Saturday, August 14, 2010

War Economics

I'm puzzled about comments I've read from discussions on the topic of the costs of war. The implication is usually that war is expensive, that the money is "thrown away" in bullets and planes and materiel in general.

What puzzles me is this question: Where is the money spent? Is it not spent mostly in the US in factories that make the equipment soldiers use? The money doesn't leave the country. The products do, but they're paid for in the US, paid to workers and companies that produce things. When a bomb drops on Afghanistan, it doesn't cost us anything. It's already cost us the price of production, but that money went to US citizens for the most part.

So is it possible that one of the things that keeps our economy going at all is the artificial market caused by warfare? If we stopped buying munitions from our factories and planes and tanks and .. our economy would probably slump much further. A lot of people would be out of work. When we don't have a war to consume goods we can produce, the economy does poorly. I'm wondering if it's possible that wars are at times manufactured by our government to keep our economy going.

I recall reading, for instance, that the war with Japan in 1941 was deliberately provoked by our cutting their ocean supply lines for oil and gasoline. It appears we put them in an unsurvivable position and waited for them to take action against us, so that they were identified as the aggressors, even though we gave them no choices. Our economy at the time was terrible; we had just recovered from a depression caused by stock market gambling. WW II ramped us up big time, severely damaged our asian competition, and gave us control of the Pacific as well as a huge demand for military products, built in the US, of course.

I would appreciate comments or arguments. I wonder if my view is too simplistic or even naive.

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