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Please note that the Demon Queen isn't saying that perpetual war is good for the economy.
She's just saying that the present state of having only two sides is preferable to multiple small scale conflicts, and more importantly, that one side decisively triumphing over the other would just result in even more misery. For the losing side, certainly, but also for a lot of the guys in the winning side. Banditry, famine, unemployment... Or maybe a multi-sided war among the victors for the spoils...
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