War: the frugal option?
Three Chicago economists pared down
the argument for war in Iraq versus further containment to—what
else?—dollars. On March 20, the day after the United States
began its air campaign, GSB professors Steven J. Davis, Kevin M.
Murphy, and Robert H. Topel released a paper arguing that the cost
of containing Saddam Hussein, at $630 billion, “dwarfs”
their war estimate of $125 billion.
One reason for the cost difference:
time. Based on similar scenarios in North Korea and the Soviet Union
as well as Saddam’s survival through the Iran–Iraq and
Persian Gulf wars plus 12 years of sanctions, the economists guesstimated
that he or his sons would rule for another 33 years. That calculated
to a 3 percent chance every year that the regime would “morph
from malign to benign.” If Saddam achieved a 9/11-like terrorist
attack, add another $50 billion. The economists lowballed $10 billion
a year for extra homeland security and assumed post-9/11 security
concerns and redoubled efforts to enforce sanctions would increase
costs by 50 percent.
The economists’ war
costs comprised two years. Davis, Murphy, and Topel argued that
long-term nation building or occupation costs would be outweighed
by the Iraqis’ increased living standards and fewer Saddam-inflicted
Graphic by Allen Carroll