Guns versus butter model
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In [[economics]], the '''guns versus butter model''' is the classic example of the [[production possibility frontier]]. It models the relationship between a nation's investment in defense and civilian goods. In this model, a nation has to choose between two options when spending its finite resources. It can buy either [[gun]]s or [[butter]], or a combination of both. This can be seen as an analogy for choices between defense and civilian spending in more complex economies.
The "guns or butter" model is generally used as a simplification of national spending as a part of [[GDP]]. The nation will have to decide which level of guns and butter best fulfill its needs, with its choice being partly influenced by the military spending and military stance of potential opponents.
This model does not typically correlate well with [[free market]] economies.<ref>Mankiw, Gregory; "Macroeconomics", Worth Publishers, 2003, for GDP model see pp15-41.</ref>
==Origins of the term==
One theory on the origin of the concept comes from [[William Jennings Bryan]]'s resignation as secretary of state in the [[Wilson Administration]]. At the outbreak of [[World War I]], the leading global exporter of nitrates for [[gunpowder]] was [[Chile]]. Chile had maintained neutrality during the war and provided nearly all America's [[nitrate]] requirements, as it was also the principal ingredient of chemical fertilizer in farming. The actual export product was [[guano]] containing high levels of phosphorus and nitrogen.
With substantial popular opinion running against U.S. entry into the war, the Bryan resignation and peace campaign (joined prominently with [[Henry Ford]]'s efforts) became a banner for local against national interests. Bryan was no more pro-German than Wilson; his motivation was to expose and publicize what he considered to be an unconscionable public policy.
The [[National Defense Act of 1916]] directed the President to select a site for the artificial production of nitrates. It was not until September 1917, several months after America entered the war, that Wilson selected [[Muscle Shoals, Alabama]], after more than a year of competition among competing political rivals. A deadlock in Congress was broken when Senator [[Ellison D. Smith]] from South Carolina sponsored the National Defense Act of 1916 that directed "the Secretary of Agriculture to manufacture nitrates for fertilizers in peace and munitions in war at water power sites designated by the President". This was presented by the news media as "guns and butter."
==Actual application==
Perhaps the best known actual usage (in translation) was in [[Nazi Germany]]. In a speech on [[January 17]], [[1936]], Minister of Propaganda [[Joseph Goebbels]] stated: "We can do without butter, but, despite all our love of peace, not without arms. One cannot shoot with butter, but with guns." Sometime in the summer of the same year, [[Hermann Goering]] announced in a speech, "Guns will make us powerful; butter will only make us fat."<ref>[http://www.bartleby.com/66/52/25152.html The Columbia World of Quotations, Columbia University Press, 1996, #25152]</ref>
In state-run economies (where GDP is controlled by a [[central planning]] authority or the [[government]]), as well as nations with consistently stagnant or declining GDP, the "guns and butter" model becomes real.
Another use of the term was [[Margaret Thatcher]]'s reference in a speech that, "The Soviets put guns over butter, but we put almost everything over guns."
The concept also has application in many [[turn based strategy games]] and some [[real time strategy games]], as many such games entail simulated simplistic economies involving player decisions to invest in infrastructure and resource gathering or military units.
==In popular culture==
{{Trivia|date=September 2007}}
[[Gang of Four (band)|Gang of Four]]'s classic 1979 album ''[[Entertainment!]]'' includes the song "Guns Before Butter."
In the [[2001]] [[John Singleton]] movie [[Baby Boy (film)|Baby Boy]], [[Ving Rhames]]' character claims there are "two types of niggas, niggas with guns... and niggas with butter."
The San Francisco jam band, Hot Buttered Rum String Band, has a song titled Guns or Butter - an anti-war song with the line "less guns, more butter."
The 12th episode of the 4th Season of [[The West Wing]] is titled "[[Guns Not Butter]]".
[[The Prodigy]]'s Grammy-winning album [[The Fat of the Land]] CD-booklet asks if a nation should choose guns or butter. The text reads: "''Would you rather have butter or guns? Shall we import Lard or Steel? Let me tell you -- Preparedness makes us powerful. Butter merely makes us fat.''"
The first album of artist rapper C-Rayz Walz, Ravipops, contains the song "Guns and butter."
Smoke and Mirrors, a 2005 album released by rapper O.C., contains a song called "Guns and butter".
[[KPFA]] Radio 94.1 FM in [[Berkeley]], [[California]] has a show called "Guns and Butter," which investigates the relationships among capitalism, militarism and politics.
The song "Industrial Lies," on [[Cybotron]]'s album [[Clear]], contains the line "You take the butter from the table, use the money, buy a gun; You think the status quo will be there when you're done."
The Blue Scholars, A seattle Hip-Hop group released an album in 2008 titled "Butter and Gun$"
== See also ==
*[[Peace dividend]] — The amount of civilian goods produced by a decrease in defense spending.
* [[Arms race]]
==References==
<references/>
== External links ==
* [http://www.people.fas.harvard.edu/~goodrich/IRnotes/Week06/Powell_BOOK_summary.pdf Guns vs. butter model] (Adobe .pdf format)
[[Category:Economics models]]
[[Category:Military economics]]
[[ca:Model armes versus mantega]]