Adam Smith observes that the true costs of war remain hidden from the taxpayers because they are sheltered in the metropole far from the fighting and instead of increasing taxes the government pays for the war by increasing the national debt (1776)

Found in: An Inquiry Into the Nature and Causes of the Wealth of Nations (Cannan ed.), vol. 1

In Chapter III: Of Publick Debts in The Wealth of Nations, Adam Smith notes that most people put up with slightly higher taxes in wartime in exchange for the "amusement" of reading about imperial exploits, little realizing that the true cost of war has been added to the national debt:

War & Peace

In great empires the people who live in the capital, and in the provinces remote from the scene of action, feel, many of them scarce any inconveniency from the war; but enjoy, at their ease, the amusement of reading in the newspapers the exploits of their own fleets and armies. To them this amusement compensates the small difference between the taxes which they pay on account of the war, and those which they had been accustomed to pay in time of peace. They are commonly dissatisfied with the return of peace, which puts an end to their amusement, and to a thousand visionary hopes of conquest and national glory, from a longer continuance of the war.

Thoughts

In this quotation Adam Smith makes a number of important points. Firstly, he correctly observes that the citizens in the metropole, far removed from the front, have no direct experience of the fighting but instead are “amused” and entertained by reports of the glorious successes of the nation. Secondly, they are shielded from the true costs of the war because the government finds it politically difficult to raise taxes too much, so it just adds the cost to the national debt thereby only having to increase taxes to cover the increased interest on the debt.

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