By Sachithanandam Sathananthan –

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 21^st 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.

The one exception is the US, locked into unceasing, egregious aggression to achieve Global Domination as the former US national security advisor Zbigniew Brzezinski helpfully elucidated in his The Grand Chessboard.

President Barak Obama to his credit expressed a sane vision for the world that “this [global] war, like all wars, must end. That’s what history advises.”

Brooks disagreed and reinvented history: “[f]or much of human history, war has been the norm and peace has been the exception”; she ignored the well-known fact that wars are invariably well documented whilst peacetime activities rarely attract comparable attention – an imbalance that deceptively downplays longer periods of lasting peace.

In an Orwellian twist, Brooks argued the new norm of a Permanent War State should be accepted in order to enact legal and institutional safeguards to protect non-combatants under enduring war. She argued the Geneva Conventions and allied legislation treat times of war as exceptional periods and, therefore, permit temporary violations of human rights and individual liberties on grounds of national security, on the expectation they are destined to be replaced fairly soon by normal stretches of peace, “Much that’s considered unacceptable and unlawful in peacetime becomes permissible in wartime”, noted Brooks; and she alleged the perpetual war that is “unlikely to end in our lifetimes” makes it “virtually impossible to draw a clear distinction between war and not-war.” US war strategists my find it difficult to spot that distinction, but nations and peoples at the receiving end of US military aggression surely can.

Brooks discouraged those who seek to establish “peacetime” and recommended they should “instead [be] focused on developing institutions and norms capable of protecting rights and rule-of-law values at all times”; her “all times” of course refers to a War Without End. She champions the formulation of a legal framework that both codifies the dos and don’ts of permanent violations of individual rights under perpetual war conditions and also regulates the Permanent War State, on the laudable premise of defending individual freedoms and promoting social justice post-9/11. However, Brooks assertions invite the speculation that her premise is the proverbial Trojan Horse – a ploy to smuggle in constitutional cover for the Permanent War State and, in the bargain, bestow legal legitimacy to the War Without End for the benefit of the M-I Complex. Those who rightly oppose legalising the Permanent War State would then be open to accusations they are undermining measures to protect people’s rights and democracy.

President Bush Jnr.’s announcement of the endless war, during his 2001 State of the Union address, in the aftermath of the attack on New York’s Twin Towers would have been music to the M-I Complex’s ears; he declared: “Our war on terror begins with Al Qaeda but it does not end there. It will not end until every terrorist group of global reach has been found, stopped and defeated…Americans should not expect one battle but a lengthy campaign unlike any other we have ever seen…We will not tire, we will not falter and we will not fail.” How Bush’s hubris fared is well known. Undeterred, the essence of Brooks’ message to the US public is that calling for an end to Bush-initiated endless war, “a return to a law enforcement framework” and seeking peace is “an understandable impulse. It’s also largely a waste of time and energy.”

Unsurprisingly Brooks does not seek to rein in the M-I Complex that is the principal cause of the “Forever War”. Her End of Peace claim is the conceptual parallel to Neo-Conservative Francis Fukuyama’s delusionary End-of-History we discussed in an analysis of the war in Ukraine.

The unbridled expansion of the M-I Complex bloated the national debt during the Cold War (1945–1990)); and the US-led NATO economies’ “addiction” to fiscal interventions by the State deepened and further reinforced the M-I Complex. President Dwight Eisenhower had presciently warned of dangers the country would face from the Complex in his farewell message in 1956 and again in 1961. Nevertheless the M-I Complex seamlessly integrated itself to become an indispensable and, over time, the leading sector in the US economy followed by similar transformations in major NATO allies.

Military – Industry nexus

“Few business people are willing to make the case for war too bluntly. They are, after all, human”, delicately intoned Newsweek about three weeks before the US invaded Iraq. But the greed for profit swiftly smothered their human-ness; they nimbly called for war not too bluntly: “And if war is going to come anyway, industries from travel to technology seem increasingly comfortable stating the case for fighting it now–in order to lift the cloud of uncertainty that has been paralyzing the global economy,” which had suffered a body blow during the Dot-com crash, about three years earlier. An excited Nikolai Juchem of TUI, Germany’s biggest tour operator chimed in: “As crass as it sounds, it would be good for the whole industry if this thing were short and painless and soon…We’d all scream ‘Hurray!’”

A week later Newsweek’s cover story (10/Feb/03) indelicately shrieked “Business Wants War” and for good measure carried a photo of a business executive wearing a battle helmet. In effect Wall Street prodded the Bush Administration to make war on Iraq.

The Hurrahs, if any, died in their throats. The Afghan and Iraq military campaigns were neither short nor painless. The US unleashed the Iraq War in 1991 ostensibly to liberate Kuwait from Iraqi occupation the previous year and, after expelling Iraqi forces, continued to pummel Iraq with sanctions – the war by other means. Washington ratcheted up the aggression after the aerial attacks on New York’s Twin Towers and other targets in September 2001, bombed Afghanistan in October and invaded Iraq again in 2003. The Iraq campaign lasting in effect for three decades (1991 to 2011) and the simultaneous 20-year Afghan War (2001 – 2021) together ballooned America’s national debt, depressed real incomes and fuelled inflation, which whittled away the profitability of civilian (consumer) industries. The resulting Stagflation pushed investors towards war industries (Raytheon, Boeing, Lockheed Martin, etc.) that paid higher returns on investments.

In 2011 Julian Assange explained, in the context of Afghan war, the Permanent War Economy’s the addiction to war: a “goal” of US policy “is to use Afghanistan to wash money out of the tax bases of the US and Europe through Afghanistan and back into the hands of the transnational elite. The goal is an endless war, not a successful war.” Assange’s conclusions are equally applicable to the US-led NATO’s on-going aggression against Russia in Ukraine.

However, the War on Iraq (and Afghanistan) not only failed to significantly reboot the US economy but also could not impede the 2008 Great Recession, directly linked to the US Sub-prime Mortgages market meltdown; neither could it arrest the European debt crisis that began in Greece in 2010.

Like a compulsive gambler throwing good money after bad, Washington’s political class doubled down and pushed Military Keynesianism. Apologists for the Permanent War State defend its cutting-edge M-I Complex, which after Afghanistan and Iraq is engaged in Ukraine against Russia and is making preparations to attack China in the South China Sea. President Barak Obama, a Nobel Peace Laureate, dutifully but perhaps reluctantly pivoted East.

[Next: Pivot to Asia]

*Dr Sachithanandam Sathananthan is an independent researcher who received his Ph.D degree from the University of Cambridge. He was Visiting Research Scholar at the Jawaharlal Nehru University School of International Studies and taught World History at Karachi University’s Institute of Business Administration. He is an award-winning filmmaker and may be reached at: commentaries.ss@gmail.com