Economics. War and the Economy

Introduction

The term war refers to any violent conflict that is often large scale and occurs between two groups of people or alliances due to their different views about an issue or issues. Different wars have occurred with varying motives (Kelly, R. p 48). Several factors have motivated wars between nations and to include inflicting punishment on the ‘enemy’ to protect the national territory or to prevent the loss of resources to another party.

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In the past as well as in the modern world, wars have occurred and continue to occur. Some have had very devastating effects on the people, the environment, and the economy of the different states. In most cases, one group of people who are involved in a conflict tend to believe that more benefits can be obtained compared to the costs incurred during the war (Gat, A. p 216). Examples of some of the global wars that have caused great damage include World War (I and II), civil wars, wars on terrorism, the Vietnam War, and Gulf wars (Keeley, L. p 137, 160). In this paper, World War II, Korean War, and the Vietnam War will be looked at. The unemployment that preceded each war will be discussed together with the effects of these wars on the economy.

World War II

World War II is also referred to as the Second World War. It had two opposing alliances which were then known as the Allies and the Axis. The military conflict began in 1939 and later ended in 1945. The war is recorded as the most widespread war in the history of mankind and it caused over 70 million deaths (people). World War II was preceded by a high level of unemployment. In addition, the war affected the economy of various nations. The conflict was triggered by German’s invasion of Poland and the attacks of Pearl Harbor by the Japanese military forces.

Unemployment Preceding WWII

The unemployment rate before the World War II was very high. The Great Depression greatly led to an economic crisis in America and Europe. The economic crisis came after the World War II and it began in 1929. The industrialized countries were affected and the international trade declined very rapidly. While construction was halted in many nations, the crop prices fell by 40-60%. This affected the agricultural production.

In the US the Wall Street Crash (1929) was a clear proof of the economic crisis that was being witnessed in USA. This resulted to lack of unemployment for a huge number of people. In the USA the high unemployment rate was a measure of the depressions’ negative impact. The unemployment rate in the US between 1929 and 1939 was estimated to be 13%. In 1932 only 30% of America’s total population was employed which resulted to unused labor and great suffering in the citizens (Chen, J. p 61).

Great Britain in 1924 was experiencing merciless deflation. The unemployment rate was also high due to the negative effects of depression. For instance, the “Mosley Memorandum” was a proposal that was meant to solve unemployment in Britain. This was initiated by Sir Oswald Mosley in 1930 and it aimed at equipping the government with the means to solve the unemployment problem. In 1921 over 2 million citizens were unemployed in Britain.

This welcomed deprivation. After the collapse of Lloyd George Coalition government in 1922 Britain’s economic crisis only worsened. Those who were employed had very low wages while they worked for very long hours. In 1932 Britain had less than 3 million people employed following the Wall Street financial markets crash in 1929. Britain however recovered from this and managed to decrease the unemployment rate by 1935 when the National Government became stable. European countries experienced very severe food shortages, high rate of unemployment and high inflation before the WWII (Keegan, J. p 67).

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The Jews migration to Europe and America in search of a better life sparked off Adolf Hitler’s desire to drive away Jews from Germany (Hughes, Matthew & Mann, C. p 148). The destruction of Jews businesses and property just before the WWII resulted to unemployment to those who had earlier been employed. The unemployment rate promoted anti-Jewish sentiments and actions.

Effects on WWII on Economy

The World War II resulted to channeling of huge amounts of resources towards the war activities and needs. The recessions between 1948 and 1990 have decreased the unemployment rate. Due to the declined production due to the economic crisis before and during the war the demand for labor increased. For instance, in the USA the unemployment rate that had risen to 24.9 percent by 1933 declined to 27 percent in 1939. By 1941 the rate had declined up to 9.9%.

Due to the increased rate of unemployment the economies experienced an improved performance of the economy. Due to the war, many people got employed in the military forces. Others were employed in industries that were manufacturing military equipment such as tanks, ships and airplanes. Through the war, the negative effects of the Great Depression were minimized. Some nations such as America managed to sell some of its products to other countries to sell some to its products to other countries which boosted its financial gains. This helped greatly in reviving the economy that had earlier been affected by the Great depression. For instance, America sold materials and goods to other nations (machinery, petroleum and metals).

The economy of many nations experienced growth due to the technological advancements that were experienced after the WWII. A large number of women who had earlier replaced men who were recruited in the military forces continued working even after the war (Hakim, J. p 39). This increased the economic productivity of different nations which later contributed to the economic revival. The war ended the depression which was very instrumental in minimizing negative effects of the economic crisis due to the Great Depression. The US gained from the war due to its prosperity in agriculture, industry and technology.

The destruction of factories and machines during the World War II affected many European countries; economies though munitions and aircraft industries experienced great growth. The great emphasis on food production after the war increased agricultural production. This boosted the positive economic growth in nations that had earlier experienced food shortages. The accumulation of massive debts by some nations had the economy severely affected when they attempted to pay for the debts. For instance, Britain and Germany had massive debts which affected their economy negatively (Robert, T. p 166).

Some nations such as Britain after the war put into place measures that would protect the economy against any possible depression. For example, Britain had the Bretton Woods Conference set up in 1944. The conference had a responsibility to develop means through which the economy would be protected against depression.

The Korean War

The Korean War was a military conflict that occurred between North Korea and South Korea. The conflict began in 1950 and ended in 1953 after the signing of an armistice. The two opposing sides had external military support and each side aimed at re-unifying the two sides under its governing structure. The conflict started when election disputes made the North Korean army to attack the South Korean side. The external forces the Soviet Union and the United States got involved in the conflict.

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The two sides (North and South Korea) border dispute was also a great motivation in the conflict. The North Korea side was supported by the Soviet Union the peoples Republic of China and the Democratic Peoples Republic of China. The Republic of Korea (South Korea) was supported by the US, UK, Canada, Australia, France, Greece and many others. The war is said to have had two super powers (US and the Soviet Union) fight which had the people in one nation suffer great destruction and loss of lives.

Unemployment before the War

The level of unemployment in the two opposing side’s territories before, during and after the war varied. Before the Korean War started the unemployment rate was still high though the various nations had managed to recover from the negative effects of the preceding wars (World War II). After the World War II many American servicemen had become jobless. For instance, the unemployment rate doubled up to 7.9% in 1949 in the US (Johnston, W. p 126).

The Northern Korea before the war had a dominant agricultural industry. The unemployment rates were much lower as compared to those before and immediately after the World War I. Korea experienced great economic hardships before the war began between the two sides. The North Korea had Soviet troops and the South American troops. When the two sides failed to be united under one government, the relations between the Soviet Union and America were ruined.

This had the trade between the two sides negatively affected. The economic hardship that followed increased the unemployment rate in Korea. While the North Korea had the industry and trade advantages, the south had a successful agricultural industry. The formal establishment of two separate governments in 1948 halted the economic development of Korea.

The recruitment of military officers before the war began increased the employment of young men in Korea. The preparation for war measures had both sides formed a formidable offensive war army. The measures also made efforts to acquire military equipment before the war. The tension that was witnessed before the war in Korea caused great political instability that affected the productivity of workers. Many people lost their jobs (www.infoplease.com).

The supply of military equipment by the other nations (US and Soviet Union) increased employment in industries that had the responsibility of manufacturing the military weapons and equipment.

Effects of Korean War on Economy

The Korean War damaged the two regimes economy severely. South Korea experienced a stagnation in its economy but later managed to modernize its industries. The US economy gained after the war since the war ended the US has enjoyed economic gains from trade between it Japan Republic of Korea. The Republic of Korea experienced great economic growth after the war. The US gets access to the Asian markets through the Korea Republic, Japan and China (Kaufman, B. p 284). The commitment of the Americans to defend the ROK (Republic of Korea) meant that America’s national interests were also protected. The enormous trade between the nations has promoted positive economic growth in the countries.

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The end of the Korean War had North Korea embark on an ambitious program that was aimed at industrializing the region. The Chinese government and the Soviet Union assisted North Korea to build power facilities, railroads, roads and industrial plants. The agricultural industry was revived and the industries present in the region were nationalized (Sun, T. p 43). This resulted to great economic growth in Korea. This was then followed by the expansion of industries that were concerned with coal, steel and iron production. Instead of using human labor in the agricultural fields, mechanized agriculture was adopted (Bin, Y & Xiaobing, Li. p 58).

The war had led to the death of so many civilians which threatened to reduce the labor force. However, the immigration of Koreans as well as Chinese colonists compensated for the high population loss. The independence of Korea (North and South Korea) promoted the Sovereign economic growth of the two regions. United Korea after the war continued to enjoy United States economic support. In addition, the US military forces presence in Korea helped the region acquire a strong military ability a situation that prevented further attack from the enemy (Stueck, W. p 172). This created a favorable environment for economic growth.

The Korean War had South Korea experience a flood of Northern Korean into the region after the war. Immediately after the war, South Korea experience economic production and go the aid from United States. The economy was faced by mass unemployment high inflation and very unfavorable trade balances. The economic situation was made worse by President Syngman Rhee authoritative rule. The government was accused of being corrupt and perpetrating actions and activities that did not observe justice (Bassett, R. p 232). The people’s discontent led to widespread violence and the public’s protests which in turn resulted to the shooting of 125 students by police in 1960.

The capitulation of the government had president Rhee resign and going into exile (www.nationsencyclopedia.com). The political instability drove the country’s economy into greater problems. The seizing of power by the South Korean armed forces was forced by General park election as president in 1963. The government managed to fight corruption and to revive the economy. Though the country has experienced some instances of political instability since then the country has had a record of incredible economic growth. Its GDP was equal to that of some lesser European countries and almost sixteen times the GDP of North Korea in 2000.

Vietnam War

The Vietnam War occurred from 1959 to the April of 1975. The conflict had two opposing sides, the communist Democratic Republic of Vietnam and another group referred to as the Republic of Vietnam. The Republic of Vietnam group got support from the American government. The Democratic Republic of Vietnam was on the other hand supported by the communist allies. Following the conflict, a very large number of soldiers, Vietnam citizens, Laotian and Cambodian citizens’ deaths. The war is recognized for the destruction of a very vast area of mangrove and tropical forests through spraying. The US government in its efforts to deprive the ‘Vietcong’ food and vegetation cover had the forests sprayed with defoliants (19 million gallons)

Unemployment and Economy before the War

Vietnam as a country had a highly centralized economy before the war began. The economy had its foundation on the Marxist economic planning (Kindsvatter, Peter. 159-162). The country had its employment rate increased after the introduction of plantation economy by France which had earlier invaded Vietnam. The farming practices promoted the extraction of rubber and exports. This generated profits for the Vietnam government.

Vietnam’s economy before the war created employment for people who were involved in the production and manufacture of consumer goods which included cigarettes, alcohol as well as opium. The French were defeated by Vietnamese revolutionaries in 1954. The colonial government in Vietnam used land alienation as a means through which maximum exploitation would be possible. The government encouraged economic growth by compelling people to work in agricultural production (Weinberg, Gerhard L. 229).

The trade links between Vietnam and other nations before the war generated huge economic benefits for the colonial government. This in turn led to the employment of a large number of Vietnamese citizens in the production of the goods.

However the great benefits that were enjoyed by the colonial government triggered rebellious movements of the people against the government. To stop the rebellions, the French colonial government punished severely those who were suspected to be disloyal to it. This saw people forced to work. lack of a peaceful unification in Vietnam in 1956 resulted to economic hardship due to the political instability (Pearce F. 248). The Vietnam Republic was divided into Northern and Southern Vietnam. This affected the Vietnam economy adversely which in turn increased the rate of unemployment before the Vietnam war.

Effects of Vietnam War on Economy

The Us war on Vietnam caused great destruction and loss of lives in Vietnam. The destruction had the country’s infrastructure completely ruined. The war had very severe effects on Vietnam’s economy. The Southern Vietnam agricultural industry was affected by the massive defoliation of the Vietnam’s forests (Cheng, Guan & Ann, C. p 146). The business and trade links between Vietnam and other nations was affected. For instance, the US efforts to punish Vietnam for the huge losses it incurred during the war made it cut off its trade with Vietnam. The US was trying to stop any unification of Vietnam through a Soviet style (Stanley, K. 95-99).

This measure resulted to negative growth of the economy in Vietnam. Vietnam suffered great economic losses up to 1985. it is then that the government decided to develop a proper economic plan to revive the country’s economy. The economic assistance usually emanated from the Eastern block nations such as the Soviet Union. The economy was state-planned after Vietnam unified the South and north Vietnam.

The 1986 introduction of an economic renovation referred to as doi moi had the economy improve through free-market strategies. The productivity increased and economic performance as well as effort was boosted by government incentives. This helped solve the problem of economic stagnation and inflation that was facing Vietnam. Economic growth of Vietnam has continued up to date. The economy has experienced great international investment and assistance.

Conclusion

The different wars in history have affected the world economy differently at varied times. Although some of the negative effects of war are irreparable, there have always been advantages as well as disadvantages of any given war in history. For instance, the World War II resulted to channeling of huge amounts of resources towards the war activities and needs. The recessions between 1948 and 1990 have decreased the unemployment rate.

Due to the declined production due to the economic crisis before and during the war the demand for labor increased. For instance, in the USA the unemployment rate that had risen to 24.9 percent by 1933 declined to 27 percent in 1939. By 1941 the rate had declined up to 9.9%. Due to the increased rate of unemployment the economies experienced an improved performance of the economy. Due to the war, many people got employed in the military forces. Others were employed in industries that were manufacturing military equipment such as tanks, ships and airplanes. Through the war, the negative effects of the Great Depression were minimized.

Some nations such as America managed to sell some of its products to other countries to sell some to its products to other countries which boosted its financial gains. This helped greatly in reviving the economy that had earlier been affected by the Great depression. The Northern Korea before the war had a dominant agricultural industry. The unemployment rates were much lower as compared to those before and immediately after the World War I.

The Korean War damaged the two regimes economy severely. South Korea experienced stagnation in its economy but later managed to modernize its industries. The US economy gained after the war since the war ended the US has enjoyed economic gains from trade between it Japan Republic of Korea. The Republic of Korea experienced great economic growth after the war.

The US war on Vietnam caused great destruction and loss of lives in Vietnam. The destruction had the country’s infrastructure completely ruined. The war had very severe effects on Vietnam’s economy. The Southern Vietnam agricultural industry was affected by the massive defoliation of the Vietnam’s forests (Cheng, Guan & Ann, C. p 146). The business and trade links between Vietnam and other nations was affected.

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