War: Effect on the Economy Essay

It is a known fact that war causes inflation which makes the prices of everything go higher as well as taxes. After World War I instead of going back down the prices continued to rise which helped to contribute to the deep depression felt during the Great Depression.

War stimulates growth, especially for countries that participate in it, but aren't experiencing it on their soil. Not experiencing the war first hand allows for the major focus of war to be the production and mobilization of the nation. In many cases, surprisingly, it is healthy for the economy and production of a country that is mobilizing for war. For example, as America entered WWII, her “GNP rose 15%... the great depression… was thus resolved because the state ‘primed the pump’ of economic demand by means of huge order…” (Source B). Essentially, the war ended the Great Depression in America and boosted her to be the mighty manufacturer she is today. After WWII, many soldiers came back and continued to stimulate the economy and increase manufacturing and population. Women during wartime, gained more freedoms and rights, as they took over jobs men occupied before they left to fight. As well as women, African Americans gained more freedoms and they strived for Civil liberties following the war. Without the war, what would America look like today, would women and African-Americans have gained more

If the emotional effects of the war were not enough, the war also hit the US economy. All wars throughout history have had a transformative effect on the economies of the participating nations. The Vietnam War severely impacted the United States’ economy due to the amount of product that the war required. A factory that would normally produce a consumer good would instead be used to produce bullets, uniforms, artillery, etc. all for the war effort. The GDP of the United States was altered from it's growing state in the early 60’s. The change in factory production from consumer goods to military goods caused controversy in the eyes of the people over the government’s use of economic policy. Money was going out, but no money was coming in. The US progressively saw more and more change to its economy. War brings on, debt and bills in large

The United States keeps sending troops to where they think we can help such a Korea, Afghanistan, Vietnam, Iraq and so forth. The cost of these wars in high and we have to change to wartime production for each one. After World War 2 the United States was at war with someone for the majority of the time, and if it wasn’t war we would occupy smaller countries to try to help. These drained our country’s resources and impacted our economy greatly, each president had to deal with some military campaign or another and that affected the civilians as well because important family members would be sent overseas and the majority of the time they were the providers for the house. This would impact work because people who normally work in business and factories are sent out of the country leaving their jobs behind. War has always put a drain on Americans resources and economy, and each war has had a different impact on the civilian populous sometimes positive sometimes

“The most widely accepted relationship between economic factors and civil war is that high-income nations are less likely to experience civil wars than low-income nations.” (Dixon 714). The disagreements over how to spend money and tax imported goods, and how territories should be distributed, cause this one nation to fight against each other.

Throughout history there have been multiple armed conflicts that have affected people, countries and the living situation in those countries. Two wars that had a major impact on society were World War One and World War Two. There were many short term and long term factors that led to the start of both these World Wars.

Politics can be defined as the practice of influencing people through the exercise of power. The main way to control a person or a group of people is to control their finances. This is why the economy of the United States is so important. Without control of its finances, the nation is unable to exercise control internally or over other nations. There have been vast doctrinal changes from the Vietnam War, to the Gulf War, to the War in Iraq that required the US to increase the amount of money fueled into the military. The US no longer fights proxy wars. It fights terrorism globally, which was because of doctrinal change. The economic cost of waging war in the 21st century has greatly increased as compared to the economic cost of waging war in the 20th century because of the domestic political state of the nation, technological advances, and doctrinal changes made by the nation.

Total war breaks down the line separating combatants and non-combatants through a series of ideological and social justifications that allowed for barbaric acts to be committed. A war becomes total when the nation itself must dedicate every facet of its existence as a state to the war effort. The general population being brought into the war effort brings to question their innocence, thus making them targets for the enemy. The transition from a small scale war into a total war is a gradual process, as adjusting a nation’s economy and society to feed the war is a long and difficult process.

     When Hazlitt wrote about how war affects economics, he wrote about this subject brilliantly. The best example Hazlitt used had to do with the broken window. He said that if a window breaks for a certain business, it is better for the economy. If a window is broken for a certain business and takes a few thousand dollars to fix, it would be a small price to pay to increase the economy. The economy would give jobs and pay wages to the repair the window. Hazlitt’s point is that sometimes there is a blessing that comes out of destruction. For example, the Civil War had a positive affect on economics. During and after the war, there was tremendous growth in industry, railroads, and others. But this came at the price of destroying land and life as well. “The war, in short, changed the postwar direction of effort; it changed the balance of industries; it changed the structure of industry” (Hazlitt p27). The reason for this growth is because it takes a lot of energy and a lot of stimulation to get the economy back where it was before the war, because the money that the government used to supply the war came from certain industries. A commodity had to be subtracted in order to supply the needs for the war. After the war, it is a great chance that

War is controversial, unfortunate, and certainly misunderstood; it is a transforming agent, a catalyst for change. Nonetheless, many people focus on war's negative consequences, while positive effects are downplayed. War is a necessary evil in the sense that it stabilizes population, encourages technological advances, and has a very high economic value. Without war, the overpopulation of the human race is inevitable. It is this reason that war is a useful tool by not only Mother Nature, but also humans themselves to institute population control.

To conclude, the past wars Britain took part in had affected its economy, especially, the wars by the beginning of the 20th century in which they weakened the economic position of Britain in the world. On the other hand, the wars Britain took during the end of the 20th century had a minimum effect on the British economy. Such as the First Gulf War which created the rise of oil prices. Additionally, the economic problems after the war were not the results of The Gulf war itself; however, they were because of the economic policies. From 1997 to 2001 the UK intervention in Kosovo, Sierra Leone, and Afghanistan also did not affect the British economy negatively and this was illustrated in the British economic performance during the years of wars.

Similar to how divorce is considered to be great for the economy, the effect that war has on an economy is about as nice as a sun kissed afternoon on my farm. Because of this, it is preferable for the people making decisions to pull the trigger on war, knowing that on our Homefront, things will be trending in the positive direction. Peace is just not as profitable, and there is plenty of history to back up this claim. The sheer number of products that are necessary to fight a war makes it extremely advantageous for businesses. This overall mentality is something that we have to break away from. If we made every choice based solely on making money, where would each of us be as an individual? In life, it is not about how much money you make, but with who you are able to build lasting relationships with that is the real currency. The act of really getting to know someone by taking a walk in their shoes gives us a deeper understanding into what makes them tick.

The first of the four traps is the conflict trap. Collier defines civil war, as a development in reverse, where not only the country itself suffers from the outcomes of war but the neighbouring countries are also affected because civil wars tend to spill into its neighbour’s territories. Collier provides economic data to show how civil wars impact economic development, in which he finds that “civil war tends to reduce growth by around 2.3 percent per year, so the typical seven-year war leaves a country around 15 percent poorer than it would have been.” He finds the two main causes of civil war linked to an economic context, comprising of low incomes and slow growth. Low income and civil war bounce off each other because just like civil wars reduce income, low income creates struggles that increase the chance of civil war. A number of studies that sought to identify the fundamental causes of civil conflict, conducted by four university economists from Oxford, Stanford and Yale, in which Paul Collier was one of the researches, concluded with similar results. Collier and Anke Hoeffler found that “countries which do not experience war are characterized by a per capita income that is more than five times higher than in countries in which wars broke out.” The other studies by James Fearon and David Latin, found that “in Africa, the Middle East and Asia, “$1,000 less in income corresponds to 36 percent greater odds of conflict outbreak.” The Final study by

Hungary is another example of an economy disrupted by war. After WWII, Hungary became a satellite state for the Soviet Union. As Germany retreated, Nazi Hungarian sympathizers who had puppeted the country took the templates used to print money back to Germany. The new Hungarian government had no

International financial flows influence war and peace, the flows influence peace because bonds save countries from bankruptcy which reduces conflict between countries, but international financial flows influence war more than peace due to the mere fact that bonds finance wars- war would be impossible if there was no money to pay for it. Professor Ferguson states that ‘War is the father of the bond market’ because wars in Europe in the 14th and 15th Century were about bonds. International financial flows can influence war when different communities have different financial ideas which result in conflict, a minor example of this we see in early Venice whereby Jews were shunned upon for borrowing money at an interest rate because Christians did not allow it meanwhile a major example would be the war between communism (East) and capitalism (West) in the late 1900s which influenced other countries throughout the world, The cold war. Nevertheless the two(international