The Economics of Peace

#125

My Dear Friend of Democracy,

I am sometimes asked why I am so vehemently in favour of military support for Ukraine. Wouldn't it be better to vote against the war, for peace instead?

I then answer that that is exactly what I am: for peace, against war. And that is why I favour more military equipment for Ukraine.

Sometimes, I am allowed to expand on the idea. It goes something like this.

I first say that I am an economist. And that economists like to think in terms of incentives. That people act the way they do because it is beneficial for them. And that societies should ideally be organized in such a way that following incentives is not only for one's own good but also for the benefit of others, best of all, everyone benefits.

Regulatory policy is based on that idea.

Example.

I buy bread rolls because I'm hungry. The baker bakes bread rolls and sell them to me because they want to make money. In the end, at least two sides benefit from this. The baker and me. Plus, society as a whole, because the deal between me and the baker generates a tax that benefits society.

What does this have to do with war and peace?

Wars are also fought because at least one side expects to gain advantages from them.

Conversely, this also means: you reduce the likelihood of wars by reducing the incentive to wage them.

There are several ways to do this. For example, by expanding cross-border trade relations. To interconnected world economically in general. Voluntary exchange as a means of generating wealth instead of violent appropriation. A war then becomes unlikely. Because everyone would lose. Because trade would come to a standstill.

The incentive to wage war is also reduced by reducing the prospect of winning. This requires a robust defending side. In the case of Ukraine, strong military support is required.

So, peace is secured by reducing the prospect of being successful with wars of aggression. This requires a strong defence. This requires in times like these, increasing military spending. Not to wage wars. To prevent wars from being fought.

Of course, it would be better if this were unnecessary, and we could save the money. Instead, invest more in health, education and the environment.

But the point is that we cannot prevent people and authoritarian systems from coming up with the idea of ​​using violence to achieve their own goals. But we can prevent them from actually achieving these goals. And the best thing is to prevent them from even suspecting they can achieve their goals by force. Only then will they not start wars in the first place. – Would Putin have invaded Ukraine if he had known that more than two years later, he still had not conquered Kyiv and overthrown the government? Probably not.

By the way, dictators usually fall after losing wars, not after winning them. Another reason not to leave Ukraine alone in its fight for freedom.

See you in Europe,

Johannes