Military Keynesianism

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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[edit]

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]


The following forms of military Keynesianism may be differentiated:

  • First, there is the differentiation between the use of military spending as 'pump primer', and efforts to achieve long term multiplier effects by the given spending. A government may opt to approve the purchases of fighter planes, warships or other military commodities so as to weather a recession. Alternatively, it may opt to approve the purchase of fighter planes, warships or other military commodities throughout all the years of a given business cycle. Since the construction of large armament systems requires extensive planning and research, capitalist states generally prefer to rely on arms' purchases or other military allocations for longer-term macro-economic policymaking and regulation.[citation needed]
  • A second differentiation that needs to be made is between primary and secondary forms of military Keynesianism. In both cases, the state uses the multiplier mechanism in order to stimulate aggregate demand in society. But the primary form of military Keynesianism refers to a situation where the state uses its military allocations as the principal means to drive the business cycle. In case of a secondary form of military Keynesianism, the given allocations contribute towards generating additional demand, but not to the extent that the economy is fully, or primarily, driven by the military allocations.[citation needed]
  • The third differentiation starts from the observation that modern capitalist economies do not function as closed systems but rely on foreign trade and exports as outlets for the sale of a part of their surplus. This general observation applies to the surplus generated in the military sector as well. As the vast amount of data regarding state promotion of arms' exports do confirm, capitalist states actively try to ensure that their armament corporations gain access to import orders from foreign states, and they do so amongst others in order to generate multiplier effects. Hence, there is a need to also differentiate between the two forms of domestic and 'externalized' military Keynesianism.[1]

See also[edit]


  1. ^ a b Custers, Peter (2010). "Military Keynesianism today: an innovative discourse". Race & Class. Institute of Race Relations. 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. ^ a b Keynes, John Maynard (1933). "An Open Letter to President Roosevelt". Retrieved 2011-08-01. 

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