Inspired by the formation of ECAAR in the US, the Dutch Nobel Prize winner Jan Tinbergen founded a Netherlands-Flemish section in 1991. In his essay "Recollections from Professional Experiences," Tinbergen wrote that economists should choose their work based on the most pressing problems facing our world: (a) how to organize a peaceful world; (b) how to strengthen solidarity with those living in poverty; and (c) how to take future generations into account.
ECONOMISTS FOR PEACE (Coexistence 22:191-194 (1985), Martinus Nijhoff Publishers, Dordrecht.)
Royal Dutch Academy of Science, The Netherlands
The Nobel Prize for Peace was awarded in 1985 to 'Physicians for Peace', the worldwide organisations of physicians, who pointed out to all of us that medical aid after a nuclear attack will be virtually impossible. Not only medical scientists have such a message to politicians. It seems appropriate that many other sciences should deal with the question whether they, from their particular point of view, should also testify. Since a war today constitutes a serious threat to human civilisation as a whole, the answer might well be that all sciences are obliged to do so.
This idea is attractive; moreover, because of all social groups those of scientists and scholars are more internationally minded than others. Being an economist, in this essay I would like to tackle the question from the point of view of economic science. I am by no means the first economist to seek to analyse some of the links between war and economic Phenomena. Two examples may illustrate this. In December 1919 John Maynard Keynes published his famous Economic Consequences of the Peace, in which he pointed out that the obligations the peace treaty after World War I imposed on Germany were much too heavy to be borne. The course of history unfortunately showed how right he was. Another example was Lionel Robbins' The Economic Causes of War, published in 1939, just before World War II. Several other economists have studied either the causes or the economic impact of war. It seems to me, however, that they did not treat war as an economic problem in the sense that a choice, on economic grounds, in favour or against war as an instrument of socio-economic policy was made. This I propose to do.
Before I make this attempt I would like to comment on how my fellow economists have behaved vis-a-vis the war phenomenon. They by and large took it for granted that political leaders or 'authorities', in certain circumstances, put into motion the military apparatus, but did not pass a judgement on such decisions as they would do with regard to the application of other instruments of economic policy. Examples of such other instruments are the imposition of taxes or social security contributions, expenditures to build dwellings or schools, the issuing of permission to private citizens or groups of them to build, and so forth. Economists consider it their task and right to formulate an evaluation of such acts of socio-economic policy, and even of the reform of our social order into a welfare state or a reform in the opposite direction. Sometimes they even use strong expressions of disagreement and call irresponsible some types of governments which follow policies different from the measures they propose themselves. To my knowledge few, if any, German economists published articles around 1914 or around 1939 in which they protested against the war initiated by their government. Neither have NATO or Warsaw Pact economists in the last few decades made clear statements on the security policies of these alliances. The time has surely come for them to do so - or rather - this time had already come some decades ago.
An evaluation of war as an instrument to settle conflicts must be based on an analysis of the impact of modern war on human welfare, comparing that impact with the consequences of alternative means of settling conflicts. The impact in question consists of inputs and outputs. The inputs are (i) very expensive arms and (ii) large numbers of victims killed or injured, many of them handicapped for the rest of their lives. The outputs are destruction and a lower level of welfare for those not killed and the loss of their relatives, friends and colleagues killed. In addition there is a satisfaction of patriotic feelings and of preferences with regard to social systems. In previous centuries gains of a material character (mineral deposits or other natural resources) to the winning party were of some importance, but their relative significance has diminished considerably. So the main positive components of the impact are satisfaction of patriotic feelings and social order preferences. Both are of a doubtful character. Patriotic feelings imply the idea that one's own compatriots are better (in some sense) than the other's. This cannot be true for both parties concerned and hence constitutes a doubtful asset, largely influenced by propaganda or indoctrination. It is accompanied by the disgusting moral pressures, exerted even by mothers who urge their sons to be heroes. It is not very different with regard to preferences for a particular social system. These preferences are also inflated to a considerable degree by propaganda and indoctrination. One illustration of this is that Soviet soldiers were not encouraged to defend their socialist order against the Nazis during World War II; nor are today's American soldiers encouraged to defend capitalism. Too many Soviet soldiers were peasants with doubtful feelings about socialism; too many American soldiers today are workers whose feelings about capitalism had better not be mobilised. Compared with these doubtful 'advantages' of war the very real and horrible disadvantages have grown in the course of time.
It is relevant to see what happened to war as an instrument of policy within the larger nations which during the last few centuries came into existence as a result of integration: the United States of America, Germany and Italy, for instance, somewhat more than a century ago. The American Civil War was the last war among the American states and the numerous wars between small German princedoms and Italian cities or regions stopped after the unification of the German Reich and the Kingdom of Italy around 1870. No sensible politician in each of these nations today wants civil or regional wars to be considered as an instrument of policy. The core of the problem the world is now facing is how to apply this experience to the world at large, how to integrate the world.
It is a problem of management, familiar to business economists. Within a well-organised unit - whether a large enterprise or a national economy - we set up a number of levels of decision making, hierarchical levels, from the work floor to the chief executive in an enterprise, from the citizens to the head of state in a nation. For each problem an optimum level of decision-making exists, that is a hierarchical level whose decisions maximise efficiency in the enterprise or the welfare of the population in a nation. Our world community, in order to operate, must make decisions on many problems, from what a family will eat today to how to keep the atmosphere clean. The family may decide itself on its menu. But in order to avoid air pollution or the killing of forests by acid rain we need decisions of a supra-national character - continental at least, but preferably at world level. The general principle determining the optimal level may be formulated as the lowest level possible without external effects. By external effects we mean effects on the welfare of people not falling under the jurisdiction of the level concerned. Put in another way: the optimum level is the lowest level responsible to all who are affected by its decision. Applying this managerial principle to the management of the planet earth, we find that a large majority of all decisions for running world society can be taken at the levels at which they are presently taken. But a few - important - sets of problems require decisions to be made at higher levels. This was understood already in 1945 when the World Bank and the International Monetary Fund were established, but was not understood when the International Trade Organisation (ITO), negotiated in Havana, was not ratified by the United States. As a weaker organisation GATT was substituted. Also the Bank and the IMF were not given all the power they needed to operate in a fully satisfactory manner; for instance, the Bank was not given the power to collect its capital in the way that maximises world welfare, only the power to spend it optimally.
In the meantime other problems have been added to those that require supranational decision-making; the problem of the environment, for one, has already been mentioned. The problem of settling international conflicts was long overdue to be dealt with, at least a century ago. The abuse of patriotism by national leaders has spread unbelievable suffering among increasing numbers of non-combatants or youngsters forced to fight. And although socialists of all denominations theoretically were internationalists, they too have not been able to end such an abuse. The settling of international conflicts must not be left to sovereign states. This is the message of economic science that has now the first priority. It cannot claim novelty; but it can claim urgency. Moreover it may be used to project the future structure of the United Nations family of organisations: the terms of reference and power needed to fulfil the tasks already vaguely understood in 1945. In some of the charters of these organisations the tasks concerned have been formulated more or less satisfactorily. The means needed in terms of competence and power have however either not been formulated or if formulated have not been carried out. Here is an attractive task for the interdisciplinary creative work of scholars, which is waiting for implementation: a better job than inventing still more sophisticated weaponry.
1. Officially: International Physicians for the Prevention of Nuclear War.