Economics of Peace

Katie Kieffer

9/24/2012 12:01:00 AM - Katie Kieffer
How would a free market entrepreneur approach Afghan foreign policy?

After all, our politicians seem incompetent on foreign policy given the soaring suicide rate among active duty U.S. military personnel, increasing insider attacks against NATO troops by our Afghan “allies” and numerous civilian casualties.

Capitalists have historically opposed war and embraced production as a means to freedom, prosperity and national security. So, it surprises me when self-described fiscal conservatives embrace a foreign policy of military interventionism.

Indeed, George W. Bush opposed nation-building when he ran for president in 2001; he maintained that military interventionism neither fosters freedom abroad nor protects it at home. Unfortunately, apprehension of terrorism has helped convince many fiscal conservatives that ongoing war and nation-building will safeguard and promote freedom.

Let us consider war from a capitalist’s perspective to see why history tells us that free market businesspeople tend to be doves.

Wealth allows for freedom

Philosopher Ayn Rand says, “…the question is: what breeds poverty? If you look at the world of today and you look back at history, you will see the answer: the degree of a country’s freedom is the degree of its prosperity.”

Rand says that a free country maintains its security and freedom through free market production (which creates national wealth) whereas a statist government maintains its weak hold by looting, first from its own people and, then, from other nations (via war).

Look at the parts of the world, like the Middle East, in unrest. The people are poor. Gangs, rape and pilfering are rampant because individuals do not have rights and “might makes right.”

The war in Afghanistan started in October of 2001. You would think that the U.S. would have taught Afghans the value of freedom by now. But Afghans are still poor and we have not succeeded in making Afghanistan a wealthy, free market economy.

Over the past two years, Afghan forces are increasingly turning on each other. 53 Afghans have died and 22 have suffered injuries at the hands of their Afghan brothers (not the Taliban). Increasing Afghan-on-Afghan attacks indicate that U.S. nation-building will not transform the Arab world. Ongoing war seems to have merely increased the internal animosity among the various Afghan cultures, tribes and families, Afghan National Police recruitment center commander Maj. Bashir Ishaqzia tells the New York Times.

Losing our assets

A good businessman protects his investments. He locks his factory doors at night. He hires a monitoring firm. He installs software on his computers to prevent employee theft of company secrets. He understands that if he loses his technology and machinery, his costs will balloon.

Why don’t we treat our soldiers like assets? After all, a West Point education costs $400,000 and flight school can cost taxpayers $700,000—for a single pilot. When that pilot commits suicide, taxpayers lose their investment.

Why don’t we treat our military equipment and technology like assets? As we linger in Afghanistan, insurgent attacks on expensive military equipment and planes escalate. This month, the Taliban succeeded in penetrating one of the most tightly- secured bases in Afghanistan, Camp Bastion, causing $150 million worth of damage to equipment, including demolishing six high-tech AV-8B Harrier jets.

Jobs for troops

Some fiscal conservatives worry that if we bring our troops home, they will struggle to find jobs. But economist Henry Hazlitt explains: “It is true that, when millions of men are suddenly released, it may require time for private industry to reabsorb them … But the taxpayers will be allowed to retain the funds that were previously taken from them in order to support the soldiers. And the taxpayers will then have additional funds to buy additional goods. Civilian demand, in other words, will be increased, and will give employment to the added labor force represented by the former soldiers. …Total national production, the wealth of everybody, is higher.”

This month, Brown University released a report putting the combined cost of our engagements in Iraq and Afghanistan at $4 trillion. This is a hefty sum which taxpayers could have utilized to employ soldiers in the private sector and secure the U.S. Mexico border from violent drug cartels.

Cut your losses

An entrepreneur knows that, regardless of the time and energy he dedicated to a venture, if it is bleeding cash or ruining his reputation, he should cut his losses. Likewise, are we losing more than we are gaining in the Arab world? Two unintended consequences of our military presence in Afghanistan are:

1.) Blowback: Such as anti-U.S. rage and demonstrations throughout the Arab world and Afghan ally partners increasingly turning against NATO forces. This animosity makes free trade difficult. We are losing key diplomatic and business partnership opportunities.

Every day the U.S. continues to nation-build in Afghanistan, innocent civilians die. For example, eight destitute Afghan women scoured the countryside for kindling on September 16, only to be blasted by a U.S. airstrike. Villagers in the eastern Afghanistan province of Laghman marched their lifeless bodies through the streets in outrage.

Entrepreneurs understand that civilian casualties from U.S. airstrikes in Afghanistan, Pakistan and Yemen are building up anti-U.S. sentiment. This makes it difficult for us to deal diplomatically with these countries—as trading partners. Instead, we are spending money we do not have (China is our sugar daddy) in military activities that will likely come back to haunt us.

2.) Broken lives: 2,676 Americans have died by suicide since the war in Afghanistan began. In comparison, 1,950 Americans have died in combat in over a decade of Afghan intervention. Increasing numbers of military personnel are suffering from alcohol and prescription drug abuse. And a new study published in the Proceedings of the National Academy of Sciences shows that Afghanistan veterans exhibit long-term brain damage due to combat stress.

A free market approach to foreign policy combines the ‘neutrality’ George Washington spoke of in his Farewell Address with the ‘peace through strength’that Ronald Reagan advocated. It is economically sound foreign policy. It is the economics of peace.