Does War Make Us Richer? | Economics Explained

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📚 Want to learn more about the economics of war? We recommend reading "War by Other Means: Geoeconomics and Statecraft", by Ambassador Robert Blackwill & Jennifer M. Harris

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Sources & Citations -

Melman, S., 1974. The permanent war economy: American capitalism in decline, New York: Simon and Schuster.

Milward, A.S., 1979. War, economy and society, 1939-1945 (Vol. 5). Univ of California Press.

Higgs, R., 2006. Depression, war, and cold war: Studies in political economy. Oxford University Press on Demand.

Trey, J.E., 1972. Women in the war economy--World War II. Review of Radical Political Economics

Baack, B. and Ray, E., 1985. The political economy of the origins of the military-industrial complex in the United States. The Journal of Economic History

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[EconomicsExplained]

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[nilstrieb]

As a swiss I have to add that war *IS* good for the economy, as long as you are not the one fighting it.

[argosfe]

Every time you hear "it's good for the economy" I think we should always wonder whose economy we are talking about.

[EconomicsExplained]

Last time I was this early the F-35 Joint Strike Fighter program was on budget.

[elshazlio]

In a time when YouTubers chase trends and prioritize monetization, I would to like to express my respect to you for choosing genuinely interesting topics, even when they straddle the thin line of YouTube demonetization. I applaud you sir. Great video, keep up the good work!

[odinlindeberg]

I'm not sure where this quote comes from, but I've heard something to the effect of; "In a fight between two, the winner is the third."
That's pretty much what happened with the US economy by the end of the war. It wasn't great for the US, but everywhere else suffered much more so the US became a super power in the post war world, a status it used to draw more power and establish the hegemony we live in now.

[Setupthemabomb]

EE on march: did a global pandemic affect economy?
EE on april: did a war affect economy?
EE on may(?): did apocalypse affect economy?

[keldelmini]

"Military is giant form of welfare" Consul Gaius Marius likes that comment.

[JosephGEvans]

"The purpose of an economy is to increase the standards of living for the participants in that economy, and wars achieve the opposite of this."


Enlightened.

[PazuzuAll]

Sun Tzu - There is no instance of a nation benefiting from prolonged warfare.
USA - I accept your challenge!

[steampowered]

I think this misses some major points. Throughout most of human history, warfare was extraordinarily lucrative. Victory on the battlefield was a major source of raw material, capital, land and cheap manpower.

In the modern age, military hardware is exceedingly expensive. Moreover, a great deal of wealth is formed of intangible assets which cannot be seized through martial means. War is simply not a profitable prospect in the current era.

However, that is not to say that warfare could not become lucrative again, if our conditions radically alter. We are living in a uniquely peaceful period and it would be naïve to think that this will continue in perpetuity.

[udayrathod]

"War is good for economy if you are seller of war related goods and equipments." - #UncleSam

[semi-useful]

In the words of anyone that got richer through war: "Less talking, more raiding!"

[cz]

How many wars are you planning to have?

US: yes

[ChargedChaos]

12:03 ah yes, i almost forgot america conquered the entirety of southern canada

[tisFrancesfault]

The American economy did well post war as it had everyone's gold*, the only industrial country without bombed out factories and a huge global post war need for what it could sell. On top of the huge investment in modern infrastructure that facilitated further growth and improved efficiency.

[coreymicallef]

8:43 Historically military jobs did add value to an economy (in certain situations). The specific example I'm thinking of was with the British Royal Navy from about the time of the Tudors onwards to the end of world war 2. The more sailors they RN (and it's independent contractors, aka privateers) had, the more ships it could sail, the more Spanish treasure ships and ports they could raid, the more money was circulated in the economy, the more need for overseas bases to expand their raids was needed, required the establishment of anchorages, which turned into colonies that started producing commodities like sugar and tobacco (that became more profitable than the raiding and priacy), which needed more sailors to protect their own trade ships from pirates and privateers, and those trader sailing the trade ships wanted to expand their opportunities to trade, so the navy needed to protect them further a field and overawe some of the locals with demonstrations of fire power, which lead to more bases and more colonies, The British military became a service for the insuring the safety of British business overseas and a means of expanding through the overt threat of fire power.

In much the same way that was what determined why the Americans were the leading western allied power at the end of world war 2, they had the most military power to shape a geopolitical position that was favourable to themselves and they could use that to ensure their alliance (which would become NATO) had free reign to trade as much as they wanted across the oceans as the US Navy ensured their safety across the ocean. This protection for trade was damn near a bribe to those countries to act as the front line in any world war 3 scenario against the USSR (to contain a potential threat to the US).

[LadyAsmodeus]

Senator Armstrong: "HELL YES"

[Enjubi]

"WAR"
"HUH!!!!"
"YEAH"
"WHAT IS IT GOOD FOR"
"EMPLOYING SOME PEOPLE AND FUNDING BIG GOVERNMENT PROJECTS THAT MIGHT OR MIGHT NOT LEAD INTO USEFUL TECHNOLOGY BUT THE MONEY COULD PROBABLY HAVE BEEN SPENT BETTER doing this in a way that didn't sacrifice human life, perhaps funding projects between private actors and universities"
"UH HAA HAAA HUH"
"SAY IT AGAIN Y'ALL"

[explosivereactionstv]

Last time i was this early, Germany was almost in Moscow