To libertarians / Rand clones

[The Don]

[ QUOTE ]
I interpret labor, technology, and capital to be inputs that lead to economic output. All three terms are described in the aggregate. And in an depression era when all three come together to produce very little, and suddenly, almost overnight, all three come together to produce a lot, oh nevermind it was just America naturally going through the business cycle, had nothing to do with any war.

[/ QUOTE ]

Same fallacious argument -- just because more was produced and more people were employed does not mean that the economy had improved. I think we have successfully proved that in the preceeding posts.

[ QUOTE ]
just because more was produced and more people were employed does not mean that the economy had improved.

[/ QUOTE ]

TheDon,

Please do something that has not been done in this thread. Define economic improvement.

[The Don]

Development and growth of the economy as a result of the actions of individuals. This way, people get what THEY want, not what government wants. In wartime, the government is causing growth as a result of their action. Ideally, the economy would grow free of this intervention.

[ QUOTE ]
Your answer: Development and growth of the economy as a result of the actions of individuals. This way, people get what THEY want, not what government wants.


[/ QUOTE ]

So when Pearl Harbor was attacked and Italy and Germany declared war on us, the people didn't want to build tanks and bombs?

Please, no dodging around the request. Please define economic improvement. I would invite anyone else who disagrees with me to do the same.

[The Don]

They people could have defended themselves without the state. The government monopoly on defense prevented the market from providing it, though.

My definition stands. Namely, growth implies a creation of wealth, not a destruction of it. Individuals only desire the latter under very rare circumstances. Governments, however, seem to desire this in excess.

[Borodog]

[ QUOTE ]
I've laid out specifics as to WWII and the economy, and all you've laid out are strawman exaggerations. You claim my argument is weak because employment+technology+capital is not a macroeconomic mechanism, and that the economic indicators of such are entirely coincidental, nor do they indicate economic improvement to begin with. I'm going to pretend you are simply correct on all of those points and throw in the towel.

[/ QUOTE ]

Neat trick. So you don't want to explain how hiring the unemployed, having them print money, and then paying them with it, is good for the economy, even though it has the same suite of features (increase GDP, lowered unemployment, inflation) that you claim indicate a robust economy? Nor are you willing to admit that you haven't provided a single mechanism whereby the Second World War could have made the nation wealthier? Nor that you have not refuted the logical mechanisms whereby I have explained that war cannot improve the economy, except in a superficial and illusory way? You're just going to declare that you're still right but you don't want to play anymore?

[ QUOTE ]
But now its time for you to get specific. What really happened that pulled America out of the Great Depression? What specific "New Deal" components that, when repealed, led to our economic surge in 1940?

[/ QUOTE ]

I'll be preparing a post on this tomorrow. It is long. And the nature of your question obviously reveals that you still don't understand what we're talking about. There was no economic surge in 1940. Besides, if there were an economic surge in 1940, wouldn't that defeat your entire argument, since that was one to two years before we entered World War Two, our supposed economic salvation?

[ QUOTE ]
How did World War Two hurt the American economy?

[/ QUOTE ]

You MUST be joking now. Come on. This is ridiculous. How about:

1) Massive destruction of labor
2) Massive waste of the factors of production
3) Shift of production from market to command economy, and all of the economic problems that ensue, i.e. the economic calculation problem.
4) Two words: Ration Cards

Those are just off the top of my head.

Your point about America being "attacked" is misleading. Roosevelt desperately needed to enter World War Two because he incorrectly believed, like you, that it would somehow magically improve an economy that his decade in office had only succeded in making worse. He maneuvered both Japan and Germany into attacking the United States with a series of provocations that virtually guaranteed "an incident," in the words of Winston Churchill. Among other overtly aggressive actions, he instituted an oil embargo against Japan, and ordered a US Navy destroyer to assist the British Navy in depth charging a German submarine. Roosevelt needed the United States to be attacked because the country was deeply isolationist and there was little support for embroiling the nation in yet another foreign conflict halfway around the globe. He engineered a long train of provocations that culminated in Pearl Harbor and got exactly what he wanted.

None of this can turn dead labor and wasted factors of production into an economic boon.

[ QUOTE ]
Namely, growth implies a creation of wealth

[/ QUOTE ]

Excellent, that is what I conclude as well. In fact, its what Adam Smith concluded. Adam Smith further articulated that the source of a nation's wealth is its ability to efficiently transform resources (inputs) into goods and services. It is the people who perform this transformation through their labor which is applied to land and capital. This is what determines a nation's economic production - Y(GDP) is a function of K(capital), L(labor), and resources(M). What this means to the people is income for which they can then purchase goods and services. But without jobs, people lack income. When people lack income, they cannot buy goods and services, and their quality of life plummets. This was clearly the case in the 1930s for many millions of Americans.

Something happened from 1940-1945 that brought tens of millions of new jobs for men in private firms contracted out by the government in order to apply their labor(L) to transform worthless metal (resources, M) into much more valuable goods (value added) such as tanks and planes (final output). In addition, 19 million women were brought out of the homes for the first time and entered the labor force to apply their labor and receive income as well. With all of these jobs, people once again had income, and plenty of it. This led to greater amounts of both savings and consumption than before as well. Of course, supplies of standard consumer goods were rationed, but the income was there none the less, and quality of life increased for the average American, as joblessness vanished entirely. On top of all of this, our ability to "efficiently transform resources" grew during this time period as well, as new processes for mass production were developed for everything from airplanes right down to penicillin.

So, clearly, as our increased capacity and efficiency to transform resources into output was more than fulfilled, our nation's wealth increased. There are several numerical indications of this, such as GDP, index-base 1939, in which it increased substantially. This is typically an indicator of economic growth, however. Economic health is usually defined in terms of unemployment, incomes, and quality of life. We also know that these indicators also improved greatly from 1939 to 1945. After a decade of economic depression, our economy was surging according to all standard economic indicators.

Now the $64,000 question. What happened following the economic depression of the 1930s that so greatly improved our nation's wealth? Clearly it was not WWII, since "wars cannot possibly be good for an economy, ever, period". What, then, was it?

[ QUOTE ]
So you don't want to explain how hiring the unemployed, having them print money, and then paying them with it, is good for the economy

[/ QUOTE ]

Not this tired old example again. Money is not a final good, it is not economic output. This strawman argument has no relevancy whatsoever.

[ QUOTE ]
There was no economic surge in 1940. Besides, if there were an economic surge in 1940, wouldn't that defeat your entire argument, since that was one to two years before we entered World War Two

[/ QUOTE ]

The economic surge began in 1940, along with our resurrected military draft (18,000 men in 1940) and our production of military goods. This is not up for argument.

For sh*ts and giggles I just ran a quick google search on economy, 1940 and found this from the Cambridge university Press.

[ QUOTE ]
The United States economic surge started in 1940 and 1941, a prelude to the wartime "production miracle" which managed to maintain civilian consumption while growing the overall economy. Contributions to this came from increasing labour force participation and reducing private investment, while war financing followed the traditional approach of deficit spending until tax increases caught up. In evaluating the cost of the war to the United States, Hugh Rockoff takes a counterfactual approach, attempting to calculate what would have happened without the war. And he argues that the change in macroeconomic regime may have been the most important contribution of the war to subsequent prosperity.



[/ QUOTE ]

http://dannyreviews.com/h/Economics_World_War.html

Edit: and somehow I magically bypassed the profanity filter.

[ QUOTE ]
Your point about America being "attacked" is misleading.

[/ QUOTE ]

I was not misleading at all. Say what you want about Roosevelt or the propaganda that ensued, the people of America wanted revenge in a big, perhaps even racist way. They also came to realize the inevitability of our war with Germany