Saturday, January 23, 2010

Morality's Cost - Part 3

War sucks. Despite what some crackpot economists may argue, war is NOT good for the economy. At best, war enriches some at the expense of others; but unlike a silent thief, destruction always ensues in war's wake. Just the threat of war causes nations to divert resources for their defense, and even when war is successfully waged, the victor usually has a bloody nose.

The beauty of the Free Market is that in seeking our own self interest we naturally depend on each other more and more. This interdependence makes fighting less valuable. If China makes cheap goods that we buy, then one consequence of war, besides a bloody nose, is the loss of cheap goods. Multiply our interdependence, and you multiply all the benefits lost when we fight.

When things are simple, when there is little interdependence, war makes economic sense. Nations plunder other nations because the benefit outweighs the cost. But when we benefit from trading with our enemies, plundering loses it's allure. The Free Market increases our interdependence and wars are less and less likely as a result. Morality has got nothing to do with it.


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