Start from Silliness and the Product is…?

Begin with a Really Stupid Assumption:

1. Assume Tom Friedman is correct.

   Not about the brilliance of cab drivers, or the flatness of the Earth, or even that AGW is the route to revitalize the U.S. economy.* But assume as valid his claim that the “global economy” makes war less likely; that Pakistan and India won’t battle because too many people in India depend on trade with Pakistan for their income and vice versa.**

   How do you then conduct war? Why, economically, of course.

   I mean, you can do it the stupid way: spend a bunch of your capital, get a lot of your people with potential for economic growth killed, and develop the enmity of those you battle, win or lose, but no one would be stupid enough to do that these days, would they?

2. Assume you want to take over a country or bunch of countries. What’s the optimal way to do it?

   My best guess is

   1. You start with countries whose economies together are larger than yours, but where each one individually is smaller. This gives them a sense of security.
   2. Check that you start in better fiscal shape than all but one or two of them. (Those that are comparable or better need to be that much smaller.)
   3. Lend significantly to the poorer countries. Iterate and expand lending program as possible, and
   4. Dun them to within an inch of their life at the first opportunity after reaching a critical mass.
3. When the result is the same as if you have just fought (and won) a war, what comes next for your “coalition.”

   Henry Farrell, who appears to be as old as I am, (and nine others [PDF]) suggests the answer:

   The long term consequences of Germany’s successful push towards austerity have yet to play out. However, initial results from the Irish case would suggest two lessons. The first is that the contradictions within Germany’s policy towards Europe are leading to bad policy. The second is that as a result, Germany is likely to receive the political blame in target countries both for the economic pain that its mandated measures are causing, and for many of the adjustment pains that they would surely have suffered in any event. Germany’s asymmetric power is reshaping European economic politics in a direct, and arguably even a brutal fashion. It is not clear that German politicians and economic policy makers have any appreciation of the resentment and hostility that they are likely to incur as a result.

New types of war may require new weapon, but they appear likely to produce the old results, though possibly with human capital devalued instead of outright eliminated.

It is left as an exercise whether the model of France 1918-1939 is preferrable to the PIIGS and Belgium 2010-???

*As an aside, that route is completely eliminated, simply as collateral damage, by the GOP spending cut proposal discussed here. Good thing their constituents don’t depend on the U.S. for anything.

**While we’re at it, I would like a pony, of course.