The Superior Economic Impact of War
While the management of scarce resources on a macro level is necessary for the construction of a healthy economy, many factors regress or excel the economic growth of a nation. Of the many factors that affect economic growth, armed conflict stands as the most prominent. The presence of armed conflict frequently results in a drastic change of a nation's economy in both the short and long-run. Additionally, a nation’s political stance alters its economy; however, positive and negative change to this degree cannot be achieved unless armed conflict is initiated. In a market economy, in which both the populace and the businesses finance, both monetary and fiscal policies are implemented in order to guide the "invisible hand" of the market but are incapable of imposing extensive changes to a nation’s economy. Alternate factors such as the laws of a nation merely guide the economy as opposed to shifting the supply and demand in each industry on both micro and macro scales. Notwithstanding, there remain two events in modern economic history that paralleled the drastic change armed conflict imposes on a nation’s economy. The Great Depression was the first, as its tenure in the 1930s resulting in mass unemployment, with the unemployment rate at 24.9% in 1933 within the United States. The second was the financial crisis of 2009. As consumer confidence on a macro scale diminished, resulting in a similar economic trough to that of the Great Depression, that raised unemployment to 10% during 2009 in the United States, a substantial difference from a healthy unemployment of 6-7 percent. However, unlike the Great Depression and the financial crisis of 2009, armed conflict is proven to be a consistent means of affecting the economy on a macro scale. Therefore, the domineer that armed conflict has over other miniscule factors that influence a nation’s economy is demonstrated over natural resources, civil wars negatively affecting a nation’s economy, and Keynesian economics during wartimes increasing industry within a nation.
