Book Review - The economics of killing

Vijay Mehta The Economics of Killing: How the West Fuels War and Poverty in the Developing World
(London: Pluto Press, 2012) £13.00

There are on the left two broad views of the current, ongoing and seemingly insoluble crisis. The first view is that it is an inevitable product of the capitalist system. This is what is suggested by a strict application of Marxist analysis, and it is also the conclusion one must draw from reading writers such as Fred Magdoff and Michael D. Yates in The ABCs of the economic crisis. The other, promoted by radical left parliamentary parties such as Greece’s Syriza or the Dutch Socialist Party, as well as numerous economists and commentators of the left and the more intelligent parts of the centre-left, is that the crisis was caused by an abdication of governmental responsibility in the face of the power of the financial sector, and is being prolonged by austerity policies. Like many who see themselves as opponents of capitalism, I must confess that I somehow manage to hold both of these essentially contradictory opinions simultaneously. The tactical implications of the first are simply too daunting, so I find myself supporting approaches based on the second, whilst at the same time doubting that there is any way out of this crisis which does not involve an objectively revolutionary upheaval resulting in either the end of capitalism or the end of just about everything. As a teacher I tell my students that capitalism’s need for constant growth can only end in global destruction. As an activist I support parties which want to, well, return to growth. There may be ways to reconcile these positions through some development of Gramscian thought, such as that proposed by Adam Harmes in his essay “Crises, social forces and the future of global governance: implications for progressive strategy” in the recent interesting collection, edited by Stephen Gill, Global Crises and the Crisis of Global Leadership. Harmes argues intelligently in favour of an incremental political programme which might enable the construction of successful counter-hegemonic coalitions of forces.

Vijay Mehta’s take on the crisis does not resolve this dilemma, but like Harmes he does offer a theoretically original and empirically rich analysis which gives as much as we are perhaps entitled to ask from any writer in this often bewildering and always rapidly-moving situation: another piece of a complex jigsaw. Mehta does more than that, in fact. He presents us with a number of pieces, so that the outlines of both crisis and if not ‘solution’ then amelioration become somewhat clearer. Mehta’s basic argument is that the ‘cause’ of the crisis is less the financial sector than the Military-Industrial Complex, though banks and finance houses certainly play a major role in this.

In establishing his arguments, Mehta makes some telling points and performs the useful service of demolishing a number of myths. It never ceases to amuse me how American mainstream commentators follow the lead of the somewhat suspect NGO Transparency International in insisting that corruption gets in the way of development. No-one wants to see crooks lining their pockets at the expense of the public or the poor, but the idea that this is a serious brake on development is refuted both by history and by the contradictions contained in these same commentators’ analyses. In almost the same breath as they bemoan the development-undermining effects of corruption they will tell you what a very corrupt country China is. Yet China is by some distance the world’s fastest-growing major economy. The same crown went to the US itself during the last three decades of the 19th Century, when it too was hopelessly corrupt. Of course, what is defined as corruption in a system based on the exploitation of the mass of the population by a small elite tends to be somewhat arbitrary in any case.

As Mehta points out, the real stimulators of economic growth are not successful policing of corruption or even an absence of serious repression, but, firstly, the presence of a governing elite which acts in its own country’s interests (even if rather narrowly defined), rather than those of a foreign power; and, by fair means or foul, successful transfer (or, occasionally, development indigenously) of appropriate technologies enabling industrialisation and a rocketing rate of productivity. So China, which like the US certainly possesses a ‘military-industrial complex’, has an elite which unlike that of the US, aims primarily ‘not to acquire basic materials from poor countries… but to steal advanced technologies from rich ones’. This may be changing as China’s needs change, but thus far plundering poorer countries remains less important.

China exports manufactured goods to much of the world, including the US, and it is on this that its success has been based. The United States, however, is the world’s leading exporter of armaments. In 2011 the total value of its sales in this sector reached a record-breaking $66.3 billion. This is a contributory factor to the huge trade deficit with China, to which US companies may not sell ‘defence’—related equipment. The Chinese would love to buy US armaments. Understandably enough, however, the Americans don’t want to sell. They would happily invest in US arms manufacturing companies, but that too is forbidden. As Mehta notes, while ending this embargo would ‘provide a permanent fix for the trade imbalance’, such a change in policy would also ‘be militarily self-defeating for the US.’  In general, the United States will sell arms to anyone at all, without regard either to the use they may be put to or to their international treaty commitments. Note, for example, the nuclear arming of India, a development which transgresses the Non-Proliferation Treaty. It will not do so, however, to a rival and often openly hostile power which sees a large part of the ‘American lake’ – as the US tends to view the Pacific Ocean – as its own natural sphere of influence.

The US also fails to excel in the production of the kind of infrastructure goods – for example those needed to develop an effective transport system – which China, precisely because of its rapid development, most needs. Instead, its major exports to the People’s Republic, Mehta points out,  ‘are remarkably low tech: scrap metal, oilseeds and grains, resins and synthetic rubber feature in the top five’.

The market for arms has been largely generated by those who manufacturer them, and the overwhelming majority of such manufacturers are US-based. After the huge expansion of the industry made necessary by the need to win World War Two, these companies had to ensure the constant creation of new markets, and their perpetuation, in order not to have to ‘demobilise’, at the cost of their profits. Markets were provided by the creation of a largely fictitious ‘Soviet threat’, and by ensuring that people came to power in newly independent developing countries – and stayed there - who were more interested in acquiring powerful friends and shiny phallic objects that went ‘bang’ than they were in the wellbeing of their populations. American foreign policy was increasingly geared to the needs of corporate capital, but then to some extent it always had been. Its ruling elite had no pre-capitalist traditions to dilute this domination, no projects of aggrandisement apart from the purely profit-seeking. The British and French Empires had many aspects and served many metropolitan interests. Essentially, the American Empire has only one purpose, even if this purpose must be constantly and consciously maintained by corporate political action. Thus, as Mehta explains, a corporation such as Lockheed Martin does not ‘have to endure capitalism’, by which he means it is not subject to any of the rigours of the market familiar to small and medium-sized enterprises. Instead, ‘it ensures its future by investing in political influence in Washington.’ Of course, the United States being a parliamentary democracy, this also involves getting a significant slice of the population on board. This is done partly by the Orwellian method of constantly creating or exaggerating threats which can only be countered by military means. With delicious irony, however, there is also a tendency to draw attention to ‘the vast numbers of ordinary Americans who owe their livelihoods to the Department of Defense’s largesse, rather as all Soviet workers were expected to be grateful to the state.’ Mehta calls this ‘Leninist’, which is a little unfair to Lenin, whose political heirs in the West are about the only tendency to take a different view. Bombs for jobs is such a widespread idea that a few years ago centre-right and centre-left collaborated on a European Parliament report calling for the consolidation of the EU ‘defence’ industry, drawing attention to the fact that it was a major employer. The fact that the two MEPs involved styled themselves a ‘Socialist’ and a ‘Christian Democrat’ respectively may also strike you as ironic or may even, if you are an adherent of any or all of the philosophies to which these labels refer, make you want to vomit.

This is, in short, an excellent book which makes its case well. My only quibble would be that, rather like all that stuff about ‘evil bankers’, it exaggerates the significance of one sector in perpetuating the system of hyper-exploitation known as capitalism and thus suggests a reformist solution. Capitalism without a thriving arms industry might well be sustainable by other means, and if so it would still be capitalism. But as I confessed at the beginning of this review, reformism is not something which, in the present climate, one is likely to be able to shun completely. Not, in any case, if you want to win popular support, still less if you want to win elections. Many more people may be horrified by people who make fortunes from manufacturing death than will immediately recoil at those whose wealth comes from the growing of bananas or the manufacture of aspirin, even if the basic economics of exploitation at the heart of all capitalist economies do not really differ. And that is at least a start, a way in to revealing the nature of this murderous system.

Steve McGiffen is Spectrezine’s editor.