Алистер Смит - The Spoils of War - Greed, Power, and the Conflicts That Made Our Greatest Presidents

Honest, impartial estimates of the cost in dollars, lives, and time of conflict would provide Congress, the president, and, most critically, “We, the people” with an objective measure of the likely total cost against which to compare the benefits of fighting.

Clear estimates of the likely costs of war provide many advantages. Most obviously, they provide a basis for Congress to assess whether it wants to declare war or authorize funds for a conflict. Well-publicized estimates also provide performance targets for executives. Leaders who bring a war to a successful conclusion more quickly, at lower cost, and with the loss of fewer American lives than anticipated will be highly regarded as truly competent and deserving of our praise. In contrast, the leader who overshoots predictions on these dimensions is likely to be seen as incompetent. Faced with such prospects, leaders are incentivized to both provide realistic assessments of the costs and to fight wars as efficiently as possible.

Consider how differently Abraham Lincoln might have acted if faced with a public estimate of the loss of lives and the duration of fighting when the Civil War was impending, say, during the four and a half months between his election and his inauguration. Consider that Richmond, Virginia, capital of the Confederacy, is a mere 100 miles from Washington, DC. Yet, despite massively overwhelming strength in terms of economic capacity and manpower, it took four years before the Army of the Potomac could advance that short distance, one that probably should have been traversed in months. Had an impartial estimate of five to six months to victory been widely known, perhaps Lincoln would have interviewed more generals at the outset, asking them what their approach to achieving victory would be, rather than choosing to stay with General McClelland for so long and then accepting Grant’s strategy of attrition. Yes, Grant was right, the South would run out of men before the North did, but was this the most cost-effective and quickest way to win? Likewise would FDR have been so reluctant to desegregate the army, if doing so would have helped him come in under budget?

Publicizing estimates of costs, lethality, and duration has another advantage: it can be expected to induce more accurate reporting by presidents. In general, leaders underestimate the cost of wars they want to fight because doing so makes it easier to gain support for their policy. However, this incentive is diminished if cost estimates are used by the voters as a basis for performance measures. Thomas Jefferson advised Madison that “the acquisition of Canada this year as far as the neighbourhood of Quebec will be a mere matter of marching,” and Henry Clay thought the Kentucky Militia alone would be sufficient.10 Of course, their Federalist opponents were far more realistic in their assessment of how much the war would cost, but they had incentives to overestimate the cost as they sought to prevent the war. Perhaps the War Hawks would have been incentivized to provide an impartial CBO-like body with accurate information of their plans and expectations if the estimates generated from such information were advertised as a measure of political performance. Madison declared victory in 1814, and that declaration might have been warranted if the estimates for the war were that it would take two years, cost $90 million (over $1.5 billion in today’s terms), and cost the lives of around fifteen thousand Americans. Otherwise, Mr. Madison’s War looked like a dismal failure.

Levy War Taxes on All Citizens

War is very costly business. Yet thus far, Americans have not insisted that presidents provide a clear, lucid, well-justified estimate of the costs of war, nor have they insisted that presidents impose a war tax surcharge to pay the carefully estimated cost of any conflict they contemplate involving us in. Failing to take these steps is dangerous, inviting leaders to engage in war for partisan rather than national advantage.

Writing in the Wealth of Nations , published in 1776, Adam Smith described the immunity from responsibility that postponing war payments allows:

The ordinary expence [ sic ] of the greater part of modern governments in time of peace being equal or nearly equal to their ordinary revenue, when war comes they are both unwilling and unable to increase their revenue in proportion to the increase of their expence. They are unwilling, for fear of offending the people, who, by so great and so sudden an increase of taxes, would soon be disgusted with the war; and they are unable, from not well knowing what taxes would be sufficient to produce the revenue wanted. The facility of borrowing delivers them from the embarrassment which this fear and inability would otherwise occasion. By means of borrowing they are enabled, with a very moderate increase of taxes, to raise, from year to year, money sufficient for carrying on the war, and by the practice of perpetual funding they are enabled, with the smallest possible increase of taxes, to raise annually the largest possible sum of money.

In great empires the people who live in the capital, and in the provinces remote from the scene of action, feel, many of them scarce any inconveniency from the war; but enjoy, at their ease, the amusement of reading in the newspapers the exploits of their own fleets and armies. To them this amusement compensates the small difference between the taxes which they pay on account of the war, and those which they had been accustomed to pay in time of peace. They are commonly dissatisfied with the return of peace, which puts an end to their amusement, and to a thousand visionary hopes of conquest and national glory, from a longer continuance of the war.11

Between 2001 and 2008, wealthy, probably Republican voters saw their post-tax income increase by many tens of thousands of dollars. As Adam Smith had said, they could “enjoy, at their ease, the amusement of reading in the newspapers the exploits of their own fleets and armies.”12 Had instead they been asked to contribute, say, $40,000 to pay for the occupation of Iraq, they might well have regarded it as being the same unmitigated failure as Democrats did. However, this was not what happened. Bush transferred the cost of the war to the poor, who saw programs that benefited them slashed, and to future generations of taxpayers on the hook for the enormous cost of the war, much of which was kept off the books for appearance’s sake. The $40,000 burden is far from unrealistic. If we take the cost of the Iraq War as $1 trillion, and others estimate the real cost to be as much as three times higher, then that equates to a little over $3,000 for every person in the United States. Of course, not everyone pays an equal share of the tax burden. The top two income quintiles pay close to 90 percent of the total federal income tax burden, which readily translates into a wealthy family’s paying about $40,000.13 Of course, these are just back-of-the-envelope calculations based on relatively conservative estimates of the Iraq War’s total cost. If we believed Joseph Stiglitz and Linda Bilmes’s much larger $3 trillion estimate and factored in the cost of the Afghan War, too, then the bill would have been an even greater retardant on the war.

When voting to authorize war, Congress should specify a schedule of taxes to pay for it. Despite the huge cost of the Vietnam War, Johnson’s war taxes left the nation’s budget in surplus. When, as with World War II, the cost cannot realistically be paid on a pay-as-you-go basis, Congress can outline a repayment scheme for the forthcoming years. In such a way, people know the financial commitment they are being asked to make and can moderate their support for war accordingly. If “We, the people” believe that the issue at stake is sufficiently important that they are willing to pay their share, then congressmen can safely endorse conflict secure in the knowledge that their reelection prospects will be unharmed. If a president fails to end the war in the timely manner predicted, then the new taxes will have to be increased and “We, the people” will naturally be unhappy. This is bad for a sitting president, but as a consequence that president will fight to win the war as quickly and cheaply as possible. Further, presidents won’t push for war unless they are confident of achieving a rapid victory.