Memorial Day provides as good an opportunity as any to reflect on the horrendous and irreversible costs of war. For most people—and rightly so—the clearest costs are those in terms of human life, which is shattered both physically and psychologically. As John Denson writes, “In looking at the costs of war we must always keep in mind the reality experienced by soldiers in actual combat. The tallies of the dead and wounded soldiers cannot carry the full meaning of the terror of actually experiencing war… [and] the very real horror and violence known by those on the front lines who actually do the fighting.” The destruction of life, civilian and soldier, is usually the goal and always the result of warfare in any age.
Yet in addition to the human costs, which are themselves staggering, there are others as well. Denson further explains:
In the war-torn [21st] century, we rarely hear that one of the main costs of war is a long-term loss of liberty to winners and losers alike. There are the obvious and direct costs of the number of dead and wounded soldiers, but rarely do we hear about the lifetime struggles of combat veterans to live with their nightmares and injuries. Nor do we hear much about the long-term hidden costs of inflation, debts, and taxes. Other inevitable long-term costs of war which are not immediately obvious are damages caused to our culture, to our morality, and to civilization in general.
As writers like Bastiat and Hazlitt emphasized, economists must be careful to examine all costs, not just the most obvious ones. When we do that, we begin to understand the scale of the destruction that war inflicts on human societies. This is true even for the “winners”; no matter which side is deemed the champion, all victories are pyrrhic victories. As Sun Tzu stated many centuries ago, “No country has ever profited from protracted warfare.” Mises was even blunter: “War prosperity is like the prosperity that an earthquake or a plague brings.”
There is much more that could be said about the economic costs of war making. Let me suggest a few readings to anyone interested. For an introduction to basic economic thinking about warfare, see a trilogy of articles surveying Austrian writings on the subject (here, here, and here). Joe Salerno has added to the foundations of the early Austrians by developing an economic theory of “Imperialism and the Logic of War Making.” Further details about the political and historical implications of war can be found in Denson’s collection, The Costs of War. And if you haven’t already, do yourself a favor and read Bob Higgs’ books Depression, War, and Cold War and Crisis and Leviathan, both of which are packed with insight into the true costs of war and the warfare state.