15 June, 2008Issue 7.3EconomicsPolitics & SocietyThe Middle EastWorld Politics

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The Value of Economic Shock and Awe

Samsher Gill

Joseph Stiglitz and Linda Bilmes
The Three Trillion Dollar War: The True Cost of the Iraq Conflict
Allen Lane, 2008
336 pages
ISBN 978-1846141287



‘America has already paid a steep price for invading Iraq,’ Joseph Stiglitz and Linda Bilmes write in the preface to The Three Trillion Dollar War, referring to the 4,000 American casualties and nearly 30,000 wounded in battle. But ‘the economic burden is less readily apparent’. Stiglitz and Bilmes set out to assess this economic toll, tabulating just what the war literally cost in dollars and cents. Both writers approach the problem with the mindset of a social scientist: Stiglitz, a Nobel laureate in 2001, is an economics professor at Columbia; Bilmes is a lecturer in public policy at Harvard. They start from the premise that governments, like markets, sometimes fail. ‘Social scientists,’ they write, ‘try to understand the systematic sources of these “failures” and look for reforms to reduce their likelihood and mitigate their consequences.’ The Iraq War, they say, is a case study in ‘government failure’.

The book primarily serves to debunk the lowball estimates the Bush administration foisted on the American public before the war, numbers that ranged from $200 billion for fighting the war to the laughably low figure of $1.7 billion for financing the reconstruction of Iraq. How do Stiglitz and Bilmes tabulate the bill? Their calculation includes money spent directly on the conflict, disability benefits and health care for veterans, the loss of productive labour due to war casualties, and the macroeconomic toll wrought by increased oil prices.

The main virtue of social science is that its methods ensure a clear and elegant approach to problems of massive scale by requiring an effective framework for collecting and analyzing data. This can also be its vice and, at times, Stiglitz and Bilmes appear trapped by their own vocation. The result is an epic of economic and statistical ‘shock and awe’. Each chapter is a barrage of frameworks, steps, procedures, estimates, qualifiers, and projections. There isn’t even one final tab. Instead, each chapter counts two sets of costs: the ‘best case’ scenario, or what they reasonably predict will be the ‘minimum possible cost that the conflict will incur’, and the ‘realistic-moderate’ scenario, which assumes a longer period of combat activities and, as a result, higher associated costs across the board.

The final totals—$2.2 trillion without interest in the best case and $4 trillion without interest in the realistic-moderate scenario—are so large as to seem incomprehensible. That the war has been so expensive comes as little surprise after Bilmes and Stiglitz tear through a dizzying array of numbers. In 2008, operating expenses may total $16 billion a month, or ‘to think of it another way, roughly every American household is spending $138 per month’ on the wars in Iraq and Afghanistan. The costs of caring for injured soldiers, many of whom require ongoing mental and physical therapy, will likely total $422 billion in the best case scenario and $717 billion in the realistic-moderate scenario. And so on.

While it is impossible to keep track through the pages and pages of mounting costs, the message is clear: the Iraq War has been a spectacularly expensive conflict. The Bush administration, through gross incompetence or willful dissimulation, continues to underestimate the costs in public pronouncements. Many of the expenses, including the interest accrued to money borrowed, will continue to burden the American economy for generations to come. Yet The Three Trillion Dollar War seems intended to be far more than a mind-numbing ledger. Stiglitz and Bilmes write in the opening that ‘by examining the costs, we can come to understand better the implications of the war, and perhaps learn how we can extricate ourselves from Iraq with the least amount of damage.’ They then close the book with a series of proposals designed to show that cost analysis can improve future decision-making under the assumption that ‘the United States will, someday, go to war again.’ Many of the suggested reforms address issues such as cost transparency and accountability, and would help eliminate a problem seemingly endemic to the Iraq War: that of lost, wasted or misdirected funds. While these are no doubt good ideas, they are budgetary solutions to budgetary problems, and the implications of the war extend far beyond the balance sheet.

Perhaps the most telling number appears early in the book, when Stiglitz and Bilmes compare the cost of Iraq to other United States wars: more expensive than Vietnam, twice the cost of Korea, ten times the first Gulf War, twice World War I. There is one exception. Although the per troop cost of Iraq is four times higher, World War II, after inflation, remains the most expensive American war at $5 trillion. Despite this enormous cost, World War II is regarded as a great success. Is this because the United States, along with the other Allies, ultimately triumphed, or because fighting it was the right thing to do?

A war can be judged by whether it accomplishes its strategic objectives and by how it goes about pursuing them. On both counts, Iraq would appear to be a titanic debacle. What Stiglitz and Bilmes show is one way the United States failed to properly wage the war. They mention frequently, though do not attempt to prove with any rigour, that the strategic goals—‘the dream of a stable, free, democratic Iraq’—have not been achieved. But there remains one final way to judge a war. That is to ask whether its goals could in any way justify the use of violence and the resulting cost, human and financial. This is the Iraq War’s fatal flaw, that many of its purported strategic benefits have been unmasked as illusory. There were no links between Saddam Hussein and the 9/11 attacks—despite some intimations to the contrary from administration officials—and there were no weapons of mass destruction. The problem with the Iraq War is its legitimacy. The war can no longer be justified, not merely from the juridical perspective of a disapproving international community, but also from that of the aggressor, whose goals were either bankrupt or misguided from the first. The war has been a disaster not just because it has cost too many lives and too much money. That is true of all wars. It is that lives and money have been spent for the wrong reasons or, perhaps worse, for no reason at all. This is a problem social science cannot address.

Max Weber, the father of modern sociology, was aware of his discipline’s limits. In a 1918 lecture to students at Munich University, Weber attempted to respond to a challenge laid down by Lev Tolstoy. ‘Science is meaningless,’ said the Russian, because it cannot answer ‘the only question important for us: “what shall we do and how shall we live?”’ In response, Weber asks, ‘what then does science actually and positively contribute to practical and personal “life”?’ He provides three answers. First, science furnishes us with the means to achieve our ends. Second, science illuminates ‘methods of thinking, the tools and the training for thought’. Third, science helps us to ‘gain clarity’.

It is when we come to choosing our ends (what Weber calls the ‘ultimate problems’) that science runs into trouble. The study of philosophy, says Weber, along with ‘philosophical discussions of principles in other sciences’, can ensure that ‘such and such a practical stand can be derived with inner consistency, and hence integrity, from this or that ultimate value position’. Science figures in our moral thinking by requiring that our ends and means are logically consistent with their supporting assumptions. This, as Weber asserts, ‘is no trifling thing’. We cannot hold accountable solutions to complicated problems unless we can accurately map out the relationship between a proposed course of action and the values from which it derives. It’s not difficult to see why this is the case; in fact, The Three Trillion Dollar War is just such an example of this kind of reasoning. The Iraq War was intended to enhance American national security, but it has wound up damaging military readiness and imposing major macroeconomic costs. Through a detailed economic investigation into the war, Stiglitz and Bilmes lend substantial clarity to the debate over how to make America safer by showing some of the inconsistencies and errors in the execution of the war, along with the egregious cost miscalculations and underestimations that helped justify it. What science—social science included—cannot tell us is how or why to choose one ‘ultimate value position’ over another.

Weber forces us to draw a frustratingly paradoxical conclusion: science cannot adjudicate fundamental questions of value, but, at the same time, it can and must play a role in deciding between subsidiary goals and beliefs, as well as in suggesting the mechanisms by which we hope to put our values into practice. Yet while Weber seems to describe as futile any hope that science might shed light on human values—what they are or should be—the reality is that science, and the social sciences in particular, spent most of the twentieth century fleeing any association with the concept of value.

Humans are value-producing beings. We have desires and inclinations; we prefer some outcomes over others. Our world does not merely exist under a system of natural laws, but carries meaning for us. Science is inextricably bound up with this existence. Without it, we would be helpless to accomplish our goals, both because we would be bereft of the means to do so and because we would be unable to navigate the hopelessly jumbled network of principles and values we aspire to follow. At the same time, social science cannot furnish us with these basic values. Quite simply, it has little to say about the meaning of life. But science cannot escape its uneasy, though hardly tenuous, relationship with our moral deliberations. At its finest, social science carries us to its own limit. As Weber pointed out to future scientists at Munich University during the twilight of the World War I, science can compel one ‘to give himself an account of the ultimate meaning of his own conduct’. By structuring our inquiry into lived experience, social science can disclose, rather than disguise, its relationship to human ends; in so doing, it brings our basic value assumptions into sharper relief. Social science illuminates our moral principles as much as it perfects our methods of adhering to them.

Stiglitz and Bilmes hope their proposals ‘will help us avoid becoming embroiled in another Iraq or Vietnam in the future’. In a limited sense, this is true—if being ‘embroiled in another Iraq or Vietnam’ means waging a war inefficiently, without proper regard to budgetary inadequacies and long-term costs. But, as the authors remind us in closing, ‘Stripped of the relentless media and government fanfare, the nationalist flag-waving, the reckless bravado, war is about men and women brutally killing and maiming other men and women.’

This, it seems, is the brute reality that Stiglitz and Bilmes are unwilling to confront. The reforms they endorse may prevent another poorly waged war. Their detailed, coldly complete tally of the economic costs may also help us understand just what is at stake when we do decide to next enter into violent conflict. But while a clear picture of the costs and benefits is essential to judging a given course of action, such knowledge is independent of the moral criteria by which we weigh the costs against the benefits. The costs and benefits do not alone disclose their value. That is something we assign independently of the bare facts. We can conduct technocratic cost calculations, efficiency assessments, and audits of all kinds, but such calculations cannot hope to answer the larger questions about the legitimacy of violent conflict. When, in the final analysis, all other considerations are removed, war really is merely about people intentionally killing each other. Deciding when such an act is just, and not wanton, will vex even the most brilliant social scientist.