Member-only story

Unveiling the Hidden Costs: "How States Pay For Wars" Exposes the True Burden of Armed Conflict

Craig Blair

·10.8k Followers· Follow

Published in How States Pay For Wars

5 min read · 1 week before

329 View Claps

19 Respond

Save

Listen

How States Pay For Wars: The Hidden Costs Of War And The Politics Of Taxation How States Pay For Wars

Warfare, a pervasive element of human history, has left an indelible mark on societies worldwide. Beyond the immediate horrors of conflict, wars also impose a substantial economic burden, often hidden from public view. In his ground-breaking book, "How States Pay for Wars: The Hidden Costs of War and the Politics of Taxation," Richard Lachmann meticulously unravels this hidden reality, exposing the multifaceted ways in which states finance their military endeavors.

How States Pay for Wars

by Sam Pizzigati

5 out of 5

Language	:	English
File size	:	2634 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	206 pages

The Hidden Costs of War

Lachmann argues that traditional analyses of war finance, which focus solely on government spending, vastly underestimate the true economic impact of armed conflict. He contends that a comprehensive assessment must account for a range of hidden costs, including:

Deferred Maintenance: Wartime spending often diverts resources from essential infrastructure and public services, leading to accumulating maintenance backlogs.
Debt Burdens: States often finance wars through borrowing, increasing their debt burden and potentially crowding out other public investments.
Inflation: Wartime spending can fuel inflation, eroding the purchasing power of citizens and undermining economic stability.
Loss of Human Capital: Wars inflict devastating human losses, including the death and disability of skilled workers and the disruption of education and training.
Environmental Damage: Armed conflicts can cause significant environmental degradation, depleting natural resources and compromising ecosystem services.

The Politics of War Taxation

Lachmann further explores the political dimensions of war finance, arguing that the way in which states pay for war is not merely a technical matter but a reflection of political priorities and ideologies. He identifies three main political models of war taxation:

Current Taxation: States raise revenue through taxes during the war, shifting the burden to the present generation.
Borrowing: States finance war expenditure through borrowing, passing the burden to future generations.
Inflation: States rely on inflation to erode the real value of existing wealth, effectively taxing citizens without explicit taxation.

Lachmann demonstrates that the choice of war taxation model is often influenced by political factors, such as the perceived legitimacy of the war, the strength of state institutions, and the level of public support for the conflict.

Case Studies and Empirical Evidence

To support his theoretical framework, Lachmann presents a wealth of empirical evidence drawn from case studies of wars fought over the past century, including World War I, World War II, the Vietnam War, and the Gulf War. He meticulously analyzes wartime budgets, taxation policies, and economic data to quantify the hidden costs of these conflicts and assess the impact of different war taxation models.

For example, Lachmann finds that states that rely heavily on borrowing to finance wars tend to have lower tax revenues in the post-war period, suggesting that the burden of war is deferred rather than eliminated.

Policy Implications and the Future of War Finance

Lachmann concludes by discussing the policy implications of his research and outlining potential reforms to the way that states pay for wars. He advocates for greater transparency in war finance, arguing that citizens should be fully informed of the true costs of armed conflict. He also proposes exploring alternative mechanisms for financing wars, such as international cooperation and wealth taxes on the ultra-wealthy.

Lachmann emphasizes that the future of war finance will be shaped by technological advancements, globalization, and the evolving nature of warfare itself. He calls on scholars, policymakers, and citizens alike to engage in critical dialogue about the ethical, economic, and political dimensions of war finance, with the ultimate goal of mitigating the devastating consequences of armed conflict.

"How States Pay for Wars" is a groundbreaking contribution to the study of war finance and a must-read for anyone interested in the true costs of armed conflict. Richard Lachmann's meticulous research and incisive analysis shed light on the hidden burdens of war, the political dynamics of war taxation, and the potential reforms that could lead to a more just and equitable way of financing future wars.

How States Pay for Wars

by Sam Pizzigati

5 out of 5