Why Peace Economics Matters
Today whole conferences are based around the least important aspects of Peace Economics. Direct expenditures only are measured, not the massive lost economic opportunity involved in using resources for destructive purposes rather than constructive purposes for decades at a time, seemingly perpetually. Military spending is a direct reduction in capital investment and manufacturing sector resources. If the average 7% of GDP devoted to the military from 1946 to 2014 had been reduced to the rest of the world level of 2% of GDP today, American median incomes of $38,000 today would instead be about 30 times as much (5% interest compounded for 69 years), or over $1,000,000 for the average American job. Obviously, there would be environmental restraints and the average workweek would come down a lot, so maybe $500,000 would be more realistic. But the military research shifted to other purposes would have probably conquered many common diseases like heart disease, cancer, obesity, and Alzheimer’s. And vacations on the Moon or around the world trips would be likely, with much more free time from work. Solar power would be basic and normal everywhere.
Growth technologies would be emphasized over power and control technologies, so the research, science, and engineering sectors would be greatly enhanced, while the financial, legal, and accounting sectors would be less important. Entitlements would be much more European style than rugged individualistic American style. Education and health care would be free. Right wing politics would look more like German right winger Angela Merkel, far to the left of either party in America today.
The accuracy of my economic models make it extremely implausible that anything more accurate could show up and compete with those models. The economic model makes other explanations look exceedingly pale by comparison, as twenty year 99% accuracy after twenty year 99% accuracy creates an elegant 99% accurate 60 year simple model of manufacturing productivity, the essence of economic growth. This model will be the new “science of physics like” backbone to the social sciences, as empire modeling and cycle theory replace the sloppiness in existing macroeconomics and climate change theories.
The unusual accuracy of peace economics and the long cycle theory would lead to widespread acceptance of the long term booms and busts of the cycle. So we would see the opportunities of the peaks around 1898, 1952, and 2006. These tops in economic growth rate also correspond to bottoms in interest rates and inflation rates. The dangers of the bottom of the cycle, 1928, 1982, and 2036, would also be taken more seriously as naturally occurring events of the earth cycle. These correspond to economic growth minimums and dangerous economic major mistakes. These also correspond to maximum interest rates and inflation rates. The major exceptions to these trends would be war and military buildup related debacles, like the real estate and savings and loan problems after the Reagan military buildup and the banking and real estate problems after the Bush wars. When regional economics is 94% determined by military buildups of congress and the presidency, false stimulus overheats military states real estate markets creating a bubble that eventually bursts bringing down elements of the banking industry.
An achievement oriented high growth win win economy is a very different thing from a power driven empire stagnant low growth win lose society. Military spending kept low creates the first condition and military spending kept high creates the second condition of empire. The growth society has high social mobility; the empire society has high prisoners, high homicides, high obesity, high teen births, and high mental health problems.
Toynbee found that 23 of 24 empires he studied rose with low military spending and fell with high military spending. Since World War Two, the highest decades of military spending for three different societies were the largest losses of share in the world economy. That would be the fifties for America when Eisenhower doubled military spending after the Korean War from what it was just before the war, the sixties when Germany doubled military spending after the Berlin Wall, and the seventies for Russia when the Breshnev buildup 1966-1982 bankrupts the Soviet Union leading to collapse in 1991.
Every president elected in the Cold War came from a high military spending state, the best record of seven indicators (military state, war hero, run before, Southern Democrat, Republican, economy, large state). About 80% of the cabinet, the congressional leadership, and the supreme court come from high military spending states. It’s 90% for the presidency, higher if you include strong CIA connections. Both Democrats elected since the Cold War worked for or with the CIA before being elected. Ford, the only Republican from a low military spending state, was never elected president.
If you base your support for military spending on research, you are conceding the lack of useful economic output of the other 90% of the military budget. Of the 10% on research, only one third gives a commercial benefit, one third is too military specific, and one third is lost due to secrecy. Venture capitalists know that benefits accrue to those who start something at the rate of about 20%, the rest goes to competitors. So military research is 33% beneficial to the civilian economy or 7% if you consider the competitors response. That makes the military budget either 97% or 99.3% economic waste depending on your theory, an upper middle class “warfare” program with no positive feedback to the rest of the economy.
The flatness of the military economy and the power imperative exceeding the achievement imperative will lead to conservative politics and a new feudalism like the high military low growth lord and serf inequality of the middle ages. The move from manufacturing to a financial services economy will steadily erode unions and the middle class.
Education helps an economy. But trying to row the boat faster doesn’t work when there is a huge hole in the bottom of the boat. Higher education does not compensate for the military hole in the bottom of the economic boat, as the G7 economies empirically show.
Lower military spending leads to higher productivity. But the political changes that go with a plentiful society can lead to taking more productivity in the form of time off and longer vacations. Also, plentiful societies are more equal and more willing to take trade offs in terms of a greener economy.
Here is the pamphlet enclosed with the Peace Economics 25th anniversary video:
Dr. Peace, Dr. Bob Reuschlein,
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