War Is Not Good For The Economy

Jul 25, 2020 · 4 min read
Photo by UX Gun on Unsplash

With the economy looking ever more fragile, Americans will begin to become bellicose I fear. There are too many jobs tied to the defense industry. It makes for a lot of “biased” thinking because one’s income is dependent upon wars happening. Boeing workers probably are thinking they need a good rocking and rolling war with the 747 retirement and 737 Max issues. It is a dangerous time geopolitically right now because Americans at all levels are confused about war and economic growth.

Many Americans believe that war is good for the economy because the Depression appeared to be ended by WWII. However, FDR’s New Deal had brought much relief to the nation by 1936–7. Unfortunately, worries about socialism in Congress and the financial classes curtailed New Deal programs. This caused another downturn in the later years of the decade. The myth of war’s economic benefits was strengthened when every one of the developed nations of the mid-twentieth century had their industrial infrastructure destroyed by war. Great Britain, Germany, Japan, China, and Russia/Soviet Union all had huge internal reconstruction to perform after the Second World War.

This reconstruction was made doubly difficult as it followed on top of the struggle to recover from the Great War. Two very destructive wars fought over two generations on their territories crippled Europe and Asia. An American economic hegemony was assured by 1945. Every potential competitor for the title of global economic leader was broken by the dual catastrophes of World War I and II.

America then used its immense economic output to make sure that there would be future markets for American goods via the Marshall Plan in Europe. General Douglas MacArthur’s rebuilding in Japan followed a similar plan. To guarantee the markets would be there for American business, the United States made the markets in its own image. America has reaped the rewards for more than half a century of this strategic rebuilding of its former enemies immediately following WWII. However, that unique situation cannot be used to drive future economic decisions.

The fact that Nazi Germany rebuilt its manufacturing infrastructure, so quickly under Hitler also feeds this myth that war is good for a nation’s economy. For some reason, it is often overlooked that rebuilding an economy is much easier when a nation does not pay workers a living wage or in the case of prison slave labor, pay the workers at all. Huge profits can be made at the expense of the dignity and freedom of the individual as was done by Hitler in Nazi Germany.

Americans easily forget that economies operating on a wartime footing tend to be tied more closely to the state with no need to provide workers a living wage. This industrial-military connection creates an authoritarian capitalism that can boost economic output quickly. Businesses love the guaranteed revenues and healthy profit margins from military customers. To some, the rightful name of the aforementioned political system is fascism.

Yes, wars can be good for economies if the aggressor nation loots and pillages everything it can from the nations it conquers. Germany tried to do that at the beginning of World War II. The Nazis could not hold what they had gained due to the Allied choice to turn back Germany while fighting a holding action against Japan. A strategy meant to prevent Hitler from gaining access to the Middle East oil fields.

Looked at with ruthless eyes, the most abject failure of the neo-conservative toppling of Saddam Hussein through invasion and occupation is that it did not deliver the promised economic benefits. Control of the Iraq oil fields should have brought some very cheap gasoline among other financial benefits to the United States, but the exact opposite occurred. Whether this failure was due to: incompetence, corruption or ideological flaws will be debated for decades.

One could make a case the war was successful for the oil industry and the defense industry. Many corporations made quite a bit of money off of the Iraq invasion and occupation. It may be the Iraq War just was not used to enrich American coffers but rather of a hateful oligarchy. Americans have yet to deal with this truth. We are ignoring what it really means for us.

Fooled into feelings of invincibility, America may enter into such confiscatory war. Once involved, it can be difficult for the aggressor nation to invest in its own infrastructure, as it has to spend so much time occupying, administrating, exploiting and holding the vanquished. This was a different lesson from WWII that the Germans and Japanese understand far better than Americans.

I don’t think Americans really “grok” war any longer. We are so divorced from it. We do not seem to understand the occupying nation must always expend resources to hold the occupied territories. Also, depending upon the persistence and resistance of the occupied, it can be a net negative even when a nation is confiscating all that is valuable from the conquered. The people of Afghanistan, who sit upon a treasure trove of natural resources at a geopolitical crossroads, have made it a habit of reminding empires through the centuries of the costs to hold and occupy the unwilling.

America may end in this graveyard of empires but before we do I think there will be strife like we have not seen. I am hopeful we can pull out of this dive we are in. I am hopeful we can pull the blinders off. I am hopeful…Shit…no I am not, but I write this anyway. To implore my fellow citizens to understand war and the military are not going to solve our problems, we have to pull together and cooperate. We CANNOT SHOOT A VIRUS PEOPLE!

Dollars and Sense

Making Sense Out of Dollar Chaos

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