War changes us, although not always for the better. This is the lesson of Hugh Rockoff's America's Economic Way of War. Despite their frequency, cost, and potential long-run impact on economic and institutional development, the first pages make clear that wars are too often overlooked in U.S. economic history. As with his earlier work (Drastic Measures: A History of Wage and Price Controls in the United States. New York: Cambridge University Press, 1984), this book is expansive in covering nearly the entire twentieth century of American war making. More importantly, America's Economic Way of War seeks an answer to a big question: How costly were America's wars?

The structure of the book makes a quick answer to this question easily accessible. Each substantive chapter—one for each major conflict—is filled with statistics on, for example, the number of service personnel, deaths and wounded, as well as estimates of financial costs and financing. Moreover, many of these figures are collected in four appendices (pp. 322–29) to facilitate comparison across wars. For example, 318,274 deaths during World War II compared with 106,378 deaths during World War I or a total cost for World War II of $4.7 trillion versus $618 billion (in 2008 dollars) for World War I. Yet the main contribution of America's Economic Way of War lies not in its success or failure in constructing comparable cost estimates across the various wars. The book makes its mark unpacking the methods used to finance America's wars. One theme running throughout the book is that the cost of war was often obscured by the choice of financing. Among the traditional instruments, costs were hidden by moving from taxation to borrowing and money creation—with the latter being made easier by the creation of the Federal Reserve in 1913 (p. 17). And even when taxation was used, it was often imposed in ways that would garner public support through appeals to populism (e.g., excess profit taxes during World War I and World War II).

However, the choice between the traditional financing options is only part of the story. Rockoff argues that these instruments were increasingly used together with the draft, wage and price controls, restrictions on the production of consumer goods, etc., to further disguise the total cost of war. The best example of the use of this full menu of alternatives is World War II. The size of the military swelled to over 16 million, key resources were funneled to the production of war goods, and price controls led firms to discontinue low-price lines of consumer goods (p. 179). The net effect very likely added to the total cost of the war, with precise estimates being much harder to come by. The long-term effects of America's wars were significant. In Rockoff's view, these effects were more negative than positive and, in any case, were more costly than contemporaries anticipated or were willing to admit (p. 317). Starting with the conquests in Cuba and the Philippines, the author notes that few benefits can be directly attributed to the opening of new markets and any indirect benefits were probably not big enough to offset the costs associated with imperial ambitions (p. 94). The obligations to veterans also grew throughout the century as this group became larger through successive wars and as politicians renewed (or found anew) their support for veterans’ benefits. Prior to World War II, payments to veterans account for about half of the total cost of war; from World War II to the Persian Gulf War, veterans’ benefits are much bigger in absolute size and comprise around one-fifth of the total cost (pp. 326–27). In addition, the support for World War II veterans’ benefits also signaled a change in the accepted best practices of policymaking in the early postwar period. The policy shifted from emphasizing balanced budgets to Keynesian stimulus, which aimed to offset the recession that was expected to follow the war (pp. 237–328).

The book provides a thorough accounting of the cost side of the ledger on America's wars. Its coverage is best for World War II and the wars prior. With respect to the existing literature, the chapters on the Spanish-American and Philippine-American Wars fill the largest gap. One drawback is that the book's commitment to following the chronology of twentieth-century wars means that almost all of the main arguments (and accompanying evidence) are broken up across chapters. In sum, America's Economic Way of War is essential reading for those interested in the history of the United States, the functioning of wartime economies, and how wars (even when they are over) continue to shape our lives.