In his 2006 book Who Really Cares, Arthur Brooks wrote of how the late Robert Byrd’s generosity with the money of others could be found all over the state of West Virginia. There was the Robert C. Byrd Highway System, the Robert C. Byrd Bridge, the Robert C. Byrd Expressway, the Robert C. Byrd Federal Building, the Robert C. Byrd Health and Wellness Center, the Robert C. Byrd Institute for Advanced Flexible Manufacturing Systems. The list was long.
As readers can likely deduce, Brooks’s point was that if government spending actually boosted economies as economists (and economics types more broadly) generally believe, then it would be true that West Virginia would not be one of the poorest states in the United States. Except that it is one of the poorest U.S. states.
Which shouldn’t surprise us. Opposite what economists believe, spending doesn’t drive economic growth. What does is talent matched with investment capital. Except that talent has been exiting the Mountain State for decades, and with it, the catalyst for investing in West Virginia.
This is worth remembering as former employees of Brooks (subsequent to Who Really Cares, Brooks ran the American Enterprise Institute) like Marc Thiessen pen op-eds for the Washington Post claiming that “aid for Ukraine is really aid to Ohio, Maine and…” Thiessen believes that U.S. funding of Ukraine’s war effort is “strengthening our defense production capacity and creating good manufacturing jobs for American workers.” Thiessen might agree in a quiet moment that he overstated things a bit.
For one, proponents of government spending might explain to us one of these days where they think the money that Congress spends, doles out, or that “aids” the U.S. by boosting the fighting capacity of foreign countries, actually comes from. The way they describe it, it’s as though the money is sourced in Pluto. In reality, it comes from you, me, the man behind the tree, and foreign investors around the world. Seemingly not considered by Thiessen is how little “aid” and “good manufacturing jobs” Ohio and Maine would require if instead of taxing the most productive people on earth so aggressively to fund their own projects (including foreign wars), Congress instead left the wealth where it was created.
From there, Thiessen has an interesting take on economic growth. Really, how would enhanced weaponry boost it? While this write-up won’t suggest that the U.S. requires no national defense, it’s hard to take seriously the idea that defense spending is economically stimulative. If so, compared to what? Is Thiessen seriously asserting that political allocation of precious resources somehow exceeds the market-driven variety?
As for the aid boosting Ukraine’s war effort, the latter most certainly wouldn’t drive economic growth. And that’s not a comment on the good or bad of Ukraine aid. Instead, it’s just a statement that war as a rule is economically destructive as wealth is destroyed, but most important, people are destroyed. People are the source of economic advance, simply because productivity is a direct consequence of more and more hands, machines and minds around the world cooperating in the production of goods and services. War fractures the wildly sophisticated interaction of people and machines to the detriment of the global economy. Lest Thiessen forget, the only “closed economy” is the world economy.
Thiessen wrote with frequency a variation of the popular view that Ukraine aid is “good for workers and manufacturing communities right here at home.” No once again. Centralized and politicized allocation of wealth is never good for workers or communities.
So while wise minds can once again debate the worth of Ukraine aid, the debate would ideally center on whether life under a corrupt individual like Vladimir Putin would somehow be worse than life would be under the impressively corrupt individuals who’ve long overseen Ukraine’s governance. From there, it will hopefully be asked whether a defense that has occurred in concert with Ukraine’s staggering depopulation and destruction made or makes it worth it to maybe keep Putin out.
Again, readers can debate. Let’s just hope the debate occurs free of economic mysticism and falsehoods suggesting government spending, spending on weaponry, wealth destruction, along with a body count in the hundreds of thousands actually has an economic upside. It does not.
Republished from RealClear Markets
