The Economic and Social Consequences of Preparing For Nuclear War

Abstract

This chapter explores economic consequences of military expenditure. The economic question is whether military expenditure is the most cost-effective means of increasing the rate of economic growth and of employment. Assessing the impact of military expenditure on economic growth involves summarizing the influences discussed. Since military expenditure tends to reduce public and private investment, to reduce labor productivity, divert funds and personnel from civilian research and development and to retard employment growth, it tends to retard rate of economic growth. D. Smith and R. Smith concluded that there was no econometric evidence for a systematic relationship between military expenditure and economic growth in developing countries and explained this by the diversity of the roles of the military forces in those countries. The level of total military expenditure is unprecedented in peace time and has been associated with the permeation of culture of militarism through industrial countries. The chapter concludes with a few comments about social and political consequences.