Dec 31, 2003 10:32 am


Some things are literally unthinkable. For example, Frederick W. Kagan's,"The art of war," an article in the November 2003 issue of The New Criterion, presents compelling evidence that attempting to dominate the world militarily will fail and lead to national ruin, yet Kagan, a teacher of military history at West Point, advocates just such a policy, and apparently sees no need to defend this choice. Excerpts follow:

"In each of the periods in recent history in which one might see a fundamental change in the nature of war, it is true that normally one state begins with a dramatic lead. …

"In each case, however, we must also consider the sequel. Napoleonic France, Imperial Germany, and Nazi Germany all ultimately lost subsequent wars and were destroyed. ...

"History so far … has been very clear that 'asymmetrical advantages' gained by one state do not normally last very long. Technology and technique inevitably spreads. Other states acquire either similar or counteracting capabilities. The final victors of each new 'revolutionary' epoch have not usually been the states that initiated the revolution, but those that responded best once the technologies and techniques had become common property. …

"The search for an indefinite American 'asymmetrical advantage,' therefore, requires not merely a revolution in military affairs: it also requires a fundamental revolution in human affairs of a sort never seen before. …

"...[F]ew if any of America's enemies will have the vast resource-stretching responsibilities that America has. They will be concerned only with their own region of the world and will focus their efforts on developing communications and target tracking systems only over a small portion of the globe. They will not need a dense global satellite constellation or the ability to project power over thousands of miles. The costs to them of developing systems comparable to America's, but only in a restricted geographic area, will accordingly be much smaller than the price the U.S. has had to pay to achieve that capability everywhere.

"Then, too, other states can reap the benefits of modern communications systems without bearing the expensive burden of basic scientific research and development. Microprocessors, satellites, encrypted laser communications systems, cell phone systems, and the whole host of technologies that form the basis of American military superiority are now the property of the world. It will not cost America's enemies anything like what it cost the U.S. to develop its capabilities, either in money or in time. Since technology inevitably becomes less expensive as it proliferates and as time goes on, moreover, the situation for America's would-be adversaries will only improve in this regard. ..."

We can look at the foreign policy of global military domination as a potential investment:

Cost: high Chances of success: very poor (success would require"a fundamental revolution in human affairs of a sort never seen before") Risk: potentially everything Reward: debatable.

Pragmatic considerations have led some to advocate a policy of"offshore balancing," which has a much more attractive risk/reward profile - see"A New Grand Strategy" by Benjamin Schwarz and Christopher Layne, The Atlantic Monthly, January 2002.

Cost/benefit analysis favors defenders over aggressors, which helps explain why the US military withdrew from Vietnam after Americans suffered a per capita death rate that was approximately 1% of that suffered by the Vietnamese. Also, relatively cost-efficient guerrilla war is seldom an option for an invader. As David Friedman wrote in Price Theory: An Intermediate Text:

"We all learn in high school history how, during the Revolutionary War, the foolish British dressed their troops in bright scarlet uniforms and marched them around in neat geometric formations, providing easy targets for the heroic Americans. My own guess is that the British knew what they were doing. It was, after all, the same British Army that less than 40 years later defeated the greatest general of the age at Waterloo. I suspect the mistake in the high school history texts is not realizing that what the British were worried about was controlling their own troops. Neat geometric formations make it hard for a soldier to advance to the rear unobtrusively; bright uniforms make it hard for soldiers to hide after their army has been defeated, which lowers the benefit of running away."

And speaking of economics, King Banaian (ECONOMICS EDUCATION MALPRACTICE, below) mentions government schools'"teaching" of economics. The pennies-on-the-floor assignment reflects our natural inclination to see economic activity as a zero sum game in which one's gain is another's loss. The exercise does more or less accurately depict the economics of imperialism, that is, exploitation, but not of capitalism, which is primarily a process of wealth creation, or development (though in the real world they coexist). As Francis Fukuyama explained in The End of History and the Last Man:

"Before the Industrial Revolution, national wealth had to be extracted from the small surpluses eked out by masses of peasants living at or just above the level of subsistence in what were almost universally agricultural societies. An ambitious prince could increase his wealth only by grabbing someone else's lands and peasants, or else by conquering certain valuable resources, like the gold and silver of the New World. After the Industrial Revolution, however, the importance of land, population, and natural resources declined sharply as sources of wealth in comparison to technology, education, and the rational organization of labor. The tremendous increases in labor productivity that the latter factors permitted were far more significant and certain than any economic gains realized through territorial conquest. Countries like Japan, Singapore, and Hong Kong with little land, limited populations, and no natural resources found themselves in an economically enviable position with no need to resort to imperialism to increase their wealth. As Iraq's attempted takeover of Kuwait demonstrates, of course, control over certain natural resources like oil confers potentially great economic benefits. The consequences of this invasion, however, are not likely to make this method of securing resources seem attractive in the future. Given the fact that access to those same resources can be obtained peacefully through a global system of free trade, war makes much less economic sense than it did two or three hundred years ago."

(Apropos of all this, check out"The War Party Versus Global Capitalism" by Jim Lobe - today's Spotlight on

The assumption that economic activity must be a zero sum game could be described as the"lump of wealth" fallacy, to match the ever-popular"lump of labor" fallacy, which Paul Krugman ("Lumps of Labor," NYT) described as,"…the idea that there is a fixed amount of work to be done in the world, so any increase in the amount each worker can produce reduces the number of available jobs. (A famous example: those dire warnings in the 1950's that automation would lead to mass unemployment.)" The lump of labor fallacy also leads to the mistaken belief that employment, or net wealth, declines when lower-wage labor is hired, such as when US companies move overseas.

Why are economic fallacies so popular? And - getting back to Frederick Kagan's article, above - why do powerful groups continue to be seduced by empire? I suspect that part of the answer is that our brains evolved when exploitation was an effective tactic, when most wealth consisted of land, population and natural resources. Development of the economy, science and society, or what we could call, using a much-suspected term, progress has only recently (though decisively) shifted the balance of wealth to technology, education, and the rational organization of labor. Progress is a result of liberty and also a cause, forming a sort of beneficial feedback loop - and this is a reason for optimism. For evolutionary reasons, it seems, love of liberty in the abstract is not widespread; however, desire for the blessings of liberty is nearly universal.

The printing press was"the tyrant's foe and the people's friend," and the internet is even better. As I wrote in my first message here, the Internet changed my life. Without going into a lot of details, it allowed me to learn, or dramatically sped up my learning, about investing, economics and politics.

Guest blogging here has been fun; thanks again to David Beito for inviting me. I'd be happy to continue these discussions; my contact info can be found at the top of's Backtalk page.

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