The Economics of Destruction

9/21/2026
Joan Robinson
We are sitting around discussing ideas totally beside the point. The important question is not whether the rate of inflation is high or low or can be brought under control but whether our generation will succeed in destroying the world. We are seeing the supply of arms pile up as the Americans and Soviets advance from one missile system to the next. This same threat lies before the next generation. We should realize that the stockpiling of destruction precedes discussion of inflation and unemployment. The arms race is too serious a matter for us to be content to dispute economic theories that float off into the stratosphere.

Economics today is only contributing to the deepening of the present recession. In the present climate, an intelligent economic policy is seen to lead to dangerous thoughts. Employment, welfare, and other relief programs are regarded as dangerous because they are considered to be socialist. Instead, governments have thrown out any idea of attaining full employment. They focus on means of reducing inflation by restricting credit, when in fact this makes the situation worse by reducing investment and productive activity. Interest rates are pushed to absurd levels, which acts against business demand for loans and in turn lowers the growth of real productive activity. Faced with rising debt and interest charges, firms cut back on expenditure and investment. Factories lay off more and more workers as businesses seek to cut costs and the economy swings deeper into recession. It is the policies of the Western governments that are stupid and disastrous. But the way democracy has worked out is that it has become an auction in which the loudest bidder wins. Governments pick up from [Milton] Friedman and the Chicago Boys and put into place policies that only indirectly act on prices. Ways of increasing employment, on the other hand, are thought to be socialist and must be dismissed as dangerous and inflationary.
It strikes me as quite funny that the embarrassment of the Soviet Union in Afghanistan has made us so self-righteous as to be standing up for democracy and human rights. Let us just look back on Chile and make some serious self-criticism. The record of the United States in defending the worst dictatorships in Latin America should lead us to reflect on Western foreign policy. Vietnam is only the most obvious example of American intervention. But Afghanistan has made the West feel so self-righteous as to reject any possibility of détente or compromise. The slogans of defense are doing a great deal of harm to the possibilities of peaceful coexistence—social programs are slashed while defense budgets must rise to keep pace with the level of rhetoric. [Solly] Zuckerman has pointed out that once both sides had enough atomic weapons to do irreparable damage to the other and the rest of the civilized world, what use is there to going on constructing nuclear missiles and using up more and more of the earth’s crust just so we can destroy ourselves?
Keynesian economics is contributing to the present crisis, owing to the inhibition to spend money on welfare and unemployment—this is socialism. Finance ministers around the world keep insisting that inflation is more important than full employment, but they always forget that wasteful government expenditure on the military-industrial complex in the United States, beginning with the Vietnam War and continuing today, is a major factor in sustaining the inflationary spiral. But it is always easy to obtain votes for defense spending: the means to finance destruction are easier to provide than the means to combat unemployment and poverty.
What is the point of sitting here discussing useless things? It reminds me of the story of the man who had the misfortune to slip off the top of a skyscraper. As he passed by the seventeenth floor on his way down he recognized a friend by the window and told him: “It’s not so bad thus far.” We are again in a slump and governments are incapable of applying policies that might reverse the present recession—they instead listen to bad economists who tell them that inflation is the root, rather than the symptom, of a sick economy. What we have are programs that aggravate the economic crisis while the means of destruction are multiplied. Economics should begin to address the important issue of our impending doom.