Are wars good for the economy?

By Alex Singleton | 15 August 2005

Mike Moffat on About.com writes:

One of the more enduring myths in Western society is that wars are somehow good for the economy. Many people see a great deal of evidence to support this myth, after all World War II came directly after the Great Depression. This faulty belief stems from a misunderstanding of the economic way of thinking.

War, of course, might sometimes be necessary to protect an economy, just as burglar alarms and security guards protect businesses. But the idea that war in and of itself is good for the economy is false. Richard Cobden spoke out against the idea that increased military spending benefits the economy:

...does it make no difference in what manner the outlay is invested - whether eight hundred millions of capital be sunk in the depths of the sea, or put out to good interest? Is there no difference between such a sum being thrown away, destroyed, annihilated, in devastating foreign countries, whilst the nation is called upon, out of its remaining capital, and with its gratuitous labour, to pay the interest - and the like amount being employed in making canals, railways, roads, bridges, drains, docks, etc; planting trees, educating the people, or in any other way in which it would return its own interest of capital?