Bison

So I was talking to this guy who happened to be ex-military, you know the type... and he was saying that a 'good war' is what we need to sort out the Global economic crisis, he actually pointed out that you can make lots of money from war and previous wars have fixed economic down turns.

Of course I went in with the view that war is bad and lots of innocent people would get killed/displaced yadda yadda, but thinking about it is he right up to a point?

Your thoughts?

Bison

Meow

No such thing as a good war. People die, are maimed and displaced. They cost a lot of money.

Your friend is a twat.

In case it had passed you by there has recently been a 'conflict' in the ME. It doesn't appear to have had any beneficial effect on economies....


-

Bison

I really wish people would read my post properly before replying... Jeez.

If you read it again Meow, I never said he was my friend, just a guy I was talking to and secondly my reaction to him was "War is bad, it kills loads of innocent people" or did you miss that bit??

I'm not saying war is good at all, I am totally against it, but can it help to sort out the economy?

The Dean

In what way precisely did your twa..... er, friend, think a war would solve the economic crisis?

Bison

We didn't really go into detail, I sort of changed the subject... just to reiterate, he isn't a friend, just some guy in a bar having a drink.

Hello.Kitty

"A good war" only really serves to boost an economy in that governments suddendly find a whole wodge of cash to pour into R&D, manufacturing and support for the army... at the detriment to other fanciful ideas such as education, healthcare, bla bla bla.

I'm not sure that it would serve our western economies well though, because we're now far more service-based, rather than manufacturing-based.

I suppose it's the same premise behind investing in infrastructure and "Big Works" in times of crisis - Germany built their motorways in the 1930s, America built their dams and stuff (history a bit rusty), employing thousands of otherwise jobless bods.

No, in my mind, "a good war" is a shortsighted economic strategy - you'd need to get into massive debt to pay for it, and then of course, if you had the misfortune to be fighting on your own territory, there's be rebuilding costs, insurance premiums would hike, etc...

Yeah... no. Not a good plan.

jmh

Many economies were on their knees post WWII struggling to feed their people. I don't think what they lost during those years of fighting was made up for by the subsequent growth which took decades to achieve. Bombing the East End of London cleared the way to better housing. Does that mean bombing those people and their homes was a good thing? No.

It's not unusual for military types to see individual sacrifice as necessary for the greater good. Seems to me that economists think the same way.

Ethos83

People credit WWII with taking the American economy out of the great depression and into the postwar prosperity that clearly enshrined the US as the world's wealthiest superpower.

The upsides of WWII were: 1) war spending introduced new infrastructure systems to the US. 2) war spending employed millions of previously unemployed people.

But the less spoken reality is the US's natural economic competitors were decimated by the war. UK was bankrupt, having given over nearly all its national wealth to the US for secondhand arms and machinery. Germany and Japan were devastated. Soviet Russia wasn't an economic competitor. China closed itself from the rest of the world following the communist takeover.

With no real economic competition, it's no wonder the US mushroomed ahead of the rest of the world for several golden decades.

Charismatic

No, what you need to create is an economy with excess capacity which will usually reduce production costs. This would mean spending money on infrastructure investment, lowering taxation (obviously spend more and tax less means you either need to sell something or borrow) and cut some red tape.

Similar argument over the olympic games in London, short term it's a boost but in the long term if you look at the return on expenditure there are better ways to invest money. Lets be frank, the UK is doing all right but is still a bit "hard up" and 9bn represents over 100 quid per person in the UK if I'm correct?
--------------------------------------------------
I've always been of a conservative opinion though thinking that governments duty to it's citizens/subjects was foremost to provide healthcare, education, roading, municipal services, defence etc. first (not exactly glam but quite essential). Collect taxes needed to run those and try to run a balanced budget over extended durations and you'll get my vote again and again. Just do basic stuff well .

Like investing in a company, you dont want to see the director has an expensive new office, six assistants or a fancy book that tells you about the companies environmental concearns or some product you can't understand. If he has a chipboard desk, plastic office chairs, employees are happy, the equipment is up-to-date and well maintained, run at a healthy profit...it's not rocket science that you are going to be eager to look further into investing regardless of the economic situation or how unexciting the product may be .

UK plc.

Worldismine

Instigating a war between two parties will bring some cash into the economy. You get to sell weapons to both sides, you can sell medicine and treatment during and after the war, once the war is over you can get the construction and weapons contracts. The winner will feel they owe you, and the loser despite what they think will still need medicine, healthcare and someone to rebuild their country, they may possibly want more weapons to rebuild their forces.

Invading a country to improve your economy is more risky but potentially can be more profitable. Unlike the first option it requires an initial investment to fund the invasion. This is only a risk worth taking if the country has significant resources that you can quickly take control of, and you already have a puppet regime to put there . Through this way, you get the resources for cheap and probably profit by redistributing it, you get to sell weapons and training, medicine and health equipment, contraction materials, mental and physical labour etc. This way is more risky, but with skill and a lot of luck it can be more profitable than the first way.

So the military guy did have a point, although he overestimates the role of the military, as they are at best only the initial investment and probably the biggest liability.

commander

it worked for Maggie in the 80's.

The falklands saved the economy..

didnt it?

The Dean

The economy was fine before the Falklands, thank you.

Cunard lost a bit of QE2 income though.................

commander

Marconi/Ferranti didnt though, when the orders flooded in to resolve the shortcomings with its radar systems

The Dean

Interesting - all the Marconi boys I knew in Saudi in 2001-03 were ex-military, with Falklands experience........... signals, comms and stuff.........

commander

working out on the Al yahama (or something like that) project for BAE?

i was offered a job there teaching the Saudi navy how to operate their weapons systems.

Turned it down. Live ammunition, explosives, and arabs = not me