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A wartime economy would be different this time
The world is entering another phase of increased defence spending.
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Defence spending will probably continue to act as an important subsidy for innovations that have broader benefits, says the writer.
PHOTO: REUTERS
Allison Schrager
I recently heard a terrifying prediction: Advances in defence technology will change the way war is waged today as much as industrialisation did in World War I. If true – and I don’t know one way or another, my area of expertise is economics – then we could be facing casualties on an unimaginable scale, just as the mechanisation of weaponry produced in the early 20th century.
As I said, however, I am an economist, and this prediction got me to thinking: What will this transformation mean for the US and global economy? In the past, increases in military spending have acted as a kind of stimulus. But there are reasons to doubt that will happen this time, at least in the same way.
