Bryan Caplan  

When to Head for Your Bunker

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Two strangely divergent reactions:

1. When economists discuss worst-case macroeconomic scenarios, they often say stuff like, "Head for your bunker," "Dig a hole and jump in," and "Hopefully you've been hoarding canned goods."

2. When foreign policy experts discuss worst-case war foreign policy scenarios, they don't.  In fact, they're likely to segue into sermons about courage, defying evil, and Churchill's "never surrender" speech.

The strangeness, in case it's not obvious, is that even another Great Depression would have a minimal body count, while a pint-sized nuclear war would kill millions.  In the broad scheme of things, economic crises are disappointments, while wars are disasters

Sure, you can use cost-benefit analysis to show that the Great Recession had a much higher social cost than a small war.  But if distribution ever matters, it matters in war.  Suppose a million Americans die in a nuclear inferno.  With standard value of life numbers, that's a loss of $7 trillion - well below most estimates of the cost of the Great Recession.  But who can doubt that a million violent deaths would have been far more tragic than the Great Recession, because the million victims lose everything they have.  To quote Eastwood in Unforgiven, "It's a hell of a thing, killing a man. Take away all he's got and all he's ever gonna have."

Yes, I know that talk of bunkers, holes, and canned goods is intended as dark humor.  But the humor spreads confusion nonetheless.  If you live in the First World, economic crises are only a First World Problem.  Major wars are macabre no matter where they happen.

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COMMENTS (6 to date)
Shane L writes:

I also think wars are underrated in their significance, not least because their disruptions can cause break downs of basic services, local famines, and so on. I feel foreign policy should be a bigger issue. In Britain recently there was shock as the Conservative Party won a majority. I was quietly amazed that so many left-leaning and broadly anti-war friends were appalled that Labour had lost - when Labour had dragged UK into the Iraq War only a few years ago. It doesn't seem to matter to people much.

NZ writes:

How is there anything "strange" about this? If people who lead nations into war downplay the risk or cost of war, it's probably just to raise morale so that their people will support the war effort and even agree/volunteer to fight in it.

I imagine that hundreds of thousands of years ago, tribal hominin leaders or shamans were doing the same thing to pump up their tribesmen for conflicts with other tribes, while they downplayed the impact of predictions of material scarcity. It's both natural and necessary.

Nathan W writes:

Dead people don't have to deal with the fallout. Did they suffer in the hypothetical scenario?

Rocinante writes:

Doesn't a certain amount of money, removed from the economy, cost lives? EPA assumes so in its cost benefit analysis, and so does OSHA (they use different figures).

Matt Skene writes:

According to UNICEF, the financial crises of 2008 killed between 15 and 27 thousand children in Sub-Saharan Africa alone. Add in the adults, and the rest of the world, and it's likely the number would rise into 6 figures. Not a nuclear holocaust, but clearly a deadly event.

Psmith writes:

Recessions are near mode. Wars are far mode.


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