I think he means that the need for technological superiority in order to win wars paves the way for future wealth creation. Just look at how many wonderful new technologies started as DARPA projects.

More controversially, war deaths reduce the supply of labor, making it more valuable for those who survive. The Black Plague had a similar effect.

Breaking windows increases the need for new windows, thus paving the wave for new window technology.

But you could have researched that anyway, without breaking the window first. When you are forced to research something b/c of a broken window, or war, you set aside what would have otherwise been a higher priority.

Being forced to do something is not a good way to discover the best priority. Free choice, while imperfect, works better.

I will restrain myself from a long discussion on the subject, but encourage you to google your way around for various pros/cons regarding the concept.

One of the most famous explanations for our need of physical destruction of goods was given in "1984"

I'm pretty sure tx was being sarcastic.

Why do you think that?