Fernando Alcoforado*
This article aims to present when and how the military-industrial complex and the war economy were born and structured in the great capitalist powers and demonstrate the imperative need for both to be brought to an end in the world so that world peace can exist. Currently, the progress of a nation or a region is measured by the size and growth of the GDP (Gross Domestic Product). In calculating GDP, measures are made of production in industry, agriculture, the service sector, of the household consumption, government spending, business investment and the trade balance. The formula for calculating GDP is as follows:
GDP = private consumption (C) + total investments made (I) + government spending (G) + exports (X) – imports (M)
An economy goes into recession when there is a drop in private consumption (C) and in total investments made (I). It was Keynes who suggested that, in times of recession and depression, government spending (G) should increase to compensate for the drop in consumption and investment in the economy to maintain full employment. The war economy [1] emerged in Nazi Germany and the United States in the 1930s of the twentieth century as a set of economic practices applied with the aim of stabilizing a country’s economy during a period of war with the expansion of public spending. This happens when the functioning of the capitalist system collapses, as happened in Germany and the United States in the 1930s. From the 20th century onwards, in a depressed environment, unable to invest their profits in the reproduction of capital goods or consumer goods, the capitalist system, represented by its dominant class, sought to invest in a new area, the production of armaments, because war contributes to increasing the sale of arms, promoting the increase of industry, commerce and services and mobilize civil construction with the post-war reconstruction effort, such as the Marshall Plan after the 2nd World War, in addition to eliminating population surpluses with the mass murder of soldiers and civilian populations as occurred in the 1st and 2nd World War (80 million dead).
A war economy [1] operates as a system of production, mobilizing and allocating resources to sustain violence. Many nation states, particularly great powers, increase the degree of planning in their economies during wars. On the aggregate demand side, the war economy concept has been linked to the concept of “military Keynesianism”, in which the government’s military budget stabilizes business cycles and fluctuations and/or is used to fight recessions and depressions as Hiltler did in Nazi Germany after the 1st World War when the German economy recovered from the depression that occurred in the 1920s and Franklin Delano Roosevelt in the United States occurred in the 1930s when the North American economy recovered from the depression resulting from the crisis of the New York Stock Exchange in 1929. On the supply side, wars are seen to accelerate technological progress to such an extent that an economy is strongly strengthened after war, especially if it has not suffered war-related destruction. This was the case for the United States which did not suffer internal destruction as a result of World War II and it was not the case for Germany where much of the country was destroyed during World War II.
During World War II, the Nazis introduced new policies that not only caused Germany’s unemployment rate to drop, but also created a capable war machine. The Third Reich implemented a project and built factories to supply its rapidly expanding military. Both actions, the war machine and the building of the war industry, created jobs for many Germans struggling with economic collapse after World War I. Furthermore, Germany exploited the economies of the countries it invaded. The most important of these was undoubtedly France and its highly developed economy, one of the largest in Europe. The French economy supplied 11% of Germany’s national income (during the German occupation of France), which covered five months of Germany’s total income for the war. Using extortion and forced labor, the Nazis diverted much of France’s economic output to their benefit. During the first months of the Nazi occupation, the French puppet government of General Petain was forced to pay a “quartering” fee of twenty million marks to Germany per day. Supposedly, the fee was payment to the Nazi occupying forces. This money was used to fuel the Nazi war economy.
The United States has a very complex history with the war economy. Many notable examples occurred during the 20th century, in which the main conflicts of the United States consisted of the two World Wars, the Korean War and the Vietnam War. In mobilizing for World War I, the United States expanded its governmental powers by creating institutions such as the War Industries Board (WIB) to help with military production. During World War II, the US government took similar steps by awarding defense contracts, allocating scarce resources – such as rubber, copper and oil – to military uses and persuading companies to convert to military production. Two-thirds of the US economy was integrated into the war effort by the end of 1943. Because of this massive cooperation between the government and private entities, it can be argued that the economic measures adopted before and during World War II helped to form the complex industrial-military [3]. The United States has been involved in numerous military endeavors in the Middle East and Latin America since the 1960s. The United States has been in a continuous state of war since the September 11th attacks, [2] whose annual military budget is greater than the combined military budgets of India, China, Russia, United Kingdom, Germany, Saudi Arabia and France [1].
The construction and expansion of the US military-industrial complex during World War II was a powerful instrument at the service of US global power. The wars and their masters became a permanent issue in matters of domestic policy and international insertion of the United States. The arms industry lobby is considered one of the most powerful in the country. It brings together members of Congress linked to districts dependent on this industry, the Department of Defense and the arms related to it, and large companies such as Boeing, Lockheed Martin and Northrop Grumman, for example. Since World War II, military spending has multiplied in the United States and, driven by the Cold War and then by 9/11, has never stopped growing. War has been used by the United States government as an ongoing effort to avoid deteriorating economic conditions or currency crises in the country, with the government promoting the expansion of services and jobs in the armed forces and the expansion of the war industry, which is the largest of the world.
Reports published annually by SIPRI, the Stockholm International Peace Research Institute, show that the United States remains the largest contributor to military spending in the world. In the 2021 document, even before the start of the War in Ukraine, the North Americans appeared as those who employed US$ 778 billion in this sector. In second place, with a noteworthy difference, came China (US$ 252 billion), followed by India (US$ 72.9 billion) and only then Russia (US$ 61.7 billion). The role of the US military-industrial complex gained prominence recently when President Joe Biden visited a Lockheed Martin facility in Alabama. It is the largest arms producer in the world and one of the most important suppliers to the US government. Contracts, in recent years, have exceeded billions of dollars. In addition, Lockheed Martin is also often mentioned in the context of discussions involving NATO’s role in the world, since it is one of the organizations that most encourages its expansion [2].
Biden’s visit to Lockheed Martin reinforced his call to the US Congress to speed up approval of a new military aid package for Ukraine. It is worth remembering that, shortly before, Germany, which is in the process of reviewing its position on disarmament, also announced the purchase of F-35 jets from Lockheed, which caused a spike in the company’s share price, reaching an increase of 43.4% in just four months. Since the beginning of the conflict between Russia and Ukraine, the Americans have sent billions of dollars in weapons to the Ukrainian government, and the Pentagon budget has not stopped growing. Fighting a Cold War-like “common external enemy” won bipartisan support in the United States [2].
How to celebrate peace in the war between Russia and Ukraine? The war between Russia and Ukraine will only come to an end if its causes are eliminated. There are two causes of the war: 1) the expansion of NATO, a western military alliance, towards Russia’s borders; and, 2) the desire of the government of Ukraine to join NATO. These were the two reasons that contributed to Russia’s invasion of Ukraine to eliminate the threat of Ukraine joining NATO. Attempts to celebrate peace between the governments of Russia and Ukraine were unsuccessful and what is observed is the increase in the bloodbath of soldiers on both sides and the Ukrainian civilian population, the increase in refugees and the destruction of the infrastructure of the Ukraine by Russian bombing. The celebration of peace in Ukraine did not produce advances because the ones who should negotiate it would be the governments of the United States and Russia because only these governments would have the capacity to eliminate the causes of war. However, irresponsibly, the US government does nothing to negotiate peace with the Russian government, instead arms the Ukrainians, and imposes economic and financial sanctions against the Russian government and its citizens causing the war between Russia and Ukraine could evolve into a conflict that would spread across Europe and the world, turning into World War 3.
It is very unlikely that the US government with its military-industrial complex will work to build peace in the conflict between Russia and Ukraine. With 102 wars in its bellicose “curriculum”, the United States is probably one of the countries most involved in military actions in the world that began with the annexation of Mexico’s land to its territory and the conquest of the Panama Canal. It is no coincidence that the United States is one of the countries that most benefit economically from armed confrontations, since the largest arms exporters in the world are American. In addition to selling ammunition and weapons, the United States also monetizes with security contracts and military training, which makes many members of the US Congress understand wars as a machine that generates jobs and money. Peace, for the United States, could cost it dearly. It is these facts that lead many to question the real motivation of the United States in defending Ukraine, which for years has been in a state of tension with Russia. It is evident that, as long as there is a war industry in the world, wars will continue to proliferate across the planet. Peace in the world will only happen when all countries are disarmed and the manufacture of weapons ceases.
From the above, it can be said that the great capitalist powers, having war industries, sponsor the arms race and the maintenance of permanently organized armies divorced from civil society and at the same time leading to the radical subversion of the economy and society. The large military-industrial complex detached from civil society requires the proliferation of wars and the adoption of a permanent war economy. This new economy of death spread like a shroud over the structures of societies in the contemporary era, especially in the United States. The modern democracy of the West is unable to hide the fact that it is governed by the monster represented by the apparatus that continuously manages and disciplines the apparently free citizen of the State in the name of the total monetary economy and the war economy linked to it until today, especially in the great capitalist powers. In no society throughout history has there been such a large participation of civil servants and administrators, soldiers and police, and none of them has ever used such a large portion of its resources in armaments and the army as it does today.
One fact is evident: peace will never be built in the world with the existence of the military-industrial complex and the war economy, especially in the great capitalist powers. This is why the end of the military-industrial complex and the war economy in the world becomes imperative. This means that, for peace to exist in the world, there must be an end to the military-industrial complex and the war economy. For there to be peace in the world, there must be world disarmament. For peace to exist in the world, would the holders of political and economic power in the great capitalist powers accept global disarmament? Would the war industry leaders and lobby accept the end of the war economy? No is the answer to these two questions. This means that humanity is facing an impasse that is difficult to overcome, which is to disarm the warmongers and end the war economy to make world peace prevail.
REFERENCES
1. WIKIPEDIA. War economy. Disponível no website <https://en.wikipedia.org/wiki/War_economy>.
2. MAGNOTTA, Fernanda. Nos EUA, complexo industrial-militar se beneficia com a Guerra da Ucrânia. Disponível no website <https://noticias.uol.com.br/colunas/fernanda-magnotta/2022/05/07/nos-eua-complexo-industrial-militar-se-beneficia-com-a-guerra-da-ucrania.htm>.
3. WIKIPEDIA. Complexo militar-industrial. Disponível no website <https://pt.wikipedia.org/wiki/Complexo_militar-industrial>.
* Fernando Alcoforado, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, of the SBPC- Brazilian Society for the Progress of Science and of IPB- Polytechnic Institute of Bahia, engineer and doctor in Territorial Planning and Regional Development from the University of Barcelona, college professor (Engineering, Economy and Administration) and consultant in the areas of strategic planning, business planning, regional planning, urban planning and energy systems, was Advisor to the Vice President of Engineering and Technology at LIGHT S.A. Electric power distribution company from Rio de Janeiro, Strategic Planning Coordinator of CEPED- Bahia Research and Development Center, Undersecretary of Energy of the State of Bahia, Secretary of Planning of Salvador, is the author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019), A humanidade ameaçada e as estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021), A escalada da ciência e da tecnologia e sua contribuição ao progresso e à sobrevivência da humanidade (Editora CRV, Curitiba, 2022), a chapter in the book Flood Handbook (CRC Press, Boca Raton, Florida United States, 2022) and How to protect human beings from threats to their existence and avoid the extinction of humanity (Generis Publishing, Europe, Republic of Moldova, Chișinău, 2023).
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