Wars have been quite costly for nations to prosecute since the 18th century. Britain and France took on great public debt to wage their wars of conquest and colonization during the 18th and 19th century. The British fight to keep America enslaved brought them to take on debt equivalent to 800% of their national annual income. If Britain had won that war the British would have had vastly more wealth and income, so the rich were gambling on a good policy for positive payback. Russia may have a similar appearance to contemporary Brits and Wall Street.
Britain lost the American revolutionary war lost so their debt persisted until about World War One when they drew the United States into the battle to help them win an armistice costly to Germany.
The ratio of private capital and debt to public capitol and debt as they relate to national income is quite an interesting historical study about which I have been reading recently in Thomas Pickety’s ‘Capital in the 21st Century’. There are various relationships that occur to nations over history between public and private capital that recur. I am just adding a few of my own remarks here that pertain to the U.S.A.
In Britain today 99% of capital is private yet of course the U.S. public often tend to regard Britain as a neo-socialist nation with its public health system. British public capital is rather puny because it is a small nation without much public land or parks. In the 21st century land does not comprise a great percent of capital in first world nations. The United States probably has a greater level of public capital because it still has substantial public lands and obviously those will be targets of long-range hostile takeover by the private sector though that would cause egregious ecospheric harm.
Private capital is definitely in the rise in the United States. It crashed during the second wo0rld war and has since recovered such that it comprises many times the national income. Public capital is comparatively deflated though the ecological value is quite undervalued. As private capital is concentrated because of the nature of networking and collective ownership in stocks it has a self-reinforcing nature that lets it accumulate more wealth and power reducing the masses to dependent and relatively powerless status. Mass political parties evolve to condition the masses to pursue unrealistic and irrelevant, non-economic political objectives.
Interestingly enough it is war that tends to reduce the ratio of private capital to public capital though not always in a way that one expects. Britain and France financed their wars in different ways. France took on vast public debt on which it eventually defaulted while Britain fought America without raising taxes. Instead the Brits borrowed money from the rich and repaid them over a century. A huge percent of British government spending for a century went to just paying off the loans to the rich with interest. The rich got much richer as a result and public infrastructure was neglected. The United States seems to face similar challenges today.
With tax cutting programs since the Reagan administration wars and defense spending have generally been accomplished without raising taxes to pay for them. I believe that President Roosevelt probably didn’t get his ideal 90% tax rate on the rich made law until the outbreak of the Second World War though the depression before had perhaps supported a legislative increase in taxes to benefit the public sector. Wars that are fought without raising taxes in the U.S.A. along with great defense spending even during peace rely in loans/bonds sold to the rich. The nation pays for that for decades or centuries. While inflation remains low and wealth is concentrated through a number of mechanical networking means of technical power the public debt is a great lever on the public sector reinforcing the corporate ad hoc governing state of an elite 1% of the people over ever one else to have their way. They own the broadcast media and increasingly the Internet and suppress or marginalize any sort of dissent or suggestion within Democratic means for changing ratios of taxation and public capital (that does not require socialism incidentally for effective reform).
I believe the United States following the black pimpernel administration and the most recent tax cuts have passed over the event horizon into the realm of corporatism as the de facto political structure of the United States and that little can be done about it. Few understand it and fewer have the will or capacity to return to a reformed constitutional democracy since even the interpretation of the constitution by the High Court has become one of creative fiction.
Capital makes for good reading, tough John Saul’s book from 1999, I believe, named ‘The Unconscious Civilization’ describing corporatism, and perhaps ‘Ecological Economics’, and some political philosophy about the nature of capitalism in addition to Adam Smith’s ‘The Wealth of Nations’ probably are required readings if one is to understand Smith’s idea about breaking up concentrated wealth and power latent in the Aristocracy of England in his day sufficient well empirically to think about creating a reformed constitutional democracy in the United States with a sustainable ecospheric relationship that provides and supports the means for enabling citizens to achieve their maximum inventive and productive potential that would keep them happy.
In contemporary popular economic philosophy there is generally confusion about the relation between private capital and public such that it is believed that to reform and to have a more equitable distribution of wealth private capital must be shifted to public capital and that of course is the road towards socialism. That mistaken belief readily overlooks the possibility of reforming private capital and reforming tax and business laws to assure that wealth is not concentrated and that everyone has an equal opportunity to produce and conserve capital without the problem of running into the obstruction of inherited concentrated wealth that dominates capital.
With the British invention of evolution theory a major change has occurred in support of the British method of concentrating wealth for the benefit of elites. Adam smith of course opposed and reformed that policy that is recurring now. Evolution theory made a political device appeals to every godless goon and immoral thug in the west seeking an amoral environment to exist in as a kind of amoeba without civic or moral concerns under the aristocratic supervision of behavioral evolutionary biologists. The trend isn’t good for the American paradigm.