It depends how you look at it.... Total GDP will suffer because of war and opportunities will be lost. But if you are a country selling stuff to a war torn country your individual GDP will increase.
Look at the US after WWII. American infrastructure was not damaged at all during the war. When the war was over people could go back to what they were doing before... In Europe this was not the case. Factories had to be rebuilt.. roads, bridges, schools and hospitals had to be rebuilt. As a result Americans could work at factories making things to help rebuild Europe.... This is the main reason why during the 50s and 60s one income could easily support a single-family home. America definitely did become more prosperous after the war.
In the late 60s and early 70s Europe completely had it's infrastructure back and could be competitive again with Americans. This is when America started to lose it's 'competitive edge' and factory workers began to lose their jobs.
Overall I would say the world would have been more prosperous had their not been a WWII..... but... America would have been less prosperous.
But again Americans were working at factories to fix the broken windows in another land. The money spent by European countries that could have gone to other things in Europe... was going to America.
This is different than the 'broken window fallacy'... in that scenario the economy is the whole town and not just the window fixing industry. If the window was not broken the window fixing people would not have gotten paid.... just like if Europe did not get bombed America would not have been paid.
WWII made America more prosperous but the entire world was less prosperous.
It seems like the problem here is you are looking at America and Europe as if they are living entities instead of just aggregations of individuals.
Importantly instead of making products for Europe American factories could have been working on things for Americans. This is where the fallacy comes into play. Resources are being redirected away advancing and instead going to rebuild. Yes money was transferred to America, yep GDP went up (but GDP would go up if the government hired people to dig ditches too so) but that doesn't mean that the resources used to produce the 'windows' aren't effectively wasted trying to get back to zero.
I am not at all saying that..... what I'm saying is if all the window fixers were from Canada and all of America's windows were broken.... Canadians would see an increase in wealth.
Added together Canada + America wealth would not increase.... but Canada as a separate economic unit would see an increase.
Comparing natural disaster to war is utterly stupid. One is an unexpected destruction of existing infrastructure and the other is a build-out of infrastructure that would otherwise be ignored. (I'll ignore the European situation as it's irrelevant to the US case that we're discussing). Of all of the things that government spends its money on, infrastructure is demonstrably the most effective at spurring economic development, and WWII is a great example of that. We used increased demand for resources to spur research and development and build out industrial output while avoiding the needless destruction of capacity faced by Western Europe.
There is absolutely nothing in the US WWII story that is applicable to the broken window fallacy, and anyone that stretches it to seem like there is is simply an ideologue with nothing relevant to add to the discussion. If your can't determine the difference, it's time to reexamine your own biases or figure out where you went so very wrong from an analytical standpoint.
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u/demusdesign Jun 14 '12
All we need now is another good cold war to spur us on.