The Economic Argument for War
You never know what axe politicians are really grinding when they talk about going to war with Iraq, but with economic analysts (such as this one from Marketviews), you can always be sure that at the end of the day, it's going to be about money. Economists don't worry about the niceties of morality or diplomacy, so the argument for immediate war becomes elegantly simple:
- The West needs oil, whether anyone likes it or not.
- Oil comes primarily from three places: Saudi Arabia, Iran and Iraq. There may be ways to replace this supply eventually, but in the short term, those are the main players.
- Saudi Arabia is, for a variety of reasons, increasingly unstable. A hostile regime in Riyadh, combined with the current problems of Iran and Iraq, would be entirely unacceptable to the US and the rest of the world that depends on Middle Eastern oil.
- Invading and occupying Iraq would solve a host of economic and geopolitical problems and complete the encirclement of Iran, the next likely target.
- Saddam’s regime in Baghdad has given the West ample pretext for an attack.
- It is easier to fight a desert war in the winter than the summer, so it makes sense to force events to a head now rather than wait too long.
To an economist, going to war to obtain control of resources is a perfectly rational action, especially when the risks and costs of war are relatively low compared to the economic impact of doing nothing. Long-term consequences, such as the damage to international law and the reputation of the United States by embarking on a war of plunder, are harder to quantify and thus discounted.
To some, this makes the economic argument inherently illegitimate and outside the bounds of political discourse. “No blood for oil” has a compelling moral clarity that transcends the cold logic of numbers. But it doesn’t answer the hard question of what realistic options our oil-dependent economy has in the event of the supply shock that would result from an Islamist overthrow of the Saudi monarchy. Sure, the fat-cats and oil company cronies of the Bush administration would suffer, but ordinary people, as always, would bear the brunt. It’s hard to imagine any Western government allowing that to happen when there is the recourse to fast, easy and effective military action against a regime that has done itself few favors in the international arena over the last ten years.
I don’t have the answers on this one. Fortunately, the administration must feel that explaining its actions in these terms doesn’t poll very well, so both sides will continue to shadow-box with proxy arguments about inspection compliance and phantom connections between Iraq and Al-Qaida. But if the argument is ever reduced to the basic issues – “we need it, they got it, let’s go take it” – will arguments based on abstract ideas of international law and morality trump the time-tested logic of need and greed?
9:35:22 AM 
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