How much does a war cost? Not just the cost of military firepower, but the
cost of compensating the families of dead soldiers, looking after injured
soldiers and the war's wider impact on a country's economy? In the case of the
war in Iraq the figure for the United States alone is a minimum of $3 trillion
if you take the word of Nobel Prize-winning economist Joseph Stiglitz. In his
book "The Three Trillion Dollar War: The True Cost of the Iraq Conflict,"
co-written with Harvard lecturer Linda Bilmes, Stiglitz forensically dissects
America's war costs. Unusually for an economist, Stiglitz's prose is crisp and
clear, but the title undersells things a bit, since Stiglitz believes the
ultimate cost to the US will be nearer $5 trillion. That's a lot of money,
particularly compared with current White House estimates of $645 billion - a
figure itself way above Washington's initial estimate of $50-60 billion.
When I spoke to Stiglitz during his visit to London last week he insisted he had
been conservative in his estimates. "We were aware people would say 'he's a
Democrat and against the war.' There are a few minor quibbles but the general
judgment is we've been conservative," he says.
Stiglitz factors just about everything into his estimates, from troop pay and
equipment to more hidden costs, including long-term veterans' healthcare
benefits, replacing military equipment, interest on money borrowed to pay for
the war (the Iraq war has been paid for largely through deficit spending), and
the impact of the war on the price of oil. He also throws in his view that there
is a direct correlation between the current crisis in global financial markets
and the cost of the conflict.
For good measure Stiglitz also has a stab at crunching the United Kingdom's
numbers, estimating the cost of British participation in Iraq and Afghanistan
through to 2010 to be at least $40 billion, more than two-thirds of which is
attributable to the Iraq war.
Is he correct? I've no idea. But at least he's come up with a figure. When I
asked the UK Treasury, the government's finance department, for an overall
estimate, I was tersely informed they did not have one. Instead they referred me
to the Ministry of Defense, which in turn, and quite correctly, referred me back
to the Treasury. When I explained the Treasury had referred me to them, they
suggested I contact Number 10 Downing Street. The prime minister's office,
you've guessed it, referred me back to Defense and Treasury. Mindful of my phone
bill, I gave up.
It seems bizarre that the Treasury, the government department that holds the
purse strings of all government spending, has no idea of how much money has been
spent in Britain's two wars. Even more bizarrely, they refused to comment on
Stiglitz's estimates.
Stiglitz is amused and surprised by the Treasury's ignorance. "Parts [of the
costs] are relatively easy to account for and are really part of good
government, such as costs of operations and injured people. Other parts, the
ones based on economic assumptions, are harder to quantify but really should
still be tracked by someone in the Treasury," he says.
Stiglitz calls the British system of funding the war "opaque," which partly
explains why he was unable to separate spending in Afghanistan from Iraq. In his
book he states that before the war, when Gordon Brown was in charge of Britain's
finances, he set aside 1 billion pounds (about $2 billion) for war spending.
Brown also allocated cash to a Special Reserve fund, a cash pot that allows the
Defense Ministry to supplement its regular budget. Stiglitz makes the point that
because funds from the Special Reserve are drawn down by the ministry when
required, without approval by Parliament, it makes it harder to quantify how
much is being spent. But Stiglitz estimates the UK has so far spent almost $19
billion on military operations alone in Iraq and Afghanistan. In crude terms
that's the price of a lot of hospitals and schools at a time when the government
is under fire for failing to adequately fund healthcare and education.
Considering the scandals that have erupted over the government's failure to
properly equip soldiers in the field - last month an inquest found that a
soldier in Afghanistan was "unlawfully killed" because the Defense Ministry
failed to provide him with proper equipment during Brown's tenure as chancellor
of the exchequer - you could be forgiven for wondering where all the money has
gone.
But $40 billion is paltry when compared with the $200 billion worth of debt that
Brown has taken onto the government's books by nationalizing Northern Rock, an
inept high street bank plunged into crisis by the global credit crunch and whose
plight last year caused the first run on a bank in Britain in more than a
century.
The fact is Iraq has slipped down the political agenda in the UK.
Notwithstanding last weekend's killing of a British airman in Basra, the war in
Iraq is over as far as Brown is concerned. Afghanistan still looms large of
course, but tough as the fighting there is, it's a war most people still largely
back. Even Prince Harry has done a tour of duty there.
Brown at the moment is more concerned with the issue of banning plastic bags in
supermarkets to help reduce global warming. He even took time to write a column
on the issue for The Daily Mail, middle England's favorite newspaper. Oddly
enough the government's marketing department used more than 1 million plastic
bags last year in the cause of promoting itself. The Treasury couldn't tell me
how much that cost either.
Source: Beirut Daily Star
Comments (1)
1. Written by John on 04-03-2008 23:48
War on the world by the capitalists is also orchestrated relative to commercial aspects. They draw profit from destruction of people's lives. Iraq is the classic example, American and European firms are there left, right and center. The Arms industry is seeing booming profits, their OIL conglomerates are growing like never before. It is all good business this!
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