Earlier quoted context omitted.
> Infamously, a lethal war adds to economic activity as people are busy building and selling weapons of destruction, thereby adding to GDP. I don't think it's a given that a lethal war adds real value when you incorporate the opportunity cost of not having the war. It's been argued that WWII is what ended the Great Depression, but I think that's partly due to the somewhat unique economic circumstances at the time, an…
Agree that when digging into the detail war is a mixed economic bag. There is the destructive aspect of war which obviously destroys economic value, then there is the "organized theft" aspect which is more like a zero-sum game of redistribution and there is the "producing the means of war" aspect which (also quite obviously) adds economic value. The issue with economic nihilism is that it would indeed count these +/-…
In the Econ 101 model of the world, there are no beans to be gained in war. Changing what you produce does not increase what you produce. There are only beans to be lost, by producing weapons of war instead of producing what markets actually need and want.
This is called the "broken window fallacy". See e.g. https://mises.org/library/broken-window-fallacy.
I have many disagreements with the author of that article, e.g. I think his model of the economy is not realistic enough to be useful. But I think perhaps his model is exactly the kind of model that people have in mind when they think of economic nihilism: an infinite number of perfectly-fungible cyborgs all trading perfectly-fungible goods and services in an idealized frictionless free market. But it is in exactly this model that the broken window fallacy is the most obviously fallacious!