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The Long-Term Economic Cost of Wars

- November 21, 2007

Recent days have brought a shower of media attention to the long-term economic cost of the war in Iraq. This sent me back to my stereotypically yellowed course notes and materials, to an article by James L. Clayton, titled “Vietnam: The 200 Year Mortgage,” which appeared in The Nation on May 26, 1969 — an old article, to be sure, but one from which much can still be learned.

According to Clayton, the pattern of long-term costs associated with American wars indicates that “the bulk of the money is spent long after the fighting stops” — and when Clayton said “long after,” he meant it. The primary reason: veterans benefits, which for the Civil War, World Wars I and II, and the Korean War averaged 1.8 times the original cost of the wars themselves. For example, veterans benefits from the War of 1812 didn’t peak until 1880 and continued to be paid until 1946, 131 years after the war ended. More generally, veterans benefits don’t peak until at least two generations after a war has ended, and don’t stop until well over a century later.

Clayton offered the following hypothetical example from the Civil War:

bq. Suppose a drummer boy, age 14, became a soldier in 1861 and was disabled in that war. Suppose also that he married, had children, his wife died, and he remarried late in late, at say age 60 in 1907. Suppose further that his second wife was 25 years old at marriage and that at age 30 she bore him a child who was mentally or physically incapable of supporting himself. That child would be 57 years old today [that is, in 1969] and still drawing benefits — more than a century after the war ended.

Of course, that’s an absurd hypothetical — a great soap opera but hardly the stuff of serious analysis. Or is it? As Clayton noted, as of 1967, 1,353 dependents of Civil War veterans were still drawing benefits.

Intrigued by Clayton’s analysis, for many years I scanned newspaper obituaries, looking for notices of the deaths of dependents of Civil War veterans. On January 20, 2003, I happened upon the following item in the Washington Post:

bq. BLAINE, Tenn. Gertrude Janeway, the last widow of a Union veteran from the Civil War, has died in the three-room log cabin where she lived most of her life. She was 93.

bq. Bedridden for years, she died Friday, more than six decades after the passing of the man she called the love of her life, John Janeway, who married her in 1927, when he was 81 and she was barely 18.

bq. …An honorary member of the Daughters of Union Veterans of the Civil War, Gertrude Janeway was the last recognized Union widow. She received a $70 check each month from the Veterans Administration.

Continuing his analysis, Clayton indicated that up to 1967, veterans benefits for the Spanish-American War had amounted to twelve times the original cost of that war, and didn’t peak until 51 years after the war ended; that World War II veterans benefits would probably peak around 2000, and that dependents of Vietnam War veterans would be drawing benefits until the 22nd century.

Of course, veterans benefits are only one part of the broader picture, of which another major component is interest on debt accrued to finance the fighting of the war. In any event, Clayton’s conclusion seems no less applicable today than it was when he wrote it:

bq. If this trend continues, wars may soon be simply too expensive to contemplate, and governments too cumbersome to endure.

P.S. Some of the long-term human (as distinguished from more narrowly economic) costs of war — diseases, disabilities, and deaths — are analyzed by Ghobarah, Huth, and Russett in this piece (gated).