27-05-2025
The cost of modern warfare goes beyond bullets
War seems to have been an inevitable companion throughout the journey of the human race since evolution. War is normally viewed as a conflict between political groups or countries and is treated as an institution recognised as a law-unto-itself.
War has been an important topic for analysts across centuries. Over a period of time it has evolved in many forms – from arrows and spears to bullets, to missiles, to chemical, biological, technological and economic. Whatever is the form, it directly or indirectly results in loss of lives, physical destruction, fall in economic activity and long-term social and economic ramifications.
Multiple perspectives on war:
Theories of war indicate varying focuses of interests like philosophical, political, economic, sociological and psychological. However, war is an extremely complex phenomenon that can be triggered from any sort of emotional outburst or such factors and not necessarily from any single approach. In the middle of the 17th century, wars were fought to spread religious interests across sovereigns. The French Revolution brought about fundamental changes by broadening the objectives that saw an increase in sizes from small forces to large armed armies.
It is apt to recall Leo Tolstoy's 1859 magnum opus 'War and Peace'. It depicts a broad panoramic view of the Russian society during the Napoleonic wars. He is said to have meticulously researched these wars by visiting the battlefields to portray a lucid depiction of human experience and suffering by the society and the people irrespective of their wealth, rank and profile.
He is quite articulate while describing the military strategies and the impact of warfare on soldiers, peasants, and the common people as also the elite class.
World War I resulted in a massive devastation of people and economies that lasted pretty long to eventually pave the way for a school of thought that equated war as a horrific social disaster that adversely impacted humanity as a whole.
By World War II (1939-45) and the subsequent evolution of mass destructive weapons, war became a social phenomenon where the protagonists and all those involved in the conflict had to come clear on what led to the conflict, which were in varying types.
There are many schools of thought that tried to analyze the causes for going to war and zeroed in on two broad drivers- innate aggressive behaviour that is caused due to rivalry or intrusion or frustration caused by an activity, and psychological, which makes it difficult to explain the actual cause as people behave differently vis-à-vis social contexts.
Price of war: The Kiel Institute for the world Economy- a research institute in Germany for globalization issues investigated the cost of more than 150 wars since 1870. They used historical data to calculate the expected economic damage caused by the Ukraine war, which is estimated to touch a cumulative GDP loss of around $120 billion by 2026. The capital stock of Ukraine would fall by more than $950 billion. For countries that are not directly involved in the war the costs are $250 billion of which $20 billion are attributable to Germany alone and $70 billion to the European Union.
Weaponisation in modern era: As Prime Minister Narendra Modi has said this is not the era of war.
Modern day wars are fought not just with weapons but with the wallets of economies. For instance, the Russia-Ukraine conflict has created a significant energy crisis, disrupted supply chains leading to inflation and exacerbated economic slowdown. It also increased uncertainty in the global trade and financial markets leading to financial instability.
As for Gaza, according to a World Bank report, 35 per cent decline in the real GDP was reported in the first quarter of 2024 for Palestinian territories marking the largest economic contraction and its gap was projected to reach $1.86 billion in 2024 posing risks of systemic failure.
The US is waging trade wars with tariff strikes across countries. Although no one has a clue as to what President Donald Trump has gained by striking the tariffs first and pausing them, almost all countries are enormously relieved by this rethink.
A good aspect about these trade wars is that not a single life was lost and there were no destructions, whatsoever. It gave a chance to correct the mistakes by reversing decisions. Prices were brought back to stability as both the US and China mellowed from their earlier postures. However, this reversal provides only a temporary relief to markets and consumers. It is not tariffs per se, the actual problem is uncertainty. Businesses need a stable environment to be assured of a steady inflow of investments. However, they caused huge turmoil in the international world economies with supersonic speed. With surging oil prices and soaring food costs, many countries are struggling to contain inflation and protect their broken supply chains. The fact is that these have far-reaching consequences compared to fiercest of wars.
Modern warfare is predominantly using Artificial Intelligence (AI) to detect the target and destroy. It looks like we are in the saga of unending conflicts where,
'War is a place where young people who don't know each other and don't hate each other but kill each other, based on decision made by people who know each other and hate each other but don't kill each other' – Paul Valery
In these wars nobody actually wins, the losers are the common people and soldiers on both sides. The AI-driven wars and conflicts benefit none other than the defence industry at the cost of finances and loss of human lives. According to sources, the costs in the India-Pakistan conflict translated approximately to Rs. 15, 000 crore for India, while it cost Pakistan around $249.6 million.
The modern times have witnessed a shift from conventional physical combat in the battlefield to airspace, cyberspace, financial markets and psychological operations. Today's battlefield is more complex and invisible and can target enemy bases with a surgical precision by the click of a mouse. Nevertheless, it leaves deep scars and cause ecological damage while generations to come will carry psychological trauma of violence, loss and financial instability.
Today, the challenge is not just about deliberating how to end wars but understanding their new faces and anticipating its deep destructive effects. Policymakers must not only redefine what victory means in this interconnected world and also remain vigilant and strategically invested in peace.
(The writer is Associate Professor in Finance at Christ University)
