The Benefits of War and the Armaments Industry

Abstract

Many twentieth-century economists stressed the merits of war and the armaments industry in resolving situations of economic stagnation by favouring public investment and employment, the so-called military Keynesianism. Some economic historians, above all Trebilcock, but some economists too, have given full weight to the technological spin-off of armaments, that is, the positive fallout from the technological innovation made in the armaments sector on peaceful industries and have evaluated the overall economic benefits coming from the demand for armaments. Some Anglo-American economists have referred to the United States, which never suffered from the effects of war on the homeland, in order to consider it right to speak of spin-offs in “economic prosperity” deriving from both the First and the Second World Wars. In fact, the neutral countries and those who saw the war fought in other countries considered the war as a significant factor in economic growth. Some economists, and many pacifists too, have, on the contrary denounced the corruption and interwoven interests that inevitably arise in all countries when arms producers, the military hierarchy and politicians are concerned. The United States was a case in point during the Cold War when common expressions such as “military industrial complex”, “state capitalism” and “Pentagon capitalism” gained currency as terms to describe the economy and politics in the country which laid claim to vast public resources that could have been used for welfare programmes instead. Mention is also made of the Soviet point of view during the Cold War.