Context:
War does not help the economy.
In the News:
Increased military spending is one of the least effective ways to create new jobs…It is, after all, an easy and popular way for a president to give himself the look of stimulating economic activity, especially in an era of steep tax cuts favoring the plutocratic class and attacks on domestic spending.
The pending U.S. defense budget will send billions of dollars to defense contractors, a move that many say will stimulate economic growth and provide an influx of new jobs. However, research from peace science says this is not the case and that any growth is short-lived and will only affect a small few.
Peace Science Insights
There is a popular assumption that war, or even increased military spending, will boost a nation’s economy. True, when a nation goes to war the surge of government investment into war-related industries can lead to short-term economic gains. However, these gains are short-lived, affect only certain, usually isolated, industries (“conflict industry”, “war profiteers”), and are no consolation for the long-term economic cost of war.
- Increased military spending leads to slower, and in some cases negative, economic growth.
- Over a 20-year period, a 1% increase in military spending will decrease a country’s economic growth by 9%.
- Increased military spending is especially detrimental to the economic growth of wealthier countries.
A study of six major U.S. wars (World War II, the Korean War, the Vietnam War, the Cold War, and the wars in Afghanistan and Iraq) finds the costs of war to negatively affect the national economy, taxes, debt, jobs, investment, and inflation. Key findings of the report show that in most wars public debt, inflation, and tax rates increase, consumption and investment decrease, and military spending displaces more productive government investment in high-tech industries, education or infrastructure—all of which severely affect long-term economic growth rates.
References:
Peace Science Digest Vol. 2, Issue 6. “The Effects of Military Spending on Economic Growth”
War Pay: Another Good Year for Weapons Makers Is Guaranteed by William D. Hartung for Transcend Media Service via TomDispatch. 29 Jan 2018.
