Alien Invasion: Krugman, Military Keynesianism, and the Report From Iron Mountain

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I am certainly enjoying reading the rampant chattering on the web concerning economist Paul Krugman’s latest Looney Tunes proposal for fixing the economy. The NYT’s Nobel nabob believes that if we all just pretended nefarious space aliens were invading planet Earth, all good men sound and true would unite in defending Mother Gaia, and there would be interstellar stimulus and economic nirvana. Two of the most perceptive analyses of Krugman’s fervid rambling can be found here and here. Some observers (in whose stolid camp I include myself) immediately thought Krugman was using the controversial Report From Iron Mountain (Here’s the .pdf version) as his public-policy play book. Check out this Wikipedia entry for the ongoing controversy surrounding this amazing document, then compare and contrast what Krugman said followed by text from the Report:

Krugman: “If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better.”

“There was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time…we need it in order to get some fiscal stimulus.”

Report From Iron Mountain: “Credibility, in fact, lies at the heart of the problem of developing a political substitute for war. This is where the space-race proposals, in many ways so well suited as economic substitutes for war, fall short. The most ambitious and unrealistic space project cannot of itself generate a believable external menace. It has been hotly argued that such a menace would offer the “last, best hope of peace,” etc., by uniting mankind against the danger of destruction by “creatures” from other planets or from outer space. Experiments have been proposed to test the credibility of an out-of-our-world invasion threat; it is possible that a few of the more difficult-to explain “flying saucer” incidents of recent years were in fact early experiments of this kind. If so, they could hardly have been judged encouraging. We anticipate no difficulties in making a “need” for a giant super space program credible for economic purposes, even were there not ample precedent; extending it, for political purposes, to include features unfortunately associated with science fiction would obviously be a more dubious undertaking.

“Nevertheless, an effective political substitute for war would require “alternate enemies,” some of which might seem equally farfetched in the context of the current war system. It may be, for instance, that gross pollution of the environment can eventually replace the possibility of mass destruction by nuclear weapons as the principal apparent threat to the survival of the species.” (page 51)

12:18 pm on August 20, 2011