The shape and content of the paper may be outlined in the beginning. It has three parts. The first suggests that the war economy is essentially distinctive. The transformation of life and purposes in war involves a revaluation of the factors into which we customarily subdivide the consideration of the social organization—the political, the administrative, the technical, and the economic. In its essence the war economy, concerned with victory not individual wants, strengthens the administrative, the technical and political, factors and reduces the importance of the economic as we know it. The ordinary economic criteria no longer apply. This raises the question discussed in the second part of the paper, the place of the price system in a war economy. In the private economy, the price system was the key to the distribution of resources, and in previous wars governments made the transformation to war mainly by acting on the price system via finance, by fiscal policies that expanded taxes, loans, and government expenditures and that thereby secured the re-allocation of resources. But this method and all its implications require reconsideration as a method of transition from peace to war, because the war economy is now so distinctive and because even in recent peace-time the price system was ceasing to be a satisfactory allocator of resources. The third section discusses the inapplicability of certain economic criteria in a war economy. The implications of this are left to the academic economist himself.