Robert Higgs: An Offer You Would Have Refused

Would you have bought into the Iraq War if George W. Bush had made you an honest offer? This question is a revealing variant of one that people often ask and answer: ''Is the war worth its price?''

Politicians and government officials are no strangers to such questions, and over the years they have given some amazing—frankly, shocking—answers. Thus, when General Curtis LeMay responded to questions about the U.S. fire-bombing of Tokyo’s residential neighborhoods in the latter stages of World War II, he declared: “We knew we were going to kill a lot of women and kids when we burned that town. Had to be done.” That is, the price was acceptable to him.

In 1996, CBS reporter Lesley Stahl, inquiring about the U.S.-led economic sanctions against Iraq, said to Secretary of State Madeleine Albright: “We have heard that a half million children have died. I mean, that’s more children than died in Hiroshima. And—and you know—is the price worth it?” Albright replied: “I think this is a very hard choice, but the price—we think the price is worth it.”

Since the Bush administration launched its invasion of Iraq in March 2003, polling organizations have been asking the public from time to time whether they regard this war as worth the price. At first, as always, a large majority replied that it was, but with the passage of time, the mounting of U.S. casualties, and the unhappy course of events on the ground during the protracted U.S. occupation of Iraq, more Americans have come to regard the war’s price as too high. In October 2003, after a CBS News/New York Times poll had found that “53 percent believe the war was not worth the cost, while just 41 percent believe it was,” the president dismissed the poll findings, declaring “I don’t make decisions based upon polls. I make decisions based upon what I think is important to the security of the American people.”

When the president appeared as Tim Russert’s guest on NBC’s “Meet the Press” on February 8, 2004, Russert asked, “Is it worth the loss of 530 American lives and 3,000 injuries and woundings simply to remove Saddam Hussein, even though there were no weapons of mass destruction?” Although the president evaded the question and replied with a series of stump-speech declarations and blatantly false claims, he strove to leave the impression that, yes, the price is worth paying.

The costs have continued to mount. Billions of dollars flow steadily from the taxpayers to the Treasury to the military and civilian providers of war goods and services—the current rate of expenditure for specifically Iraq-related military and occupation purposes is approximately $5 billion per month. Two previous emergency appropriations for the Iraq War have provided $149 billion and a recent supplement added $25 billion, but this $174 billion total surely fails to include some war costs included in the regular budget of the Department of Defense. Estimates for the occupation of Iraq in 2005 alone run as high as $75 billion, and the actual expenditures may well turn out to be even greater—government cost overruns are not unheard of, especially in the military-industrial complex. If the true costs of the war to date amount to, say, $200 billion, then the cost is equivalent to approximately $1,850 per household, say, $2,000 in round numbers (if it’s not there yet, it will be soon).

Costs in terms of lost life and limb also continue to mount daily. To date, the military authorities have acknowledged more than a thousand deaths and some 7,000 persons seriously wounded or injured among the U.S. forces (according to some unofficial estimates, as many as 12,000 have been wounded or injured). Many soldiers have been blinded or have lost limbs or have suffered severe psychological traumas from which they will never recover.

Still, the president and his spokesmen, defenders, and supporters stoutly insist that the price is worth paying. The basic problem is that, when the question is posed in the usual way, the answers are meaningless.

Consider your situation when you visit an automobile showroom to shop for a new car. The salesman informs you that the model you fancy carries a price tag of, say, $25,000. In considering whether this is a “price worth paying,” you do not conduct a public-opinion survey. You do not ask your neighbor or your brother-in-law. You would never think of calling Karl Rove to find out. Only you can answer the question meaningfully, because only you will enjoy the services of the vehicle and only you will bear the sacrifices entailed by your decision to purchase it.

Decisions that government officials make about how to spend your money, whether on the conduct of war or on any other similar governmental undertaking, have a completely different character. In these cases, the government provides a so-called “public good,” which is to say, a state of affairs that, for better or worse, is the same for everybody. Economists used to argue that owing to the “free-rider problem,” only government can provide such public goods, and hence political processes must be employed to decide which projects to undertake and how much of the public’s money to spend on each of them.

More recently, however, economists have come to understand that public-good situations can be dealt with more rationally by the use of an arrangement known as a contingent contract. This is an agreement in which each member of a group—in this case, each citizen of the United States—is invited to make a certain contribution toward the provision of the resources required to carry out a fully-described all-or-nothing project on the condition that no one must bear his pro rata share of the costs unless a sufficient number of other members accept the same obligation (51 percent, 75 percent, 100 percent of the group’s members—whatever is deemed necessary to ensure completion of the project while preserving equity among its expected beneficiaries).

In the case of the Iraq War, for example, the U.S. government, refraining from false advertising, might have presented to each adult living in the United States early in 2003 the following offer. We will bring about a certain state of affairs in Iraq as of September 2004: Saddam Hussein imprisoned and his government overthrown; widespread fighting between U.S troops and resistance forces; extensive public disorder, rampant crime, and personal insecurity; autocratic government and lack of civil liberties; widespread lack of basic public services, such as reliable water supply, sewerage, and electricity supply; and seething political discord among tribal, ethnic, and religious factions struggling to control the country after they have driven out the U.S. occupation forces and their allies. That’s what you’ll get for your contribution.

In exchange, you and everyone else in the country, should you all agree to the contract, will each make a pro rata financial contribution of $2,000 for each household. In addition, you will each agree to bear your pro rata share of the casualties by participating in a lottery in which each ticket holder will place members of his household at risk of death, injuries, or wounds. Your chance that a household member will be killed is approximately one in 108,000, and your chance that a household member will be seriously wounded or injured is approximately one in 15,000.

How many citizens do you suppose would have been willing to accept this contract? My guess is almost none. Even if I’m far from guessing correctly, however, I find it inconceivable that enough citizens even to approach forming a majority would have entered voluntarily into this contract. After all, it is an extraordinarily bad deal. In exchange for $2,000 from your personal bank account and a nontrivial chance of death or injury among members of your household, it offers you—well, scarcely anything of value. Even the good part of the deal, the overthrow of the tyrant Saddam Hussein, is unlikely to be worth so much to you; even if you are that rare American who cares deeply about the well-being of the Iraqi people, it’s not as if once the old tyrant has been driven from power, everything will be sweetness and light in Iraq--remember, you have been offered an honest deal with an accurate forecast of exactly what the U.S. government will bring about, not a political swindle promising Middle Eastern pie in the sky.

Of course, no politician is about to use contingent contracting to find out what the citizens really want and how urgently they want it. Our rulers already know everything they need to know. They have calculated their own expected political gains and losses, and they have taken into account the gains and losses that will be reaped--often in cold cash--by the coalition of special-interest groups that supports them in holding onto power. The rest of us can resign ourselves to bearing the full costs, to our bank accounts as well as to our lives, limbs, and liberties, while our rulers feed us noble-sounding lies and promise us an outcome so lovely and implausible that only God could bring it to pass.

*Robert Higgs is Senior Fellow in Political Economy at The Independent Institute and editor of its scholarly quarterly journal, . He is also the author of Crisis and Leviathan: Critical Episodes in the Growth of American Government and the editor of Arms, Politics and the Economy: Historical and Contemporary Perspectives. For further articles and studies, see the War on Terrorism and OnPower.org.

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