The War That Never Ends

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by Nathan P. Goodman, Activist Post:

It’s been over 20 years since the 9/11 attacks. Ever since those horrible attacks, the United States government has been waging a “war on terror” both at home and abroad.

The war on terror has fundamentally reshaped our lives. The TSA’s invasive searches have become a prerequisite for air travel. Millions of Americans have had their phone records and other metadata intercepted by the National Security Agency. According to the Costs of War Project at Brown University, the U.S. government has spent over $8 trillion on the war on terror. They also find disturbing human costs, including over 900,000 deaths in the war on terror.

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The war on terror has been going on for most of my life. Many college students today have been living with the war on terror for their entire lives.

These students might wonder whether economics has anything relevant to say about the world they live in, especially if they’re just taught a set of abstract models. But economics is not just a set of abstract models on a blackboard. Economics is a way of thinking. As Peter Boettke says, the economic way of thinking is a set of eyeglasses that help us clearly see the world around us. In Manufacturing Militarism, Christopher J. Coyne and Abigail R. Hall use economics to explain the war on terror.

More specifically, Coyne and Hall use economics to explain the role of government propaganda in the war on terror. They quote philosopher Jason Stanley’s definition of propaganda as having “three key characteristics:”

First, propaganda is purposefully biased or false. Its purpose is to deter people from having access to truthful information. Second, propaganda is used to promote a political cause. Third, propaganda is bad from the perspective of those targeted by the propagandist’s message because it limits their ability to make an informed judgment.

While they acknowledge that propaganda can exist in many spheres of life, they focus on government propaganda and the U.S. national security state. They illuminate this important phenomenon using a mix of economic theory and illustrative history.

Economic theorists use models to analyze the social world. One such model describes the ideal protective state. In this model, citizens have access to information about public officials’ performance. Acting on this information, they can hold officials accountable. This creates incentives for officials to act in the interest of citizens. Under this model, there is no need for propaganda. If officials are already acting as citizens wish, then officials do not need propaganda to secure the citizens’ support. There is also no room for propaganda within this model. Citizens are assumed to have sufficient information that they will not be fooled.

But as Hall and Coyne persuasively show, real-world governments deviate sharply from this idealized model. Actual states are characterized by principal-agent problems. A principal-agent problem happens when one person (the principal) owns an asset but actual control is in the hands of someone who is supposed to act on their behalf, their “agent.” For example, corporations “are owned by shareholders who must rely on those hired to manage the firm to serve their interests.” The agent will often know things that the principal does not. This asymmetric information means that there is room for the agent to act opportunistically, which undermines the interest of the principal.

Principal-agent problems don’t just apply to corporations. Democratic states are full of them! The citizens of a democratic state can be understood as principals, and public officials as the citizens’ agents. You might think that public officials have strong incentives to act in the interests of citizens. After all, citizens have the power to vote politicians out of office.

But Coyne and Hall point out a variety of factors that undermine democratic feedback. One such factor is rational ignorance. Since a single vote is unlikely to change the outcome of an election, voters have very little incentive to acquire detailed information about government officials’ actions. Even if they do acquire such information, the time delays between elections mean that they often cannot penalize elected officials until it is too late to reverse their actions. This creates slack in the system that special interests, both private corporations and public employees, can exploit. And of course, the secrecy associated with national security policy makes these issues even more severe. This means that the ideal state model does not hold, and there is substantial room for powerful government officials to use propaganda to manipulate the public.

The economic analysis that Coyne and Hall offer is classic public choice theory. Public choice theorists use the tools of economics to offer a clear-eyed analysis of government. Rather than assuming benevolence, they study the incentives facing voters, vote-seeking politicians, bureaucrats, and contractors.

But Coyne and Hall offer more than theory. They use real-world examples to show that the theory is empirically relevant.

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