.


fukidontknow's picture

New Zealand is not a very good example - we've joined just about every war it's how you sell milk. 

Spungo's picture

To be fair, war and the threat of war does drive a lot of innovation. Almost everything we know about rockets and jets is from military research. The first probe in space, the first man in space, the first dog in space, and the missions to the moon were entirely driven by dick waving. Ever notice how the space race suddenly stopped when the cold war ended? A lot of stuff related to computers was driven by military research. Internet, VPN, and onion routing (tor) are all military inventions. The American interstate highway system and the German autoban were created so military equipment could be quickly moved across the country. GPS was a military creation. Spy satellites evolved into Google Earth.

I think "green energy" will be the next big military project. Anyone who isn't completely retarded knows that relying on foreign oil is a huge threat to national security, and it pulls us into neverending bullshit wars. China understands this very well, and that's why China is leading the way in wind and nuclear power development. Maybe we should do the same. Spending 1 trillion dollars on nuclear and wind power resarch seems like a better investment than doing whatever the fuck we did in Iraq for the past decade.

Libertarian777's picture

all who believe war is good for the economy, i will buy you an AR-15 and send you off to Iraq personally. Come back when you're ready to tell me how much better my life will be.

I guess if you're maimed its better than if you're dead, think of all the healthcare jobs!

PhilofOz's picture

> Good for the economy

> Good for the elite

War, who is it really good for?

gcjohns1971's picture

And, skipping to the punchline, the war will be on...

(as in everyone who works for a living rather than eating taxes or collecting welfare).

Because they really are stupid enough to bite the hand that feeds them over, and over, and over.

And who is to blame?

Why do we keep feeding them?