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The War Dividend

On the economics of permanent threat

After 1990, they spoke of the "peace dividend" — the gains a society reaps when it no longer has to arm for war. Schools instead of tanks. Hospitals instead of missiles. Research instead of destruction.

They spoke of it. That was long ago.

I observe the present and see the opposite: the war dividend. The gains that certain actors reap when society permanently arms for war. Not society as a whole — certain actors. And these gains are enormous.

The Ultimate Source of Returns

Every economic system eventually hits limits. Markets are saturated. Productivity gains exhausted. Resources depleted. Consumers over-indebted. Where is the growth supposed to come from that keeps the machine running?

There is an answer as old as civilization: destruction.

War destroys cities, factories, infrastructure. And then everything must be rebuilt. Both phases are profitable — destruction for the arms industry, reconstruction for everyone else. A perfect cycle, as long as it finances itself.

But it doesn't have to be a hot war. Even preparation for war — permanent rearmament, constant modernization, the endless replacement of material that never sees action — is a business model. A business model that never suffers from saturation because its product becomes obsolete before it's consumed.

War is the ultimate source of returns because it solves the problem of overproduction. What is produced is destroyed. What is destroyed must be replaced. The cycle closes. Growth continues.

Conflict Management

But war is risky. War is unpredictable. War can hit the wrong people. It's smarter to avoid war and instead manage the conflict.

Conflict management means: keeping the conflict alive without letting it escalate. Letting it simmer, not boil. Enough tension to justify arms spending. Not enough tension to actually have to fight.

I observe the world's conflicts and see this pattern everywhere. The Middle East conflict — unresolved since 1948, but profitably managed. The Korea conflict — frozen since 1953, but lucrative for everyone who sells weapons. The Kashmir conflict. The Taiwan conflict. Everywhere the same pattern: conflicts that are never resolved because resolving them benefits no one — except the people who suffer under them.

A resolved conflict is a dead conflict. And dead conflicts generate no returns.

So peace negotiations are sabotaged. Compromises prevented. Hardliners supported. Ceasefires broken. Not always intentionally, not always coordinated — but the system has its own logic. It rewards those who keep conflicts alive and punishes those who want to end them.

The Enemy Factory

But what if an enemy disappears? What if — as in 1991 — the enemy system collapses? Then a new enemy is needed. The machine needs fuel.

I observe the history of the last thirty years and see an enemy factory at work.

1989–1991: The Eastern Bloc disintegrates. The old enemy is lost. And the new one is already waiting: Saddam Hussein. Iraq becomes the enemy. Gulf War one, sanctions, Gulf War two. Iraq is destroyed, but the machine runs.

Then: terrorism. A perfect enemy — invisible, everywhere, never definitively defeatable. The "war on terror" is not a war that can be won. It's a war meant to last forever. And it lasted twenty years, cost trillions, killed millions. The returns were excellent.

Then: China. The rising rival. The existential threat. A new Cold War, this time in the Pacific. New weapons, new alliances, new budgets. The machine keeps running.

And now: Russia again. The old enemy, back on stage. How convenient. Defense budgets explode. Arms manufacturers' stocks rise. A hundred billion in "special funds" flow into the Bundeswehr. The peace crisis is overcome.

The enemy factory produces reliably. As soon as one enemy is used up, it delivers the next. The system never stalls. The threat is permanent — and so is the profit.

The Architecture of Fear

How does this work concretely? Who operates this machine?

It's not a master plan. It's not a conspiracy. It's a system of interests that reinforce each other.

The arms industry — obviously. It profits from every conflict, every threat, every escalation. Its lobbyists work in Washington, Brussels, Berlin. Its former managers sit in ministries. Its shareholders expect returns. Peace is bad for business.

The media — less obvious, but equally important. Conflict sells. Threat generates clicks. A complicated peace process interests no one. A missile strike is breaking news. The media have a structural interest in tension, fear, drama. They're not conspirators — they follow their incentives.

Politics — even less obvious, but central. Politicians need enemies. Enemies unite their own side. Enemies justify measures that would otherwise be unenforceable. Enemies distract from internal problems. A politician without an enemy is a politician without a profile. So enemies are cultivated, emphasized, sometimes invented.

Intelligence agencies — in the background, but powerful. Their budgets depend on threats. No threat, no budgets. So threats are found, analyzed, presented. Sometimes exaggerated, sometimes invented. The history of intelligence agencies is a history of threat inflation.

Think tanks — the intellectuals of the system. They provide the justifications, the analyses, the strategy papers. Many are funded by the arms industry. Their "independent" experts reliably recommend more armaments, more toughness, more confrontation. Surprise.

The Victims

Who pays for this system?

First: the taxpayers. Hundreds of billions annually flow into armaments that are never used — or, worse, that are used. This money is missing for schools, hospitals, infrastructure, research, climate protection. It's not gone — it's redistributed. From the many to the few.

Then: the soldiers. The young men and women sent into wars they don't understand, for goals no one can explain. They come back — traumatized, maimed, or not at all. Their sacrifices are celebrated and forgotten.

Then: the civilians. The people in countries that become battlefields. The Iraqis, the Afghans, the Syrians, the Ukrainians. They die under bombs built in democratic countries, with tax money that could have been used for better purposes. Their death is collateral damage. Their number is not counted.

Finally: all of us. Because a society permanently oriented toward war changes. It becomes militarized, polarized, frightened. It loses the ability to resolve conflicts other than through violence. It forgets that alternatives exist.

The Alternatives Not Discussed

What if the resources flowing into armaments were used differently?

What if the hundred billion that Germany is now putting into the Bundeswehr were invested in renewable energy? In education? In development aid that addresses the root causes of flight? In diplomacy that prevents conflicts before they arise?

These questions are not asked. They're considered naive, unrealistic, dangerous. In a world of threats — so the argument goes — one must be able to defend oneself. Whoever disarms will be overrun.

Perhaps that's true. Perhaps the world really is as dangerous as it's portrayed. Perhaps the enemies really are as threatening as claimed.

But I observe who makes these claims, and I see: It's those who profit from the threats. It's the arms manufacturers, the think tanks, the politicians, the media. They have an interest in us being afraid. Their business models depend on it.

That doesn't automatically make their claims false. But it should make us skeptical.

The Mechanism of Escalation

The most dangerous thing about this system is: it escalates by itself.

Country A arms itself because it feels threatened. Country B sees Country A's armament and also arms itself. Country A sees this as confirmation of its fears and arms further. The cycle spins, faster and faster.

Every step is "defensive." Each side only reacts to the other. No one is to blame, and yet the system moves toward the abyss.

This was the logic of World War I. This was the logic of the Cold War. This is the logic of today.

The system's profiteers have no interest in stopping this spiral. On the contrary: the faster it spins, the greater the returns. Until the point where it spins out of control.

And then everyone pays — including the profiteers. But by then they've made their profits. And afterward, there's always reconstruction.

The system is not designed to prevent war. It's designed to profit from war — and from its preparation. War itself is an operational accident. An expensive but ultimately manageable operational accident.

Escape Routes

Is there a way out?

The honest answer: I don't know. The system is stable because it serves powerful interests. It has proven resistant to all attempts at dismantlement. The peace movements of the 1980s didn't end the Cold War — it ended for other reasons. And as soon as it was over, the next one began.

But I see starting points.

First: transparency. Who profits from the threat? Who funds the think tanks? Who sits on the boards of arms companies? Who moves between ministries and industry? When these connections become visible, the rhetoric of "security" becomes less credible.

Second: alternative narratives. The story that we live in a world of permanent threat is not the only story. The same facts can be told differently — as a story of interdependence, of shared interests, of possible cooperation. These stories are not naive — they are a different perspective.

Third: conversion. The arms industry employs highly qualified people who could build other things. Engineers who design missiles could design wind turbines. The skills are transferable — only the incentives need to change.

Fourth: democratic control. Armament decisions are often made behind closed doors, by experts with conflicts of interest. If citizens could really participate — not just every four years, but concretely on armament projects — the decisions might look different.

A Final Thought

I write this essay not as a pacifist. I understand that defense is sometimes necessary. I understand that there are real threats — not just constructed ones.

But I observe a system that needs threats to function. A system that manages conflicts rather than solving them. A system that produces enemies when they're lacking. A system that profits from war — and therefore has no interest in peace.

This system is not operated by evil people. It's operated by normal people who do their work, feed their families, pursue their careers. They're not conspirators — they're cogs in a machine whose overall logic they don't grasp.

But the machine runs. And as long as it runs, we will live in a world of permanent threat. Not because the threats are real — some are, some aren't. But because the threats are profitable.

The war dividend. It's the opposite of the peace dividend. And it's paid out, every day, in the billions.

The only question is: Who collects it? And who pays?

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We actually know the answer.

We pay.

All of us.