# War And Economic Growth: IS war good? **URL:** \ **Category:** Great Debates\ **Created:** [December 19, 2004, 12:17pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642 "2004-12-19T12:17:32Z")\ **Posts on this page:** 18\ **Page:** 1
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [December 19, 2004, 12:17pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/1 "2004-12-19T12:17:32Z")
Take the case of Germany…it finished WWII totally defeated. 20 million dead, and every major city destroyed-factories devastated, shipyards gutted, railroads wrecked. Plus, most of the eastern part of the country was gone-including the coal mines of Silesia. Yet, with hard work, the Germans rebuilt-and by the mid-1960’s, they had modern auto factories, new rail lines, autobahns, etc. Their traditional dominance in steel, chemicals, and automobiles turned into an asset, as they were able to maintain a huge surplus in foreign trade. Meanwhile, across the North Sea, it was another story. Great Britain emerged from WWII victorious-with the second largest navy in the world, and a globe-spanning empire. Its factories, mines, rail links were largely intact. And except for bomb damage in London and a few other cities, it was nowhere near as devasted as Germany. So what happened? The Brtish continued to run their ancent factories (the Jaguar factory was a pre-WWI! operation. Same story with the shipyards-by the mid 1960’s, British shipyards were all losing money, and almost all of the profitable merchant ship market was being built by yards in Japan and Korea. Likewisw for automobiles-nobody was buying Austins, Rovers, Jaguars-instead, M-B, BMW, and Volkswagen ruled the roads. Even the British textile industry was suffering, as India, Japan, and other Asian markets closed up on them. So was Germany better off BECAUSE of the war? After all, they built new, modern factories, while the British struggled on with their obsolete infrastructure-and by the 1970’s, Britsh industry was in the final terminal stages. Does war actually help economies to grow? ---
**Author:** ![glee](https://avatars.discourse-cdn.com/v4/letter/g/b5a626/32.png) [@glee](https://boards.straightdope.com/u/glee)\ **Post date:** [December 19, 2004, 4:35pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/2 "2004-12-19T16:35:19Z")
I think you are missing the point. ‘ **20 million dead** , and every major city destroyed-factories devastated, shipyards gutted, railroads wrecked.’ This is \*\*not \*\* a recipe for success. Also consider the parallel cases of East and West Germany. One eventually gained a high standard of living, the other was stuck in a timewarp with a poor economy. So political leadership and economic systems are far more important than wars. However there are two points that support you: - public investment can boost an economy (see Keynesian theory). I’m sure there are better ways than fighting wars, but it still counts as an input. - modernising is sometimes easier if you don’t invent the previous version. The UK was one of the first with a national telephone network. Ah, those mechanical Strowger telephone exchanges. When things went electronic, it cost a fortune to tear out the old equipment. (Again, war is a terrible way to achieve this.) ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [December 19, 2004, 4:38pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/3 "2004-12-19T16:38:48Z")
You are neglecting the fact that after the war, the Allies put billions into rebuilding Germany and Japan. ---
**Author:** ![glee](https://avatars.discourse-cdn.com/v4/letter/g/b5a626/32.png) [@glee](https://boards.straightdope.com/u/glee)\ **Post date:** [December 19, 2004, 4:42pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/4 "2004-12-19T16:42:40Z")
> [@msmith537](#): > > You are neglecting the fact that after the war, the Allies put billions into rebuilding Germany and Japan. Surely it was the US who kindly helped with the Marshall plan? I’m sure the UK benefited (and needed) such aid. ---
**Author:** ![kellner](https://avatars.discourse-cdn.com/v4/letter/k/c2a13f/32.png) [@kellner](https://boards.straightdope.com/u/kellner)\ **Post date:** [December 19, 2004, 4:45pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/5 "2004-12-19T16:45:51Z")
> [@msmith537](#): > > You are neglecting the fact that after the war, the Allies put billions into rebuilding Germany and Japan. The Marshall Plan had an important role in the recovery, but it doesn’t explain the difference between Germany and the UK, because the UK got more than twice as much money out of it [(link)](http://en.wikipedia.org/wiki/Marshall_plan). ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 19, 2004, 4:47pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/6 "2004-12-19T16:47:49Z")
> [@glee](#): > > I’m sure the UK benefited (and needed) such aid. Britain had a socialist government after the war and the economy really went to pot - we even had to have bread rationing from1946 to 1948. That’s after the war had ended. ---
**Author:** ![Rune](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@Rune](https://boards.straightdope.com/u/Rune)\ **Post date:** [December 19, 2004, 4:53pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/7 "2004-12-19T16:53:54Z")
20 million killed Germans?! Germany had nowhere that number killed. More like 3 million or there about. Wikipedia says 3.5. [http://en.wikipedia.org/wiki/List\_of\_World\_War\_II\_casualties\_by\_country](http://en.wikipedia.org/wiki/List_of_World_War_II_casualties_by_country) ---
**Author:** ![glee](https://avatars.discourse-cdn.com/v4/letter/g/b5a626/32.png) [@glee](https://boards.straightdope.com/u/glee)\ **Post date:** [December 19, 2004, 4:58pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/8 "2004-12-19T16:58:52Z")
> [@Quartz](#): > > Britain had a socialist government after the war and the economy really went to pot - we even had to have bread rationing from1946 to 1948. That’s after the war had ended. Gosh. **Rationing was due to socialist policies, huh?** :rolleyes: Perhaps you didn’t know that the war killed millions, involved terrible damage through bombing and cost so much that Britain collapsed from a major economic power to a near-bankrupt economy. Are you really so politically biased that you instinctively blame the inevitable post-war reconstruction trauma on a left-wing government? I suppose you think the economic policies of the Conservative party are impeccable. Remember John Major losing £15,000,000,000 **in one day**? 😃 ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [December 19, 2004, 5:03pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/9 "2004-12-19T17:03:12Z")
> [@glee](#): > > I suppose you think the economic policies of the Conservative party are impeccable. Remember John Major losing £15,000,000,000 **in one day**? 😃 Why are you smiling about that? ---
**Author:** ![glee](https://avatars.discourse-cdn.com/v4/letter/g/b5a626/32.png) [@glee](https://boards.straightdope.com/u/glee)\ **Post date:** [December 19, 2004, 5:09pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/10 "2004-12-19T17:09:31Z")
> [@treis](#): > > Why are you smiling about that? Well I could have been ruder, but this is Great Debates. On the one hand, the assumption is ‘Rationing was due to socialist policies’. Clearly Quartz supports the rightwing and is ignoring the actual situation postwar. It did concern me that a rightwing politician should have been so financially incompetent, but I was amused picturing how Quartz would explain that away. ---
**Author:** ![Ryan\_Liam](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ryan_liam/32/3965_2.png) [@Ryan\_Liam](https://boards.straightdope.com/u/Ryan_Liam)\ **Post date:** [December 19, 2004, 7:05pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/11 "2004-12-19T19:05:11Z")
> [@](#): > > So was Germany better off BECAUSE of the war? After all, they built new, modern factories, while the British struggled on with their obsolete infrastructure-and by the 1970’s, Britsh industry was in the final terminal stages. Large myth here, Germany and Japan actually had large amounts of industry left over from the war, and didn’t completely start over a new industrial base. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [December 19, 2004, 7:30pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/12 "2004-12-19T19:30:31Z")
Actually, Britain (with its largely intact, albeit obsolete industrial base) should have come out FAR ahead of Germany. After all, they could start their factories up right away, while the Germans had to repair their bombed-out cities and plants before they could export one single Volkswagen. So what explains the different outcomes? It clearly wasn’t a lack of basic research, because Great Britain was on the cutting edge of jet engine design and development, or in automobiles (Britain invented/developed disc brake technology, for example), and Jaguar was capable of building world-class cars. In addition, Britain had the advantage of trusted brand names (think Raleigh bicycles)…as an interesting aside, my dad bought me a german made bike once-it was horrible (fell apart) while my cousin’s 30 year old Raleigh worked perfectly and lasted forever! What went wrong with England? Was it the unions? Or the social;ist governments? The UK should have bypassed Germany long ago-yet it took the Iron Lady to get the British economy back in shape! ---
**Author:** ![Ryan\_Liam](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ryan_liam/32/3965_2.png) [@Ryan\_Liam](https://boards.straightdope.com/u/Ryan_Liam)\ **Post date:** [December 19, 2004, 7:52pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/13 "2004-12-19T19:52:35Z")
> [@](#): > > Actually, Britain (with its largely intact, albeit obsolete industrial base) should have come out FAR ahead of Germany. After all, they could start their factories up right away, while the Germans had to repair their bombed-out cities and plants before they could export one single Volkswagen. Did you ever read a history book? Ever heard something called the Blitz? Battle of Britain? V-1 or V2 bombings? Or the fact places of large manfacturing, such as Manchester, Birmingham ,Liverpool, were constantly attacked and burnt out, and what about Coventry? a large manufacturing base, completely burnt out and attacked by the Luftwaffe. All of Europe was somewhat affected by Air bombardment, but to place German attacks on Britain as minimal is inaccurate. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [December 20, 2004, 12:03pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/14 "2004-12-20T12:03:08Z")
This is an old debate. > [@](#): > > [Parable of the broken window](http://en.wikipedia.org/wiki/Parable_of_the_broken_window) > > The parable describes a shopkeeper whose window is broken by a little boy. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the glazier, who will then buy bread, benefitting the baker, who will then buy shoes, benefitting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town. > > The fallacy of the onlookers’ argument is that they considered the positive benefits of purchasing a new window, but they ignored the hidden costs to the shopkeeper and others. He was forced to spend his money on a new window, and therefore could not have spent it on something else. Perhaps he was going to buy bread, benefitting the baker, who would then have bought shoes, etc., but instead he was forced to buy a window. Instead of a window and bread, he had only a window. Or perhaps he would have bought a new shirt, benefitting the tailor; in that case the glazier’s gain was the tailor’s loss, and again the shopkeeper has only a window instead of a window and a shirt. The child did not bring any net benefit to the town. Instead, he made the town poorer by the value of one window. > > Economists of the Austrian School and libertarians argue that the “broken window fallacy” is extremely common in popular thinking. For example, after September 11, 2001, some economists suggested that the rebuilding in New York would stimulate billions of dollars of economic activity, which would provide a net benefit to the United States economy, which was in recession at the time. But libertarians argue that this was an example of the broken window fallacy, since it ignored the billions of dollars in assets which were a net loss as a result of the attack. If the World Trade Center should be rebuilt exactly as it was before, the world would have a World Trade Center, whereas without the September 11, 2001 attack, the world would have not only the World Trade Center, but also all the good things that could have been done with the resources now spent on rebuilding it (not to talk about all the lives and assets lost with the WTC). > > Note that the Austrian interpretation stems from the assumption that all resources are initially fully and appropriately employed. Another school, the Keynesians, argues that in some circumstances the little boy may actually be a benefactor, though not the best possible one. Facing severely underutilized resources (as in the Great Depression), John Maynard Keynes argued (in a somewhat joking way) that it may make economic sense to build totally useless pyramids in order to stimulate the economy, raise aggregate demand, and encourage full employment. More analogous to the broken window, World War II, an extremely destructive event, had exactly that effect. However, Keynes would have preferred to engage in demand stimulus in a way that would be more beneficial to society, such as government investment in education, basic research, public health, and infrastructure. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [December 20, 2004, 9:39pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/15 "2004-12-20T21:39:30Z")
OK, he “broken window” argument says that Great Britain should jhave been ahead of germany. But we all know that Germany became a world-class exporter of automobiles, Great Britain went from being one to nearly losing their entire domestic auto industry. Why was GB giving subsidies to con men like John DeLorean? Surely Britain had competent automotive engineers and executives (like Alec Issogonis)…what killed Britain as an industrial power? ---
**Author:** ![kellner](https://avatars.discourse-cdn.com/v4/letter/k/c2a13f/32.png) [@kellner](https://boards.straightdope.com/u/kellner)\ **Post date:** [December 20, 2004, 10:01pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/16 "2004-12-20T22:01:13Z")
> [@ralph124c](#): > > what killed Britain as an industrial power? I think you are a bit harsh. e.g. according to the [CIA world factbook](http://www.cia.gov/cia/publications/factbook/index.html) the purchasing power adjusted GDP per capita was $27,600 in Germany and $27,700 in the UK. Certainly this will fluctuate over time and you can debate how much these numbers actually mean, but the two countries just aren’t that far apart. (Of course Germany is a bit bigger in absolute terms and there are differences between the east and the west.) Also, I think that the auto industry is simply more visible than many other industries. ---
**Author:** ![Wrath](https://avatars.discourse-cdn.com/v4/letter/w/ee7513/32.png) [@Wrath](https://boards.straightdope.com/u/Wrath)\ **Post date:** [December 20, 2004, 10:01pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/17 "2004-12-20T22:01:54Z")
> [@](#): > > Does war actually help economies to grow? War is the mother of invention… and surplus. Well, at least is _was_. If you read about or watch on the History Channel the History of Advertising, you’d see how they are conenected. After WWI, we had many surpluses - a good example was bar soap. I don’t have the specifics, but they needed to liquidate the surplus by creating a market - prior to WWI only the rich took a bath once a day. Soap was now available to the masses cheaply, and early advertising connected taking a bath every day with feeling luxurious. Worked like a charm. That was then. Today we have a market for humvees. Surplusses aren’t as much of a by-product of war anymore, but wars DO fuel invention, and if that invention has a civilian market, it will be exploited. ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 21, 2004, 11:54pm UTC](https://boards.straightdope.com/t/war-and-economic-growth-is-war-good/280642/18 "2004-12-21T23:54:49Z")
> [@glee](#): > > **Rationing was due to socialist policies, huh?** :rolleyes: I didn’t say that - don’t put words into my mouth. > [@glee](#): > > Are you really so politically biased that you instinctively blame the inevitable post-war reconstruction trauma on a left-wing government? No, I’m stating a **fact**. Would you care to contradict the **facts**? It is a **fact** that Labour were in power at the time. It is a **fact** that there was bread rationing at the time.