Book Reviews: Butter and Guns: Americaªs Cold War Economic Diplomacy

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Butter and Guns: Americaªs Cold War Economic Diplomacy

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  10 of 14 people found the following review helpful:
 Good on diplomatic history, bad on economics, March 30, 2000
By Excerpt from "The Independent Review" (Oakland, CA) - See all my reviews

This review is from: BUTTER AND GUNS: America's Cold War Economic Diplomacy (Hardcover)
To what did Americans owe their postwar prosperity? In "Butter and Guns: America's Cold War Economic Diplomacy," Yale University professor of history Diane B. Kunz argues: the defense spending policies of the national security state....
If military spending indeed "continually primed the pump of the American economy" (p. 63), as Kunz asserts, she might have wondered where the pump-priming dollars came from. What is missing from her analysis is a sensitivity to the notion of opportunity cost. As historians Thomas G. Paterson ("On Every Front: The Making and Unmaking of the Cold War") and Paul Kennedy ("The Rise and Fall of the Great Powers") have noted, the Cold War saddled America with enormous material costs in terms of forgone socioeconomic well-being, in terms of lost consumer-oriented production, and in terms of overburdened government finances. Moreover, even in the areas of education and infrastructure spending (GI Bills and the interstate highway act), where contemporary liberal economists claim that government spending contributed positively to economic growth, it hardly stands to reason that the Cold War was a prerequisite to such spending. The Cold War did allow America to play a preponderant role in the postwar world, particularly while the economies of Europe and Japan still lay in ruins. Yet the enormous demands that the Cold War placed on the American economy saddled it with costs that became quite apparent by the 1970s. Even NSC-68, the postwar "blueprint" of the national security state, recognized the enormousness of those costs. Kunz does not.
Because Kunz misinterprets the mainsprings of economic growth in the postwar period, she can only lament the passing of the Cold War. Having demonstrated little faith in the workings of free markets, she can only look to the future with a sense of foreboding, as her chapter entitled "Free Trade Forever?" suggests. She concludes, absurdly (but consistently), that "Josef Stalin rescued American fifty years ago" (p. 334) and wonders who is to rescue America now, because "the free market cannot solve every ill" (p. 335).
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  3 of 7 people found the following review helpful:
 Obviously has no idea what economics is all about., May 21, 2003
By Jeffrey M. Cavanaugh (Champaign, IL) - See all my reviews
   

This review is from: BUTTER AND GUNS: America's Cold War Economic Diplomacy (Hardcover)
This is, frankly, a poor book. It is a mediocre history of US economic diplomacy since WWII, but it is episodic in nature and fails to really tie together the ebb and flow of international diplomacy over economic issues. It also entirely fails to discuss the economic theory that governs politics in this area such as rent-seeking, two-level games, and even the Ricardo-Viner or Stophler(sp?)-Samuelson models of international trade. Moreover, in stressing the importance of the US military-industrial complex as a source of economic growth and job creation during this period, she totally ignores concepts basic to economics and economic analysis -- opportunity and transaction costs -- and so wrongly argued that the vast amount of capital spent on the military was GOOD for the US economy. She also, to add to the poor analysis everywhere evident in this book, fails to show any real correlation between military spending and economic growth.
BAD BOOK!