From the US Presidency to the media to academia Military Keynesianism is strong and alive even today. The establishment, even in a recent large conference in Berlin on military budget reductions, consistently looks at military spending as either money or jobs. Nobody seems to understand that military spending is much more than that, it is lost capital investment and lost manufacturing and lost manufacturing productivity. This lost economic growth opportunity is far more costly to society than any other aspect of military spending and is rarely understood or researched at all. This “changes everything”, to recognize the economic stagnation and socio-economic decline of empire and manufacturing that directly results internally with high levels of military spending, indeed, at any level of military spending. This is what I mean by the “Peace Economics” difference, a term I invented in 1986 and has been stolen and misused by the Italians and Code Pink among many others. Inevitably, when others use the term, they mean money and jobs only, not the engines of economic growth in the terms manufacturing, investment, and productivity. There is a widespread false equivalency assumed between the military economy and the manufacturing economy. The fact that one is economically a dead end and the other leads to economic progress is lost on almost everyone, including almost all peace studies people.
Peace Movement Compromised
Forty-five years ago, in the middle of the 1980s decade, I picked up a copy of the Peace Resource Handbook. That source listed 5000 peace organizations located in the fifty United States. In the eleven former Confederate States the number of peace organizations is unusually low. Everywhere else, the number of peace organizations per capita by state is 90% correlated with the military spending per capita in that state. Hence the peace movement is strongest in California and Massachusetts. Hence the peace movement is compromised by its close association with the high military spending states. Military Keynesianism thrives under such circumstances, the false notion that military spending is just money and jobs. This interpretation does not recognize the lost opportunity cost that is the essential recognition of Peace Economics. I have witnessed firsthand many times how the presence or absence of military spending colors a local community. Therefore I worry about the compromise entailed in locating the peace and justice (PJSA) headquarters in Georgetown University, the number one source of CIA and Foreign Service students among all colleges. Memories include the “Gays in the Military” phone saturation protest in DC on Clinton inauguration day 1993 and driving through Utah listening to the glories of the aircraft carrier on a long radio broadcast.
Evidence of Stubborn Resistance
While the field of peace studies barely existed prior to 1970, it grew steadily after the Vietnam War. In January 1986 I visited the offices of the Progressive Magazine and discussed my research with someone who called himself Matt Centrowitz, who eventually threw me out of the office because I did not read the New York Times and had not yet figured out the paradox of how military spending can lead to local economic growth even while it inhibits national economic growth. It must have been Matt Rothschild, who worked at the Progressive since circa 1983 and became editor from about 1990 to 2014.
In the Fall (October) of 1987 as I was teaching my second course of Peace Economics at the University of Oregon, I met Seymour Melman, the leading author of economics of peace books like Pentagon Capitalism. I presented my Peace Economics in a conference held at Oregon State University in Corvallis while Melman was the keynoter. There he was answering questions when he got one, I knew the answer to but was sure he didn’t. So I answered explaining why the economics of military spending had not really caught on in the peace movement. That was because peace was in two fields at the time, the anti-nuke environmentalists and the anti-interventionists of the human rights field. Neither main group was interested in economics.
Next, I met Alexander Cockburn who boasted he had a socialist column in the Wall Street Journal. I gave him a copy of my Peace Economics (1986) book explaining how military spending hurt the economy, but the next month he wrote a column reaffirming the Military Keynesian economic orthodoxy.
In 1990 at a Eugene Oregon conference I explained the paradox of how military spending can be non-productive and yet defense contractors contribute to the calculation of manufacturing productivity. The answer is that the weapons contractors are suppliers to the military machine, hence they are heavy machinery suppliers like those who create the assembly line machinery in a normal factory. Hence the military “factory” is light manufacturing and takes inputs from the heavy manufacturing weapons industry.
Paul Krugman, Nobel Economics Laureate and New York Times columnist still clings in his books to the idea that World War II brought the US out of the Great Depression. He does not recognize that the war bonding deficit and massive consumer sacrifice really brought us out of the Depression despite the war spending drag on the economy, which clearly shows up when you correlate the annual economic growth rates with the net military spending. Net military spending is the difference between the federal deficit and military spending, which largely offset each other during the war years. From 1941-48 the NET military spending explains the economic growth rate with 97% accuracy.
Joseph Stiglitz, Bill Clinton’s economist, comes closest to the most accurate military spending perspective, almost a Peace Economist. But he fears the military industrial complex, so he hints around in British newspapers and one page in his book Three Trillion Dollar War. I’ve seen him on TV explaining World War II in Peace Economics like terms, preferring to hint rather than state things straight out.
Larry Summers, Obama’s economist, lambasted the great Seymour Melman when he spoke at MIT. He is an old-fashioned Military Keynesian. His belief in military economics lead Obama astray when he tripled the 30,000 troops in Afghanistan to 90,000 even as he withdrew from Iraq. This kept military spending high and delayed the recovery from the Great Recession until the 2011 withdrawal from Iraq.
When the last three Democratic Presidents start military buildups in their last year in office leading to three Republican wins in the presidency, clearly the Military Keynesians are in charge, believing in the military economy despite the negative national economic growth and manufacturing recessions produced. Despite the clear empirical record, military Keynesianism rules the day, thanks to the murkiness of social science thinking. While the basics were nailed down in 1986, many nuances have added to the understanding in recent decades and especially since my 2009 doctorate.
Definitive 64-year proof of Peace Economics in US economic history:
Please cite this work as follows: Reuschlein, Robert. (2020, January 29), “More Than Money and Jobs” Madison, WI, Real Economy Institute. Retrieved from: https://www.expertclick.com/NewsRelease/More-Than-Money-and-Jobs,2019207808.aspx
Dr. Peace, Professor Robert Reuschlein, Real Economy Institute, Nobel Peace Prize nominee 2016-2020 with accelerating interest from Norway.