I was having dinner with a friend who is smart about business and I asked him what he thought was needed, what with the Euro crisis, America's anemic recovery and China's slowing growth, to get the global economy going again. His answer was one word: war.
It's true that periods of great growth often follow wars. There's all that rebuilding to do, and fewer people to do it. It's kind of depressing, though, to think that war is the only way back to prosperity.
We have the oldest economic system in the world, the only one really: producing and selling goods and services. There's a natural limit to commercial activity, though. When people don't have money, they don't buy. Producers cut back. Growth stalls.
A half century ago, the economist John Kenneth Galbraith suggested that we could not, over the long term, buy and sell ourselves into prosperity. He advocated more public works. By building roads and schools, modernizing electric grids, desalinating seawater, vaccinating against disease, we not only put people to work today but lay the foundations for the future.
But most infrastructure investments don't make money quickly enough to attract private capital, so they depend on government funding. Government spending is a tough sell these days, with austerity being the buzzword in many capitals. Not many have the stomach for raising taxes or taking on more government debt.