Friday, January 28, 2022

The Permanent War Economy: The More Things Change the More They Stay the Same (Unless We Organize)

 Harry Targ

https://masspeaceaction.org/event/international-relations-and-militarism-today/

(Revised Excerpts from a presentation at the Deerfield Progressive Forum, Deerfield Beach, Florida, January 17, 2009 and an essay posted on January 30, 2009)

 


In the Beginning

After suffering the greatest economic depression in United States history, this country participated in a war-time coalition with Great Britain and the former Soviet Union to defeat fascism in Europe and Japanese imperialism in Asia. As a result of the economic mobilization for war, the United States economy grew to become the most powerful one by war’s end. By 1945, Americans were responsible for three-fourths of the world’s invested capital and controlled two-thirds of its industrial capacity. Near the end of World War II, General Electric CEO Charles Wilson recommended that the U.S. continue the wartime partnership between the government, the corporate sector, and the military to maintain what he called a “permanent war economy.” He and others feared the possibility of return to depression.

To justify a permanent war economy-ever increasing military expenditures, bases all around the world, periodic military interventions, and the maintenance of a large land army, navy, and air force-an external threat was needed. In 1947 President Truman told the American people that there was such a threat, “international communism.”

Many liberals and conservatives remained skeptical about high military expenditures. But, just before the Korean War started, permanent war economy advocates threw their support behind recommendations made in a long- time classified document, National Security Council Document 68, which recommended a dramatic increase in military spending. NSC-68 also recommended that military spending from that point on should be the number one priority of the national government. When presidents sit down to construct a federal budget they should first allocate all the money requested by military and corporate elites and lobbyists concerned with military spending. Only after that should government programs address education, health care, roads, transportation, housing and other critical domestic issues.

When the United States entered the Korean War, Truman committed the nation to a permanent war economy. Each subsequent president did likewise. According to Chalmers Johnson (Blowback, Sorrows of Empire), between 1947 and 1990, the permanent war economy cost the American people close to $9 trillion. Ruth Sivard (World Military Expenditures) presented data to indicate that over 100,000 U.S. military personnel died in wars and military interventions during this period. And, in other countries, nearly 10 million people died directly or indirectly in wars in which the United States was a participant.

Some influential Americans raised criticisms of the new permanent war economy. For example, while he subsequently complied with many of the demands for more military spending, President Eisenhower declared in one of his first speeches in office that “every gun that is made, every warship launched, every rocket fired, signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.” After eight years in the White House Eisenhower gave a prescient farewell address in which he warned of a “conjunction of an immense military establishment and a large arms industry” which was new in American history. And, he proclaimed; “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” Incidentally, his original draft spoke of a “military-industrial-academic complex.”

Seven years later, in the midst of the Vietnam War, Dr. Martin Luther King Jr. proclaimed “Somehow this madness must cease. We must stop now. I speak for those whose land is being laid waste, whose homes are being destroyed, whose culture is being subverted. I speak for the poor of America who are paying the double price of smashed hopes at home and death and corruption in Vietnam. I speak as a citizen of the world, for the world as it stands aghast at the path we have taken.”





The Permanent War Economy Today

And in the current century the United States launched two wars: in Iraq and Afghanistan costing more than any war except World War II, against an enemy magnified, demonized, and mythologized as much or more than the cold war enemy. The demonization was used to justify a $3 trillion price tag for the Iraq War, the deaths of more than 4,000 soldiers, ten times that number of disabled veterans, and casualties and deaths of Iraqis (and Afghanis) probably approaching a million people. 9/11 afforded the Bush Administration the opportunity to launch a “war on terrorism” and the justification of preemptive war on any human target defined as a possible threat to the United States. The “terrorists” became the post-Cold War “international communists.” This is what the permanent war economy has come to. And now the new threats are Russia and China.


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Summary of Findings From the Cost of War Project

Over 929,000 people have died in the post-9/11 wars due to direct war violence, and several times as many due to the reverberating effects of war

  • Over 387,000 civilians have been killed as a result of the fighting
  • 38 million — the number of war refugees and displaced persons
  • The US federal price tag for the post-9/11 wars is over $8 trillion 
  • The US government is conducting counterterror activities in 85 countries
  • The wars have been accompanied by violations of human rights and civil liberties, in the U.S. and abroad
  • https://watson.brown.edu/costsofwar/

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Did the vision of Charles Wilson and the framers and advocates of NSC 68 bear fruit in terms of the domestic economy? The answer to this question is complicated, but in the end clear. The U.S. economy is subject to cycles of growth and decay; expansion and recession; and periods of increased consumerism and low unemployment versus periods of declining product demand, lower wages, and high unemployment.

Looking at the period since World War II, bursts of increased military spending brought the U.S. economy out of the recessions of the late 1940s and 50s. The 60s economy boomed as the Vietnam war escalated before the economic crises of the 1970s. The so-called Reagan recovery was driven by dramatic increases in military spending. 1980s military spending equaled the total value of such spending between the founding of the nation and 1980.

In addition, military spending has benefited those industries, communities, and universities which have been the beneficiaries of such largesse. In the first decade of the twenty-first century, Halliburton, Bechtel, and Kellogg, Brown, and Root did quite well. For example, when Dick Cheney left his post as Secretary of Defense in 1993 to become the CEO of Halliburton, its subsidiary, KBR jumped from the 73rd ranked Pentagon contractor to the 18th.

Military spending pumped money into the economy to the advantage of selected multinational corporations and some communities. Usually recipients of defense dollars were part of what C. Wright Mills called, “the power elite,” those powerful individuals who, at the apex of government, corporate, and military institutions, influence policy. On the other hand, most citizens were not beneficiaries of military spending.

                                        
                               

“Indirect effects” of military spending, usually overwhelm the short-term stimulative effects of such spending. Military spending is “capital intensive,” that is the investment of dollars in military goods and services require less labor power to produce than the investment of comparable dollars in other sectors of the economy. Robert Pollin and Heidi Garrett-Peltier referred to spending on Iraq as a “job killer.” They estimated that $1 billion spent on investments in education, healthcare, energy conservation, and infrastructure would have created anywhere from 50 to 100 percent more jobs than comparable spending on the war. They said; “Taking the 2007 Iraq war budget of $138 billion, this means that upward of one million jobs were lost because the Bush Administration chose the Iraq sinkhole over public investment” (The Nation, March 31, 2008).

Further, military spending requires government to borrow money from private sources. Consequently, the more borrowing for the military, the less funds are available for non-military economic activity. Non-military spending gets “crowded out” by investment in arms.

Paralleling this, expanding investments in military reduce the resources of society that can be allocated for the production of goods and services that have use values. Military spending constitutes waste in that the resources that go into armies, navies, air forces, and weapons of human destruction cannot be put to constructive use. Looking at government spending alone, the 2008 federal budget increased by $35 billion in military spending, bringing the total to $541 billion. At the same time federal aid to state and local governments fell by $19.2 billion. The war on Iraq cost $522.5 billion and it was projected by distinguished economists that the total cost for the war, including paying debts, veterans' benefits, and replacing destroyed equipment, would top $3 trillion (Linda J. Bilmes and Joseph Stiglitz, Washington Post, March 9, 2008, p.B01).

Andrew Bacevich summed up this tradition of permanent war in reviewing a biography of 1940s Secretary of Defense James Forrestal in The Nation (April 23, 2007):

“From Forrestal's day to the present, semi-warriors have viewed democratic politics as problematic. Debate means delay. To engage in give-and-take or compromise is to forfeit clarity and suggests a lack of conviction. The effective management of national security requires specialized knowledge, a capacity for clear-eyed analysis and above all an unflinching willingness to make decisions, whatever the cost. With the advent of semiwar, therefore, national security policy became the preserve of experts, few in number, almost always unelected, habitually operating in secret, persuading themselves that to exclude the public from such matters was to serve the public interest. After all, the people had no demonstrable ‘need to know.’ In a time of perpetual crisis, the anointed role of the citizen was to be pliant, deferential and afraid.”

It is the task of the peace and justice activists today (again in 2022) to build a mass movement, mobilizing the citizenry to reject the role of “pliant, deferential,” and fearful citizens. The people must insist that our politicians say “no” to the semi-warriors.

For example, The New Poor Peoples Campaign compares prospective impacts of military spending with spending on social and economic needs.

 https://ips-dc.org/wp-content/uploads/2021/12/PPC-BBB-fact-sheet.pdf





 

 

The Bookshelf

CHALLENGING LATE CAPITALISM by Harry R. Targ

Read Challenging Late Capitalism by Harry R. Targ.