The war economy of the capitalist states in the early 20th century was that of a more centralized economy, fixed prices, state corporations, and restriction on the consuming of non military funded goods. How has this changed since the start of the modern capitalist state? It seems that in the early 20th century upon entering war the economy was focused very greatly on supporting this effort. Was this because of lack of efficient technology or has the state developed to such a way where funds are allocated for the maintainence of imperialist wars. It seems in modern times when the state enters war it has no noticable effect on the nations economy or how it functions but I doubt that is the case. Finally what I want to understand is how the modern state funds the war economy.
The US war economy first served to close the unemployment gap and second to create the necessary surplus to fight WW2. The crown jewel of this productive effort was an ultimate weapon that effectively put an end to large scale fighting of that sort, but the war economy was the only productive force hitherto discovered that could produce extreme wealth indefinitely, so the weapons were still created. There were engagements in Vietnam and Korea, but not on the scale of a world war, for fear of nuclear escalation. This is the defining feature of the cold war, i.e. a global state of war without significant fighting, in which the CIA and its international counterparts become major players in the war economy. The CIA is not really an intelligence agency, but an organization that creates the conditions in which a war economy can thrive, via the installation of military dictatorships through covert means. Once General Pinoche, Saddam Hussein, the Shah, and countless others are in power, the US could dispense of the surplus product of the war economy without actually going to war. This has produced a number of dialectal responses from the subordinate states, which have become more pronounced since the collapse of the USSR. The first was a simple trade in material. During the Iran-Contra affairs, Oliver North noted that the money problems experienced by the paramilitaries in central america had been solved by the importation of drugs into america, and that this relationship could sustain the war indefinitely if kept a secret. These death squads are now fully integrated into the cartel world. The second was a shift of attitude among states in the Balkans and the Middle East who, after the fall of the soviet union, had themselves become acquisitional and and imperialist, and they flaunted their fascist nature that had originally earned them US support by waging genocide and war. Among these factions were Al Qaeda, who were a non-afghan split of from the CIA supported mujahideen, whose operation in manhattan has compelled the US the turn its war economy and its military onto its own cold war imperial establishment, much to the dislike of the old imperial establishment (and many liberals who fear change) at home and abroad.
