"Irrationally" Producing Armaments

The economic reason, derived from the profit conditions of capital accumulation on the national and international level, also explains away the paradox -- remarked upon by Albrecht, Lock, and Wulf -- of "irrationally" producing armaments that cost more in total expenditures and/or foreign exchange than they would if imported outright. The overriding objective of such arms production is not to save or minimize production costs through domestic manufacture, but rather to maximize public expenditures on, and hence profits in, domestic capital goods and machine-building industry -- even at the cost of high expenditures of foreign exchange. These high expenditures (not coincidentally) benefit the foreign producers who are engaged in joint ventures with local producers.

Thus the production -- not to mention the subsequent use and replacement-of armaments, especially those with the most capital-intensive advanced technology, becomes a "growth industry" with "public sector" demand par excellence. What better ideological justification is there for this "growth industry" than "national security," and what better arguments are there for blue-collar workers than "jobs" and for white-collar employees than R & D and engineering positions? According to the Shah of Iran, huge military expenditures constitute the shortest and quickest route to increased productivity and a highly trained work force. Others have developed ideological arguments supporting military expenditures and production as the "growth industry" best suited to "generate growth." Thus, a peace-loving Quaker under contract to the Pentagon, Emile Benoit, has even claimed to demonstrate in his Defense and Economic Growth in Developing Countries that a "strong positive correlation between high defense burdens and rapid growth rates" shows that "it seems clear that in sample countries higher defense burdens stimulate growth", and not vice versa. Such growth comes especially through military training but also through military equipment and production. When Benoit discussed his thesis at a symposium a large number of concerns were expressed regarding the methodology and the conclusions of the paper. . . . Serious questions were raised, particularly with respect to the statistical treatment of the available data on military expenditures and GDP as a measure for development [which] most participants felt. . . . is not a satisfactory measure since the effect on welfare of people may be negligible or even be negative for a large part of the population. . . . The inference from the correlation could be challenged by pointing out that other causal relationships could be presented to explain this phenomenon. For instance, high economic growth rates achieved in a developing country, especially exported growth under world market conditions, might antagonize large sectors of the population. Since inequalities are increased in such a situation, social frictions could lead to an expansion of military expenditures to ensure, by means of repression, sustained industrial growth. Furthermore, it was pointed out that militarization in the Third World often correlates with crisis situations in the capitalist system. . . . Nonetheless some participants expressed their interest in Benoit's approach and recommended that it be given further study.