Choice between guns and butter
When it comes to public goods like the common defence and market efficiency, every State has a choice. According to the infamous analogy, in the zero-sum game of budget allocation, every State can decide whether to prioritize guns or butter. Guns represent the State’s ability to protect her stored capital and Butter represents her ability to generate capital. According to this simple analogy, a certain balance is clearly required as one without the other is bankrupt. Post-War societies present a unique opportunity.
By M.A.Sumanthiran-2013-07-07
When it comes to public goods like the common defence and market efficiency, every State has a choice. According to the infamous analogy, in the zero-sum game of budget allocation, every State can decide whether to prioritize guns or butter. Guns represent the State’s ability to protect her stored capital and Butter represents her ability to generate capital. According to this simple analogy, a certain balance is clearly required as one without the other is bankrupt. Post-War societies present a unique opportunity.
In a post-war society where peace has been won, Guns are (at least temporarily) obsolete. This fact provides post-war societies with an opportunity for unbridled production of ‘Butter’ Simple manifestations of this over simplified economic principle are abundant – Germany and Japan post-WWII being the most obvious examples. Intervening variables certainly exist and the nomenclature ‘Post-War’ carries no written expiration date; it could dissolve at any moment for any number of reasons. But the central principle is not a prescription for a proper ratio between Guns and Butter, it is a description of the ratio’s simple uncompromising truth: a loss in one is a necessary gain in the other and vice versa. The abiding question for Sri Lanka is: how can we expect an increase in Butter if we have had no decrease in Guns?
Strange bedfellows
