Page 304 - Deep Learning

Error Correction in Context 287

their thoughts, the objective truth is that World War II was a war of choice, and
it almost wiped Germany off the face of the Earth. Other societies that launched
wars of choice have suffered similar fates. What is less obvious is that wars are
ruinous for the winners. Wars are the most costly enterprises undertaken by
societies, and governments finance them by borrowing money on the interna-
tional financial markets. Loans have to be repaid with interest, so gigantic loans
come with gigantic payments. William J. Bernstein in his 2004 book The Birth of
Plenty provide data on U.S. payments for World War II: By the time the Vietnam
War heated up in the 1960s, the debt burden for World War II, although drop-
ping, was still at approximately 30% of the gross domestic product. The usual
30
reason to launch a war of choice is that a society seeks to enrich itself through
plunder. From Roman conquest of fertile farmland and trade routes and Viking
raids on prosperous British villages to Nazi looting of French art treasures, the
object of war is usually self-enrichment by the extraction of raw materials from
the opponent’s territory or the expropriation of the products of the vanquished
people’s labors. Surprisingly but justly, this course of action does not work. Loot
is finite and eventually consumed, leaving the conqueror with nothing but the
yet-to-be-paid debt on his war effort. Production and trade, not war, are the
sources of prosperity. This lesson is naturally formulated as a constraint: Do not
wage war unless attacked.
Absence of war does not automatically produce prosperity. What factors
differentiate those societies that prosper from those that do not? Bernstein
has proposed that there are four factors – four constraints – that determine
whether a society prospers or flounders economically. Each factor represents
a potential error in the design of a society’s institutions and practices. The first
constraint is that governments should respect private property. The possibil-
ity of improving one’s lot is a key driving force behind economic activity, but
that incentive goes away if one is not allowed to keep one’s gains. Protection
of property requires a government of law, laws that constrain the power of
the executive branch of government and an independent judiciary that can
enforce such laws. The second constraint is that a society should not restrict
the focus and scope of scientific inquiry or the development of technology.
The results of science are not to be distorted or suppressed to fit ideological,
political or religious concepts. This requires freedom of thought and freedom
of speech. The third constraint is that governments should not restrict the
movement of capital for those who wish to take the risk of engaging in an
economic enterprise. The fourth is that governments must allocate resources
to maintain and extend the infrastructure that allows goods and services to
travel. In short, there are four basic mistakes that nations might commit that