Public Goods, Redistribution and Rent Seeking

Public Goods, Redistribution and Rent Seeking

The Locke Institute series

Gordon Tullock

Gordon Tullock, eminent political economist and one of the founders of public choice, offers this new and fascinating look at how governments and externalities are linked. Economists frequently justify government as dealing with externalities, defined as benefits or costs that are generated as the result of an economic activity, but that do not accrue directly to those involved in the activity. In this original work, Gordon Tullock posits that government can also create externalities. In doing so, he looks at governmental activity that internalizes such externalities.

Chapter 10: War

Gordon Tullock

Subjects: economics and finance, public choice theory, politics and public policy, public choice

Extract

Warfare is seldom discussed under the heading of externalities although it certainly does impose serious costs on people other than the citizens of the acting nation. I suppose one could argue that since the costs and benefits accrue to the nations participating in the warfare they are not really external. Still innocent bystanders can be hurt and even a purist will except that as an externality. For present purposes, however, we are going to count injury to either of the parties, if it is caused by the other or by the conflict itself, as an externality. This includes the taxes imposed to pay for the war, and conscription.1 It seems quite possible that I would not have included a chapter on war had it not been that our war with Afghanistan and the second war with Iraq coincided with my work on this book. Indeed at the present moment both are only winding down. Anyone who has read a history of Great Britain’s first three Afghan wars will realize that they never really ended. Britain won all of them in the strict military sense, but in each one found itself unable to impose its terms on the apparently defeated enemy. Afghans are tribal and the defeat of some tribes or even their complete annihilation, as the Russians found out much later, does not necessarily terminate the hostilities. We are now learning that from our own experience. Our Afghan operation was, militarily, a tour de force. Originally operating o...

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