Dope

We've been preparting to review Neill Ferguson's Empire for a certain paper. So we have been drifting through The Cash Nexus, Ferguson's hefty volume about money and power in the world system since 1700. We found the chapter on state deficits quite helpful in getting our bearings about the coming red inkiness that will be the legacy of the Bush era.

Ferguson points out that governments in the early modern period were quite cavalier about owing money. The French defaulted on their debts almost every decade, until Louis XVI fatally called a halt to the practice. It was the refusal of France's creditor's to lend more money that prompted the court to call the Estates General into session, and we know that heads literally rolled after that. So never say that a national debt has no effect on our real lives. although that is the current smoke drifting out of D.C. Interesting, too, is the US history of debt. After the Civil War, the debt level was around 50% of GNP -- which was extraordinarily low for a state the size of the U.S. We suspect that this figure is not quite accurate -- does it include Confederate debts that were repudiated, as well as the distributed debts of the states? The federal system has a way of spreading out the true indebtedness of the government, just as it spreads out the tax burden. Interestingly, for a Tory, Ferguson is pretty calm himself about governmental borrowing -- not for him the nostrums of the balanced budget. Which already puts him ahead of the IMF crowd, at least.

However, looking over his dense stats, the one thing that stands out is that debt and the military are indissolubly linked, the price of the latter being paid for by the former, and the former then driving the policies that inevitably resulting in the use of the latter. The cash nexus, here, is an arms nexus. From the money spent by the British establishment to destroy Napoleon to the money spent by LBJ to destroy Ho Chi Minh, it is obvious that "defense" -- or, to give it another, more appropriate name, "offense" -- has driven government economics. A level can be reached at which the commonwealth is ruined to the extent that it can no longer re-arm -- but this simply means that others will arm in its place, and often on its soil. Germany has been the most pacific of nations during the last fifty years, but it has also been the place with the largest concentration of tactical nuclear missiles, as well as a vast staging area for US and, until 1989, Russian troops.

Pacifists often act as though war is simply a matter of directed violence; what they ignore is that violence is a functioning part of a larger culture: that it creates an order; that that order creates dependents on the order; and that those dependents have a tradition to draw on that is quite attractive to the leaders of a state, who are often (as in the case of Cheney, et al) one and the same people. The unimaginableness of an economy from which violence had been eliminated acts on states to create seemingly irrational situations. Whatever else we say about Saddam Hussein, we have to say that his resistance to exploring weapons research for weapons he cannot effectively use -- since he has been in no position to use them for the past ten years -- shows that he is, even fatally, addicted to the cash-arms nexus.

Peacetime economics has not actually happened, at least in the modern era. We wonder what it would look like.

Samuel Brittan has an interesting review of Ferguson's book that seems, now, to be pretty prescient. Here's a graf that we especially liked:

"In conclusion Ferguson moves onto more interesting ground in his theory of "under-stretch". He looks at a world full of rogue states and genocidal regimes. In deliberate contrast to Kennedy, he considers that this world can only be made safe if the US and its allies are prepared to restore defence budgets which have shrunk so much since the end of the Cold War. I wonder. In the Kosovo conflict which the West only won - if it did win - by luck and bluff, it was not the lack of military spending but the refusal to risk a single American casualty which handicapped the campaign."

Unexpectedly, the American aversion to risk has so far magnified casualties of those who oppose American forces, by upping the amount of firepower thrown upon them, as well as stimulating technologies that will massively decimate them. This is solidly in the American military tradition. It takes Grant's inelegant, but efficient, military strategy of overwhelming might and tries to eliminate its glaring vice, to American eyes: the high casualties. You might say it is Grant's strategy combined with McClellan's timidity. The failure of this strategy in Vietnam stemmed from the fact that a rate of small casualty losses, strung out over an extended period, has an effect on the morale equal to large casualties suffered over a short period. We think this hypothesis is about to be tested.