In late August 1990, I published an article in the Wall Street Journal. The title was badly chosen, though not by me: “Sorry Saddam, Embargoes Don’t Hurt U.S.” My editor at the time, by the way, was David Frum, and, although he and I differed on the issue of war against Saddam Hussein, he was a fantastic editor.
I’ve published that article on my own web site here.
Here are the opening two paragraphs:
Saddam Hussein is an evil man who has no qualms about hurting innocent people. But many Americans believe that if he were to succeed in extending his control to a large part of the Arab world, he could severely damage the oil-dependent U.S. economy. No less an authority than Henry Kissinger has claimed that an unchecked Saddam would be able to “cause a world-wide economic crisis.”
But is it true that Saddam Hussein can impose large costs on our economy? Economic analysis of the oil market answers with a resounding, No. The annual cost to the U.S. economy of doing nothing in the Gulf would be less than half of 1% of the gross national product. The vaunted oil weapon is a dud.
Early in September 1990, I wrote and circulated among economists a statement making the point I made in the WSJ op/ed, and asked them to sign. It was titled “Economists Speak Out on War for Oil.” The statement, though substantially shorter than my article, was somewhat lengthy. For that reason, I’m not typing it in here unless 2 or more people demand it.
Ed Crane of the Cato Institute thought he could get some funds to publish a big ad in major publications with the statement and, underneath it, the names of signers. We hoped to get a lot of names people had heard of.
I got some but not enough and so we junked the project. The signers, in alphabetical oder, were:
Barbara Bergmann, American University
Tyler Cowen, George Mason University
Richard Ebeling, Hillsdale College
James K. Galbraith, University of Texas
George Horwich, Purdue University
John M. Heineke, Santa Clara University
Me
Dwight R. Lee, University of Georgia
William A. Niskanen, Cato Institute
David Ranson, H.C. Wainwright & Co.
Alan Reynolds, Hudson Institute
Jennifer Roback, George Mason University
George Selgin, University of Georgia
Richard Timberlake, University of Georgia
Robert D. Tollison, George Mason University
David Weimer, University of Rochester
Lawrence H. White, University of Georgia
Benjamin Zycher, UCLA
In going through some old files on Friday, I found some notes I had taken verbatim about my conversations on the issue with three prominent economists who had all refused to sign: Gary Becker, Paul Samuelson, and Sam Peltzman. Milton Friedman wrote me a separate letter saying that he agreed with the analysis but wouldn’t sign because many people would conclude that he was against the war, and he wasn’t.
Here are the conversations with Becker, Samuelson, and Peltman:
Gary S. Becker: I agree with the economic point you made. But I won’t sign. I’m not a signer. Also, Saddam Hussein is a threat in other ways. But I agree that the threat does not arise from his power over the price of oil.
Paul A. Samuelson: This war isn’t about the price of oil.Henderson: Maybe it’s not but that’s the justification that’s being given by Bush and Baker. [I should have said “one of the main justifications.”]
Samuelson: It is and it isn’t. But I won’t sign.Henderson: Do you agree with my analysis?
Samuelson: I don’t have any quarrel with your analysis.
Henderson: If I’m ever asked, can I quote you to that effect?
Samuelson: (Pause.) Sure. Your analysis was correct.
Sam Peltzman: The analysis is right but I won’t sign.
Henderson: Can I quote you as saying the analysis is right?
Peltzman: Why do you want to quote me?
Henderson: You’re a name. You said the same thing that Paul Samuelson, Murray Weidenbaum, and Gary Becker said. You guys are names. Can I quote you?
Peltzman: Sure. I don’t care.
Why do I post this here? First, because I’m kind of proud of the results and second, to make the point that when you ask for something that you don’t get, try to get something out of it.
READER COMMENTS
Jon Murphy
Aug 19 2018 at 3:35pm
I think this is also an important lesson on interpreting silence on an issue. Gary Becker was, in a sense, silent on this issue by refusing to sign your letter. But, it would have been a mistake to conclude that he opposed your argument at all!
David Henderson
Aug 19 2018 at 11:31pm
Exactly, Jon. Indeed, Gary, Milton, and Sam all agreed with the argument, as did James Tobin.
James
Aug 19 2018 at 3:59pm
This is also a good lesson in how political economists feel they need to be. I’m sure a huge majority of economists could have signed on to the specific analysis without hesitation about the economics but they did not want to be seen as opposing the war.
There are probably a lot of positions that most economists would agree to be factually correct but would avoid signing their name because of the likelihood that it would be interpreted as a political statement.
Some other examples: There is little or no evidence that the minimum wage has reduced the perentage of Americans in poverty. There is little or no evidence that tax cuts or tax rebates significantly stimulate consumption. The severity, duration and frequency of recessions has been the same after the inception of the Fed as before. Under a progressive income tax, any policy that reduced income inequality would require an increase in tax rates to maintain the same level of tax receipts. The consequences of drug prohibition are largely dependent on the elasticity of demand for drugs.
Don Boudreaux
Aug 19 2018 at 7:54pm
David: I was in law school at the time, so I – likely – wasn’t asked to sign. Either way, I certainly don’t recall being asked to sign. But had I been asked, I certainly would have signed (for whatever this pittance of news might be worth).
David Henderson
Aug 19 2018 at 11:33pm
Thanks, Don. That’s probably right. And I know you well enough to know you would have signed. One of my biggest triumphs, by the way, was getting Jamie Galbraith, along with a graceful personal statement of support.
Robert Simmons
Aug 20 2018 at 1:40pm
You could post a scan of the statement. I’m sure some reader has software that can easily transcribe it to text format.
Andrew_FL
Aug 21 2018 at 2:00pm
Milton Friedman wasn’t against the first Gulf War? I know he was against the second. He disagreed with Rose on it, in fact.
David Henderson
Aug 21 2018 at 2:11pm
Correct.
john heineke
Sep 16 2018 at 1:34pm
Hi David,
It’s been a while. Thanks for digging this out, I had almost forgotten about it. I am sure that “James,” above, is correct in that few economists would disagree with your analysis, but widely recognized names were concerned about political blow back from their signatures and therefore did not sign.
john
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