War prosperity

Economics Economics Questions
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1

In the 40’s during the Great Depression all of the liberal and socialist politicians were telling Americans that the New Deal combined with our involvement in World War 2 was getting us out of the Great Depression. And after the war was over American in the 50’s enjoyed a period of prosperity the likes of which we’ve never seen before that time. Today instead of the liberals it’s the conservatives (to a much lesser degree than the liberals in the 40’s) who are the ones spouting the “war creates prosperity” argument as an advantage of the current wars.

All of this seems to go completely against the free market theories. Can war actually create prospierty or is there more to past examples that are often used than meets the eye? Or does it only create temporary prosperity and at the expensive of future generations who have to pay the price of government intervention in the economy.

2

All the GDP numbers from the war years are bogus since there were government dictated prices on just about everything. The reason most people are fooled by the myth that the war got us out of the depression is that the war ended the mass unemployment of the depression era. What really started us on the path out of depression was the death of Franklin Rosevelt.

3

I wonder what all the dead people, all the maimed people, all their friends and relatives have to say about the goodness of war ?

I also wonder how can a massive destruction of capital make people richer ?

4

The GDP includes stuff that is made to be destroyed at the expense of goods that consumers would have purchased volunarily.

5

If you just read the first couple of chapters of Economics in One Lesson, he addresses this claim.

If someone breaks your window, now you will have to spend money to fix the window instead of having an expensive dinner. So no demand was really created, since there already was demand in the first place, because there was demand for an expensive dinner, but not anymore. Demand has switched over to fixing a window.

6

That’s by Hazlitt and it’s on-line for free. You might want to do a search for it.

Or if you like paper, Mises.org bookstore with a cheap edition at $14.

7

There is no economic value in destruction. Now individuals may profit from murder, mayhem and destruction as pirates did in the 17th century. The whole economy on the other hand suffers as consumers purchase things they don’t want like weapons instead of things like homes, cars, technology, etc.

An interesting point that needs re-inforced against the economic crap that war helps the economy is the immediate aftermath of WW2. The political powers fortunately for the sake of the country and its future did not believe that soldiers in the field help the economy as is the logic of the War for Economic Good Crowd. Of course the returning soldiers dropped/beat their swords into plowshares and re-inforced the economic gains of the 1950s.