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Does war really make a country go bankrupt?


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#1 allie

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Posted 28 July 2009 - 07:11 AM

Most Emperors believe that excessive war or military campagns is not good as it will cause the country to go bankrupt.

But I think it really depends on which country they are attacking.

For instance when Han Wudi sends his army to attack the xiongnu, naturally it will cause the country to go bankrupt as they do not gain anything from the attacks.

But say Han Wudi had send his army to attack Roman Empire which is a very rich country and manage to defeat it.

The treasures and money that the army can take from the romans after they had conquered the place is probably more than the military expenses that they spend.

For instance during second opium war when the westerners entered beijing and they stole all the treasures in the palace is probably already worth more than their military expenses.

#2 DaiLuoBin

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Posted 28 July 2009 - 09:39 AM

Most Emperors believe that excessive war or military campagns is not good as it will cause the country to go bankrupt.



Some historians have a tendency to scrutinize economics and neglect more important issues . . . like morale and HUMAN LIFE. I didn't know that most emperors believed that. I also don't know what the emperors mean by "excessive".

On the other hand, war can unify nations and have other benefits, especially economic benefits. I am reminded of WW2 pulling America out of the "dirty thirties" by persuading (financially and otherwise) the private sector to unite and work with the government.

#3 呂便

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Posted 31 July 2009 - 10:44 AM

I think it can go both ways. War can wreak havoc on your economy if you do not tend to certain needs like food supplies. However as DaiLuoBin mentioned about the Americans and WWII war can also boost an economy. It's a matter of approach, though one might want to consider more important things that come in to play: human lives and mindset, but also and not so much in a lesser extent stable politics and a peace of mind for the afflicted nations.

On a related note: I like how Orwell explains in '1984' how even the thought of war can rally the people and keep them in line. This being 'benificial' for both morale and economy. This eventually became true for a various number of nations; they boosted their (military) economy through the threat of nuclear holocaust during The Cold War.

Edited by 呂便, 10 August 2009 - 08:10 AM.


#4 Taran ap Dafydd

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Posted 07 August 2009 - 10:18 AM

I think it can go both ways. War can wreck havoc on your economy if you do not tend to certain needs like food supplies. However as DaiLuoBin mentioned about the Americans and WWII war can also boost an economy. It's a matter of approach, though one might want to consider more important things that come in to play: human lives and mindset, but also and not so much in a lesser extent stable politics and a peace of mind for the afflicted nations.

On a related note: I like how Orwell explains in '1984' how even the thought of war can rally the people and keep them in line. This being 'benificial' for both morale and economy. This eventually became true for a various number of nations; they boosted their (military) economy through the threat of nuclear holocaust during The Cold War.



Whether war will be a boon to an economy or harmful to it (or even have a negligible impact) depends on just what resources, and how many of them, you are making use of. The losses incurred in the war are also important. Arguably, they are More important. Certainly they are more important for the post-war period.


While the Americans did receive an economic boost from entering WW2, Dai Luo Bin would have been more accurate to point to the Germans for that. The American economy was already on the rebound before becoming a war economy. The German economy had no other recovery in sight. There was also the French economy going into Napoleon's wars. A complete wreck after the revolution, Napoleon gave it direction and the people purpose and returned life into that economy.
Had Germany won WW2, or Napoleon won his wars, or, hell, had either of them cut their wars off after their early conquests, they would have been much strengthened by those wars.
Whether America's economy directly benefited from WW2 is arguable. Certainly it was the Only major industrial power in the world not decimated by the war, but with millions of GIs returning home and leaving the service to flood a job market that had been filled with women during the war... Well, there was significant economic and social upheaval in the wake of WW2.

On the other end of the equation, nearly every time a nation LOSES a war, it's bad for it's economy. However, WW1 was a perfect case study for how victory can be as damaging as loss, economically. The American Civil War, as well. Of course, anytime the fighting is on Your land, it's not going to really matter, economically, whether you win or lose.

And, finally, as you can see from the Wars in Afghanistan and Iraq, if you know what to look at, war can be waged in the long term with a negligible economic cost. IF it's done on someone else's land, and If you have the resources to spare.

Sun Tzu knew all of this. He wrote extensively on the logistics of war in "The Art of War." And through him, the Chinese Emperors and generals all knew this. Whether they understood it is another matter. Most people, even most people who know it, don't understand it. Thus the saying, "Good generals study strategy. Great generals study logistics."

The Chinese, except in cases of rebellion and invasion, tried to wage war "Elsewhere." They tried to do so with spare resources and for limited times (I haven't heard of any Chinese campaigns of invasion that lasted longer than 2 years and most 2 seasons or less). And, of course, they tried very hard not to lose, but, in losing, made sure to take as many physical resources from the country they attacked as they could, mitigating the cost of their loss and also the benefit to their enemies of victory.
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#5 allie

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Posted 07 August 2009 - 11:00 PM

The mongols waged war for more than 2 years..

#6 brightness

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Posted 09 August 2009 - 05:09 PM

War strengthens the economy (See Nazi Germany, US during WWII and how it ended the Great Depression)

No one played MGS4? :clapping:


War did not strengthen the economy or end the Great Depression for either Nazi Germany or the US. That it did was one of the big Keynesian lies that get frequently repeated by the public education system.

Keynes introduced a funny concept called "GDP/GNP," which has a funny way of counting: a toilet sold for $30 in a store is counted as $30 towards GDP, but if DoD buys the same toilet for $64,000, it's $64,000 towards GDP! As you can see, the more fraud the more waste in government spending, the higher the GDP goes. Of course, if the government spends all its money overpaying for toilets, it would become obvious to the public. So it has to overpay on items that people do not usually buy in order to boost GDP . . . the choice became infrastructure and military spending in Germany and the US. The Autobahn did not benefit the average Germans, who did not have cars; Volkswagen (the people's car) did not deliver a single car to the Germany consumer until years after WWII . . . goes to show the utter incompetence of government bureacrats at delivering real goods to people.

In the US, during WWII, gasoline was rationed, no new cars were available for purchase because they were no longer made, women had to go to factories because the menfolk were being drafted into slavery to die half a world away. Those were not signs of improving living standards. The global GDP went through the roof when major cities like London, Berlin, Dresden and Tokyo were bombed into smithering: as all the aircrafts, bombs, anti-aircraft guns, ammos, bomber crews, and fire-fighting brigades were all counted as GDP . . . of course, none of that had anything to do with improving the people's standards of living or economizing resources. Such is the business of GDP. Yes, GDP went up, but the depression went deeper. You could have accomplished the same by hiring half the German population to kill the other half and burn down all the cities. GDP would have gone up due to government spending, lives would have been just as miserable. GDP has little to do with the real economy when a large component of it is consisted of government purchase. Counting total sales in a normal competitive market economy as some kind of guage of economy has a mariginal meaning only because the prices are competitively set and therefore reflective of people's desires, however transient. When the GDP number is largely consisted of government spending, it has lost whatever marginal statistic value it might have had, as government purchases are not competitively priced, nor do they reflect the value assigned by invididual people spending their own money. Waste and fraud become the norm.

#7 somechineseperson

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Posted 10 August 2009 - 05:09 AM

Most Emperors believe that excessive war or military campagns is not good as it will cause the country to go bankrupt.

But I think it really depends on which country they are attacking.

For instance when Han Wudi sends his army to attack the xiongnu, naturally it will cause the country to go bankrupt as they do not gain anything from the attacks.

But say Han Wudi had send his army to attack Roman Empire which is a very rich country and manage to defeat it.

The treasures and money that the army can take from the romans after they had conquered the place is probably more than the military expenses that they spend.

For instance during second opium war when the westerners entered beijing and they stole all the treasures in the palace is probably already worth more than their military expenses.


Yes, which is why despite very expensive military campaigns, the Han dynasty never really managed to hold onto the steppes region from the Xiongnu. On the other hand, the expansion of the Han dynasty in what is now southern China (a potentially agriculturally very fertile region) was very cost-effective and indeed became permanent.

To say "wars make a country go/not go bankrupt" in a sweeping metaphysical sense is useless. One has to examine and analyse the specific details of different situations. Sometimes wars are good for the economy, sometimes they are bad, it is hard to generalise so simplistically.

#8 brightness

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Posted 10 August 2009 - 10:31 AM

Yes, which is why despite very expensive military campaigns, the Han dynasty never really managed to hold onto the steppes region from the Xiongnu. On the other hand, the expansion of the Han dynasty in what is now southern China (a potentially agriculturally very fertile region) was very cost-effective and indeed became permanent.

To say "wars make a country go/not go bankrupt" in a sweeping metaphysical sense is useless. One has to examine and analyse the specific details of different situations. Sometimes wars are good for the economy, sometimes they are bad, it is hard to generalise so simplistically.



Qin and Han's expansion into (what would later become) southern China and making such occupation permanent only proves that such expansion was good for the ruling class of Qin and Han (questionable in the case of Qin). It does not mean such expansion was good for the economy, any more than say Jin conquest of northern half of Song and making it permanent was good for the economy or Mongol conquest of Southern Song was good for the economy. Especially in the case of Qin, it's not entirely clear whether the southward expansion was a looting/conquering drive or just chasing after Chinese subjects who were fleeing from the onslaught of Qin state slavery, or both.

To answer the original poster's question, yes it is possible, especially in ancient times when communication technology was backward, for wars to be positive for the economy: when the two sides were extremely lopsided and the winning side could utilize the natural resources much more efficiently, and a similar level of resource utilization had not been possible with trade. In modern times, however, those conditions are almost impossible to meet. Japanese thought they could utilize the vast land and human resources of China much more efficiently than the corrupt Chinese rulers could; guess where that line of thinking got them 64 years ago (Nagasaki anniversary was yesterday).

#9 Taran ap Dafydd

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Posted 13 August 2009 - 10:25 PM

War did not strengthen the economy or end the Great Depression for either Nazi Germany or the US. That it did was one of the big Keynesian lies that get frequently repeated by the public education system.

Except that for Germany, it was not a lie.
As I posted above, the American economy was already rebounding.
The German economy, however, was going nowhere. In moving to a wartime economy, the German government employed the unemployed, and engaged the factories with orders for materiel. After their early conquests, they had a robust economy that they could have successfully transitioned into a peacetime economy had they halted their campaigns with the conquest of Poland. But they didn't. They pressed it and were destroyed for it. Napoleon made the same mistake 150 years earlier.


In the US, during WWII, gasoline was rationed, no new cars were available for purchase because they were no longer made, women had to go to factories because the menfolk were being drafted into slavery to die half a world away.

I'd really appreciate it if you would rephrase that. Slavery it most certainly was not. Nor is it slavery in any other country that still has a draft and/or mandatory service (very nearly Every other country). It is merely a responsibility of citizenship.

The rest of your post I have little to argue with.

Oh, and for your other post:
Wars can still be beneficial for countries. It's just that there is less likelihood that the aggressor nation will stop before warring becomes self-destructive. Japan is another perfect example. As is the USSR. Actually, I wonder if it really Is less likely or if the leaders who used to go to war for economic gain have just transferred into business...

Edited by Taran ap Dafydd, 13 August 2009 - 10:33 PM.

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#10 DurstigerMann

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Posted 14 August 2009 - 06:10 AM

Except that for Germany, it was not a lie.
As I posted above, the American economy was already rebounding.
The German economy, however, was going nowhere. In moving to a wartime economy, the German government employed the unemployed, and engaged the factories with orders for materiel. After their early conquests, they had a robust economy that they could have successfully transitioned into a peacetime economy had they halted their campaigns with the conquest of Poland. But they didn't. They pressed it and were destroyed for it. Napoleon made the same mistake 150 years earlier.


Contrary to popular belief, the German economy was not going nowhere and it was not the NSDAP which maneuvered Germany out of it.
By the time Hitler seized power, the German economy was already recovering.
This was mainly due to the stop of reparations and the renunciation of Brünning`s deflationary policy under Franz von Papen and Kurt von Schleicher.

The economy during the Third Reich was hollow.
The Reichsbank was short of foreign exchange, the relative standard of living was far behind the USA or even GB and the Reichsmark was overvalued on the international markets. The Reich couldn`t even pay the imports of steel for the re-armament, so it had to scale down weapon production. In short: Germany was near bankruptcy.

The financial policy of the NSDAP, which never had any concepts to begin with, was horrible.
It could only win from war.



Regarding the topic, I believe that total warfare will make a country go bankrupt. An all out war of a whole nation and its society is not financeable. At least if there is no money to rip from the enemy. And even then the toll (money is not everything in the matter) might have been just too high.
One of the best examples for this is WWI. It hit Germany and France hard. Even though France formally belonged to the winning side, it should rather be considered a losing party. The whole nation went into an all out war against Germany, which also went into an all out war. At the end, both countries economies were done for and a whole generation lost. Especially France suffered due to the lack of able young males (even more than Germany). GB wasn`t hit nearly as hard, both financially and casualty-wise.

I`d say that war always takes a high toll on a nations finances and a nation at war will always want the loser to pay for it.

Edited by DurstigerMann, 14 August 2009 - 04:20 PM.


#11 haidao

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Posted 14 August 2009 - 02:46 PM

In answering the OP's question, war can lead to bankruptcy. During WW II Japan was stuck in a quagmire in China which was deeply affecting there economy in a negative way.


And WW II was good for the US since US ended up having a sort of trade monopoly. If you wanted it you had to buy it from the US. Afterall, most of the worlds industrial nations were bombed out. US was the only major industrialized nation that still had there factories still intact. It would be like having the only store for hundreds of miles. You are guaranteed business. As the world rebuilt and competition increased things changed. Today the US has a trade deficit.

Edited by haidao, 14 August 2009 - 02:48 PM.


#12 Taran ap Dafydd

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Posted 14 August 2009 - 05:22 PM

In answering the OP's question, war can lead to bankruptcy. During WW II Japan was stuck in a quagmire in China which was deeply affecting there economy in a negative way.


And WW II was good for the US since US ended up having a sort of trade monopoly. If you wanted it you had to buy it from the US. Afterall, most of the worlds industrial nations were bombed out. US was the only major industrialized nation that still had there factories still intact. It would be like having the only store for hundreds of miles. You are guaranteed business. As the world rebuilt and competition increased things changed. Today the US has a trade deficit.


Therein lies the benefit of fighting "Somewhere Else"
Even if you win, "Fighting Here" (wherever "Here" is for you) will do a great deal of damage to your infrastructure...
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#13 brightness

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Posted 15 August 2009 - 12:38 AM

Except that for Germany, it was not a lie.
As I posted above, the American economy was already rebounding.
The German economy, however, was going nowhere. In moving to a wartime economy, the German government employed the unemployed, and engaged the factories with orders for materiel. After their early conquests, they had a robust economy that they could have successfully transitioned into a peacetime economy had they halted their campaigns with the conquest of Poland. But they didn't. They pressed it and were destroyed for it. Napoleon made the same mistake 150 years earlier.


There are a few problems with this thesis:

(1) After Nazi-Soviet conquest of Poland, Britain and France were not exactly in the mood for peace with Germany;

(2) It's not clear why Germany would have a robust economy after conquring Poland. Why would the country suddenly be in a robust economy when millions of healthy young male workers were taken out of their normal lines of work . . . while all the trade relations with pre-war Poland were disrupted;

(3) German government employing the unemployed to do non-productive things like munition making is no different from say, if the German government hired half of them to dig a holes in the ground, and hired the other half to fill the holes back up, as far as the well being of the people are concerned . . . hole-digging and hole-filling probably would be less disruptive as the effort would be less polluting and uses less material in competition against real productive economy.

(4) US economy was not in recovery either, because of the same sort of nonsensical Keynesian policies as the Germans carried out..

I'd really appreciate it if you would rephrase that. Slavery it most certainly was not. Nor is it slavery in any other country that still has a draft and/or mandatory service (very nearly Every other country). It is merely a responsibility of citizenship.


Slavery means forced labor without compensation. Military draft fits the ordinary definition of slavery quite well. Of course, some prefer to make a special case for military draft, and defining it as something other than slavery.

Oh, and for your other post:
Wars can still be beneficial for countries. It's just that there is less likelihood that the aggressor nation will stop before warring becomes self-destructive. Japan is another perfect example. As is the USSR. Actually, I wonder if it really Is less likely or if the leaders who used to go to war for economic gain have just transferred into business...


IMHO, like Clausewitz said, war is politics by alternative means. Business (collaboration) came long before politics (coercion).

#14 Taran ap Dafydd

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Posted 16 August 2009 - 10:03 AM

(1) After Nazi-Soviet conquest of Poland, Britain and France were not exactly in the mood for peace with Germany;

France and Britain were not exactly in any position to argue. Germany was fully mobilized. France never managed complete it mobilization, they were overrun too fast. And England was still trying to negotiate "Peace in our time." Oh yes. They had a window of opportunity.

(2) It's not clear why Germany would have a robust economy after conquring Poland. Why would the country suddenly be in a robust economy when millions of healthy young male workers were taken out of their normal lines of work . . . while all the trade relations with pre-war Poland were disrupted;

(3) German government employing the unemployed to do non-productive things like munition making is no different from say, if the German government hired half of them to dig a holes in the ground, and hired the other half to fill the holes back up, as far as the well being of the people are concerned . . . hole-digging and hole-filling probably would be less disruptive as the effort would be less polluting and uses less material in competition against real productive economy.


It has been done before. Takes a little imagination, but it is possible.
Secondly, How can you take unemployed persons "out of their normal lines of work?" They are UNEMPLOYED. By Definition they have no "normal lines of work."
Furthermore, munitions and weapons production are Not "non-productive" industries. They are, in fact, Producing something. And that something can be sold. To the government, or the populace, or foreign buyers. You might note that there is quite a healthy bit of trade going on in exactly that field.
However, it is a moot point if, in fact, Durstiger is correct. If you're reading this, Durstiger, I'd like to know your source because I can't find it.

(4) US economy was not in recovery either, because of the same sort of nonsensical Keynesian policies as the Germans carried out..

The keynsian policies enacted by the USA certainly DELAYED recovery by about 10 years, but they did not and could not Prevent it. They Could Have done so, but we wouldn't exist as a nation right now if they had. In the end, the industry of the American people proved too strong for the government to break and we recovered Despite those policies. You might note that many of those very policies are Still in effect and, all in all, we've been doing pretty well since then.
Furthermore, once those Keynsian policies shifted from digging holes and filling them up (an actual jobs program under FDR) to Producing such things as weapons, tanks, aircraft and munitions (many of which were sold or leased to foreign buyers), the economic recovery picked up its pace.
This is not, ind you, a defense of Keynes and his economic theories. In almost all conditions, they are a Bad choice. But under the right circumstances they Can help more than they hurt. '39-41 was a period of exactly the right circumstances.



Slavery means forced labor without compensation. Military draft fits the ordinary definition of slavery quite well. Of course, some prefer to make a special case for military draft, and defining it as something other than slavery.

Soooo... Soldiers don't get paid? They don't get some of the best healthcare in the world (well, soldiers in the Western world, anyway)? They don't get training in any of dozens of fields that are quite lucrative in the private sector? They don't get pensions?
How, exactly, do YOU define "compensation?"

And don't tell me that "They didn't get all that stuff during WWII." If that's what you think you have quite a rereading of history to start. Soldiers in the Western world have gotten all these things in greater or lesser quantity as long as there have been soldiers in the Western world.

IMHO, like Clausewitz said, war is politics by alternative means. Business (collaboration) came long before politics (coercion).

Either you need to check your history a little better, or you need to check your definition of "politics." Even if it is only in the matter of "Who will lead the clan" it's politics. Politics is as old as the beginnings of any human community. Even apes practice politics.
Yes, reading that line again tells me you definitely need to check your definitions. Not anywhere near all business is "collaboration" nor is anywhere near all politics "coercion."
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#15 brightness

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Posted 16 August 2009 - 12:22 PM

France and Britain were not exactly in any position to argue. Germany was fully mobilized. France never managed complete it mobilization, they were overrun too fast. And England was still trying to negotiate "Peace in our time." Oh yes. They had a window of opportunity.


Are we still talking about the time period immediately after the conquest of Poland in the fall of 1939 or some other time period or even some other war? France was not fully mobilized in the Fraco-Prussian War of 1870-71. At the beginning of 1940, France was quite mobilized. The rapid overrun of France was actualy the result of the aggressive French War Plan D, projecting the entire mobile force of French Army and BEF deep into western Belgium and southern Netherlands. Chamberlain's "Peace in our time" Munich Agreement took place in 1938, not in 1939. By late 1939 and early 1940, the allies were not exactly interested in peace. France was thought to have the largest army in the world.

On top of that, it's not clear how the huge mobilized armies would be handled in early 1940 if suddenly peace broke out. The enormous cost of mobilization and disruptions to the economies would have politically necessitated major fighting war.

It has been done before. Takes a little imagination, but it is possible.


Every time such nonsensical social planning was tried, it led to upheavals and/or wars. That's been the case in modern Europe since at least the 1840's, and much earlier in Roman time and ancient Chinese time.

Secondly, How can you take unemployed persons "out of their normal lines of work?" They are UNEMPLOYED. By Definition they have no "normal lines of work."


Except labor allocation in real economies do not follow those neat lines along "unemployment" vs. "employment." If the government drafts people into the military, it drafts the employed along with the unemployed. If the government pays higher than market wages to entice people into the military and mlitary industrial complex, it competes against the private productive economic sector for the productive workers. The unfit and incompetent that can not find gainful employment in the private sector are often unfit for military as well, even in a draft.

Furthermore, munitions and weapons production are Not "non-productive" industries. They are, in fact, Producing something. And that something can be sold. To the government, or the populace, or foreign buyers. You might note that there is quite a healthy bit of trade going on in exactly that field.


"Producing something" is like the government owned legacy enterprises in China and the Lada factory in post-Soviet Russia . . . without market pricing and profit motives, enterprises are prone to turning resources (both material and human labor) into end products that are worth less than the input. Value-addedness have to have competitive market place setting value first; otherwise turning turning furniture into firewood would be "producing something."

The keynsian policies enacted by the USA certainly DELAYED recovery by about 10 years, but they did not and could not Prevent it. They Could Have done so, but we wouldn't exist as a nation right now if they had. In the end, the industry of the American people proved too strong for the government to break and we recovered Despite those policies. You might note that many of those very policies are Still in effect and, all in all, we've been doing pretty well since then.


At least we agree on something. The recovery came despite the Keynesian policies, not because of them.

Furthermore, once those Keynsian policies shifted from digging holes and filling them up (an actual jobs program under FDR) to Producing such things as weapons, tanks, aircraft and munitions (many of which were sold or leased to foreign buyers), the economic recovery picked up its pace.
This is not, ind you, a defense of Keynes and his economic theories. In almost all conditions, they are a Bad choice. But under the right circumstances they Can help more than they hurt. '39-41 was a period of exactly the right circumstances.


An alternative view is that, the Keynesian policies of Nazi Germany, Japan and the US led to the war itself.

Soooo... Soldiers don't get paid? They don't get some of the best healthcare in the world (well, soldiers in the Western world, anyway)? They don't get training in any of dozens of fields that are quite lucrative in the private sector? They don't get pensions?
How, exactly, do YOU define "compensation?"

And don't tell me that "They didn't get all that stuff during WWII." If that's what you think you have quite a rereading of history to start. Soldiers in the Western world have gotten all these things in greater or lesser quantity as long as there have been soldiers in the Western world.


Slaves too received food, housing, clothing, medical care, and education from their masters. The difference between slavery vs. free labor is whether the laborer has the choice to refuse entering into the contract offerred by the master/employer. All-voluntary military is free-labor; a draft system on the other hand is slavery . . . for the simple reason that the laborer is forced by law to work under terms that he would not have otherwise accepted. We can not talk about "just compensation" when one party is being forced into it.

Either you need to check your history a little better, or you need to check your definition of "politics." Even if it is only in the matter of "Who will lead the clan" it's politics. Politics is as old as the beginnings of any human community. Even apes practice politics.
Yes, reading that line again tells me you definitely need to check your definitions. Not anywhere near all business is "collaboration" nor is anywhere near all politics "coercion."


Sure, apes have coercion/politics too. The difference between business vs. politics is the coercive element. Politic is unnecessary if nobody is to be coerced. New communities and new interactions between individuals and disparate communities usually take the form of collaboration (i.e. doing business) first, before coercion is feasible across tenuously long distances (what is long distance is determined by the prevailing transportation technology at the time).




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