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This is a paradox the party wishes to instil in the outer party in particular. While Oceania is at war, which they constantly are, there must be peace within the state. Only then can Oceania be truly strong to fight the war. Everybody must be on the same side, hence internal peace, for victory. This way the Party can remain in perpetual power.
The three slogans of the Party are "WAR IS PEACE," "FREEDOM IS SLAVERY," "IGNORANCE IS STRENGTH." The Ministry of Truth is extensively involved with news media, entertainment, the fine arts and educational books. Its ultimate purpose is to rewrite history and change the facts to fit Party doctrine for propaganda effect. This rewriting not only includes the distant past, but the novel's present as well. If they make a mistake in their predicitons, they simply rewrite things again.
The statement war is peace has a dual meaning. Historically, war meant fighting the opposition; in 1984 we are fighting against outselves. The state of perpetual war is internal, psychologically controlling, non-destructive, and it tends to keep society in fact. War brings people together....... therefore perpetual war in a society actually brings that society a permanent peace.
Hope that helps, and that it wasn;t confusing.
That is exactly what "war is peace" entails. It is one of the three paradoxical statements that constitute the party's motto. Peace within the state because of constant war ensures power for the party. This book is burned into my brain so if I'm missing something about this statement, I'd like to know.