The Free Market: War Socialism

The Mises Institute monthly, free with membership

July 1999
Volume 17, Number 7

War Socialism
Thomas J. DiLorenzo

The international socialist movement, led by Bill Clinton, British Prime Minister Tony Blair, and German Chancellor Gerhard Schroeder, is attempting to revive the disastrous policy of war socialism with which the current century began.

Four recent events make clear their intentions: the Nato war on Yugoslavia; the resignation of all twenty members of the European Union's executive body due to massive corruption; the announcement of a "new Marshall Plan" for southern Europe; and Nato's announcement at its 50th anniversary celebration in April of a "new strategic concept" of intervening militarily in any country around the globe whose policies Nato dislikes.

British Prime Minister Tony Blair called this concept "a new doctrine of international community." Professor Michael Mandelbaum of The Johns Hopkins University, who has scrutinized the new "doctrines" that were spelled out at Nato's anniversary celebration, explains that this will require Nato to "engage regularly in the kind of war it's now fighting in Yugoslavia, and not just in Europe but elsewhere."

The Europeans are said to be especially excited about this policy of creating a "new international community" at the barrel of a gun. The reason is clear: the most wide-ranging military adventurism in the history of the world (paid for mostly with US blood and treasure) would also provide the politicians of Nato countries with almost unimaginable prospects for patronage, bribery, and power. The corruption that led recently to the resignation of all the top European Union officials would be peanuts compared to what would result from the Blair-Clinton- Schroeder "new international community."

The big majority of the politicians who run the EU and Nato are socialists. Of the twenty members of the EU governing board, seventeen are associated with political parties that either have the word "socialist" in the party name or, like the British Labor party, proclaim socialism to be their main objective but shun the "S" word.

When all is said and done, socialism never amounted to more than a massive political patronage scheme that allowed a small elite to accumulate wealth and power at the expense of everyone else, while destroying the economy of country after country. Yet this is what the advocates of the "new international community" have in mind--essentially, a world economy run by EU bureaucrats and their American accomplices, all enforced by Nato's firepower.

The EU is a thoroughly and inherently corrupt organization, and it hopes to spread its corruption worldwide. It currently has "power" to "oversee" European economic policy, including the European Central Bank, although its meetings are completely in secret. It ostensibly "answers" to the European Parliament, whose members (the majority of whom are socialists) recently voted to pay themselves $250,000 per year each, plus fringe benefits, and who built themselves a $1.2 billion headquarters building in Brussels.

The EU spends almost $100 billion per year. Each member has his own little patronage fiefdom which dispenses largesse to his political supporters, compliments of European taxpayers. It is corporate welfare run amok.

This fact explains the support by so many American politicians of both parties for waging war against Yugoslavia over the secession of a minor province (Kosovo). Waging war on a country and then using taxpayers' dollars to "rebuild" it is the lifeblood of the modern military- industrial complex.

It is instructive to recall that when former US Commerce Secretary Ron Brown died in a plane crash over Bosnia in 1996 he was escorting several dozen American businessmen who were in search of contracts to do work financed by the World Bank, International Monetary Fund, and US taxpayers. Most of the companies represented on the trip were "Democratic donors," the Wall Street Journal reported at the time.

Former Republican Defense Secretary Dick Cheney, who heads the construction firm of Brown and Root, saw to it that his company was paid more than half a billion dollars to build barracks and other facilities to serve the "expanding needs of US troops in Bosnia," according to the Associated Press. The US General Accounting Office publicly blamed Brown and Root for $327 million in "budget overruns for the Bosnia operation," but nothing was done about it. Nice work if you can get it.

The original Marshall Plan was a colossal boondoggle that only hampered European recovery from World War II, but that fact will be ignored as the contemporary advocates of war socialism (a.k.a. the "new international community") propose new Marshall Plans for much of the rest of the globe. The Marshall Plan greatly enlarged the government sectors of recipient countries by requiring "matching funds" for "public works" or other state projects.

But the countries that received the largest amounts of Marshall Plan aid, such as Greece and Austria, did not recover until the aid was ended, whereas Germany, France, and Italy rebounded before receiving any Marshall Plan funds. Germany's economic recovery after the war was due to the free-market policies implemented by German Economic Minister Ludwig Ehrard, not Marshall Plan welfare.

So-called foreign aid always enlarges the state sector of the recipient countries, thereby increasing its resources, patronage, and power in relation to the rest of society. This in turn destroys genuine free enterprise, making the recipients more and more dependent on international handouts.

Nothing could be more insidious than an international welfare state enforced and implemented by the Nato military machine. Any US politician who supports the shedding of American blood and the squandering of American treasure for such an objective should be tried for treason.

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