– What is war economy?
In: Economics
The classic simple model in economics is that you can produce up to 100 units, your pick, of guns and butter. In peacetime maybe you want to produce a lot of butter and few guns, because your citizens need to eat. In wartime, you maybe want to draw back on butter production and increase gun production, because you need the weapons to fight the war.
Scale up in terms of numbers and complexity, and “war economy” is just basically taking the lever and pushing it toward the “guns” side of the guns-and-butter spectrum.
In practice this can involve all sorts of different policies: government going deeply into debt to finance arms production, government ordering factories and workers to retool (or retrain) and shift over to military production orders, production quotas, rationing, and so on.
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