The Economic Impact of War

The Global Effects of War on Society and the Economy

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War occurs when two groups conflict with each other for any reason over a period. Given that we are working towards globalisation, war can positively or negatively impact the world's economy.

Looking back at the western hemisphere, World War I sped up industrial production in the United States of America, leading to an economic boom in their nation throughout the 1920s.

The 'Great' war was significantly more devastating for France and the United Kingdom. However, Germany faced the most difficulty: huge reparation costs, soaring inflation, and high unemployment, which led to an economic depression.

One of the deadliest wars in human history, World War II involved around 30 countries and resulted in about 70 million deaths, with its effects still being felt in society today.

In a turn of events, there were many benefits resulting from the war: growth in European and US GDP technological and health advancements. 

Humanity saw innovations such as radar technology and the commercial production of penicillin.

As we can't look away from the news headlines, the ongoing war between Ukraine and Russia has resulted in massive damage to infrastructure, and many civilians are fleeing to seek refuge in neighbouring countries.

The sanctions placed on Russia by European and American powers have caused a surge in energy and commodity prices. Inflationary pressures are particularly rife in poor households, where food and fuel make up a more significant percentage of their expenses.

There are a few categories of concerns we can break down to understand: how does war affect humans in a globalised society?

Human costs

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The toll of war on human beings is tricky to measure. The profound psychological impacts of the pain of death, suffering, fear, and disability can be inconsolable and irreparable. 

Soldiers and civilians are often left dealing with trauma from their experiences. In a study entitled Fragility and Conflict : On the Front Lines of the Fight against Poverty, it was found that the mental illnesses developed in people who experience war can be passed down to the next generation, showing that war has a psychological effect decades after it has been declared officially over.

Damage to infrastructure

Public infrastructures from water, gas, and electricity lines to hospitals and schools can be wiped out in seconds. Post-war restoration of damaged infrastructure can take longer than building back society. 

It can be extremely costly to a nation, resulting in affected countries incurring more debt and raising taxes to meet these debt commitments.

Global shortages

Russia's invasion of Ukraine led to a rise in the price of oil and gas. In turn, global fuel prices have soared. With oil and gas one of Russia's biggest exports, it's no wonder sanctions, and many other economic factors have experts predicting that petrol may eventually hit R40/l.

The food supply chain may be stagnated due to the war. Russia and Ukraine account for more than 1/4 of global wheat exports.

 Ukraine is also one of the largest exporters of sunflower oil, a vital food commodity for most nations. The media is already reporting that slaap chips may be in danger. 

A lack of production and blocked imports can be a spell for disaster that severely impact global supply chains.

Inflation 

Due to war, lack of commodities and household goods can lead to price hikes, increasing the cost of living and rising debt levels. 

Higher overall debt levels have resulted in some countries printing more currency to cover war costs, devaluing their currency and causing a state of hyperinflation.

*Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy

Innovation 

The life-or-death chaos of war powerfully ignites human creativity. 

Some of the significant inventions have come from conflict. Such as the jet engine, synthetic rubber and oil, pressurised cabins, and sanitary pad – yes, sanitary pads.

Though it may be too early to predict what will come of this war, people will invent a way to overcome them when they face obstacles.

Change in social attitudes

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This can be either a good or bad part of our society, but a change in culture and attitudes comes with war.

There was an influx of women entering the workforce after the first and second World Wars. Women took on jobs previously reserved for men, which helped change cultural attitudes.

US Government figures show that women's employment increased during the Second World War. The female workforce grew from about 5.1 million in 1939 (26%) to just over 7.25 million in 1943 (36% of all women of working age).

Even though there are benefits of war, the associated costs and most importantly, the loss of innocent lives, are too severe to validate it.