Evidence Against Victor Davis Hanson’s Global Order Theory

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Victor Davis Hanson claims that the global order created and enforced by the U.S. government brings peace and prosperity. I quote “Amid all the talk of the isolationism that supposedly characterizes the Obama administration’s foreign policy, we forget that since World War II, the global order has largely been determined by U.S. engagement. The historically rare state of prosperity and peace that defined the postwar world were due to past U.S. vigilance and sacrifice.” I will argue that this thesis is wrong with respect to America. American growth has slowed down. On the other hand, world growth appears to have sped up, as Hanson claims. The question is whether or not that is attributable to the interventionist policies of the American Empire.

Prof. Hanson doesn’t have his basic facts right regarding American growth. Before the U.S. ever became a big player on the world stage, per capita real GDP grew faster than it has since the U.S. became a player. This is because being a big player has meant big government, which has meant more wars and more taxes. The taxes and wars do not produce greater income because, as investments, they provide poor returns as compared with private sector investments. Government wastes capital. The following graph (on a log scale so that growth rates appear as slopes) shows real per capita GDP in America from 1800 to the present:

1800 to present, real per capita GDP

The line has a steeper slope (rate of growth) between 1800 and 1920 than it does from 1920 to the present, where one can see a distinct concave curvature sets in. The post-WW II growth has surely not been exceptional; if anything it has been slower than pre-1920 periods of the same length.

The premise of Hanson’s entire argument is false with respect to America. If the global order has been largely determined by U.S. engagement, vigilance and sacrifice, there is no evidence that this has paid off in terms of greater prosperity in America. As for the “peace” that he claims characterizes the post-World War II era, is Hanson living in the same country as we are? The U.S. government has taken Americans into serious and costly wars including the Korean War, the Vietnam War, the Cold War, several Iraq Wars and War in Afghanistan.

Hanson makes a big claim: “This strange postwar world ushered in the greatest advancement in prosperity amid the general absence of a cataclysmic world conflagration or continental war since the dawn of civilization.” This, I am arguing, is contradicted by the American evidence. He wants more interventionism, i.e., continued big government, higher taxes and wasted capital. This will bring slower American growth.

However, Hanson is probably correct to say that the growth in the world’s real per capita GDP has been higher since 1920 than before. This is difficult to measure, but there is evidence to support this contention. If this is true, why has it occurred? Why did America slow down and the rest of the world speed up? Is it because of the U.S. military, the U.S. alliances, and the nuclear umbrella bringing order to the world or does it have other causes? To answer this question, we need to look at individual cases and evaluate cause and effect, one by one. I don’t think we’re going to find much of a case to be made that American military might is the key factor in supporting economic growth in very many places, such as India, China, Pakistan, Brazil, Hong Kong, Singapore, Vietnam and Indonesia. Korea will be a very mixed case because the U.S. policies after WW II brought about its division and that was one cause of the war. Japan may provide some evidence because of its limited military spending. The decline of communism in Russia will be a contentious issue. This will pit the Mises thesis of socialism failing by its inherent inadequacies versus the theory that the USSR couldn’t compete with the U.S. military spending.

The U.S. has relied on very costly conventional wars, conventional warfare and nuclear deterrents, right up to the present, but these have produced mainly stalemates, losses, and insurgencies. The latest rounds of intervention bear no relation to world economic growth, not in Iraq, Afghanistan, Libya, Syria, Somalia, Yemen and many places in Africa. They are leading or have led to insurgencies that undermine those countries and their progress. The NATO interventions and threats of interventions in Yugoslavia and Ukraine also do nothing to enhance the prospects of economic linkages between the EU and Russia. The U.S. cannot fight and win against insurgencies, not without draconian bloodbaths that it cannot undertake, and not without expenditures it cannot afford that further undermine the American economy. Hanson’s rosy picture of a world order enforced by American might is a dream — a fairy tale — out of the past. Even if it were true at one time, it is inapplicable to today’s realities.

9:10 am on June 27, 2014
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