Permanent arms industry
The theory of the permanent armaments economy tries to explain the upswing of the capitalist states after the Second World War within the framework of Marxism . For Marxists there is a need for explanation here because most of them assumed during the Second World War that history would repeat itself. As after the First World War , crises and stagnation tendencies along the lines of the Great Depression of 1929 would soon emerge in the event of possibly short-lived vertigo . In fact, capitalism experienced after the Second World War, a sustained upturn, a kind of golden age , the first with the oil crisis 1973 / 1974 clearly came to an end and the (Marxists) gave the expected crisis cycle along with a since-lasting stagnation tendency.
The permanent armaments economic theory takes a certain difference between the post-war period of the two world wars as its starting point. While states quickly reduced their armaments to a peaceful level after the First World War, armament continued after the Second World War in the course of the Cold War . This ongoing upgrade is responsible for the long upswing after the Second World War. The various varieties of the theory of the permanent armaments economy differ in the assessment of how the armaments had a favorable effect on economic development in detail.
theorist
The theory of the permanent armaments economy is mainly represented within the International Socialist Tendency (IST), in particular by Chris Harman . Previously, Michael Kidron and Tony Cliff also worked on versions of this theory within the IS tendency in Great Britain. The first publications on the subject were made in the 1940s by a Marxist who published under the name Oakes and Vance.
In Germany (in addition to Linksruck , the German section of the IST), Christoph Deutschmann should be mentioned. But Alfred Sohn-Rethel also has considerations that show similarities, but also differences, to the theory of the permanent armaments industry.
variants
The variants presented by the various representatives are in tension with one another in individual points or also contradict one another. A Keynesian understanding of the theory contrasts with one that ties in with Marx's law of the tendency for the rate of profit to fall .
Armaments Keynesianism
The "armaments Keynesian" variant focuses on the stabilizing effect of state armaments demand. It can be compared with Keynes's remarks, for example, when he finds that two pyramids are better than one. In contrast, two railway lines from London to York are no better than just one railway line (because they compete with each other and the demand for rail transport is objectively limited). Armor now has exactly the economic properties of a pyramid. The production is complex and there is no danger of competition with other market-based products. There is a demand effect but no capacity effect.
The question remains whether civil spending, especially in the social field, could have the same effect. The objection is made:
Excessive expansion of the welfare state threatens to shift the power relationship between the working class and the capitalist class in favor of the workers. So there are power-political reasons from the rulers' point of view speaking against peaceful Keynesianism.
By Jürgen Habermas , the word comes from the "legitimacy crisis in late capitalism ". This means that the control and regulation of the capitalist economy, as Habermas locates it in late capitalism, undermines the existing ideology of the market economy constraints . The economy seems less and less “natural”, but to be more and more political. For those in power, the question arises as to whether the claims that arise in this way can be contained. With the help of armaments capitalism, which is supposed to ward off an external danger, this problem can be avoided, including the problem of a politically undesirable increase in the prosperity of the working class.
The end of armaments Keynesianism is finally justified similarly as that of Keynesianism in general. In the course of time, the USA lost its outstanding economic superiority because " free riders " like the FRG or Japan were free from armaments spending and were able to catch up more and more economically. The USA could no longer act as an “ideal total capitalist”, here as a world armament capitalist. It had to pay more and more attention to its international competitiveness. The law of value prevailed again.
While US military spending in terms of gross domestic product peaked at 16% in the 1950s , it fell to 2% by the mid-1990s. The sharp decline in US defense demand in the late 1960s and early 1970s marked the end of armaments capitalism and the return of the crisis for the capitalist world economy.
Law of the tendency of the rate of profit to fall
Other theorists start with the law of the tendency for the rate of profit to fall and reject Keynesian interpretations. In short, the case of the average rate of profit can be explained according to the following formula:
It is assumed that the value composition of capital , the ratio of constant capital c to variable capital v, increases, so that the rate of profit must decrease if this is not offset by an increasing rate of surplus value m to v.
But if the state taxes the profits to finance armaments, the capitalists are prevented from increasing the value composition of capital. This then has a stabilizing effect on the overall economy.
Certain statements by Marx, which count as analogies, are used for further justification. Among the so-called "counteracting causes" Marx lists the luxury consumption of capitalists and the export of capital. In Marx's case, these counteracting causes have less of an effect than the direct use of capital, but because the value composition of capital in new luxury industries is initially still low, according to Marx's assumption, and capital is exported to countries with a still high rate of profit.
For Henryk Grossmann , the export of capital is a direct counteracting cause, because the exported capital can no longer serve to accumulate constant capital, so that the point in time (Z point, Z for collapse ) at which the surplus value is no longer sufficient to meet demand to cover in additional constant capital, is postponed.
From the material side, Grossmann's model can be understood as follows:
In phase I ( competitive capitalism ), companies increasingly increase their investments per job, while investments in additional jobs (at Grossmann, however, this is the expenditure on “entrepreneurial consumption”) grows weaker. At the same time, however, in order to be as productive as possible and to achieve the highest possible rate of profit, companies not only invest more and more per job, but also have to expand their employment, albeit to a lesser extent.
In phase II, the added value is no longer sufficient to finance both additional investments per job and (to a lesser extent) additional jobs. This is no longer possible for all companies at the same time. It is still possible for individual companies, but then through “cannibalism” on other weaker companies. Capital centralization occurs . The competitive capitalism goes into monopoly capitalism over.
In monopoly capitalism the nature of competition changes. For the monopolies (or oligopolies ) it is no longer so important to reduce the competition. On the contrary, greater supply creates costs and leads to lower prices. The competition does not stop, but only takes on other forms, but the propensity to invest in monopoly or late capitalism decreases, so that primarily the capital goods industry, "Department I" at Marx, is threatened by tendencies towards stagnation . The collapse in demand for capital goods can in turn intensify in a downward spiral and lead to a serious crisis.
This is where Christoph Deutschmann (like Michael Kidron) sees the decisive effect of the state armaments demand. This is of particular benefit to the capital goods industry. Actually, in monopoly capitalism there would be a falling demand for capital goods with the risk that this would develop in a downward spiral to a crisis. But the state takes out loans, asks for armaments, which are mainly manufactured by companies in the capital goods sector, so that the downward spiral is not triggered. This is also intended to answer the question of why profit cannot be diverted peacefully in this variant of the theory, which is linked to the fall in the rate of profit. A reduction in profits through the expansion of the welfare state or simply through higher wages would primarily benefit Department II, the consumer goods industry. In monopoly capitalism, however, it is less Department II than Department I, the capital goods industry, that is endangered by a lack of demand. State armaments demand directly benefits the capacity utilization of Department I.
The armaments are financed through currency devaluation , through inflation . Historically unprecedented high inflation rates in the 1970s finally forced the states, especially the USA, to cut back their armaments spending financed by loans. The world economy has stagnated since then.
In contrast, Chris Harman claims that the armaments were not financed by loans, but by taxes, and sees this as further evidence of the non-Keynesian character of the permanent arms industry. The law of value procured here, as in the rüstungskeynesianischen variant on free riders finally again immediately validity. States that withdrew from armament finally forced the world's largest economy, the USA, which at that time was still far more preponderant, to cut costs on armaments.
"Non-reproductive demand"
In his writings, which, according to him, were originally written in England between 1937 and 1941, Alfred Sohn-Rethel does not consider the post-war period, but German capitalism before Hitler came to power. The German steel industry in particular had to struggle with a large value composition of capital and high underutilization. These steel mills had to be kept afloat with “non-reproductive” demand. “Non-reproductive values are products that neither directly nor indirectly serve the maintenance and renewal of human labor or material means of production. This includes primarily armaments, secondly waste, as is predominant in modern space travel, and thirdly luxury goods. The demand for such goods requires a state power that imposes payment for such production on the population. We are dealing here with a clear alternative to competitive capitalism . ”These large companies must be supported by the state above all because their collapse would entail large parts of the economy.
While the IST version sees the permanent armaments industry as a favorable doom, which unplanned brought about a stabilization of the economy for the capitalists due to the arms race imposed by the circumstances , Alfred Sohn-Rethel also sees planning among the German business leaders of the early 1930s in the game, who saw through the deeper causes of the crisis to a certain extent and would have drawn appropriate conclusions.
literature
- Christoph Deutschmann : Left Keynesianism. Athenaeum, Frankfurt am Main 1973, ISBN 3-7610-5871-3 (= social science paperbacks ).
- Jürgen Habermas : Legitimation Problems in Late Capitalism . 12th edition. edition suhrkamp 623, Frankfurt am Main 2011 (first edition 1973), ISBN 978-3-518-10623-5 .
- Chris Harman: Imperialism - from colonialism to the wars of the 21st century, (original title Analyzing Imperialism , translated by Rosemarie Nünning). VGZA Association for the History and Contemporary History of the Labor Movement e. V., Frankfurt am Main 2004, ISBN 978-3-934536-09-8 (= Edition Aurora ).
- Michael Kidron: Armaments and economic growth - an essay on western capitalism after 1945. (Original title: Western Capitalism Since the War , translated from English by Volkhard Mosler, Rainer Deppe and Hedda Wagner. Edition suhrkamp; 464, Frankfurt am Main 1971) .
- Karl Popper : The open society and its enemies (1945) ( 2 volumes ). Mohr Siebeck, Tübingen, ISBN 978-3-16-148068-3 / ISBN 978-3-16-148069-0 . In Volume 2, "Marx and Hegel", Popper briefly discusses arms production as a compensation for an overproduction crisis .
- Alfred Sohn-Rethel : Industry and National Socialism - Notes from the 'Central European Business Day'. Wagenbach, Berlin 1992, ISBN 3-8031-2204-X .