Economics of War and Peace | Abigail Hall Blanco

In this compelling lecture hosted by New Media UFM, Dr. Abigail Hall Blanco examines why and how government-led military deployments and foreign interventions consistently fail to achieve stability or democratic growth, focusing on U.S. activity since 2001 across more than 170 notable deployments. The discussion examines how  the "interventionist mindset" ignores fundamental economic constraints. By applying the principles of the Austrian school of economics, Hall Blanco argues that these missions are driven by flawed political incentives and a lack of market-based knowledge, which ultimately stifles global freedom and creates a cycle of unintended, often violent, consequences. “Economics studies human action, so it applies to war and foreign policy—analyzing how governments pursue goals and the limits on achieving ideal outcomes.” – Abigail Blanco The central theme of the lecture is the "knowledge problem," a concept famously championed by F.A. Hayek. Dr. Hall Blanco explains that policymakers operate under the "pretense of knowledge," assuming they can reengineer foreign societies from the top down. However, she introduces the concept of institutional stickiness, noting that human rights and democratic norms cannot be "exported" if they do not align with a country's internal metis—its core values, customs, and social norms. When an interventionist power attempts to impose exogenous institutions, they often fail to "stick," leading to the very instability they sought to prevent. “Institutions (like democracy) can’t easily be imposed externally due to ‘institutional stickiness’ and local cultural differences.” – Abigail Blanco Dr. Hall Blanco contrasts the efficiency of market mechanisms with the stagnation of government bureaucracies. In a market, the price system provides a feedback loop that rewards value and punishes waste. Conversely, military and political entities lack a profit-and-loss signal, often leading to rent-seeking and the expansion of the military-industrial complex. In this environment, liberty is sidelined by bureaucratic survival; failure is frequently met with increased funding rather than accountability, ensuring that ineffective policies persist at the expense of both the intervening and host populations. To illustrate the disconnect between good intentions and disastrous results, the lecture cites the 2011 intervention in Libya. The removal of Muammar Gaddafi is framed as a humanitarian necessity to protect human rights, yet it results in a "power vacuum" that leads to a decade of civil war and regional terrorism. This oversimplification of complex systems assumes that societies can be managed like machines. Hall Blanco concludes that true individual sovereignty and peace emerge through voluntary interaction rather than "gun-barrel diplomacy." Explore more content on economics, war, and international relations in the New Media UFM video library and discover related lectures. Expand your knowledge and learn new skills in http://www.newmedia.ufm.edu Organized by: Centro Henry Hazlitt https://chh.ufm.edu/ A production by UFM Studios http://newmedia.ufm.edu Follow us on social media Facebook @ufmvideos Twitter @newmediaufm