Pros and Cons of War on the Economy

T

TedBundy

Veteran X
After doing a bunch of reading on the subject, it seems that the old fashioned saying "War is good for the economy" is kind of a fallacy. That it only creates an illusion of doing good for the economy. Does anyone still think that war is a pro for the economy?
 
Wars like WWII are credited for making the US into the economic superpower it is today. Wars like Desert Storm helped the US economy. The current war in Iraq, however, is not
 
WWII was fucking GREAT for the economy
that's why the idea started



every other way has been shit, but no one wants to talk about it =\
 
No. Its an inefficient use of resources that could be used to invest in long-term growth. Its a short-term propup for industries, but a waste of money in the long run.
 
Necessary wars will spur the economy, i.e. wars that the entire country will get behind to help the war effort because everyone believes in the cause.
 
The biggest thing about WWII was how decimated everyone else's industry was. Kind of easy to climb to number one in the post-war world when you are the only one left, and the demand for civilian goods suddenly skyrockets.
 
CarpeIppon said:
No. Its an inefficient use of resources that could be used to invest in long-term growth. Its a short-term propup for industries, but a waste of money in the long run.
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You say its short-term, because realistically a war cannot go on forever?
 
This is my view on it as a non-economist. Feel free to rip into it:

Well at it's core, war doesn't really produce anything of use for the economy. It stimulates research which can then lead to technologies sold to other countries (ie. giving us money), but war specifically doesn't really help us. We have to use resources to build guns and then kill other people who we could potentially use (to some extent). It causes employment, but in a fashion which is really just redistributing wealth we already have (at a loss due to the fact that some wealth goes into making bullets/tanks/etc. which really doesn't directly help us). But then there's a lot of other factors to consider, since our defeating others can potentially give us more than we initially spent. It's not exactly an easy question to answer and people will say different things since a "healthy" economy isn't easy to specify. But most importantly, as long as there is a shortage of resources (ie. a finite amount), there will be inequity and war (or at least some conflict of some sort), so it's not going away anytime soon.
 
logmans said:
Are you assuming no capital destruction in the country going to war?
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Even so.

America's best industries are all grown by war, even the IT industry, even sun micro, even ms. When we go to war our tech and aerospace industry grows, and is funded more. We then sell more weapons to other nations, and make more money.

Our oil buisness also makes more.

War is good for our economy, hell ww2 bailed us out.

It's in our best interest to wage war, and grow big buisness. When war goes away, our profits will drop. We must create conflict and instability to retain our power on an economic level.
 
But you Obviously have to specify the level of destruction in the country in question in order to make that statement.
 
You see the thing with the war ---> research ---> development is sort of an indirect way of bringing good results. The reason it's so effective (at bringing new technologies) is that we can put a lot of money into research in a way that's politically not painful. It's obviously going to be hard (politically) to throw a lot of money into certain avionics or computer development, if it were sold in that fashion, but it's much easier when done for defense (or just plain war). In the US, the electorate seems to be much more allowing for war spending than spending specifically in research.
 
A war (ie. increased government spending) will have different effects given the state of the economy when it enters and any other actions. Generally, it will raise output and lower unemployment in the short run. Long run implications (ie. price levels/inflation) depend on other factors.
 
This is my view on it as a non-economist. Feel free to rip into it:

Well at it's core, war doesn't really produce anything of use for the economy. It stimulates research which can then lead to technologies sold to other countries (ie. giving us money), but war specifically doesn't really help us. We have to use resources to build guns and then kill other people who we could potentially use (to some extent). It causes employment, but in a fashion which is really just redistributing wealth we already have (at a loss due to the fact that some wealth goes into making bullets/tanks/etc. which really doesn't directly help us). But then there's a lot of other factors to consider, since our defeating others can potentially give us more than we initially spent. It's not exactly an easy question to answer and people will say different things since a "healthy" economy isn't easy to specify. But most importantly, as long as there is a shortage of resources (ie. a finite amount), there will be inequity and war (or at least some conflict of some sort), so it's not going away anytime soon.
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Your logic about producing things that aren't usefull to civilians is correct from an economists point of view. the economic term for this is called opertunity cost. The opertunity cost of going to war is that production must be shifted from civilian goods to military goods. This forgone production of civilian goods is gone forever even after the war ends and the fewer civilian goods that can be produced or bought, the lower the standard of living in the country.

However, I think that war is good for the economy. The increased government spending and investment in production factors such as factories, technological advancements and the increased work force participation (women in WW2) do not disapear after the war ends and they help to spur economic growth in the years following.
 
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