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p After the Second World War, the USA, in pursuance of its aggressive aims, used the advances in military technology to expand the production of modern weapons of war to a scale unprecedented for peacetime, building arms factories for manufacturing a particular range of goods. In contrast to the past, they account for a large share of the total value of goods consumed by the military machine. The arms industry has become an organic component of the US economy. A sizable share of manufactured goods and services is regularly used for military purposes. This fact is universally known and is admitted even by high-ranking US statesmen and generals.

p War production implies the manufacture of goods for military uses. -A vast range of goods is needed to prepare and wage wars. The range of goods used for the material support of the armed forces covers about 4 million items. The rapid progress of military technology and the invention of novel means of warfare entail constant changes in the range of goods for military uses. The historical tendency towards an increase in their numbers is slightly offset by the withdrawal from service of obsolescent military equipment, as well as by measures the Pentagon takes to standardise and narrow the range of supply items and adjust the system of military procurement.

p According to their use-value the numerous goods manufactured for military purposes fall into two large groups: (1) goods for exclusive military use; (2) goods for military use largely similar to civilian goods.

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p Historically these two groups have always been in imbalance, the ratio changing drastically under the impact of advances in military technology. Until the early 20th century, goods of the second group met most of the armed forces requirements. For a long time, manpower and animals were the two basic components of armed forces, foodstuffs and forage being their main items of consumption. The relatively small demand for specific military goods was met mainly by government arsenals, so their production accounted for an insignificant share in the country’s total. The military sector of the economy in its modern sense was non-existent. The USA first embarked on a mass-scale manufacture of specific goods for military uses in the First World War. Government arsenals produced a small share of them, the bulk of war contracts going to private industries. Armsmanufacturing companies sprang up in the private sector of the economy for the first time ever. War production, which was at a low ebb in the twenties and thirties, skyrocketed in the Second World War.

p Indices of the size and structure of the arms industry as a whole will not be found in US statistical publications or in the standard official classification of industries. The reason is not only the concealment by the nation’s rulers of the true scale of war consumption but also the specific character of war production. The fact is that almost all industries and a host of research and other institutions are involved in the production of a vast range of goods for war and in supply of varied services to the armed forces. Not infrequently, many companies of different industries share as subcontractors in the manufacture of sophisticated weapons systems incorporating thousands of parts. Therefore, it is well-nigh impossible practically to size up the general scope of war production and the extent to which the entire economy is militarised, scanning information on individual industries or on the output of individual goods for war.

p Therefore, the method for assessing the degree of militarisation of the economy by correlating a nation’s total military spending with its gross national product (see Table 21) may be accepted as workable here.

p Since data on military spending are borrowed from NATO statistics using a uniform standard method to show the
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148 Table 21 Military Expenditures of NATO Countries as a Percentage of GNP Country I960 1955 1957 i960 1963 1965 1967 1969 1970 USA ......... 5 4 11.1 10.9 9 9 9 8 8 0 9 5 8 7 7 8 Britain . . ... 7 3 9 4 8 1 7 3 7 0 fi 3 5 7 5 0 l\ 9 France ......... 6.5 7.6 8 7 7 fi fi 9 5 fi 5 0 4 4 4 0 Canada ........ 3.1 7.6 fi 5 5 ?, 4 fi 3 ? ? 8 ? 4 ?. 5 Greece ......... 7.5 6.2 6 0 5 9 4 7 4 3 4 9 5 1 4 9 Turkey ........ 6 4 5.6 4 5 5 5 5 8 4 3 4 4 4 ? 3 7 FRG* ......... 5 2 4 8 4 8 4 7 fi 1 4 4 4 3 3 fi 3 3 Netherlands ...... 5 4 6 2 5 7 4 4 4 9 4 3 3 8 3 fi 3 fi Italy ....... 4.6 4.5 4 3 4 0 4 > ? 9 3 1 ? 7 ?, 8 Portugal ..... 4 1 4 7 4 5 4 7 1 8 5 8 7 "> fi 7 fi fi Norway ..... 2.6 4 4 4 0 3 fi 4 1 3 9 3 5 3 fi 2 9 Belgium . ... 2 4 4 1 3 9 3 7 3 fi ? 9 fl 9 3 0 ?, 8 Denmark ..... 1 8 3 6 3 5 3 1 3 4 ? fi ?, 7 ?, fi 2 3 Luxembourg ...... 1 5 3 6 2.2 1 1 1 4 1 4 1 ?, 0 9 0 9

p * Before its admission to NATO (in 1955) the FRG had met the occupational expenses of some countries and made a number of other payments listed as military spending in NATO statistics.

Sources: The Review of Economics and Statistics, November 1967, p. 528; The Military Balance, 1968-1969, London, 1968, p. 55; ibid., 1971-1972, London, 1972, p. 60.

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military expenditures of all countries, they can be used to compare the extent of militarisation of individual capitalist economies. Moreover, the table gives an authentic overall picture of trends in militarisation of the economy. Its data, however, misrepresent the actual relative level of military consumption, first, because many types of military spending are listed under civilian items of the budget to conceal the true scale of military development, second, because wrong methods are used to calculate gross national product, with much repeated counting and hence a notable overstatement of the total.

p With requisite corrections in the calculation of military expenditures and gross national product, the percentage thereby obtained will indicate more or less accurately the extent of a country’s militarisation. By our estimates, the 149 US direct military expenditures (by the Defence Department, AEG, NASA, and on military aid) in 1969/70 totalled 84,000 million dollars. According to official statistics, the 1969 gross national product was worth 929,000 million dollars. Presuming that repeated counting overstated the US gross national product roughly by 20 per cent, the actual GNP in that year totalled 743,000 million dollars. In this case, the share of US direct military spending in GNP in 1969 was 13 per cent rather than 8.7 per cent as indicated in Table 21.

p The extent of militarisation of the economy can also be assessed by correlating the strength of personnel employed in all the fields of military activity with the country’s total employment. Richard P. Oliver of the US Department of Labour Bureau of Labour Statistics used an inter-industry balance model to assess the impact of Department of Defence expenditures on employment. Oliver’s estimates are presented in Table 22, showing that the total of persons serving in the armed forces (including civilians) and employed in war production increased from 5.7 million in 1964/65 to 7.4 million in 1966/67. In 1964/65, military employment accounted for 8.6 per cent of the nation’s total, whereas the figure for 1966/67 was 10.3 per cent. Over the period, the share of military employment in the private sector grew from 3.9 to 5.2 per cent. Oliver’s assessment of the impact of the Vietnam war on employment rates in the USA is of definite interest. According to his estimates, the war has created 1.8 million jobs, which account for 24.4 per cent of the total employment increase in the country. In connection with ending the war in Vietnam the total and relative employment in the United States has somewhat reduced.

The USA ranks first not only in the overall volume of military work but also in the extent of militarisation of the economy. Before the Second World War, it spent, as a rule, less than one per cent of its GNP for ’military purposes in peacetime, whereas today it spends more than 10 per cent. Since the late fifties, a certain downward trend in the share of military spending in GNP was in evidence in the USA, because its economy grew faster than its military spending. The escalation of the Vietnam war, however, stepped up the rates of militarisation of the US economy.

150 Estimated Employment Attributable Expend!

Source: Monthly Labor Review, Washington, September 1967, p. 10.

Category of employment 1964/65 Total employment, thous. Military employment thous. % Federal government .... 5,067 2,716 2,351 7,462 54,483 3,635.4 2,716.0 919.4 12.6 2,101.2 72.0 100.0 39.1 0.2 3.9 State and municipal admi- Private industries .... Total .......... 67,012 5,749.2 8.6

p The enormous militarisation of the US economy is mainly the product of huge investments in the military machine. Another factor is government military contracts as a bonanza for continued enrichment of the financial oligarchy and a means of state-monopoly regulation of capitalist reproduction and mitigation of its antagonistic contradictions. In fact, the Administration uses war preparations to carry into effect most of its measures involved in state-monopoly policy.

Still another factor contributing to the militarisation of the economy is the manufacture by the USA of armaments not only for its own armed forces but also for its allies, as well as for boosting exports. The USA has become a veritable arsenal for all reactionary and aggressive forces of modern capitalism. "It is the world’s biggest arms dealer, supplying arms to its allies, to enemies in conflict with each other. In the period 1945-70, the capitalist countries exported 66,000 million dollars’ worth of arms, in which the US share was almost 50,000 million.  [150•1 

151 Table 22 to Department of Defence tures 1966/07 Employment involved directly or indirectly in Vietnam war in 1966/67 Military employment rnent, thous. thous. % thous. % to military employment % to total employment 6,016 4,437.5 73.8 798.8 18.0 13.3 3,350 3,350.0 100.0 634.0 18.9 18.9 2,666 1,087.5 40.8 164.8 15.2 6.2 8,569 19.3 0.2 6.0 31.1 0.1 57,670 2,971.5 5.2 1,008.8 33.9 1.7 72,255 7,428.3 10.3 1,813.6 24.4 2.5

p Arms exports are used by the US imperialists to increase the dependence of the capitalist countries on the USA in the military field, to secure fat war contracts for US corporations, to reduce the US negative balance of payments, etc. To promote arms exports, the Administration has increased credits for arms manufacture, through the Export-Import Bank in particular. At the request of the Department of Defence, from 1963 to 1967 this bank gave 2,600 million dollars in foreign loans for arms purchases in the USA. In 1964, the US Congress authorised the Department of Defence to issue guarantees to private banks on credits granted to corporations for arms exports. The procedure of issuing arms export licences has been simplified (arms exports are subject to government control, so private firms need a federal licence).

p All this contributed to a large growth of US arms exports. In the period from 1961/62 to 1965/66, the Pentagon sold 11,100 million dollars’ worth of arms, of which 90 per cent went to NATO partners, Japan and Australia and 10 per cent to the developing countries. The annual rate of 152 purchases of US arms by the developing countries increased 13 times from 34 million dollars in 1961/62 to 444 million in 1965/66.  [152•1 

p According to Henry J. Kuss, Jr., Assistant Secretary of Defence, during 1962-65 arms sales yielded almost 1,000 million dollars in profits for arms-manufacturing firms and 1.2 million man-years of employment spread throughout the country.  [152•2  Arms exports consume some 5 per cent of the
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Table 23 Biggest Arms-Exporting Firms Firm Export item Sales volume 1962-65, mil. dollars General Dynamics F-111A fighter-bombers .... Tartar ground-to-air guided missiles ........... 1,072.0 34.4 Lockheed Aircraft Starfighter F-104 fighter- bombers ............ 527.1 Hercules C-130 transports . . Orione R-3A anti-submarine aircraft ........... 409.3 23.5 McDonnel Aircraft F-4 fighter planes ...... 703.0 Bath Iron Works/ Defoe Shipbuilding Anti-aircraft guided missile destroyers .......... 277.0 Martin-Marietta Pershing ground-to-ground missiles ........... 253.0 Raytheon Hawk ground-to-air guided missiles ........... 231.8 Food Machinery and Chemical M-113 armoured personnel carriers ........... 166.8 Chrysler Sperry Rand Ling-Temco-Vought General Motors Boeing Airplane Tanks. M60AI 105-mm guns Sergeant guided missiles . . . Crusader F-8E fighter planes M-109 155-mm howitzers . . . C-135F aircraft ........ 154.2 149.7 66.0 56.5 53.0 Pacific Car & Foundry M-107 175-mm guns ..... 38.7 Grumman Aircraft S-2E anti-submarine aircraft 23.3

Source: Technology Week, October 3, 1966, p. 10.

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total output of the US military industry. The bulk of these exports consists of aircraft, missile and space equipment. The biggest arms dealers are General Dynamics and Lockheed Aircraft. In the period 1962-65, they exported over 2,000 million dollars’ worth of weapons systems and military equipment (see Table 23).

p Its technological superiority and huge war production enable the USA to sell arms at prices 30-40 per cent below those offered by other arms-exporting countries. This secures US domination of foreign arms markets. Occasionally, even the governments of industrialised capitalist countries prefer to buy arms from the USA rather than develop and produce new sophisticated weapons at home. A case in point is the British Government’s decision to buy in the USA F-4 and Phantom-2 jet fighters and C-130 turboprop transport planes rather than continue to support costly lagging development programmes in the United Kingdom.  [153•1 

The production of military equipment for its own armed forces and for export has assumed immense proportions in the USA and has become a permanent element of the structure of its economy. According to US press reports, US arms exports will scoop up 15,000-20,000 million dollars in the period 1966-75.