The first lesson from economics, appearing at the beginning of Nobel Laureate Paul A Samuelson’s magnum opus “Foundations of Economic Analysis” (1948), is that a country must choose between military spending ~ guns ~ and spending on social goods ~ butter. This trade-off was apparent to politicians much earlier; the Nazi Minister of Propaganda Joseph Goebbels had said: “We can do without butter, but, despite all our love of peace, not without arms,” which was repeated by Hermann Göring, the Nazi Supreme Commander of the Air Force, who said: “Guns will make us powerful; butter will only make us fat.”
From the beginning of history, till very recently, the choice was very clear ~ all countries chose swords or guns, as every country was perpetually at war with every other country, since all countries looked for opportunities to subjugate their weaker neighbours. Civilisations diverging from this trend paid the price ~ barbarian invaders repeatedly ransacked ancient Greece and Egypt. Closer home, Indian kingdoms were repeatedly assailed by foreign raiders, who had little culture or education, but carried long guns. The nadir was reached when the Khans – Chengiz, Kubla, Halaku et al, nomads from a desert region ~ rampaged through the civilised world, establishing the Mongol Empire ~ the largest contiguous land empire in world history, covering almost a quarter of the Earth’s total land area.
Notably, the Khans concentrated all their energies into warfare, and effortlessly triumphed over their much more civilised enemies. The advent of democracy curbed the bloodthirsty tendencies of rulers, because the public increasingly wanted good infrastructure like roads and schools, to the exclusion of war trophies. Also, the Industrial Revolution enhanced the role of technology ~ factories were required to mass produce guns ~ linking industrial progress to military power. The US, which remained aloof from the internecine wars in Europe, gained prosperity by leaps and bounds.
Jumping late into both World Wars, the US provided heft to Allied powers ~ decisively proving the need of an industrial base to wage warfare, in modern times. After the destruction brought about by World War II, most countries, except America, USSR and China, chose butter over guns; America and Russia, inimical to each other, stockpiled an array of nuclear weapons, and tried to divide the world into their client states. After more than a quarter century of rivalry, good sense dawned, and the next twenty years saw a thaw in the Cold War.
And after disintegration of the USSR, brought about by its disproportionate spending on arms, while its citizens hankered after material prosperity, the US, which had both military strength and prosperity ~ thanks to its overperforming economy ~ established a unipolar world order. Abandoning the Monroe Doctrine, the USA took over the role of a global policeman ~ attacking Vietnam, Iraq, Afghanistan, Yemen, Libya, Syria, and now Iran. Taking a cue from the US, autocrats Vladimir Putin and Xi Jinping also let loose their territorial ambitions on smaller neighbours, pushing the world into turmoil, and negating the social and economic gains of the last many years.
Donald Trump’s advent upended the existing world order, with the US opting out of multilateral agencies, and imposing mindless tariffs on imports. Other countries regressed into protectionism, and free trade became a distant memory. This was a double whammy for smaller, peace-loving countries; in addition to insecurity, they also faced economic headwinds. The United Nations, created to maintain international peace, security and co-operation, became functus officio – unable to stop the Russia-Ukraine war, because of the Russian veto, and the genocide in Gaza, because of the US veto. In fact, bolstered by US support, Israel blatantly ignored decisions of the International Court of Justice (ICJ) that directed it (Israel) to halt its genocide in Gaza.
Instead, Israel took out warrants against judges of ICJ, and demolished buildings in the compound of United Nations Relief and Works Agency for Palestine Refugees in the Near East. Not to be left behind, the Chinese, without provocation, intruded into Ladakh, with a threat to do the same in Arunachal Pradesh. Living in such troubled times, all countries are hiking their defence budgets, repurposing funds from welfare spending, to armaments ~ which only helps giant corporations, and arms exporting countries like the US, Russia and Israel. Trump’s intemperate, pirate-like statements about acquiring Greenland from Denmark, a fellow NATO member, conquering Venezuela for its oil, threatening Cuba and attacking Iran twice for no justifiable reason, has pumped up anxiety levels the world over.
All except die-hard Trump supporters are wondering if Trump has lost his mental balance, or if the US has turned into a rogue state. It does not help that Trump is notoriously fickle-minded and economical with the truth; during his election campaign Trump vowed not to send US troops abroad; speaking in the UN in September 2025, Trump declared: “Everyone says that I should get a Nobel Peace Prize” because “I ended seven un-endable wars in seven months,” which was perfidy at its worst ~ a white lie ~ because not one of the abovementioned wars was ended by Trump. The guns vs. butter dilemma haunts European countries, which, till now, were spending most of their budgets on welfare activities.
European countries are visibly shaken, what with the US castigating NATO members for freebooting at US cost, and threatening to pull out of NATO, citing lack of European support for its invasion of Iran. European analysts and policy experts are now wondering if the rest of EU should finance the nuclear arsenals of UK and France, the only two countries in Western Europe with credible nuclear capabilities. There too, the war machine is rusty; Britain has an army of only 70,000 soldiers, and produces little steel ~ the first requirement for manufacturing arms.
Iran, an energy superpower, is a poor country on all indicators; there is extreme poverty, the economy is contracting, and public infrastructure is pitiable. The sustained Iranian resistance, and Iran’s capability of imposing losses on its aggressors and neighbours, shows that all along Iran had spent the bulk of its substantial oil and gas revenues on arming itself ~ to the exclusion of public infrastructure and welfare. The bitter lesson learnt from Iran’s determined defence against three invasions in the last two years ~ one by Israel alone, and two by Israel and America in conjunction ~ is that sometimes, it may be better to invest in armaments, rather than in social welfare.
However, the wars and aggressive posturing by the world’s two most powerful nations cannot come at a worse time for the rest of the world – when Trump’s ill-thought tariffs had already broken long-established supply chains, and had driven up commodity prices, including those of food grains. The US-Israel-Iran war has precipitated an energy crisis ~ in addition to food shortages in many poor countries, and famine-like conditions in the Horn of Africa, brought about by the Russia-Ukraine war. Such insensitivity on the part of the world’s most powerful countries, bodes ill for humanity. According to the United Nations Organisation, while rich countries vie for superiority:
* Only 35 per cent of Sustainable Development Goals (SDGs) 2030 targets, are on track or making modest gains. Nearly half are progressing too slowly, and 18 per cent are regressing.
* Over 800 million people in the world still live in extreme poverty and hunger. One in eleven people still faces hunger. Billions live without safe drinking water and sanitation. * Persons with disabilities remain under-served across sectors.
* Climate records are being shattered; extreme climate events take place with alarming regularity, with 2024 being the hottest year in history.
* CO2 levels are the highest in over two million years.
* Over 120 million people are displaced ~ more than double the number in 2015.
* Debt service costs for low and middle-income countries have hit $1.4 trillion, draining resources from critical development. In this bleak global scenario, wasting scarce resources on mindless wars, and games of one-upmanship is downright criminal. As former US President and one-time Supreme Commander of Allied Forces in Europe, Dwight D. Eisenhower had said: “Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the clouds of war, it is humanity hanging on a cross of iron.”
(The writer is a retired Principal Chief Commissioner of Income-Tax)