The gorilla-whale is back. And he’s here to stimulate the economy.
On Friday, theaters across the country will be debuting the fourth American remake of Godzilla (the name is a romanization of the original Japanese name “Gojira” — which is a combination of two Japanese words: gorira (‘gorilla’) and kujira (‘whale’). Over its opening weekend the film is projected to earn $78,000,000, and cumulative revenues of over $240,000,000. While that could be a generous stream of income for Hollywood, it’s a drop in the $17 trillion ocean that is the U.S. economy.
But what if instead of releasing the movie, the government were to convincingly lie to the American people about an imminent invasion by a 150 foot tall gorilla-whale? What would be the effect if the government said we must take action now to protect our way of life from the monster?
According to some liberal economists, it would lead to an economic boom. In defending President Obama’s stimulus proposal in 2011, Paul Krugman proposed a peculiar solution for economic recovery that is similar to an invasion by Godzilla:
“If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” he declared, arguing in favor of the president’s stimulus package. “And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better [off].”
Can you spot the economic fallacy being posited by this winner of the Nobel Prize for economics?
To ramp up these unnecessary defenses, the government would need to take money from current productive activity (in the form of taxes) or borrow from future productive activity (in the form of deficit spending) in order to fund the non-productive activity. The government spending is not creating new wealth, but merely moving it from productive uses to a non-productive use.
In his famous essay “That Which is Seen, and That Which is Not Seen” (1850), Frederick Bastiat explained why it is economically harmful to pay more for national defense than is needed:
We will suppose that we are in the village of A. The recruiting sergeants go their round, and take off a man. The tax-gatherers go their round, and take off a thousand francs. The man and the sum of money are taken to Metz, and the latter is destined to support the former for a year without doing anything. If you consider Metz only, you are quite right; the measure is a very advantageous one: but if you look towards the village of A., you will judge very differently; for, unless you are very blind indeed, you will see that that village has lost a worker, and the thousand francs which would remunerate his labour, as well as the activity which, by the expenditure of those thousand francs, it would spread around it.
At first sight, there would seem to be some compensation. What took place at the village, now takes place at Metz, that is all. But the loss is to be estimated in this way: At the village, a man dug and worked; he was a worker. At Metz, he turns to the right about, and to the left about; he is a soldier. The money and the circulation are the same in both cases; but in the one there were three hundred days of productive labour; in the other, there are three hundred days of unproductive labour, supposing, of course, that a part of the army is not indispensable to the public safety.
Krugman’s proposal—which is the based on the idea that almost any kind of “stimulus” spending is good for the economy—is based on this flawed logic. Like most make-work stimulus proposals, preparing for an attack by Godzilla that never comes would harm, not help, the economy.
Using force to shift resources from productive uses to unproductive one is is antithetical to the approach Christians should champion. As Anne Bradley explains,
God has not just called us to preserve what he has given us, but to increase and grow it. Our job description as given in Genesis 2 is to:
• Be fruitful and multiply.
• Create rather than destroy.
• Use our ingenuity and talent to increase the sum of flourishing, not just preserve existing levels.
The Christian approach to economic growth — which tends to lead to increased human flourishing — is to be innovative, productive, creative, and responsible stewards of resources. That is why we can spend our hard earned money at the theaters watching the Godzilla movie, while it wouldn’t be God-honoring to waste his resources on unproductive government spending, such as defending against the invasion of gorilla-whales.