Although Ricardo’s Law shows that cooperating can benefit everyone, knowledge of economics can be used as tool of warfare if one is so inclined.
For example, suppose I’m a millionaire and I’m feuding with a poorer person. I spend a lot of money to purchase nearby homes in their neighborhood and then pay people to come and trash them. Haha! I’ve destroyed the value of my opponent’s home (albeit at great expense to myself). And I haven’t even violated the NAP.
The above is a brute force example. It would be cheaper (but still harmful to me) if I just followed my opponent everywhere he goes. When he goes to the grocery store for example, I offer to pay slightly more to the grocer for the groceries he is trying to purchase. No one will sell food to him. Eventually, he will starve.
Governments engage in economic warfare too. Usually governments errect trade barriers just to satisfy domestic special interest groups, but sometimes they do try to use trade barriers to punish pariah countries. IMHO this isn’t very effective historically. Is it theoretically possible for one nation to manipulate things more subtly to divert another nation’s structure of production one way, and then the other, causing a resonance-like effect that eventually drains their capital? Or would this require more knowledge than is humanly possible?
Are there any good authors that analyze the effects, strategy, or morality of such behaviors?
The difference between free individuals and state being uncool is that the feud is only between the individuals. The rest of society is no worse off because of their feud. Now if the millionaire uses his money to pay to manipulate government force then the situation becomes bigger than just the feuding parties. Prohibitions are great examples of this. These involve feuding individuals: drinkers vs nondrinkers, smokers vs nonsmokers, etc where the non party uses the hammer of government to stop the doing party. The results are predictably awful. You need with governments filling prisons with non-violent people leaving the vicious and violent out on the street. At the same time the black marketeers show up cause even more mayhem.
If some country intends to destroy an other economically it only needs some time and good falsifiers, and it could just print massive amounts of falsified enemy currency and see the other guy’s economy go down the hyperinflationary drain.
Its really that simple, although a very important condition must be satisfied: to avoid retaliation, the attacking country would itself need to have a commodity currency. That’s why no one ever tries such things. (but that’s how the very fist anarchistic community to emerge will wreak havoc among states without even firing a shot).
As a side note, I never understood the big deal many make of China’s holdings of US debt. “The chinese could unload them all at the same time!!!” So what? That debt would have been serviced anyway and no country ever came close to gaining enough currency reserves to inflate the other’s economy by those alone. Only printing can do that.
Wouldn’t this cause the supply to go up beyond what the millionaire can purchase? I mean, if I knew I could always get an above market price if I try to sell to this one guy, I would continually buy @ market price and keep selling until eventually the market rate rose beyond what the poor chap could afford, or the millionaire went bankrupt, whichever happens first.
As for the capital draining, read this and then this. I believe trade embargoes are used both to soften up the targeted country and to reduce sympathy toward the targeted country’s populous from the aggressor country’s populous before invading.
The author is a left of center statist, and a former “economist” to boot [:)] , but the book is still worth reading, in my opinion.
It was very popular when it came out. I have not read the follow ups , but they also look interesting.
From the Amazon.com review: "John Perkins started and stopped writingConfessions of an Economic Hit Man four times over 20 years. He says he was threatened and bribed in an effort to kill the project, but after 9/11 he finally decided to go through with this expose of his former professional life. Perkins, a former chief economist at Boston strategic-consulting firm Chas. T. Main, says he was an “economic hit man” for 10 years, helping U.S. intelligence agencies and multinationals cajole and blackmail foreign leaders into serving U.S. foreign policy and awarding lucrative contracts to American business. “Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars,” Perkins writes.Confessions of an Economic Hit Man is an extraordinary and gripping tale of intrigue and dark machinations. Think John Le Carré, except it’s a true story."