Eli5 why is war good for the economy? As some ppl say.

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Eli5 why is war good for the economy? As some ppl say.

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Not only is war an expensive undertaking in and of itself, it frequently has knock-on effects that tend to raise the price of goods and services even off the battlefield. The end result is that you have lot of people and organizations that want to buy a lot of things quickly, and are willing to pay higher prices for them than normal. The increased consumption leads to increased production, and so the ecpnomy overall benefits as both supply and demand increase.

War involves the government spending lots and lots of money. On one hand, that money has to come from somewhere but on the other that money is now rapidly circulating through the economy. You’ve got a higher demand for soldiers and workers in the arms industry. Said arms industry is also going to need more refined materials to make into weapons and vehicles.

Financially speaking, it’s good for all the companies who create war stuff. That means weapons obviously, but also first-aid kits and uniforms and canteens and cargo planes and everything else you might need in a war.

Of course that doesn’t completely explain it, because isn’t peacetime just as good for the companies that create peace stuff? Stuff like karaoke machines and wallpaper and video games and other stuff that has nothing to do with war?

Well, yes. So different companies are going to have different perspectives on whether or not “war is good for the economy”.

But the one thing that war does is it gets the government to spend a lot of money on *something*, and sometimes government spending is great for the economy. The government buys a bunch of stuff, people profit off of that stuff, and then those people buy other stuff from other people, etc.. Now in that case it doesn’t much matter which sorts of stuff the government is buying so long as it puts somebody to work, but in reality war just takes priority.

Convincing the government to spend a lot of money on roads and bridges is kindof hard; people will complain that the government is spending too much. But convincing the government to spend a lot of money on war is comparatively easy, because it’s *war* and there are deadly consequences if you lose.

This of course comes from an American perspective, which has had a massive military budget (even in peacetime) for decades. Republicans in particular are happy to let the government spend money on military stuff but they complain when the government spends money on other stuff.

Also, war can only be good for the economy if you *don’t lose*. Obviously it’s not good if somebody invades your country and smashes all your stuff.

Wars have historically been very good for some economies, in the long run. In the short run, not so much.

They stimulate internal government spending, which expands the economy. It’s unlikely to be outsourcing military equipment.

They also fund research and development in the weapons space. When the country is an arms exporter, this can produce better products which are more desirable in the subsequent market.

One key property is to **not** fight the war on your own territory. The US was an excellent example in WWII, and subsequent wars in Korea, Vietnam, Afghanistan and Iraq have further illustrated how much better it is to be fighting “over there” than at home.

Nobody aims to run an empire at a loss, control of people and resources can be extremely profitable. The colonial empires are an example of this, they brutally exploited the colonies to build “Western Civilization”. Still to this day the First World drains the Third to the tune of 3 trillion dollars every year (net), and nations that get in the way of that is the target for regime change, invasions etc.