Military Keynesianism

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Military Keynesianism is an

warfare states, in which the latter feeds the former, in a potentially unlimited spiral. The term is often used pejoratively to refer to politicians who apparently reject Keynesian economics, but use Keynesian arguments in support of excessive military spending.[1][2][3]

Keynesian economics and application

The most direct economic criticism of military Keynesianism maintains that government expenditures on non-military public goods such as health care, education, mass transit, and infrastructure repair create more jobs than equivalent military expenditures.[4]

Noam Chomsky, a critic of military Keynesianism, contends that military Keynesianism offers the state advantages over non-military Keynesianism. Specifically, military Keynesianism can be implemented with less public interest and participation. "Social spending may well arouse public interest and participation, thus enhancing the threat of democracy; the public cares about hospitals, roads, neighborhoods, and so on, but has no opinion about the choice of missiles and high-tech fighter planes." Essentially, when the public is less interested in the details of state spending, it affords the state increased discretion in how it spends money.[5]

Nazi Germany

Much of the

Third Reich economy was oriented towards militarization, especially to prepare for a possible war with the Slavic nations, rather than in the production of consumer goods or towards commercial expansion. Nevertheless, the concentration of capital in the arms industry had favored a rapid expansion of German industrial capacity and helped to reduce unemployment
rates.

United States

In the

Second World War, during the presidencies of Franklin Delano Roosevelt and Harry Truman, the latter with the document NSC-68. The influence of Military Keynesianism on US economic policy choices lasted until the Vietnam War. Keynesians maintain that government spending should first be used for useful purposes such as infrastructure investment, but that even non-useful spending may be helpful during recessions. John Maynard Keynes advocated that government spending could be used "in the interests of peace and prosperity" instead of "war and destruction".[6] An example of such policies are the Public Works Administration in the 1930s in the United States
.

Keynes' 1933 letter to Roosevelt

In 1933, John Maynard Keynes wrote an open letter to President Franklin Roosevelt urging the new president to borrow money to be spent on public works programs.[6]

Thus as the prime mover in the first stage of the technique of recovery I lay overwhelming emphasis on the increase of national purchasing power resulting from governmental expenditure which is financed by Loans and not by taxing present incomes. Nothing else counts in comparison with this. In a boom inflation can be caused by allowing unlimited credit to support the excited enthusiasm of business speculators. But in a slump governmental Loan expenditure is the only sure means of securing quickly a rising output at rising prices. That is why a war has always caused intense industrial activity. In the past orthodox finance has regarded a war as the only legitimate excuse for creating employment by governmental expenditure. You, Mr President, having cast off such fetters, are free to engage in the interests of peace and prosperity the technique which hitherto has only been allowed to serve the purposes of war and destruction.

Barney Frank

While the idea dates back to Keynes, a similar term is often attributed to

F-22 fighter:[3][7]

These arguments will come from the very people who denied that the economic recovery plan created any jobs. We have a very odd economic philosophy in Washington: It’s called weaponized Keynesianism. It is the view that the government does not create jobs when it funds the building of bridges or important research or retrains workers, but when it builds airplanes that are never going to be used in combat, that is of course economic salvation.

Forms

The following forms of military Keynesianism may be differentiated:

Permanent war economy

The concept of permanent war economy originated in 1945 with an article by

US military expenditure would remain large, reducing the percentage of unemployed compared to the 1930s. He extended this analysis in 1950 and 1951.[9] In 1974, this idea was expanded on by Seymour Melman in the book “The Permanent War Economy: American Capitalism in Decline” where Melman describes the downside of having a permanent war economy as “sustained nonproductive use of capital and labor.[10]” Melman goes on to observe that because this issue “is not unique to the United States[11]” that “It is shared by all states that try to sustain permanent war economies[12]
.” Melman argues that most of the military production is unnecessary and drains the talents of highly skilled workers due to politicians attempting to create a powerful influx of jobs in their districts, and because of this, most military production is in place to create jobs instead of adding to public safety. Melman suggests that the large sum of money allocated towards unnecessary military spending would be put to better uses by maintaining or improving domestic infrastructure to have an active positive benefit to society.

Empirical estimates

Many economists have attempted to estimate the multiplier effect of military expenditures with mixed results. A meta-analysis of 42 primary studies with 243 estimates concluded that military expenditures tended to increase the economy in developed countries with military exports but decrease the economy in less developed countries with generally higher level of political corruption.[13]

Externalities

Gross Domestic Product of the United States, and that is assumed to be good.[citation needed
]

See also

Notes

  1. ^
    S2CID 154824097
    .
  2. ^ Veronique de Rugy (December 2012). "Military Keynesians". Reason Magazine. Reason Foundation. Retrieved 2 February 2013.
  3. ^ a b Krugman, Paul (2009-06-24). "Weaponized Keynesianism". New York Times. Retrieved 26 January 2015.
  4. ^ Feffer, John (February 9, 2009). "The Risk of Military Keynesianism" (PDF). Institute for Policy Studies (originally in Foreign Policy In Focus).
  5. ^ Noam Chomsky (February 1993). "The Pentagon System". Z Magazine. Reason.
  6. ^ a b Keynes, John Maynard (1933). "An Open Letter to President Roosevelt". Retrieved 2011-08-01.
  7. ^ Frick, Ali (2009-06-23). "Barney Frank: GOP Thinks $2 Billion F-22 Project Is Funded By Monopoly Money". Think Progress.
  8. ISSN 0301-7605
    .
  9. ^ See Peter Drucker, Max Schachtman and his Left. A Socialist Odyssey through the 'American Century', Humanities Press 1994, p. xv, 218; Paul Hampton, "Trotskyism after Trotsky? C'est moi!", in Workers Liberty, vol 55, April 1999, p. 38
  10. ISBN 978-0-671-21811-9
    .
  11. ISBN 978-0-671-21811-9
    .
  12. ISBN 978-0-671-21811-9
    .
  13. ^ Awaworyi, Sefa; Yew, Siew Ling (2014), "The Effect of Military Expenditure on Growth: An Empirical Synthesis" (PDF), Discussion paper 25/14, vol. 14, no. 15, Department of Economics, Monash U., archived from the original (PDF) on 2016-03-29, retrieved 2017-03-15
  14. ^ "5. 2009–2015: Syria uprising and ISIL in Syria", Enemy of Enemies: The Rise of ISIL, 2015, archived from the original on 2015-11-27, retrieved 2015-11-27
  15. ^ Astore, William J. (2014-10-14), Tomgram: William Astore, America's Hollow Foreign Legions – Investing in Junk Armies, TomDispatch.com, retrieved 2014-10-16
  16. ^ "2. 2004–2006: Abu Musab Al-Zarqawi Emerges", Enemy of Enemies: The Rise of ISIL, Al Jazeera, 2015, archived from the original on 2015-11-27, retrieved 2015-11-27

References

External links

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