[Op-ed] War is good for business!

[Simon_Jester]

In my opinion, the appearance of crisis rarely causes substantial change, the kind with lasting, obvious results. Selling people on an idea is a good way to motivate them to do something flashy in the short term, but the resulting changes usually wind up muddled and partially cancelled out by later actions.

The Iraq War is a case where a real crisis was generated using a fictional crisis as a pretext- but nothing of consequence happened until the real crisis had begun.

The matter of the new Australian budget, I do not know... but I suspect that if Abbott isn't addressing a genuine structural problem, most of his changes will end up reversed or sharply reorganized over time. Because purely illusory 'crises' never do much to change or remove the underlying factors that made things the way they are; the system will tend to revert to its old equilibrium state.

[Dr. Trainwreck]

I'm with you that the author's examples are silly and that war is the worst of all possible ways to stimulate economic growth, but he does actually have a point that it is on that list, if you see what I'm getting at. We Americans tend to look at everything as part of our own national narrative, and in that narrative WW2 forced the government to spend vast sums on industry and infrastructure that, since none of WW2 actually happened in America, are still there today. The innovations were largely made by people from other countries working from theories developed during peacetime, but that's also not part of the narrative.

So, yes, I think that article is right in saying that war is good for business - or at least, the specific war for the specific country. Just not for the reasons it gives. Whether that's off-topic or not is for you to decide, but I don't think it's too much of a stretch.

Well then, okay. This looks like simply a difference in structural narrative. I just instantly thought "where else would this work?" and, y'know, given that most countries right now cannot wage war a few thousand kms away...

That's not even getting into the fact that he's cherrypicking examples. Which war led to the creation of the lightbulb, or the discovery of alternating current? Which war propelled the automobile, and which war helped television shape the world? Did some jarheads discover penicilin? What rifle led to pasteurization?

Actually.... a lot of those were influenced by war. Or at least international conflict, violent or no. Open heart surgery, reconstructive surgery, prosthesis technology, antibiotics, rocketry, the internet, computers, encryption. All of these things came into existence due to wars (even cold ones) or to help deal with their aftermath. Hell, even engines got some leaps forward IIRC due to wars by way of planes, tanks, and ship construction. The rate of technological advancement does increase with military necessity.

Duh, I never said that war doesn't create a necessity for technological innovation. I only questioned its level of importance.

My real opinion is that crisis forces change, by stripping away popular support for failed policies and destroying factions that would act to oppose the change. The crisis may be military, political, economic... anything.

Military crises are good for causing some kinds of changes (infrastructural and technological) but not so good for causing others (political and social change are usually on hold for the duration of a war, though the losing side in a war often experiences drastic changes).

Cowen is thus at least partly right, but hasn't generalized his theory far enough.

Now, changes can occur without crisis- but they are not forced without crisis. Cowen's complaint is that America is not changing fast enough. That even basic, very commonsense measures like infrastructure upgrades simply aren't happening, despite nearly everyone thinking they are a good idea. He seems to speculate that crisis (in his mind, war or at least 'cold war') is needed to make those changes happen.

The question to me is, why do these changes not occur? Who is responsible? Could these things happen without a crisis to provide impetus? I'd like to think so, but to make that happen we need a more detailed analysis of what is preventing change, and whether it can be bypassed without provoking a national crisis.

Basically, I'm okay with this.

[Korto]

The matter of the new Australian budget, I do not know... but I suspect that if Abbott isn't addressing a genuine structural problem, most of his changes will end up reversed or sharply reorganized over time. Because purely illusory 'crises' never do much to change or remove the underlying factors that made things the way they are; the system will tend to revert to its old equilibrium state.

Yeah. There's no real crisis with the Australian budget. There's structural problems, to do with vote-buying during the good times, but "crisis" infers urgency, and with our low debt there's no urgency.
Abbot's been trying to call it a crisis so he can force through some quite harsh measures, but not enough people believe him. It looks like he'll have some trouble getting it passed.
Australian's think Federal Budget 2014 is the worst for very long time