All right, y'all.
Welcome back to the show.
Santi war radio.
Our next guest is Eric Phillips.
He's a writer from Philadelphia, grad student and founder of the blog notes and observations dot M E.
That's interesting.
His articles have been featured on mises.org, Lou Rockwell.com, economic policy journal, and in talkies magazine.
Hey, that ain't so shabby.
Uh, here's one at mises.org called military spending and Bastiat's unseen.
Welcome to the show, Eric.
How are you?
Good.
Great to be with you, Scott.
Uh, good.
Well, I'm happy to have you here.
Great article.
I really like it because you really make the point.
Well, um, I like it cause it's exactly what I think.
Only it's a hell of a lot better than what I could have written on the subject.
That's what immediately struck me about the thing.
You brought up all kinds of great examples and, uh, studies and quotable block quotes and, and all kinds of things to illustrate your point.
Uh, your point that begins with a quote from, uh, Frederick Bastiat from, uh, refer to right there in the title, who was he and what did he say that's so important for people to understand?
Right.
Frederick Bastiat was a, uh, free market economist from France in the 1800s.
And one of his most important points that he ever made was just this idea that there is no free lunch.
This is what economists today call opportunity costs.
If the government spends money on one thing, that means they can't spend, spend money on another thing.
So there's this whole, whole idea that the broken window fallacy.
So if someone breaks a window, you know, the, the fallacy is the person who comes and sees the broken window and says, well, at least the window makers will have a job, but you know, that overlooks the fact that, you know, the wealth that the person who has the broken window has to spend on replacing the window they could have spent on buying a new pair of shoes or a picture or a frame or something like that.
So the purpose of my article is to, you know, apply this analysis to the military and, you know, people look at the military and they see the big tanks, they see the expensive aircraft and they think these things are good, but they typically don't think about what had to be foregone to produce these things.
You know, when I was a kid, I remember being surprised to hear the, uh, you know, news people, I guess.
And I'm talking when I was real young, um, talk about the cost of a certain military operation or another, maybe they talked about the cost of bombing Libya or something like that.
And, uh, I remember thinking, you know, cause I watched mash all the time, uh, being my mom's kid.
And, uh, I remember thinking, but why does it cost anything for the government to do stuff?
If you know, Colonel Potter tells people to do it and they do it, then basically it's all free, right?
So you could talk about what those people could have been doing otherwise, but, uh, it just seemed like the military existed separate and apart from the rest of the economy, the rest of society.
And always in a way where it's sort of unquestioned that it's at least revenue neutral, if not beneficial, it's never, nobody ever really talks about military spending as you know, you know, with an exclamation point, trillions just thrown in a hole, trillions just wasted.
Right.
Yeah.
And I guess I bring up when I was a little kid, cause I think that that's what everybody else thinks is the stupid things I thought when I was a little kid.
That's pretty much everybody else in America.
I'm coming to understand.
Well, it is easy to, when, when people start talking about billions of dollars, it's just so much bigger than what the average person actually deals with on an everyday basis.
It's easy, you know, just to lose track of how much money that actually is.
Uh, but every single dollar that the government spends, it does have to extract from the private economy because the government doesn't produce anything.
So, you know, all of its weapon systems, it has to procure from, uh, companies like Boeing or Lockheed or places like this, all its soldiers, it has to pay.
And the way where it gets money is it can get it through taxation.
They can borrow it or they can just print the money.
So when they tax or inflate the money supply, that's, they're taking money away from the private sector.
They're taking money away from, uh, the people who produce things to create this giant military.
And, uh, now you quote, uh, the great anarcho-capitalist Hans Hermann Hoppe explaining why it is, uh, which it's pretty easy, but sometimes it takes the greats to get it out there for us, uh, why it is that the military will always recommend more of itself.
And the people who sell it, weapons will always agree.
Right.
Yeah.
And, and that's because the government has gotten itself a monopoly on the production of security.
And of course it's solution to every perceived and real threat is that we should spend more money.
Uh, this is in its self-interest, uh, of course, to get more money.
And it's something that's kind of easy to, to get people behind, you know, you're, you're, you have to, you have to give us money or you're not going to be safe.
And, uh, as we've seen, you know, with the exploding defense budgets where the United States now spends, you know, more than the next 20 highest, highest defense vendors combined, where it has a Navy that's bigger than the next 13 Navies combined.
And 11 of those eight, 11 of those Navies that it's bigger than our us allies, uh, you know, it's, it's, it's an easy enough argument to make to the American public where, you know, they can get away with this.
And, you know, there's no, there's no reason, there's no strategic reason to have, uh, you know, a military, this big or a Navy, this big, that the, the only thing that, or at least in defensive terms, I mean, the only thing that you could possibly use them for is for, you know, starting wars in Iraq or Iran, but you know, as far as serving a defensive purpose of actually protecting people in this country, uh, you know, having a military, this big, it's just nonsensical.
Yeah.
I mean, you think about the end of the cold war, uh, the people who said, all right, give us our peace dividend and let's, you know, be a anti-war now that the Soviet union is gone.
Not only did they lose out, but even the, the small cuts, I mean, Clinton always had minimum, you know, $300 billion defense budgets, that kind of thing.
Um, but even with that, uh, there was always a crocodile tears from the right and all parts of the right that look at the horrible betrayal of all these defense cuts and all these bombers that are getting their wings cut off and are being sent out to the bomber graveyard or whatever.
We need those bombers, but they forgotten.
They're so used to having so many bombers.
They had forgotten that the only reason they ever built up that big of a force in the first place was as a temporary thing because of the emergency of the Soviet union.
And that without the Soviet union, they really didn't need all those bombers.
Instead, people saw it as like, Clinton is, you know, turning America over to the one world government.
He's getting rid of our military when it was still a $300 billion creature.
Right.
And, and now they're, they're worried that Obama is decreasing the defense budget when really what he's proposed is to mildly decrease the rate of increase of, of defense spending.
They use this, uh, CBO baseline where the CBO has already projected that, you know, defense spending is going to increase by a certain rate over, you know, the next 10 years and Obama says, well, we're going to decrease that.
We're not going to increase it quite so much.
And then you have people like bill crystal who say, well, these are massive cuts, you know, it's going to eviscerate the military.
And, uh, you know, it, it, they never, you know, they never consider like they never reconsider, you know, what is actually necessary to defend this country.
They just take it for granted that we need, you know, B2 bombers, which even, even John McCain was against funding the B2 bomber back when it, you know, they were first getting money for it back in the late eighties and early nineties.
Um, I, I, yeah, I mean, a lot of these like weapons systems, you see them and they're, they, they look impressive.
And, you know, there's all these like programs on the places like the military channel or history channel, things like this.
And a lot of the, this, you know, they show off how technically advanced these weapons are.
And, uh, and, and then, uh, and I always watch these shows and then I realized something about them.
There's sources, there's always, you know, the guy who flies it, who'd like they're interviewing, you know, it's like a military spokesman who's talking about how great and technically advanced this plane is that we have.
And, you know, people, and that's like the main source of information.
And most people don't even know what these things do, but you know, for the people who do pay attention, they see these programs and they're like, wow, that's an amazing plane.
It's just like with the media, when a lot of the news, it's always completely stripped of the context of the only reason we have jet fighters that are this neat, that you'd want to sit there watching this show and imagine flying one because of how much fun it would be is because we need these to kill people with.
They don't even ever talk about that.
Or even if they do say, well, we're in Afghanistan here, and this is our, the trucks of Afghanistan, they still never even pretend to justify why they're there or anything.
All of that just goes without saying it's strictly a hardware only focus.
It's amazing.
Really?
It's fine, but it just loses a lot of truth.
You know, I like fighter jets.
What can I say?
I just don't have one.
All right.
We got to take this break.
We'll be right back with Eric Phillips after this.
That's a really great article at Mises.org military spending and by stats unseen.
All right, y'all.
Welcome back to the show.
It's anti-war radio talking with Eric Phillips from Mises.org about his article military spending and besty outs unseen about the opportunity costs, the, what could have been with the trillion plus dollars spent per year on America's empire and national security state.
And really like that's kind of the fun part is we get to use our imagination and think, I think, you know, just in what's been lost since 2001, we could be living in a Jetson's future with flying cars and all that beyond 2000 stuff we thought we'd have by now.
If it hadn't all been blown on this kind of thing, you look at all the advances that have taken place anyway, and just, you know, take your best guess.
And one of the best ways that you illustrate you know, just how to begin imagining what could have been in this article, Eric is your discussion of the R and D money and, and the projects and the direction that all the brightest engineering and scientific minds are put in.
And in fact, you even quote Bob Higgs about how that all, how that makes a bunch of people who could very well be anti-war forces vested interests in the warfare state, which is sort of a negative side effect.
But just think of all the gadgets for peace and for feeding people and for getting things done in positive ways have not been invented.
You know, all of Buckminster Fuller's wildest dreams that could have been, if only we hadn't have blown all this money, what do you think?
Right.
I mean, there are only so many people out there who can do well in advanced PhD programs in physics and engineering, extremely difficult things to do.
And when the government spends a lot of money on defense, you know, in R and D that they end up draining these people away from, from, you know, what they could have been doing in the civilian sector, you know, by offering higher salaries, of course, that are, and they get that money to offer them higher salaries by taking it from the productive economy.
And yeah, and it's not just the, the people in the hard sciences, what, you know, I quoted Bob Higgs and, you know, that's also people, you know, who are, uh, who get their PhDs in history and in, you know, softer subjects who, you know, end up working in the think tank world or end up working for the government in some capacity, all the bureaucrats that end up working, you know, in office jobs in the defense department, those people who you never know may not have, you know, who may have been more anti-government, but, you know, they get a job with the defense department and they get a nice salary that's paid for by the taxpayers.
And, you know, and when they start looking at arguments for cutting defense and they realize that if they embrace these arguments, they're going to lose their high paying job.
Well, that's going to take away smart people from, from the realm of possible recruits that, you know, you can find people who would, who would be against the state.
So it's really, uh, it, it, it drains people from all across, you know, the spectrum.
I'm, you know, from the, from the hard science people to the soft science people and all the way down, of course, into, you know, the, the, the infantrymen, the privates, you know, who could be, who could be working civilian jobs, you know, in the United States, but who are, you know, deployed overseas defending Germany.
So.
Well, you know, it's true too.
And I think it bears mention that, um, that could be better off if he just, uh, you know, it's well, one of the key points of the pro military propaganda that we're all subjected to, at least any sports fan in America is subjected to is that this is how to get a better job.
Maybe you don't have a dad.
Maybe you're from a bad part of town.
Maybe you go to a crappy school, but you know what?
You joined the army.
We'll teach you how to be a real man.
And when you get out, you can get a job as a helicopter repair man or something important, and you can be able to take care of your family and get ahead in the world and whatever, and that's their whole thing.
But it's a damn lie.
And we see the headlines all the time about how, no, actually in a bad economy, the soldiers have it worse than everybody.
Cause they didn't learn any skills that are applicable in the, in the regular market, if they did learn how to work on helicopters, they're not the same ones or whatever fact that they were in the air force doesn't necessarily mean they're going to get employed.
And on all the, uh, all the numbers across the board, they do worse economically, uh, nevermind, even on the margin, the guys on the side of the road in their army jacket, you know?
Right.
Yeah.
The last number that I saw was a 2.5% was the, was the unemployment rate for military veterans.
It was 2.5% higher than it was for everyone else.
And it's true, but they don't, I mean, you know, the average infantryman, the average artilleryman or the average tank driver, uh, people like this, they, they don't learn any experiment experience that, you know, is going to be valuable in particularly valuable in the private sector.
And yeah, like you were saying, there are mechanics and technicians and things like these, and these people do tend to have, uh, you know, they, they're better off than the average grunt on the ground, but, uh, it's not, yeah, it's not exactly the same thing.
They have to, you know, relearn, you know, which, you know, vehicles, you know, the, the different systems for civilian equipment versus military equipment.
And there's a lot of friction there.
And that friction, again, is just another source of this, of the, as another source of the unseen costs where it would, of course, it would have been much better for society if these people who were mechanics in the military had just learned to be civilian mechanics in the first place, rather than being military mechanics, working on these useless military, useless weapon systems, and then getting out and then having to re you know, how to alter their skills for the civilian world.
And then finally getting a job in the civilian workforce.
Yeah.
Well, and I don't want to sound selfish, but how about the opportunity costs for the rest of us for the, all the loss of life, all the dead Iraqis and dead Americans think of all the things they could have made and traded with each other and helped to make the whole world a richer place.
Yeah.
And you know, when I originally, we might've killed a little baby Iraqi Einstein over there who was going to cure all the cancers or who knows what, but they didn't because of the shrapnel.
And I mean, that's right.
I mean, you know, I originally set out when I wrote the, wanted to write this article, I was like, I just want to respond to all these people.
I know who tell me how much they love, you know, the free market, but at the same time, they want this massive military.
And I originally had all these plans of what to write and I ended up, you know, just cause that wasn't a not realistic project for one article.
I just focused on the opportunity cost, which is just one point of how, you know, the, the, the typical position, a strong national fence quote unquote position is incompatible with peace and prosperity and freedom.
And yeah, of course the war is one of the main, I mean, of course not only kills people, wounds people, uh, both physically and mentally.
Uh, it's just a huge wealth destroyer.
I mean, you can just look like the old cliche, a picture is worth a thousand words.
Uh, you know, if you just look at pictures of Libya right now, it's obvious like the cities are just completely destroyed and that just, it just shows in a very visceral way exactly what war does.
And it's just the destruction of life and property.
And of course, all those people who died, whether it was the million Iraqis or however hundred, however many hundreds of thousands of people have died in these wars recently, both, uh, from in the Middle East, in Africa and in America.
Yeah.
All these people are people that are robbed from us and both in personal terms and in economic terms.
Well, and, you know, think about the, uh, there's just no way that you could ever calculate, I don't know, maybe Lloyd's alone that could try to calculate the lost opportunity costs in losing the narrative, the myth in the world that America is a great place to live and a great bunch of people and the shining light of Liberty to the degree that people did believe that.
I mean, there were places, maybe there still are, I don't know.
I know there used to be that Coca-Cola, a tiny little shot glass of Coca-Cola.
It's a special treat, man.
And people really like America, the place where Coca-Cola is from and got nothing but good things to say in a lot of places and how that's really gone.
America's that a blood soaked empire walking around trying to do like the Soviet Union in Afghanistan right now, for example, and how much of that has been hurt in the, you know, what they would call a brand USA or whatever, as far as all of our exports go and that kind of thing, you know?
Yeah.
And that's one of the things that makes it hard to make the point is, you know, you talk about all this, what could have been, all these abstractions.
And I mean, it's all very true, but you know, it's easier for people who aren't really thinking about it too much.
And they see, they see, you know, the buildings blowing up on 9-11 and they assume that the people just did it because they're mean.
And then they see, you know, the local military base and it's buzzing with activity and, you know, there's all the worry if the military base moves, all the people are going to lose their jobs.
And, you know, that's what they see.
And it's concrete and what we have to talk about are these unseen things.
And it's harder to make the point, but I guess, you know, it's what we got to try to do.
Right.
Well, you know, my favorite presidential candidate told the Washington Post last time around, oh, come on, you know, we could defend this country with a couple of good submarines.
And then it was the Washington Post, like the video interview with the Washington Post, and they were like, huh, they couldn't believe it.
But to me, it really draws that, that comparison for people to just think about, wait a minute, is it possible that we actually don't need a global Navy force for good out there ruling every sea?
Maybe just because it exists doesn't mean it has to be good or true, you know, just because it's red, white, and blue.
But anyway, so this article is a good way to help combat that.
Everybody check it out.
Eric Phillips, Military Spending and Bastiats Unseen at Mises.org.
Thanks very much.
All right.
Thanks for having me.
