War On China? – II: US Military-Industrial Complex & The War Without End

By Sachithanandam Sathananthan –MAY 23, 2022

Dr. Sachithanandam Sathananthan

Military Keynesianism

We discussed in Part I how the Thucydides Trap “theory” is used to ideologically condition the US public for a War on China. It fits snugly with the military dimension: the Permanent War Economy. Almost immediately after the end of US military interventions, supported by some NATO members, in Vietnam, Kampuchea and Laos in 1973, the western economies sank back into an economic slump in mid-1975. It persisted with varying degrees of intensity despite skirmishers by the US in Nicaragua (1980s), Somalia and Arabian Gulf (1990s) and the Global War on Terror (2001 onwards).

Earlier, in 1933, John Maynard Keynes proposed an antidote to dependence on war to fuel a national economy. Regretting that “hitherto war has been the only object of government loan-expenditure on a large scale” and contradicting “cynics” who “conclude that nothing except a war can bring the major [1929] slump to its conclusion,” he countered that the State should intervene directly by creating financial resources over and above national revenue – government debt financing – to build public infrastructure and amenities (roads, bridges, parks). The money income poured into workers’ pockets would raise total consumer demand in the economy. Keynes recommended a deficit spending stimulus assuming competitive capital would respond by investing in the production of consumer and related capital goods and re-float the market economy. The resulting expanded tax base and increased fiscal revenues, would, Keynes expected, cover the deficit (debt) and “balance the books”.

However monopoly capital became increasingly dominant in core sectors while pushing competitive capital to the margins in western industrial economies. Monopoly capital is far less responsive to consumer Keynesianism – that is, it does not increase output and incomes commensurate with the deficit spending stimulus. The relatively sluggish response of monopoly capital curtailed the expansion in domestic manufactures and employment and limited the effectiveness of President Franklin D. Roosevelt’s application of the Keynesian fiscal mechanism – the so-called “pump priming” – in the New Deal. War-related production during WW2 became by far the primary driver that pulled US and allied European economies out of the 1929 Depression. The rise in the US national debt during the Korean and Vietnam wars too proved the “cynics” correct: western economies increasingly relied on debt-financed military expenditure to stimulate economic growth. The national debt multiplied for obvious reasons: goods of the arms industry – tanks, bombs, ammunition – expended directly on the battlefield do not circulate widely within the national economy to induce a multiplier effect and generate incomes. Revenues from arms sales to allies and in the black market flow into the coffers of arms industries but are nowhere near enough to generate fiscal revenues sufficient to offset the corresponding national debt; so the debt grew like a malignant tumour.

The tumour metastasised rapidly as the political class manipulated the overall Cold War climate of fear to inveigle tax payers to acquiesce in the debt-financed cycles of inventing weapon systems, maintaining them ready for battle and then scrapping them as obsolete to clear the deck for the next cycle of never-to-be-used weapon systems that nourished the insatiable M-I Complex and promised security through the well-known MAD (Mutually Assured Destruction) claim. It was but a matter of time before the overwhelming dominance of the M-I Complex entrenched Military Keynesianism. War expenditure recaptured its pride of place as the main economic stimulant, best demonstrated by President Ronald Reagan’s “Star Wars”, and transformed the country into the Permanent War Economy. The militarised economic base is complemented by its corresponding superstructure: the Permanent War State, which would be the fourth theory for war, the other three being Thucydides dynamic, Clash of Civilisation and the Domino Theory we discussed in Part I of this series.

Apologists for the Permanent War State assert that the endless war is the reality, apparently the highest achievement of Western Civilisation. For example, Rosa Brooks in her 2015 essay, “There’s No Such Thing as Peacetime”, asserted “[t]he Forever War is here to stay. Wartime is the only time we have.” Predictably it found a place in the Foreign Policy journal, the ideological platform of the hard-right White Establishment in the US.

Brooks’ US-centric approach is transparent. She views the past through the prism of the US invasions of Iraq and Afghanistan she witnessed in the first two decades of the 21st Century and, using broad brush strokes, she breezily explained in the essay that between 1900 and 2000, the US used military force against one or another of more than 21 countries. Whilst the US administration was no doubt entangled in Forever Wars in one country after another, it does not follow those countries were themselves perpetually at war with their adversaries in the neighbourhood or elsewhere.

Brooks then transposed the violence back to the “18th, 17th, 16th, and 15th centuries” which she alleged “were similarly marred by widespread conflict, punctuated less by periods of peace than by periods of smaller-scale conflicts.” Unable to provide evidence why almost all political groups, involved in “smaller-scale” localised and inevitably sporadic conflicts, could be taken to have engaged in perpetual war during the four centuries, Brooks, apparently disingenuous, unearthed a quote by a US military historian, who claimed “war, armed conflict between organized political groups, has been the universal norm in human history”. However, a universal norm of using weapons during occasions of struggles for power is not proof of perpetual war among all or most groups; that was never true with kingdoms in the past and is certainly not true for nation-states today.

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