Many journalists and even economists believe that war benefits the economies of the nations in a state of war. The classic example is WWII, wherein the economy seemed to skyrocket and the unemployment level was constantly falling. But, was America’s economy, as well the consumers, really benefited by the Second World War?
First, lets look at some of the actions taken by the government during the war. First, they arbitrarily created price ceilings on consumer goods. They also began rationing to American households the consumer goods that were being produced, along with many other similar regulations.
After the war began, all the unemployed laborers that were fired due to the Great Depression were suddenly employed by the government… to go fight in the war. Imagine if all of the skilled workers in a society were suddenly deported, given rifles, and most of them killed off? Guess what that would do the economy back home? First, teenagers and women, suddenly forced into the workforce, many of them with no experience in the tasks they now had to preform, would be, and were, thrown into the factories and miscellaneous technical jobs the men left behind, as well as the societies older men, who had the experience but reduced performance and output than the young men off killing and being killed overseas.
Not long after the war began, the American economy was transformed. Over 40% of the American workforce was working for the government either overseas or in factories either fighting or building weapons and munitions for the war effort. These workers aren’t even producing consumer goods that benefit the average individual… they’re making items useful only for the war effort. And, to make things worse, they have to be paid to do this harmful (economically speaking) set of activities by the remaining 60% of the population who are actually creating useful consumer goods.
Well, it was a totally genius idea. We can take care of all the unemployed hanging around soup kitchens by rounding them up, slapping them into a tragic, and many times fatal war. Again, just totally brilliant. Much of Europe was demolished, and the Allied economies irreparably harmed. The war being necessary is ultimately not important. The facts are clear; war did not benefit the economy. Instead, it took away most of the economies skilled laborers, and then killed many of them, damaging the future of the consumer economy.
To add insult to injury, the economy during the war is not an example of a peace-time economy. The economy, as I mentioned, was completely propped up by the government, exactly as it was in Nazi controlled Germany (the irony). Imagine if the government declared that pizza was $500 dollars each, and then it said that it would buy three billion pizzas a year? All the pizza places would do very well indeed, and it would seemingly jack up the economy… but that doesn’t mean anything. Real figures that actually mean something are when people buy and sell willingly, and don’t have their money being taken by them to buy something that they could care less for, at least in the quantity its being produced.
Thus, the WWII American or world economy, or any war economy for that matter, cannot, and should not be used as an example in support of war benefiting the economy. Instead, it is the greatest example of a once free economy being hijacked and systematically destroyed by its government… all in the name of supporting freedom and democracy for the world.
WAR is a racket. It always has been.
It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.
A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.
~ Major General Smedley Butler, War Is A Racket