Then it would negate modern History, specifically in regards to the collapse of the Soviet Union, wherein a country with 100s of ICBs with nuclear warheads, warehouses churning out AK47s and ammunition surplus that still are being exported to this day (Viktor Anatolyevich Bout), tanks and war ships in such quantities that they'd trade Pepsi for them [1]! And still end up destitute, with a plutocracy and a massively disenfranchised population both at home as well as much of the former satellite nations.
Capital investment is best spent on a sound currency, strong local manufacturing base and a strong legal system to protect both from corruption as well as the Human rights of its populations; unfortunately no nation Western or Eastern seems intent on doing that... like ever in History. Thus proving that Humanity is not capable of not giving into the intoxication of ending mutually beneficial collaboration with others for extended periods of Time in exchange 'for more of their share.' It may occur for short windows, but so long as a Human entity remains in charge of those aspects of Civilization it will always succumb to the same avarice and corruption regardless of whatever the rhetoric is espoused of National Brotherhood or Patriotic duty. Hence the argument for currencies and economic models outside the control of centralized systems like Governments.
I'm sure many of you are seeing visions of Westworld or Psycho pass type dystopias but I'm convinced there is a middle ground between the two we just haven't been able to arrive to due to constant conflicts, and endless wars that drain the World of Human capital and technological resources best used for this end.
But I also find it funny how some of Elon Musk's, an openly declared Utopian Anarchist, biggest proponents haven't realized the fact that all of his and Kimbal's businesses are aimed to help establish a colony on Mars where he has gone on record to say one of the biggest reasons to do so it try and re-do all of this non-sense on Earth with a blank slate canvas approach, and this is the extreme one has to go to do it.
People keep accepting that War with China is inevitable, as it were some unavoidable deterministic outcome, but I disagree and have hope that Humanity can come to reason and refuse to participate. War is never in anyone's best interest, I really wish that we'd have learned that by now.
1: https://www.businessinsider.com/how-pepsi-briefly-became-the...
In the West (and in ex-Soviet countries now) when you see an obvious gap in the market that you can provide a solution for you can start a business to do that. During Soviet times you could complain to the government and that was more or less it.
That is to say, I don't think the Soviet Union's lack of wealth is necessarily a strong counterargument to the weapons-as-investment idea.
Its population was and is, some are so much so they opine the former Soviet Union where it seemed to most that all were on equal terms because of this. Especially when they see the stark contrast of the oligarch's wealth in Moscow.
> That is to say, I don't think the Soviet Union's lack of wealth is necessarily a strong counterargument to the weapons-as-investment idea.
Well, then there is no appeasing you based on reason or logic then, because that example concretely shows how that met the criteria yet still failed as a nation-state, one that has real consequences to this day: eg Crimea annexation.
It gets more complicated when you look at where the money went. The U.S. built up a massive global navy to control commerce and the shipping lanes. Meanwhile, the Soviets focused large on the European theater and ultimately could not compete with the U.S. Navy.
Eventually you wind up considering a philosophical question about money, especially modern fiat currency, where there is a big question about why we continue to value it the way we do. Sure, we have all agreed on some common exchange rate for goods using it, but this is backed by the "full faith and credit of the U.S. government". It can be argued that faith and credit is ultimately backed by the war machine behind it.
Even in older times, if you traded in a currency, and you had to go collect a debt in that currency from another nation, what are you going to use to collect it? Angry letters? No, you're going to send the military.
The same goes for China in the American controlled world.
The reason the Soviet Union did not have access to global commerce is that they spent inordinate amounts of money telling everybody how they would destroy their countries, had a communist party controlled by Moscow in every country, were refusing to pay Russian debt and were questioning the concept of private property.
Russia neither had the sea ports or the shipping industry or the international partners to control commercial trade. I am sure they would have loved to do so.
> Sure, we have all agreed on some common exchange rate for goods using it, but this is backed by the "full faith and credit of the U.S. government". It can be argued that faith and credit is ultimately backed by the war machine behind it.
It is not backed by the war machine, but rather by the Federal reserve controlling its supply, or at least the effect of its supply in the market and by the US economy as a whole. To some extend that economy is secured by a military, but even if 90% of the US military went away tomorrow, the $ would not lose its value.
The $ would lose its value if China decided to blockade the US from international trade and destroy its economy, but we are pretty far into the world of hypothetical and ignoring nukes besides.
Britain controlled global trade with small % of its budget, and an even smaller % of the budget of the whole empire. The US could do so to, but for political reasons it spends like crazy on the military, but that does not make the most of the military necessary to keep up the value of the $.
The crux of my argument is that a nations currency is only as good as the gun behind it. Do you think the European powers after WW2 would have even gone along with the Bretton Woods agreement without the U.S. having been the first nuclear power? France in particular did not want to go along with it, referred to it as America's "exorbitant privilege", then proceeded making nuclear weapons a national priority. Then in 1965, Charles De Gaulle sent the French Navy to the U.S. to pick up the French gold reserves. This lead, along with other factors, to the Nixon Shock and ending the gold peg.
There are numerous historical examples. When you run a global empire, even a benevolent one, you still have to enforce it. Otherwise, you're just left with worthless pieces of paper.
As an aside, the Soviet Union didn't actually trade tanks and war ships for Pepsi. Well, I mean, technically they did but not in the way people might assume when they read the sentence trading Pepsi for war ships.
Pepsi became nominally the owner of a derelict fleet headed to the scrap yard in 1989 as a way to bypass the Soviet Union lack of dollars. The Swedish scrap yard then directly paid Pepsi.
> And still end up destitute,
Capitalism doesn't guarantee returns. There are winners and losers on the big gambles.
> Capital investment is best spent on a sound currency, strong local manufacturing base and a strong legal system to protect both from corruption as well as the Human rights of its populations; unfortunately no nation Western or Eastern seems intent on doing that... like ever in History.
This is pretty much what every single western country has done.
Can you argue that they didn't do it perfectly. Sure, but what the are you comparing it to? Some perfect utopia. Everything falls short to that.
Your assertions fly directly in the face of the existence of you having a computer that you are typing that on.
The British government has existed for arguable 100s of years, would you call that a short time? Since about 1700-1800 they had about 2% growth per year.
> I'm sure many of you are seeing visions of Westworld or Psycho pass type dystopias but I'm convinced there is a middle ground between the two we just haven't been able to arrive to due to constant conflicts, and endless wars that drain the World of Human capital and technological resources best used for this end.
Wars now are in fact less common then at any time in history, and that includes the casualties of war.
By any actual look at the numbers war was never less frequent and human prosperity never higher. I really don't understand the pessimism that western elites seem to believe in so strongly (I'm assuming you are part of a western elite).
> But I also find it funny how some of Elon Musk's, an openly declared Utopian Anarchist,
Can you give me a source on that? Asked about his political views he said he was socially liberal, economically conservative.
He seems to me to be more of a libertarian type, certainty not a left anarchist or even an anarcho-capitalist.
> biggest proponents haven't realized the fact that all of his and Kimbal's businesses are aimed to help establish a colony on Mars where he has gone on record to say one of the biggest reasons to do so it try and re-do all of this non-sense on Earth with a blank slate canvas approach, and this is the extreme one has to go to do it.
He has said about 100x more often that in general having a backup in case of extinction level that is gone happen is 100% on a long enough time scale. He has also said that separation often lends itself to experimentation with social structure, but he made those comments based on historical knowledge.
We know that is happens like that, I don't think he said that in a Utopian spirit.
> People keep accepting that War with China is inevitable
I certainty don't.
His own words:
https://twitter.com/elonmusk/status/1008120904759402501
He certainly went off on a Anarchist tirade on his earning's call, and his stance on Alameda County.
> This is pretty much what every single western country has done.
By inflating the currency until absolute oblivion? I will admit that the State has done so at a time when overall prosperity has increased by orders of magnitude for a large segment of the Species, but that's more consequential than it is a direct causation.
Me having a computer has nothing to do with how the US has lost 90+% of its worth since 1913 when it was severed from the Gold standard and its monetary policy. And more to do with the risks taken by Market participants to drive the price to an accessible level for me, the end consumer. I'd wax on Market dynamics but to be honest that would take an entire other conversation and today is Crew Dragon flight test!
But just so it's clear, I think PM are a relic of 18th Century thinking and that money has evolved by orders of magnitude since then.
> We know that is happens like that, I don't think he said that in a Utopian spirit.
I was just watching the 3rd row podcast and saw Todd behave surprised when he only realized that even Kimbal's Square Roots was built specifically for the intent for Food production on Mars.
However, if others see the 'opportunity' and also participate in that market, profits decline until your income can barely cover production costs.
Have a look at the quality of life of the Soviet Union. They spent everything on weapons with a very limited return on investment.
On the other hand, Guns Germs and Steel argues that the military competition within Europe has led to western dominance. From that perspective, investing in weapons leads to huge profits even if short term returns are very low.
The "Triumph of the West" by Roberts has a more compelling thesis - that Western culture is more favorable towards new ideas and new ways of doing things. We see this as country after country discards the old ways and adopts western culture.
I don't understand the rationality, wouldn't your thesis mean that other countries which are supposedly more closed won't abandon their ways? With what I know about history, western culture doesn't seem more prone than others to incorporate other cultures. We can find evidently countless examples of western culture adapting to new ideas and foreign cultures, but only seems special if we ignore the rest of the cultures doing the same.
Sometimes you'll see countries violently reject western culture and return to their old ways, but it's a losing game for them.
I think the construction of nuclear weapons post-1950s are an example of a successful hedge, wherein machines of war were invested in, but never caused destruction. To your point, though, it is definitely an interesting and worthy data point if the proposed thesis is being pursued.
This is very likely. An example of a war investment that panned out over time was the Manhattan project. One that did not would be something like the Maginot line. At some point, it's just an investment with no guarantee on return.
From somewhere around the War of Spanish Succession until probably the Napoleonic War there were huge changes in military technology/organisation, and the ones who innovated fastest ended up winning (also, guns were one of the first products to be manufactured in a factory system...so there were spillovers). There was, of course, innovation after but this period was when the modern military really took shape.
However, it is also probably true that the military was often an output of economic strength, not a technological input (in the way that we might think of technology/knowledge today). A big reason why there was military innovation was because of the huge growth in govt borrowing and creation of financial markets in the 18th century. So you saw countries start to take power that could innovate financially (i.e. Dutch Republic, Spain) and then you saw these countries implode when they couldn't keep pace with France and Britain (France is kind of tricky because they frequently imploded through the 18/19th century, always making a miracle comeback...usually through dint of having such a huge population i.e. Napoleonic Wars).
To give a concrete example: one part of British dominance was the Navy (which was in part a technological advantage), another part was their ability to subsidise pretty much every other country in Europe to fight France...there isn't really one without the other.
In terms of the 20th century, it is probably true as well. Like Britain in the 19th century, the US has kind of guaranteed security and freedom of trade around the world...and to do this you need to have the resources to bash some heads every once in a while (and btw, the US has done this in a far less evil way by seeding multilateral institutions). And, as you know, that investment is the reason why we have Silicon Valley so there are definitely spillovers from military tech still.
Pretty meandering answer but there are quite a few threads here because the military has never been easy to separate from the rest of the economy.
1% of your budget into the military is probably a great investment for many countries, some countries maybe up 2-3% and when you are higher then that you either need very great reasons, or you are probably doing something stupid.
Britain controlled the world trade with small % of its budget and with a tiny % amount of the whole imperial trade size.
I would argue their success was precisely because the didn't need gigantic military to reach their aims. An part of that is to have reasonable aims in the first place.
Iraq and US military spending is case and point, Iraq was a both a strategic disaster and a very expensive one. If you didn't have the aim of remaking the whole middle east, you would need that much spending.
Germany before WW1 is a great example of spending lots of money on stupid aims. They invested in a fleet that was utterly useless and was directly opposed to what their aims should have been.
No amount of military spending by itself gets you anything, only military spending combined with great strategy focused on your particular nation can be great investment.
They also got involved tactically, even someone like Palmerston who was an interventionist didn't intervene before the point when it was necessary. And a lot of the direct military intervention was to secure trade in countries where you had a gun, and the enemy had a spear. So they really maximised what they spent in a way that others couldn't.
Compare this to France, who probably spent the most on military, if war breaks out then they don't have a choice...you are getting invaded. Britain didn't need a big standing army (and really didn't have one until WW1).
Also, whilst British expenditures were small relative to budget (I don't know this but assuming you are correct), it was still very difficult for anyone to catch up until the late 19th century because their economy was so much larger.
Germany invested in a fleet because they, correctly, concluded that the only way to beat Britain was their navy. France tried the exact same thing in the mid 18th century, they were actually predominant for a short period, but they imploded financially (this was pre-Napoleonic, although they obviously tried to rebuild with Napoleon).
I think the issue for Germany was their economic strength was kind of shaky (they were still a largely agricultural economy until the 1960s) and there was no scenario in which they wouldn't need to spend heavily on the army as well.
But it wasn't useless or opposed to what their aims should have been. War started, they got blockaded almost instantly (just like France in the Seven Years War), and that crippled them. So I don't think there was any easy answer (there was no way in which they were going to avoid war either).
I am not sure I said military spending by itself is valuable...but I don't think it is.
The invested in a navy because the Kaiser was gelly of his cousin, so he promoted the people who wanted a big navy and used his power to get it. That would absolutely not have happened without the Kaisers personal opinion.
Many in Germany thought it was an idiotic idea and it was.
It was simply bad strategy, bad decision making against the strategic interest of Germany.
First of all, a Navy that is can operate in the North Sea is basically spending crazy amounts of money and saying publicly, "We build this to destroy Britain".
Second, they knew they could not out-build Britain, so trying would be utterly useless. And as it turned out, it was utterly useless when the war started.
If that is not bad strategy then nothing is.
> I think the issue for Germany was their economic strength was kind of shaky
That is not necessary a negative, they were very elite economically by WW1, but Britain could still cut their supply. Without that they would have been unbeatable.
> But it wasn't useless or opposed to what their aims should have been.
Yes it was. German had no strategic conflict with Britain, outside of a few people stuck in the last century who still believed that Germany need to create a colloquial empire.
Britain was perfectly happy with German economic growth and the British dominated world had nothing but advantages for Germany. Germany was increasingly surrounded by 2 strong powers and thought 'Great idea, lets do everything we can to get even more enemies'.
Britain was the natural enemy of Russia, by far the most dangerous enemy for Germany. There was a huge amount of common interest between Britain and Germany with regards to policy in the East.
Its only historically bad diplomacy on a level that boggles the mind that Britain ended up fighting on the side of Russia.
> War started, they got blockaded almost instantly (just like France in the Seven Years War), and that crippled them.
Yes and all the money they invest in a navy helped them how exactly?
And btw, the got blocked because their idiotic generals had the totally wrong believe that invading Belgium was a great idea.
Again, from the time Willy takes over, Germany foreign policy is just historically terrible and misguided. And its a real battle between the generals, the foreign office and the Kaiser himself who makes dumber moves. When Bismark left Germany was in a historically strong position in Europe, 20 years later the next 3 powerful states were against at them.
not buying tea from the chinese with them.