THERE HAS been much talk of late about the cost of the Iraq War, due in no small part to the huge estimates postulated by Nobel Prize-winning economist Joseph Stiglitz. Together with his colleague Linda Bilmes, Stiglitz asserts with confidence that the cost of the Iraq War will exceed $3 trillion, prompting sound-bite-prone journalists to dub Iraq "the trillion dollar war." Of course, these estimates are for costs extending through 2017. In fact, our Iraq adventure will cost far less on the margin, since the military will not disappear even if the war in Iraq does. Whether or not we retain forces in Iraq, they will have to be equipped, housed and trained somewhere. Attributing those costs to the Iraq War is disingenuous. What is real are the hidden "opportunity costs" we've already incurred.
The cost of the decision to overthrow the Baathist government of Iraq in 2003 was one number. The cost of the decision to occupy the nation of Iraq until they come up with a government that can hold the country together and pass muster with America's goal of installing a human-rights-respecting democracy is a larger number.
But economists insist that the true cost of any decision includes the opportunity cost of events that were precluded by the decision. In the case of invading and occupying Iraq, that is a very large number.
Had the United States not invaded and occupied Iraq, the world would almost certainly have enacted the Doha round of trade liberalization that would have ended most agricultural subsidies. Absent Iraq, Germany would have pressured France to abandon their farm subsidies. But because of Iraq, Germany and France linked arms against America, and trade liberalization was frozen.