The Economic Benefits Of War Outweigh The Costs
The Economic benefits of war outweigh the costs. Discuss.
The last century witnessed a proliferation of warfare unparalleled in the history of mankind, that same century however witnessed also an unparalleled expansion of human economic activity. The two would appear to be linked; war is fundamentally an economic activity. Fighting a war forces an economy to equip large numbers of men with a wide variety of equipment, in addition to building warships, warplanes and tanks. This equipment has to be procured by the government from defence contractors. War is consumption, increasing consumption increases Aggregate Demand. Therefore it follows that war would increase output, reduce unemployment and boost the economy. However this essay will discuss how this conclusion- albeit logical- is flawed. The economic benefits of war are in fact illusionary and the costs too great to bear. Military spending in fact diverts money from more productive uses such as investment or consumption.
Jeanette Rankin likened war to natural disaster, stating; “You can no more win a war than you can win an earthquake.” This concept is that war and natural disaster are both nothing more than acts of destruction. Superficially, this would appear to support the notion that war has greater economic benefits than costs. When something is destroyed, it usually has to be replaced. This generates additional output and benefits the economy by providing an injection to the circular flow and consequently, a multiplier effect. However as Bastitat’s glazier’s fallacy1 would suggest this logic is fundamentally flawed. This is because as individuals we can usually attach meaning only to what we can perceive, therefore we cannot appreciate the holistic impact of that destruction. The parable is thus: A young hooligan breaks the window of the local kebab shop,forcuing the propreiter to replace it. During the chaos a crowd gathers to assess the damage, they conclude that the hooligan has in fact performed
The last century witnessed a proliferation of warfare unparalleled in the history of mankind, that same century however witnessed also an unparalleled expansion of human economic activity. The two would appear to be linked; war is fundamentally an economic activity. Fighting a war forces an economy to equip large numbers of men with a wide variety of equipment, in addition to building warships, warplanes and tanks. This equipment has to be procured by the government from defence contractors. War is consumption, increasing consumption increases Aggregate Demand. Therefore it follows that war would increase output, reduce unemployment and boost the economy. However this essay will discuss how this conclusion- albeit logical- is flawed. The economic benefits of war are in fact illusionary and the costs too great to bear. Military spending in fact diverts money from more productive uses such as investment or consumption.
Jeanette Rankin likened war to natural disaster, stating; “You can no more win a war than you can win an earthquake.” This concept is that war and natural disaster are both nothing more than acts of destruction. Superficially, this would appear to support the notion that war has greater economic benefits than costs. When something is destroyed, it usually has to be replaced. This generates additional output and benefits the economy by providing an injection to the circular flow and consequently, a multiplier effect. However as Bastitat’s glazier’s fallacy1 would suggest this logic is fundamentally flawed. This is because as individuals we can usually attach meaning only to what we can perceive, therefore we cannot appreciate the holistic impact of that destruction. The parable is thus: A young hooligan breaks the window of the local kebab shop,forcuing the propreiter to replace it. During the chaos a crowd gathers to assess the damage, they conclude that the hooligan has in fact performed