The cost of the war

David Leonhardt has a nice piece in the New York Times on the opportunity cost of the trillion dollar Iraq war. Leonhardt does a good job of getting the concept across without actually using the economic jargon. Coincidentally, I have a piece in tomorrow’s (Thursday’s) Fin, making the same point, not for the first time, along with a reference to the work Kahneman and Renshon on psychological biases to hawkishness.

59 thoughts on “The cost of the war

  1. It never ceases to amaze how easy it is to get approval from the political system to spend any amount of money on war, compared to almost anything else.

  2. Just looked at the casualty figures in your May 2003 piece. If we’re to believe what The Lancet published, they’ve now reached hundreds of thousands for Iraquis, and we know that they’re thousands for the USA, hundreds for the UK and one for Australia. You can monetise, so to speak, this human cost, and that associated with injury and disease caused by the war, but is it right to do so? Isn’t the John Donne approach better?

  3. Hal9000 – agree. It was put really well in a cartoon I once read. The caption was something like “I would like to see the day when a general has to have a cake stall to raise money for a new bomber”

  4. There are so many factors to this question. One can’t help at looking at human needs and relating the cost of the war to health and nutrition and poverty demands.
    One can’t begin to put a dollar or human cost on the trauma of Iraq and the the Iraqi citizenry.
    One can’t begin to put a dollar or human cost on the effects to the repatriated soldiers.
    One can’t begin to put a dollar BENEFIT to the contractors( mainly American, surprise).

    The article is an interesting academic work but serves merely to further isolate intelligent and thinking people from perversion of American foreign policy, aided of course by the deputy sheriff.

  5. With so much money spent on war, how would the payment distribution of say 1 trillion dollar look like in terms of generational spread. Out of trillion how much would it be paid by the living, and how long would it take US to pay it off. How many decades or centuries would it take at their current ‘minimal payment’ levels. I would imagine fair bit of interest comes with 1 trillion dollar tag. Anyone good with numbers?

  6. Re “H’s” comment, my leaky memory rings a distant bell suggesting Stiglitz has said somewhere along the line that he knew and offered his calculations as conservative. He knew that even the conservative figures are Given Stiglitz and Bilmes frankly preface their offering as to be seenin this light. They frankly say they are not able to get at all the figures they need and have not factored in completely certain calculations relating to depreciation, reinvestment denied more productive areas, money misappropriated from the US and Iraqi people by criminals and the corruption of productivity in a real world by egregious Cheney/ Bush poleconomics. We should not be surprised if we find the opportunity of a century has been blown.
    And the sad thing is they are obviously, in petulant “denial” mode thinking through whether to embark on a disaster involving Iran that could, going “wrong”, eclipse even

  7. The NYT article is nice, but why doesn’t it acknowledge that the war costs in Iraq and Afghanistan would make a good contribution to reducing greenhouse emissions in the US if invested in low-emission technologies? Why doesn’t it acknowledge that the cost of the Iraq/Afghanistan wars are only the latest instalment in sixy years of excessive military spending by the US and its allies, and calculate the value of the social and industrial investments which could have been made since 1945?

  8. John, how about posting your article so those of us who missed it in the Fin Review can read it? As I recall you have usually done this in that past.
    You might even elicit a few more comments on this highly significant topic.

  9. What price freedom?? All that money wasted on WWII and the Cold War to defeat Nazism and Communism. What were they thinking!! May as well ignore Islamofascism and spend it on feeeeeel goooooood stuff. Shoudn’t have reacted to Sep 11, 2001. Israel should have capitulated to the first invasion by the surrounding Arab countries! All that money wasted!! My wife’s Grandfather shouldn’t have been up there on the Kokoda Track stopping the Japs – what was he thinking???

  10. Did anyone see In the Shadow of the Palms last night on the ABC? It was a cinema verite style doco following the lives of a dozen ordinary Iraqis in the weeks leading up to the invasion and in the weeks following the ‘tipping point’ election of the present ‘government’. Most were optimistic that life would return to normal following the war but all subsequently perceived themselves to be much worse off. One, an Olympic wrestler, had disappeared in the week before the second visit of the filmmaker. Of particular interest to Australians was the fact that the filmmaker was welcomed in the weeks before the war even though Australia was a COW founding member. The hostility of Iraqis in the street to Australia was very evident on the second visit.

    Aside from providing a poignant baseline on pre- and post- war Iraq and following the deteriorating conditions from the Iraqi in the street’s viewpoint, what struck me was the similarity in the behaviour of the fellows in the uniforms with the guns. Under Saddam and under the US occupation – journalists with cameras were and are not welcome. Only the flags on the shoulder patches have changed. Says a lot about the ‘freedom’ Razor says all this treasure has bought, to my mind. It also showed those who may have forgotten and who cared to notice that Iraqis are every bit as human as Australians, and provided irrefutable evidence that this invasion and occupation has been a criminal enterprise.

    Returning to the subject of this thread, the stupendous cost estimates show that not just Iraqis but virtually everyone on the planet – from US taxpayers to sub-Saharan AIDS sufferers – is a victim.

  11. There was also the similarity between the optimism of the invaders and the optimism of the invaded. The Iraqis before the war were saying: well, we’ll get thru this somehow and then it’ll quickly be back to normal or even more optimistically we’ll rout the Americans.

    The old line that war is hell, just doesn’t seem to have the currency I thought it did.

  12. wilful – I didn’t say Iraq was all about Sep 11. Afghanistan definitely was and few (even on the Anti-Bush side) disagree with that course of action, just how it is being fought.

    However, now that you mention it, there is a logical link, not a direct one, between Sep 11, 2001 and the removal of Hussein.

    Prior to Sep 11, hijackings had been a feature of terrorist operations. In fact intelligence reports had indicated possibel Al Queda hijackings. However, hijackings had never previously seen planes full of people used as missiles against civilian targets. This was a completely new type of warfare. It was also an indicator that Al Queda was determined to make catastrophic attacks on western targets. Nuclear, Biological and Chemical (NBC) attacks were identfied as being a potential weapon. While this had previously been identified as a potential threat, it was never taken seriously. Following Sep 11 the threat was taken seriously. (Indeed, evidence has been found in Afghanistan of attempts to manufacture both chemical and biological agents, but they don’t appear to have been weaponised.) Given that threat is a combination of capability and intent (the US could invade Australia but doesn’t have the intent – therefore, no threat) the fact was Al Queda had the intent and just needed the capability. So, who was the most likely source for NBC weapons? There were/are a number of countries, but given Iraq’s past use of NBC weapons, their continued disruption and non-cooperation with the UN Inspectors, broad international bi-partisan support for the belief in Iraq possessing NBC weapons, support for terrorists such as Palestinian suicide bombers and Abu Nidal, and the fact that Hussein deserved to be removed from power for a whole range of good reasons meant that Iraq was next on the list. Tony Blair, obviously agreed and still does that it was the right course of action – and he is a Labor PM, not generally the political bedfellow of US Republicans.

    Wilful, what price do youput on your freedom?

    If the Coalition forces withdrew from Iraq now, would peace break out?

    Shouldn’t the terrorist deliberately targetting iraqi non-combatants be fought? Or, aren’t the vast majority of Iraqis who want to live in peace worth fighting for?

  13. Dear John

    I am relieved to find that some minds are engaged with this vexing problem. War is expensive. There always seems to be open-ended willingness to pay the military outgoings for a war. There is never anywhere near enough money to repair the ruined lives of combatants who never had the opportunity to assess the legality and legitimacy of the war before they received their orders.

    Opportunity costs should be calculated, but should include the real cost of reparations. These costs include physical, social and cultural destruction, the lives of hundreds of thousands of Iraqi and Afghan dead and the opportunity costs associated with the fifty year set back to the development of these countries, the opportunity costs associated with these countries being saddled once again with US-backed puppet military dictatorships and having their resources stolen. But wasn’t that always the plan?

    It will be up to all of us to see to it that politicians who are not serious about global warming are at the back of the Centrelink queue.

    Willy Bach

  14. Dear Willy,

    I don’t know about the bad guys, but the Combatants on the good side in the War on Terror are generally VOLUNTEERS – certainly, the US, UK, Australian and Canadian. They can say they don’t want to do what they are doing at anytime. They can refuse to deploy or ask to be withdrawn at any time. They want to be where they are, doing what they are doing.

  15. Well hopefully we got one benefit from Iraq. People with Razor’s level of thinking have been discredited for at least another decade or so. With any luck we’ll get a good 30 years of peace like we did after Vietnam as another generation learns the hard way not to listen to them.

    Seeing that Iraq looks like ending up with about a tenth the casualties of Vietnam* and Vietnam had around tenth the casualties of WWII which was about 30 years prior to that, with any luck the next war won’t be until 2035 or so and will be an order of magnitude less destructive too.

    *US Military Casualties in…
    …WW II: 407,300 dead
    …Vietnam: 58,209 dead
    …Iraq II: 3,019 confirmed dead as of 17/01/2006

    Invaded countries…
    …WWII: 32,327,100 (Total worldwide civilian deaths) (1)
    …Vietnam: 2 ~ 5 million (1.1 million military, 900,000 to 4 million civilian)
    …Iraq II: approx 600,000 (Additional Iraqi deaths due to violence according to Lancet study)

    (1) yes i know the US did not go and invade the whole world in WWII as a cursory reading of this table might suggest.

  16. Razor – “the fact that Hussein deserved to be removed from power for a whole range of good reasons meant that Iraq was next on the list”

    Really tenuous connection there. So who is next on the list? Seeings as the USA is now in the brutal dictator removal business who is next?

    The invasion of Iraq was prepared long before 9/11. The USA needs to control the remaining oil and the major oil producing region. What part of dictator removing is the building of 14 permanant air force bases?

  17. Ender I don’t care which next dictator gets removed, but more than happy for them to get on with it.

    It is logical an invasion of Iraq was in the prepared plans, given their propensity for invading neighbours and ignoring UN Security Council resolutions.

    If you think it is about oil, you can believe that but it is only an opinion. Are there many things you believe in without supporting evidence.

    Your link is not evidence of 14 permanant air force bases. How can the US forces, especially air force, operate against the terrorists within Iraq without bases? Now if the terrorists stopped killing innocent Iraqis, maybe you’d have a point, but at this stage that isn’t the case.

  18. They can say they don’t want to do what they are doing at anytime. They can refuse to deploy or ask to be withdrawn at any time.
    That’s an interesting interpretation of a volunteer army. Where does it come from? The only stories I’ve read about service personnel who refused to deploy was that they went straight to the brig.

  19. Re Hal and the doco.
    I saw a chunk of it and found it good for getting the realisation of how like most of us the ordinary people are- just battlers trying to deal with what a given day serves up. Did you catch a lot of the wit and black humour? So “Aussie” so much of the response from these poor buggers.
    Someone else was making a comment about the virtual Baudrillardian “war” waged by monolithic mass media. The occasional doco that gets through to the ABC or SBS concerning Iraqi, Lebanese, Palestinians, Afghanis, etc just contrasts all the more and reveals how shallow and biased ideological tabloid mass media is, as the likes of McGeough or Pilger and others also prove, as to the press.

  20. Razor – “If you think it is about oil, you can believe that but it is only an opinion. Are there many things you believe in without supporting evidence.”

    If you are so blinded that you imagine control of energy played no part in it then have nothing more to say. It is obviously sheer coincidence that Iraq has the second largest oil reserves and next door is Saudi Arabia with the largest and it connects the Straight of Hormuz that something like 50% of the world’s oil passes through.

    “Your link is not evidence of 14 permanant air force bases. How can the US forces, especially air force, operate against the terrorists within Iraq without bases?”

    Sure – fast jet fighter/bombers are really useful in urban warfare fighting a domestic insurgency. Why are they permanent? Surely now the dictator has been removed there should only be the need for police. Police do not normally need air-support other than helicopters which do not need large bases. My link is far less tenuous than your attempt to justify the invasion by linking Saddam to Al-queda.

  21. a major opportunity cost revealed itself yesterday when china took out one of its own old satellites with a medium range missile

    having ripped up geneva, non-proliferation, the UN charter and all the other fragile supranational attempts to regulate international relations in favour pre-WW2 style law of the jungle, how can the americans, the UK, or australia possibly complain about the militarisation of space

    in an age of pre-emptive attack, there are no rules and no one can blame the chinese or anyone else for acting unilaterally

  22. Rogs is right. The US is powerful, but in relative terms it is a declining power (it had about half of world GDP in 1948, it now has about a fifth). It needs to think about using its current power to set a system of international laws that will protect it in the future.

    As for those who indignantly claim we can’t set a value on human life, they haven’t thought it through. Money is a measure of human resource and effort, and we don’t spend infinite amounts of that effort in avoiding all deaths. F’rinstance, no doubt we could cut the road toll in half if we devoted most of our GDP to roads and traffic enforcement (perhaps reintroduce the Red Flag Act). But we rightly choose instead to spend the money on other things that make our lives better and longer.

    It really is quite appropriate to ask “how else could we have made human lives better and longer with a trillion dollars?”.

  23. derrida derider – “The US is powerful, but in relative terms it is a declining power”

    One of the symptoms is the age of the aircraft in the US air force. Sons are still flying F-15s that their fathers also flew. A bit like still flying Mustangs in Vietnam.

    “After five years at war in Afghanistan and Iraq, the Air Force is wearing thin.

    Dozens of aircraft are too old or fragile to fly safely. Others have restrictions on how fast or aggressively pilots can maneuver them. Humvees, air-control radars and support equipment also are wearing out at alarming rates – two or three times faster than planned.

    “It’s really approaching a crisis,” said Loren Thompson, who regularly advises senior Pentagon officials. He is chief operating officer of the Lexington Institute, an Arlington County, Va., think tank.

    The average age of the Air Force aircraft fleet is about 25 years, a historic high. Aerial tankers average more than 40 years old. And pilots are flying the same B-52s that their grandfathers flew during the 1950s.”

    Cheney cancelled, when he was defence minister heaps of programs to modernise the Air Force – perhaps he was trying to save money for the invasion.

    “As Pentagon chief from 1989 to 1993, Cheney canceled or cut back many of the
    same weapons programs — bombers, fighter planes, tanks — that he says Kerry
    tried to deprive the armed forces of. ”

    Not only did he help take the US to a destructive war that did not need fighting he also tried to make sure they did not have the proper weapons.

  24. In the EU emissions trading scheme, CO2 is trading at about 4 euros / tonne, (US$5.20)

    At US$100/tonne of CO2 (more than enough to bridge the gap between most clean energy technologies and today’s conventional power)

    US$1.2 trillion could buy 12 billion tonnes of CO2 abatement.

    By comparison, total greenhouse emissions from all the Annex-I countries was about 18 billion tonnes of CO2 in 2004:

  25. Ender,
    There is another link, if you want to put it that way, between Iraq and al-Qaeda – but an indirect one. One of the principal reasons / excuses that bin-Laden used for 9/11 was the presence of US forces in the land of the Prophet. Those forces were there, at least ostensibly, to protect the Saudis from the possibility of an invasion by Iraq under Saddam. The US government probably thought that the best way to resolve that issue was to move the forces out of Saudi Arabia, but the only way to do that was to also eliminate the threat from Saddam. Neat solution was to topple Saddam.
    Pity it did not work out quite as easy as the US planners thought.

  26. “David Leonhardt has a nice piece in the New York Times on the opportunity cost of the trillion dollar Iraq war.”

    It’s a great opportunity for the United States to start shutting down all the useless government social in order to pay for this military campaign and subsequent campaigns we need to be waging (like in Iran, for example).

    Doubt if any political party in America has the will to do it though.

  27. “What part of dictator removing is the building of 14 permanant air force bases?”

    The part when we use those bases to crush the Syrian Baathists and the mad mullahs in Iran.

  28. wbb – if I saw a terrorist planting an IED and I had air support available I would much rather organise an airstrike than get close enough to get shot or killed by the IED. That is how you hit Baathists planting IEDs from air force bases. You obviously have a very small understanding of military operations, even for a civilian.

  29. I think your arguments against rushing to finance wars could also be used to caution on rushing to implement radical left wing global warming policies. Afterall, didn’t we have “intergovernmental” concensus that Iraq had WMDs?

  30. Umm, no. We had assurances from the same Bush Administration that got things totally wrong on global warming.

  31. “Afterall, didn’t we have “intergovernmentalâ€? concensus that Iraq had WMDs?”

    Which they did…and your point is?

  32. Sorry, Dave, I didn’t mention that I was talking about the Iraq on planet Earth, and not Bizarro Iraq.

    I apologise to other Bizarro World readers for this. I also apologize for frequent references to the disaster in Iraq, global warming, the exposure of the Bush Administration as incompetent frauds, and so on. As Dave and other Bizarro readers are well aware, following the flowering of democracy throughout the Bizarro Middle East, the withdrawal of the victorious US forces, and BizarroBush’s confirmation as President for Life, the only problem facing Bizarro world is global cooling.



    That’s from 1998. It’s a lie that President Bush is the only one who was assuring us the Iraqis had WMD, a lie that President Bush started a war with Iraq (can’t start a war with a country that you’re bombing all the time, as we were all through the 1990s), and also, of course a lie when the leftys claim Iraq had no WMD.

    You should apologize, Quiggin.

  34. whoops, you missed capitalising on a few words in there Dave. Who is Dick Cheney? You know that reality is what you make by acting Dave so why lower yourself to shouting at loser lefties who only read and think, don’t do stuff like hard men. They’re pretty well out of power so no wurries mate!

  35. At the relevant time, only the USA and those deluded by it (far from a majority) were persuaded that Iraq definitely had weapons of mass destruction. There simply was no global consensus that Iraq had such weapons. Citing an earlier American assertion that Iraq had them in no way substantiates the claim that there ever was any such belief on the part of others.

    It is as bad as something the Melbourne Age once did. It edited a Howard speech to misrepresent him as admitting that the monarchy was obsolete (leaving out words to the effect that “some people think that…”). Later, it repeated this in an article, and when I queried it cited the Age’s own earlier false report in support; when I pointed out that this was also false, which could be checked by referring to the fuller report in the Australian, I heard nothing more.

  36. PML, thanks for providing the facts, but Dave is here purely for amusement value (and because he confirms our stereotypes about Republicans). Trying to respond seriously to his delusional worldview is a waste of time.

  37. Apparently, Quiggin is suffering from the delusion that I’m a Republican.

    Not surprisingly, he’s as wrong about that as he is about everything else (he’s a left wing loon…it’s expected).

    The Iraqis, did in fact have WMD in their possession, which is why there was “intergovermental consensus” that they had them.

    “Previously, inspectors reportedly had been finding little amiss. For instance, in December a team found a dozen artillery shells just as inspectors had left them in 1998, filled with mustard gas, sealed and tagged for destruction.”

    And, there is a ton of stuff that mysteriously went missing and still is not accounted for…

    “After reviewing the 12,000-page declaration of weapons programs that Iraq presented the U.N. in early December, analysts reportedly said its major omissions include a failure to explain the fate of 550 mustard-gas shells and 150 bombs containing biological agents that were unaccounted for in the 1990s.”

    “Among the missing: the remnants of warheads for 50 long-range missiles that Iraq said it had destroyed; quantities of deadly biological agents Iraq produced, including botulinum toxin, (which causes botulism), anthrax; gangrene gas (which rots flesh) and aflatoxin (which causes liver cancer).”

  38. Don’t worry Dave. A mission from earth will rescue you from the timewarp shortly. Meanwhile, Jan 26 2003 isn’t a bad day to be stuck in. It’s Australia Day, after all.

  39. Who’s worried? We pounded the crap out of the Baathists, killed or captured their leadership, and hundreds of their terrorist proxies, not to mention the fact that we rendered moot the U.N.’s idiotic WMD disarmament plan in the process (if the Baathists stashed all that missing anthrax away…it won’t help them now).

    That’s a win for my side.

    Sorry, you’re all bent out of shape about it.

  40. The revisionist leftist party line (i.e.a bald-faced lie):

    “There simply was no global consensus that Iraq had such weapons.”

    The truth (a term little understood by leftists):

    “For instance, in December a team found a dozen artillery shells just as inspectors had left them in 1998, filled with mustard gas…”

  41. Dave Surls, let’s pretend for a moment that you are 100% accurate about Iraq having had weapons of mass destruction.

    Even pretending that, it still leaves you 100% wrong – knowingly or unknowingly – about the world being convinced of it in 2003. I definitely recall lots of discussion on the point, showing how little persuaded the bulk of the world was.

    If you have been told differently, if you saw different accounts, consider whose accounts they were. Even if Iraq had been as guilty as hell, I can assure you the case had not been made well enough as of 2003. For you to tell me otherwise is for you to tell me and many like me that we don’t know what we thought then.

    “Knowingly or unknowingly”… Think for a moment, if you can, what either of those options imply about you. Knave or fool? Either way, the world is a more dangerous place – for the rest of us – for having people like you about, for some of them really can affect the course of events.

  42. “Dave Surls, let’s pretend for a moment that you are 100% accurate about Iraq having had weapons of mass destruction.”

    No need to pretend. The Iraqis did have WMD, and all the governments of the world knew it. There was, in fact, an “intergovernmental consensus” that the Iraqis had WMD, and when John Quiggin says otherwise…he’s not speaking the truth.

  43. Dave Surls expects perfection. Saddam’s report missed some ordnance. So what?

    Is Dave Surls as fanatical about the missing palettes of billions of dollars in greenbacks shovelled into Iraq by the CPA? This was money stolen by the US from the Iraqi people.

    These stolen billions must be added to the cost of the the war because they have impoverished the Iraqi people, corrupted civil life in Iraq, and doubtless have been funnelled in various ways into terrorist activity.

    Don’t bother answering Dave unless you can cite a url to your earlier comments on this serious topic.

  44. Please, Katz, you’re spoiling the fun. Don’t confuse the issue with facts. Let’s encourage Dave to tell us more about the wonderful world he lives in. It certainly sounds cheerier than the one we live in, with all those doomsayers like the National Intelligence Estimates bringing us down.

    Let’s hear more about the lemonade fountain and the big rock candy mountain where the Iraqis gather those sweets and flowers with which they daily shower the handful of remaining US troops just after the democracy parade down Haifa Street.

  45. Umm, Rog, like Dave, you’ve obviously been in on another planet for quite a few years now. This report on bogus intelligence only confirms what has been public knowledge since shortly after the invasion. But don’t let me drag you back from Fantasyland – it’s obviously more congenial than the mess Bush has created.

  46. JQ, it would appear that the NIE have now gained your respect. A senate committee into the original NIE report on WMD found that Bush & Co did not pressure the NIE to form pro war conclusions and that any errors were of management.

  47. Earth to Rog – no one cares any more. Iraq is a catastrophe, everyone knows it, and semantic exercises of the kind you are offering here are not worth refuting or engaging with.

  48. Sure, Iraq is a catastrophe for the Baathists, and for terrorists like Abu Abbas and for their supporters in the west.

    But, hey leftys, you can’t win ’em all.

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