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Peace as a Profitable Business - Econlib

World war, as we know it, has come to an end. The ideological divide that has polarized humanity and brought order to the world’s wars is behind us. Still, the number of entrepreneurs and companies selling weapons and military expertise is growing. But is war a more profitable business than peace?

Barbera (1973) argued that war and peace differ not in the ends pursued but in the means used to achieve them. War represents human violence in its strongest form, but it is not just violence. Von Clausewitz (1911) defined war as “an act of violence intended to compel the enemy to do his will”.

The nature of warfare has changed over time. Although the level of violence has declined, the types of wars in the world, such as economic wars and trade wars, seem to take on new hues.

A trade war is an economic conflict that leads opposing countries to impose protectionist trade policies through trade barriers. These barriers can be imposed in a variety of ways, including tariffs, import quotas, domestic subsidies, currency devaluations and embargoes.

Another type of trade war is based on weakening the enemy’s combat power by attacking supply chains. For example, between 1944 and her 1945, Germany had no natural oil reserves, so Germany was completely dependent on domestic resources. Repeated bombings of oil plants in the summer of 1944 permanently reduced supply, resulting in an inability to meet demand.

Undoubtedly, warfare of any kind is physical and human capitalHowever, the impact of war on GDP per capita is unknown. On the one hand, war can increase GDP per capita by reducing unemployment and shifting people from non-market activities to wartime production. War, on the other hand, destroys existing physical and human capital and minimizes investment in new physical and human capital, thereby affecting all factors and labor productivity. It can reduce GDP per capita.

This ambiguity is due to the method National Income Accounting Consider the death and destruction suffered during the war.

of Economic impact of violence The impact on the global economy in 2019 was $14.5 trillion. This equates to his 10.6% of global economic activity, or $1,909 per person. Violence continues to have a major impact on economic activity around the world.

Similarly, the global economic impact of violence can be understood as expenditures and economic impacts related to “containment, prevention and treatment of the consequences of violence”. Among the measures that allow this impact to be calculated, the multiplier effect is the direct cost of violence, such as the additional economic benefits from investing in business development or infrastructure improvement, rather than the less effective cost of violence. represents the effect of Contain or deal with violence.

One dollar spent can generate more than one dollar of economic activity. A multiplier effect is a frequently used economic concept that describes how additional spending improves the overall economy. Thus, the resources used to confront and contain violence will eventually fade away. The resources invested in peacebuilding and development will double.

Given this fact, HobbesFrom this point of view, an interesting question is raised. Can peace be simply defined as the absence of war? (Greeves, 1977). Well, it’s not. We have observed how the incidence of violence is increasing worldwide, even as the number of wars in progress is declining.

With violence and instability continuing in many parts of the world, trillions of dollars in annual military spending is unsustainable and other ways of promoting peace must be put in place. A valuable but untapped asset is the business community. Business and peace are often understood as: Opponentsbut growing evidence of their relevance suggests that business should not be excluded from the wider range of actors working for peace.

Attention has been focused on understanding business as an integral part of the problems of conflict-affected regions, underestimating the value of business as a possible solution. As engines of economic activity, businesses can promote peace in a number of ways, facilitating a shift from dependence on social programs to self-sustaining progress.

Business plays an important role in creating wealth, promoting socioeconomic development, and contributing (directly or indirectly) to conflict prevention and resolution. As the market economy becomes more widespread and companies become more important actors than the state, the role of companies becomes more and more important.

Business sectors are becoming increasingly aware that their actions can have a positive or negative impact on society. Peter Sutherland, Chairman of BP and Goldman Sachs, said: Business thrives where society thrives. A truly prosperous and sustainable business sector needs peace. Just as peace requires private initiative to build itself.

Peace and conflict prevention have a direct positive impact on business. peace It represents a series of good opportunities to provide customers, qualified employees, local suppliers and investors to the private sector. A peaceful and stable situation will most likely reduce some of the major operating costs of a business, such as risk management, security, and labor costs, so businesses can find operational cost savings.

The business sector’s contribution to peacebuilding is not only an ethical responsibility but also a lucrative opportunity. Businesses, through their management and concrete initiatives, have a positive impact on peacebuilding by contributing to the generation of inclusive social, political, environmental and cultural conditions. They also contribute to peace by building trust and facilitating the peaceful resolution of disagreements between social, public and private parties.

Recent research by the United Nations and World Bank Conclusion that there is an urgent need for the international community to refocus on building peaceful societies and preventing violent conflict; They estimate that this could save between $5 billion and $70 billion annually.

A peaceful society allows its citizens to carry out their life projects. It promotes free exchange between individuals, resulting in growth and development of jobs, wealth, prosperity, opportunity, and assets that are very difficult to access in violent situations.

So we can agree that war is business, but peace is equality. better business.


Barbera, H. (1973). Rich and poor countries in peace and war. Lexington Books, Lexington, MA.

GRIEVES F. (1977) Conflict and Order: An Introduction to International Relations. Houghton Mifflin, Boston.

Institute for Economy and Peace. (2020). Global Peace Index: Measuring Peace in a Complex World, Sydney.

Prince of Wales Business Leaders Forum, International Alert, Economic Priorities Council. (2020). peace business.

United Nations and World Bank. (2018). The Road to Peace: A Comprehensive Approach to Preventing Violent Conflict. Executive summary booklet. World Bank, Washington DC. License: Creative Commons Attribution CC BY 3.0 IGO.

United States Strategic Bombing Survey (USSBS) (1946). Summary Report (European War), Washington, DC: US ​​Government Printing Office.

VON CLAUSEWITZ, K. (1832). Vom Kriege. Ferdinand Dummler, Berlin. (English version: “On War”, London, 1911).

This article has been translated from the original publication.

Michelle Vernier Lawyer specializing in international law and commercial law. She holds a master’s degree in Law and International Business and has two degrees from the International University of Iberoamericana in Mexico and her European University in Atlantico. She is also part of the first cohort of Students for Liberty. Fellowship for Freedom in India.