The Russian invasion in Ukraine has sparked intense political debate about the geopolitical implications of the conflict. Not as well-known, but equally important, the war has allowed for a more aggressive militarization in an already complex global war economy. Geopolitical tensions and international conflicts may be tragic for those caught up in conflagrations such as in Ukraine — but advantageous for those seeking to legitimize expanding military and security budgets and open up new opportunities for capitalist profit-making in the face of chronic stagnation and social discontent.
In late March, Biden’s administration, citing Russian invasion, called to have a $31 billion increase in the Pentagon budget over the previous year and on top of an emergency appropriation weeks earlier of $14 billion for Ukraine’s defense. The U.S. government approved a military budget of nearly $800 million in late 2021. However, it also ended the war on Afghanistan that year. Nearly immediately following the Russian invasion, the U.S. and European Union allocated billions in additional military expenditure and sent streams of military hardware to Ukraine.
Shares in military and security companies surged in the wakeof the invasion. Two weeks into the conflict sharesRaytheon was up 8 percent, General Dynamics was up 12 percent and Lockheed Martin was up 18%, Northrop Grumman was up 22 percent, while war stock in Europe, India and elsewhere experienced an increase of 22 percent. similar surgesIn anticipation of an exponential increase in global military expenditures. Russian President Vladimir Putin, in the words of the managing director of AeroDynamic Advisory, a Pentagon contractor, is “unquestionably the best F-35 salesman of all time,” in reference to a spike in U.S. government funding for the Lockheed Martin jet fighter. Said one consultant to Boeing, General Dynamics, Lockheed Martin and Raytheon Technologies: “For the defense industry, happy days are here again. When the defense budget rises it tends to lift all boats in the industry.”
The Russian invasion — brutal, reckless and condemnable by any standard — has sparked debate on NATO’s proposed expansion into Ukraine and the role that it played in motivating the Kremlin. In fact, U.S. officials knew that Russia’s desire to expand NATO to Russian borders would eventually lead to a military conflict. “We examine a wide range of nonviolent measures that could exploit Russia’s actual vulnerabilities and anxieties as a way of stressing Russia’s military and economy and the regime’s political standing at home and abroad,” notes a 2019 studyRAND Corporation, an affiliated think tank of the Pentagon. “The steps we examine would not have either defense or deterrence as their prime purpose,” it states, but rather, “these steps are conceived of as elements in a campaign designed to unbalance the adversary, leading Russia to compete in domains or regions where the United States has a competitive advantage, and causing Russia to overextend itself militarily or economically.”
The provocation was not reduced to geopolitical rivalry, however important it was, as many observers wanted to. The centrality and importance of militarized accumulation — of endless low- and high-intensity warfare, simmering conflicts, civil strife and policing — to the global political economy. Militarized accumulation refers a situation in a world where a global war economy is dependent on the state’s ability to organize war-making and social control in order to sustain capital accumulation despite the stagnation and saturation of global market. These state-organized practices are outsourced by transnational corporate capital. They involve the fusion of private accumulation and state militarization in an effort to sustain capital accumulation. These cycles of destruction and reconstruction offer ongoing outlets for capital accumulation. They also provide new opportunities for transnational capitalists to make a profit from the huge amounts of cash they have. There is a convergence in this process of global capitalism’s political need for social control and repression in the face of mounting popular discontent worldwide and its economic need to perpetuate accumulation in the face of stagnation.
Wars are a crucial economic stimulus. They have historically helped the capitalist system to escape accumulation crises, while deflecting attention from political tensions or problems of legitimacy. World War II was the only way to lift capitalism from the Great Depression. The Cold War justified a half-century of increasing military budgets. The longest wars in human history, the Iraq/Afghanistan, kept the economy sputtering despite the decades of stagnation. From the anti-Communist fervor of the Cold War, to the “war on terror,” then the so-called New Cold War, and now the Russian invasion of Ukraine, the transnational elite, led by Washington, have had to conjure up one enemy after another to legitimate militarized accumulation and deflect crises of state legitimacy and capitalist hegemony onto external enemies and contrived threats.
The events of September 11, 2001 marked the dawn of a new era in global warfare. In this era, logistics, warfare and intelligence are more or less the property of transnational capital. Between 1998 and 2011, the Pentagon budget grew by 91 percent in real terms, while total state military expenditures worldwide grew by 50 percent between 2006 and 2015, from $1.4 billion to more than 2 trillion. (This figure does not take into account the hundreds of billions of dollars spent on intelligence; contingency operations; policing; bogus wars against immigrants, terrorism and drugs; and “homeland security.”) During this time, military-industrial complex profits quadrupled.
However, focusing only on the state budgets for military purposes is only one part of the global war economic picture. As I demonstrated in my 2020 book The Global Police StateThe fusion of private accumulation and state militarization is the key to the many wars, conflicts, and campaigns of social control, and repression, around the globe. In this relationship, the state facilitates the expansion of opportunities for private capital to accumulate through militarization, such as by facilitating global weapons sales by military-industrial-security firms, the amounts of which have reached unprecedented levels. Global weapons sales by the 100 top weapons manufacturers and military service corporations increased by 38 percent between 2002-2016 and can be expected further in the event of a prolonged conflict in Ukraine.
By 2018, private for-profit military companiesSome 15 million people are employed around the globe, another 20 million peoplePrivate security was a lucrative industry worldwide. Private security (policing), has become a major economic sector in many countries. The 2003 invasion of Iraq saw a 73% increase in private security spending than that in the public sector. In addition, there were three times the number of people employed in private security agencies than in the official law enforcement agencies. In half of the world’s countries, private security agents outnumber police officers.
These corporate soldiers and policeThey were used to protect corporate property and provide personal security for executives, their families, and collect data. They also conduct counterinsurgency, police, and surveillance operations. They also carry out mass crowd control, repression, and run private detention and interrogation centers. These private security and military firms are now available for hire. pouring into UkraineSome mercenary companies offer between $1,000 and $2,000 per day for combat veterans.
While the Russian invasion has contributed to an increase in military spending, it did not cause the current surge in global military spending. It is remarkable that the state budgets for military spending are so high around the world. skyrocketedIn the wake ofThe 2008 financial collapse was more than the post-9/11 spending rise, which rose from approximately $1.5 billion in 2008 and to over $2 trillion by 2022. This explosive increase in spending coincides perfectly after the Great Recession. This suggests that the heightened militarization the global economy is more a response or a response towards this ongoing stagnation than to perceived security risks. Bursts of militarized accumulation, such as the one caused by 9/11, the 2008 financial crisis, and the Russian invasion, may help to offset the overaccumulation crisis. However, they are high-risk bets that increase tensions around the world and push the world towards an all-out global conflagration.
The Crisis of Global Capitalism
This crisis of global capitalism has an economic (or structural) component. It is a period of persistent stagnation in the global economic system. It is also political. It is a crisis of capitalist hegemony and state legitimacy. The system is moving towards “a general crisis of capitalist rule” as billions of people around the world face uncertain struggles for survival and question a system they no longer see as legitimate. The capitalist system has been saved from crisis by wars, which serve to distract attention away from political tensions and issues of legitimacy.
Economically, global capitalism faces what is known in technical language as “overaccumulation”: a situation in which the economy has produced — or has the capacity to produce — great quantities of wealth but the market cannot absorb this wealth because of escalating inequality. Capitalism will, by its very nature, produce wealth but polarize this wealth and create ever greater levels of social inequality unless redistributive policies are implemented. This unprecedented level of social polarization in the world and inequality is unprecedented. In 2018, the richest 1% of humanity held control more than half of the world’s wealthThe bottom 80 percent could only manage with 5 percent, Oxfam is an international development agency. reported in JanuaryThe 10 richest men in world increased their fortunes by more than two years during the coronavirus epidemic. They went from $700billion to $1.5 trillion while 99 percent of humanity saw their income drop and 160 million more fell into poverty.
Such inequalities end up undermining the stability of the system as the gap grows between what is — or could be — produced and what the market can absorb. The extreme concentration of the planet’s wealth in the hands of the few and the accelerated impoverishment and dispossession of the majority means that the transnational capitalist class, or TCC, has increasing difficulty in finding productive outlets to unload enormous amounts of surplus it accumulated. There was a rash of pandemics in the years preceding the pandemic. steady rise in underutilized capacity and a slowdown in industrial productionAround the world. The surplus of capital with no place to go grew rapidly. Recorded transnational corporations record profitsDuring the 2010s, corporate investment declined at the same time. TCC has also turned to unprecedented levels in financial speculation and debt-driven growth to maintain profit-making in the face the crisis. If left unchecked, overaccumulation results in crisis — in stagnation, recessions, depressions, social upheavals and war — just what we are experiencing right now.
However, there is another dynamic at play in the global warfare economy: the need for dominant group to suppress mass discontents and deflect the crisis state legitimacy. International frictions increase as states attempt to subliminize social and political tensions in order to preserve their legitimacy and keep the social order intact. All over the world, there is a growing number of international frictions. “people’s Spring” has taken off. Waves of strikes and mass protests have proliferated from Chile to Lebanon to India, Iraq to India and France to the United States. In some cases, they may be taking on an anti-capitalist tone. As the crisis worsens, the ruling groups can use external enemies and wars to divert attention from domestic malaise in an effort to keep their grip on power.
In the U.S., this sublimation has involved efforts to channel social unrest towards scapegoated communities such as immigrants or other marginalized groups — this is one key function of racism and was a core component of the Trump government’s political strategy — or towards an external enemy such as China or Russia, which had clearly become a cornerstone of the Biden government’s strategy well before the Russian invasion of Ukraine. The U.S. presidents have always reached their goals. highest approval ratingsWhen they start wars. George W. Bush achieved an all-time high 90 percent approval rating in 2001 as his administration prepared for the invasion of Afghanistan. His father George H.W.W. also reached this level. Bush achieved an 89 percent approval rating in 1991, right as the U.S. declared the end of its (first) invasion of Iraq and the “liberation of Kuwait.”
It is unlikely that a growing militarization of world capitalism will in the long-term offset either the political or economic dimensions of the global capitalism crisis. Global capitalism is emerging after the coronavirus pandemic. It has more inequality, authoritarianism and militarization and more civic- and political strife. The U.S. is seeing a rise in class struggle with strikes and unionization drives in Amazon, Starbucks and other gig economy companies. The current inflationary spiral, and the escalation in class struggle in the United States and elsewhere in the world, point to the inability to control the growing crisis. The capitalist state’s drive to externalize the political fallout from the crisis increases the risk that international tensions, localized conflicts like those in Ukraine, will escalate into larger international conflagrations with unforeseen consequences.
As the Ukraine crisis drags on and the global revolt escalates there will be a radical reconfiguration global geopolitical alignments. This will be to the beat of increasing turbulence and instability in the global economy. This will feed new political upheavals as well as violent conflicts, making global capitalism even more volatile. It is difficult to see a return to the status-quo antebellum in Eastern Europe. However, the larger picture shows that the global crisis of capitalism is not the cause, but a consequence. This crisis is only going to get worse. Don’t forget to fasten your seatbelts. It will only get worse.