IRAK

Guardian: The myth of the war economy by Joseph Stigliz

"War is widely thought to be linked to economic good times. The second world war is often said to have brought the world out of depression, and war has since enhanced its reputation as a spur to economic growth. Some even suggest that capitalism needs wars, that without them, recession would always lurk on the horizon.
Today, we know that this is nonsense. The 1990s boom showed that peace is economically far better than war. The Gulf war of 1991 demonstrated that wars can actually be bad for an economy. That conflict contributed mightily to the onset of the recession of 1991 (which was probably the key factor in denying the first President Bush re-election in 1992).

The current situation is far more akin to the Gulf war than to wars that may have contributed to economic growth. Indeed, the economic effects of a second war against Iraq would probably be far more adverse. The second world war called for total mobilisation, requiring a country's total resources, and that is what wiped out unemployment. Total war means total employment."

Joseph Stiglitz is professor of economics and finance at Columbia University, the winner of the 2001 Nobel Prize in economics, and author of Globalization and its Discontents. He was formerly chairman of the council of economic advisers to President Clinton and chief economist at the World Bank