The Cost of War

  • Renata AllioEmail author
Part of the Palgrave Studies in the History of Economic Thought book series (PHET)


The cost analysis of conflicts has been made at various moments in time, but with greater intensity after the First World War. Then some economists and many economic historians tried to estimate the materials costs of fighting and destruction. They defined the special characteristics of a state-run economy as had been tried out during the war and sought to evaluate its application in times of peace. The accounting could involve the real costs of the conflicts (as Einaudi, Stiglitz and many others did), which are nevertheless difficult to quantify, or the opportunity costs, that is the costs of the war measured in terms of the utility that could have been obtained if the money spent on armaments had been used in works of peace (S. Melman, B. M. Russett). Starting with Smith and going on to Keynes, Einaudi, Pigou and many others, at various times the question was asked as to what was the best way to pay for the war: taxation, indebtedness, printing banknotes. Some economists even checked who, in the end, bore the costs of wars in reality.


Real costs Opportunity costs How much does war cost? Who pays for the war? How to pay for the war? 


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© The Author(s) 2020

Authors and Affiliations

  1. 1.University of TurinTurinItaly

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