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Military State Capitalism Seymou b r YMelman John Dewey reminded us, “Every government should have a minister of irritance.” It is in that spirit that the views of Seymour Melman are presented through these pages of the Texas Observer. Behind the U.S. war in the Gulf lies a transformation in American political economy. This war and others on the Pentagon’s drawing board stem from the normal operation of a military form of state capitalism. It has been made the dominant form of political economy worldwide, independently of variation in economic superstructure, ideology, history, culture. With the United States and Soviet Russia as prime movers, their allied states were modelled after and incorporated into the competing state managerial systems. The operative categories are capitalism, state, military. Capitalism. This is the way of controlling production and other aspects of economy that embodies three core social-relational features: First, an occupational separation between the work of decision-making and that of producing; second, a hierarchical organization of decision-making; third, an imperative among the managerial occupations toenlarge their decision power both within and among hierarchies the mores of the managerial occupations, a powerful imperative. By state I mean the central government. In state capitalism, the state has primary control over capital resources and houses the most important industrial management. Thus in the United States from 1951 to 1990, every year the budgets of one Executive Branch department, the Department of Defense, exceeded the combined net profits of all American corporations. Also, from 1949 to 1989, the combined budgets of the Department of Defense in 1982 dollars amounted to $8.2 trillion. This compares with the money value of all U.S. industry’s plant and equipment, plus the U.S. infrastructure, which amounts to $7.3 trillion, again in 1982 dollars. The federal government has expended resources on military account in excess of what would be required to replace most of what is human-made on the surface of the United States. Further, the Pentagon includes the largest management organization in the economy. In military state capitalism, the military activity building and operating armed forces and their industrial base becomes the dominant activity of the state. In the U.S. the Pentagon uses 75 percent of the federal government’s R&D funds, has more employees than the rest of the government together, and has machinery assets that dwarf the capital of any one or grouping of corporations. These core characteristics of the military form of state capitalism have led to sustained international violence as the state managers apply their military assets to their normal drive for extending managerial control. During the long Cold War, especially since 1961 \(when McNamara installed a formal Central Administrative Office been performing as a military state capitalism. \(Thus the U.S. war in Vietnam is inexplicable by classic criteria of capitalist imperialism: no trade or investment to speak of. That war was States the consequences from the establishment of military state capitalism include: Alterations in ruling class, government and economy. The Ruling Class. American business and government were always partners, sharing power. Business used to be the dominant partner; but some time around the Second World War, government and business became equal partners. Then, as a consequence of the Cold War, plus the managerial organization of the Pentagon after 1961, the government managers became senior partner in that relationship, as indicated by their preeminence in control over capital in all forms. Thereby, the normal managerial ruling class thrust for maintaining and enlarging decision power now has its main center in Washington’s state management, with corporate management as a lesser partner. Government. The Constitution gives the President, as Chief Executive, top political power, and names him Commanderin-Chief of the armed forces. But nowhere in the Constitution is the President accorded top economic power.That capacity sterns from his functional role as Chief Executive Officer of the military economy’s management. Subordinate to the CEO are the managers of 35,000 prime contracting firms and about 100,000 subcontractors. The Pentagon uses 500,000 people in its own Central Administrative Office network. Recall that top military, political and economic decision power in the same hands has been a hallmark of the Leninist form of state organization. Independently of intention, that form of government has been installed in the U.S. an automatic consequence of a military form of capitalism. Economy. I stand by my 1974 assessment of the economic consequences of The Permanent War Economy: “Traditional economic competence of every sort is being eroded by the state capitalist directorate that elevates inefficiency into a national purpose, that disables the market system, that destroys the value of the currency, and that diminishes the decision power of all institutions other than its own. Industrial productivity, the foundation of every nation’s economic growth, is eroded by the relentlessly predatory effects of the military economy.” The predatory consequences from concentrating finite production resources in products that lack use-value for consumption or further production are dramatically visible in the decay of U.S. infrastructure and industry, and in the breakdown of production capability in the Soviet Union. In the U.S. the burden of this plundering, a virtual war against our own people, falls most heavily on working people, minorities, children, and on all who have been made into a castoff population of homeless, hungry and untended sick. The comprehensive nature of this war waged by military state capitalist directorates against their own populations was captured by Dwight Eisenhower addressing the North American Society of Newspaper Editors, April 19, 1953: “… Every gun American Income Life Insurance Company BERNARD RAPOPORT Chairman of the Board and Chief Executive Officer 22 APRIL 5, 1991