War and Economics Part III
Conclusion – Utopia Revisited
By Richard E. Noble
We have established in War and Economics I and II that War as business can not be profitable unless the residual businesses and the secondary revenue sources are able to bring in returns greater than the initial and subsequent investments. In other words the government’s spending on producing a War must be out-distanced by the taxes collected, plus the expanding residual industries created, plus the excess sales of superfluous or outdated weapons produced by the War Industries and manufactures. If all this truly happens, as it seems to be happening and as most Americans consciously or subconsciously believe - then War is in fact profitable. And just to repeat for clarity’s sake - War is basically a Government business which manufactures a product that is given away for free or actually used to destroy other things.
If, in fact, this is the case then we see why governments promote war and we substantiate the basic notion brought forward in the beginning of this thesis - “War is a profitable and good business practice.”
War begins with government spending or investment. Government investment leads to profit and employment. Profits and employment lead to consumption in residual industries. If tax returns from the War Industries amount to 1/3 of initial government outlay and tax return from residual industries return the other 2/3 - then we have a government or taxpayer based industry that is paying for itself.
If returns from residual industries (some of which have real products to produce) are greater than 2/3 of original taxpayer outlay and borrowed money to create the industry then we have a profit making industry without even selling or using the products produced by the Industry or collecting booty from a war.
Is this really possible? Can an industry be created where an actual product is not necessary? Where no capital goods are necessary? Well, it seems to be the case. War it does seem is exactly that type of industry.
What we are suggesting here is that all we need to do is expend taxpayer’s dollars (or even borrowed dollars - or better yet un-borrowed, debt free, created dollars) so that they are redistributed to a portion of the public in the form of wages and profits which are then spent for real products that then start a chain economic reaction of societal sustaining residual industries - with the original tax investment returned to the taxpayers to fund future investment? We have thus created perpetual economic motion.
If we can sell the products from our War Industry we can further increase the profits from our Tax funded business, but this would be gravy - not necessity. The products can be sold or they can be thrown away - or blown up or exploded - or buried in a land fill or whatever.
If what has been established in the above is true - war is in fact a profitable business which has cured depressions, recessions and monetary catastrophes of any kind and serves as a viable policy for the sustenance of a nation - then how could we apply the principles learned above to benefit our nation in a more positive way - possibly eliminating all the death and destruction?
Well, if you have understood and accepted the above formula it should be quite obvious that if war can work as a profitable business venture - anything can work.
This is all pure Keynesian economics. In other words; we the people or the government get investment capital via borrowing, deficit spending and general taxation (or just employing a free monetary printing press). We invest that money in any enterprise that creates jobs. The jobs produce a product - the majority of which is thrown away, given away or destroyed. If any of this product is sold to anybody at any cost - that’s gravy. Our real profits come from the taxes collected on the new jobs created and on the profits of the new businesses and corporations along with the residual businesses established as a result of the prosperity created by our “seed” industry.
So for example, if we wanted to replace the Military Industrial Complex with the Health Care and Drug Industrial Complex, it would be simple. We start “factories” with our government seed revenues that produce drugs that cure diseases. As with bombs and bullets we don’t sell these products; we give them away. We hire researchers to find new products and we set our goal to cure every disease known to mankind. We hire additional people to go around the world curing people with these drugs. Or we can be “Capitalistic” and loan the money to the sick people so that they can buy these drugs from our company. When they become well we employ them in our industry or a residual industry of their own creation (free enterprise) and then they pay us back with interest or simply by creating more prosperity from which we all gain.
Now we have money coming in from the income taxes on the employees and the profits of the employing company.
The increased spending from the people with the good jobs in this industry promotes residual enterprises and more jobs. These businesses and jobs are also taxed and now we have more “cash flow”. As with arms, we sell our drugs to countries who can afford to pay for them – wherever and whenever we can. Through our research we make new and better drugs but then we sell the old technology to lesser developed countries. They will be more than happy to buy our old drug technologies - even if there are better products available, just as they have eagerly bought our old guns and bombs.
This whole scenario is exactly the same as our war machine but instead of destruction we bring Health. We have no cleanup program but instead we have an absence of sick and diseased people - who will work to produce other products that will serve to increase the World Gross International Product.
All our other industries - banks and whatever - will continue to work in their traditional ways - nothing will change. We will still have profits, salaries, wages, investments, invention, stocks and bonds, entrepreneurship and Capitalism. We will simply have constructive Capitalism instead of destructive Capitalism.
Different countries can pick different humanitarian industries to promote and they can develop their own Industrial Complex - if anyone can think of an Industry that actually sells a useful product so much the better.
We will all, of course, still be required to have our militaries but they can be geared down due to the obvious “peace divided’ that will result from an economic system that is clearly designed to do good and promote prosperity and health and happiness for all.
Almost any “business” that we could invent would be better than War. The products of our War industry are all blown up and destroyed and they are used to destroy other things. If we substitute producing an actual product - like health care drugs - we eventually sell them - possibly at a profit - instead of just giving them away. They develop in spin off industries and other residual business that involve building things instead of blowing things up. This creates rents, loans, interest payments salaries and whatnot. The world’s populations are employed, taxes are collected and this utopian business Complex becomes self perpetuating.
This whole concept is created on the idea of concocting a business without a true viable product - as the business of War does. The “product” of war is destruction; the product of our new industry will be creation - creation of anything positive.
If we accept that war works in the way that I have described it, then this business based on manufactured creation - as opposed to manufactured destruction - should work even better.
But if this whole scenario is false and War is nothing more than a sophisticated Ponzi scam that can only be sustained by another war and which will then only come to an end with the eventual destruction of all nations and their populations - then my Ponzi scam will also end accordingly but with positive as opposed to negative results.
The difference is that my economic Pozi scam, based on the “creation” of a better world, will only end after the whole world and everyone in it has been cured of all disease and benefited from every kind of knowledge; and every nation in the world has improved the living conditions of all of its population to the point where nothing better can be created or conceived.
If this be Ponzi, then so be it!
Mother's Day 2013
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