It's true that technical innovation comes about in war; it's also true that it comes about in peace. I don't think anyone would seriously suggest, however, that the net economic effect of an event such as the conquest and occupation of Iraq, let alone mega-wars like 1914-1918 and 1939-1945, is anything but negative. On the one hand you have vast, direct destruction of plant and equipment, not to mention people being killed and maimed. On the other you have resources like oil and labor being used for purposes that do not result in an increase in the net social capital. If these resources remained at home and were devoted to production, that much more economic growth would occur. Someone mentioned that WW-II provided the U.S. economy with the fiscal stimulus that it needed to pull out of the Great Depression. That's true, but only because the policy-makers of the day didn't understand how much stimulus was needed. (Modern policy-makers in Washington today likewise have applied too little stimulus to the economy, and the result is that our recession will be longer and more painful than necessary, with a greater net negative impact on long-term growth, but that's another topic.) I think it's facile to attribute the profound technical advantages that the Europeans enjoyed over the Americans in A.D. 1500 to Europeans having engaged in that many more wars. For one thing, there was a terrific amount of war going on in America before Columbus. But even in the depths of the Dark Ages, European technology excelled that of the Americans in 1500 (they had steel; the arch; sea-faring), and of European technical advances after that, the only one that I can think of having much to do with war is the invention of artillery; and gunpowder, something not originally invented for war-making, was borrowed from the Chinese. Wind and water mills; techniques of wool production, dyeing and weaving; glass production; canals; sea transport; these major European technical advances came about due to the expansion of markets and trade, not due to war. The carracks that the Europeans sailed around the world in were originally designed for north-south European trade, I understand. Artillery + ocean-going ships = world conquest, it turns out, but it was trade, not world conquest, that was on the minds of the orginal European explorers and adventurers. If you build a lathe or a die-press, a tractor or an airliner, you have something that increases your ability to produce goods and services; if you build a 500-bomb, a supersonic fighter-jet or an aircraft carrier, you have, along the same dimension, precisely nothing.
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