Anti-Capitalist Chronicles: War - Who Benefits From It?

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“The one sector of government that doesn’t experience austerity is the military budget.” In this episode of Anti-Capitalist Chronicles, Prof. Harvey looks at the role of military expenditures in contemporary capitalism in the US and how it affects the rest of the world. From WWII to the Cold War, to the Iraq War, to the current Russian War on Ukraine, the US has consistently found ways to justify expanding the military budget, while shrinking almost every other government sector. But who benefits from this constant expansion? As Harvey reveals, it’s the politicians who represent locales with military bases and the corporations like Lockheed Martin and Boeing, that provide the military supplies and equipment.

Transcript has been edited for clarity.

This is David Harvey and you're listening to the Anti-Capitalist Chronicles, a podcast that looks at capitalism through a Marxist lens. This podcast is made possible by Democracy at Work.

I start my podcast today with a certain date, which is June 14, 1944. At that time I was nearly nine years old, and on the night of June 14th, I became acquainted with something
called “doodlebugs.’

A week before June 14th, the D-Day invasion of Normandy had occurred. The place where I lived on that night was full of aircraft flying. We knew something was up because it was sortie, after sortie, after sortie of aircraft flying over, presumably to drop bombs on the German positions. I remember it in particular because I was watching the night sky, and most of the planes were flying without lights, and suddenly there was a big flash and a bang, and I thought there was some explosion. I didn't know what it was. We thought something happened, but it turned out it was two planes that [had] collided, and that's always in my memory.

But June 14th was very different because there was noise in the sky and it was a peculiar noise in the sky. It was rather like a very old motor chug-chug-chugging its way, and when we looked out the window, we saw what seemed to me at the time huge, black beetles coming across the sky, spitting fire as they came. We were watching this, and at first I think everyone thought it had something to do with the D-Day invasion, and then my mother suddenly realized that they may be coming for us. So it was [at] that point that I was picked up, pushed downstairs and thrown under the stairway, because under the stairs were the safest place to be in the case of bombs dropping. This was the first rocket attack coming from the Germans towards London. We were in between Germany and London, and so they were coming over our head and there was wave after wave of these doodlebugs. What we soon learned was that all the time the engine was going, there was nothing to worry about. So when the things were going chug-chug-chug across the sky, we would (later on) just stand and watch them, just get used to them going. The thing was that as soon as they ran out of fuel, they would crash, and when they crashed, of course they exploded, so the first wave of doodlebugs was this kind. But I was very, very frightened by this, and therefore it's indelibly in my “condition” to think about this, and [it] has always remained with me. Right now I'm watching what is going on in the Ukraine and I'm watching the rocket attacks.

Soon after the doodlebugs, about a month later, we started to get what were called V2s, which were rockets. The doodlebugs are bomb engines flying across the sky. The rocket attacks came about a month or so later – the V2 – and about three or four thousand people died in Britain from the rocket attacks. I never saw the rocket attacks and we never heard them, of course, and most of them did not come over us so that we wouldn't see them. They just were up in the atmosphere and then landed mainly in and around London.

So this is my early experience, and it stayed with me because I always think, when I see sights such as what's going on in Ukraine, I think, “What's happening to the kids there? How many kids, nine year old[s] – what effect is [this] going to have on them?” Because this experience was a traumatic experience in my own life, which played a very significant way in which I react to all the visual images which are now getting of the destruction in Ukraine. I think it's images which actually transfer, so one of the things that is bothering me right now is while
everybody is decrying what is happening in Ukraine and going on and on and on about Putin and so on – and of course I share all of those opinions – but then I remember the attack upon Baghdad and the opening of the Iraq war, back in 2003.

At that time I remember … I was visiting Madrid and I took off in the late afternoon from New York. I arrived in Madrid the next morning, and during that period war broke out. The invasion of Iraq had begun and of course the invasion was preceded by this rocket attack upon Baghdad and we saw it all on television. There were these red flashes and blue flashes and green flashes and so on, and we were assured these were only military targets which were being hit, but we now know that of course that was not the case. And even if it was only military targets being hit, I was thinking “What's happening to the kids? How is it affecting them? How terrifying it might be.” And I went back to that moment where I was being terrified by the doodlebugs and thinking to myself, well you know, this is very minuscule compared to what is going on in Baghdad, which in some ways is minuscule in relationship to what is happening in Ukraine.

Except, that while we're all going on about how dreadful it is, [about] why would
Putin do this, it was equally dreadful that Bush did that to Baghdad. As we now know, it was all based on a complete lie about him having weapons of mass destruction, and in the same way we can say, “What is Putin trying to do?” He's trying to impose upon [Ukraine] a certain way of living which is consistent with his ideas about the universe. What did we do in iraq? The Coalition Authority that took power in the wake of Saddam's defeat and death, what happened there is that they effectively prescribed a neo-liberal constitutional order. Bremer, who took over the Coalition Authority, insisted that all public enterprises be privatized, that everything should be open to foreign investment, that there should be no barriers whatsoever to the transmission of profits from foreign investment abroad, and also there were certain requirements of
labor about labor organization and so on.

So in effect, when I'm sitting here and I'm listening to all this stuff about how much we should decry what Putin is doing and all the rest of it, I think the same people who actually were behind what happened in Iraq are now pretending they're the good guys. And as far as I'm concerned, they're all bad guys. We'd have to start to think about how to how to deal
with these bad guys, and what this bad guy stuff is all about, and it's just bad guys on both sides now.

This brings me to one really interesting sidebar on this. The V2 rockets that landed on Britain were designed and developed in Germany in a very, very scientific way, and the scientific power behind them and the technological knowledge behind them was very, very significant. So what happened after the end of World War II? All of the German scientists were picked up from Germany, and not attacked for having engaged in war crimes or anything of that kind. No, they were picked up and brought to the United States, and they formed NASA and the whole rocket science aspect of U.S. military engineering. The head of this program was none other than Wernher von Braun, who is the famous leader of the whole NASA effort to develop international rocketry science and ballistic missiles and all the rest of it.

So you then [see] there is a certain continuity between this German effort to produce the V2s, which was part of my upbringing, and the subsequent development of rocket science in the United States, which was about military expenditure. Which then, of course, immediately brings us to the question of: why is it that World War II, which was the center of a lot of technological innovation and significant innovation, led into the idea that there should be no giving up on technological science being applied to military ends? And this leads me immediately to one of the reflections which I’ve thought about and occasionally mentioned in these podcasts, which is: what's the role of military expenditures? What's the role of militarization? What's the role of the military-industrial complex as Eisenhower described it back in the 1950s? What is the role of the military-industrial complex in contemporary capitalism in the United States?

I want to argue that in the same way that wasteful expenditures on all sorts of
crazy real estate ventures and built environments and so on, are one of the ways in which surplus gets absorbed, so military expenditures are one of the ways in which surplus can get absorbed, and a large quantity of surplus which is very difficult to absorb right now because there's so much of it. Large quantities of surplus are being absorbed in military expenditures. So in a funny kind of way, the military expenditures which the United States has developed over the last twenty or thirty years – those military expenditures have finally found a use. That is, their use value, is they can be sent to Ukraine… the military equipment which is going to Ukraine actually has a use. But even if they don't have a use, then their use is that they absorb surplus capital in an acceptable way. This absorption of surplus capital is a very important problem for an expansionary system. That is, capital is expanding at a compound rate, about three percent per annum, and that three percent becomes larger and larger and larger, so we now have a global economy of something like 90 trillion dollars. But then three percent on 90 trillion dollars is going to soon get you to 150 trillion dollars, 200 trillion dollars.

So where is all that excess money, all of that surplus, going to go? That problem has been around since the 1950s and it has partially been solved by an expansion of military expenditures. Military expenditures have no productive use. They have only a destructive use, and I would like to comment that the destructive use is important, because if you destroy something then you've got to rebuild it. So the rebuilding of Europe after World War II was a terribly important way in which the economy of the 1950s and 1960s was revitalized. We've seen examples of earthquake destruction and so on which actually creates the possibility for new employment and rebuilding. That surplus absorption is one of the big themes in capitalist political economy which is not really given enough concern, and this form of surplus absorption I’m talking about is the surplus absorption that comes with military expenditures.

Now this is a point whereI want to make a very explicit argument about Ukraine history and the argument is this: that in 1991 we saw the end of the Cold War. Now, the justification for all the military expenditures in the 1950s, 1960s, 1970s was always, “We've got to keep up with the Soviets.” And when the Soviet [Union] did the Sputnik, that sent everybody crazy and so everybody had to get involved in space science and … getting a man on the moon and all that kind of thing. So Sputnik had a big, big impact. Then you find what the military industrial complex does – [that] is, it has a propaganda arm which generally says there is some military weakness which has to be cured. It can be a missile gap. It could be anything of this kind. You start to say that we are vulnerable and we're insecure because we are not in advance of what we think the Soviets are doing, and even if they are or not it doesn't matter. As long as we think they're doing it, it then becomes significant. The propaganda arm will say, “We have evidence that the Soviets are developing these kinds of missiles, so we've got to develop another kind of missile defense, and new kinds of missiles that can get past the defense.” These are the sorts of issues which then get propagated into the public, and they then lead into another bout of massive expenditures on armaments and the military.

Now when the cold war ended, it seemed as if the reason for these military expenditures had gone away. The enemy had collapsed. [...] In fact, in part they had collapsed as a result of an arms race. This was another very interesting aspect of the military expenditures story. The one sector of government which doesn't experience austerity, or rarely experiences austerity, is the military budget. So even though there may be a demand that everybody should save, and everybody should engage in austerity, and there's less money for social expenditures, less money for education, less money for health care, less money for public investments – all those kinds of things – the one thing they always say (except one side is saying it) is: “That is not true. We cannot have less money for military expenditures because that will put ourselves at risk.”

Now this argument becomes very significant, and it's significant particularly at times of recession. In 1980-1982, there was what we call the Reagan recession. All of the inflation of the 1970s was a problem. Paul Volcker had raised interest rates.There was a recession.The answer to the recession, the Republicans and Reagan said, is just to try to shrink public expenditures. That's the way out of it–except for military expenditures. What Reagan did was to engage in something which subsequently became called “military Keynesianism”---that is, he borrowed money like crazy, to spend like crazy, defense. And he did so very overtly in relationship to the Soviets and one of his plans was—and this may have been significant in what happened—to essentially try to bankrupt the Soviets, because the Soviets would not be able to keep up with the massive expansion of expenditures in the military that Reagan set in motion.

Now you ask yourself, “Where is the military industrial complex located? Where are all of the corporations? Where are all of them now?” There are two aspects to this. One is the military establishments which are very significant now in the economies of local places. What happens in Congress is that you bid, if you can, to get a military establishment in your state. And once you've got it, you protect it to no end, and when there's a proposal to close some military camps, all hell breaks loose locally. That's the end of our economy because that's the heart of our economy, and in Congress everybody gets together and says, “No, you can't you can't do that,” so it actually turns out to be very difficult indeed to close down the military establishments and the military camps in the different states and in the different localities. Everybody fights like crazy to keep them. At some point or other there was a commission to try to close down some, and I think they managed to close down three relatively small establishments, because of the political resistance to [closing]. So there's a vested interest, therefore, in keeping a very large military establishment in place for that reason.

The second part is of course the suppliers and research and military equipment — McDonnell Douglas and Lockheed and Boeing and those kinds of corporations. Now if you look at where these establishments are located, you find they're actually located in this big arc, which starts off very gently in Maryland and Virginia, goes big-time through the Carolinas, goes into Texas, ends up in Los Angeles and then goes up to Boeing in Seattle. So there's a big arc of military-minded corporations, and through that big arc, interestingly enough, when you look at who voted for Reagan in the 1980 election, you find it’s people in that big arc. So there he is paying them back, as it were, by saying okay, everywhere else is gonna suffer austerity, but you lot are gonna do okay because we're gonna expand military expenditures like crazy. So that arc did extremely well in the crisis of 1982, and the high unemployment rate did not hit those places. This was largely in the Sun Belt. It was not in the Rust Belt. So you find that the military arm of government expenditures has a political use in those two senses.

So, at the end of the Cold War in 199, finally the whole thing was over. Now at that point, everybody started to say, “Now's the chance for a peace dividend. We don't we don't need all these expenditures anymore because the Soviets have collapsed. Russia is diminished in all kinds of ways — its economy is in shambles, its empire is gone — so there's nothing there to be frightened about. Why don't we collect what in the Clinton regime was called a ‘peace dividend?’ Where is the peace dividend? We can actually cut back on military expenditures because there is no threat.”

Now at that point, the military establishment got together with the neo-conservatives and the hawks, and started to say, “Yes, but there's a very serious problem around the world. We have to actually expand military expenditures.” And part of that then took up a saying: “Well, what are we going to do about NATO?” NATO was built to try to resist Soviet domination — that was what it was about. NATO no longer had a reason to exist. In fact, you could have disbanded NATO in the 1990s very easily if you wanted to. Instead of which, the hawks, and the military-industrial establishment persuaded us not only that there should be no peace dividend, [but] you should keep on doing the research and maintain the military establishments all around the country and and abroad, that all of that apparatus should be maintained just in case, but not only that — but that NATO would expand.

So we get this push to try to bring in all of those states which had been part of the Soviet bloc into NATO. We get this urge and push to expand NATO. This was in some ways a crazy idea: to expand it at a particular moment when Russia was on its knees. Russia had a collapsed economy. Life expectancy in Russia was in decline. The U.S. and the International Monetary Fund was telling Russia that they had to go through shock therapy in order to come into the capitalist world and reap the benefits of global capitalism. There was a little, cute remark made by Boris Kagolitsky, a Russian intellectual, who said, “In 1991 we all thought that the arrival of a capitalist market economy was going to send us one way. We all thought that we were getting on a jet plane to Paris where the annual income is fifty thousand dollars per year, and it was a bit like we got halfway across where we were traveling to, and the pilot came on and said welcome to Burkina Faso, which only has a per capita income of around two thousand dollars a year.”

The Soviet Union was in total shambles, total collapse. It was being humiliated economically — absolutely humiliated economically — and it was in really bad shape during the 1990s. Its monetary system collapsed. If you traded things in Russia in 1992-93, the trading item was bottles of vodka. The large corporations that existed traded bottles of vodka. That was their currency rather than rubles because rubles weren't worth anything.

When you get a total economic collapse, what does the world do? The total economic collapse that occurred after world war II was mitigated by a Marshall Plan, that is, the U.S. went in and said, “We are going to revive the Japanese and the German economies.” Of course, you could say they did that just because they were good people, but no, they were really doing it because that was the only way in which they could defend against Communism. They needed to develop vibrant capitalist economies in places like Japan and West Germany in order to say, “Well, we have a better kind of world than the Communists do.”

There was no Marshall Plan for Russia. There was, in fact, almost a gloating, because this was a time when people started to talk about the end of history: “Everything is over and we have won!” There were people in Russia saying, “What do you mean, we have won? You have won. What's happening to us, well, we're down the chute and nobody is helping us — absolutely nobody's helping us.”

At the very moment that's going on, militarily, what are the United States and NATO doing? What [they’re] doing is, expanding its military capacity and expanding it in a double fashion — expanding its rocketry and its atomic weaponry and all those kinds of things. At the same time, it's actually beginning to bring more and more people into NATO. A lot of people at the time said that this is insane.

There's a man called George Kennan. Now George Kennan was a kind of elder statesman, and he was the big designer in the 1960s of what was called the containment policy. This approach to the Communist threat was to say, you cannot go against it directly. We cannot risk an interchange of nuclear weapons, because by then both Russia and China had atomic weaponry. We cannot risk that, so how do we contain it? In two ways: One is we build strong pro-capitalist economies around. That is you do that in Germany, or you allow it to happen in Germany, and you help it happen in Germany, and you help it happen also in Japan, and then you help it happen in South Korea, and you help it happen in Taiwan and Singapore and all the rest of it.

In other words, Kennan was into the containment strategy and he said if we can develop strong and vibrant capitalist economies surrounding the Soviets, surrounding China, then the threat of Communism is contained, and that's what we do. He was no friend of Russia or China, but what Kennan saw in the 1990s was [that] the threat from Russia in particular is over. It's over. So what did he say? I have a quote from what he said in 1998, which I think is very telling.

He went to NATO and he gave a speech, and he said, “Look, I'm appalled at what you're doing… I think this is the beginning of a new cold war. I think the Russians will gradually react quite adversely, and it will affect their policies. I think this is a tragic mistake. There was no reason for this whatsoever. No one was threatening anybody else. The expansion of NATO would make the Founding Fathers of this country turn over in their graves. Of course there is going to be a bad reaction from Russia. And they, the NATO expanders, will then say, ‘We always told you that that is the way in which the Russians are going to behave. But this is just wrong.”

In a way, Putin has reacted in exactly the way that Kennan suspected would happen if you went ahead with this expansion of NATO and pushed it up to the edges of Russia. So here now we are in this mess which is again, very important. I 'm not saying this to excuse anything that Putin is doing. I'm just simply saying what we have here is the keeping alive of the U.S. capitalist economy through military expenditures, the constant expansion of militarized interests and the constant expansion of the military budget, research, new products and all the rest of it, very much tied to the kinds of research which is going on in these establishments. You've got that on the one side. This is actually creating a situation in the world, where if people are not on board with this — that is, if people are not totally sort of involved inside of this but are on the outside of it as Russia and China were, then you're going to get their reaction.

What concerns me is, we probably need NATO right now to be able to resist these awful things which Putin is up to, but if and when this is over, one of the things we should do is to start to say hey, it's about time we demilitarize the economy. It would be so interesting to see how well capital can survive without a demilitarized economy. My view is that demilitarizing the economy would be not only a security threat, but in part, it has been kept alive because demilitarizing the economy will be a serious economic threat. If you close down all those military bases in all those places around the country, if you really suck it to to those corporations that are heavily into the provisioning of the defense industry, then there'll be serious kind of economic [ramifications] coming out of that.

Of course, the argument about the peace dividend was: we've got all that money, it's all going into military expenditures. Why can't we put it into building better hospitals, building better schools, building better social fabric? Why can't we do it that way? Yes, indeed, we could use the
the peace dividend that way if it was possible. But the trouble is that there are strong, strong vested interests in favor of perpetuating militarism, in favor of perpetuating defense, in favor of perpetuating all of the mess that has actually led into the current version of the mess.

And is that the way we want the future to be? I want to argue as part of an anti-capitalist strategy that we should have very much in mind the idea of involving ourselves strongly in a peace movement. The peace movement, back in February 15, 2003, about 15 million people came out on the streets of the major cities to say, “We don't want war.” I don't believe the people in the Ukraine want war. I don't believe the people in Russia want war and I don’t believe the people in Europe want war. The people in the United States don't want war. None of us wants war, and yet here we are, close to war.

Thank you for joining me today. You've been listening to David Harvey's Anti-Capitalist Chronicles, a Democracy at Work production. A special thank you to the wonderful Patreon community for supporting this project.

Transcript by Cindy Mitlo
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