In my memo last week, I committed to addressing the question: “Is war good for the economy?” From the moment I wrote it, I’ve regretted framing this as an interesting economic question. Real people are losing homes, loved ones, and their semblance of security and peace of mind. I truly loathe the question.
That said, let’s dispel the myth.
So, here’s the short answer to the question: yes, war can have a positive effect — but not for the reasons people think.
One of the greatest periods of U.S. expansion was post-World War II. So did war spark the economy? Let’s not forget that we entered the war just as we were coming out of The Great Depression. Nobel laureate Paul Krugman is cited as describing WWII as:
“… above all, a burst of deficit-financed government spending that created an economic boom and laid the foundation for long-run prosperity.”
In short, the real driver was massive government spending and full employment — not the war itself. Many economists argue that the same investment in peacetime could have done the same thing.
Today? War benefits a narrow slice of industries — defense, weapons, logistics. Everyone else pays the tab and the bill comes due long after the last shot is fired.
The truth is, I am not arguing for or against war. The more I learn, the more I appreciate how much I don’t know. These are deep, layered, complicated waters — and I wade in with great humility.
All I know is that I wish all beings could live safe, happy, free and with dignity.
I wish peace for all,
Barbara
March 15, 2026
Sources:
- https://www.federalreservehistory.org/essays/great-depression
- https://www.mercatus.org/research/policy-briefs/economic-recovery-lessons-post-world-war-ii-period
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