— Ch. 1 · The Production Frontier —
Guns versus butter model.
~4 min read · Ch. 1 of 5
A nation must choose between two options when spending its finite resources. It may buy either guns to invest in defense or butter to invest in production of goods. The government will have to decide which balance best fulfills its needs. This choice is partly influenced by the military spending and stance of potential opponents. Points like X that are outside the curve are impossible to achieve. Points such as B, C, and D illustrate the trade-off between these categories. At these levels of production, producing more of one requires producing less of the other. Points located along the curve represent sustainable combinations of each type of production. A, however, is inside the curve and represents a combination of output that does not utilize all available resources.
Munitions And Nitrates
One theory on the origin of the concept comes from the decision to expand munitions before the US entered World War I. In 1914 the leading global exporter of nitrates for gunpowder was Chile. Chile maintained neutrality during the war and provided nearly all of the US's nitrate requirements. It was also the principal ingredient of chemical fertilizer in farming. The US realized it needed control of its own supply. The National Defense Act of 1916 directed the president to select a site for the artificial production of nitrates within the United States. It was not until September 1917 that Wilson selected Muscle Shoals, Alabama. A deadlock in the Congress was broken when South Carolina Senator Ellison D. Smith sponsored the act. This legislation 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.Propaganda Speeches
Perhaps the best known use of the phrase in translation was in Nazi Germany. In a speech on the 17th of January 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. Referencing the same concept, sometime in the summer of the same year another Nazi official, Hermann Göring, announced in a speech: Guns will make us powerful; butter will only make us fat. US President Lyndon B. Johnson used the phrase to catch the attention of the national media while reporting on the state of national defense and the economy. Another use of the phrase was British Prime Minister Margaret Thatcher's statement in a 1976 speech she gave at the old Kensington Town Hall. She said: The Soviets put guns over butter, but we put almost everything over guns.