Why War Matters | Mises Institute

“I am getting more and more convinced the war-peace question is the key to the whole libertarian business,” Murray Rothbard wrote to his friend Kenneth Templeton in 1959. Rothbard had seen an article recently rejected by National Review in which he proposed a return to a restrained foreign policy and nuclear disarmament by both the USSR and United States. This marked one of the moments that would push Rothbard to abandon the New Right of William F. Buckley Jr.

Rothbard saw the fusionists, who dominated National Review, as sacrificing libertarianism on the altar of a global empire. Unlike Buckley, Rothbard did not believe:

[W]e have got to accept Big Government for the duration—for neither an offensive nor a defensive war can be waged, given our present government skills, except through the instrument of a totalitarian bureaucracy within our shores.

Today, some fans of our current administration will brow beat those with concerns over foreign policy and aid, accusing you of not being sufficiently focused on domestic issues. In a perfect world, one could stay focused on affordability (or immigration, as these brow beaters typically focus on) and other kitchen table issues. But the issue of war and peace touches every aspect of American life whether one wants to admit it or not.

You should not allow gatekeepers, who selectively brow beat over foreign policy as a focus, to prevent you from caring about foreign policy.

Rothbard himself emphasized the connection between leviathan state and war machine in his essay “War Collectivism in World War I” and The Betrayal of the American Right more broadly. What James Burnham described as the managerial revolution, and his disciple Sam Francis would dub “corporate liberalism,” was born in the wake of war. Buckley was correct in saying that the Cold War could not be waged without a totalitarian bureaucracy, because bureaucracy is an inherent form of government, especially the warfare state.

The permanent war economy needed to feed the military machine entails interventionism on many fronts.

First is the issue of financing. Per the usual Sowellian phrase, government must finance its expenditures through taxation, borrowing, or inflation. The financing of these conflicts through taxation and borrowing will result in mass capital consumption as military spending draws resources into it and the bill is fronted to the general public in a tax bill or in their stock market openly. This is why, as Dr. Joe Salerno explains, modern warfare has become dominated by inflation financing of conflicts. Inflation’s false profits bring about a slow erosion of the capital structure of the economy as interest rates are held low and firms consume out of their profits. Under a system of ordinary economic calculation, the costs of war would be evident. But under inflationism, there is a slow, insidious inflation required that hollows out industries that produce real goods and a wealth transfer to military contractors and their allies.

This inflationism is done so through a central bank that buys up government debt either directly in the case of the Bank of England in World War I, or indirectly through banks like the Federal Reserve today. The lowering of interest rates increases the values of equities as new money enters the economy. This pushes up artificially, not only the capital value of war producers who provide nothing of value to real consumers, but also homes and other assets held. This includes homes that many people will long struggle to buy.

The costs of war must be adequately analyzed further, as we left total war for a permanent garrison state long ago and thus don’t mobilize the entire economy as we did in World War II.

A far more insidious relationship exists between state and economy, and especially state and university.

The New Left—led by Students for a Democratic Society—would often accuse their universities of being complicit in the warfarism of the government and rightly so. The National Science Foundation and other agencies connected with the warfare state issue grants to research universities to conduct research that is no longer concerned with discovering the truth, but rather to make weapons, chemicals, and technology to be used in war. Some laud some of the achievements to be brought from this relationship––the internet and some radio technologies for one––but these represent a small amount of total research spending.

The brightest minds become sucked into research universities to produce research for military contractors and government. They then are recruited to military contractors, to create more weapons, and think tanks, to advocate more interventionism in all its forms. A brain drain from productive to destructive society occurs. The joke amongst young people of “working for Lockheed Martin and discarding morals” is a prospect under our garrison state.

This is just a cursory analysis of the economic effects of the warfare state that underpins foreign policy. One might go further to look at media, propaganda, civil liberties, and the like. But the simple fact remains that, contra the critics, foreign policy does matter to the average American.

All of American life has become intertwined with the military-university-industrial complex. We cannot ignore it and a refusal to recognize it demonstrates either gross ignorance or intentional gatekeeping to justify foreign policy.

Is it really in the interest of the average American to destroy their economy to police the world, to defend gross actions by foreign governments, or subsidize international trade for other nations? Is it worth the brain drain, the destruction of real businesses, and the unaffordability of new homes? Foreign policy is not its own isolated aspect of politics, it must be confronted as the trojan horse for the leviathan state it is.