By Michael Shank

Looking to save the world trillions of dollars? How about investing in peace and nonviolence?

Australia’s Institute for Economics and Peace recently released its 2011 Global Peace Index, citing a veritable “who’s who” of peaceful countries. It counted up the savings had the world been at peace: more than $8 trillion last year, and almost $38 trillion over the five years since the index was started. Think of what a country such as the United States – which does not fare well on the index – could do with that kind of change.

Produced in coordination with the Economist Intelligence Unit, the index ranks 153 countries. It uses data on each nation’s domestic and international conflicts, safety in society, and militarization. Measuring a range of factors from violent crime and homicide levels to incarceration rates and weapons access, the peace index is an important contribution to the global security debate.

In contrast with the Failed States Index and the Terrorism Index developed by Foreign Policy magazine, the Global Peace Index is one of the first indices to assess the true cost of violence and the true economics of peace.

The 2011 peace index shows that the world became less peaceful in the last year. Among the most peaceful nations, Iceland, New Zealand, and Japan emerged as the top three, respectively. European Union countries also fared well, garnering six of the Top 10 slots, with Canada ranking as 8th most peaceful.

Why the US doesn’t fare well on peace index

Most worryingly, the US ranked 82nd, far behind its EU allies. This is hardly a rosy picture for America and seems to fly in the face of foreign policy indices that show the US among the most free, democratic, and least failing states. For the US, the domestic data vis-a-vis violence is particularly daunting – though America has improved peace-wise since the mid-1990s because of a substantial decrease in homicides and violent crime.

Still, in the US, every year almost 100,000 people are shot in murders, assaults, suicides, or accidents, or by police intervention – one-third of whom die. Last year, America witnessed 1.25 million violent crimes. With one in every hundred adult Americans incarcerated, no other rich country is nearly as punitive as the Land of the Free, as The Economist put it.

The cost of this violence is financially untenable. The Centers for Disease Control and Prevention estimate that for each life cut short by homicide, the economy loses $1.65 million. For prisons, America spends $80 billion annually on its correctional system – or $35,000 per inmate – a figure that does not include the nearly $98 billion in lost productivity from America’s 2.3 million inmates.

America pursues policies that primarily react to violence, not prevent it. It does this despite the fact that we know, from the US Peace Index (produced by the same groups that produce the global index) that the more an American state “graduates its students, insures its residents, provides basic services, prevents pregnancy and infant mortality, and lowers poverty and inequality rates, the less prevalent and pervasive violent crime, homicide, incarceration, policing and small arms trafficking will be.”

Reducing violence by a mere 25 percent – a feasible goal, which should be the focus of foreign policy forums – could reap a global peace dividend of at least $2 trillion annually.

This all sounds very pie-in-the-sky; who doesn’t want to reap the economic benefits of peacetime? As it turns out, weapons industries, among others, profit mightily from conflict – whether it happens in Afghanistan or Detroit.

Profits of peace outweigh capital of conflict

Since 9/11, America’s defense budget has grown 7 percent annually, correlating positively with money spent by the defense lobby, which grew by 7 percent in the last year alone. This growth serves defense contractors well. In 2009, for example, shares of Lockheed Martin, one of the US Defense Department’s primary contractors, reached a decade-high price of $120, the same year the company received nearly $40 billion in US contracts, made $3 billion in profits, and paid its chief executive officer $22.9 million. And yet Lockheed tops the Federal Contractor Misconduct Database compiled by the Project on Government Oversight.

Despite defense industry influence, peacetime economies are ultimately more profitable for the public. That’s not surprising, given the economic activity that thrives during peacetime (development, trade) and the additional business that could be redirected from industries that generate and contain violence to other more productive sectors.

From institutions of war to schools of peace

That the economics of peace have had such a hard time prevailing in policy conversations is, in part, because the dominant language, lobbies, and learning environments are all geared toward the mechanics of war.

Attempts to offer alternatives to defense departments, war colleges, military academies, and national defense universities remain fledgling due to lack of funding. For example, the Institute of Peace in Washington receives a mere 1 percent of what Lockheed gets in government funds annually.

Unless we invest in a federal department or agency, with cabinet-level access or advisory status, devoted to building the structures necessary for peace, we will continue to find ourselves at war.

The investment is worth it. Reductions in violence and crime to rates equal to Canada’s would yield an estimated $89 billion in direct savings and $272 billion in additional economic activity for America, according to the Institute for Economics and Peace, in Sydney, which publishes the global – and a US – peace index.

Thankfully, there are some alternatives. The nonprofit National Peace Academy in Shelburne, Vt., is one such institution, building the skills for the professional peacemaker in every aspect of life, be it at the personal, social, political, institutional, or ecological level. And, thankfully, university programs like George Mason University’s School for Conflict Analysis and Resolution, which pioneered the country’s first graduate programs in peace, are becoming more numerous.

But more is needed as invasions loom, inmates abound, and poor index rankings continue. The economic argument for peace may be unassailable – all we need now is to make this field as professionally attractive as the war business.

Michael Shank is the senior policy adviser for US Rep. Michael Honda (D) of California, and is a doctoral candidate at George Mason University’s School for Conflict Analysis and Resolution. This article reflects the author’s opinion and not the views of Mr. Honda’s office.