What if war no longer counted toward economic growth? A futuring exercise

In most countries today, war contributes to economic growth. This may sound counterintuitive, but it is a simple consequence of how we measure prosperity. Military expenditure counts toward Gross Domestic Product (GDP) just like education, healthcare, or renewable energy investments. The production of weapons increases GDP. Reconstruction after destruction increases GDP again. From a purely economic perspective, war can become productive. But what does that mean for how societies organize themselves?

When weapons become a product

The global arms industry illustrates how deeply war has become embedded within economic logic. Weapons are not only tools of defense; they are also commercial products traded within a competitive global marketplace.

Defense fairs around the world showcase the newest military technologies with language that closely resembles that of consumer electronics or automotive industries. Companies present innovations in terms such as “enhanced lethality,” “operational efficiency,” or “hit-kill ratio.” Some exhibitions even simulate military operations in environments resembling civilian neighborhoods to demonstrate how these technologies function in real-world scenarios. In these contexts, destruction becomes a performance metric.

Events such as the annual Munich Security Conference illustrate the close proximity between political decision-makers, defense industries, and strategic policy discussions. While the conference officially aims to address global security challenges, critics often point out that such forums also serve as spaces where geopolitical tensions, military alliances, and defense spending are normalized as necessary features of global stability.

Nearby events, such as arms fairs hosted in European exhibition centers, further demonstrate how war technologies circulate within a marketplace of buyers and sellers. Hundreds of companies present surveillance systems, drones, weapons platforms, and tactical technologies to government representatives and security agencies from around the world. Seen through a market lens, war becomes an economic sector. And like any sector, it operates with incentives.

The incentive problem

Economic incentives shape behavior. When industries depend on demand, they benefit when that demand increases. This raises the uncomfortable question: What happens when the demand is conflict?

According to the Stockholm International Peace Research Institute (SIPRI), global military spending surpassed $2.4 trillion in 2023, reaching the highest level ever recorded. As long as military expenditure contributes directly to GDP calculations, governments can paradoxically experience economic benefits from increased defense budgets, even when those expenditures are tied to geopolitical tensions or conflict. In such a system, war or the threat of war can become economically sustainable. This is often the outcome of institutional design. When economic success is measured primarily through growth, activities that generate large financial flows are rewarded regardless of their social consequences. This is precisely why I have proposed redefining business as: an entity that solves social issues and creates social value in a financially sustainable way.

Under this new definition, organizations are evaluated not by how much profit they generate, but by whether their activities contribute to solving problems or creating value for society. The arms industry highlights what happens when the opposite principle dominates. When profit is tied to the production of destructive capacity, systems may unintentionally reward the continuation of conflict rather than its resolution. But what if we imagined a different economic architecture?

A futuring exercise

We are now in the year 2100. Looking back, historians often point to a quiet but profound shift that began in the mid-21st century: governments stopped counting military expenditure as economic growth. For decades, GDP had treated weapons production and arms sales like any other industry. Tanks, missiles, and drones increased national output just as much as schools or hospitals. But once military spending was decoupled from GDP calculations, the economic logic of war began to change.

At first, defense budgets did not immediately disappear. But without the ability to boost economic indicators through military spending, governments gradually redirected investments toward areas that genuinely strengthen societal resilience: diplomacy, conflict prevention, climate adaptation, public health, and education.

Defense industries did not vanish right away. Many of the same engineers who once designed advanced weapons began applying their expertise to civilian technologies, like early-warning systems for climate disasters, resilient energy infrastructures, planetary monitoring systems, and large-scale environmental restoration projects. Over time, the meaning of security itself shifted. Instead of asking how to deter enemies, policymakers started asking: What conditions allow societies to remain stable, cooperative, and resilient?

The answer doesn’t involve weapons. It involves water security, functioning ecosystems, accessible healthcare, meaningful work, and institutions capable of resolving conflict before it escalated. In 2100, national strategies are built around the concept of human security and the idea that the safety of people and the health of the planet are inseparable. Peace, once defined merely as the absence of war, has become something more deliberate: a system of institutions designed to sustain life.

Designing the incentives of the future

This scenario may sound idealistic. Yet it highlights an important insight: economic systems are not natural laws, but human-designed frameworks. The indicators we choose shape the behaviors we encourage.

If prosperity is measured through growth alone, activities that generate large financial flows, whether constructive or destructive, will be rewarded. If prosperity is measured through wellbeing and stability, entirely different forms of innovation become valuable. In other words, the future depends not only on technological breakthroughs, but on the definitions that organize our economic systems. Perhaps the question is not simply how to prevent war, but how to design economic systems in which peace becomes the more profitable path.