Abstract
Perhaps the most obvious (and certainly the most sinister) difference between the post-war and pre-war worlds was the level of military expenditure carried on by the victorious powers. Disarmament had not been complete even after the First World War, but there was no precedent in the peacetime history of capitalism for the scale of arms spending which was now being undertaken. In 1950 military expenditure accounted for 6.6 per cent of the United Kingdom’s GNP, for 5.5 per cent in France and 5.1 per cent in the United States; a decade later the figures were 6.5 per cent, 6.5 per cent and 9.0 per cent respectively.1 One explanation for this persistent militarism was what the liberal economist James Tobin was later to describe as the ‘naive theory’ of arms spending, which saw it simply as ‘a response to world events’.2 However, this is less naive than it sounds. Undoubtedly there were serious political barriers to disarmament after 1945. France and (less desperately) Britain were embroiled in colonial wars, the United States was defending its newly-won ‘informal empire’, and all three were engaged in the long Cold War confrontation with the Soviet Union and China.
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Notes
D. Smith and R. Smith, The Economics of Militarism (London: Pluto Press, 1983), p. 23.
J. Tobin, The New Economics One Decade Older (Princeton, NJ: Princeton University Press, 1974), pp. 41–51.
S. Melman, The Permanent War Economy: American Capitalism in Decline (New York: Simon & Schuster, 1985), pp. 140–1.
F. Engels, ‘Can Europe Disarm?’ (1893), pp. 810–32 of O. Henderson, The Life of Friedrich Engels, volume II (London: Cass, 1976).
K. Kautsky, ‘Altere und Neuere Kolonialpolitik’, Die Neue Zeit, 16, 1897–8, p. 781;
K. Kautsky, ‘Finanzkapital und Krisen’, Die Neue Zeit, 29, 1910–11, pp. 802–4.
K. Kautsky, ‘Der Erste Mai und der Kampf Gegen den Militarismus’, Die Neue Zeit, 30, 1911–12, pp. 106–9.
R. Luxemburg, The Accumulation of Capital (London: Routledge & Kegan Paul, 1951 first published 1913). Ch XXXII
J. Robinson, ‘Introduction’ to Luxemburg, Accumulation, pp. 27–8. See also M. Kalecki, ‘The Problem of Effective Demand in Tugan-Baranovsky and Rosa Luxemburg’, (1967), in Kalecki, Selected Essays on the Dynamics of the Capitalist Economy (Cambridge: Cambridge University Press, 1971), pp. 146–55; and
R. Rowthorn, ‘Rosa Luxemburg and the Political Economy of Militarism’, in Rowthorn, Capitalism, Conflict and Inflation (London: Lawrence & Wishart, 1980), pp. 250–69.
N.I. Bukharin, Economics of the Transformation Period (New York: Bergman, 1971; first published in 1920), Ch. 3; Rowthorn, ‘Rosa Luxemburg’, pp. 251, 260–1.
E. Varga, Two Systems: Socialist Economy and Capitalist Economy (London: Lawrence & Wishart, 1939), pp. 137–8 and 238; original stress. On Varga see Ch. 1 of this book.
N. Moszkowska, ‘Erwartung und Wirklichkeit’, Periodikum für Wissenschaft-liche Sozialismus, 16, 1960, p. 10.
F. Pollock, ‘State Capitalism: Its Possibilities and Limitations’ (1941), in A. Arato and E. Gebhardt (eds), The Essential Frankfurt School Reader (Oxford: Blackwell, 1978), pp. 89–90.
P.M. Sweezy, The Theory of Capitalist Development (New York: Monthly Review Press, 1970; first published 1942), pp. 309–10.
P.M. Sweezy, ‘Peace and Prosperity’ (1953), in Sweezy, The Present as History (New York: Monthly Review Press, 1953), pp. 364–5;
cf. M. Kalecki, ‘The Economic Situation in the United States as Compared with the Pre-War Period’ (1956), in M. Kalecki, The Last Phase in the Transformation of Capitalism (New York: Monthly Review Press, 1972), pp. 85–97.
P.A. Baran and P.M. Sweezy, Monopoly Capital (Harmondsworth: Penguin, 1966), Ch. 7.
H. Gintis, ‘American Keynesianism and the War Machine’, in D. Mermelstein (ed.), Economics: Mainstream Readings and Radical Critiques (New York: Random House, 1970), p. 248;
cf. M. Reich, ‘Does the U.S. Economy Require Military Spending?’, American Economic Review, 62, 1972, pp. 296–303.
Melman, Permanent War Economy, p. 18: SIPRI Yearbook. 1989. p. 136.
R. Smith, ‘Military Expenditure and Capitalism Revisited’, paper presented to ESRC Political Economy Study Group seminar, London, 27 February 1987; R.P. Smith, ‘Alternate Models of Military Expenditure’, Discussion Paper in Economics 87/17, Birkbeck College, London, 1987; P. Dunne and R. Simth, ‘Military Expenditure and Unemployment in the OECD’, Defence Economics, 1, 1990, pp. 57–73; Symposium on the Political Economy of Military Expenditure, Cambridge Journal of Economics 14, 1990, pp 395–505.
A. Szymanski, ‘Military Spending and Economic Stagnation’, American Journal of Sociology, 79, 1973–4, pp. 1–14.
R. Smith, ‘Military Expenditure and Capitalism’, Cambridge Journal of Economics, 1, 1977, pp. 61–76;
E. Chester, ‘Military Spending and Capitalist Stability’, Cambridge Journal of Economics, 2, 1978, pp. 293–8
Smith, ‘Military Expenditure and Capitalism: A Reply’, Cambridge Journal of Economics, 2, 1978 pp. 299–304.
Reich, ‘Does the U.S. Economy’; M. Pivetti, ‘Military Expenditure and Economic Analysis: A Review Article’, Contributions to Political Economy, 8, 1989, pp. 55–67.
M. Bleaney, The Rise and Fall of Keynesian Economics (London: Macmillan, 1986), pp. 103–4.
M. Kidron, Western Capitalism Since the War (Harmondsworth: Penguin, 1970), pp. 12–13, 42–7.
Ibid, pp. 49, 55–61; M. Kidron, ‘Capitalism: The Latest Stage’, and ‘Imperialism: Highest Stage but One’, in Kidron, Capitalism and Theory (London: Pluto Press, 1974), pp. 11–31 and 124–42;
C. Harman, Explaining the Crisis: A Marxist Reappraisal (London: Bookmarks, 1984), pp. 75–121.
See also A. Martineau, Herbert Marcuse’s Utopia (Montreal: Harvest House 1986), pp. 48ff, 58, 94ff.
Compare K. Marx, Theories of Surplus Value, volume I (London: Lawrence & Wishart, 1969), p. 216 and ibid, volume II (London: Lawrence & Wishart, 1969), p. 423.
E. Mandel, Late Capitalism (London: Verso, 1980), Ch. 9;
cf. F.M. Gottheil, ‘Marx Versus Marxists on the Role of Military Production in Capitalist Economies’, Journal of Post-Keynesian Economics, 8, 1986, pp. 563–73.
L. von Bortkiewicz, ‘On the Correction of Marx’s Fundamental Theoretical Construction in the Third Volume of “Capital”’ (1907), in P.M. Sweezy (ed.), Karl Marx and the Close of His System (New York: Kelley, 1966), pp. 206–9, 214–15; cf. section V of Ch. 3 of volume I of this book.
P. Sraffa, The Production of Commodities by Means of Commodities (Cambridge: Cambridge University Press, 1960), pp. 7–8; see also Ch. 13 below. In joint production systems, however, there is no such simple intuitive definition of ‘basic’ commodities. Moreover, the causal importance of the conditions of production of basic commodities depends on the validity of the surplus approach in economic theory; see Ch. 15 below.
D. Purdy, ‘The Theory of the Permanent Arms Economy — a Critique and an Alternative’, Bulletin of the Conference of Socialist Economists, September 1973, p. 21; cf. Ch. 16 below.
Kidron, Western Capitalism, pp. 63–4; Smith and Smith, Economics, pp. 93–6; J. Cekota, ‘The Military Sector and Technological Change’, Peace Research 19, 1987, pp. 7–10 and 71–4.
See however, J.M. Cypher, ‘Military Spending, Technical Change and Economic Growth: A Disguised Form of Industrial Policy?’ Journal of Economic Issues, 21, 1987, pp. 33–59.
Melman, Permanent War Economy; M. Kaldor, ‘Warfare and Capitalism’, in E.P. Thompson (ed.), Exterminism and Cold War (London: Verso, 1982), pp. 261–87
cf. C. Barnett, The Audit of War (London: Macmillan, 1986).
C.Y.H. Lo, ‘Theories of the State and Business Opposition to Increased Military Spending’, Social Problems, 29, 1982, pp. 424–38.
A.C. Pigou, The Political Economy of War (London: Macmillan. 1921), p. 24.
J.J. O’Connor, The Fiscal Crisis of the State (New York: St. Martin’s Press, 1973), pp. 154–5.
L. Harris, ‘The Arms Race: A Burden on the Economy’, World Marxist Review, 27, 1984, pp. 89–95;
B. Fine and L. Harris, The Peculiarities of the British Economy (London: Lawrence & Wishart, 1985), Ch. 8.
J. Lovering, ‘The Atlantic Arms Economy: Towards a Military Regime of Accumulation?’, Capital and Class, 33, 1987, pp. 129–55.
Ibid, p. 92; C.Y.H. Lo, ‘The Conflicting Functions of US Military Spending after World War Two’, Kapitalistate, 3, 1975, pp. 26–44.
See also P. Kennedy, The Rise and Fall of the Great Powers (London: Fontana, 1989), pp. 447–698.
E.P. Thompson, ‘Notes on Exterminism, the Last Stage of Civilisation’, New Left Review, 121, 1980, pp. 3–31.
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© 1992 M. C. Howard and J. E. King
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Howard, M.C., King, J.E. (1992). The Permanent Arms Economy. In: A History of Marxian Economics. Radical Economics. Palgrave, London. https://doi.org/10.1007/978-1-349-21890-5_8
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