David R. Henderson  

The Boys in the Boat

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On my flight from Chicago to Phoenix on Thursday, I finished The Boys in the Boat. It's subtitled "Nine Americans and Their Epic Quest for Gold at the 1936 Berlin Olympics." I highly recommend it.

Not that this is why I recommend it, but I noted two things that might interest readers of Econlog.

1. In discussing Hitler's construction of some of the facilities for the games, the author, Daniel James Brown, writes:

In order to put the maximum number of men to work, Hitler had decreed that virtually all the labor was to be done by hand, even that which machines could do more efficiently.

I trust that readers of this blog will get Hitler's screwy thinking about economics. His mistake reminded me of this Dwight Lee article--"Creating Jobs vs. Creating Wealth."

2. When I advocate a non-interventionist foreign policy, the most common counterexample people cite back is the disastrous British non-interventionist foreign policy of the late 1930s. Brown reminds us that the British foreign policy was interventionist. He discusses Hitler's move of 30,000 German troops into the demilitarized Rhineland, "in open defiance of both the Treaty of Versailles and the Locarno Pact to which Germany was a signatory." He points out that Hitler was not ready for war and was waiting tensely to see if the French and British would react.

Brown writes:
He needn't have worried. In England, foreign secretary Anthony Eden said he "deeply regretted" the news, and then set about pressuring the French not to overreact.
In other words, the British government did intervene--with the French.


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COMMENTS (14 to date)
David Friedman writes:

My standard example of your second point is the history of the German annexation of Austria. The first time Hitler tried it, he was stopped by Mussolini, who declared that Italy would not tolerate such an action and moved Italian divisions into the Brenner pass to make his point. Hitler backed down.

Then came the Italian invasion of Abyssinia. The allies reacted by objecting but doing nothing very effective. Mussolini concluded that they were not his friends and not very dangerous enemies, so the next time Hitler wanted to annex Austria Mussolini gave his permission. The (incompetent) interventionist policy of the allies had given Hitler his first significant ally.

And, of course, the true lesson of Munich was that interventionist policy is not always conducted competently. If England and France had not had an interventionist policy, Hitler would not have had to ask their permission before he moved into the Sudetenland.

MG writes:

Funny. This reminded me of the famous Friedman quote, where he predicts even more "stimulus" by suggesting the plan's sponsors forego using picks and shovels and use spoons instead. It seems this whole line of thinking has a rich history, both factual and apocryphal.

See http://quoteinvestigator.com/2011/10/10/spoons-shovels/

David R. Henderson writes:

@MG,
Thanks for that cite. I had often seen this story attributed to Milton Friedman and had been skeptical. As your link shows, it’s not at all clear that it was Milton. But that is why I referenced the Dwight Lee article. As with you, this Hitler story reminded me of the shovel/spoon story that Dwight tells.

TMC writes:

#1 It would matter what Hitler's intentions were. Was it to get the work done efficiently or to provide employment to keep discontent in check. Keep the folks busy enough that they have no time or will to organize against him.

David R. Henderson writes:

@TMC,
True.

ThomasH writes:

If Hitler wanted more employment than profit maximizing employers would choose, then he would need an additional policy instrument. A wage subsidy might have been the least cost instrument, but regulating the K/L ratio of the projects could achieve his objective. Of course creating jobs is not the same as creating wealth, but presumably Hitler was not interested in creating wealth, for which the Allies should be grateful.

Tracy W writes:

2. I'm sleep deprived, so there may be something I'm missing in this story. So the moral of your story is that a non-interventionist foreign policy is fine if carried out by the British or the Americans, but the French should be left to intervene however they like, not even moral suasion for them?

Bostonian writes:

I think Henderson is playing with words. If France and the UK has taken action ("intervened") in 1936, tens of millions of lives might have been saved.

David R. Henderson writes:

@Tracy W,
So the moral of your story is that a non-interventionist foreign policy is fine if carried out by the British or the Americans, but the French should be left to intervene however they like, not even moral suasion for them?
Good question. I’m not sure. The closer the threat is geographically, the stronger the case for intervention when you see the threat. So, to take an unlikely example, if the Canadian government massed one million Canadian troops on the U.S. border, I would not necessarily insist that the U.S. government wait for an actual invasion before attacking.
@Bostonian,
I think Henderson is playing with words. If France and the UK has taken action ("intervened") in 1936, tens of millions of lives might have been saved.

You’re right that had France and the UK taken the action you want, then tens of millions of lives would have been saved. Although I think we should say “might have been saved.” But I’m not playing with words. Many people who advocate intervention--and you appear to be one of them-- want the “right” intervention and they somehow think the government will do that.
As David Friedman said above, "And, of course, the true lesson of Munich was that interventionist policy is not always conducted competently."

Shane L writes:

To me the most obvious objection to the interventionist use of the World War II example is that it is used so liberally. Is every disobedient foreign power a new Nazi Germany, bulging with industrial might and genocidal intent? Does the United States always play the role of the plucky UK standing up against a mass-murdering bully? Far from it. No Iran or Iraq or Afghanistan poses anything like the threat of Nazi Germany, and American tendencies to stagger about picking fights is more reminiscent of Fascist Italy than Churchillian Britain.

Chris Koresko writes:

In order to put the maximum number of men to work, Hitler had decreed that virtually all the labor was to be done by hand, even that which machines could do more efficiently.

Kind of reminds you of a New Deal program, doesn't it?

Tracy W writes:

Shane L: I understand that with the Middle East, there is a threat to US security:
1. A lot of countries there have attacked Israel in the past and might do so again in the future, particularly to distract from political problems at home.
2. Israel is strongly suspected to have nuclear weapons (the USA tried to stop this from happening).
3. Israel might use those nuclear weapons if it thought that was the only way to ensure its own survival.
4. Israel using nukes could start a wider nuclear exchange if the USSR/Russia thought it was a Western attack on them. Or, now we have India and Pakistan to worry about.

In the absence of bright ideas about how to get the nukes out of Israel's hands, I can totally see why the US government would want to stop this at point 3, by trying to make sure Israel never feels that it needs to use those nukes.

And in Afghanistan, America was basically ignoring that country until 11 September 2001.

[typo in name of commenter revised.--Econlib Ed.]

David Ramsay Steele writes:

The story about Hitler's order is a typical piece of legendary nonsense. See his Table Talk, where he lays into people who advocate traditional methods of work, instead of what's most efficient. Table Talk is the closest thing we have to Hitler speaking "from the heart". Furthermore, Hitler was not an imbecile; he could figure out that doing this for the Games might delay construction for the Games and would produce a negligible increase in employment. If you want to see whether there was any bias toward handcraft, look at the construction of the Autobahns.

David R. Henderson writes:

@David Ramsay Steele,
I just noticed this. Thank you.

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