War always increases State power over the economy, and the Gulf war is no exception. Thus one of President Bushs first actions was, by executive fiat, to give himself total control over any corporation or industry, if he deems it necessary for the war effort. He can now requisition what he wants, without regard to contracts or the needs of property owners and their customers.
This method was used extensively in both world wars and the Korean war. The armed forces commandeered railroads, communications, ships, and coal, for example. They allowed the ordinary managers to operate, but made them subject to Washington, D.C. Private property rights were effectively abolished.
Since the end of World War II, the government has spent about $10 trillion in todays purchasing power on military affairs. This is about two years of current productionas if every single person stopped working for two years. With a constitutional foreign policy, most of these resources would have been available for private investment. We are a much poorer country because they were not.
War also means more government control of labor, with the draft the preferred means. Soldiers whose terms of service were set to expire have been forbidden to leave, tantamount to a partial draft. The war economy means government takeover of private resources and people. This would easily be recognized without war. Suppose that the president on his own authority, suddenly expanded government control of the economy. People would have much less freedom, and would have to pay much higher taxes. The public would be outraged. But during wartime, people readily accept an executive takeover of just about every aspect of the economy.
Even victory can have its problems. Should the Iraq war be viewed as a glorious achievement, the politicians wll be able to pick our pockets even more.
From a historical standpoint war is instrumental in expanding government in every dimension. Particularly during the world wars, the transformation of a mainly market economy into a mainly command economy taught people to use government to achieve their personal ends, and eroded resistance to bureaucratization by making Americans less willing to protest. Not only does the war machine not return to its previous level, every other aspect of government is fostered as well. During World War II, bureaucracies that had little to do with the warthe Department of Interior or Agriculture, for exampleclaimed they were essential for the war effort so their budgets and activities should be increased. Once the war was over, they retained their newly acquired functions.
The most important consequence of war is the ideological shift. A successful war brings new stature to the government. In the case of the Gulf war, a success will mean a more interventionist foreign policy. As neoconservative Ben Wattenberg puts it, victory will yield greater domestic political support for future assertiveness.
To the extent that the public thinks successful government management meant victory, their faith is increased in government solutions. It is difficult to argue that the government cannot run a national energy policy when it appears to be running a New World Order. Thanks in large part to war, we are much less free than we were in 1939. Living in a garrison state has also changed the political character of the American people. They are more like sheep, more easily led into approving government actionsdomestic and international.
Consider the recently passed child care bill. At one time, most Americans would have viewed child care as none of the governments business. Today, federalized child care is supported by the Congress and the president, and even the opponents didnt use principled arguments.
Until neutrality becomes once again the dominant principle in foreign policy, we have no realistic hope of dismantling domestic intervention. Yet instead of cutting back on spending and taxes, Bush is increasing them to fund a New World Order.
This Wilsonian fantasy is as much a pipe dream as the centrally planned economy. This world of the future will be the same world weve always hadwith kaleidoscopic changes constantly going on. If the president really thinks he can impose a new order on other countries, that means buying them or bombing them. Neither is consistent with the republic of the Founding Fathers vision.
As James Madison wrote in 1795: Of all the enemies to public liberty, war is, perhaps, the most to be dreaded . . . . War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few.
Robert Higgs is Senior Fellow in Political Economy at The Independent Institute and Editor at Large of the Institutes quarterly journal The Independent Review. He received his Ph.D. in economics from Johns Hopkins University, and he has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics, Prague. He has been a visiting scholar at Oxford University and Stanford University, and a fellow for the Hoover Institution and the National Science Foundation. He is the author of many books, including Depression, War, and Cold War.
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Reprinted with permission from the March 1991 issue of The Free Market, published by the Ludwig von Mises Institute. Copyright 1991, Ludwig von Mises Institute, 518 W. Magnolia Avenue, Auburn, AL 36832-4528.