The Economics of War | Matthew McCaffrey

Recorded at the Mises Institute in Auburn, Alabama, on July 19, 2018.

Mises University is the world's leading instructional program in the Austrian School of economics, and is the essential training ground for economists who are looking beyond the mainstream.

[gregorybainathsah]

This guy is a good speaker, it all comes naturally to him. It's a great presentation
But if I had a dollar for every time he said "right", I'd have a lot of money

[evbambly]

Matthew missed one important source of wartime income:
The opposing side.

This comes in the form of plunder,
economic subjugation or war reparations after the fact.

And governments do look at their financial charts with such future earnings already assumed.

This is one big reason that war is so devastating.

For instance-
in WWI both sides counted on reparations, so the Germans were broke and the entante needed to extract extra resources from them for the same reason.

[tomy]

The thing about socialism in war is that although they don't have a system of market prices, it's not as much of a problem in that the state can calculate demands to a reasonable degree and it is in direct control of the supply chain and therefore they only need to fulfill its demands. Having all its industries under control allows it to mobilize it faster and have greater control of its production, this allows it to have a potentially higher efficiency in a war time economy where the goals (winning the war) and demands (equipment needed) were clear to the planners. This is seen in WWII where the USSR with its totalitarian wartime economy was about to outproduce the Germans with a mixed economy despite having a much smaller prewar GDP and heavy industries such as steel and coal, where only oil was produced at a greater amount than the Germans.

[crimony]

He doesn't build from the ground up. 50, 000 years ago, there were 50 warriors on one side and 50 warriors on the other. Each were outfitted with uniforms, gear, and weapons. There was a battle. Afterward, there were 40 warriors on one side with double the number of uniforms, gear, and weapons, 25 new slaves, and a whole lot of fresh meat for the cooking. Is there any other gambit in the ancient world that offered such a profound gain in material wealth to its participants?

[TDBoedy]

please for the love of god stop ending every sentence with "Right?" No not right! It's a terrible affectation...so is y'know what I'm sayin' or any other idiom.

[tjejojyj]

The idea that war only shifts production to lower levels of production is problematic historically. What about the Manhattan Project or the development of the jet engine?

Similarly didn’t US planners turn to the “Cold War” and “wartime socialism” in part as the ideological cover for State intervention to support development of new technologies.

Also can someone give a reference for anyone saying their was “wartime prosperity”? I’ve seen plenty of analyses noting the increase in economic output but never “prosperity”. I’ve tried google without luck; it sounds like a straw man argument. It’s obviously ridiculous because, aside from the grotesque waste of human life, WWII was financed by a reduction in private consumption. Profits might have been prosperous for some, but that’s about it.

I was waiting for a rebuttal of Lenin’s and Trotsky’s analysis of the outbreak of WWI, that capitalism had created a world economy which had outgrown the nation-state system which it could not do away with. The only way under capitalism to resolve this contradictions is to “work out” which nation-State would dominate its rivals.