International Relations: Korean Conflict and US Economy

Words: 2575
Topic: Politics & Government


The Korean Conflict was a domestic and armed war that took place in the Korean Peninsula. The conflict was between North and South Korea. It got to its peak between 1950 and 1953. The conflict emanated from the partitioning of Korea after WWII. As a result, industrialist and socialist nations divided the country into two, namely North and South Korea.

Entire Korea had before division completely lost its political control to Japan. Japan had dominated the country since 1910. It had attempted to exterminate the Korean culture, but the conflict terminated in 1945 before this objective was attained. Consequently, Japan was forced out of this country.

In the dusk of 1940s, America created the Republic of South Korea under an industrialist structure. In an effort not to be left behind by its immemorial rival, Russia helped in forming North Korea. The north fell under the communist statute. This was the beginning of the countries as they are known today. The border was mapped along the 38th parallel (Spurr 102).

North and South Korean military occupy either side facing each other for decades while anticipating the next armed conflict. In 1950, North Korea attacked South Korea to join the two countries and effectively avert a premeditated invasion by the US. The aftermath of the attack indicates that the decision was ill-advised. The United States and the United Nations came to the rescue of their customer nation of South Korea.

Conversely, North Korea was overpowered and a huge portion of the country occupied by the West. The hostilities flanked by both Koreas caught the attention of third-party nations into what would be a world political and philosophical disagreement. In 1951, China threatened to attack America and its allies as they advanced towards its boundary. In return, China regained control of North Korea.

The United States was dragged into a slow destruction conflict. This lasted until 1953 when a ceasefire agreement was signed. The agreement signed still exist to-date. The ramifications of the conflict were multiple both on domestic and global measures.

Domestically, the conflict had far-reaching implications upon the Korean citizens. For instance, there was a substantial loss of life. Thousands of families were detached a majority of whom never rejoined. Irrespective of the negative impacts, there were significant affirmative outcomes of the conflict, especially for Japan and the US. The economy of both countries was substantially improved.

Japan became a trading partner with the US during the advancement of the conflict. As a result, the countries’ national relation was boosted. Korean Conflict influenced the path of the Cold War.

Economically, it presented modifications and technological progress that are essential to the economy of the US. Military arsenal was developed by the US and sold to South Korea. The war equipment is still sold to different countries boosting the US revenue collection.

Thesis: The Korean Conflict had the most economic impact ever realized in America owing to the fear of communism; the social and political consequences of the Korean Conflict and the ongoing Cold War with Russia lead to enormous growth and prosperity of Americans for the decades.

Research Questions

  1. Was the Korean Conflict of any economic benefit to the US?
  2. Did it change international relations (social and political) with countries that had a direct impact on the US economy?

Literature Review

According to Blackburn (2013), the Korean Conflict had a deep social impact on the citizens of the region. Besides a large number of noncombatant casualties, the conflict alienated thousands of families with a huge portion of North Korean community displaced and migrated to South Korea. The North Korean refugees had lost all their possessions.

However, most of the Northern refugees were prosperous property-owners who feared religious and partisan oppression. Having left behind properties worth millions, they were willing to support the South Korean government in trouncing the North to regain their properties. The South Korean government lacked military equipment.

The affluent refugees offered financial support to purchase the equipment including firearms, tanks, fighter jets, missiles, bullets and communication gadgets. The United States supplied the equipment and realized millions of dollars. When the war escalated, the US military scientists developed advanced equipment to help the South win the war.

This further boosted the economy as weapons were also sold to other countries that were at war or were anticipating such an eventuality. The equipment that was innovated during the conflict continues to fetch the US millions of dollars to-date. Without the Korean Conflict, it would probably have taken the US more time to develop such advanced weapons that have played a big role in advancing its economy.

Initially, the US had involved in the Korean Conflict citing the Truman Doctrine (Blackburn 2). The document fundamentally assured that the US would assist nations rebelling communism. Communism was being advocated by America’s longtime political and ideological rival called Russia. The development of military weapons yielded a boost in the US economy as allies and countries seeking to fight communism placed orders with the manufacturer.

This created a lasting economic relationship between the US and its clients. Most of the equipment required servicing, including fighter jets, tanks, vehicles, and communication equipment. In most cases, it is the US experts who are engaged in servicing the equipment, thus fetching millions that are plowed back to the US economy. They also supply spare parts for the equipment.

The conflict saw the expansion of the US military alongside the creation of new martial treaties. However, the conflict had caught the US military off-guard. The magnitude of the conflict had not been anticipated. There were hundred thousands of refugees that crossed the border to South Korea where there was relative peace as North Korea was the battle zone.

During and after the progression of the conflict, the US supplied the refugees with relief food and supplies. This was a form of investment with its client known as South Korea. Upon the termination of the conflict, the South had to repay the debts it owed the US both in supplies and logistical support. The debts have ensured that the US remains a lifelong partner in the South Korea economy.

Emdund Learned (1951) assert that the Korean Conflict was costly and continues to be costly for the US (p.14). They argue that the unexpected development that caught the US military unaware saw the military budget increase hence costing the economy millions of dollars. In addition to accumulating an overwhelming supply of weapons, it is requisite for the military to stay put throughout.

With the number of combatants and bases increased, the spending is also overwhelming for the economy. The eventual Cold War required the US to concentrate not only on the production capacity of military end-items but also the protection of citizens’ morale and productivity. Sequentially, this enforces the necessity of maintaining the capability to create a satisfactory supply of civilian goods and services (Learned 14).

The high output of weaponry meant to defend against enemies, particularly the communist countries requires the establishment of new production facilities and equipment. This has the potential to lead to disastrous inflation (Learned 15).

The researchers further argue that the expansion of the military has substantially reduced the civilian labor force as more citizens join the military and undertake roles outside the US. Consequently, the output is substantially affected and consequently the economy. There is increased spending on the military budget while the production rate of the country is decreasing according to Learned (1951).

The argument is refuted by a Congressional Research Service report which asserts that the conflict boosted the gross domestic product (GDP) growth of the US. This was attained through government spending. The conflict was financed through taxation. The report indicates that there was only a negligible recession after the conflict. However, in the years that followed the end of the conflict, two constituents of the US GDP were impacted.

These included consumption and investment. The report indicates that these constituents did not return to their pre-war state. It is indicated that consumer spending during the conflict plummeted bearing to the fact that there was increased taxation.

During this period, the economy stagnated as more resources were allocated to financing the conflict. Upon the end of the conflict, the economy grew rapidly as investors gained confidence in the economic trend and the stability of the US. As the military expanded, employment opportunities increased. In the long-term, the development of technology to face future conflict challenges opened more avenues for the growth of the US economy.


Upon the end of the conflict, the US military budget was increased to $50 billion. The army and the marine were doubled in number. Air Groups were also increased almost threefold. The units were deployed to diverse global locations such as Europe, the Middle East, and Asia. This enhanced national relations between the US and the host countries. Various economic connections were established and flourished over time.

The military intelligence would gather intelligence while at the same time pinpointing investment and trade opportunities for its citizens. The government would negotiate on behalf of the investor through diplomatic avenues.

Once the military established stability in the country, it would offer advice to the investor about suitable locations where labor and raw materials were easily accessible at a low cost. The products manufactured in the establishments would be imported to the US. These trade connections remain today with Asia and Africa as an illustration. This helps boost the economy of the US.

On the other hand, the war saw the beginning of ethnic amalgamation in the US military service. For decades, the military was exclusively dominated by White Americans. This left the rest of American races without employment. They were a liability to the US economy. In addition to the racial integration having a positive image of the US, there was a significant economic impact. Those who joined the military earned a decent living.

They earned and had money to spend. This was plowed back to the economy. Those who were stationed abroad would get extra money apart from what they were paid for military service and send it back home for developments. The executive order by Truman was influenced into implementation by the Korean Conflict.

A sense of equality amongst Americans saw a change in attitude among other American races. They were now willing to invest in the country and abroad with the money put back into the American economy (Ohanian 29).

Inherently, the Korean Conflict influenced the wider Cold War. The Cold War had arisen as a philosophical conflict between the Korean nations. It established the criteria for various later conflicts. It represented the indication of a ‘delegation war’. This is a situation involving two superpowers fighting one another camouflaged in the host country with the citizens of the host country suffering the consequences.

Consequently, the superpowers benefit from the renovation of the infrastructure as an economic partner of the dilapidated country. The US was a beneficiary of the Korean Conflict as its companies got contracts to rebuild the country’s infrastructures. On the same note, the conflict brought huge economic benefits to the US through the development of technology.

The US greatly invested in technology to outshine Russia (Newman 1). It competed in gaining missile and space race. These were the primary dealings of the Cold War. Subsequently, the American infrastructure was not damaged hence little negative economic impact. Through technology, America would take the war to the enemy’s doorstep, ensuring that its infrastructure was not destroyed.

Most of the contemporary technology is the result of developments made then. They include digital watches and liquid crystal displays. These technologies fetch the US a substantial amount of revenue. The technologies have helped the US to advance in technology and science that are essential for its economy.

The US remains a trade partner of South Korea. With the enormous population of 43 million hardworking citizens, South Korea provides economic advantages for the US. America continues to politically dominate South Korea. It aided in creating a military dictatorship dynasty. It remains a puppet of the US. The Koreans who were involved in the conflict regard the US as savior and hold it in high esteem a culture that is passed on to generations.

With this influence, the US has managed to coerce South Koreans to purchase its commodities at exceedingly high prices. For instance, a set of Levis jeans costs about $150 in the US while it costs about $400 in South Korea (Institute for Economics and Peace 7). The sarcasm is that they are manufactured in the country.

Furthermore, the labor costs in the country are way cheaper than in the US. Fundamentally, South Korea is the USA’s economic puppet. The population is addicted to Hollywood and all American products.

Also, American companies in South Korea employ thousands of Koreans to manufacture computers, vehicles, and televisions for a portion of the cost it would consume in producing the same in the US. The Koreans are lowly paid and work for long hours.

The conflict opened an avenue for the US military to have a significant manifestation in Asia. The mountainous landscape of the country presents the US military with an appropriate location for testing new artilleries in the surrounding waters. This means that the space in the US that would have been used for such tests is used for other economic activities. The space provided for anchoring warships is essential to the US economy (Ohanian 31).

It provides the US with the opportunity to deliver enormous military supplies, including artilleries, for their use. The bulk of the supplies is sold to the Korean Army and costs South Korean millions of dollars.

Learned to develop the image of the US economy given reduced civilian labor force with increasing military spending (p.15). However, given the long-term benefits that the US reaped from the progression of the conflict, it is indisputable that the conflict was more advantageous than disadvantageous for the US economy.

The trade that the US engages in yields the economy billions of dollars compared to the millions spent in the military budget.


The Korean Conflict of the 1950s was devastating for South and North Korea alike. Other countries that got involved suffered little loss with America and Japan emerging as the beneficiaries. The economy of both countries increased owing to the supplies to South Korea during the conflict. The US as a savior of South Korea dominates the political and economic platforms of the country.

After the conflict, the US engaged in rebuilding the country’s infrastructure reaping millions from the Korean government. Modernly, the US continues to supply South Korean Military with US-manufactured artillery and military equipment.

The conflict helped the US to realize its potential in technological development. The country now manufactures technology products for the advancement of its economy with supplements sold to the global market.

However, the conflict facilitated the expansion of the US economy, as more personnel were required to safeguard the interests of the US in different global locations. The concern arose after the US indicated that it was fighting communism and would execute such duties as may be necessary against any communist country, including Russia.

Fundamentally, the conflict enabled the US to use South Korea as the base from which it can easily reach the Asian market with artilleries and consumable products. In this, the US has been able to globalize its economy to unsuspected global locations while substantially expanding its economy.

Works Cited

Blackburn, Rachel. Impact of the Korean War. 20 Aug. 2013. Web. 30 Jan. 2014. <>

Institute for Economics and Peace 2010, Economic Consequences of War on the US Economy. PDF file. 30 Jan. 2014. <>.

Learned, Emdund. “Thinking Ahead.” Harvard Business Review 29.1(1951): 13-140. Print.

Newman, Rick. How a Second Korean War Would Harm the US Economy. 3 Apr. 2013. Web. 30 Jan. 2014. < >.

Ohanian, Lee 1997, The Microeconomic Effects of War Finance in the United States: World War II and the Korean War. PDF file. 30 Jan. 2014. <>.

Spurr, Mary. (2007). Twentieth Century History 1945-2000. Collingwood, Victoria: History Teachers’ Association of Victoria. Print.