Military Keynesianism

Military Keynesianism is the position that the government should increase military spending in order to increase economic growth. The term is often used pejoratively to refer to politicians who reject Keynesian economics, except when arguing for the positive job creation of military spending.[1][2][3]

Keynesians maintain that government spending should first be used for useful purposes such as infrastructure investment, but that even non-useful spending may be helpful during recessions. John Maynard Keynes advocated that government spending be used "in the interests of peace and prosperity" instead of "war and destruction".[4] An example of such policies are the Public Works Administration in the 1930s in the United States.

Keynes' 1933 letter to Roosevelt

In 1933, John Maynard Keynes wrote an open letter to President Franklin Roosevelt urging the new president to borrow money to be spent on public works programs.[4]

Thus as the prime mover in the first stage of the technique of recovery I lay overwhelming emphasis on the increase of national purchasing power resulting from governmental expenditure which is financed by Loans and not by taxing present incomes. Nothing else counts in comparison with this. In a boom inflation can be caused by allowing unlimited credit to support the excited enthusiasm of business speculators. But in a slump governmental Loan expenditure is the only sure means of securing quickly a rising output at rising prices. That is why a war has always caused intense industrial activity. In the past orthodox finance has regarded a war as the only legitimate excuse for creating employment by governmental expenditure. You, Mr President, having cast off such fetters, are free to engage in the interests of peace and prosperity the technique which hitherto has only been allowed to serve the purposes of war and destruction.

Criticisms

The most direct economic criticism of military Keynesianism maintains that government expenditures on non-military public goods such as health care, education, mass transit, and infrastructure repair create more jobs than equivalent military expenditures.[5]

Noam Chomsky, a critic of military Keynesianism, contends that military Keynesianism offers the state advantages over non-military Keynesianism. Specifically, military Keynesianism can be implemented with less public interest and participation. "Social spending may well arouse public interest and participation, thus enhancing the threat of democracy; the public cares about hospitals, roads, neighborhoods, and so on, but has no opinion about the choice of missiles and high-tech fighter planes." Essentially, when the public is less interested in the details of state spending, it affords the state increased discretion in how it spends money.[6]

Forms of military Keynesianism

The following forms of military Keynesianism may be differentiated:

See also

Notes

  1. Custers, Peter (2010). "Military Keynesianism today: an innovative discourse". Race & Class 51 (4): 79–94. doi:10.1177/0306396810363049.
  2. Veronique de Rugy (December 2012). "Military Keynesians". Reason magazine (Reason Foundation). Retrieved 2 February 2013.
  3. Krugman, Paul (2009-06-24). "Weaponized Keynesianism". New York Times. Retrieved 26 January 2015.
  4. 1 2 Keynes, John Maynard (1933). "An Open Letter to President Roosevelt". Retrieved 2011-08-01.
  5. http://www.ips-dc.org/reports/071001-jobcreation.pdf
  6. Noam Chomsky (February 1993). "The Pentagon System". Z Magazine (Reason).
  7. Custers P. (2010). Military Keynesianism today: an innovative discourse, Institute of Race Relations, Vol. 51(4): 79–94 Available from 10.1177/0306396810363049 http://rac.sagepub.com [Accessed March 2011].

External links

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