corbett no wwii did not end the great depression

| by James Corbett
| BoilingFrogsPost.com
| June 18, 2014

The idea that the Great Depression was finally brought to an end by the
onset of WWII has been a staple of history textbooks, documentaries and
various war propaganda for decades. This myth `continues to be
perpetuated `__ to the
present day.

The idea that war is good for the economy is, needless to say, a
fallacious argument which itself is based on `incorrect economic
data `__.

The idea that the economic activity surrounding militarization
represents a net economic gain is called the “ `broken window
fallacy `__.”
This fallacy was named and identified by French economist Frédéric
Bastiat in his 1850 essay, “ `That Which is Seen, and That Which is Not
Seen `__,” in which he imagines
the case of a shopkeeper whose careless son breaks a pane of glass in
his shop window. In Bastiat’s example, ‘that which is seen’ is that the
glazier comes, performs the task of fixing the window, and receives six
francs for his effort. Onlookers to the scene believe that the economy
has actually been bolstered by this act of destruction, since six francs
have been spent into it that otherwise would not have been.

But Bastiat notes that what is important is not what is seen, but what
is not seen: “It is not seen that as our shopkeeper has spent six francs
upon one thing, he cannot spend them upon another. It is not seen that
if he had not had a window to replace, he would, perhaps, have replaced
his old shoes, or added another book to his library. In short, he would
have employed his six francs in some way, which this accident has
prevented.”

Similarly, production for war is the broken window fallacy writ large.
Economic “gains” produced by government spending on munitions and
vehicle manufacture and supplying and equipping the troops are not gains
at all; money has merely been diverted to the pockets of the defense
contractors via the political cronies in their back pocket.

So why is this important? Because sadly, this myth is being played on by
the warmongering class to once again push the idea that war is good and
even necessary for economic progress. This time it is not just
manufacture of supplies or munitions that are being touted, but war’s
ability to justify government spending on investment. No matter how
unlikely the threat, or whether it is indeed completely made up, this
warped thinking holds that such `lies and
exaggerations `__ are the
answer to our current economic problems.

Sadly, it is not just intellectual deficients like Paul Krugman making
this case. In a `new
op-ed `__
in the New York Times, Tyler Cowen of George Mason University argues
that technological advances from nuclear research to rocketry to
internet and robotics have all been spurred by defense spending, and
thus war or threats of war are necessary to continue the advance of
civilization.

Why these technologies are ends in themselves, or more valuable than the
tens of millions of lives lost in the previous “great wars” is a
question left unexamined. Perhaps more to the point, Cowen never
addresses why such advances could not take place in the absence of war
or without the motivation of advancing the methods of killing as their
impetus.

What is most fundamentally upsetting about the mindset that justifies
carnage in the name of “economic gain” is that economic gain is usually
measured in abstract concepts like GDP growth or increasing equities
markets that have no or even negative correlation with the livelihood of
the poorest members of society. `Income actually
shrank `__ by
0.7% for 99% of Americans during the supposed “recovery” of 2009-2011.
For the top 1%, income grew 11.5%. This is the type of “help” that
massive government spending on bank bailouts and other stimulus measures
invariably creates. In times of war, the situation is even more
perverse: money is created as debt owed to the banks, backed up by the
average working taxpayer, to pay politically-connected defense
contractors to create bombs to kill poor brown people on the other side
of the planet. This is called economic progress.

Taken to its logical conclusion, there is only one more effective way of
`solving the problem of
poverty `__. After all, if
we are willing to believe the lie that sacrificing lives is good for the
economy, why not go that one step further…