Economic consequences of armaments production: institutional perspectives of J.K. Galbraith and T.B. Veblen

Journal of Economic Issues, March, 2008 by James M. Cypher

In most respects the aspects of militarism that Veblen examined were distinct from those that Galbraith analyzed. Much of the distinction would seem to have to do with the historical period under examination. Modern state economic intervention of the Keynesian period was unknown to Veblen. His work placed much emphasis on the inculcation of "patriotism": "Warlike enterprise and warlike preparation induce a patriotic temper in the underlying population, at the same time that they exact a servile obedience to the constituted authority" (Veblen [1921] 1934, 445). As such, military activities had the collateral effect of subordinating the growing hostility of the working class to the industrial system--a system that held out the promise of affluence and simultaneously dashed that hope because the industrial system was a for-profit system rather than a system that concerned itself with the delivery of the means for a satisfactory existence for the working class. As a consequence, governments had a vested interest in warlike preparation, most particularly in times when peace seemed to be at hand. As such, "either the price system and its attendant business enterprise will yield and pass out; or the pacific nations will conserve their pecuniary scheme of law and order at the cost of returning to a war footing" (Veblen [1917] 1948, 627).

While Veblen saw the creation of warlike conditions as conducive to the social stability of monopoly-dominated capitalism this came at the cost of undermining the technological capabilities of the economic system. A warlike footing brought back into the foreground "dynastic" traits and tendencies, including the upholding of status and military rank and a differential stance toward the socioeconomic hierarchy. In short, military affairs and "aggressive politics" or "a strenuous national policy" meant that a nation's creative energies would be devoted to preparation for conquest and destruction--not on developing the industrial arts or advancing technological breakthroughs. Nations bent on a warlike policy are caught up in an arms race that is cumulative--what are perceived as high levels of military outlays at one moment are later perceived of as inadequate, necessitating even greater outlays (Veblen [1904] 1965, 298).

Military Expenditures as "Outside Stimulus"

On the whole, Veblen insisted with considerable eloquence that placing the society on a warlike footing would act to undermine the industrial system due to its corrosive effects as it inculcated the "predatory animus" in all class levels. Workers would become more docile and submissive--presumably a net benefit for the industrial system, but they would become less "workmanlike" in their comportment and attitude, adopting the predatory mores and indolence of the lower ranks of the army and navy. At the same time, as the warlike preparation proceeded, society would recognize, laud and reward a growing stratum of predatory military officers while national policy would shift progressively away from the development of the industrial arts and technology toward the nurturing of an aggressive national policy.