The Review of Austrian Economics

, Volume 26, Issue 4, pp 413–431 | Cite as

The overlooked costs of the permanent war economy: A market process approach

  • Thomas K. DuncanEmail author
  • Christopher J. Coyne


How does the permanent war economy interact, and subsume, the private, non-military economy? Can the two remain at a distance while sharing resource pools? This paper argues that they cannot. Once the U.S. embarked upon the path of permanent war, starting with World War II, the result was a permanent war economy. The permanent war economy continuously draws resources into the military sector at the expense of the private economy, even in times of peace. We explore the overlooked costs of this process. The permanent war economy does not just transfer resources from the private economy, but also distorts and undermines the market process which is ultimately responsible for improvements in standards of living.


War economy National defense Economic calculation Interventionism 

JEL codes

B53 H00 H56 P50 


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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Department of EconomicsGeorge Mason UniversityFairfaxUSA

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