Economists tend to say "one the one hand, on the other hand."  A lot of people get frustrated by this overly cautious social science way of doing things.  In the math world, there is the principle of reductio ad absurdum, that if you cannot disprove a theory after you've tried and tested it every way you can think of, it must be true.  Or more literally, if its opposite is shown to be false, then it is true.  (See my SUMMARY paper on my academia.edu website for several other key tests besides the model building.)  Reductio Ad Absurdum is the principle that has allowed me to develop Peace Economics.  Here are the 28 steps I followed to develop the Peace Economics model of manufacturing productivity over the last eighty years of the United States economy in the twentieth century.

General Characteristics of the Model

The idea that military spending is essentially economic waste has the following characteristics.  Models are more accurate the larger the economy and the longer the time period measured.  Military spending has a place holder function in the economy, as it acts like manufacturing by distributing money to the stakeholders.  But it is unlike manufacturing because no consumer product is being produced.  This interrupts the cycle of producing, testing against the marketplace, and refining and improving a product, and giving something to the consumer.  Alternatively, military spending looks like lost capital investment.  Adding the capital investment lost in military spending tends to reach a common total among leading Western economies.  Because military spending mimics manufacturing, it correlates positively in the regional models with economic growth and employment changes.  Actually this positive correlation is misleading, because it also lowers manufacturing when military spending increases, so the positive in high military spending states is offset by the negative in low military but high manufacturing states, with a net loss overall.  That makes military spending a transfer program like social safety-net programs, which stabilizes society but does not produce a net economic benefit.  The beneficiaries of this warfare state are usually upper middle class, unlike welfare state beneficiaries who are usually lower working class.

Creating Economic Model, 28 Steps

Each of these 28 steps are followed in capital letters by one or more of the nine fields of expertise that enabled me to develop Peace Economics, as listed in my RESUME paper or Curriculum Vitae on my academia.edu website.  Then at the bottom are the total mentions of each experience of each of the nine fields.  Each of these nine fields represents a minimum of at least three full time equivalent work years.     

#1 Bar chart from Ruth Sivard found, military vs. manufacturing productivity.  POLITICS

PEACE ECONOMICS

#2 Graph the bar chart.  MATH WARGAMING

#3 Correlate raw data.  MATH BUSINESS

#4 Drop one country and correlate again. WARGAMING (VISION SENSE)

#5 Weighted average three continents and correlate r = -0.997.  ACCOUNTING

#6 After perfect cross continent proof, create long term model in leading economic country, US.  MATH (TRIANGULATE)

#7 Graph economic growth rate plus military spending.  ENGINEERING (MODELING)

#8 Recognize deficit offsets military spending to explain World War II.  ACCOUNTING

#9 Recognize Kondratiev Wave explains fifties.  ENGINEERING POLITICS GLOBAL WARM

#10 Recognize manufacturing productivity explains better than economic growth. BUSINESS

#11 Look to establish parameters for long term US model.  ENGINEERING

#12 Use a variety of multi year moving averages to locate peaks and troughs over time.  MATH

#13 Use formula given by a friend when peak to trough and trough to peak matches that formula. POLITICS ENGINEERING GLOBAL WARMING

#14 Know that the answer to all differential equations is a sine wave.  MATH ENGINEERING

#15 Compute amplitude sine wave using peak and trough of economic growth.  ACCOUNTING

#16 Compute values each year and compare to actual values. ACCOUNTING ENGINEERING

#17 When annual comparisons show differences, compute running total of variations over time. ACCOUNTING SCIENCE

#18 Note that running total approaches zero periodically.  ACCOUNTING MATH ENGINEERING SCIENCE

#19 Consult Encyclopedia Britannica on economic cycles.  BUSINESS

#20 Note periodic perfection of running total error follows Juglar 8 to 10 year cycle.  BUSINESS

#21 Note that model drops to 7.0 lower rate during Great Depression.  ENGINEERING

#22 Note that model drops 3.7 lower rate during seventies Oil Crisis.  ENGINEERING

#23 Note that down periods perfect out at lower level every three years or so. BUSINESS

#24 Note that down periods just return to normal after about a decade. WARGAMING

#25 Note that starting period 1920 to 1922 requires using a three year average for the 1921 year ACCOUNTING ENGINEERING MATH

#26 Note that 1939 to 1947 data gap fills smoothly with no productivity gain for the four war years and average productivity assumed for the years 1940, 1941, and 1946.  ENGINEERING

#27 Note the linear reduction in total model volatility in six successive Juglar cycles from the twenties to the eighties.  ACCOUNTING SCIENCE

#28 Note model extended for another thirteen years with similar accuracy r = .999.  SCIENCE

Fields of Knowledge

Fields of knowledge used at each stage of these 28 development steps, ranked ordered by steps depending on that knowledge:

ENGINEERING 11, ACCOUNTING 8, MATH 7, BUSINESS 5, SCIENCE 4,

POLITICS 3, WARGAMING 3, GLOBAL WARMING 2, PEACE ECONOMICS 2

The top three, engineering, accounting, and math are mentioned 26 times, while the bottom six are mentioned only 19 times.  Clearly my engineering accounting and math skills are more important than economic skills to produce this model.  I had to drop out of a Ph.D. Economics program because they were taking me down the wrong path in spite of recognizing my major points.  I consider my engineering degree my most challenging degree, with accounting second, both far more difficult than an economics degree.  Politics was essential with an exposure to the social sciences and a broad liberal education coming from that pursuit, and with the two most crucial pieces of the puzzle coming from that exposure.

Conclusion

The proofs of this model are so many and so detailed, that it is impossible to imagine some other true model coming along to take its place.  The dead end nature of military economics, the lift from borrowing provided by deficits (in the economy of the nation whose currency is used as a reserve currency for two thirds of banking worldwide), the 54 year cycle and the nine year cycle are all conclusively embedded in the super accurate model created.  Take any of those elements out of the model, and you can continue the ambiguity of all other economic models of the past and present.  Or you can recognize that economics has just moved a step closer to being a real science, like the physical sciences.

Full eleven page explanation of this model including numbers used:  PEACE ECONOMICS

https://www.academia.edu/7632773/PROOF_of_Peace_Economics_11_pages_1986