What I call Peace Economics is an evolution of ideas that spring from reassessing the false theory that military spending stimulates the economy. What is revolutionary about this idea is the mathematical certainty of the models that verify it and the long shadow of internal political, social, defense, and historical consequences that spring directly from the military economy.
Military Spending Hurts the National Economy (#1 Idea)
This first finding surprised me so much because I had assumed that military Keynesianism showed that military spending helped the economic growth rate. But Ruth Sivard’s work so contradicted that knowledge I had been taught at college that I instantly shared her bar charts all over the State of Oregon Legislature. Finding that others did not share my clear vision and enthusiasm led to the exhaustive tests and proofs that she was right that I eventually named Peace Economics. The peace movement was seemingly just as deluded as the economists, politicians, and journalists. The peace movement was principally concerned only two ways, about nuclear weapons and about human rights. This central finding led to a new economic theory, proof of the Kondratiev Wave (54 yr.), and proof of the Juglar Cycle (8-10 yr.). Keynes and Roosevelt had already proven the economic stimulus value of the national deficit. It has been a long heavy lift to establish the other three basic points, just as Thomas Kuhn’s Structure of a Scientific Revolution would predict.
Military Spending Hurts the National Defense (#2 Idea)
My second book title, Strength Through Peace, conveys this concept. While defenders of the military industrial complex often resort to the slogan Peace Through Strength, I find that slogan very misleading. The real power of a nation lies in its economic strength even more than its military strength. The short-term benefits of military spending are usually meager compared to the steady erosion of economic strength military spending causes. In fact, because of Idea #1 above, premature high levels of military spending when threats are relatively low only serve the purpose of gradually weakening a nation when a major threat shows up some time later. The longer the interval before a real military need emerges, the greater the weakening rendered by excessively high premature levels of military spending. The Defense Strategy chapter of my 1986 book Peace Economics shows some of the trade-off charts used to estimate appropriate levels of military spending for the longer term or even for the shorter-term strategies.
Military Spending Dominates and Controls a Nation (#3 Idea)
This shows up in the regional nature of changes in military spending. What crystalizes this as a mathematical relationship is looking at the degree of militarization of a state’s economy and lumping states together in one region based on major metropolitan centers that can pull several states together into a mini-region. Thus, the military states concept shows how politics in the United States is dominated by the military industrial complex. All of America’s leading political institutions are dominated by figures from the high military spending states and regions. That includes about 80% of the presidents since World War II, 80% of the cabinet, 80% of congressional leadership, and 80% of the supreme court. The misleading positive correlation with military spending regionally fails to recognize the losses in manufacturing states under military buildups and the gains in manufacturing states under military builddowns. In other words, the nation as a whole gains when the military lowers and the nation as a whole loses when the military is increased. This contrast shows up most sharply between the Great Lakes states industrial heartland versus the high military and financial states of the bi-coastal economy. Great opportunities exist in the financial markets to exploit these regional differences whenever a major change in military spending occurs.
Episodic Nature of Major Wars and Economic and Natural Events (#4 Idea)
The Kondratiev Wave, 54-year cycle, shows up precisely as a perfectly sinusoidal fluctuation in the manufacturing productivity growth rate in the 63-year model mentioned in Idea #1. After the 1988 drought in the United States I took three years to figure out the natural connection to this cycle and the war cycle. After hurricane Sandy hit New York in 2012, I created a chart of 56 major natural, economic, and war event examples of the cycle, with about 95% accuracy. I also established the connecting mechanisms between these three different forms of the cycle. This is a great achievement that will improve forecasting for hurricanes, great recessions, and wars. This makes possible a rational reduction in military spending as part of a national defense strategy. Millions will benefit from improved forecasting of economic and natural disasters and wars might even be avoided when their causes are better understood as part of this long cycle.
Empire Decline and Socioeconomic Decay (#5 Idea)
My 1989 work first showed the murder and crime correlations with military spending. This is a leading indicator of the social decay that occurs with prolonged levels of high military spending in a nation and shows up in the sharp drop in crime that occurred in the nineties with the end of Cold War high levels of military spending. This also helps explain how crime has dropped in Germany and other European countries much more than in the United States in the twenty-first century, thanks to the post 9-11-01 military buildup and wars waged by the United States. In fact, the Index created in the Spirit Level book shows that empire and military spending correlate even stronger than income inequality with obesity, mental health, teen birthrates, prisoners, and homicides. The theory of empire that blames collapse on moral weakness has it backwards. High military spending changes change the economy in the same year they occur, showing that the economic effect occurs first before the social effects, just as crime drops in the nineties took several years to take hold rather than happening immediately. Cause and effect require a closer look than just watching correlations. Military spending is the first domino to fall in the long process of manufacturing decline and social decay of empire. Rigidity is a result of the ensuing stagnation. Stagnation comes in many forms, from political, to class rigidity, and the lack of social mobility.
Twelve Stages of Empire:
Please cite this work as follows:
Reuschlein, Robert. (2018, October 1), “Valuable Peace Economics”, Madison, WI: Real Economy Institute. Retrieved from: https://www.expertclick.com/NewsRelease/Valuable-Peace-Economics,2018162572.aspx
Dr. Peace, Professor Robert Reuschlein, Real Economy Institute
Nominated Vetted for 2016, Given Odds for 2017 Nobel Peace Prize