Far from the front

In 2024 the hundred largest arms makers in the world took in $679 billion from weapons and military services, the highest total SIPRI has recorded; European companies rose 13%, and at some, such as Rheinmetall, the growth was driven by demand linked to the war in Ukraine.¹ That figure is what people usually mean by the war economy. It covers every customer and every war at once. Set beside the other flows that a single war set off or swelled, it is not the largest.

A war moves prices far from where it is fought. It removes or threatens supplies, of gas and grain among others; it raises risk; it destroys things that must later be rebuilt. Every price that rises moves money from those who buy to those who sell, in every economy connected to the shock. In that sense the war economy is mostly a price system.

Russia's invasion of Ukraine in February 2022 struck a European energy market already in crisis, by Bruegel's dating since September 2021.² From September 2021 to early 2023, European governments allocated and earmarked €651 billion to shield consumers from rising energy costs: €540 billion in the European Union, €158 billion of it in Germany alone, and €103 billion in Britain.² That is roughly a year of the whole world's arms sales, set aside in seventeen months for heating and power bills.

Some of what households and governments paid ended with producers far from the fighting. Norway's general government took in about NOK 1,457 billion from petroleum in 2022, which Statistics Norway called "by far the highest ever recorded"; taxes from oil companies alone were nearly triple the year before, and the government ran a surplus equal to 26% of GDP.³ Norway had no part in the war.

Food moved the same way. In March 2022 the FAO's food price index rose 12.6% in a month to its highest level since the index began in 1990, and the agency put the jump in cereal prices down largely to "conflict-related export disruptions from Ukraine and, to a lesser extent, the Russian Federation."⁴ Every country that buys wheat abroad paid some of that.

Even money labelled as aid to Ukraine is often spent far from it. Of the €100 billion that Germany's government reports as bilateral aid to Ukraine, the Kiel Institute counts only about €41.7 billion as actual bilateral aid to Ukraine; €35.9 billion was spent in Germany, largely on Ukrainian refugees, and €22.0 billion is future commitments for military aid.⁵

The largest item is still to come. In February 2025 the World Bank, the Ukrainian government, the European Commission and the United Nations put the cost of Ukraine's recovery and reconstruction at $524 billion over the next decade, about 2.8 times the country's GDP, with direct damage alone at $176 billion.⁶ For 2025, $7.37 billion had been allocated to priorities and a financing gap of $9.96 billion remained.⁶ The biggest construction bill in Europe is, so far, mostly a number.

None of this adds up to a total, and it should not be made to. Bruegel's count begins five months before the invasion.² The FAO's March record followed a record in February.⁴ The war deepened shocks that were already under way, and no accounting can cleanly separate its share from theirs.

Mostly, the money moved through prices, from people who buy energy and food to people who sell them, and later, if it is paid, it will move to whoever rebuilds. The arms makers are the part of a war's economy that is visibly about war. Much of the rest is paid at the kitchen table and collected by treasuries that never chose a side.