What are the causes and consequences ? What system will fail first?
In: Economics
That’s not always true. If you’re on the losing side your economy could get decimated. Where did you hear economies overheat during a war?
(Modern) wars are economic and logistical in addition to the shooting and killing.
So a country has to manage both the supply of weapons and manpower going to the front and it has to manage the money supply, resources and how much of the economy is being diverted toward the war effort. And as more resources are diverted to building guns, bullets, bombs, there is less availability of everything else. So people who want that “Everything else” start having to pay more for those things, and that drives inflation for the entire economy.
Plus there is the second whammy that wars consume human beings and those consumed human beings are no longer producing bullets, bread, bombs, cars or anything else for the economy, so manpower gets short. So companies have to raise payrates in order to attract labor. And this also drives inflation.
And both countries in a war have to manage this, the country that is losing men and material and faster than the other has to spend more to replace those loses. Now go back and read the two paragraphs above this one.
Yes, modern war is about driving the country into financial ruin before yours, while at the same time shooting and killing as many of the enemy as possible; so your soldiers and equipment are not destroyed (needing replacement).
The more efficient one country is about killing the other, the less economic damage you do to your own country while doing it.
Side note: That is why Russia is slowly being ground under in ways that do not directly appear on the battlefield. Everyone else has cut off Russia’s supply of money, high tech goods, replacement parts and so on. So Russia now has to figure out how to replace all of these parts themselves, often less efficiently and with more cost. It is also why China feels that it can dictate the price of oil to the russians. And Russian men that go to the front are dying at a rate of 1,000 men a day (or are looking for ways to flee across the border). Russia is slowly having its entire economy ground under the longer this war goes on. The question becomes, even though Ukraine has high-tech weapons that can kill Russians at a better rate of exchange (Ukrainian artillery counter battery has been murderous against static russian howitzers), can the Ukrainians last long enough for the Russian economy to collapse.
Economy overheating typically means inflation is increasing. During a wartime economy, you focus more of your production efforts on making bullets and guns instead of bread and butter. This means the people who make bread and butter have a harder time competing for labor and there is less food to go around. Since there is less food but you’re still trying to feed the same amount of people there is a shortage which increases the price of food (everything)
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