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70 y.o. millionaires sitting at home should not be allowed a higher income than soldiers who risk their lives IF the war is a full national effort. All justifiable wars should be national efforts, because they would be defensive wars against peers or worse. Military adventures abroad are not easily justifiable, but they don't require a full national effort either.
The protection of many non-conscripts from the hardships of war certainly increases the readiness to enter major wars. In fact, it's even worse; the prospect of war profiteering can even create a strong pro-war lobby based on such partial interests!
Does this sound extreme? I guess so, because it's not how things are usually done.
What's more extreme?
(a) Compulsive labour to force citizens into the military where they risk their lives, lose liberties and are at times supposed to kill humans?
or
(b) Compulsive labour to force citizens to work for the war effort at no better income than subsistence?
What's more gross?
(a) Not allowing companies to have any net profit during times of war and conscription (and thus capital owners no capital income)
or
(b) corporations (and thus their shareholders) making huge profit with rushed wartime orders - profit that's paid for with public debt that needs to be paid off by the general public after the war (= a wealth transfer from the poor to capital owners because of war)?
The actual implementation of a nation-wide general conscription would be a huge challenge because of many problems (especially the problem of pushing the economy to maximum output for the war effort despite gutting the capitalist incentive structure), of course.
Nevertheless, it's in my opinion an interesting exercise for the mind; how to get rid of the orthodox concept and to think about how things should be done in the interest of the whole society.
P.S.: I wrote this back in October 2013 when discussing public debt issues was fashionable, but it was still in my drafts list. Maybe it was published before and accidentally reverted to draft status (though it has no comments) - I honestly cannot tell. It's published now because I didn't get to write a new text amid several distractions.
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Wartime profiteering is a disgusting affair, and it's linked to the extreme burden of wartime debt that's typical for major wars.
It has bothered me for years that states accumulate a huge debt in time of war even if they use conscription. Something didn't seem to fit in that picture.
Such states took away the liberty of up to several million men (still only about a tenth of the population), paid them and provided for them just a little more than margin of subsistence and yet these states accumulated huge debts? How? Isn't a (total) war an effort of the whole society?
One perfectly justified source for such debt is the net import of goods and services for the war effort and state services. You pay for what you buy or you accumulate debt for it - that's simple. The British bought many industrial products from the U.S. in 1940 and that naturally added a substantial debt.
The domestic debts are not so easily justified.
Why should anyone in the nation have a better income than the conscripted soldiers during wartime? I just don't get it, I see no justification for it. Millions of citizens are reduced to survival at best, and others actually gain wealth? How is that supposed to work, why, and how did it happen that it appeared to be natural?
It has bothered me for years that states accumulate a huge debt in time of war even if they use conscription. Something didn't seem to fit in that picture.
Such states took away the liberty of up to several million men (still only about a tenth of the population), paid them and provided for them just a little more than margin of subsistence and yet these states accumulated huge debts? How? Isn't a (total) war an effort of the whole society?
One perfectly justified source for such debt is the net import of goods and services for the war effort and state services. You pay for what you buy or you accumulate debt for it - that's simple. The British bought many industrial products from the U.S. in 1940 and that naturally added a substantial debt.
The domestic debts are not so easily justified.
Why should anyone in the nation have a better income than the conscripted soldiers during wartime? I just don't get it, I see no justification for it. Millions of citizens are reduced to survival at best, and others actually gain wealth? How is that supposed to work, why, and how did it happen that it appeared to be natural?
A graph that shows U.S. federal debt - including the spikes of Civil War, WWI and WWII.
70 y.o. millionaires sitting at home should not be allowed a higher income than soldiers who risk their lives IF the war is a full national effort. All justifiable wars should be national efforts, because they would be defensive wars against peers or worse. Military adventures abroad are not easily justifiable, but they don't require a full national effort either.
The protection of many non-conscripts from the hardships of war certainly increases the readiness to enter major wars. In fact, it's even worse; the prospect of war profiteering can even create a strong pro-war lobby based on such partial interests!
How could this be avoided?
I think instead of a full wartime conscription that conscripts just about everyone age 16 or older who's not seriously retarded:
The completely (military service and work) unfit citizens would not be called upon despite the conscription (but their names would be made public to make sure the unavoidable dodgers live in shame). Those fit for military service would serve as soldiers unless they're needed more for their professional expertise in the economy. Those who are just fit for work would need to work, and a public system would need to make sure that they work in jobs that are of maximum utility for the society. Juristic persons (corporations) would get their equity capital reset to the original value at the end of the conscriptions and would not be allowed to hand out equity capital to shareholders during mobilisation.
The state would work hard on corrections of mistakes and avoidance behaviour that happened during the conscription.
In the end the net increase in public debt could be at most equal to the interest payments and national trade balance deficit sum during the conscription. That would only be a fraction of the public debt increases that we saw during both World Wars.
I think instead of a full wartime conscription that conscripts just about everyone age 16 or older who's not seriously retarded:
The completely (military service and work) unfit citizens would not be called upon despite the conscription (but their names would be made public to make sure the unavoidable dodgers live in shame). Those fit for military service would serve as soldiers unless they're needed more for their professional expertise in the economy. Those who are just fit for work would need to work, and a public system would need to make sure that they work in jobs that are of maximum utility for the society. Juristic persons (corporations) would get their equity capital reset to the original value at the end of the conscriptions and would not be allowed to hand out equity capital to shareholders during mobilisation.
The state would work hard on corrections of mistakes and avoidance behaviour that happened during the conscription.
In the end the net increase in public debt could be at most equal to the interest payments and national trade balance deficit sum during the conscription. That would only be a fraction of the public debt increases that we saw during both World Wars.
The greatest problem would likely be the loss of the economic key motivator in market economies; greed. This is probably not a killing blow to the idea because Western nations tend to turn towards much centralised planning when they fully mobilise for war anyway.
Does this sound extreme? I guess so, because it's not how things are usually done.
What's more extreme?
(a) Compulsive labour to force citizens into the military where they risk their lives, lose liberties and are at times supposed to kill humans?
or
(b) Compulsive labour to force citizens to work for the war effort at no better income than subsistence?
What's more gross?
(a) Not allowing companies to have any net profit during times of war and conscription (and thus capital owners no capital income)
or
(b) corporations (and thus their shareholders) making huge profit with rushed wartime orders - profit that's paid for with public debt that needs to be paid off by the general public after the war (= a wealth transfer from the poor to capital owners because of war)?
The actual implementation of a nation-wide general conscription would be a huge challenge because of many problems (especially the problem of pushing the economy to maximum output for the war effort despite gutting the capitalist incentive structure), of course.
Nevertheless, it's in my opinion an interesting exercise for the mind; how to get rid of the orthodox concept and to think about how things should be done in the interest of the whole society.
P.S.: I wrote this back in October 2013 when discussing public debt issues was fashionable, but it was still in my drafts list. Maybe it was published before and accidentally reverted to draft status (though it has no comments) - I honestly cannot tell. It's published now because I didn't get to write a new text amid several distractions.
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People who had private jobs and paid taxes are converted in to people who have public sector jobs and consume taxes.
ReplyDeleteDebt explodes
Domestic public debt from (more or less total) war is a kind of redistribution of wealth, and it's not a redistribution towards those who risked or lost the most.
DeleteImagine everyone simply gets conscripted at no pay and the government gets to use all existing capital stock for the war effort at no charge. This would be debt neutral in a closed economy.
Now modify by paying everyone a little, and this little is giving purchasing power to buy goods and services from the economy, which at such a point would effectively be the government, for everyone would work for it. Again, debt neutral.
Instead, we saw mobilizations where war profiteering happened at grand scales.
I don't argue to run total war or total government control of war economy, but I sure see a weird defect in how great war efforts were arranged economically.
The damage to a nation's prosperity from wasting human life, ruining human health and neglecting investment for years is already terrible. To add a huge redistribution (debt repayment) problem seems avoidable ex post.
Imagine, the republic of elbonia
DeleteIt has a government revenues and spending of £10bn, imports if £1bn and exports of £1bn
It goes to war with the Empire of K'nee
Government spending increases to £15bn to fund the war effort, taxes fall to £5bn as taxpaying factory workers become tax consuming soldiers
Exports drop to zero as factories close and imports double as arms are imported.
Just saying, conscript everyone doesn't fix those problems.
Your argument is trivial.
DeleteWhat matters isn't the government spending, but the trade balance deficit incurred by additional imports and reduced exports that can not be paid for by gold reserves and such. That trade balance deficit is the unavoidable increase in public debt (neglecting the ex ante credit balance of government).
You did apparently not think about how those "15 bn" spending come to happen.
This comment has been removed by the author.
ReplyDeleteI see a problem in your arguments.
ReplyDeleteIn 2nd World War often the corporations get paid a fixed price for equipment where benefits increase if the item is produced efficiently.
That way is possible to produce more with less work and resources.
If corporations are unable to benefit then what incentive would have to streamline production?
Maybe a solution could be if workers and managers are incentivized but not the shareholders, but in that case wouldn't have incentives to invert.
JM
I mentioned that myself in the blog post, at the end.
DeleteThere are alternative incentives schemes possible, of course.
The idea of more "Justice" in this context is nice and well, but even if you conscript everybody, not every function in the military is the same in the question of risk for your live. So most of the low-risk positions in the army would be occupied by people of rich families with high influence and this would then still produce injustice and would not significantly change the overall system. If no profit is then possible in wartime, the same people would use then their easier survival and their influence in the supply chain of the armed forces (most such low-risk jobs are in the logistics etc) to save the moeny for them still after the war and to get their greedy fingers on the property of others then the war is declared over.
ReplyDeleteI therefore do not think that your idea would work. It could work only if we would have an complete different kind of social-culture.
By the way: in the early and middle roman republic the wealthy families had to invest more into the armed forces than the poor and the losses of life and property were much higher for the wealthy than for the poor. The people without any property (capite censi) had not to fight at all. On the opposite the war-effort resulted in direct political influence as part of the offical political system. The richer / wealthier you were, the more you had to risk your life in warfare and the more you had to pay for the war and at the same time your political influence was much higher so that of the first class of the citizens weighted much more than one of the lower classes.
This could be an model: to directly interconnect political power about the state and its going to the question of military investment in both moeny and blood, from the question how many voices you get in a election to the question who can become an politican at all. No (high) investment, no military service in an first line and high risk combat troop - no political career, and only one voice in an election in comparison to many many voices if you fullfil this requirement. Such an construct would also then change the social culture with the time.
Similarly, in Classical Greece, a middle class person might be expected to buy their own armor and weaponry, while a really rich person might be expected to help fund construction of a Trireme.
DeleteThe model of a citizen-militia could again become interesting for the question of how to fight in modern wars because on the one side the war becomes more and more technical and the necessary abilities could be more easily produced if civilians as part of an militia could deliver them to the military. Think for example about cyber warfare, drone warfare, logistics, supply chain etc
ReplyDeleteOn the other side conventional armed forces could become unusable and the face and nature of warfare at all will perhaps change significantly to the point in which conventional warfare between regular armies will not happen any more - but all kinds of civil war, civil unresting, organised criminality on a warfare level (northern mexiko et al) and all kinds of hybrid wars, guerilla warfare etc will become the dominating scheme of war. Especially for this side of the coin of the future warfare again a citizen-militia would be superior to the todays conventional armies of professionals as it both delivers more manpower, more infantry and boots on the ground for especially this scenarios (and also better overall skills) and also i makes expeditionary warfare more difficult as the militias are not suited for this kind of warfare oversea. Therefore the form and strucutre of our forces would prevent to misuse them in such colonial wars oversea. Moreover such a milita type of army would remiliarise the society as an whole which would increase the necessary social-cultural intangibles which are necessary to fight the wars which will come. And last but not least it would also reduce the costs.
Therefore in my opinion we should change the absolute mass of our current conventional forces to a milita kind of force in most parts of the armed forces.