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Forgive my ignorance, but how does a country with a strong military turn that into GDP? I don't understand how military > manufacturing in terms of GDP. In my m

Forgive my ignorance, but how does a country with a strong military turn that into GDP? I don't understand how military > manufacturing in terms of GDP. In my mind, manufacturing > military, but my knowledge of economics isn't great.

SirHumphrey 2y ago
GDP includes government spending. If a country spends a lot of money on military, that reflects in GDP figures.
- credit_guy 2y ago
  That's correct, but it's not that material. The US GDP is about $27 trillion, the military spending is about $1 trillion, or about 3% of the GDP.
- VHRanger 2y ago
  Correct. But military spending only *grows* GDP if the money is invested properly. In, say, research/infrastructure/training, etc. Malinvested money will pump GDP for a few years before growth stops and potentially reverses.
chvid 2y ago
In the old days a country would use its military to conquer or subvert other countries to setup exploitative trading relationships. For example the opium wars. Nowadays the empire works via its currency that allows it to buy real goods and assets for something it can create for free with little constrain. Of course the exploitive nature of the “exorbitant” privilege is controversial; and some economists would argue that it does not exist at all.
- marcosdumay 2y ago
  > For example the opium wars. For a more recent example, the CIA operations on South and Central America in the 20th century. But well, it didn't take the entire military there, just a military-like paragovernamental entity. Doing that today would be seen in a bad light and has a real chance of turning the entire world against the country. That doesn't seem enough to stop Russia, though.
marcosdumay 2y ago
In the 20th century, the US was quite successful into turning "military spending" into very advanced R&D subsides. I think most of the believes that military spending and growth are related come from that.

SirHumphrey 2y ago

GDP includes government spending. If a country spends a lot of money on military, that reflects in GDP figures.

credit_guy 2y ago
That's correct, but it's not that material. The US GDP is about $27 trillion, the military spending is about $1 trillion, or about 3% of the GDP.
VHRanger 2y ago
Correct. But military spending only *grows* GDP if the money is invested properly. In, say, research/infrastructure/training, etc. Malinvested money will pump GDP for a few years before growth stops and potentially reverses.

chvid 2y ago

In the old days a country would use its military to conquer or subvert other countries to setup exploitative trading relationships. For example the opium wars. Nowadays the empire works via its currency that allows it to buy real goods and assets for something it can create for free with little constrain. Of course the exploitive nature of the “exorbitant” privilege is controversial; and some economists would argue that it does not exist at all.

marcosdumay 2y ago
> For example the opium wars. For a more recent example, the CIA operations on South and Central America in the 20th century. But well, it didn't take the entire military there, just a military-like paragovernamental entity. Doing that today would be seen in a bad light and has a real chance of turning the entire world against the country. That doesn't seem enough to stop Russia, though.

marcosdumay 2y ago

In the 20th century, the US was quite successful into turning "military spending" into very advanced R&D subsides. I think most of the believes that military spending and growth are related come from that.