Paul Mattick 1959
Economics of the War Economy
: by Adam Buick.
EVER since Lord Keynes’ dictum that wars—like pyramid-building
and earthquakes—may serve to increase wealth, it has been
increasingly recognized that war and preparation for war are
necessary aspects of the prevailing economy and a condition of its
proper functioning. Because, in recent history, only inflation and
war have resulted in full utilization of productive capacities, the
question has been raised whether this association between war
and full employment is an accident or a necessity. It is usually
answered with the assurance that, although it is no accident, it is
not a necessity, for government expenditures can lead to full
employment whether they are geared to the needs of war or to the
requirements of peace. With full employment as the sole goal of
economic activity, even people opposed to war do not seriously
object to the creation of ‘wealth’ in the form of armaments and
military installation, even though they may prefer ‘wealth’ in the
form of social welfare.
Quite independent of preferences, government spending
includes an always growing amount for purposes of defense. The
‘military wealth’ of the United States is said to exceed $124 billion.
This ‘Real and Personal Property of the Defense Department’ does
not include investments in atomic energy estimated at $12.5 billion,
nor the properties of the ‘National Plant and Equipment Reserve,’
nor the supplies and equipment in overseas depots, nor the military
assistance to allied and favored nations. The great bulk of the
inventory consists of things that can be used up, wasted, or that will
become obsolete. The Defense Department is actually a
tremendous business enterprise. In 1955, for instance, it spent
more than $42 billion, or about one-seventh of the national income.
It was directly responsible for the employment of close to 4.5
million people, or about 7 percent of the national labor force.
As always, so now, too, there is much talk of cutting government
spending and reducing the budget deficit. This economy talk,
however, does not include spending for military purposes. On this
point both ‘savers’ and ‘spenders’ think alike. The ‘defense
establishment,’ as the President made clear recently, ‘is an
exception to the general desire of living within the amounts set by
the Budget Bureau after it had cut the spending requests.’
Opposing all cuts and arguing for increased government spending,