March 19, 2006
The Economics of the Iraq War--BECKER
The third anniversary of the start of the Iraqi war has brought forth several assessments of how it was conducted, what its cost has been, and what the costs will be in the future. These include analyses of whether American military leaders adequately prepared for a war of insurrection, whether economic costs were grossly underestimated, and whether the American people were prepared for the protracted nature of and heavy casualties during the insurrection period. I will concentrate mainly on attempts to measure economic costs, but these estimates include assigning costs to deaths and injuries of American military personnel.
Clearly, aggregate costs to the United States have been considerable, and they will continue to rise as the insurrection persists and additional lives are lost. These costs include the military equipment lost during the war and subsequent fighting, the value placed on deaths and injuries, increased depreciation of military equipment, higher cost of attracting enlistments to the military, and reconstruction aid to Iraq. Davis, Murphy, and Topel of the University of Chicago Graduate School of Business in "War in Iraq versus Containment", unpublished, February 15, 2006 make various estimates of the aggregate cost under different scenarios about how long the insurrection continues, the number of American lives that will be lost in the future, etc. They assume a statistical value of life of about $7 million per each military death, and about seven injuries per fatality. Their median estimate of the total cost discounted back to 2003 at a 2 per cent interest rate is about $450 billion, while their "high" estimates are between $650 and $850 billion. One can quarrel with their estimates--such calculations are extremely difficult-- but they are carefully made. In any case, their results show that the cost of the war is large in some absolute sense.
Estimates of the war’s cost by Bilmes and Stiglitz in "The Economic Costs of the Iraq War", have received much more publicity. Stiglitz very briefly summarizes these estimates in a short piece this month called "The High Cost of the Iraq War", in the online forum Economists' Voice. In many respects their numbers are similar to those by Davis, Murphy, and Topel, but they are larger. Their "conservative" estimate of budgetary costs that does not include additional interest on the larger federal debt due to the war is $650 billion when discounted at 4 per cent. They also have "conservative" estimates that include additional interest on government debt, but I do not understand why this should be counted since they already count military spending as a cost. They adjust the $650 billion figure to account for increased depreciation of military equipment, the value of lives lost, and additional costs due to the many injuries of military personnel. Mainly due to the assumption about increased depreciation and additional losses due to injuries, they raise their estimate to $840 billion. I believe they exaggerate how large these costs are, but the calculations are difficult to make. Even so, their total is consistent with the high end of the Davis, et al. estimates.
I am much more doubtful about the additions that Bilmes and Stiglitz make to reach total costs of between $1 and $2 trillion, the numbers that have received the greatest publicity, and are cited in Stiglitz;’ Economic Voice paper. They assume that the war increased the price of oil from $5 and $10 a barrel for between 5 and 10 years. These are sheer guesses that are far from obvious. This would depend on the net reduction in Iraqi oil production, the increase in the oil supplied by other producers, and the effects of the war on demand for oil. It is not clear that there was even a net reduction when one considers the alternative of continuing containment. Assuming the scandals in the UN administered oil for food program would have been discovered anyway, might not Iraqi exports under containment been considerably reduced?
About half of the increase in their estimate of costs from $1 to $2 trillion is due to their most generous assumption about the magnitude and duration of the oil price increase. The other half is due to what strikes me as highly dubious assumptions about other macroeconomic effects of the war. Since they count government spending on the war as a cost, it is a bit of a stretch (and even double counting under reasonable assumptions) to count also some of the reduced spending on other government programs. This requires assumptions about private versus public returns on spending that have little basis in hard evidence. I have similar doubts about their adjustment ($250 billion) for the effects of the war on economic growth.
I tentatively conclude from these two studies that the cost of the war will amount to somewhere between $500 and $850 billion, taking account of the loss in life and injuries. These are certainly high numbers, and generally much larger than initially estimated by the administration and many outsiders. Has the war been worth its cost? The American people are increasingly expressing grave doubts about that. I do not know the answer to this question, but whether the war was justified depends on how the Iraqi situation plays out, and what would have happened had we not gone to war.
The Bilmes-Stiglitz paper, along with other papers on the cost of the war, do not compare these costs with the costs of alternative policies. Davis, et al do estimate the cost of various alternative scenarios, including continuing the containment of Saddam Hussein that had been in place before the war. Their middle range scenario concludes that the present value of the cost of continuing containment would have been about $400 billion. This is lower than their estimates of the cost of the war, but how much lower depends on which war estimate is used. With their middle range estimate of war costs, the difference is not large, but the difference is considerable with the $840 billion estimate of Bilmes-Stiglitz.
It is not a justification for the war but neither is it totally irrelevant to put the war's cost in perspective. The over 2000 young American men and women killed are a minor fraction of the almost 60,000 soldiers killed, and 350,000 casualties, during the Vietnam war. It is also a fraction of the 40,000 mainly young persons killed annually in automobile accidents. Consider the magnitude of the cost of the Vietnam War if it had been (and should have been!) calculated the correct way.
I have not mentioned anything about the costs or benefits to the Iraqi people. Much property has been destroyed and many Iraqis killed during the insurgency, but can anyone doubt that practically all Kurds and Shiites (about 75 per cent of the total population), and some Sunnis, consider themselves better off now than under the brutal regime of Saddam? This brutality includes not only the enormous devastation to the Iraqi economy, but also the many thousands of deaths that he caused, a number that would be well in the hundreds of thousands if deaths due to the Iran invasion are included. Since Democrats as well as Republicans often mention spreading democracy, I do not see how the effects on Iraqis can be ignored.
No terrorist attack has taken place in the U.S. since 9/11, including the three years after the war started. Maybe that would have happened anyway, and maybe the war even raised the probability of such attacks. Still, the circumstantial evidence would suggest that the war might have decreased the probability of attacks in the U.S. This could be because terrorists have been busy concentrating on Iraq, or because we have killed many who might have been involved in such attacks.
Still, I believe the war should be assessed a bad failure if Iraq degenerates into civil war that leads before very long to another brutal dictatorial regime. On the other hand, if Iraq stabilizes reasonably soon, has a decent government, and starts to progress economically, the war would have been a success. I say this not only because the war got rid of a cruel and dangerous dictator who inflicted immense harm on his own people, and who would have used highly destructive weapons on others if he ever obtained them. In addition, a stable and progressive Iraq is likely to have beneficial effects on Syria, Saudi Arabia, and other bad regimes in the Middle East that will directly benefit the whole free world, possibly including creating a background for a peace between Israel and its Arab neighbors.
It could be a decade or more before the ultimate verdict about the war is available.The future looks precarious at present, but it is too early to throw in the towel and conclude that the war was a costly failure.
Posted by Richard Posner at 09:57 PM | Comments (53) | TrackBack (0)
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It is hardly too early, however, to conclude that the war is likely to have proved a costly failure.
We are not in the 1980s anymore, running up large annual deficits that can be made up by the savings related to the end of the Cold War and the influx of tax revenue from the technology boom of the late 1990s. Late additions to government outlays must now be assessed in the context of the vast obligations that we know are coming -- those related to the retirement of the baby boomers -- as well as those that might be coming, for example costs related to a possible confrontation with China over Taiwan.
As to the benefits of a peaceful, democratic, Iraq....well, if wishes were horses and all that. Having had no reason to think that a backward Arab culture could sustain a system of government so demanding of civic virtue as democracy, the United States has nonetheless wagered lives and vast amounts of borrowed money on the bet that it could -- because all people love liberty and so forth.
I suppose that in ten years when the verdict is known beyond all doubt, our most erudite economists will write learnedly that "of course" the Iraq war was ill-advised; only a fool would have considered the effort to seed democracy in perhaps the world's least hospitable soil and paying for it on a credit card the prudent thing for an American administration to have done. Fat lot of good that future verdict does us now. The only thing this particular erudite economist feels able to tell us now is no more than any person picked at random from the Kansas City phone book could tell us: there is the one hand, and then the other hand. Thanks a lot.
Posted by Zathras at March 19, 2006 10:29 PM | direct link
$2 trillion cost divided by 290 million people in U.S. equals around $6,700 cost per person. I'd believe this number. War is not cheap. The psychological and mental costs are high - mental anguishment, lost productivity in U.S. because everyone watches the war on the internet and talks about the war, opportunity cost - smart people work on war and not the next amazon or amgen, etc.
However, I might not believe the rational to get to the $2 trillion number.
I believe that a higher per-barrel price of oil figured into the cost of the war is very questionable. If Stiglitz or others knew with certainty what drove commodity prices, they would be traders and endowing professorships vs. benefiting from endowments.
So, in conclusion, I lean toward agreeing with the $2 trillion price tag but may not agree with the rational to get to $2 trillion.
Posted by anon at March 20, 2006 10:22 AM | direct link
One of the tragic consequences of realpolitic is how we abandon our loyal friends. Becker's comment about the harm this ill-thought out war hurts the people of Iraq applies to the Kurds more than anyone else.
Under the protective umbrella of Naval Air Power, the "no fly zone," the Kurds were well on the way to developing a market-based democratic society.
However, in order to appease the Turks, we are forcing the Kurds to stay in Iraq, a county invented in a London club.
Posted by Collestro at March 20, 2006 10:49 AM | direct link
http://finance.yahoo.com/q/bc?t=5y&s=HAL&l=on&z=m&q=l&c=xom&c=%5EGSPC
Progress during Bush and Cheney - Halliburton (symbol: HAL) and ExxonMobil (symbol: XOM).
The opportunity of this may be very, very high. We have to hope we avoid some sort of dark ages or momentum-shifting defeat to some underdog in a foreign land.
Posted by anon at March 20, 2006 11:40 AM | direct link
The unmeasurable is not imponderable. The war has had huge costs not only to the United States and Iraq, but to other members of the Coalition, and to the rest of the world. If we could not quantify the costs and benefits to even the major stakeholders, they should at least have been given voice in the decision to go to war.
Of course, when in 2003 the White House denied its own economist's estimate of the cost of the war, it was issuing false information. The Bush Administration was not likely then or now to take kindly to estimates of the true costs of the war to others.
Posted by stconsultant at March 20, 2006 11:57 AM | direct link
No terrorist attack has taken place in the U.S. since 9/11, including the three years after the war started.
Major terrorist attacks take a long time to develop. First, an event happens that makes certain individuals decide to take (terrorist) action. Then it takes a couple years for them to organize into a group of like minded individuals. Then it takes another few years to plan and prepare for the attack.
I would expect that carefully planned terrorist attacks on the United States motivated by the invasion of Iraq will occur five to ten years after the initial invasion. We will probably see some initial attacks arround 2008 followed by major successful attacks around 2013.
Posted by Wes at March 20, 2006 12:45 PM | direct link
An excellent article on what was happening in the Iraqi leadership immediately prior to the invasion, based on information from captured officials:
http://www.foreignaffairs.org/20060501faessay85301/kevin-woods-james-lacey-williamson-murray/saddam-s-delusions-the-view-from-the-inside.html
Posted by ben at March 20, 2006 04:00 PM | direct link
I know I have said this before.
Wes, if you can predict things like terrorist attacks in 2013, please apply for a job at the Pentagon.
Politics is the incorrect arena for prediction. I think Prof. Becker's column ilustrates this very well. Only the outcome will seal a veredict on the costs. A much misunderstood Florentine diplomat and military advisor made this point nearly 500 years ago.
It is also reckless to predict events based on people's motivations. Why do Spanish officials keep thwarting terrorist attacks long after Spanish troops have left Iraq?
Posted by anaxanagorenas at March 20, 2006 07:52 PM | direct link
A lot rides on the manner of U.S. disengagement from Iraq. If U.S. hangs tough and does a gradual draw down of forces that provide the best chance possible for Iraq to stabilize, the war would be viewed as a success, otherwise not.
I am sympathetic to the view that Kurds whose just demand for an independent country, Kurdistan, was acknowledge by President Woodrow Wilson in early parts of 20th century have been shortchanged by U.S. policy tilt towards Turkey. Given that U.S. spent five decades or more nurturing Turkey as an ally and Turkey turned around and refused to help in the Iraq war, perhaps some balance between Kurdish and Turkish interests of the U.S. in needed.
Posted by Arun Khanna at March 20, 2006 11:57 PM | direct link
I am not qualified to comment on the specific economic arguments, not being an economist myself. But this is one issue where economics is but a small part of the equation.
It may seem a little late to question the reasons for waging war, but they remain relevant to assessing its success and the wisdom of re-electing those who supported it. WMD was a red herring, or certainly proved to be. That benefit accordingly goes out the window. It is hard to see, though we can never know for sure, how the war has made mainland America safer. It certainly didn't make two principal allies, Britain and Spain, safer. And despite the lack of a homeland attack, within a year or so (unless the situation changes dramatically) the death toll amongst US servicemen and women will exceed that of the 9/11 attacks. Meanwhile the average Iraqi seems no better off than under Saddam, and quite possibly worse as the insurrection rages on.
The US military has no doubt learned valuable lessons for future conflict, but then it was already committed to a war in Afghanistan where much of the same lessons were learned.
I see the following as the major adverse consequences for the US: (i) the ongoing financial costs; (ii) the damaged image of America amongst her allies; (iii) the lessening credibility of the US intelligence services at home or abroad (who is going to believe it if the US claims Iranian nuclear weapons constitute a clear and present danger); (iv) the strain on the military if Iran or North Korea does in fact become a clear and present danger; and (vi) the radicalisation amongst Muslims and hence the enhanced opportunities for terrorist recruiters. For Iraq itself, as well as the US, the war will be a failure if it becomes, as may well be the case, another Islamic theocracy.
In that sense the real irony of the war is that Saddam Hussain, in suppressing radical Islamic clerics, was actually an ally in the war on terror - which is why he was a friend of the US up until the Kuwait invasion.
Posted by James Wilson at March 21, 2006 10:13 AM | direct link
Wes, if you can predict things like terrorist attacks in 2013, please apply for a job at the Pentagon.
Past behavior indicates that the pentagon does not want accurate predictions. Instead, the pentagon wants predictions that will cause people to behave the way the pentagon wants.
Politics is the incorrect arena for prediction.
I'm not quite sure what is meant by this so I don't know whether I agree or disagree. A very powerful method for distinguishing between competing models of how the world works is to make pedictions based on these models and then later compare these predictions to factual observations.
Only the outcome will seal a veredict on the costs.
I think we agree here. In fact, my point was that we will have to wait decades in order to be able to distinguish between competing models of whether the Iraq war will increase or decrease terrorist attacks on the United States.
The neo-conservative model is that terrorism will decrease. Their proposed mechanism is that terrorism results from Islamic fundamentalism and lack of "democracy" and the invasion of Iraq will eventually decrease Islamic fundamentalism and increase "democracy" in the Middle East.
It will be decades before the invasion of Iraq results in a decrease in Islamic fundamentalism or more "democracy" in the Middle East generally (if that even happens at all). As a result, any decrease in terrorism that would validates their model will only be observed decades from now.
The other model is that the invasion of Iraq has made huge numbers of people extremely angry and that this anger will result in terrorist attacks on the United States. Now, huge numbers of people became very angry at the time of invasion which, if terrorist attacks required no organization or planning or preparation, would imply that terrorist attacks should have begun immediately after the invasion and the lack of attacks would, at the very least, fail to support this model.
Based on factual observations of the world trade center destruction, it can be concluded that terrorist attacks can occur many years after the orginal events that motivated the attack. The first attack of the world trade center occurred in 1993. Whatever events motivated the destruction of the word trade center had to have occurred occured almost a decade before the world trade center was finally destroyed in 2001.
Factual observations supporting (or failing to support) either model will not be available until at least a decade after the invasion of Iraq.
Posted by Wes at March 21, 2006 11:55 AM | direct link
For United State, the only benefit from Iraq war is deferring the economic depression due to 9/11 attack.
Posted by keith yeung at March 21, 2006 01:14 PM | direct link
all great comments. i just wanted to add that the american academy of arts and sciences published a 90-page document BEFORE the war entitled "War with Iraq: Costs, Consequences, and Alternatives." William Nordhaus (MIT Prof. known for his seminal work on the relationship between inventor and society) wrote the chapter on the economics. The work is very thorough: historical costs from the Revolutionary War on up, publicized government estimates since the Civil War, direct military costs, casualities, followed by a section on indirect costs (oil price, macros like employment etc.). This paper, published in 2002, gives two scenarios: Low Cost (short and favorable war) 99 billion bucks; High (protracted and unfavorable: two trillion smackaroos. These prices are all-inclusive - direct military spending and follow-on costs i.e. occupation and peacekeeping, reconstruction and nation-building, humanitarian assistance, impact on oil markets, and macroeconomic impact. What do you all think - can Nordhaus spell it out or what!?
_________________
Posted by Anonymous at March 21, 2006 03:37 PM | direct link
Judge Posner, you write, "Much property has been destroyed and many Iraqis killed during the insurgency." This Why do you not consider Iraqi deaths and property damage caused by the American, British and allied forces? Your willingness to consider deaths in purely economic terms is belied somewhat by your apparent reluctance to assess the full cost in light of all Iraqi deaths, injuries and losses. Isn't the number of Iraqis killed during the invasion and by coalition forces subsequently well over 100,000? In this vein, your references to the costs of leaving Saddam in power focuses on his insanely destructive war against Iran, but makes no estimate of the harm he would have caused his people had he remained in power these past three years. To put the point briefly but, admittedly, partially: would even Saddam have killed and maimed as many of his own people in the past three years as the United States and its allies have?
Posted by Lewis at March 21, 2006 05:28 PM | direct link
"WMD was a red herring, or certainly proved to be. That benefit accordingly goes out the window."
Someone told me that we (U.S.) know Iraq had WMD because the U.S. gave WMD to Iraq back in the 1980s.
So I do not think WMD was a red herring or goes out the window. The govt knows stuff we do not know. This may be why Dems went along with the Iraq war at inception.
It may be a shell game. The WMD may have been moved.
I lean toward discontinuation of guessing where the WMD may be. I lean away from continued invasions of other countries on the basis of WMD.
We had better keep track of submarines from the former Soviet Union.
Posted by anon at March 21, 2006 07:19 PM | direct link
Wes,
Thank you for your reply.
I found your comment on the Pentagon very funny. To be precise and fair to our military establishment, we are both referring to the civilian arm of the Pentagon.
You provide a good answer to my comment on politics and prediction. I agree fully with what you have to say concerning the importance of competing models of prediction and would only add that it is very difficult to make an accurate prediction based on the motivations of Islamic terrorists.
I see no problems with your math concerning the motivation and timing of terrorist attacks. I would only note that there are other, perhaps stronger motivators of terrorism than the invasion of Iraq. In particular, I am thinking of unemployment, political repression, and culture, among others.
If you are interested in filling in the gaps to your calculations and fine tuning an assessment of motivations, I recommend you read an excellent book called �al-Qaeda� by Jason Burke. He provides a good analysis of the wealth of different motivations behind Islamic terrorism.
Posted by anaxanagorenas at March 21, 2006 08:23 PM | direct link
OT: if one wanted to, say, print out posts from the Becker-Posner blog and read them on the bus, they would be disappointed as this blog's posts don't print well. To be specific: posts on this blog only print one page when printed normall and the rest of the text is cut off... here's an example:
http://josephhall.org/tmp/bpblog_ex.pdf
Posted by joe at March 21, 2006 08:38 PM | direct link
It's pretty clear that Becker has never carried an M16 ... kind of like Bush and Cheney.
Posted by Rob at March 21, 2006 10:14 PM | direct link
Social choices as to war frequently don't make overall conventional cost-benefit sense retrospectively in an open society. But that leaves out attachments of the decisive set to respective social-capital* networks, a kind of wealth. It also leaves out the uncertainty of the outcome, asymmetric information, and differences in social networks making it likely that some will not survive. The latter contingency might be one for which human beings, or its decisive sets in populations, were selected. One reason for war is seeming myopia. But if the social-capital network is sufficiently depleted by expansion of another group's social capital, what looks like myopia & an ill-considered spasm response might instead be characterized as an implicit calculation that war would shorten the conflict, lower the long-term cost, and avert replacement of the social network. Then some seeming myopia might have survival value. The applicability of that contingency and for whom in the present conflict may play out in the next few years.
* On which see Prof. Becker's "Preferences and Values" in Accounting for Tastes. (Revised from a misplaced posting.)
Posted by T at March 21, 2006 10:27 PM | direct link
James Wilson
An assessment of leadership has to occur in view of the information they had at the time of their decisions. Accordingly, it is literally irrelevant to that assessment that WMDs were not found, for example. What matters is how credible pre-invasion information on WMDs was, and how it was used by the leadership. There is evidence that even the Iraqi leadership did not know if it possessed WMDs (see the link I posted above). Holding leadership accountable for information it did not have, though common, is unhelpful.
Posted by ben at March 22, 2006 12:34 AM | direct link
Ben,
Thank you for your response. If you trace the history of the intelligence dossiers etc, the evidence of WMD was always pretty flimsy - two British cabinet ministers resigned as a result, prior to the war. IMO Blair, at least, genuinely believed there were WMD - after all, Iraq certainly did have them at some point (including those sold by the US).
But I don't think it was Blair's reason for going to war. He did it because (imo) he believed that, ultimately, Britain's security would depend or at least would benefit from being allies with America. Bush, on the other hand, wanted a show of strength after 9/11, had a bone to pick with Saddam (true of his advisors such as Cheney as well) and was frustrated that Bin Laden was proving hard to catch. He may also have believed that America could democratize the Middle East as a result, or at least start the process, and put pressure on other rogue regimes. The latter seems to have been achieved with Libya, and possibly to an extent with Syria (why doesn't the media ever accept the success in Libya denouncing terrorism?) In all of this I still think WMD was a red herring, and we were misled by statements that it was the casus belli. If it were, they could have left the UN inspectors for longer.
Posted by James Wilson at March 22, 2006 05:12 AM | direct link
...WMD - after all, Iraq certainly did have them at some point (including those sold by the US).
Iraq never had nuclear weapons and many of the chemical and biological weapons that Iraq had prior to 1991 had a sufficiently short shelf life that (even had they not been destroyed) they would not have been particularly useful as weapons at the time of invasion in 2003.
Posted by Wes at March 22, 2006 12:22 PM | direct link
No terrorist attack has taken place in the U.S. since 9/11, including the three years after the war started. Maybe that would have happened anyway, and maybe the war even raised the probability of such attacks. Still, the circumstantial evidence would suggest that the war might have decreased the probability of attacks in the U.S. This could be because terrorists have been busy concentrating on Iraq, or because we have killed many who might have been involved in such attacks.
Remember the first terrorist attack on the World Trade Center in 1993. No attcks for 8 years. Why?
Posted by dennet at March 22, 2006 01:23 PM | direct link
If the cost of this war does end up exceeding the benefit, there are already efforts at foot to absolve Bush and Cheney and Powell and Rumsfeld and Rice and Hastert and Frist and Rehnquist.
----------------------------------------------
THE ISRAEL LOBBY AND U.S. FOREIGN POLICY
John J. Mearsheimer
Department of Political Science
University of Chicago
Stephen M. Walt
John F. Kennedy School of Government
Harvard University
Excerpt (page 32):
That help arrived with 9/11. Specifically, the events of that fateful day led Bush and Cheney to reverse course and become strong proponents of a preventive war to toppl Saddam. Neoconservatives in the Lobby—most notably Scooter Libby, Paul Wolfowitz, and Princeton historian Bernard Lewis—played especially critical roles in persuading the President and Vice‐President to favor war.
...
Meanwhile, other neoconservatives were at work within the corridors of power. We do not have the full story yet, but scholars like Lewis and Fouad Ajami of John Hopkins University reportedly played key roles in convincing Vice President Chney to favor the war.161 Cheney’s views were also heavily influenced by the neoconservatives on his staff, especially Eric Edelman, John Hannah, and chief of staff Libby, one of the most powerful individuals in the Administration.162 The Vice President’s influence helped convince President Bush by early 2002. With Bush and Cheney on board, the die for war was cast."
Posted by anon at March 22, 2006 08:17 PM | direct link
http://ksgnotes1.harvard.edu/Research/wpaper.nsf/rwp/RWP06-011/$File/rwp_06_011_walt.pdf
Posted by anon at March 22, 2006 08:18 PM | direct link
Judge Posner and Dr. Becker,
I'm a sophomore majoring in Economics at Western New England College (Springfield, MA) and have studied both of you in class but I just found your blog today. I've been going through the archives and I'm very impressed by your discussions on a wide bevy of topics. It's an invaluable resource for someone like me who wants to approach law school with a strong Economics perspective. Most of the blogs out there are angry rants, which makes your intellectual discussions refreshing. Please keep writing. I'll keep reading. All the best, gentlemen.
-BSM-
Posted by Brian Shea Murphy at March 22, 2006 10:25 PM | direct link
I don't know how the $7 million value per life is calculated, I presume a hedonic wage function of some sort. I agree that assigning a dollar value per life is useful, but I think without adjustment the $7 million overstates the cost of war.
The reasoning is this: if we are going to count the net cost of a life lost in war then we should also be counting the net cost of lives not lost.
Since all personel in Iraq are there because they volunteered, an argument can be mounted that these personel enjoy a private net benefit from participating in the conflict through some combination of wages earned, prestige, personal satisfaction and achievement. Its a bit more complicated than that - some personnel may have joined the military not expecting to see combat - but on the whole our forces are there because for them military service and likely participation in a conflict was the opportunity superior to their alternatives. I believe this benefit, if it can be estimated, is legitimately deducted from the economic cost of war to America.
Posted by ben at March 23, 2006 12:06 AM | direct link
Wes,
You wrote "_Iraq never had nuclear weapons and many of the chemical and biological weapons that Iraq had prior to 1991 had a sufficiently short shelf life that (even had they not been destroyed) they would not have been particularly useful as weapons at the time of invasion in 2003._"
That might true with the benefit of hindsight, but I doubt very much that Tony Blair would have spent so much time and energy trying to convince the British public that they were invading because of the threat of WMD if he'd not genuinely believed there would be some there. As I tried to explain above, I don't think that was his actual, or primary reason for invading, but he considered it was the only one on which he could sell it to the British public. He was risking looking extremely foolish (as has transpired to be the case) if it were otherwise.
Posted by James Wilson at March 23, 2006 04:18 AM | direct link
Rob,
"It's pretty clear that Becker has never carried an M16 ... kind of like Bush and Cheney."
It is quite fair to point out that the administration which lead us to war is headed by a coke sniffing deserter. Everyone knows our hawkish VP is a cowardly draft-dodger who was drunk enough to drive but not brave enough to serve. However, your slam against Prof. B. is bad form. His post is hardly a call to arms, but much more of a, "on the other hand" attempt to examine our current policy. Were he rattling the saber, it might be fair to point out he never held one. What he is trying to do is examine the economic basis of the war. He may never have held a gun, but he has wielded a pencil.
As a man who has taken up arms in the service of my county, and who shudders every time I hear the fascist phrase "homeland," let me ask for less heat and more light.
Posted by Collestro at March 23, 2006 06:42 AM | direct link
That might true with the benefit of hindsight, but I doubt very much that Tony Blair would have spent so much time and energy trying to convince the British public that they were invading because of the threat of WMD if he'd not genuinely believed there would be some there.
Tony Blair's position was inconsistant. Because the invasion did not a have the approval of the international community, for it to be legal under international law (that is, not a war crime) he needed to justify the invasion as "pre-emptive" self defense. This meant that Iraq needed to have the capability and the intent to launch a major attack on Britain using WMD.
On the other hand, if Tony Blair had actually thought that Iraq had the ability to retaliate for the invasion (for example, use a WMD to destroy half of London) then he most definitely would not have participated in the invasion.
Posted by Wes at March 23, 2006 10:50 AM | direct link
On the other hand, if Tony Blair had actually thought that Iraq had the ability to retaliate for the invasion (for example, use a WMD to destroy half of London) then he most definitely would not have participated in the invasion.
You're missing the point of pre-emption by assuming zero probability of that WMD's use on London absent invasion. It is surely possible that Blair judged the long term threat to Britain and her allies reduced by invasion i.e. that in the month between invasion and regime change Saddam would be less likely to get a WMD to a Western city than if he had stayed in power indefinitely. Your "most definitely" comment therefore doesn't stand up.
I would agree with you if Saddam had had a more credible deterrent, like a nuclear sub loaded with ICBMs parked in the Atlantic.
Posted by ben at March 23, 2006 03:23 PM | direct link
If it's $7 million per US life, then it is $7 million per all other lives lost, including the Iraqis. I'd subtract lives saved if and only if there were some immediate, credible, identifiable threat to American lives had the war not been fought. There is not now nor has there ever been any evidence for that; indeed, the war was justified on the novel grounds of a "grave and gathering" threat, a standard heretofore unknown to international law.
Add also the erosion of confidence in American electoral institutions as a method of governance: every stated justification for war has been proven false, thus eroding confidence in the notion of a "republican form of government" which not only leads the populace but represents its general will. Erosion of confidence results in less participation and thus by inference less "efficient" elections (i.e., most closely matched to the greatest sum of popular desires).
Add also the true opportunity costs of alternative allocations (including direct tax rebates to rich people, something GWB might agree is worthy), especially the lost value of contributions to the economy of people left undereducated by the war costs (which should be compounded, not discounted).
If it's morning, Becker and Posner rationalize the wishes of the status quo. "Service to power" is what you could call it.
Posted by mike riikola at March 23, 2006 03:26 PM | direct link
You're missing the point of pre-emption by assuming zero probability of that WMD's use on London absent invasion.
No, I am basing my argument on the fact that Iraq had not used WMD against the UK prior to the invasion. This fact allows us to conclude that Iraq lacked either the capability or the intent (or both) to attack the UK with WMD.
If Tony Blair thought that the lack of a WMD attack on the UK prior to the invasion was due to a lack of capability (or both a lack of capability and a lack of intent) then he was lying to the public and furthermore he had no business claiming self defense as a justification for the invasion.
On the other hand, if Tony Blair thought that the lack of attack was due (only) to lack of intent then he would have been colossally stupid to invade as that would certainly have motivated an attack.
Posted by Wes at March 23, 2006 05:59 PM | direct link
Wes, think for a moment about what you are saying. Iraq's failure to attack a particular target does not on its own rule out the possibility it will. Using your logic in July 1990, we would conclude Iraq either lacked intent or capability (or both) to invade Kuwait because it had not already done so. By 2003 any number of unseen internal factors could have moved Iraq's policy towards aggression.
Nothing you have said rules out the possibility that there was both intent and capability to attack and planning was under way to achieve that.
Posted by ben at March 23, 2006 07:51 PM | direct link
Mike Rikola
I'm not talking about lives saved. That's separate and additional.
Posted by ben at March 23, 2006 07:53 PM | direct link
Using your logic in July 1990, we would conclude Iraq either lacked intent or capability (or both) to invade Kuwait because it had not already done so.
Actually, Kuwait is a good illustration of my point which is that, in cases where pre-emption could be justifed as self defense, it is not actually a good idea.
Specifically, Iraq had the capability to invade Kuwait for many years but prior to 1990 it did not have the intent. Kuwait could have acted "pre-emptively" and invaded first but all that would have done is discourage the international community from coming to the aid of Kuwait after the inevitable defeat and occupation of Kuwait by Iraq.
Getting back to my point about Tony Blair, if Iraq had had enough WMD capability and intent to justify Tony Blair's decisions to invade as self defense then it would not have been in Britain's interest to invade pre-emptively anyway.
Posted by Wes at March 23, 2006 11:18 PM | direct link
Wes: "Kuwait could have acted "pre-emptively" and invaded first but all that would have done is discourage the international community from coming to the aid of Kuwait after the inevitable defeat and occupation of Kuwait by Iraq."
So it is better to wait until the enemy invades your territory in order to avoid discouraging uninvolved third parties from hypothetically coming to your aid?
Wes, you will have to explain yourself a little more. Though there are several arguments to be leveled against the ancient doctrine of pre-emption, surely this is not one of them. Please elaborate!
Posted by anaxanagorenas at March 24, 2006 12:52 AM | direct link
Wes,
The threat that Blair was continually alluding to was not the possibility of a direct attack by Iraqi forces on London - by super scuds or jets or whatever - but passing biological or chemical weapons to terrorists and having them set off in a clandestine attack. There was the infamous "45 minute" claim about Iraq being able directly to attack British bases in Cyprus, but that wasn't the main focus. Moreover, he wasn't just suggesting that WMD constituted a direct threat to Britain but also a breach of UN Security Council resolutions, which he was desperately trying to establish in order to legitimise the invasion and attract more allies.
One of the most dramatic domestic episodes in Britain was the suicide of the weapons expert Dr David Kelly, who couldn't face being named as the source who had slipped information to the BBC which the BBC broadcast as insider information suggesting the government was misleading the people about WMD. Ironically Kelly himself said that we'd never find the truth about what stocks of WMD remained in Iraq without military intervention.
I stand by what I said at the beginning: Blair invaded for other reasons, but believed genuinely that there were WMD. He risked looking (as has transpired) like a fool or a liar if there weren't. He only obtained Parliament's approval because of the WMD story - and has survived politically because enough of the major opposition party believed the same story.
Posted by James Wilson at March 24, 2006 04:32 AM | direct link
Wes, your arguments that pre-emption raises the threat of attack contradicts your earlier claim from above. You wrote:
Major terrorist attacks take a long time to develop. First, an event happens that makes certain individuals decide to take (terrorist) action. Then it takes a couple years for them to organize into a group of like minded individuals. Then it takes another few years to plan and prepare for the attack.
Please explain how the 5+ years of planning for an attack can be compressed into three weeks between invasion and the fall of Baghdad.
Even if invasion raised the incentives for terrorism, your own reasoning indicates there was no time to do anything about it.
Posted by ben at March 24, 2006 05:18 AM | direct link
Squatterblog #13
Just realized that the only way to get everything done on a to do list is to only put one thing on at a time, get it done, and move on. A bit selfhelpish, but that's what I'm thiking about this morning.
-------------------------------------------------
SQUATTERBLOG: David's Blog in the comment sections of other folks Blogs
#12 http://piequeen.blogspot.com/2006/03/blueberry-mountain.html#comments
#11 http://www.hypnagogica.com/2006_02_01_hypnagogica_archive.php#'114021838171707388'
#10 http://www.cake-club.com/emily/2005/10/four_words_i_lo.html
#9 http://storiesfromtheroad.com/blog/juli/2005/10/epic-night-in-new-york-city.php
#8 too http://sassyass.net/archives/000877.html
#8 http://www.zephoria.org/thoughts/archives/2005/04/18/its_real.html
#7 Evicted from http://www.kotke.org
#6 Evicted from http://www.phoblographer.com
#5 Page lost http://www.caterinafake.com
#4 Evicted from http://www.superherodesigns.com
#3 http://www.owlmonkey.com/halfshell/archive/00000062.html#comments
#2 http://www.zephoria.org/thoughts/archives/2003/07/29/monkey_vs_robot.html
#1 http://www.hypnagogica.com/2003_07_01_archive.php#105881872826773568
Posted by David at March 24, 2006 10:43 AM | direct link
Please explain how the 5+ years of planning for an attack can be compressed into three weeks between invasion and the fall of Baghdad.
By the time a pre-emptive invasion can be justified as self-defense, the planning and preparation have already taken place.
Suppose that Tony Blair thought that Iraq had a 55 gallon drum of sarin and had the connections to deliver it to terrorists who had the capability to use it to flood a few blocks in London with poison gas. If Tony Blair invaded Iraq, he would remove an remaining deterrents to Iraq giving the sarin to the terrorists and the ensuing chaos would actually make it easier for Iraq to complete the transfer and for the terrorist to smuggle the sarin out of Iraq (think of Bin Laden in Afghanistan).
Now, if Tony Blair did absolutely nothing, then it is possible that Iraq would use the sarin at a later date anyway. On the other hand, the whole neo-conservative premise on which the invasion was founded is that threat of invasion is an effective deterrent. If Tony Blair got a clear statement from the international community that use of the sarin would result in invasion and occupation then it is hard to imagine that Saddam Hussein would go ahead with the attack anyway. Furthermore, the reality was that the international community was opposed to Iraq possessing WMD and that, in fact, they had instituted policies that were effective in that regard.
Posted by Wes at March 24, 2006 11:32 AM | direct link
Moreover, he wasn't just suggesting that WMD constituted a direct threat to Britain but also a breach of UN Security Council resolutions, which he was desperately trying to establish in order to legitimise the invasion and attract more allies.
There are two ways the invasion would have been legal under international law - either with the approval of the UN (for any number of reasons but most likely relating to disarmanent requirements) or unilaterally, without UN approval, as part of a country's inherent right to self-defense.
With respect to UN approval of the invasion, it didn't matter what Tony Blair thought, it mattered what the UN thought and, at the time of invasion, the the UN did not approve of the invasion.
With respect to unilateral self defense, if Tony Blair really thought that Iraq was a direct threat to Britain then he either engaged in very sloppy thinking or very convoluted thinking to conclude the pre-emptive invasion was the best course of action.
I stand by what I said at the beginning: Blair invaded for other reasons, but believed genuinely that there were WMD. He risked looking (as has transpired) like a fool or a liar if there weren't.
He risked more than that. If he really believed that Iraq had the capability to carry out a major attack on Britain then he valued imposing democracy on Iraq more than the lives of his own people.
Then again, Republican seem to like that kind of thing. Ronald Reagan is a hero because he valued hastening the economic collapse of the Soviet Union (whatever that was worth) more than he valued preventing the total annihilation of the United States in an all out nuclear war.
Posted by Wes at March 24, 2006 12:14 PM | direct link
Iraq war costs United States more than it was expected, but we knew that war was really uncertain thing before the Iraq war.
I think that we could do better to minimize the risk of uncertainty if government could contract with private insurance companies or if government provided high return assets which lose its value if the cost of war exceeds the certain cutoff points (like a bond).
Could insurance be a solution for cost problem in Iraq war?
Posted by Muppy at March 24, 2006 06:08 PM | direct link
By the time a pre-emptive invasion can be justified as self-defense, the planning and preparation have already taken place.
You surely do not mean that pre-emptive invasion can be justified only once planning is complete and the WMD is in London and ready to go. By what morality do you permit terrorist states to act with such impunity?
As long as you admit the mere possibility that planning of a terrorist attack by Iraq on a Western city was not within three weeks of completion, then you must admit the possibility that invasion lowered the threat of WMD use by Iraq. Accordingly, your clever theory about Blair's paradoxical rationale can be, and may well be, circumvented.
As you note above, use of WMD by Iraq would guarantee Saddam's fall. Given this, a pre-requisite for activating a WMD is certainty (in the opinion of the Iraqi leadership) of Iraqi regime change. But Saddam was convinced that Iraq would win the war even after the invasion had begun, and continued to believe this until only a few days before invaders reached Baghdad. This is why Saddam did not blow the oil wells or burst dams in the south of Iraq - he need these to maintain power and survive internal uprisings after he had repelled the invaders. In effect, the time during which Saddam believed his defeat was likely or certain - the time in which he might activate a WMD - was only a few days.
Posted by ben at March 24, 2006 07:00 PM | direct link
Ronald Reagan is a hero because he valued hastening the economic collapse of the Soviet Union (whatever that was worth) more than he valued preventing the total annihilation of the United States in an all out nuclear war.
Ummm...Wes, the economic collapse of the Soviet Union and the end of Cold War wasn't a coincidence.
Posted by ben at March 24, 2006 07:03 PM | direct link
Ummm...Wes, the economic collapse of the Soviet Union and the end of Cold War wasn't a coincidence.
Maybe it wasn't a coincidence and maybe it was but, even if it wasn't a coincidence, is it really worth going to the brink of total nuclear annihilation to hasten something that is going to happen anyway? My answer is no.
Interestingly, that seems to be a theme in this discussion of Iraq: whether it is preferable to have a high risk for a short time or a low risk over a longer time.
Posted by Wes at March 24, 2006 07:35 PM | direct link
As someone who does this for a living, I have to correct some of the claims by Becker and Posner in their NBER paper on this subject. First, their estimate of deployment costs, which they infer from some Congressional data, is way off the mark...WAY off the mark. Basically Becker and Posner have confused total costs and marginal costs. Most of the costs that they attribute to extended deployments to support containment are really fixed costs that would apply even if the forces were in CONUS. They claimed that they were not aware of any formal cost models within DoD. The DoD cost analysis folks use a Contingency Operation Support Tool (COST) and Army folks use a FORCES model. They also assume that the "containment" costs would have gone away had the war gone as Bush had hoped. There is no evidence for this at all. For example, all of the Navy and Air Force deployments would have stayed in the area even if Iraq magically became Sweden. The no fly zone flights should really be thought of as training flights. And the real intent of those no fly zone patrols was to provoke a response by Saddam, not to "contain" him. The Army troops in the region rarely exceeded a brigade. In fact, Kuwait was treated as an alternative training site for Ft. Irwin. Bottom line is that the containment costs that Becker and Posner used were really fixed costs and did not depend on Saddam. So scratch those as contingent costs of the containment policy. That argument is a red herring. There is also an assumption that the real costs were a complete surprise to analysts at the Pentagon. That's not how I remember things. Posner and Becker also use the old device of presenting a false choice. They claim that there were only two plausible options: continuing containment or war. Those may have been the only choices in President Bush's mind, but more creative policymakers could have come up with other possibilities. For example, a two-thirds solution that left a rump Sunni state was something that could have been done at almost anytime and at very little cost. Not a perfect solution, but in hindsight (as I would also argue in foresight) that two-thirds solution looks pretty good right now.
Posted by 2slugbaits at March 24, 2006 09:20 PM | direct link
Rob said: "It's pretty clear that Becker has never carried an M16 ... kind of like Bush and Cheney."
What is pertinent to Professor Becker's analysis is his logic and economic arguments not whether he has carried an M16. Though now that you mention 16 I am reasonably sure Becker's IQ is 60 points above yours, Rob.
Posted by Arun Khanna at March 25, 2006 11:09 AM | direct link
Off-topic:
-Any input on Google Finance? (in "Beta" stage)
-What do you think of "Take-Off from Bath Tub" in bottom-right-corner at site below?
http://finance.google.com/finance?q=uaua
Posted by nate at March 25, 2006 04:32 PM | direct link
The US military has no doubt learned valuable lessons for future conflict, but then it was already committed to a war in Afghanistan where much of the same lessons were learned.That's true.
Posted by Dennis at March 26, 2006 01:32 AM | direct link
"The US military has no doubt learned valuable lessons for future conflict" ............................................................................................................................ Perhaps, but I think it's more likely that the military will have forgotten those lessons long before they will have another opportunity to put those hard learned lesson to use again. Just as in Vietnam, the debacle of this war could cause the US military to retreat into itself for another generation. "No more Iraqs" will be the watchword. A whole new generation of officers will be trained in how to fight budget battles instead of real battles. Career paths will come out of service in G8 (budget & resources) rather than G3 (operations). The real Pentagon battles won't be against terrorists, it will be with politicians who are going to have find a way to pay for this war once all those bills start coming in. And one of the effects of the war could be that military planners become even more seduced by the allure of pie-in-the-sky weapon systems that harken back to the good old days when generals fantasized about tanks rolling across the Fulda Gap. That was the kind of war in which the enemy played fair! You can expect the military to shun future Iraqs and future peacekeeping missions. I wouldn't mind the former, but the latter would be irresponsible (think of Darfur). Maybe Messrs. Becker and Posner should have included the costs of future inaction in their analysis. Being gun shy about future military adventures if things went badly was a predictable (and predicted) cost.
Posted by 2slugbaits at March 26, 2006 06:55 AM | direct link
"I believe the war should be assessed a bad failure if Iraq degenerates into civil war that leads before very long to another brutal dictatorial regime. On the other hand, if Iraq stabilizes reasonably soon, has a decent government, and starts to progress economically, the war would have been a success."
As an independent voter, I'm confunded by President Bush attempts to define victory in Iraq, and the statement above is the first reasonable - and devoid of partisan blobs - attempt to define what should be our goals in iraq. I hope you can expand on this theme.
Posted by Ronny Max at March 26, 2006 11:42 AM | direct link
2slugbaits
The 'valuable lessons' to which I referred were more on the operational level rather than the strategic level. I agree that one result of Iraq is that America will be very reluctant to commit to another major foreign operation, which is a bad thing: future operations need to be judged on their own terms, and not avoided simply because people have bad memories of what might have been a very different experience. I meant on the ground level: the US is learning the hard way about the dangers of RPGs and IODs, as well as the more subtle business of winning of hearts and mind. Those were all things that could have been learned in Afghanistan if America hadn't become disinterested. And I don't think they're learning about hearts and minds either. One problem was the fear of casualties at the start. A British colonial governor would have rooted out the trouble makers before they started and hanged them in the town square. One contemporary British officer, Col. Collins (whose moving pre-battle speech was hung in President Bush's office), with decades of experience in Northern Ireland (a much closer parallel than Vietman), ran his province in Iraq in 2003 with an iron fist and experienced no trouble, using the sort of tactics found to succeed in Ireland.
In reply to Prof Becker, whether the average Iraqi is better off is a tough call. He has greater freedom (for now), but not greater economic prosperity and now faces the threat of terrorist attacks every day. Security is under severe strain. Although the Iraqis supported the overthrow of Saddam at the time, the worsening conditions mean that their view now might be different. That said, I accept that nation building takes years, and did so even in Germany and Japan after WWII.
Wes,
Blair was trying to convince the UN that Saddam was in breach of UN resolutions and therefore another resolution should be passed authorising the war. When that wasn't forthcoming, he wanted everyone to believe that the alleged breaches justified war without a further resolution. I know it didn't matter what he thought, that's the whole point about why he was trying to gain UN endorsement.
As to the threat from WMD, I repeat what I said before - it was not a threat of direct attack but that, at some point, Saddam might pass WMD stocks to terrorists who would use them in Britain. Invading could recover those stocks before that happened, hence it was not the case that Blair would not have invaded had he known Saddam possessed WMD.
Posted by James Wilson at March 27, 2006 05:14 AM | direct link

