Year XXVI, 1984, Number 3 - Page 219
THE BENEFITS OF REDUCING MILITARY SPENDING
The war machine of every State, and in particular great powers, who are the source of innovation in military technology, has grown beyond all bounds. The quantity of human resources and materials destined to maintain and develop it is huge, and so is the number of men employed in the armies, production and commercial activities connected· with military requirements.
The cost of military apparatus is steadily becoming more absurd and unacceptable if we consider the military, economic and social consequences of the arms race. On the one hand, the nuclear arms potential is able to destroy the world several times over. On the other hand, military spending is intolerable if we consider that it prevents us from satisfying the basic need of survival (from food onwards) of the Third World countries and the need to improve the quality of life in industrialised countries.
Data supplied by a recent work by Wassily Leontief and Faye Duchin (Military Spending, O.U.P., 1983) are most striking. 6% of the volume of world production is military. In other words, “military spending is, every year, nearly equal to a third of productive investments and the stock of instrumental goods”. It “has doubled on a world scale between 1951and 1970, increasing from 100 thousand million US dollars to over 200 thousand million US dollars in 1970 at a constant value” and in the following years increased at the same rate. Hence, if we project the current economic trends into the future, in the year 2000, military spending will be 646 thousand million dollars.
Moreover, production of military equipment is concentrated in a small number of countries, primarily, the USA and the Soviet Union and their NATO and Warsaw Pact allies. In 1957, 86% of the world’s military spending was concentrated in these countries, though this had fallen to 71% in 1978. In the same period, the percentage distribution of military spending deeply changed. It dropped from 44.9% to 25.6% in the USA, from 19.2% to 17.2% in the European NATO countries, while in the Soviet Union military spending increased from 20.2% to 25.5% and in Warsaw Pact countries from 1.7% to 3.1%. The three groups of countries which increased military spending most significantly were the Middle East, which increased from 0.6% to 6.1 %, the Far East from 8.2% to 14.4% and Africa from 0.2% to 2%. North America and the Soviet Union exported nearly identical quantities of arms to the same regions, primarily the Middle East and African oil-producing countries and the European allies of the Superpowers.
Leontief’s study is mainly concerned with analysing the economic effects of military spending. In particular, it demonstrates that a consistent reduction of military spending in the world would have a stimulating effect on the world economy, because it would encourage an increase in production and consumption everywhere. In particular, Third World countries would derive the greatest benefit, especially those with few natural resources (like the arid areas of Africa, poor in resources, South American countries, low-income Asiatic countries and tropical Africa), which could then cut down the gap between them and industrialised countries. Indeed, reducing military spending would allow these countries “to replace military imports with imports of machines and other equipment, which would directly encourage economic growth”. But countries exporting weapons would also stand to gain, when we consider, for example, that the greatest increase in pro capita consumption after the arid areas of Africa would be in the Soviet Union and the Eastern European countries.
Moreover, if a part of the resources made available by reducing military spending was used to help development in the poorest regions, the effect would not only be to bring about “an expansion of the world economy” but also an expansion of most of the regional economies. The greatest benefits would naturally go to the most backward countries, who would have additional resources made available for importing essential consumer goods. The manpower of industrialised countries could be used more efficiently in civil production rather than in military production.
An economic theory put forward by Baran and Sweezy (Monopoly Capital, New York, 1968) which was very much in vogue at the time of the 1968 protest wave among the young, accredited the still prevalent idea that only military-type spending can make the capitalist system work. The argument runs as follows: a significant reduction in military spending would depress the world economy. By encouraging a high level of employment, military spending would lessen social conflict and would end up by being accepted by the working classes, on whom any revolution efforts ought to be centred.
But Leontief’s work describes an alternative use of resources today destined to military spending and provides a major and well-documented analysis of the positive aspects of this alternative as regards developing production, consumption and employment. It is in fact very easy to demonstrate that a space exploration project, a Third World investment programme, and an overall plan for the conservation of the historical centres of cities or the improvement of the communications and transport networks are alternatives to military spending, which would stimulate the world economy very effectively and at the same time guarantee full employment.
In addition, Baran and Sweezy’s theory did not explain the prodigious development of Japanese capitalism with a reduced military budget and low military production. Leontief’s data show that high-income Asiatic countries spend by far the least in absolute terms in government military purchase as compared with GDP (gross domestic product).
As regards method, this work is significant particularly because it uses an analytical framework based on a world economy model in relation to which national economies are considered as interdependent subsystems. One of the most important contributions Leontief makes to economic theory is that he has given a decisive spur to overcoming the central position that the national standpoint holds in economic theory.
Leontief’s econometric analysis is based on a model of the world economy taken as a system of interdependent elements. The world is divided into fifteen regions according to the level of economic development and the development trends are analysed in terms of the mutual relationships between the various production branches. The world economy is described using data available in 1970 and updated with data for subsequent years right up to the eighties. Alternative hypotheses are worked out using these data regarding development in the eighties and nineties right up to the year 2000. The purpose of the research is to analyse the consequences of military spending on a world scale. The basic scenario is based on the projection of current trends. Two further hypotheses relate to forecasts in the increase in military spending. Finally, a further three hypotheses forecast a reduction in military spending.
Thanks to input-output analysis, a sophisticated way of analysing sectorial interdependence, and the vast amount of empirical data collected and co-ordinated, this survey has given us a precise understanding of current reality, despite uncertainties deriving from the secrecy covering most data about military spending. Nevertheless, as regards the forecasting of future trends, the survey goes no further than formulating hypotheses on the basis of forecasts which are projections, with a numberof variations, of currently prevailing trends. The variations are presented as possible developments of the world economy by a neutral observer. Obviously, the great qualitative changes and analysis of the circumstances making them possible is beyond the scope of this forecasting. Leontief merely illustrates the positive economic and social consequences of a reduction in military spending but does not deal with the international context which would make it possible, nor does he examine the changes favouring a world policy, which are necessary to direct the world towards peace and international justice.
Security obviously occupies a major position in the scale of priorities facing States. And when international tensions are high, as is currently the case, the cost of military security tends to grow. The way in which military spending is distributed faithfully reflects the hegemony of the United States and the Soviet Union over the rest of the world. Variations in the distribution of military spending indicate, firstly, that the power relationships between the Superpowers have steadily moved in favour of the Soviet Union (while US military spending in 1957 was twice that of the Soviet Union, today it is identical), secondly, that areas of strong international tension are increasing, such as the Middle East, the Far East and Africa and, finally, that the social costs of the growth of military spending are more severe in developing countries, the Soviet Union and Eastern European countries.
We need to take into account the fact that the decision to increase or decrease military spending is political and not economic, that it relates to the survival of peoples and may even go so far as to require sacrifices which in normal times would be unbearable in relation to GDP. The answer to the problem which Leontief does not solve, lies not with future developments in the world economic system but in the transformation of the world system of States.
The change which the world needs is a new approach to problems of defence and security which, today, despite the development of nuclear arms, continue to be understood in terms of the pursuit of the military balance of power at an ever higher level. But the nuclear arms that have been introduced into the anarchic system of sovereign States are not defence weapons which guarantee the survival of the State in the struggle against other States, but a means of extermination, because they have a destructive power which threatens the very survival of mankind. The State which was born to guarantee the conservation of life is losing its essential function, threatening to plunge humanity into new barbarity.
Constructing European unity is the one area where it is possible to act in such a way as to prevent a nuclear catastrophe. Firstly, it makes it possible both to overcome the rigid division into two blocks, caused by the absence of any mediating function by other independent poles in the world system of States, and to direct the world towards a more open, more peaceful and more flexible multipolar power system when compared to the current system and in which it would be possible to lower the cost of security.
Secondly, it would open up the way for the first forms of international democracy, and thus give the world the first example of peacefully overcoming consolidated nations in history. The European federation is the first stage in a process of unification which begins in one part of the planet, but which affects the other continents hoping for unification and potentially affects the entire world. The plan for popular control of international politics is an alternative to the antagonism between the United States and the Soviet Union, between the principles of democracy and communism and the unification of the world under the hegemony of each of these States. It opens up the way to get round the myth of exclusive national sovereignty and the logic of power relationships in international politics, which prevent a rational government of the world, and makes it possible to set out on the road towards the political unity of the human race, i.e. towards perpetual peace, universal disarmament and equality among nations.
Thirdly, it would make it possible to test a form of defence which, in Albertini’s words, is “beyond war”. The nuclear defence of Europe ought to be restricted to mere dissuasive functions carried out by missile-launching submarines, with the result that a European government would be unable to be the aggressor and that European territory would be denuclearised. Conventional defence ought to be territorial on the Swiss and Yugoslavian models, with a view to preventing a conventional war on European territory, putting an end to any aggression by Europe and reducing military spending. Moreover, the European government could use its negotiating powers to achieve disarmament, by stating its willingness to transfer the control of its nuclear arms to the UN, provided other nuclear powers did the same, thus bringing about democratic reform of the UN. At the same time, the European government could use its international influence to persuade the Superpowers to undertake a Third World development plan, using the resources made available by a reduction in military spending.
Lucio Levi
