I remember receiving several coarse emails a couple of years ago for citing William Nordhaus‘ 2002 study that estimated the Iraq War would cost around $1.2 trillion over ten years. Read the full study here. WARNING: Large download. (A summary table can be seen here.)
The figure was outlandish, I was told. This was back at the time when Larry Lindsay was fired for making public his estimate that the war would cost $200 billion when the Bush Administration was estimating a cost of about half that amount. Now it seems that Nordhaus is looking rather prescient.
An op-ed in today’s New York Times by a Harvard public finance professor reports on a study that considers two and a half years of war spending and estimates that the the war will end up costing $1.3 trillion, or $11,300 for every household in the United States. Applying constant dollars to both studies, the estimates are very close. How about studies showing how trade, and not empire, can serve to make such costs a thing of the past, by promoting the necessary foundation for peace among nations? Such work would extend the analysis of Mises, who knew that “[i]n the long run war and the preservation of the market economy are incompatible. Capitalism is essentially a scheme for peaceful nations.”
