Bring The War Home
There's no war to end all wars
Never think that war, no matter how necessary, nor how justified, is not a crime– Ernest Hemingway
In the chill of the winter of 1914, amidst the chaos of the First World War, a remarkable event unfolded along the Western Front. Soldiers huddled in their trenches, the cold biting through their uniforms. The ground was hard, the air filled with the stench of gunpowder and despair, but something extraordinary was about to happen. On Christmas Eve, as darkness deepened, soldiers heard an unfamiliar sound—not the usual artillery barrage, but the sweet, clear melodies of Christmas carols drifting from the enemy lines.
Curiosity piqued, and soldiers peered over the edges of their trenches. There, in the no man's land that had seen so much death, German and British soldiers were putting down their weapons and singing, their voices mingling in the frosty air. The soldiers from both sides joined in the chorus of "Silent Night," some in German, others in English, creating a spontaneous harmony that transcended the battlefield.
The truce was unofficial, from a shared sense of humanity rather than military orders. Soldiers ventured out, exchanging gifts of cigarettes, chocolate, and buttons from their uniforms. They played football with a makeshift ball, laughing and running, the war momentarily forgotten. Many shared stories of their homes, their families, and the lives they hoped to return to, creating bonds that would last beyond the night.
For those hours, the war seemed a distant nightmare. Soldiers exchanged addresses, promising to write once the war was over, a small hope in a sea of uncertainty. The Christmas Truce was a brief respite, a glimmer of peace in a time of relentless conflict. As dawn broke on Christmas Day, the soldiers reluctantly returned to their trenches, the truce ending as silently as it had begun.
This story passed down through letters, diaries, and oral history, became a legend of peace amidst war. It's a tale that has been retold countless times, symbolizing the potential for reconciliation and the enduring spirit of Christmas, even in the darkest of times. The Christmas Truce of 1914 remains a poignant reminder of what can happen when enemies choose to see each other as human, if only for a moment.
Raised by pacifists, I’ve always considered war absurd, preferring peace and negotiation over conflict. However, today’s analysis isn’t about morality but understanding the economic forces behind the war. Everyone knows that war is always disastrous for those involved, whether on the battlefield or as civilians in cities torn apart by bombings. It’s also widely acknowledged that those who initiate or push for war rarely suffer the most, either in human or economic terms.
A few years ago, many in the West might have viewed imperialism and war as relics of a bloody past. Yet, recent events have proven otherwise, revealing that war still casts a long shadow over nations, peoples, and individuals. The ongoing war in Ukraine shattered the hopes of many in the West who believed war was a problem left behind by our grandparents’ generation.
Europe’s strategy after the Cold War, which focused on engaging in international trade with Russia and China while underfunding its military in favor of social security, seems to have failed badly. Despite most European countries being members of NATO, Europe cannot defend itself against foreign conquest without the dominant global hegemon: the United States.
With the justification of the old Latin saying “Si vis pacem, para bellum” (“If you want peace, prepare for war”), military advisors and geopolitical strategists bombard the public with opinion pieces and statements on talk shows, claiming that nations must ramp up military spending to protect themselves from “imperialist dictators.” They argue that advocating for peace plays into the hands of imperialists.
However, the current situation did not arise out of nowhere. The scale of military production during World War II was unprecedented, as was the redirection of labor and raw materials toward war efforts. The total mobilization of resources, industry, and human effort for military purposes remains unmatched to this day.
World War II also marked the birth of the military-industrial complex in the United States. During the war, a symbiotic relationship between the armed forces, the defense industry, and the government became essential to mobilizing all the necessary resources to win. Free markets gave way to central planning in times of war, as the state transformed into a massive war factory.
However, once global conflicts end, military production facilities must be repurposed to manufacture the goods and services that consumers demand. The demand for military equipment is not as high in peacetime as in wartime.
Regarding World War II, the war ended with two emerging superpowers— the USSR and the United States— locked in intense rivalry. Before Japan's final surrender, the US dropped atomic bombs on Hiroshima and Nagasaki. Officially, the justification for the bombings was to force Japan to surrender, but there was possibly more to:
Some historians have speculated that the bombs might also have had another purpose – to send a warning to the Soviet Union about the strength of the American arsenal.
Nevertheless, the USSR successfully developed its own atomic bomb, and the arms race of the Cold War began. This was a boom time for the US defense industry, as it was required to arm not only the US military but also its NATO allies, several other governments fighting communist uprisings, and rebel groups within communist countries.
However, with the end of the Cold War in 1989, the defense industry faced a significant problem. With no clear enemy left to fight, who would continue to purchase their weapons and military equipment? One potential solution was for producers to diversify into civilian markets to meet private-sector demand— for example, Boeing, which shifted focus to ramping up commercial airplane production.
However, private demand is subject to economic conditions and consumer preferences, which can lead to fluctuating revenues. In contrast, defense spending is a matter of national security and thus remains in the hands of the state. The state offers long-term contracts that provide a stable revenue stream. The complexity of defense products also allows for high-profit margins. Consequently, these companies are vested in lobbying for consistently high defense spending.
For the defense industry, peacetime is a period of turbulence and unpredictability, whereas wartime ensures steady demand for their products. However, since labor and resources are finite, their gain often comes at the expense of consumers. Economically, defense spending should be as low as possible to allow as many resources as possible to be directed toward improving the standard of living for ordinary people.
Yet, it is well known that the lobbying power of ordinary citizens is much weaker than that of a well-organized business lobby, particularly in the defense sector. People generally prefer peace over war because peace promises increasing prosperity, while war only leads to property destruction.
As a global hegemon, the US can maintain high military spending while keeping most citizens out of direct conflict—engaging in wars far from home. Aside from political considerations, such as suppressing the influence of competing superpowers (as in Guatemala in 1954), economic motivations are also at play.
The economic rationale becomes apparent when examining comments made by Republican politician Lindsey Graham regarding US aid to Ukraine:
Providing state-of-the-art weapons for the Ukrainian military helps the American economy by keeping the defense supply chain open and running. This type of military assistance will create jobs in America.
Graham suggests that sending weapons abroad helps secure jobs in the US defense industry. The fact that NATO allies are also purchasing large quantities of US military equipment likely played a role in why every US president after 1990 pushed for NATO enlargement. More countries joining the alliance means increased demand for fighter jets, weapons, and other military equipment (some of which are produced in the US). That means that while new NATO members have a security interest, the US likely has a more substantial financial interest than a purely security-driven one.
While one could argue that such defense and economic policies benefit the economy, this perspective misses an important point: opportunity costs. It's not just that people in the defense industry earn wages and spend them back into the economy. The key issue is the amount of resources and labor allocated to producing defense goods that could otherwise be directed toward producing consumer goods and services that meet domestic demand.
The fall of the Berlin Wall led to an initial drop in defense spending. As US military spending decreased, many companies that also produced goods for the private sector phased out their defense production or sold off their defense divisions. This shift was understandable, given that the collapse of the Soviet Union and the economic downfall of its satellite states led to fewer perceived military threats.
However, this short-term reduction in defense spending ultimately led to a wave of mergers and acquisitions, resulting in industry concentration. This trend became particularly evident with the rise of the internet and after 9/11 when government demand for IT and security services (emphasis mine) skyrocketed. That also helps explain why the defense industry became increasingly concentrated over time.
Companies that specialize in defense—and some broader federal markets like IT services and government facilities—may not know much about commercial sectors, but they know a lot about the art of selling to the government. They have… sprawling teams of professionals who are trained to understand how the government buys and what it wants.
One could even go further. Economically, governments eager to intervene in markets and businesses keen to sell their products can form a dangerous combination. This reallocation of resources enables the defense industry to shape US foreign policy actively.
Although this dynamic may have also existed during the Cold War, the fall of the USSR removed a significant justification for promoting the need for defense products to the government. Still, businesses with governments as their primary or sole customers have a clear incentive to sell their products, not to act on moral grounds.
This becomes evident when researching various wars and conflicts, such as the Iran-Iraq War in the 1980s, in which US companies and the US government armed both sides. Beyond funding both sides of a war, these businesses are incentivized to lobby for US intervention, regardless of whether that means switching allegiances or supporting one side.
“If you’re the last remaining superpower, you can do whatever you want” could have been a common refrain in sales pitches to the government. In fact, no country on earth can genuinely threaten or conquer the US, and the US could likely conquer any nation (if not for nuclear weapons); this power imbalance shapes foreign policy.
To understand the economic implications, one must consider the US's interventions and its inconsistent backing of various groups and governments in different regions. It's likely safe to say that this approach didn't calm the situation but instead fueled ongoing conflicts. Professional mercenaries move from one country to another, fighting for causes that benefit their clients, further perpetuating instability.
It is indisputable that the military-industrial complex actively shapes US and, more broadly, Western European geopolitical policies. The increasing centralization of political decision-making only strengthens this influence. Washington and Brussels have become magnets for lobbyists, who work to influence politicians and push for policies that align with the business interests of the defense sector.
While government actions have far-reaching consequences for geopolitics and international relations, the military-industrial complex remains primarily focused on selling its products. When actions lead to new conflicts, this simply translates into more business. This dynamic is not confined to the Middle East, however.
While Russia’s invasion of Ukraine is unquestionably unjustifiable, it is undeniable that several US geopolitical moves increased the likelihood of such an outcome. In 1998, George Kennan, the architect of America’s successful containment of the Soviet Union, told the New York Times about the Senate’s ratification of NATO expansion:
I think it is the beginning of a new cold war. I think the Russians will gradually react quite adversely and it will affect their policies. I think it’s a tragic mistake. There was no reason for this whatsoever. No one was threatening anybody else…Our differences in the cold war were with the Soviet Communist regime. And now we are turning our backs on the very people who mounted the greatest bloodless revolution in history to remove that Soviet Regime… It shows so little understanding of Russian history and Soviet history. Of course there is going to be a bad reaction from Russia, and then [the NATO expanders] will say that we always told you that is how the Russians are – but this is just wrong.
That, by no means, justifies what the Russians did. However, if Kennan saw it coming in 1998, I find it hard to believe that no one else in Washington noticed it. That said, beyond some of the background that explains how the symbiosis between the defense industry, government, and specific non-governmental organizations fuels the economics behind it, the core issue is simple: it's all about interests. Some companies lobby because they want access to resources, others to sell weapons and fighter jets, while governments seek to influence or aim to achieve specific outcomes.
Although there seems to be little chance that this dynamic will change— and it feels as though war as a political tool is experiencing a renaissance— with Christmas around the corner, I want to reserve my outlook for 2025 for the last "Weekly Wintersberger" of the year, I feel it’s worth speculating about how wars could be avoided.
First, there’s the financial aspect of war. Remember when the EU and the US said we used to make "war for Russia as costly as possible" to ensure "it serves as an example that waging war isn’t successful"? In reality, the modern fiat money system makes war possible.
Without fiat money, prolonged war would eventually become unfinanceable because it consumes so many resources that, after a certain point, countries can only fund it by debasing their citizens' savings and wages through money printing. Initially, governments can rely on methods like taxation or issuing war bonds, but it becomes increasingly challenging to generate the necessary funds as the war drags on.
Unsurprisingly, during World War I, when the global gold standard was still in place, all major countries abandoned it and resorted to printing money to finance the war. Historical examples go back much further, such as the Chinese Yuan Dynasty, which issued paper currency known as “Jiaochao.”
Governments rely on the central bank as an accomplice to sustain this strategy. Central banks can keep the war machine running by slashing interest rates to near zero or monetizing government debt by printing money. Sometimes, they may even be obligated to buy war bonds when propaganda fails, and people aren't buying them.
One might argue that a non-inflationary monetary system could have prevented major wars like the two World Wars. Without abandoning the gold standard, World War I might have remained a regional conflict with a much shorter duration.
Therefore, it’s safe to say that those who favor peace should adopt a "hard money" stance. In one sense, the EU and the US are right. The best way to prevent or end war quickly is to make it as costly as possible. And what could make war more expensive than a monetary system based on a finite resource—something that can’t be printed endlessly? Nothing.
However, every proponent of peace and hard money must acknowledge that even with such a system, governments can quickly revert to fiat money by simply declaring its end when war begins. As far as I know, there’s no real way to prevent the state from doing so except for the unrealistic goal of establishing anarcho-capitalism, where businesses provide goods and services typically offered by governments.
But beyond abolishing fiat money, there’s another policy that, if it gained widespread international support, could resolve many conflicts—ethical or geographical. Coincidentally, its original proponent was born in what is now Lviv, Ukraine.
Ludwig von Mises, the renowned Austrian economist, was a soldier during World War I. He witnessed the horrors of war firsthand before being wounded and working in the Austro-Hungarian war bureaucracy. 1919, he published his book Nation, State, and Economy, originally titled Imperialism. The book compares the pre and post-war political and economic landscapes.
Von Mises explored the nature of national identities, arguing that they precede national governments and are shaped by language and culture. He suggested that socialist policies within countries partly contributed to the outbreak of the war. However, his most significant contribution was his proposal to avoid war and maintain peace.
Mises observed that overlapping linguistic and cultural communities, where one group sought independence and more freedom, were key to understanding the origins of conflict. These groups wanted the power and autonomy to function independently from distant central governments.
This idea is highly relevant today, as the wars in Ukraine and former Yugoslavia were rooted in cultural or ethnic tensions. In Yugoslavia, Croatians, Bosnians, and later Kosovars sought more significant political and economic autonomy, or in other words, their states. After Bosnia-Herzegovina and Croatia seceded from Serbia, Serbs in the region wanted to do the same—either stay with Serbia or form their autonomous governments.
In Ukraine, the western part generally leaned toward European integration, while the east, dominated by ethnic Russians, remained closely tied to Moscow. The conflict arose because the international community supported secession for some regions, like Croatia, Bosnia, and Kosovo, but denied Serbian minorities the same rights. In Ukraine, the international community supported Kyiv and argued that secession was not permissible.
To resolve such conflicts, Mises proposed a solution that he called “pacifistic liberalism,” which centers on the "right to secession" as a core principle of classical liberalism. His argument was simple: when a minority or group of people wishes to secede from a democratic government to form their own, they should have the right to do so under the principle of self-determination.
If the "right to self-determination" became a central part of the international order, most conflicts would likely be resolved, and many new nation-states would emerge. For instance, the years-long Basque conflict in Spain could be settled peacefully. It's also likely that the wars in Ukraine would never have started or that the Israel-Palestine situation could have been resolved if people who wanted to secede could quickly form their own states.
However, it also becomes clear why democracies and nations oppose this principle. Often, the more productive regions fund socialist policies pursued by the government. Convincing nations to agree to such policies would require significant persuasion.
As someone raised as a pacifist, I believe this could be the cornerstone of a more peaceful world, dramatically reducing the likelihood of future conflicts. With Christmas around the corner, I thought it would be a good time to dream of a more peaceful world—one without a military-industrial complex, a nation-state that forces you to be part of it or a monetary system that funds wars across the globe. There may never be a war to end all wars, but we can strive for a world where peace is more than just a fleeting hope.
Feeding the machine, and staining this world,
with blood instead
And only now I understand,
There is no war to end all warsHeaven Shall Burn – Bring The War Home
Have a great weekend!
Fabian Wintersberger
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