Economic militarism is the
ideology surrounding the use of
military
A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare. It is typically authorized and maintained by a sovereign state, with its members identifiable by their distinct ...
expenditure to prop up an
economy
An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...
, or the use of military power to gain control or access to territory or other economic resources.
Thus a link between output and military expenditure can be made. The scope of this effect depend on : threat faced, productivity of factors, degree of the military utilisation, finance method of military spending, its externalities and effectiveness of this military spending in countering the treaty. As a consequence, a same amount of military spending in different countries can have wide-ranging effects.
Brief history of the term
The first important use dates from 1939 with ''Germany Rampant: A Study in Economic Militarism'' by Ernest Hambloch,
a long-serving British diplomat. ''Germany Rampant'' "traces the philosophy of Nazism to the German mythological figures of ancient times."
Since this book the term has been used in connection with the ancient
Aztecs, and with militaristic movements in a variety of cultures, and applies to the ideological and cultural aspects of a state, society or group that sustain the drive for
hegemony
Hegemony (, , ) is the political, economic, and military predominance of one State (polity), state over other states. In Ancient Greece (8th BC – AD 6th ), hegemony denoted the politico-military dominance of the ''hegemon'' city-state over oth ...
or
empire
An empire is a "political unit" made up of several territories and peoples, "usually created by conquest, and divided between a dominant center and subordinate peripheries". The center of the empire (sometimes referred to as the metropole) ex ...
. For example, Joseph Kenney applies the term to the
Almoravids.
In 2003
Clyde Prestowitz, of the Economic Strategy Institute published a book containing his analysis of what he called economic militarism in American foreign policy, that was reviewed in
The Economist
''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Eco ...
magazine.
Demand effect
Military expenditure can impact the economy of a country and its growth through the demand effect. An increase of military spending, will increase the prosperity of the country and its employment rate, thanks to a rise of demand. It is link to the Keynesian multiplier effect, introduced by
Richard Kahn in the 1930s, that states that every exogenous rise in government expenditure will decrease unemployment and increase growth, no matter the form of expenditure. However, the extent of this effect, and some potential others, will depend on the way this expenditure will be financed (see
War finance).
Changes in the industrial output will also appeared when military expenditure is increased. This effect can be explained thanks to the
Input-output model
In computing, input/output (I/O, or informally io or IO) is the communication between an information processing system, such as a computer, and the outside world, possibly a human or another information processing system. Inputs are the signals ...
.
Supply effect
As previously said, an increase of military expenditure can change the industrial output thanks to the input-output effect, but it as a consequence, also modifies the input. Factors of production such as labor force, natural resources or capital can be heavily changed when the government has the desire to increase its military capacity. Some resources previously used by civilians or by other branches of production are transferred to the military field. This could destroy profoundly resources of a country (especially during war times). Research and development(R&D) investments can also be made to improve the military capacity of production. It could then have positive impacts on other production fields. Moreover, more workers will be employed, which might reduce the unemployment rate, but this might also reduce their productive when they will return to a non-military sector of employment, or the unemployment rate could rise again dramatically when the military use will decrease.
As a consequence, an increase of military expenditure can create a large variety of economic impacts and externalities, positives and/or negatives (see also:
Externality).
Security effect
In order to invest and innovate, agents should be confident in the economic, its well-being and as a consequence, in the security of persons. During war times or in cases of foreign threats, military expenditure could enable to increase security, maintain the market operations and thus increase output. Indeed, if you look at the world dynamic of military spendings over time, you can clearly identify a positive relation between war or war threat and spendings ; for example during the First World War, The Second World War and the Cold War.
However, in some situations military expenditure is rather use to increase exponentially the military industrial complex and to threaten other nations (as it was the case during the
Cold War), and can lead to dangerous arms races.
See also
*
Militarism
Militarism is the belief or the desire of a government or a people that a state should maintain a strong military capability and to use it aggressively to expand national interests and/or values. It may also imply the glorification of the mili ...
*
Military Keynesianism
Military Keynesianism is an economic policy based on the position that government should raise military spending to boost economic growth. It is a fiscal stimulus policy as advocated by John Maynard Keynes. But where Keynes advocated increasing ...
*
Military–industrial complex
The expression military–industrial complex (MIC) describes the relationship between a country's military and the defense industry that supplies it, seen together as a vested interest which influences public policy. A driving factor behind the r ...
*
Permanent war economy
Military Keynesianism is an economic policy based on the position that government should raise military spending to boost economic growth. It is a fiscal stimulus policy as advocated by John Maynard Keynes. But where Keynes advocated increasing ...
*
War economy
A war economy or wartime economy is the set of contingencies undertaken by a modern state to mobilize its economy for war production. Philippe Le Billon describes a war economy as a "system of producing, mobilizing and allocating resources t ...
*
War finance
*
Immanuel Wallerstein
Immanuel Maurice Wallerstein (; September 28, 1930 – August 31, 2019) was an American sociologist and economic historian. He is perhaps best known for his development of the general approach in sociology which led to the emergence of his wor ...
References
{{DEFAULTSORT:Economic Militarism
Militarism
Military terminology
Military–industrial complex