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War and peace represent two vastly different paths for societies, each with profound economic, social, and structural consequences. Waging war incurs enormous direct costs \u2013 from military expenditures to physical destruction \u2013 and indirect costs that echo for generations in lost lives and stalled development. By contrast, international cooperation and peace-building require far fewer resources yet promise long-term shared gains in prosperity and human well-being. This analysis compares the cost of war<\/em> versus the cost of cooperation<\/em>, examining economic impacts, social and structural effects, and weighing the touted short-term economic benefits of war against its devastating long-term consequences. Historical evidence, economic data, and theoretical models all suggest that the dividends of cooperation far outweigh the fleeting gains of conflict, and we explore how a cooperative global economic system could function to sustainably meet the needs of all people.<\/p>\n Massive Financial Costs:<\/strong> War is a costly undertaking. Global conflict and violence cost the world on the order of $14 trillion<\/strong> per year (about 10% of global GDP) in recent years\u200b weforum.org <\/span><\/a>weforum.org<\/span><\/a>. This translates to roughly $5 a day for every person on the planet\u200b weforum.org<\/span><\/a>\u2013 resources that could otherwise be invested in productive and humane ends. For countries directly embroiled in conflict, the economic toll is devastating: in 2016 the costs of violence were estimated at 67% of GDP for Syria, 58% for Iraq, and 52% for Afghanistan<\/strong>\u200b visionofhumanity.org<\/span><\/a>. War often obliterates physical capital and productive capacity, causing economic output to plunge. A study of 150 wars since 1870 finds that on average a war reduces the affected country\u2019s GDP by about 30% over five years<\/strong>, as factories, buildings and infrastructure are destroyed\u200b ifw-kiel.de<\/span><\/a>. Even neighboring countries suffer economic fallout \u2013 losing around 10% of output on average due to war-induced trade disruptions, refugee flows, and regional instability\u200b ifw-kiel.de<\/span><\/a>. In the case of the ongoing Ukraine conflict, projections based on past wars suggest Ukraine may lose about $120 billion in GDP and nearly $1 trillion in capital stock<\/strong> by 2026 as a result of the invasion\u200b ifw-kiel.de.<\/span><\/a>\u00a0These staggering losses underscore how war ravages economies at both national and regional levels.<\/p>\n Long-Term Drag on Growth:<\/strong> The negative economic impacts of war are not just immediate but persist for years or decades. War-inflicted countries often experience slower GDP growth long after the fighting stops<\/strong>. For example, nine years after its civil war ended, Sierra Leone\u2019s GDP was still 31% lower<\/strong> than it would have been without the war\u2019s legacy visionofhumanity.org<\/span><\/a>. Globally, research suggests that if all violent conflict since 1970 had been avoided, world GDP would be about 12% higher<\/strong> today than it actually is\u200b warpreventioninitiative.org <\/span><\/a>warpreventioninitiative.org<\/span><\/a>. War diminishes growth by destroying human capital (through deaths and disruption of education), deterring investment, and diverting public finances from productive uses to military needs war prevention initiative.org<\/span><\/a>. In contrast, peaceful and stable countries consistently outperform conflict-torn states in economic growth. Over the past half century, per capita GDP growth has been three times higher in highly peaceful countries compared to countries with low levels of peace <\/strong>economicsandpeace.org<\/span><\/a>. Peace creates an environment conducive to investment, innovation, and commerce, whereas war breeds uncertainty and capital flight. In short, economies flourish with cooperation and stability, and they stagnate or regress with conflict.<\/p>\n Debt and Opportunity Costs:<\/strong> Another economic strike against war is how it is financed. Major wars are often paid for with heavy government borrowing and higher taxes<\/strong>, which can simulate a short-term stimulus but impose steep costs later\u200b <\/span>visionofhumanity.org<\/span><\/a><\/span>. During World War II and other large conflicts, GDP rose in countries like the United States due to massive war production, giving rise to the notion that \u201cwar is good for the economy\u201d\u200b<\/span>visionofhumanity.org<\/span><\/a>. However, this is largely an illusion<\/em>. Wartime GDP gains often reflect armaments and rebuilding that merely replace what\u2019s been destroyed, rather than net new wealth \u2013 a classic \u201cbroken window\u201d fallacy<\/strong> where destruction masquerades as growth. In fact, wartime financing crowds out civilian investment and consumption, and the post-war period is frequently burdened by debt repayment and inflation <\/strong>visionofhumanity.org <\/span><\/a><\/span>ifw-kiel.de<\/span><\/a><\/span>. For example, the U.S. wars in Iraq and Afghanistan were funded heavily by debt; estimates including future veterans\u2019 care and interest payments put the total cost of the 20-year \u201cWar on Terror\u201d at around $8 trillion<\/strong> for the U.S. alone\u200b<\/span>brown.edu <\/span><\/a>brown.edu<\/span><\/a><\/span>. These debts will be paid by future generations, siphoning funds away from domestic priorities. The opportunity cost of war is enormous: money spent on tanks and bombs is money not spent on schools, hospitals, or infrastructure. Indeed, the annual global cost of armed conflict (circa $14 trillion) exceeds the world\u2019s total yearly spending on health care ($7.2 trillion in 2015) and rivals what is spent on education<\/strong>\u200b <\/span>fcnl.org<\/span><\/a><\/span>. It dwarfs the resources needed to address humanitarian goals \u2013 for instance, the $267 billion per year<\/strong> that could end global hunger is just a tiny fraction (around 2%) of what the world loses to violence\u200b <\/span>fcnl.org<\/span><\/a><\/span>. In economic terms, choosing war is an astoundingly inefficient allocation of resources compared to choosing cooperation and peace.<\/p>\n Humanitarian Catastrophe:<\/strong> Beyond spreadsheets and GDP figures, the true cost of war is measured in human lives and social devastation. War inflicts suffering on a massive scale. In the 20th century, major wars killed on the order of 100 million people<\/strong>, and modern conflicts continue to take a heavy toll. Today, about 1.4 million people die violently each year<\/strong> due to wars and other conflicts\u200b <\/span>weforum.org<\/span><\/a><\/span>, and for every battlefield death it is estimated 40 more people are injured <\/strong>weforum.org<\/span><\/a><\/span>, often maimed for life. The societal trauma of large-scale violence is incalculable \u2013 families are torn apart, communities uprooted, and whole generations grow up in fear and grief. War zones experience spikes in atrocities, gender-based violence, and the collapse of basic services. As conflicts drag on, they create millions of refugees and internally displaced persons<\/strong>; more than three-quarters of the world\u2019s refugees are hosted in low-income, fragile states that can ill afford the strain\u200b <\/span>weforum.org<\/span><\/a><\/span>. The social fabric frays under such pressure. For example, wars in the Middle East and North Africa over the past decade have left tens of millions in need of humanitarian aid<\/strong> \u2013 13.5 million people in Syria, 21 million in Yemen, 8 million in Iraq, and so on\u200b <\/span>worldbank.org <\/span><\/a>\u2013 overwhelming both local and international aid capacities. The poverty rate soars in war-torn societies<\/strong>, as seen in Yemen where over 80% of the population is now impoverished amid conflict\u200b worldbank.org<\/span><\/a><\/span>. Education and healthcare systems collapse or barely function; children in conflict zones lose years of schooling and are often traumatized, undermining the development of human capital. These social costs \u2013 death, displacement, trauma, lost education \u2013 represent lasting wounds that hinder a country\u2019s ability to recover even decades after the guns fall silent.<\/p>\n Infrastructure and Institutional Destruction:<\/strong> War literally shatters the physical and institutional structures<\/strong> that hold societies together. Bombs and artillery turn cities into rubble, destroying homes, factories, power grids, roads, and hospitals. For instance, in Syria and Iraq, persistent conflict has left their per capita incomes roughly 25% lower<\/strong> than they would have been without war, reflecting the destruction of infrastructure and industry\u200b<\/span>worldbank.org<\/span><\/a><\/span>. Rebuilding war-ravaged infrastructure can take tens of billions of dollars and many years \u2013 resources that could have been invested in new development rather than just replacing what was lost. The structural damage<\/strong> is not only physical: wars often collapse governing institutions and the rule of law. Administrative systems break down under conflict, leading to lawlessness, corruption, and the erosion of trust in authority. Civil wars are especially corrosive to institutions; they can turn functioning states into failed states. Public health crises and famine frequently accompany wars, as agricultural systems are disrupted and disease outbreaks spread unchecked (historically, more soldiers have died from disease and malnutrition in some wars than from combat). Moreover, war\u2019s impacts are intergenerational<\/strong> \u2013 malnutrition in wartime can stunt children\u2019s growth, landmines left behind can kill or maim civilians for decades, and the environmental damage (oil well fires, defoliated forests, polluted battlefields) can render areas unlivable. In sum, war not only destroys what exists \u2013 it also destroys the potential for future progress by crippling the infrastructure and institutions needed for a healthy, productive society.<\/p>\n Violence Breeds Further Instability:<\/strong> The social and structural upheavals caused by war can create vicious cycles of conflict. Societies emerging from war often confront devastated economies, rampant unemployment (especially among youth), and grievances over past atrocities \u2013 conditions ripe for extremism, crime, or relapse into conflict<\/strong> if not carefully managed. Studies of fragile states find that a civil war greatly increases the risk of future conflicts<\/strong>, trapping countries in a conflict cycle that is extremely hard to break. For example, the persistence of violence and poor governance in parts of the Middle East and Africa has fueled a rise in violent extremist groups, despite massive military efforts to defeat them\u200b fcnl.org <\/span><\/a><\/span>fcnl.org<\/span><\/a><\/span>. In contrast, peaceful cooperation provides the stability in which social capital can grow and disputes can be resolved without bloodshed. Countries that invest in inclusive institutions, equitable development, and justice<\/strong> \u2013 the building blocks of a cooperative order \u2013 are far less likely to fall into war. Thus, the structural damage war causes to economies and governance isn\u2019t easily repaired; it often leaves a legacy of instability that undermines development and security long after the war itself ends. This underscores that preventing war and fostering cooperation is not just morally preferable, but crucial to breaking cycles of underdevelopment and violence.<\/p>\n Proponents of military build-up sometimes argue that war or high defense spending can benefit an economy by creating jobs, spurring technological innovation, or boosting certain industries. History offers some limited evidence of short-term economic boosts from war<\/strong>, but these must be weighed against the overwhelming long-term costs already discussed. It is true, for instance, that World War II ended the Great Depression in the United States<\/strong>, as massive war production mobilized idle factories and workers. GDP growth surged during WWII, as well as during the Korean and Vietnam Wars, fueling the argument that war can be an economic stimulant\u200b <\/span>visionofhumanity.org<\/span><\/a><\/span>. Large conflicts also often coincide with rapid innovation in technology \u2013 the world wars and the Cold War gave birth to radar, jet engines, nuclear energy, computers, and the internet, among other breakthroughs. Military R&D has produced useful civilian spin-offs like GPS navigation and microwave ovens\u200b<\/span>visionofhumanity.org<\/span><\/a><\/p>\n <\/span>. Additionally, the military-industrial sector<\/strong> \u2013 private contractors supplying arms and equipment \u2013 profits greatly during wartime, and arms-exporting countries see revenue windfalls. Major powers not suffering combat on their own soil (for example, the U.S. in World Wars I and II) can emerge economically strengthened relative to devastated rivals, at least in the immediate aftermath of war. These factors show that some economic interests can<\/em> benefit from war \u2013 chiefly arms manufacturers, military personnel employment, and industries tied to defense.<\/p>\n However, extensive research indicates that these short-term or narrow benefits do not outweigh the broader destruction and economic distortion caused by war<\/strong>. In fact, many economists label the idea that \u201cwar is good for the economy\u201d a dangerous myth\u200b <\/span>visionofhumanity.org<\/span><\/a><\/span>. The apparent boosts in output during war are often an artifact of how we measure GDP \u2013 all<\/em> spending counts as positive, even if it\u2019s producing weapons or rebuilding what was destroyed\u200b <\/span>visionofhumanity.org<\/span><\/a><\/span>. As one peace economist noted, \u201cIt counts that which is destructive for society in the same way as what is good\u201d <\/em>visionofhumanity.org<\/span><\/a>. Resources poured into making bombs could have built schools or businesses; their explosion yields no lasting economic gain. When we consider opportunity cost<\/em>, war is a terrible deal. Numerous researchers have pointed out that investing the same money in civilian industries or research yields greater long-term growth than military spending<\/strong>\u200b <\/span>visionofhumanity.org<\/span><\/a><\/span>. For example, money spent on military R&D often produces accidental civilian benefits as a by-product, whereas the same money in direct civilian R&D is specifically targeted at improving economic productivity <\/strong>visionofhumanity.org<\/span><\/a><\/span>.<\/p>\n Moreover, military spending is an inefficient job creator compared to other forms of spending. Dollar for dollar, federal spending on education, healthcare, clean energy, or infrastructure creates far more jobs than defense spending <\/strong>brown.edu<\/span><\/a><\/span>. One study found that $1 million spent on the military creates about 7 jobs<\/strong>, whereas the same $1 million would create 19 jobs in education or 14 jobs in the healthcare sector<\/strong>\u200b <\/span>brown.edu<\/span><\/a><\/span>. War industry jobs may be high-tech, but they are relatively few; investing in peacetime industries employs more people and yields goods that raise living standards, not just armaments. War can also distort a nation\u2019s economic structure \u2013 during conflicts, skilled labor and materials are diverted to military purposes, often leading to shortages and rationing<\/em> of consumer goods. In extreme cases, such as total war mobilization, civilian consumption is suppressed (e.g. Americans in WWII could not buy new cars or appliances for years because factories were making tanks and bombers). Higher taxes and inflation<\/strong> frequently accompany wars\u200b <\/span>ifw-kiel.de<\/span><\/a><\/span>, eroding household incomes. And while some companies thrive (weapons manufacturers, private military contractors), other sectors suffer from instability and uncertainty. It\u2019s telling that peaceful countries, not war-torn ones, consistently achieve higher economic performance<\/strong> \u2013 whatever spur war might provide is more than canceled out by its destruction. As evidence, during 1960\u20132016 the most peaceful nations enjoyed triple the per-capita GDP growth of the least peaceful ones\u200b <\/span>economicsandpeace.org<\/span><\/a><\/span>. In short, the so-called \u201ceconomic benefits\u201d of war accrue to a limited few and are often short-lived, whereas the costs \u2013 lost output, debt, destruction, human capital loss \u2013 are systemic and long-lasting. War is fundamentally a zero-sum or negative-sum game, whereas cooperation allows for positive-sum outcomes where all sides can gain.<\/p>\n \n \n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.27.4″ _module_preset=”default” column_structure=”1_2,1_2″][et_pb_column _builder_version=”4.27.4″ _module_preset=”default” type=”1_2″][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n Job creation per $1 million spent: Military spending yields far fewer jobs than the same spending on education, healthcare, clean energy, or infrastructure. In this comparison of a $230 billion expenditure, war-related outlays (leftmost bar) support far fewer jobs (\u22481.5 million) than equivalent spending on clean energy (\u22482.2 million), infrastructure (\u22481.9 million), healthcare (\u22483.0 million), or education (\u22483.7 million). This illustrates the greater employment bang-for-buck when investing in cooperative social goods rather than the military\u200b <\/span><\/em>brown.edu<\/span><\/a><\/span>.<\/em><\/p>\n [\/et_pb_text][\/et_pb_column][et_pb_column _builder_version=”4.27.4″ _module_preset=”default” type=”1_2″][et_pb_image src=”https:\/\/newsfromtheotherside.com\/wp-content\/uploads\/2025\/03\/Chart001-1.jpg” _builder_version=”4.27.4″ _module_preset=”default” alt=”Chart” title_text=”Screenshot”][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ theme_builder_area=”post_content” _builder_version=”4.27.4″ _module_preset=”default”][et_pb_row _builder_version=”4.27.4″ _module_preset=”default” theme_builder_area=”post_content”][et_pb_column _builder_version=”4.27.4″ _module_preset=”default” type=”4_4″ theme_builder_area=”post_content”][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” theme_builder_area=”post_content” hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n If war is so costly, what about the alternative \u2013 cooperation and peace? Peaceful, cooperative approaches also require investment and effort (for example, diplomacy, foreign aid, peacekeeping missions, and international institutions all have a financial cost), but these costs are minute compared to the price of war<\/strong>. Consider the United Nations: the entire<\/em> UN peacekeeping budget for a year is on the order of $6 billion<\/strong>, which is roughly 0.3% of annual global military spending<\/strong>\u200b<\/span>betterworldcampaign.org<\/span><\/a><\/span>. In other words, the world spends hundreds of times more on war and armaments than on peacekeeping and conflict prevention. The \u201ccost of cooperation\u201d \u2013 funding dialogue, mediation, economic development assistance, etc. \u2013 is a bargain in comparison. For example, development aid aimed at preventing state failure or famine might cost a few billion, whereas a war triggered by state collapse can cost trillions. Investments in preventive diplomacy and peacebuilding<\/strong> yield enormous returns. Research by the Institute for Economics and Peace indicates that each dollar invested in peacebuilding can save about $16 by reducing the cost of conflict<\/strong> down the road. This highlights a huge peace dividend<\/em>: money spent on cooperation and stability pays off many times over by averting the far greater damages of war.<\/p>\n From an economic perspective, a cooperative global system unlocks positive-sum<\/em> gains. When nations trade freely and collaborate, they can specialize in what they do best, leading to greater overall output (the classic gains from trade in economics). International cooperation also allows the sharing of knowledge and technology, boosting innovation worldwide. One historical example is the European Union<\/strong> \u2013 by cooperating and integrating their economies after World War II, European countries eliminated the costly military rivalries among themselves and created a single market that has greatly increased prosperity. The \u201cpeace dividend\u201d in Europe after 1945 included decades of economic growth; resources once spent on armies were redirected to industry, welfare, and infrastructure. The cooperative effort of the Marshall Plan<\/strong> \u2013 a U.S.-funded European Recovery Program \u2013 cost about $13.3 billion (around $140 billion in today\u2019s dollars)<\/strong>\u200b <\/span>afsa.org<\/span><\/a><\/span>, a fraction of what the war had cost, and helped war-torn nations rebuild their economies\u200b <\/span>afsa.org <\/span><\/a><\/span>afsa.org<\/span><\/a><\/span>. This investment in cooperation paid off by revitalizing trade partners and stabilizing a region that might otherwise have descended into chaos. In contrast, the punitive approach after World War I (imposing crushing reparations on Germany without adequate cooperation or aid) is widely seen as contributing to economic collapse and the rise of another war. History thus shows that the cost of helping former adversaries and investing in shared prosperity is far less than the cost of letting conflicts fester or resume<\/strong>.<\/p>\n International cooperation can also spread costs in a fairer way. Solving global problems \u2013 whether preventing wars, fighting pandemics, or addressing climate change \u2013 benefits everyone, but requires collective action. A cooperative global economic system would see nations pool resources to tackle common challenges<\/strong>, which is far cheaper per country than each nation acting alone or, worse, falling into conflict over resources. For instance, rather than nations fighting wars over oil or water, cooperative investment in sustainable energy and water-sharing agreements<\/strong> would meet needs without bloodshed. The cost of such cooperation is relatively small. The United Nations estimates that achieving universal access to primary and secondary education worldwide (one of the Sustainable Development Goals) would require an investment of roughly only 3% of global military spending<\/strong>\u200b <\/span>unfoldzero.org<\/span><\/a>. Likewise, to eliminate extreme poverty and hunger<\/strong> \u2013 raising the living standards of the poorest \u2013 would cost on the order of 10\u201315% of global military expenditure\u200b<\/span>unfoldzero.org<\/span><\/a><\/span>. In other words, a modest reallocation of what the world already spends on arms could literally<\/em> end hunger and illiteracy. A cooperative global system would prioritize such life-improving investments. The benefits of doing so would be immense: higher education levels and poverty reduction are strongly linked to lower conflict risk, creating a virtuous cycle of peace and prosperity. By contrast, the current militarized approach yields a vicious cycle, where high military spending drains resources from social needs, which can in turn breed the very instability used to justify more military spending.<\/p>\n What might a truly cooperative global economic system look like, and how would it meet human needs sustainably? In essence, it would be a world order where nations see peace and shared prosperity as common interests<\/strong>, and structure their economies and institutions accordingly. Several key features can be envisioned:<\/p>\n International Institutions and Rule of Law:<\/strong> A cooperative system relies on robust international institutions to mediate disputes and enforce agreements, so that nations trust that their rivals will not simply cheat or resort to force. Strengthening bodies like the United Nations<\/strong>, international courts, and regional unions is vital. Instead of conflicts being settled by war (with \u201cwinner takes all\u201d outcomes), they would be settled at the negotiating table via treaties, arbitration, and law weforum.org<\/span><\/a><\/span>. This requires commitment to international law and perhaps reforming institutions (for example, a reformed UN Security Council more reflective of today\u2019s power distribution\u200b <\/span>weforum.org<\/span><\/a><\/span>). The cost<\/em> of funding these institutions and diplomatic efforts is tiny next to war budgets. And when disputes are resolved peacefully, trade and cooperation can continue with minimal disruption.<\/p>\n<\/li>\n Preventive Diplomacy and Conflict Prevention:<\/strong> A sustainable peace-based system would invest heavily in preventing wars before they start<\/em>. This means addressing root causes of conflict \u2013 poverty, inequality, injustice, and insecurity \u2013 through cooperative efforts. Programs that support inclusive governance, economic development in fragile states, and early mediation in emerging crises<\/strong> can stop conflicts from igniting\u200b weforum.org<\/span><\/a><\/span>. It is far cheaper to pay facilitators and development projects now than to pay for peacekeepers and reconstruction after a war. For example, supporting food security and climate resilience in vulnerable regions can prevent resource scarcity conflicts. Theoretical models in peace research (such as game theory) show that building trust and communication (akin to iterated \u201cprisoner\u2019s dilemma\u201d cooperation) reduces the incentive for betrayal or aggression. In practice, this might involve confidence-building measures, arms control agreements, and cultural exchanges that humanize former adversaries. The world has seen successes in this realm \u2013 for instance, decades of arms control treaties<\/strong> (like the Non-Proliferation Treaty, strategic arms limitation agreements, etc.) curbed the arms race and reduced the probability of great-power war, saving untold resources that would have been spent on an even larger nuclear arsenal. Every dollar or effort spent on The Economic Costs of War vs. Peace<\/h2>\n
Social and Structural Impacts of War<\/h2>\n
War\u2019s \u201cBenefits\u201d \u2013 Myth or Reality?<\/h2>\n
The Cost of Cooperation (and the Peace Dividend)<\/h2>\n
Envisioning a Sustainable Cooperative Global System<\/h2>\n
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