(OPE-L) Re: Forces of destruction

From: glevy@PRATT.EDU
Date: Mon Nov 01 2004 - 17:55:33 EST

---------------------------- Original Message ----------------------------
Subject: Forces of destruction
From:    "Jurriaan Bendien" <andromeda246@hetnet.nl>
Date:    Mon, November 1, 2004 5:36 pm

An English source for the Marx quote on "forces of destruction" is at:
Under the heading "forces of destruction" we could include weapons
production, but also forms of production which cause ecological damage or
which damage human health.

As regards the military industries, Rosa Luxemburg additionally
commented in 1913: "Finally, militarism is a
weapon in the competitive struggle between capitalist countries for areas
of non-capitalist civilisation. In addition, militarism has yet another
important function. For the purely economic point of view, it is a
pre-eminent means for the realisation of surplus-value; it is itself a
province for accumulation. (...) Capital increasingly employs militarism
for implementing a foreign and colonial policy to get hold of the means of
production and labour power of non-capitalist countries and societies.
This same militarism works in like manner in the capitalist countries to
divert purchasing power away from the non-capitalist strata. (...) The
more ruthlessly capital sets about the destruction of non-capitalist
strata at home and in the outside world, the more it lowers the standard
of living for the workers as a whole, the greater also is the change in
the day-to-day history of capital. It becomes a string of political and
social disasters and convulsions, and under these conditions, punctuated
by periodical economic catastrophes or crises, accumulation can go on no
longer. But even before this natural economic impasse of capital's own
creation is properly reached, it becomes a necessity for the international
working class to revolt against the rule of capital."

From: Rosa Luxemburg, The Accumulation of Capital,
Modern Reader Paperbacks 1951, p. 454, 466-467.

For data on world military expenditure, see:

For privatisation in the military sector, see:

Here's some additional notes:

"We can't have it both ways. We can't be both the world's leading
champion of peace and the world's leading supplier of arms."
- Former US President Jimmy Carter, presidential campaign, 1976

World military R&D is, by far, the largest single research pursuit on
earth. Few researchers however are researching the economics of
the military industry itself. During the 1980s, Elisabeth Sköns notes,
world military expenditure was 10 times higher than in 1925-1938. In 1989,
the USA spent 36% and the USSR 23% of it. Nevertheless, few
governments provide regular and comprehensive information
about their national arms industry. I think that
in real terms world military expenditure is in 2004 back to the
same level as 1988 or has exceeded it. .

After 1989, there was a sharp drop in government purchases
of military equipment. The global stockpile of nuclear warheads
peaked in 1986 at 69,490, equal to an explosive yield of 18
billions tons of TNT, three times the explosive force used in
all of world war 2. The Pentagon industry claimed
the defense industry laid off 795,000 American workers
between 1992 and 1997. The corporations
responded to this with "export-led development", involving
many offset agreements - incentives provided to
foreign countries in exchange for the purchase of military goods
and services. More and more weapons are now
produced for export, with government assistance.

Some "biggies" in the arms business are Lockheed Martin,
Boeing, Raytheon, British Aerospace, GEC, Northop
Grumman, Thomson, Thomson CSF, General Dynamics,
TRW, and United Technlogies. But Daimler-Chrysler,
Mitsubishi, Rolls Royce, Tenix, ADI and Lucent
Technologies also produce military equipment.

The programs often include agreements to manufacture
some or all of the products in the purchasing country. So Turkey,
for example, bought 160 F-16s from General Dynamics
in 1987 (for delivery through 1994) for about $4 billion, on
the condition that most of the planes be built in Turkey. In turn,
Israel's military industry won its biggest contract ever, upgrading
Turkey's Patton tanks. Thus, according to the London-based
International Institute for Strategic Studies, while the arms
trade declined in 1985-1995, it grew in real terms by 36
percent between 1995 and 1997 through export-led
development. Since 9/11 the industry is again growing
strongly, and US weapons manufacturers have shown
big profits.

The five permanent members of the UN Security Council -
the USA, UK, France, Russia, and China - are responsible
for 90% of reported conventional arms exports. The
USA, the UK and France make more money from weapons
sales to developing countries than they give them in civilian aid. The top
15 countries in terms of military spending account for
over four fifths of total world military spending. Such expenditure
estimates of course do not reflect the actual stock of world military
hardware accumulated over a longer timespan, and the value
of that stock.

The total number of smallarms, ranging from pistols and revolvers to
shoulder-fired rocket launchers, in civilian and military hands around the
world was estimated to have risen to to 639 million in 2001, and the USA
accounts for a third of those (Geneva Graduate Institute of
International Studies, 2002).

8 million more smallarms are produced every year, so we can estimate the
current total world stock at about 660 million smallarms. So there exists
one firearm for every 9 or 10 people on the planet. For every four
Americans, there are 3 firearms owned by the military or by civilians.

According to the United Nations, of 49 major conflicts in the 1990s, 47
were waged with smallarms as the weapons of choice. Smallarms are
responsible for over half a million deaths per year, including 300,000 in
armed conflict (war fatalities) and 200,000 more from homicides and
suicides (in Israel, more IDF soldiers seem to be dying from suicide than
from interventions in the West Bank). That's one person in the world
killed every minute by smallarms.

SIPRI adopts a definition of "world military expenditure" data as all
current and capital expenditure used on: (a) the armed forces, including
peacekeeping forces; (b) defence ministries and other government agencies
engaged in defence projects; (c) paramilitary forces, when judged to be
trained and equipped for military operations; and (d) military space
activities. The aggregate includes: (a) military as well as civil
personnel, including retirement pensions of military personnel and social
services for personnel; (b) operations and maintenance; (c) procurement;
(d) military research and development; and (e) military aid (in the
military expenditure of the donor country). Excluded are (1) civil defence
and current
expenditures for previous military activities, such as for veterans'
demobilization, conversion and weapon destruction, (2) military
expenditures by non-state organisations such as armed opposition
groups (more difficult to estimate, also).

On this basis, using CPI deflators, SIPRI calculated world military
expenditure in the calendar year 2002 was $794, accounting for
2.5% of world GDP valued at $31.8 trillion, and $128 per head
of the world population. Cuba spends about $30 per Cuban citizen and the
USA slightly more than $1,000 a year for each American citizen.

SIPRI previously converted military expenditure using Purchasing Power
Parity exchange rates, whereas now market exchange rates (MERs) are used
for all countries, giving considerably lower dollar figures for the
countries in question. If PPP rates, which better reflect the actual
volume of goods and services that can be purchased in each country with
its currency, are used, then the US remains the top spender by far, but
the next three are then China, India and Russia. This is because MER
dollars tend to undervalue the purchasing power of money in developing
countries and economies in transition. However, lack of reliable PPP
dollar data meant that SIPRI chose to use MER dollars to convert all
currencies to US dollars.
Yet world GDP is normally estimated in PPP dollars, although,
the World Bank now uses an Atlas Method.

Let's take a closer look at the SIPRI total. If we just
take the total expenditure of the top 15 countries in military spending,
the discrepancy between MER dollar and PPP dollar valuations is 28.7%, a
difference of $256.6 billion, which basically means that, in reality,
military expenditures are more than a quarter higher, if adjusted for real
buying power, i.e. more bangs for bucks.

This big discrepancy is for the most part due to the currency
differentials applying to China, Russia and India. In 2002 MER dollars,
these countries spent respectively $31.1 , $11.4 and $12.9, a total of
$55.4 billion for those three countries, but if you convert that to PPP
dollars,  then military spending of these three countries works out
actually five times higher.

If I estimate SIPRI world military spending in PPP terms, I arrive at a
figure equivalent of about one trillion US dollars, or, given a world
population of 6.2 billion, a military expenditure value per head of the
world population in 2002 which is equivalent to about $161
in real terms.

The World Bank estimate of world GDP in 2002 was US$32.3
trillion and world GNI was US$31.5. In that case, it would be more correct
to say that in truth, world military expenditure using SIPRI's definition
is about 3.3% of world GDP, and not 2.5%  as SIPRI suggests
(3.4% of world GNI). In other words, it's about 0.8% higher than
the SIPRI measure suggests. A rather trivial difference you might say, but
in reality it's gigantic, because we're talking about the total new value
added by world production in 2002, i.e. a value of nearly
260 billion dollars. The world GDP measure for 2002 implied by
SIPRI itself is actually slightly lower than the World Bank measure, in
which case real expenditure works out at nearly 3.4%.

Let's extrapolate linearly that world GDP for 2004 will be approximately
$33.9 trillion, then we are on pretty safe ground if we estimated that
world military expenditure in 2004 using the SIPRI definition will be
around the $1.1 or $1.2 trillion mark in real terms. That's about the same
as the total value of the world oil market, or the same as the combined
income of half the people living on earth.

SIPRI says the USA in 2002 accounted for 43% of world military expenditure
in MER terms. The  USA, Japan, the UK, France and China in MER terms
accounted for 62% of the world total, and the top 15 countries account for
82%. If I substitute the PPP dollar values for China, Russia and
India only, then the total 2002 expenditure is bumped
up to $964.5 billion. In that case, US military expenditure
would represent only 34.8 percent of the world military expenditure, i.e.
about a third, in real terms. The military spending of the USA plus close
allies (NATO countries, Australia, Japan and South Korea) spend
more than the rest of the world combined, i.e. two thirds of all
military spending and approximately  57 times more than the
seven "rogue states" included in Bush's "axis of evil".

For 2002-2003, SIPRI calculated that world military spending using their
measure had increased by 18% in real terms, to reach $956 billion (in
current dollars) in 2003. So really, whatever valuation measure you use,
it can be said confidently that the military industry is a trillion dollar
a year business.

In SIPRI data, various items are not included. As the researchers
themselves indicate, in their calculations the value of veterans'
benefits paid out and demobilization costs (regarded as transfers in GDP),
 conversion costs (partly included and partly excluded
from GDP) and weapons destruction costs (partly included and
partly excluded in GDP) are excluded in the SIPRI world total for military
expenditure, because they are expenditures in respect of military
activities that took place in the past. Yet it is "military expenditure".
Elisabeth Sköns notes that military expenditure should be a measure of the
total cost of maintaining a defence establishment, but that in reality
government data only cover part of those costs. Private
armies and opposition movements are also not yet included in
the figures.

Another issue concerns procurement of military equipment
(ranging from weapons and weapons systems to vehicles, clothing,
support services and the like - arms procurement usually
accounts for only 20-30% of the military budgets of the larger
arms-purchasing countries, while the largest portion is normally spent on
operations, maintenance and personnel; world arms sales are only about
$20-25 billion, it is the military apparatus that consumes the big money).
Government money spent on obtaining weaponry and weapons systems
doesn't really adequately represent the value of the net output of GDP
defined industries producing military equipment. So, by just striking a
ratio between government military expenditures and GDP, we
probably understate the real economic significance of military


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