Krugman: War Is BAD for the Economy

“War Necessarily Inflicts Severe Economic Harm Even On the Victor”

We pointed out in 2009 that war is bad for the American economy. We noted in 2012 that military spending as “stimulus” can’t work, because conditions are different than they were in World War II.

We’ve reported for years that economists (like Paul Krugman) who believe that war stimulates the economy are wrong.  We exhaustively debunked this claim again just last month.

Mr. Krugman has now changed his mind. He wrote yesterday in the New York Times:

If you’re a modern, wealthy nation, however, war — even easy, victorious war — doesn’t pay. And this has been true for a long time. In his famous 1910 book “The Great Illusion,” the British journalist Norman Angell argued that “military power is socially and economically futile.” As he pointed out, in an interdependent world (which already existed in the age of steamships, railroads, and the telegraph), war would necessarily inflict severe economic harm even on the victor. Furthermore, it’s very hard to extract golden eggs from sophisticated economies without killing the goose in the process.

We might add that modern war is very, very expensive. For example, by any estimate the eventual costs (including things like veterans’ care) of the Iraq war will end up being well over $1 trillion, that is, many times Iraq’s entire G.D.P.


So the thesis of “The Great Illusion” was right: Modern nations can’t enrich themselves by waging war.

This is a huge sea-change, and we thank Mr. Krugman for re-examining the evidence.

Facebooktwittergoogle_plusredditpinterestlinkedinmail
This entry was posted in Business / Economics, Politics / World News. Bookmark the permalink.
  • wunsacon

    WB, there is no “sea change” here.

    This:

    >> World War II is the great natural experiment in the effects of large
    increases in government spending, and as such has always served as an
    important positive example for those of us who favor an activist
    approach to a depressed economy.

    is not lobbying for or advocating war. Krugman is citing it as an example of why he advocates government spending programs that put large numbers of unemployed people to work.

  • Ann

    Noting that Krugman buys into mainstream media’s false narrative about the Ukraine crisis, investigative journalist Robert Parry http://consortiumnews.com/2014/08/18/the-powerful-group-think-on-ukraine/ observes:

    “…it’s hard to decide whether to despair over the impossibility of America ever understanding the world’s problems or to marvel at the power of the U.S. political/media propaganda machine to manufacture its own reality.

    “On Monday, Krugman’s New York Times column accepts the storyline that Russia’s President Vladimir Putin instigated the Ukraine crisis and extrapolates from that “fact” the conclusion that perhaps the nefarious Putin did so to engineer a cheap land grab or to distract Russians from their economic problems.”

    Parry urges readers to “look at the actual facts of how the Ukraine crisis began and realize that it was the West, not Russia, that instigated this crisis. Putin’s response has been reactive to what he perceives as threats posed by the violent overthrow of elected President Viktor Yanukovych and the imposition of a new Western-oriented regime hostile to Moscow and Ukraine’s ethnic Russians.”

  • Ann

    Noting that Krugman buys into mainstream media’s false narrative about the Ukraine crisis, investigative journalist Robert Parry http://consortiumnews.com/2014/08/18/the-powerful-group-think-on-ukraine/ observes:

    “…it’s hard to decide whether to despair over the impossibility of America ever understanding the world’s problems or to marvel at the power of the U.S. political/media propaganda machine to manufacture its own reality.

    “On Monday, Krugman’s New York Times column accepts the storyline that Russia’s President Vladimir Putin instigated the Ukraine crisis and extrapolates from that “fact” the conclusion that perhaps the nefarious Putin did so to engineer a cheap land grab or to distract Russians from their economic problems.”

    Parry urges readers to “look at the actual facts of how the Ukraine crisis began and realize that it was the West, not Russia, that instigated this crisis. Putin’s response has been reactive to what he perceives as threats posed by the violent overthrow of elected President Viktor Yanukovych and the imposition of a new Western-oriented regime hostile to Moscow and Ukraine’s ethnic Russians.”

  • Ann

    By mindlessly repeating the evidence-free claims of those “scarier by the day” headlines from Ukraine, Krugman is lobbying for or advocating war.

  • MOLON LABE

    June 27th, 2014 Iraq and Ukraine: End of the American Empire

    NEO – Iraq and Ukraine: End of the American Empire

    Petr Lvov gives us a not surprising prediction that America’s continued foreign policy train wreck seems irreversible at this point despite Mr. Nobel Peace Prize at the helm.
    http://www.veteranstoday.com/2014/06/27/neo-iraq-and-ukraine-end-of-the-american-empire/?utm_source=rss&utm_medium=rss&utm_campaign=neo-iraq-and-ukraine-end-of-the-american-empire#rssowlmlink