The Risk of Military Keynesianism

The global economy is taking a beating from the latest crisis. The United States, EU, and Japan expect growth of only 1.5% or so in 2009. The International Labor Organization forecasts a “global jobs crisis” that will add 50 million people to the ranks of the unemployed and cast 200 million workers into extreme poverty in 2009.

With government budgets shrinking and the economic crisis putting greater pressure on social welfare programs, a shift of money from military budgets to human needs would appear to be a no-brainer. But don’t expect a large-scale beating of swords into ploughshares. In fact, if early signs are any indication, governments will largely shelter their military budgets from the current economic crisis.

Call it the new military Keynesianism: the use of military spending to stimulate the economy and pull the country out of recession. Proponents of this approach even enlist FDR on their side by arguing that the United States didn’t exit the Great Depression until it shifted to a war footing after Pearl Harbor. Today, the advocates of military Keynesianism are pushing back against the Obama stimulus package — which already includes over $10 billion for the Pentagon and $1 billion for nuclear programs at the Department of Energy — with a proposal to maintain U.S. military spending at 4% of GDP.

The rest of the world isn’t immune to these arguments. In East Asia, for example, the major military powers aren’t likely to step back from their ambitious plans of modernization. China, the only major country still on track to have substantial growth next year on the order of 8-10%, will likely continue to build on its 18% increase in military spending in 2008. Japan, South Korea, and Russia have all embarked on seemingly recession-proof spending programs.

The countries involved in the Six Party Talks — the United States, the two Koreas, China, Japan, and Russia — are the engine of global military spending. Led by the United States, they are responsible for more than 65% of global military spending. Any successful attempt to challenge the logic of military Keynesianism and shrink the global military-industrial complex must start with these countries.

Obama’s Challenge

The Obama administration’s first budget figures have not yet been released, so it’s difficult to say with certainty what it will allocate to the Pentagon. According to one report, Obama is asking the Joint Chiefs of Staff to cut the Pentagon’s 2010 request by 10%. But the Pentagon’s initial request for 2010 is for a 13% increase over the last budget under the Bush administration ($584 billion versus $513 billion). So, even if the Obama administration sets a ceiling for the Pentagon at $527 billion, military spending will go up. And that doesn’t count the additional supplemental requests for waging war in Iraq and Afghanistan. Meanwhile, the Pentagon has a big wish-list. At the tail end of the Bush administration, it put in a request for an increase in military spending of $450 billion over the next five years.

The rationale for maintaining such high levels of military spending has shifted. Under the Obama administration, talk of a “global war on terror” has receded. With Washington depending on Beijing to help pull the global economy out of recession, the China “threat” no longer has the capacity to pry open government coffers for more military dollars.

The operative word in Washington isn’t “terror” or “China.” It’s “employment.” Defense contractors are scrambling to prove that they play an essential role in keeping factories running and workers employed. Lockheed Martin recently ran a full-page ad in The Washington Post that linked its F-22 Raptor — an expensive weapon of dubious utility in today’s strategic context — to 95,000 jobs in 44 states. Not to be outdone, the shipbuilding industry lobbied Congress to send a letter to Obama arguing for a doubling of the rate of naval shipbuilding — to preserve 400,000 jobs in 47 states. With the U.S. economy shedding nearly 600,000 jobs in January, these arguments find a receptive audience on Capitol Hill.

The stimulus package discussion has turned into a brawl. The bipartisan crew in the Senate, led by Susan Collins (R-ME) and Ben Nelson (D-NE) are proposing cuts in school construction, Amtrak funding, and scientific research. The military-industrial complex isn’t on the chopping block. Indeed, Collins has wanted to add $13 billion more in Pentagon assistance. The same conservatives that expressed horror at the government bailout of the auto companies have no problem with continuing their support of the government bailing out defense contractors.
Meanwhile in Asia

The United States is responsible for nearly half of all global military spending. During the last 10 years, when global military spending increased by 45%, the United States set the pace. Now, during a period of global belt-tightening, the military Keynesianism with which the U.S. government is flirting threatens to establish another pattern for both our allies and competitors.

Consider the situation in Northeast Asia. Ever since they recovered from the Asian financial crisis, the countries in this region have been involved in a serious arms race. Between 1999 and 2006, South Korea raised its defense spending by over 70%, and the government in Seoul plans to increase this figure by 7-8% every year for the next dozen years. Chinese and Russian military spending increases have been even larger over the same period. In its difficult economic straits, North Korea has attempted to keep pace by raising the amount it spends (which is still less than 1/40th the amount South Korea spends). Only Japan has not increased its expenditures over the same period, though an influential group of politicians in the ruling party has been pushing to remove the 1%-of-GDP cap on military spending.

And don’t expect much change in this trajectory. “Japan, Taiwan, and South Korea could resist major cuts in defense spending in the short term due to commitments to ‘recapitalizing their militaries,’” according to military analyst Richard Bitzinger. China has the indigenous arms production capabilities and a still-expanding economy to justify continued military modernization.

The arms race in East Asia is no mere regional issue. In East Asia, the largest militaries in the world — the United States, China, Russia, and Japan — all face one another. The U.S.-China rivalry threatens to be the Cold War of this century (the Pentagon, at least, seems to be spending money on this assumption).

Northeast Asia is ground zero for the global military industrial complex. If we can somehow reverse the logic that perpetuates the arms race in that region we can begin to shift resources toward the real crises facing the planet: recession, economic inequality, climate change.

Challenging the central thesis of military Keynesianism — that military spending can pull the world out of recession — requires two primary counter-arguments. First, defense spending is not an effective stimulus package. Investments in the civil sector, as several studies have demonstrated, produce more jobs than investments in the military sector. Second, in order to secure sufficient funds to address economic recession and climate change — without saddling future generations with crippling debt — governments must begin to shift military spending toward human needs. No other large pot of money exists.

And that’s where the Pacific Freeze comes in.

Military Freeze

To address the new arms race in Asia and press the governments concerned to change their budget priorities, activists from the peace and Asian-American communities have proposed a Pacific Freeze campaign. Modeled after Randall Forsberg’s Nuclear Weapons Freeze campaign of the 1980s, the Pacific Freeze calls on the governments in the Six Party Talks to freeze their military spending and then reduce their budgets on an equitable basis — with the United States leading the way — as a first step in demilitarizing the region. Like Forsberg’s earlier campaign, the initial freeze on military spending would be mutual.

The Freeze includes both the United States and Russia, for they are Pacific powers and spend a great deal of money on their military presence in the region. They are also the top two arms exporters in the world. Any attempt to restrain military spending that doesn’t include the former Cold War adversaries won’t likely succeed. The Freeze also applies to the entirety of the military budgets and not just the portions used in the Pacific region. The United States doesn’t spend its entire half-trillion-dollar military budget on its military presence in the Pacific. Nor do Russia and China. However, all three countries can redeploy troops and military hardware to the Pacific region in an emergency. And, since all six countries spend far in excess of their legitimate security needs, freezing the overall budget is a necessary first step in establishing reasonable budget priorities.

The ultimate goal of the campaign is to draw down military budgets and transfer a portion of the savings to a regional Green Energy fund. But the intermediary goal, as with the Nuclear Freeze campaign of the 1980s, is to get people talking about the issue. Right now, military spending is a sacred cow in all six countries. Every government insists that military “modernization” is imperative. Few civic groups have been able to raise the issue in a unilateral context in the sense of urging their government to unilaterally reduce military spending. So, both governments, and to a certain extent civic groups too, are trapped in a security dilemma. Yet this narrow security dilemma is itself set in a much larger human security dilemma. At a time when we urgently need funds for the food crisis, the energy crisis, the climate crisis, the AIDS crisis, and other looming crises — all of which threaten human security — military spending is nowhere near the top of the global agenda.

The Six Party Talks provide a strategic opening for this kind of campaign. The participating governments have all been talking peace but preparing for war. With the Freeze, we call on the governments to put their money where the mouths are. Any progress in the nuclear talks is commendable. But the runaway military budgets exacerbate the many challenges to regional security. Despite booming trade relations, the region faces many threats to stability. A regional security mechanism, one of the working groups within the Six Party framework, could begin to address these threats. But unless such a mechanism deals with the arms race in the region, it will address only surface issues and fail to grapple with a driving force behind insecurity.

Here in the United States, peace activists have tried for years to clip the wings of the Pentagon. We’ve pushed for military reductions domestically and watched the Pentagon expand like the Blob. We’ve tried to work at an international level to restrain military spending only to witness the creation of a global military industrial complex. It’s time to try something new. Let’s leverage the negative impact of the financial crisis and the positive developments of the Six Party Talks to get the issue of military spending on table. The global military industrial complex is eating our planet. A freeze is the first step in chaining this monster and turning to the real problems that confront us.

For more information and to sign the Pacific Freeze Call to Action, please visit: http://www.pacificfreeze.ips-dc.org/

John Feffer is the co-director of Foreign Policy In Focus.

John Feffer is co-director of Foreign Policy In Focus at the Institute for Policy Studies.