Q&A: The multiplier effect of violence containment spending

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After I spoke on Wisconsin Public Radio a few weeks ago, a listener wrote me with an important question. In the interview, I said that the Institute for Economics and Peace has calculated that the multiplier effect of reallocating our current violence containment spending would be about 2 to 1. That means that money spent manufacturing and purchasing guns, tanks, police uniforms, and even security cameras could generate twice as much economic activity if it were instead spent on books, computers, school uniforms and movie cameras. I later said that we’re missing out on the multiplier effect when we spend money on violence and violence containment.

Brian wrote me with this question:

Would the purchase not be an economic multiplier for the company that received the order, it’s employees and families and everything they spent money on?

The multiplier effect is the economic concept that every $1 spent generates more than $1 in economic activity. And the answer to Brian’s question is, yes.

It’s correct that manufacturing violence containment has some economic multiplier. I should have specified — it is significantly limited compared to other industries. Let’s take a computer and a simple explosive device as an example:

The firms that manufacture computers and explosives both generate economic multipliers for each $1 in sales. The firms pay employees, suppliers, and other vendors, who in turn pay other firms and individuals. Employees of both businesses buy groceries, go to the movies, pay the mortgage, pay their taxes, etc. The difference in the flow-on effect is chiefly in the economic activity generated (or not) after the product is manufactured and sold.

The computer serves as an input to a number of other activities: a student’s education (which generates economic benefits for a lifetime), the operations of other firms, or maybe even the creation of a new business. The explosive device does not create any new economic activity. In fact, if used, it is likely to destroy wealth (homes, factories, etc.) and the infrastructure that makes future economic growth possible (roads, ports, power grids, etc.). And so the flow-of effect of spending money on violence or violence containment is limited, or even negative!, compared to spending money on computers.

This is one example, and it obviously gets more complicated. For example, hiring a security guard may generate a net positive return for, say, a bank. But from a macroeconomic perspective, those human resources could be productively used manufacturing computers, used by business schools to train new entrepreneurs, who develop new products, and employ more factory workers, and so on.

The goal is to start categorizing our economic activity in a way that allows us to understand the impact of violence. “Manufacturing” as a category of economic activity includes the production of computers, toys, shoes, guns, fighter jets, and drones. “Violence containment” as a category let’s us measure the economic impact of the subset guns, fighter jets, and drones.

It does get tricky when we use drones, for example, for more than defense purposes. But, using the example I mentioned on air, we know that $40 million for drones on the border will not be producing economic flow-on benefits. We could, alternatively, create those benefits by caring for and schooling the children that have arrived here, thus adding a host of young people to our future work force. And if you are worried that we won’t have jobs for them, well, I’ll note that $40 million at the mean US income would employ about 1,000 social workers, educators, and grocery store and restaurant proprietors, to name a few, and their families and our economy would certainly enjoy the multiplier effect of that spending. The beneficiaries of that spending can be expected to create new jobs — history predicts that well enough.

Police Brutality Vigil Tonight, 8/14, 7pm Union Sq NYC

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What has happened in Ferguson, MO this week, and LA, and I’m sure many other American cities that we aren’t hearing about, is unacceptable. And it is scary, and it is heart breaking.

But the violence in our communities – much of which comes from over armed police forces – is not inevitable, and it is not hopeless.

There is something we can do about it.

It’s time to come together and make a change. Come out if you can. Hold a candle. Hold your neighbor’s hand. Make a statement that this is not ok.

I just received this email from a colleague organizing one of many vigils in NYC tonight:

Here is the event page on facebook: https://www.facebook.com/events/696125507103287/?ref_dashboard_filter=upcoming

There are multiple locations in Manhattan: Harlem, Union Square, Brooklyn, Queens and Long Island. This is a nationwide vigil. Here is the facebook community page: https://www.facebook.com/NMOS2014

The vigil was organized by Blogger @FeministaJones. You can also follow the vigils here at #NMOS14 on twitter. I am the primary organizer for the event tonight in Union and my twitter is @StilettoViper.

This is NOT a protest. It is a peaceful vigil. At 7:20 EST we will be observing 60 seconds of silence. This is a time for people to come together and mourn. This is not a place for violence.

See you in the streets.

Building Green Peace: Peacebuilding & Environmentalism

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Let me say: I’m pretty excited to share a by-line with Jurgen Brauer, who blogs at Stone Garden Economics. Jurgen is a co-author of the book Peace Economics and co-editor of The Economics of Peace & Security Journal.

We collaborated last month to discuss the environmental impact of war. (Jurgen wrote a book on that too.) We concluded that it’s time for peacebuilders and environmentalists to come together.

In the past, human conflict and destruction of the environment were viewed as separate problems. Today, they must be seen as interlocking parts of the same problem. Organizations need to respond by approaching them in an integrated, unified manner. Putting a conservationist’s desk in every peacebuilding office and a conflict assessment specialist or peacebuilding program officer in every environmental NGO would make tangible progress toward the protection of people and the planet.

Read the full article – from the environmental impact of war, to discussion of climate change and conflict, with our recommendations – here, on World Politics Review.

Listen In: Discussing Peace on Wisconsin Public Radio

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Update: I had a great time talking with Rob about peacefulness and peace economics. You can listen to the interview here.

One listener/reader has sent me a question, so, Q&A post forthcoming. Send me your thoughts and questions, too.

Continue reading

Turkey Can Teach Israel How To Make Peace

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Our headlines have been filled with an overwhelming amount of violence and conflict lately – Ukraine, Gaza, Syria, Central America. Fortunately, this week, Turkish journalist Mustafa Akyol has published a New York Times Op-Ed about how we can build peace.

The article is titled Turkey Can Teach Israel How To End Terror. To me, that headline exemplifies our cultural focus on war and violence at the expense of focusing on the outcome we want – peace. Terror gets more clicks than peace.

But regardless, Akyol makes several salient points. Continue reading

Fewer wars and less peace? What to do about it.

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Last month, the Institute for Economics and Peace released the 2014 Global Peace Index. The results are frustrating: the world has been getting less peaceful for the last several years. And at the same time, the number of wars between countries is also declining. How is that possible? Read my analysis of the 2014 Index report on Pacific Standard:

In short, the nature of peace is changing. Breakdowns in peacefulness are becoming more decentralized, and peacefulness relies more heavily on social structures and non-state actors as opposed to exclusively governments and formal militaries. Peace is becoming more democratic, if you will. Given the severity of organized, inter-state conflict in the 20th century, the trend of declining militarization and international war implies that we have made progress in solving 20th-century problems.

The rise of internal conflict, in all its forms, demonstrates that people are unsatisfied with their governments, economies, and social structures. We don’t need complicated econometrics to tell us that—the Arab Spring movements, the anti-austerity protestors, and even ISIS have made their dissatisfaction abundantly clear. Meanwhile, violent markets—like the drug trade—are growing as opportunities in formal, non-violent markets disappear.

Click through for the full article.

The Pacific Standard site doesn’t do comments, but I’d love to hear your thoughts and questions here or on social media. Do you think this analysis makes sense? Are we doing the right things to address our 21st century problems? Do you have an innovative idea for building peace?

Support. Don’t Punish.

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A global advocacy campaign to raise awareness of the harms being caused by the criminalization of people who use drugs.

If you’ve been following along, you already know that I stand against the War on Drugs. Fortunately, the failures of meeting economic activity with a militarized law enforcement response are becoming more recognized, and several movements for drug policy reform are growing. Support. Don’t Punish is one of them.

From their website, the Support. Don’t Punish campaign aims to:

  • Change laws and policies which impede access to harm reduction interventions for people who use drugs.
  • Raise awareness about the need to stop criminalising (‘punishing’) people for using drugs.
  • Raise awareness about the need for greater funding and attention for essential health services and other ‘support’ for people who use drugs.
  • Promote respect for the human rights of people who use drugs.
  • Engender public support for drug reform.

This Thursday afternoon, Support. Don’t Punish is hosting a global day of action for drug policy reform.

June 26 is the United Nations’ International Day Against Drug Abuse and Illicit Trafficking, and also the UN International Day in Support of Victims of Torture. On this day, governments around the world celebrate their contributions to the global war on drugs, in some cases even commemorating this day by holding public executions or beatings of drug offenders.

NYC is helping to reclaim this day by becoming involved in the 2nd annual Global Day of Action, along with over 80 other cities around the world.”

Join us at the United Nations Headquarters (Corner of 1st Ave & E 47th St) at 2pm for a rally for smarter, more effective drug policy. Find more information on the event Facebook page.