[PEN-L:4644] RE: Re: On Military Keynesianism

[sawicky@xxxxxxxxxx (Max Sawicky)]

> You neglected the lead time factor.  Military Keynesianism
involves
first the depletion of inventory and then the replacement phase
later.
Armed conflicts accelerates this cycle.>

One might guess from this that the series of conflicts since
1986 -- Grenada, Middle East, Gulf War, Iraqi bombardment,
Somalia -- would push up military spending without too much time
elapsing.  But one would not have looked at any actual numbers in
coming to this conclusion.  The inventory replacement cycle is
real, but it is too small to figure as any kind of significant
economic factor or policy.  LOOK AT THE NUMBERS.

>
> The technical and budgetary fallouts are more R&D and upgrades.
The B2 is now costing $3 billion each due to upgrades. The
Stealth
fighter will cost 30% more to make it less vulnerable. The new
price
will be around $65 million each. Manufacturers are not afraid of
field
tests.>

The B2 price inflated without its use in any armed conflicts, or
few at best, so this shows conflicts and field testing are not
necessary to justify upgrades and cost overruns.  Indeed, no
empirical data at all is invoked in support of a huge commitment
to anti-missile defense.

> > 6.  Military Keynesianism may have meant something back in
the
1950's, or in 1962 when defense/GDP was near ten percent.
Presently the defense budget is about $270 billion.  An unlikely
increase of, say, $80 billion, all in one year, and all
deficit-financed, might add a percent or so of GDP in a time of
economic slack.  It's hard to imagine the fate of capitalism
hinging on this.

> It is precisely that MK has not been an significant factor in
cushioning
the economy in the post Cold War decade that gives new incentives
for violent conflicts.  MK has always had an international
strategic dimension.  Reagon used it in Star Wars to bankrupt the
USSR, paying the price of  record deficits and national debts. >

This reasoning cannot be refuted with data, but it cannot be
confirmed either.  If there is lots of military spending, this
demonstrates MK.  If there isn't, this is an incentive for
conflict.

> After the Cold War, the US economy was fueled by neo-liberal
globalization which you might have heard got itself busted in
1997.  In that respect, capitalism does depend on being saved by
MK.>

More soothsaying, unsupported by anything, much less data.  The
recovery the U.S. is in now has been marked by a wind-down of
military spending.

> Military Keynesianism is now an necessary option, but it takes
time and
eventually it will take a total war to work as in WWII.  The NMD
and TMD  systems are part of the trend.  By 2003, MK will be in
full swing with
military expenditure again  at 25% of GDP. >>

This would make military spending larger than the entire current
Federal budget.  It is as crazy as anything said on PEN-L this
past week.  Which says a lot.

>  Regional conflicts now, such as Iraq and the current Kosovo
bombing, run about $100 million a day in the first phase and $200
million in the intensive later phases.  Pretty soon, that adds up
to a lot of money.>

By the actual numbers, it has not.  LOOK AT THE NUMBERS.

> The reason MK at this moment in history contributes relatively
little to
the US GDP is because the US economy is so much bigger than its
perceived adversaries. >>

No, it's because the economy is so much larger than the military
budget.

>> In that sense, your are correct to observe that its role has
shifted from domestic economic stimulant to global geopolitical
weaponry.  But the very nature of war has changed, the link
between economic warfare and physical conflicts has become
continuous. >

Whatever all this means, it has nothing to do with military
keynesianism, whose hallmark is high defense expenditures
financed by borrowing, neither of which have been in force, and
neither of which are in the cards.

In my alter-ego as Louis, after some obligatory, diversionary
slurs on my "MBS" persona, I pointed out the significant element
of irrationality in the conduct of military adventures, as
opposed to mechanistic economic explanations.  It should be
noted, however, that the more explanations we discard, the more
likely is the one we are getting from our own despised leaders,
to wit, some variation on:

The best explanation for the Yugo intervention is the desire for
an orderly expansion and consolidation of bourgeois Europe.  The
fact that the nature of the intervention at this point is feeble
and likely ineffective, as far as it goes right now, does not
refute this basic motive, nor its (the goal, not necessarily the
methods) defensibility from an ethical standpoint.  As things
stand, there is simply no alternative from an unconstrained
Milosevic but barbarism and genocide.

But my main, minimum purpose here is to throw deserved cold water
on U.S. military spending -- actual or desired -- as an important
factor in all this.

One might think that almost any ulterior motive on the part of
NATO would be subject to some kind of absolution, if the
prevention of mass butchery was conceivable.  But apparently that
isn't enough.

"MBS"