- A war economy is the set of contingencies undertaken by a modern state to mobilize its economy for war production. Philippe Le Billon describes a war economy as a “system of producing, mobilizing and allocating resources to sustain the violence.”
- A concept in which the government’s military budget stabilizes business cycles and fluctuations and/or is used to fight recessions. It has been observed that wars sometimes have the effect of accelerating technological progress to such an extent that an economy is greatly strengthened after the war.
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US Economy during World War ll :
- The war years of 1941 to 1945 saw one of the most significant short term increases in growth in the history of the U.S. economy. Growth during this period was driven by government spending and accompanied by declines in consumption and investment in comparison to the pre-war trend.
- During the war 17 million new civilian jobs were created, industrial productivity increased by 96 percent, and corporat profits after taxes doubled. War needs directly consumed over one-third of the output of industry, but the expanded productivity ensured a remarkabl supply of consumer goods to the people as well.
- By 1944, as a result of wage increases and overtime pay, real weekly wages in manufacturing were 50 percent higher than in 1939. The war also created entire new technologies, associated human skills.
End of Cold War and rising fears in Europe :
- Ever since the end of cold war, Russia has been continuously carrying the baton of USSR’s ideology. This has created fear in Europe about rising Russia’s probable westward expansion to proliferate its ideology and fulfill its interests.
- USA has been the major beneficiary of this fear as it acts as the security provider in the region and bags billions of dollars.
Present Day :
- The United States has been involved in numerous military endeavors within the Middle East and Latin America since the 1960s. Having been in a continuous state of war since the September 11 attacks, they have an annual military budget larger than many country’s military budgets combined.
- According to the Stockholm Peace Research Institute (SIPRI), While global trade in major arms declined by 4.6%, European countries increased their arms purchases by 19%, which amounts to the biggest increase of all world regions. This was Europe’s response to Russia’s annexation of the Crimean Peninsula in 2014.
- The United States was by far the main supplier to the Europeans, especially of combat aircraft. The United Kingdom, Norway, and the Netherlands together ordered 71 US F-35 fighters onder In 2020/21, more orders were added by countries that feel particularly threatened by Russia: Finland and Poland put in orders for(64 and 32 F-35 aircraft respectively. Germany, meanwhile, ordered five P-8A anti-submarine aircraft from the United States.
Conflict with Iran & Paris air show 2019 :
- In Paris Airshow 2019, nearly 400 U.S. companies were showcasing equipment as the United States and Iran neared 7 open confrontation in the Persian Gulf.
- Lockheed Martin, Boeing and other top weapons makers said they had seen accelerating demand for U.S. weapons at the biennial air show despite escalating trade tensions between the United States and Europe.
- Industry executives and government officials said growing concern about Iran’s missile development program is another key factor. Iran is our best business development partner Every time they do something like this, it heightens awareness of the threat,” said one senior US defense industry executive.
Benefiting from Ukraine War :
- In 2017-end, when US President Donald Trump approved a license for Ukraine to buy arms and approved the export of weapons worth $47 million, Observers watching Russia-Europe warned that the move could put Russia’s President Vladimir Putin on the warpath in the region.
- Yet, the US continued with the arms sale to Ukraine even after Trump lost the presidential election to Joe Biden. The military aid policy continued and the warnings came true as Putin ordered invasion of Ukraine on February 24.
Making Profits beyond Europe :
- Over the past decade under banners like the Pivot to Asia and the Indo-Pacific Strategy, the US has been using arms sales, most of them second-hand, as bait to expand influence and infiltrate Southeast Asian countries.
- The US has always been known to develop the most advanced weapons in the world. Some of its outdated weapons remain top class in the eyes of some countries and regions and it is therefore supposed to bel a good bargain.
- South Korean administration purchased more than a dozen Chinook CH-47D helicopters at a hefty price tag of $130 million from the US military.
- For RQ-4 Global Hawk, US chose Japan to make the maximum profit. The acquisition cost Japan 61.3 billion yen ($528 million) while operation and maintenance expenses amount to 13 billion yen annually.
- The US also kept providing arms to the island of Taiwan, despite saying it does not support(“Taiwan independence. US weapons like Kidd-class destroyers and Perry-class frigates were delivered to the island of Taiwan at very exorbitant costs.
Effects of USA’s Profiteering
- US has failed to control its weapons transfers, and some of them have ended up on the black market, eventually falling into the wrong hands including those of terrorists. According to a report by Conflict Armament Research (an independent arms-tracking organization) some weapons bought by the US military in 2015 ended up in the hands of ISIS fighters.
USA’s Agenda :
- While the US sells these weapons often under the name of safeguarding peace, it is hoping to create more wars , so US arms dealers can earn more money.
- From the War in Afghanistan to the Syrian Crisis; from the Israeli-Palestinian conflict to the Russian-Ukrainian conflic US arms firms and politicians have always been there, rea whatever they can, at the cost of fear, homelessness, and death of local people.