Debate: The Iraq War and Entrepreneurs

Debate: The Iraq War and Entrepreneurs

How is the Iraq war affecting small companies? James Schrager, professor of entrepreneurship and strategy at the University of Chicago and president of consulting firm Great Lakes Group, and Linda Bilmes, a lecturer in public finance at Harvard University and co-author of The Three Trillion Dollar War: The True Cost of the Iraq Conflict, square off.

JAMES SCHRAGER

"It is hard to imagine a business that is not helped by hundreds of millions of dollars in government spending. In the U.S. any war makes a huge amount of money for manufacturers."

LINDA BILMES

"Economically, small business tends to lose out the way the rest of the population loses out: The money we spent on the war is primarily being spent on things that don't have a stimulating effect."

JAMES SCHRAGER

"There is a great desire to keep troops safe, which has sparked huge spending and has been very good for businesses. My manufacturing clients are adding workers at all levels, from assemblers to precision welders."

LINDA BILMES

"The major contracts for the war have gone to a small number of large, well-known defense contractors.Small business has missed out."

JAMES SCHRAGER

"However, by putting people to work, by producing larger numbers of military goods at the same time you are producing consumer goods, you risk inflation. That is the spot we are in right now."

LINDA BILMES

"The cost that falls particularly hard on small business is paying interest on the [war] debt. Small business often benefits through federal funding to states, which then choose small businesses for nonmilitary contracts. Because of the war debt, that funding is going to dry up."

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