Mises Daily

The War the Government Cannot Win

Ludwig von Mises said that the great accomplishment of economists was to draw attention to the extreme limits on the power of government. His point was not merely that government should be limited, but that it is limited by the very structure of reality. It cannot make all people rich by its own initiative. It cannot provide universal housing, literacy, and health. It cannot raise wages across the board. It cannot ban products. Those who seek to accomplish economic ends such as these are choosing the wrong means. That is because there is something more powerful than government: namely economic law.

And what is economic law? It is a force that operates within the structure of all societies everywhere that governs the production and allocation of material resources and time according to strict bounds of what is possible. Some things are just not possible. It just so happens that this includes most of the demands that are made by the public and pressure groups on the government. This was the great discovery of the modern science of economics. This was not known by the ancients. It was not known by the fathers of the early church. It was the discovery of the medieval schoolmen, and the insight was gradually elaborated upon and systematized over the centuries, culminating in the classical and Austrian traditions of thought.

The power of government to do what we desire is strictly limited. Those who do not understand this point do not understand economics. And the economic teaching has a broader implication that concerns the organization of society itself. Government is not free to make and unmake society as it sees fit. It is not a tool we can use to fulfill our private dreams. Society is too complicated, too far reaching, too much a reflection of the free volition of individual actors, for government to be able to accomplish its ends. Most often, what government attempts to do — whether abolish poverty, end liquor consumption, or make all citizens literate and healthy — ends up backfiring and generating the exact opposite.

With this background, I would like to discuss the broad topic of the war on terror. Terrorism is not something that any of us likes. We would all like to see a world without violence and bloodshed. This hardly distinguishes our generation from any that preceded. What is unique about our moment is that we live under a regime that has come to believe that the government itself can produce this result for us if we only give the government enough power, money, and managerial discretion to accomplish this goal.

We associate this view with the political Right. This might be something of a misnomer since the Right was very much against the wars of the 1990s. It was the Right that made the case against nation building, and it was Bush who earned the support of the American middle class by promising a humble foreign policy. It was the conviction back then that Clinton’s wars had been waged at the expense of the life and liberty of Americans here and abroad, and had failed to accomplish their ends.

A similar critique of left-wing wars was offered by the Right in the interwar period. It was clear that World War I had diminished American liberty, regimented the economy, inflated the money, slaughtered many people, and failed to accomplish its goal of bringing about self-determination for all peoples of the world. The Right applied its political logic of the need for freedom at home to issues of foreign policy. Small government and non-intervention applied to domestic as well as foreign affairs, for reasons both practical and moral. The Left, in contrast, saw war as yet another application of the principle that government can accomplish great things for us, and they saw how war provides the great pretext for expanding the power of the state to do these things.

But these days, the political roles have changed. The Left is the major voice criticizing the war on terror, while the Right, much to my dismay, has enlisted in ways I could not have imagined back in the 1990s. The Right has led the call for war abroad, and called for speech controls, domestic spying, and more power to the president to arrest, jail, and even convict people in military courts without the slightest concern for human rights and liberties. Countless times I’ve had to explain to people who otherwise are suspicious of government that it is not a good thing to give the US government the power to overthrow any government in the world or torture people abroad or pass out trillions in reconstruction aid.

When the Left makes a case for total government management at home and yet nonintervention abroad, while the Right argues for free markets at home and a global war on terror abroad, there is some sort of political schizophrenia alive in the land. People who have doubted the power of government to do much at home seem to take leave of their senses when it comes to war abroad. And it is hardly a surprise that they have been proven wrong.

Four years ago, Bill O’Reilly said: “I will bet you the best dinner in the gas-light district of San Diego that military action will not last more than a week.”

Tony Snow said: “The three week swing through Iraq has utterly shattered skeptic’s complaints.”

Morton Kondrake said: “All the naysayers have been humiliated so far …the final word on this is, hooray.”

Fred Barnes said: “The war was the hard part …and it gets easier.”

Well, it hasn’t gotten easier. Bush says that we should stay in Iraq as long as necessary. A poll that came out last week says that only 23 percent of soldiers in Iraq agree with him. Seventy-two percent say that the United States should leave completely within a year. Nearly a third say that all troops should leave immediately. When the troops themselves are willing to tell pollsters this sort of thing, a war is completely doomed.

War supporters at home are starting to see the light. Let me read to you a note I received this morning.

Dear Lew,

Some years ago, I wrote to you as a supporter of the Bush war on terrorism. You reminded me, in a response which now escapes me, that the war was in essence a mistake. I remember being disappointed at the time with your response, what with 9/11 and alI. I joined the throng of Conservative lemmings who were following our leader over the edge of the cliff in large measure because I had voted for him in the previous election and I was willing to believe his pronouncements regarding the need for war. I suppose you could say that I trusted him to tell us the truth, as naive as that may sound for a person who is supposed to be a Conservative.

I now must admit to you that I was wrong and you were right. Without going into too much detail, I have come to see that UN mandates, lack of conclusive proof of WMDs and generally poor intelligence about the Iraqi regime as well as the specious arguments of Saddam’s Al Qaida connections were all more or less used to cover our invasion of that country and at the price of so many fine soldiers and marines. And what did we get in exchange for our blood and treasure? I wonder.

A couple of years ago I found one of my grandfather’s books, Three Soldiers by John Dos Passos. Within the cover I found where he had inscribed the phrase “To Hell with all wars.” Papa had served in the Army during the Great War and was an eyewitness to its horrors. My grandfather taught me much about the world and gave me my conservative viewpoint. That discovery combined with my observations of the current scene caused me to re-evaluate my acceptance of this conflict. Not that I have become, as it were, a pacifist; but I have re-examined the history of our republic and have come to the conclusion that we should fight only in national self-defense and certainly not without a real congressional declaration as spelled out in our Constitution. It is very difficult to die for a lie, knowing it to be such.

Such notes no longer surprise me. The feeling is widespread. The lie noted in this letter concerns the supposition about Iraq’s weapons of mass destruction. But that is not the most egregious lie. The worst lie is the big one: that government can accomplish wonderful things if we give it enough power, money, and discretion. No matter how many times we hear it, or in what context, it is always and everywhere a lie. A leader who says this, is the equivalent of the snake in the garden who promises that glorious knowledge comes with just one bite of fruit. And yet we as a people keep being lured into accepting it.

The debates about the war on terror have typically involved great detail about the validity of intelligence reports, investigations of terror networks, discussion of the reliability of this or that foreign regime, and the like. But none of this is really necessary if you want to make a sound judgment about whether to support the war in question. What we really need is more general knowledge about the nature of government and its limits. If we understand how it will lose the small wars against things such as cigarettes and liquor, we can more clearly understand how it loses the large wars.

The attempt to ban liquor led to a vast increase in liquor distribution and consumption through black-market means. The campaign to wage a war on poverty resulted in more poverty. The war on literacy has created generations of illiterates. The wars on cigarettes and drugs have been spectacularly unsuccessful, and for proof you need look no further than prison, an environment that government fully controls and which is predictably swimming in cigarettes and drugs of all sorts.

There are some things that a state just cannot do, no matter how much power it accumulates or employs. I’m sorry to tell this to the American Left, but the war on warm weather is not going to be any more successful than any other of these wars. And I’m sorry to tell this to the American Right, but there is no way that the American government can kill every person on the planet who resents US imperialism. The attempt to do so will generate more, not less, terrorism.

We are now more than half a decade into this war on terror. The State Department now says, based on its own data, that the results of the war are “mixed.” In government parlance, the admission of mixed results means, in regular language, total failure. The number of terror-related incidents increased 28.5 percent from 11,153 in 2005 to 14,338 in 2006. The number of people killed in terror-related incidents went from 14,618 in 2005 to 20,498 last year. Most occurred in Iraq but the number in Afghanistan also nearly doubled from 491 to 749. The number of children killed in bombings has increased 80 percent to 700 killed kids and 1,100 wounded.

Let us compare all this to the year 2001, when the war on terror really got going. Including the New York and Washington attacks, there were a total of 531 attacks, with a total of 3,572 dead and 2,283 wounded. The number of attacks went down slightly in 2002, a fact which the government trumpeted as proof that the war was working. But this link between cause and effect was quickly deleted. By the next year, the problem began to grow steadily worse, with 208 attacks and 625 people dead and 3,646 wounded. In 2004, the number of incidents shot through the roof to 3,259 and it suddenly became far more difficult to obtain the data. The old reports that had made it crystal clear became totally reformatted and replete with propaganda instead of facts. The number tripled the next year, but the data on this was nearly impossible to find.

Gone was the rhetoric from 2002 about the great success. It was replaced with frenzied attacks on ever-increasing numbers of terror groups. Instead of 10 or 20, there were hundreds and hundreds of them taking the lives of ever more people. Incredibly, the State Department decided not to make public the 2005 figures since attacks rose yet again. Officials had to be hauled before a Congressional committee before they would give any specifics.

Now they can’t get away with hiding the numbers but you still have to look very hard to find them. The bottom line is that since the war on terror began, the incidents that qualify as terrorism have increased by an incredible 26 times. For every one incident in 2001, there are now 26 incidents. For every person killed by terrorism in 2002, 23 people were killed in 2006. Meanwhile, the polls reflect the perception that the world is more, not less, dangerous since the war on terror began. Indeed, among those polled, 81% now believe that the world is becoming more dangerous.

Are we going to call this a job well done? It depends on what you call a good job. It fits precisely with what we might expect government to do: its wars always and everywhere make the problem worse, and not better.

Now let us consider spending. According to Portfolio.com, the combined cost of the Iraq war (Operation Iraqi Freedom, in Pentagon jargon) and its companions, Operation Enduring Freedom, in Afghanistan, and the Global War on Terror, could easily top $600 billion this year. But the overall cost is even higher, exceeding perhaps $2 trillion. The annual congressional appropriations for the wars — averaging $127 billion — are bigger than the global markets for soap, heroin, or gambling. And the spending is growing. Monthly spending for the wars in Iraq and Afghanistan averaged $6.8 billion in 2006. That figure is now closer to $8 billion a month.

Portfolio adds:

At that rate of burn, General Electric’s value would be wiped out in three and a half years, Bill Gates’ personal fortune would evaporate in just seven months, and the troubled Ford Motor Co. would cease to exist in a matter of weeks. If you think of the wars as a giant impulse buy using an unlimited credit card, then paying it off would require coming up with enough cash to match the GDP of three Irelands or about 11 Kuwaits or the Netherlands — but only if you throw in Sri Lanka.

Before the invasion of Iraq in 2003, Colin Powell warned President Bush that if you break it, you buy it. At last count, we’ve bought the equivalent of 10 Iraqs with your tax dollars. But instead of buying 10, the money has gone to completely destroying one country.

But surely this money is going to more than just war. What about the effort to rebuild Iraq’s infrastructure? Well, if you know anything about government building projects, you know there is not a record of success. Pick any Section-8 housing project anywhere in the country and you will find a long record of mismanagement, misallocation, and waste. So it is in Iraq. These reconstruction projects that war supporters have heralded have amounted to little or nothing.

At the Baghdad airport, for example, your tax dollars paid for $11.8 million in new electrical generators. But $8.6 million worth of them are no longer functioning. The problems with generators in Baghdad are legendary: low oil, broken fuel lines, missing batteries, and the like. The water purification system for the city is no longer working. At the maternity hospital in Erbil, an incinerator for medical waste was padlocked and officials can’t find the key. So syringes, bandages, and drug vials are clogging the sewage system and contaminating the water.

Now, how did we get all this information? A federal oversight agency went to inspect a sample of eight projects that US officials in Iraq had declared to be a success. Of these eight successes, seven of them were not actually functioning at all due to plumbing and electrical failure, poor maintenance, looting, and just general neglect. Keep in mind that these are the projects that the US government declared successes! The failures must be abysmal beyond belief.

So too with myriad state programs, among which is the Global War on Terror. There is no standard by which it can be considered a success. But as we know, data only get you so far. If you ask the people who the establishment considers to be experts in terrorism, they are united in one belief: we aren’t spending enough money on the effort. Every agency needs more power and money, they say. The reason for the failure is a lack of resources. If we would just fork over more, all will be well.

It is precisely this rationale that led socialism in Russia to last 70 years and drive the entire country into the ground. Those of us who watched this calamity from a distance were astonished that a failure could last so long. Can’t the government look around and see what a disaster they have created? Can’t they see that while their people were lining up blocks for a scrap of bread and dying at the age of 60, ours were shopping in massive department stores and living to 70 and 75? Why isn’t it obvious what a failure socialism has been?

Well, one thing is clear in the social sciences: nothing is obvious to the experts. The reason has to do with their perception of cause and effect. The supporters of socialism always believed that more money and better management would take care of the problem. Every failure was caused by something outside of the system that a perfection of the management system would correct.

So it is with the war on terror. All the experts counsel more spending and power. It never occurs to them that the war itself is the problem. All problems are blamed on some other factor: sectarianism, outside interference, a demagogic new leader, poor management, or what have you. The excuses can be manufactured without end.

And then there is the overwhelming factor that the war on terror can only be considered a failure from the point of view of the stated aims. It is not a failure for those who directly benefit from the increased funding and power. And it is an indisputable fact that the government has benefited massively from the war on terror.

It is essential that we look at this war in light of history. At the end of World War II, the government and its elites were quite desperate for a massive global cause to keep spending high and the government in control. Communism was picked, and so our former allies in the war became our sworn enemies.

Ten years ago, with communism gone, the American warmongers had little to do, other than intervene in small skirmishes. Finally they hit on a great idea: demonize Islamic radicalism. Here is a nation without borders that is terrifying to the American people, just like communism. Despite all the appearance of sadness and anger after 9–11, the elites also understood that it meant the continuation of the old war apparatus. And for that, they were not entirely regretful.

At last there was a pretext for war preparedness and war itself that rivaled the old communist threat. So off we went into this structure. There has been no shortage of rhetoric. No expense is spared on arms escalation. There is no lack of will. The effort has the support of plenty of smart people. It is backed by threats of massive bloodshed.

What is missing in the war on terror is the essential means to cause the war to yield beneficial results. Of all the billions of potential terrorists out there, and the infinite possibilities of how, when, and where they will strike, there is no way the state can possibly stop them, even if it had the incentive to do so.

Behind terrorism is political grievance. This is not speculation. This is the word of the terrorists themselves, from Timothy McVeigh to Osama Bin Laden to innumerable suicide bombers. They are not acting randomly. They have goals. The goal is, first, get the US government and its troops out. And if history teaches us anything it is that no country wants to be ruled by a foreign power, whether that foreign occupation takes the form of colonialism or outright military dictatorship. People would rather run a country badly than have it run well from the outside. No one should understand this better than the American people, whose country was born in a revolt against foreign rule.

The second goal of the terrorists is to gain access to the levers of power. In many cases, the United States created these, such as in Afghanistan and Iraq. We insist that there must be a single governing power. Then we are surprised when groups appear that are determined to control it. It would have been much better for everyone in Iraq and Afghanistan to have left them without states at all.

The longer we continue in the failures of our war on terror, the more problems that we generate. The pool of actual terrorists (like the poor in the War on Poverty) is limited and can be known, and they are the ones the state focuses on. But the pool of potential terrorists (and potential poor people) is unlimited, and unleashed by the very means the state employs in its war.

Hence, not only does the state not accomplish its stated goals, it recruits more people into the armies of the enemy, and ends up completely swamped by a problem that grows ever worse until the state throws in the towel. In the meantime, the target population is able to make a mockery of the state through sheer defiance.

The means of conducting war has all the features and failings of every form of central planning. There is an overutilization of resources, and, when the results are the very opposite of the promise, they overutilize some more resources. They do not account for the possibility of error, even though error is more common than anything.

Rather than admit error, the war planners shift the blame. The war planners do not account for basic traits of human nature, such as the will to resist. They assume that the world is theirs for the making and never confront the fact that there are forces beyond their control. The people who planned the war on Iraq dismissed suggestions that perhaps not everyone in Iraq is going to be overjoyed at the prospect of gaining freedom through bombing, destruction, and martial law administered by a US military dictatorship or a puppet regime.

But can’t the state just kill more, employ ever more violence, perhaps even terrify the enemy into passivity? It cannot work. Even prisons experience rioting. The theorist who first saw the collapse of the ideology of the nation-state, Israeli historian Martin van Creveld, was asked about this in an interview for the Australian Broadcasting Corporation. He was refreshingly blunt: “The Americans in Vietnam tried it. They killed between two-and-a-half and three million Vietnamese. I don’t see that it helped them much.”

Without admitting defeat, the Americans finally pulled out of Vietnam, which today has a thriving stock market. To a notable extent, the war on poverty has ended its most aggressive phases and poverty is declining. What does this experience tell us about the War on Terror? The right approach to this program, as to all government programs, is to end it immediately.

But wouldn’t that mean surrender? It would mean that the state surrenders its role but not that everyone else does. Had the airlines been in charge of their own security, 9–11 would not have happened. Bin Laden would have a hard time gaining recruits. Muslim fundamentalism would be dealt a serious blow, for no longer would US policy seem specifically designed to feed the madness of its lunatic fringe.

In all the talk of war on Iraq, I’ve yet to hear anyone recently claim that taking out Saddam or bringing about a regime change made the world a more peaceful, happier place. No one really believes that. The 1990 war on Iraq gave rise to al-Qaeda, led to the bombing of the Oklahoma City federal building, and emboldened an entire generation of Muslims to devote their lives to fighting America. The new war in Iraq has done the same. And where did these fanatics come from in the first place? They were subsidized in the 1980s by US policy. We believed that they were good guys because they were fighting communism. Some of the same groups that we are now bombing in Afghanistan and Iraq we were wining and dining in the 1980s in the pursuit of the Cold War.

Thus has one bad intervention led to another, precisely in the way that Mises spelled out in his 1929 book Critique of Interventionism. He explained that interventionism is not a stable policy. It creates imbalances that cry out for correction, either by abandoning the policy or pursuing it further to the point of collapse. For this reason, the War on Terror is impossible, not in the sense that it cannot cause immense amounts of bloodshed and destruction and loss of liberty, but in the sense that it cannot finally achieve what it is supposed to achieve, and will only end in creating more of the same conditions that led to its declaration in the first place.

In other words, it is a typical government program, costly and unworkable, like socialism, like the War on Poverty, like every other attempt by the government to shape reality according to its own designs.

Now let us look at the flip side of the impossibility thesis. If government wars are impossible, what is possible? The answer was provided by the old liberal school: freedom. Society contains within itself the capacity to self-organize. There is nothing that government can do to produce a better result.

This is true in domestic and foreign policy.

“The idea of liberalism starts with the freedom of the individual,” Mises wrote. “It rejects all rule of some persons over others; it knows no master peoples and no subject peoples, just as within the nation itself it distinguishes between no masters and no serfs.”

The war on Iraq has enjoyed some measure of public support based on the desire for revenge. Even though Saddam had nothing to do with 9–11, people wanted someone to suffer. What we tend to forget is that this is an old motive for war, and it can lead to calamity.

World War I had ended with many resentments stewing and the old longing for empire had not entirely gone away. Germany in particular was ripe for bamboozlement by a leader who could tap into the resentment concerning lost territories. The leader would convince the people that the urge for justice can only be satisfied by re-creating an empire, and only the strongest possible leader could manage to accomplish this against all odds.

Mises wrote with an impassioned desire to stop the course of events. “It would be the most terrible misfortune for Germany and for all humanity if the idea of revenge should dominate the German policy of the future,” he wrote. “To become free of the fetters that have been forced upon German development by the peace of Versailles, to free our fellow nationals from servitude and need, that alone should be the goal of the new German policy. To retaliate for wrong suffered, to take revenge and to punish, does satisfy lower instincts, but in politics the avenger harms himself no less than the enemy. What would he gain from quenching his thirst for revenge at the cost of his own welfare?”

Americans have a deep-rooted attachment to the ideal of liberty, which is a glorious thing. But it is also why American leaders have always justified foreign wars in the name of liberating the oppressed people of the world. The mistake is thinking that freedom can be achieved by means of force. The Cold War originated with the idea that the United States should do whatever was necessary to roll back the very Soviet client states that the US worked to establish at the end of World War II. Then the US pursued a series of wars in far-flung places that cost lives and liberty and did nothing to stop the spread of communism.

The more implausible the imperial war, the more a variety of rationales becomes necessary. Iraq has been justified on grounds of security, safety, religion, vengeance, and economics, each rationale carefully tailored to appeal to a certain demographic group. All that is necessary is that the state convinces a slight majority, however temporarily.

What must a person forget in order to believe in the unity of interest between US foreign policy and the American people? They must forget that America was born in revolt against not only the British Empire but also the very idea of empire itself. They must forget that the only way the US Constitution was adopted was the promise that it would not act imperialistically at home or abroad. They must forget the warnings of George Washington, Thomas Jefferson, and many presidents of the 19th century. They must forget about the history of failure of our own imperial wars in the 20th century, in which guerilla armies have consistently beat back our regular troops.

To believe in the war on terror is to adopt a posture that forgets everything that is truly American: our history, our belief in human rights, our hatred of despotism, our opposition to international meddling.


The United States has no business attempting to run a war that involves the entire world and the whole human race, and certainly we can’t be surprised when those we rule call us the evil empire. Americans are all rebels in our hearts. Anyone who longs for freedom must be. Empire is contrary to the American ethos. The American people have made exceptions in this century. But there is no threat on the world scene to our families and property greater than that posed by the US government itself.

I’m often asked what an average person can do to stop the madness and further liberty. The first and most important step is intellectual. We all need to begin to say no to the state on an intellectual level. When asked what we would like the government to do for us, we need to be prepared to reply: nothing. We should not ask it to save our children, nor provide security, nor vanquish all evil, nor give us anything at all.

We should not ask government to win a war on terror, end poverty, make everyone healthy and literate, provide for us when we are old, or anything else. Nothing the government does takes place without a greater cost than benefit to society.

Knowing this, we can still be good citizens. We can be good parents, teachers, workers, entrepreneurs, church members, students, and contributors to society in a million different ways. This is far more important to the future of liberty than anything else we do. We must regain our confidence in our capacity for self-governance. I believe this is happening already. The government’s wars will continue to fail, and I do not think that we should regret this. Even if the public sector cannot and will not prepare for a future of liberty, we can. Let us look for and work toward the triumph of liberty unencumbered by Leviathan and its wars.

[This talk was delivered at the Wisconsin Forum in Milwaukee on May 1, 2007.]

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