In 2017, the Institute for Economics and Peace released a report that provided a comprehensive assessment of global economic losses from activities aimed at “containing, preventing, and eliminating the consequences of violence.” As it turned out, violence costs us 13.6 trillion dollars per year, or 13.3% of global GDP (estimate given for 2015). To put this in perspective, a 10% reduction in the economic impact of violence would free up more funds than the total value of global food exports or the total volume of global foreign direct investment in 2014. These are gigantic figures.
Military spending plays the primary role in this matter, reaching 6.16 trillion dollars, or 45% of all economic losses from violence. Internal security expenditures, such as spending on police, the judicial system, prisons, and private security, account for 3.5 trillion dollars, or 26% of all losses. It is also worth highlighting homicides and violent crime, which directly lead to medical expenses and loss of income for victims, and indirectly to their loss of productivity, as well as the productivity of their families and friends due to psychological consequences. This accounts for 1.79 trillion dollars, or 8% of all losses. Of course, violence leads to many other losses, for example, those related to internal and external conflicts, as well as the refugees that follow them.
Naturally, it is impossible to add certain less obvious losses to this assessment, especially those related to systemic violence and missed opportunities. Of course, we have already accounted for spending on military and security sectors, as well as losses from private violent crime. But how much benefit could these funds have brought if they had been invested in productive activity, rather than being taken by states to sponsor security structures, as well as other bureaucratized, corrupt, and inefficient state structures? How much potential was lost due to the harm caused by perpetrators, whether by the state—for example, in the persecution of people and wars—or by private individuals? Obviously, the real economic losses from violence will be much higher than 13.3% of global GDP per year; this estimate is merely the absolute minimum from which to start.
We could lose far less if we invested funds into solving the problem of violence rather than into its containment and the elimination of its consequences. The Institute for Economics and Peace article states that a dollar invested in education will bring more benefit and contribute more strongly to maintaining peace than a dollar invested in prisons. But we must also remember that the source of all serious violence is a minority of pathological individuals with a dysfunction of the violence inhibitor, who feel nothing wrong with causing harm to other people. A dollar invested in the development of an effective therapy that restores inhibitory control over aggression in those who lack it would eliminate losses from violence that are orders of magnitude greater than such an investment. A great deal of funds, time, and human lives could be saved and directed toward productive activity that increases the well-being of everyone.
