I was wondering this when I debated war with my brother who said, that at least war and tax money going to the us army is not wasted, since war is profitable.
But how is war profitable? The Iraq war cost 5 trillion dollars, which is more money than exists in the entire world. And the US military has an annual budget of 500 Billion, which is about switzerlands GPD.
So how can you possibly recuperate that much money? Because that is more money than oil could possibly be worth.
So how does the US military make its money back?
In: Economics
>The Iraq war cost 5 trillion dollars, which is more money than exists in the entire world
The entire world’s GDP is more than $80 trillion
[Some older threads](https://www.reddit.com/r/explainlikeimfive/search/?q=war%20profitable&restrict_sr=1&sort=new)
I am pretty sure when people say war is profitable they dont mean for the government for the most part, but for everyone else. They mean for the private sector as government will hand out contracts. Defense contracts, logistics contracts, all kinds of contracts etc. I mean whole companies are created and live on just government contracts. Because a lot of these companies live on government contracts, war is profitable as war will get the government to buy more.
Take missiles and ammo for example. Yes the government still buys them for training and such, but for war? The check is blank. They can expect their orders to be magnitudes bigger. It is from war that these companies make more money, they become more profitable. I know a buddy that works at a company that supplies small product for the US military. When the Iraq war activity died down, they essentially had low orders and had to let people go. Then when things heated up again, and the government ordered more they hired more people. That’s just a small example, imagine a bigger scale with multi billion dollar companies getting contracts in the hundreds of billions.
All the destruction, who do you think gets contracts to clean up and to deal with all those occupied places? More contracts more companies, more money, more profits.
Essentially, you’re creating a problem in which you pay for a solution except a very expensive solution. The government is supply and demand.
Then there is economic growth from war at home, which some others can chime in but over simplifying here, war stimulates the economy as government spends. You can see that from WWII and aftermath.
lots of money to be made after, rebuilding infrastructure, loan the country money to buy in your services charge loads of interest on loans.
Maybe help to put in a new leader thats sympathetic to further investments or loans as they should be called. Gives you 10/20 years of income as the countrys economy picks up, you get new opportunity to bring in more business to help build the country further and all with the aim of profit.
Broken Window fallacy.
Bombing a factory to justify building another one is generally a net economic loss.
Now, that being said, war can serve resource redistribution.
What if you get reparations for the victor? Those help pay off the contractors and manufacturers that made the war material, pumping money back into the economy. However, that’s simply externalizing the costs elsewhere.
As a general rule, war is not profitable overall (factoring all affecting parties). An argument could be made weakly; a war may fundamentally change institutions and economies, allowing much greater growth afterwards (Post-Marshall plan Europe, post war Korea and Japan, however all those areas mentioned with the exception of Korea were already wealthy, educated, and powerful nations before the war. So it’s a weak argument.) in some situations by clearing out the “deadwood” (an authoritarian government that prevents economic growth, extractive institutions, think removing slavery in the South allowing for industrialization to finally occur).
Your brother is incorrect from the “tax money on war isn’t being wasted” economic perspective. Public education has one of the highest ROIs of any spending category, as well as public R&D, infrastructure, etc. If those are underfunded due to the military, then economic performance suffers.
The US Military is a sink, but Team USA sees a profit from their activities.
After WWII, most of the first world was bled nearly to death, and most of the 2nd world was coming up into the first.
Instead of pouring billions into their defense budgets, they could instead sign up with the UN and Team USA would protect them along with our allies.
Now you have a world where the only military force of real consideration is the United States. There are others that could put up a fight, but that’s World War III: The End Times territory.
So if you’re a smaller power, and start getting shitty with your neighbors, or being neglectful in the terms of your trade agreements, the US will park [1000ft of Freedom](https://nationalinterest.org/sites/default/files/styles/desktop__1486_x_614/public/main_images/5526433794_35ff1d8459_o.jpg?itok=IApON6eT) in the middle of your biggest shipping lanes “for training” and wait for you to call the State Department.
Now, how is that profitable? That now means that every foreign government that relies on our “peacemaking” abilities has to consider the US’s feelings on every international deal they make. If we support it, they know the US Military will back their play. If we don’t, their “navy” of 12 dudes in a Vietnam Era-boat had better be able to handle it.
That means the US gets the right of first refusal in nearly every trade deal, and has a standing seat at every negotiation table. We can use our military to enforce (or not enforce) any treaties we see benefit from, and keep a soft pressure around the world.
If we were to dial back the spending and stop playing World Police, those smaller countries wouldn’t go building up their navy. Instead, they’d more likely find another big friend like China or Russia and start sliding favorable trade deals their way instead of ours.
Is it a net gain? Definitely debatable. But being the first country in every foreign leader’s mind, and the only guy with a gun in the room means we don’t have to find out.
it depends on what you give value. Now a days, profitability in war is mostly political. Iraq was about presence in the middle east and oil.
War makes money for people involved in the war business. Not for every day Americans.
Back in the day war was profitable to the economy as a whole because people worked in munitions plants; building planes, jeeps, artillery shells, bombs, bullets etc.
Now, that is all done by private companies via direct contracts with the government, most of which is automated. No many jobs there.
you use your military to further your master plan or agenda. traditionally, you fought wars for land. nowadays, you don’t fight for land as much, but you fight for power and control. the iraq war rooted out a lot of the “terrorist” organizations which would have continued attacks like 9/11 and such. so your benefit is eliminating future attacks and installing a government that’s friendly to you, which you could exert a lot of control over. especially on how their country develops and you reap the benefits for years to come. it’s not necessarily profitable in the traditional sense. but you do have unmeasurable benefits. how much is preventing another 9/11 worth?
Well war and “tax money going to the US army” are two different things. u/JudgeHoltman makes a good case for why military spending can be a net positive for a nation. Intuitively, there must be *some* positive level of military spending that is good, or else no country would bother spending their money on a military. It would, however, be a classic fallacy to assume that just because the last dollar was worthwhile, the next one will be too. Eventually military spending becomes wasteful, though there’s a lot of debate about where that line is.
War is a different beast and is basically never profitable to people except military contractors. One could even say that military spending is worthwhile primarily *because* it helps to avoid wars, or at least minimize their impact on citizens when they do happen. War is destructive. There’s money to be made in rebuilding what you destroyed, but the most efficient approach was to just not destroy the stuff in the first place. This extends to people as much as it does to buildings and equipment. Some of the “economic miracles” that followed the 20th century wars were brought on by the opportunity to re-orient institutions, but a lot of it arose from the simple fact that there was now a lot of work to be done by a smaller number of people, so those people were able to collect high wages at stable jobs. To really asses whether war was “worth it”, you’d have to put yourself in the shoes of a random citizen before the war even began. There’s some chance you live to enjoy the economic miracle, but maybe you don’t.
There are a lot of good answers on here, but I just want to add another factor for consideration:
Being at war is profitable for the people who build guns, and who train soldiers. These people (such as defense contractors) are able to use their money and power to lobby/bribe the government. Therefore it’s in the best interest of the politicians to sell the idea that war is profitable to people like your brother, so that he’ll agree to keep paying his tax dollars into the war effort, which makes the war profiteers happy, which makes the politicians happy.
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