The Myth of War Prosperity by Rep. Ron Paul
There is a commonly-held myth that war creates prosperity. Many believe that World War II ended the Great Depression. Unemployment went down because hundreds of thousands of men were drafted, and factories at home busied themselves with war production. This provided the illusion of a bustling wartime economy. But in truth the economy shrank and GDP plummeted. The hidden costs were enormous, because so much human energy and human capital was expended fighting the war rather than doing productive, specialized work back home. …
The greatest economic cost of war, however, comes from the expansion in the size and scope of government. Government always grows during wars and other crises. As economist Murray Rothbard noted, government uses crises to “Engineer the great leaps forward,” in the size of the state. When the crisis ends, government never returns to its former size. As government expands, individual liberty necessarily shrinks. True prosperity cannot exist without individual liberty and its corollaries of limited government, property rights, and free markets. Ultimately, war leaves us with less freedom at home. The sad irony is that while our soldiers have fought for the freedom of Europe, Korea, Vietnam, Kuwait, and Iraq, the government uses war to steadily diminish freedom here at home. While we fight a war in Iraq, we must also fight to maintain and restore individual liberty in America.