Jan
19
We all live under governmental rule, we both Indians and Pakistanis.
We both suffers the mutual tensions, terrorist strikes, and war like situations, we have suffered during previous wars.
Why do we fight and what for?
Indian government and Indian media are claiming that Pakistan sponsored Mumbai Attacks.
The general question, which arises in mind is, just some months ago, Pakistan was facing the worst economic disaster when Pakistan was forced to beg money from International banks, China, America and other nations. How can a nation in such a dire situation support such drastic moves? Why will a national government support any such adamant step in a period of economic disaster when that nation itself is suffering from extreme poverty and chaos?
Answer lies in the mysteries of Military Keynesianism.[1]
Keynesian economics is what we call as Mixed economics or government controlled economy. According to Keynesian economics[2] the state should encourage economic growth and perk up stability in the private sector - through, interest rates, and taxation and public projects etc. That “etc” holds the key to our answer.
Military Keynesianism is a government economic policy in which the government devotes large amounts of spending to the military in an effort to increase economic growth. Almost all Mixed economies of the world, from America to India to Pakistan to China follow Keynesian economics. Military Keynesianism is based on a false observation and wrong interpretation of John Maynard Keynes on the Great Depression and World War II. The observation suggests that to face an economic recession, government should increase spending to counter the sharp decline in market and investment. Without increased spending, the downturn will stay deeper and longer. During the Great Depression, when US increased its spending in Military and joined in the war actively, US saw success against the depression. This observation created the myth of Military Keynesianism that suggests that during a depression, military spending and wars help in bringing an economy out of the recession.
Political economist Robert Higgs[3] blows out this idea out delicately as -
nearly every other lion of the mainstream economics profession, failed to notice that by the very empirical-test standard the profession considers sacrosanct, this theory was decisively refuted by the events of 1945-47[4] -or perhaps the mainstreamers believe that after their model had, as they see it, proved its mettle so beautifully on the upside from 1940 to 1945, its abysmal failure to predict from 1945 to 1947 need not be taken seriously.
In his article[5] Higgs exposes the illness of Military Keynesianism, which tends a nation to go for wars.
He mentions —
For decades, secretaries of defense helped to justify their gargantuan budget requests by claiming that high levels of military spending would be “good for the economy” and that reduced military spending would cause recession. So common did this argument become that Marxist critics gave it the apt name military Keynesianism. On both the right and the left, people believed that huge military spending propped up an economy that, lacking this support, would collapse into depression. Such thinking played an important part in the political process that directed about $15 trillion (in today’s dollars) into Cold War military spending[6] between 1948 and 1990. Nor did the argument disappear even after the Soviet Union unsportingly left the playing field.
Military Keynesianism has enough surface plausibility that it garnered a substantial following in certain quarters even before Keynes’s General Theory gave it apparent intellectual respectability. In his 1944 book As We Go Marching[7] John T. Flynn noted as a fact “this devotion of the conservative elements to military might,” and he emphasized that “militarism is the one great glamorous public-works project upon which a variety of elements in the community can be brought into agreement.” He understood, however, that military public-works spending has far graver consequences than ordinary Keynesian pyramid building. “Inevitably, having surrendered to militarism as an economic device, we will do what other countries have done: we will keep alive the fears of our people of the aggressive ambitions of other countries and we will ourselves embark upon imperialistic enterprises of our own.” Flynn deserves high marks as a prophet.
Thus, it shows why it is possible for Pakistan to support terrorism, wars and havoc even in a situation when it is economically devastated. Just before Mumbai attacks, Pakistan was begging money from international communities to pay for its charges.
As the general thinking of Mixed economy governments is that government spending helps economy, it is quite possible that Pakistan planned it all.
Now one may say that Pakistan was already spending allot on Afghanistan border along-with America. We all know that Pakistani people just do not support US and its anti-terror strikes. In order to gain public confidence and gather the military power properly devoted for an aim, Pakistan needed to create a situation. After Mumbai attacks, Indian government got enraged and started making international pressure on Pakistan, and Pakistan got a chance to move its forces towards Indian borders. Now public has more important issue to handle for instead of opposing and criticizing Pakistani government. Against India, they are all united, and that brings confidence in government. Thus, more than anything, the reason behind all Pakistani military efforts since long past is the Keynesian mixed Economy, government regulated economy based on Military Keynesianism.
Is India immune to this Keynesian mixed economy madness?
We all know Indian government and politicians like our Prime Minister Manmohan Singh is staunch Keynesian economist. As he said in his interview.[8]
It clarifies that in any recession or downturn, a government, be it Indian, or Pakistanis, or Chinese, or US government, may go for wars and mass murders, and what would be the reason? Just to bring economy out of recession or depression or deflation.
Such is the effect of Mixed economy government controlled economy. 
In His article, Higgs clarifies that these entire Keynesian hypothesis is nothing but a myth. Austrian economists have been opposing all this madness since always, yet American government almost always followed the Military Keynesianism idea and so is Indian government is hell bent to do it. The recent tension on borders and Media are just phase of it. Just some days ago, Indian government announced the draconian UAPA law which is no better than the Patriot act. India is demanding missiles from US. How logical it is to go for an Arm’s race? Should government waste tax-payers money in such infertile activities?
Does spending on worthless unproductive things help anybody?
After 9/11 attacks, Paul Krugman[9] suggested that there will be favorable effects of the terrorist attack.
Yet that is how almost all government’s act. After 2001 recession in USA, US troops engaged in severe attacks on Iraq. Was it Keynesian Mixed economy effect?
The U.S. is likely to increase further spending on defense and on rebuilding the infrastructure that has been destroyed. This would ultimately create a positive sentiment in an already lethargic American economy, says Oommen A. Ninan[10] .
Again there is recession, and Obama is a Keynesian. He knows he cannot keep US military fighting in Iraq, thus, he has announced stronger troops in Afghanistan.
In such a situation, is there possibility for Indian government to waste money on such needless wars? While discussing Indian Reserve Bank Dilemma, we showed how fear of recession is senseless as it clears out all “non-productive-activities” and helps the market to revamp and gain stability. We further discussed that injecting money in market would be a wrong cause as it would further increase the percentage of bad assets. We discussed how “Bail Outs” never help an economy but further increase the burden. We, the citizens of India and Pakistan do want peace, yet is it possible?
It is quite obvious that any governmental intervention in economics causes harm alone. Yet, the biggest harm to human kind can be wars terrorism and Military Keynesianism. Footnotes:
- Military Keynesianism, Wikipedia Link [↩]
- Keynesian economics, Wikipedia Link [↩]
- Robert Higgs, Independent.org [↩]
- Military Keynesianism was refuted in 1945-47, Independent.org [↩]
- Higgs,Independent.org [↩]
- Cold War military spending between 1948 and 1990, Independent.org [↩]
- As We Go Marching, John T. Flynn [↩]
- he says here,sikhtimes.com [↩]
- Paul KrugmanHis article [↩]
- Oommen A. Ninan, The Hindu [↩]
Related Posts
1 views18 Responses to “Why there are Wars, Terrorists and Militants”
Leave a Reply
Nita Says:
January 19th, 2009 at 12:59 pmThat’s rather a long post but interesting. I had not read of this theory in detail anywhere before though I had vaguely heard about it. Though I have not put my brain to work on it like you have, I would say that instinctively it seems wrong.
Unpretentious Diva Says:
January 19th, 2009 at 2:48 pmwell, it’s not my instinctive report on the issue, it is a well researched and thorough report with reasonable links to the past and present active issues.
Why do you think it is so difficult for US forces to catch Osama Bin Laden?
Because that never was the mission, mission was to gear up Military Keyensianism and help the economy. Although, the way is wrong, the result will be wrong. and they come out to be wrong. Wastage of resources never helps anybody.
Dsylexic Says:
January 19th, 2009 at 4:01 pmthe pakistani state actions are not motivated by any sort of keynesian militarinomics. in fact most pakistani and indian politicians give a damn about economics.
the simple matter is that the pakistani govt had created ,in tandem with the US CIA, many jihadi groups with the express purpose of terrorism in the region. it just so happens that one such group is now (predictably) out of control and wants to annihilate hindus (mainly) across the border.ergo.
you are using the western man’s analysis to this issue.
i agree that militarinomics of the keynesian variety is bulls***.
i would have give some credence to your theory if the pakistan miltary had a military industrial complex -ofcourse not.they import all the equipment and their aim is not to produce employment. rather it is simple the effects of a failed state dictated by theocratic concern. i wonder how pakistan can be called a democracy when its constitution officially recognizes it as a moslem state.
Unpretentious Diva Says:
January 19th, 2009 at 4:18 pm@ Dsylexic,
I agree that Pakistan acted under US/CIA, and my essay coverrs the cold war too. The jihadi groups thus produced by CIA/ISI against soviets were also motivated by same Military Keynesianism.
I agree that Pak politicians gives a heck about economics, but they do care about their allies who are not so ignorant (America, China. if pak keeps on and on, America gets its market., Keynesian economics do well in there.
About Indian politicians, they are not that fool, we have got a stream of Keynesians Since the times of Indira Gandhi.
And well the essay covers, whole world, it is not specifically about Indo-pak situation. When we talk of Military keynesianism, we cover off China, India, UK, USA, Pakistan, Russia, Israel too. Other nations also just cannot avoid its effect.
Sushant Says:
January 19th, 2009 at 5:05 pmYour take on wars and its causes is interesting and I agree all wars and conflicts are about economics but not the way you suggested in the article.
We all know conflict and wars are caused when resources are scarce and requirements are high and in order to meet once requirement there is power struggle. From the time immemorial the wars have been fought for taking away resources from another party. The more recent ones the two world wars ,including the cold war was result of nation states pursuing their influence on resources away from their own territories. If we talk about the India Pakistan conflicts we can dig a bit deep and see that Pakistan has this unending resolve to equate itself with India in the geo-political standing. After the war of Bangladesh Pakistan was convinced that it cannot win a direct war with India and under the military dictator ship of Zia-ul-haq created these terrorist organizations to bled India to bring it on a negotiable table. If Pakistan managed to get Kashmir it will be a big moral victory on its actual quest to gain power on expense of India. I am sure things will not stop there till the balance of power and resource tilt favourably towards pakistan and perhaps total annhilation of idea of India as a nation state.
We have to understand that Nation states don’t spend on wars to just increase spending but the larger idea is to gain control of resources
So War, if Resources gained after war > Spending on the war
Pakistan is in it for a long haul and not to mere bring in any increase in spending to pep up the economy but to win over the power struggle that started the day Brithshers left our shores..
Unpretentious Diva Says:
January 19th, 2009 at 5:27 pmSushant, whatever you are talking of, is just an implication of the article.
but if US and allies attacks on iraq or iran or Afghanistan (as now Obama has proposed increasing troops on Afghnaistan) its not about winning land.
If India, China, Pakistan invest on increasing military power, it is not always about wars or fights or terrorism. but it is always about the falsified idea of spending.
Obviously, it can be a profitable deal if one nation grabs area of other, as China did in 1962 war, but its all the same game plan of Keynesian Economics.
During 1962 war too, China was suffering heavily from depression, and to gain economic control and confidence over its citizens, China staged that war. Win over a land piece was just the extra cheese.
And after that, to improve Indian economy, Indian government started increasing Military spendings. The disease is contagious, that is why it is called race of weapons.
Furthermore,you will notice that india denied that “extra cheese” after indo-pak war (that is another fact that India was not in position to control pak area). But after the war, by imposing emergency, Indira Gandhi did controlled and revamped economy completely, and increased military spendings to further high.
GP Says:
January 19th, 2009 at 5:31 pmThnx for thw wiki link of Military Keyensianism. I do agree with theory that pak and US govt. did use Military Keyensianism but
for political gains not necessarily boosting the economy. why?? — > ( the answer you will find in last para of Criticisms section on same wikilink
“Some critics, and even some supporters, contend that in the modern world, these policies are no longer viable for developed countries because military strength is now built on high-technology professional armies, and the military is thus no longer viable as a source of employment of last resort for uneducated young people.”)
So I wudn’t term it as step to boost economy but to pursue the political interests in South East Asia for US and “hate politics against INDIA to stay in power” by Pak politicians
Also, as heavy taxation employed to fund the military and armed forces which so far have not been observed in INDIA( atleast I never heard such announcement from Indian govt. so far, if u do then kindly post it for my reference) also
the press release and public statements made by Mr. Pranav Mukherjee and other UPA govt. Spokepersonnel always re-iterated the fact that -
INDIA do not want war with pak and indian govt. urging international community to pressurise pak to handover the terrorists responsible for Mumbai attack to INDIA”. Now they do say - they kept all options open
but that doesn’t mean they have announced the war( I think its just a part of pressure tactics and political diplomacy)
Regarding your view on UAPA - I do agree it cud be misused by cops/ATS but that doesn’t mean there shudn’t be any laws which wud deal strictly with inhuman beings (read - terrorists).
Also, there are always ways and means to refine the existing draconian laws which are overlooking the Human rights aspects and cud endanger the safety of innocent public lives
so the way is filing PIL in SC and HC and getting SC’s guidelines for it.
U can’t ban/threw knives out of your kitchen just bcoz u think that - One day my child cud use it to attack his classmate for taking revenge of his earlier fight instead of using it to cut the breads for daily breakfast.
Unpretentious Diva Says:
January 19th, 2009 at 5:35 pmINDIA do not want war
It doesn’t matter, war or no war, India is increasing the spending, the wasteful spending which will help nobody.
Also, there can surely be issues of Political power. But the essay is about discussing the Mixed Government Controlled Economy, its meaning, its evil ways, and ideas to help people. Its not about indian or pakistan or us or uk government, its about any mixed economy or totalitarian government.
Shruti Says:
January 19th, 2009 at 6:05 pmI must say it was very deeply researched!
And well, I don’t have a very long comment to type out..Just this that I hate the whole idea of spreading terrorism..
It kills people, religion, feelings and peace!
Pravesh Says:
January 19th, 2009 at 6:18 pmvery well researched
renegade_division Says:
January 19th, 2009 at 6:28 pm@GP Says:
Well buddy you haven’t observed doesn’t mean it does exist. Taxation may not only mean direct taxes, but indirect taxes too(sales tax, VAT, duties cess etc)
Another way for the govt to make money is revenues extracted by the monopolistic and non-monopolistic trade ventures like Indian Railways(Govt Monopoly), and BSNL(non-Monopoly, but receiving favors from govt and having access to govt treasury for investment).
In addition to that govt can always print more money, borrow more money against our future generations etc etc(can be observed through inflation).
So when you say “it has not been observed” you gotta make sure you covered all the aspects you can observe. Coz to fund the war the govt needs money from somewhere, there is no magic involved lemme assure that.
One thing you can always observe, the inflation always runs high during a war, the govt wants to make you believe that since its a war the demand for commodities is higher, but its bullshit, govt is simply expanding the money supply like crazy.
GP Says:
January 19th, 2009 at 9:07 pm@renegade_division
Dude,so far there are no signs of war. Atleast no signs of increasing the taxes( I mean atleast i am not aware and I might be wrong ).
I do agree with you about rising inflation in war situations and all the stuff related govt. can increase indirect taxes,etc.
But I think its better to wait and watch till FM announces next budget before concluding/criticising govt. without any proofs for “so called increased taxation as per your comments”.
and Like all honest tax payers I do pray that - indian diplomacy shud work and there shudn’t be any potential war or hike in taxes :)
and of course pak shud handover the terrorists to INDIA
Siddharth Says:
January 19th, 2009 at 9:16 pmcheck ure facts first before you create smtin.
Stefan Molyneux Says:
January 19th, 2009 at 10:55 pmYou really should check out the website Freedomain Radio… :)
Vikram Says:
January 22nd, 2009 at 11:24 am1) The Pakistani state is not directly orchestrating attacks on India. Elements of the state (namely the army and ISI) have however created an atmosphere within its territory (due to both their malfeasance and incompetence) where terrorists can recruit, train and plan in impunity. There is a strong geo-political and ideological basis towards any Pakistani attitude towards India, it is hard to say whether any economic considerations are present. I would strongly recommend ‘Descent into Chaos’ by Ahmed Rashid, it will help you understand Pakistan and extremism better.
2) Your thesis that nation-states indulge in warfare to stave off recession due to misguided economic systems is not backed up by facts. The nations of Europe and Japan were/are in recession for long periods, but are among the most pacifist of nations. America is a tricky case, but the bottom line is that wars have made American administrations less and not more popular, even during times of economic gain. Before this economic crash, America’s economy was doing quite well but the adiministration was quite unpopular.
Unpretentious Diva Says:
January 22nd, 2009 at 2:10 pm1> Actually you are forgetting that the Elements of the state are and were well supported by state and ISI, infact CIA and ISI were the creator of those elements.
2> baby it is backed up by facts. It is the major point of keynesianism.
Just that you are not able to grasp it.
Was cold war not backed up by most of European states, America, Russia, China, Pakistan and on unheard notes, by India?
Wasn’t it the case of fist world, second world and third world? It is a fact you cannot deny.
Weren’t the elements you are complaining of created by states? Haven’t Indian state created similar sort of Elements? Isn’t RAW supporting militancy in Pakistan?
What facts you have that ISI is supporting rouge elements? isn’t ISI a state organization?
Ostrich remains Ostrich.
Unpretentious Diva Says:
January 22nd, 2009 at 2:23 pmSince you do not have knowledge and facts doesn’t mean that truths are not providing facts.
India and Pakistan were in recession in 1999, kargil war happened, Indian government is always blamed that it had proper knowledge of Pakistan insurgency and infilteration, but it didn’t take action to stop it, and forced India to go to war. it is a fact.
Also, even during recent Mumbai attacks, Indian Intelligence blames government that it provided excellent information about some attacks being planned, but government never heeded and there were no security plans. What do you think of continuous blame game of failure of intelligence by government and counterblame by intelligence departments of failure of central and state governments to use the provided informations? Its just illusive blame game.
2> in 2000-2001 America was in deep recession. Iraq war took place. Osama was one of best friend of USA government, US government was providing business plans and deals to Osama and his family, suddenly he became enemy in recession. its a fact nooone can deny.
3> current recession is going on since 2006. its not new thing, its effects are visible now in most expresive way. and it is the middle of recession, it will go on till 3 more years as US and european experts says. We Austrian experts says until government won’t leave interference in economy, crisis will sustain and keep coming in going out in cycles. such cycles are called cycle of boom and burst.
The article i wrote is well backed up and facts have been linked.
Military Keynesianism is a state policy backed up by every european american asian mixed economy state. it is a fact.
mayank Says:
June 3rd, 2010 at 1:45 amamerican army task is very different from indian army work … we are sorrounded by enemy nations and they have got nukes… spending on army is a debatable issue but dont look at india with american point of view … american need army to guard there economical intrest only …
people like gargi still think that there anarcho capitalist .. ayan rand type theories will work like magic wand for this or any country .. but look at the condition of the country who tried to apply these so called free market policies….
so wake up try to see india as an indian..