Expanding Markets by Force
War is a “terrible” thing? Yes. But it is a terribly profitable thing.Vladimir Ilyich Lenin
Capitalism has always required military force. The capitalist system requires a work force that has been separated from the means of production. This means predominantly private ownership of land and resources. In order to expand the capitalist system, it was necessary to expropriate the land from public ownership into private, capitalist hands. This expropriation was done primarily through use of force. The early history of capitalism is rife with violent seizure of land. From that primitive beginning, capitalism has continued to use the military to open up new markets and avenues for accumulation of resources and profits. Military accumulation today takes many forms from bloated military budgets to repressive police states.
Capitalism was born in blood. In order to transition away from the feudal system, capital required land to privatize. This land was seized in a number of ways, the primary being colonization and the enclosure of the commons. Enclosure was done through acts of parliament which were backed by the full oppressive force of the state. Colonization was accomplished through military force. This seizure of land and resources was defined by Karl Marx as primitive accumulation and had to occur before the capitalist system could become widespread.
The capitalist system presupposes the complete separation of the labourers from all property in the means by which they can realize their labour.Marx, Capital Volume 1
Every phase of capitalist expansion has been accompanied by an increase in militarism. From the early colonization of Africa, India, and the Americas in the 15th-18th century, the small wars of Queen Victoria during the 19th century, the Banana wars of the early 20th century, the World Wars, post-World War II neo-colonialism, to the U.S. backed coups and wars of today, violent military action has been at the forefront.
The results of this reliance on militarism can be seen today in the United States. The United States is one of the most geographically secure nations on earth, it only shares land borders with two countries – Mexico and Canada. Yet it spends more on its military budget than the next 9 countries combined. Since 2001, the United States has increased this budget from $331.81 billion to $778 billion in 2022. This increase comes at the same time that real wages for the working-class have only increased minimally since the 1960s. Meanwhile, spending on public housing has remained stable during the same period.
Why can the U.S. always find the political will to increase spending on the military but not on social programs?
In the United States (and many other capitalist countries) private capitalist interests have swallowed the society and the state. As Paul Sweezy and Paul Baran described in Monopoly Capital in 1966:
Votes are the nominal source of political power, and money is the real source: the system, in other words, is democratic in form and plutocratic in content.Monopoly Capital, Page 157
In other words, the big corporations are the real source of political power in the United States system of monopoly (oligopoly) capitalism. It is the corporate funded lobbyists who make the decisions in Washington, not the politicians and definitely not the voters. The essence of bourgeois democracy is to give the people the illusion of control while in reality corporate interests hold all the power. Members of congress serve as puppets for the oligarchy, while paying lip service to the people. An investigation by USA TODAY, The Arizona Republic, and the Center for Public Integrity found that from 2010-2018 “more than 10,000 bills introduced in statehouses nationwide were almost entirely copied from bills written by special interests.” This happens on the Federal level as well, according to a report by the New York Times, Citigroup was involved in writing part of the 2014 omnibus budget deal:
In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committees 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word.
Mike Froman, a former Citigroup executive, helped to select Obama’s cabinet in 2008. This is democracy under capitalism – a system where the biggest corporations write their own laws. The system that Sweezy and Baran described in Monopoly Capital is even more corrupt today. As they wrote:
The positive role of government has tended to be narrowly confined to a few functions which could command the approval of substantially all elements of the moneyed classes: extending the national territory and protecting the interests of American businessmen and investors abroad, activities which throughout the nation’s history have been the first concern of the federal government; perfecting and protecting property rights at home; carving up the public domain among the most powerful and insistent claimants; providing a minimum infrastructure for the profitable operation of private business; passing out favours and subsidies in accordance with the well-known principles of the log-roll and the pork barrel.Monopoly Capital, pg. 160
The military and police are a huge part of this agenda of protecting and expanding the rights of private capital. These bodies of armed men employed by the state are used to open new markets for capitalist expansion and exploitation as well as to keep the working-class oppressed. As opposed to social spending, military spending does not compete with or threaten private interests. Instead, it is of benefit to them. Public housing threatens the real estate and rental industries, public healthcare threatens insurance and private healthcare, and a living minimum wage threatens the profits of all corporations. Even though a single-payer national healthcare system would be cheaper, more efficient, and save 68,000 lives per year, it threatens the private insurance and healthcare for-profit industries. This means it will never pass Congress under the capitalist system.
The Nature of Capitalism
The capitalist economic system cannot maintain itself without expansion. If capital does not keep opening new markets and investments like a cancerous growth, it stagnates.The need for a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.Marx and Engels, Communist Manifesto
Without these outlets for accumulated capital, the capitalist system reaches a crisis point and threatens to collapse upon itself. Such large structural capitalist crises were experienced in the US in 1929, 1970, 2008, and 2020. During these times, the capitalists have often had to rely on state spending to pull the system out of crisis. The crisis that started in 1929 and continued through the 1930s is a good example of how monopoly capitalism tends toward stagnation without outside factors. The New Deal was able to keep the system limping along but did not solve the inherent contradictions of capitalism. The Great Depression, as it was known, did not end until World War II when the United States turned to a wartime economy. The unemployment rate before the crash in 1929 was at 3.2%. It increased to 8.7% in 1930 and reached a peak of 24.9% in 1933 when FDR enacted the New Deal. In 1939, it still remained at 17.2% in spite of the New Deal reforms. From 1943-1945, the peak of the war years, unemployment was below 2%. Though the primary crisis ended, even with a full wartime economy, unemployment was never eliminated by the capitalist system.
Unemployment today could be eliminated through a Federal Jobs Guarantee. Rather than having what classical economists refer to as a natural rate of unemployment (NAIRU) it would be possible to have full employment at all times with a federally funded, locally sourced jobs program. Yet such a program would compete against capitalist interests in the job market. The reserve army of the unemployed is a natural result of the capitalist system, a mass of humanity ready to be exploited by the wage labor system.
But if a surplus labouring population is a necessary product of accumulation or of the development of wealth on a capitalist basis, this surplus population becomes, conversely, the lever of capitalistic accumulation, nay, a condition of existence of the capitalist mode of production. It forms a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost. Independently of the limits of the actual increase of population, it creates, for the changing needs of the self-expansion of capital, a mass of human material always ready for exploitation.Marx, Capital Volume 1
President Franklin D. Roosevelt attempted to go beyond the reforms of the New Deal when he announced his second bill of rights. As he described on January 11, 1944 in his State of the Union address:
The right to a useful and remunerative job in the industries or shops or farms or mines of the Nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
These fundamental rights are possible but are all opposed by capitalist interests. As Sweezy and Baran explained:
Real competition with private enterprise cannot be tolerated, no matter how incompetent and inadequate its performance may be; undermining of class privileges or of the stability of the class structure must be resisted at any cost.Monopoly Capital, pg. 174
The corporations need state funds to maintain the stability of the system and keep it from stagnating or collapsing, but will do everything in their power to make sure this spending is limited in areas that compete with their own private profit-making enterprises. It was only the wartime economic spending policies of World War II that were able to shake the economy free from the Great Depression. The military spending launched during World War II can be considered military Keynesianism. This continued into the Cold War era with the development of the military-industrial complex and has been propping up the system since then.
Military Accumulation Today
Military spending has remained constant in upholding the capitalist system, but has reached new levels today which represent a qualitative shift that University of California, Santa Barbara Sociology Professor William I. Robinson has described in his work, The Global Police State.
While the old-style military Keynesianism is still in place, the concept of militarized accumulation points to the more expansive role that generating war, repression, and systems of transnational social control now play as they move to the very center of the global economy. The Global Police State, pg. 72
This shift to a global war economy and system of global police state began with the events of September 11, 2001. The global war on terror, the wars in Iraq and Afghanistan started by President George W. Bush, and the five wars in Yemen, Somalia, Pakistan, Libya, and Syria started by President Barack Obama are all examples of the new place military accumulation takes in the United States political economy. The US-created conflict in Ukraine is just the most recent example of military accumulation.
This war is being used by the United States and NATO as an excuse to further expand militarism. In two major bills passed by Congress this year, the US has committed to spending $53.7 billion on the war in Ukraine. There are additional billions that have been spent on equipment and training in Ukraine since the US-backed, neo-Nazi led Maidan coup in 2014. Much of this money ends up with weapons manufacturers like Raytheon and Lockheed-Martin, literal merchants of death. It is no coincidence that the Biden administration appointed Lloyd Austin III, former board member of Raytheon, to head the Department of Defense. Weapons manufacturers help to create the US foreign policy that enriches them.
With additional drawdowns, the total amount the US has spent or agreed to spend on Ukraine this year is $57.7 billion. This amount of money could have funded tuition free college for everyone for a year. It could build new apartments for around half of the 550,000 homeless people living in the US. Instead, it is being used to enrich capitalist interests in support of a losing war in Ukraine. The working-class of Ukraine will see no benefit from this and neither will the working-class of the United States.
The US has also escalated their involvement in Europe. Biden recently announced that they will open two more military bases in Europe and establish a permanent presence in Poland. Combat troops will be rotated through Romania and the Baltic. The North Atlantic Treaty Organization serves as an arm of private transnational corporations. William Robinson outlines its connection to the Atlantic Council:
Since 2006, NATO itself requires that member states spend a minimum of 2% of their GDP on defense. These are guaranteed profits for the military-industrial complex. The war in Ukraine has caused many NATO member states to increase their defense funding, further adding to the profits of the corporate class.
In an article for CounterPunch, Matthew Hoh found that, “The US supports nearly 75% of the world’s dictators, autocracies, monarchies, military regimes, etc., with weapons, military training and money.” Exporting weapons is big business in the US and the human rights records of the regimes receiving the weapons are of no interest as long as there are profits to be made. In a debate in 2019, Joe Biden said he would make Saudi Arabia “a pariah” and not sell weapons to the country after their brutal murder of Jamal Khashoggi.
“I would make it very clear we were not going to in fact sell more weapons to them,” Biden said. “We were going to in fact make them pay the price, and make them in fact the pariah that they are.”
This was nice rhetoric for a debate since Trump had fast tracked an $8.1 billion arms sale to Saudi Arabia in July of 2019. Biden changed his tune after being elected and approved a $650 million arms sale to Saudi Arabia that was completed in December, 2021. A report by the Stockholm International Peace Institute showed that the United States accounted for 39% of global arms exports from 2017-2021. And 23% of the total arms exports from the US during this period went to Saudi Arabia. It is unlikely this flow of weapons will stop with Biden scheduled to visit Saudi Arabia in July, 2022.
Military spending is not the only form of military accumulation that can be seen in the US involvement in the war in Ukraine. As William Robinson and César Rodríguez explain in their article, Militarised Accumulation:
Yet, the relationship between the state and private capital in militarized accumulation is more than state spending to pay contractors for military hardware. The function of the capitalist state is to secure the overall conditions under which capitalist development proceeds. This involves, among other things, the state’s capacity to keep private capital in motion in accordance with prevailing conditions, political opportunities and the correlation of social and class forces in particular historical circumstances.
Ukraine represents a destination for weapons, security, and aid funding – the profits going directly to private capital. But the war also represents a crisis that can exploited by capitalists in numerous other ways. Ukraine will need to be rebuilt after the war and that means opportunities for private contractors like those seen in Iraq and Afghanistan. The amount of refugees created by the war also means new opportunities of repression for profit.
European Union spending on border security in third countries has increased vastly. While it is hard to find total figures, funding for migration-related projects comes from ever more instruments, with security and irregular migration as top priorities and is also diverted from development aid…. The growth in border security spending has benefited a wide range of companies, in particular arms manufacturers and biometric security companies.Mark Akkerman, Transnational Institute, Expanding the Fortress
The war in Ukraine has created 5.5 million refugees across Europe. For the World Bank, this means an opportunity for private corporations to profit. As described in their blog post entitled Refugees mean business: the role of the private sector in creating economic opportunities for the forcibly displaced:
The Bank’s involvement in PS4R [Private Sector for Refugees initiative] is part of the Refugee Investment and Matchmaking Platform (RIMP) project. Established in 2018, RIMP’s first pilot in Jordan supported 57 business deals leading to 1,930 new jobs for refugees and Jordanians (mostly women). Now renamed the World Bank Private Sector for Refugees (PS4R) Platform, it is operating in other countries, including Djibouti, Iraq, Lebanon and Poland, while advising projects in other regions.
Displaced people are seen by the private sector as potential fodder for the capitalist system – a new source of cheap labor that can be exploited for their surplus value. The misery created by the devastating war in Ukraine is seen as a profit-making opportunity for private corporations. Capitalism never lets a crisis go to waste.
This is the concept of disaster capitalism. If disasters do not come up naturally, capitalists will manufacture them for profit. The Ukraine war is a war created by the United States and its allies in NATO and the International Monetary Fund. The complete destruction of the country and its working-class people is of no concern to the ruling class.
Socialism: A Proven Alternative
It does not have to be this way; the economy does not have to rely on military accumulation and disaster capitalism to survive. Socialism represents a far better alternative. Socialism does not require endless expansion, but empowers the working-class through a more equitable distribution of resources. While western propaganda pretends that socialism has never worked, history tells another tale. Multiple studies have shown that the people benefit materially from a socialist system when compared with capitalist countries in a similar stage of development.
In a 1981 article entitled Public Action and the Quality of Life in Developing Countries published in the Oxford Bulletin of Economics and Statistics, Amartya Sen wrote, “One thought that is bound to occur is that communism is good for poverty removal. There are 10 communist countries in the total list of 100, and of them nine show some distinction.” In an article published in 1986 in the International Journal of Health Services, Shirley Cereseto and Howard Waitzkin found based on World Bank statistics that “The data indicated that the socialist countries generally have achieved better PQL [physical quality of life] outcomes than the capitalist countries at equivalent levels of economic development.” In 1993, Professor Vicente Navarro of John Hopkins University found, “that, contrary to dominant ideology, socialism and socialist forces have been, for the most part, better able to improve health conditions than have capitalism and capitalist forces.” Socialism works.
Historical data is clear that countries moving towards socialism and communism have achieved better outcomes for their people. When a government isn’t captured by private capitalist interests, it actually delivers real gains for their working-class. This is why the US has intervened with every attempt at socialism. It would not do for the good example of a socialist society to exist. And in the cases where US interventionism has failed, such as Cuba, they have relied on their control of the media entertainment complex to propagandize the public against the successes of socialism. If the working-class of the United States understood what socialism would mean for them, the revolution would happen today.
The resources and labor are available to create a better society, but they are being used to enrich private interests rather than to improve the material conditions of the working-class. The capitalist system relies on militarization and oppression to continue and expand. In order to achieve socialism, a united workers movement must overcome both economic exploitation and the military power of the corporate class. However, it is the working-class that makes militarization possible; the military industrial complex cannot exist without the workers. Workers hold the power; it is just a matter of uniting as a class and using it. As Big Bill Haywood said:
But all the workers have to do is to organize so that they can put their hands in their pockets; when they have got their hands there, the capitalists can’t get theirs in. If the workers can organize so that they can stand idle they will then be strong enough so that they can take the factories. – Big Bill Haywood
Capital is nothing without labor. Labor can have everything, but only after overthrowing the oppressive yoke of capital.
Baran, Paul A.; Paul M. Sweezy (1966). Monopoly Capital. New York: Monthly Review Press.
Robinson, William I. (2020). The Global Police State. London: Pluto Press.