The Falklands War: a simple cost benefit analysis

                It is the 30th anniversary of Argentina’s attack on the Falklands islands. I was against the UK responding with a counter invasion. The key justification for taking the islands back by force was that the people there wanted to live under British rather than Argentinean rule. The population at the time was about 1,800. Nearly 900 soldiers lost their lives in that conflict. The financial cost for the UK was estimated at around $2 billion. 
                My argument at the time was very simple. The order of magnitude of the financial cost was pretty well known in advance.The UK government could have offered each islander $1 million dollars, either as compensation for living under Argentinean rule, or for being relocated in some part of the UK. (The Highlands of Scotland is pretty empty and would be the closest substitute.) The financial cost to the government would be the same, but no lives would be lost.
                There were various counterarguments to this ‘crude’ utilitarian reasoning. One was that, if the UK had not attempted to fight, this would set a precedent which would encourage other dictators to use force in a similar manner. All that was demonstrated, of course, was that the UK was prepared to fight to protect one of its dependencies, against another side it thought it could beat. I do not think the Falklands war has really stopped Spain invading Gibraltar. Another argument was that the UK had a moral duty to protect its citizens. Strangely, this moral duty seemed not to apply to the similar number of residents of Diego Garcia some 10 years earlier, who were removed by the British from their homes to make way for a US airbase.
                Unfortunately I think the actual decision to fight back had little to do with principles. The moment Mrs Thatcher was told she could win, it would have been too humiliating for her government not to go to war. What I find much more depressing is that the war was hugely popular in the UK. National honor was at stake. Just before hostilities began, an opinion poll had only 18% of people saying that the UK government had been too willing to use force. Tellingly, however, only 14% of those polled were prepared to sacrifice more than 100 UK servicemen’s lives to regain the islands. 
                The conflict had huge consequences for both countries. It helped keep Mrs Thatcher in power for another decade, but it was fatal for the Argentine junta.  The ‘Falklands factor’ may have encouraged Tony Blair’s military interventionism. This, together with a feeling of gratitude to the US for their intelligence support during the conflict, may have played a part when it came to UK involvement in Iraq. Any ex post cost benefit analysis is hugely complicated and uncertain, but I still think my ex ante crude utilitarian view is compelling.
                The UK declared war three days before my wife and I were due to fly to Peru for a month long holiday. We went as planned, despite knowing that Peru would be very supportive of Argentina. In the first three weeks the Peruvians we talked to regarded the whole thing with bemused curiosity, and there was no ill feeling towards us. The atmosphere changed a bit just before we left after the General Belgrano was sunk. Lives were being lost as two countries attempted to salvage their national pride.                
                 

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