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This chapter is a contribution to the intellectual history of the anxiety that full employment in the modern United States depended somehow on military spending. This discourse (conveniently abbreviated as “military Keynesianism”) is vaguely familiar, but its contours and transit still await a full study. The chapter shows the origins of the idea in the left-Keynesian milieu centered around Harvard’s Alvin Hansen in the late 1930s, with a particular focus on the diverse group that cowrote the 1938 stagnationist manifesto An Economic Program for American Democracy. After a discussion of how these young economists participated in the World War II mobilization, the chapter considers how questions of stagnation and military stimulus were marginalized during the years of the high Cold War, only to be revived by younger radicals. At the same time, it demonstrates the existence of a community of discourse that directly links the Old Left of the 1930s and 1940s with the New Left of the 1960s and 1970s, and cuts across the division between left-wing social critique and liberal statecraft.

The goal of this chapter is to reexamine the nature and structure of the military–industrial complex (MIC) through the works of John Kenneth Galbraith. MIC, or military power as he prefers, is a coalition of vested interests within the state and industry that promoted the military power in the name of “national security” for their interests. Galbraith’s theory of giant corporations helps us understand the role of military corporations in the MIC. Moreover, he is a critical scholar in examining this topic because he was a political insider in the Roosevelt, Kennedy, and Johnson administrations and a prominent public intellectual against the Vietnam War. Against this background, this chapter has three parts. After explaining the development of military Keynesianism with respect to the main economic thoughts, it examines the history of the MIC and its impact on economic priorities during and after the Cold War through Galbraith’s works. Finally, this chapter discusses MIC’s relevancy today and evaluates Galbraith’s prophecies.

The recent recession has seen something of a resurgence in the debate over military Keynesianism. Recent commentators, who should know better, have claimed that it would make sense to stimulate the U.S. economy through increases in military spending, as though this has not been a commonly contested view over the last 40 years. A large, literature has debated the economic effects of military spending, and while it has reached no consensus, there is also little support for any belief that military spending is a good way of stimulating the economy. This paper makes a contribution to the debate by assessing the theoretical perspectives and the empirical approaches used. It then undertakes an analysis of the United States using a number of approaches, and the results suggest that the simple military Keynesian arguments still lack empirical support.

In recent years, and especially with the war in Iraq, the U.S. military's reliance on private contractors as forces in the theater of war has grown and become increasingly clear. We critically evaluate some of the best literature on the emergence of this phenomenon – especially Ken Silverstein's Private Warriors and P. W. Singer's Corporate Warriors: The Rise of the Privatized Military Industry – and find a neglect of the historical path-dependent character of the rise of the new corporate armed forces. In particular, we concentrate on American experience and two silences that are integral to understanding the path-dependent character of this process: (1) earlier historical reliance on private armed force to suppress the labor movement in America, the template for this new form of irregular armed force and (2) the ghost of Vietnam as a continuing political liability in the mobilization of sufficient troop levels under neo-imperialist aspirations and “the global war on terror,” as the main condition for the rise of the new private military form. Both elements suggest the theoretical importance of state strength/weakness in any explanation of private armed force. We discuss several important political implications of our findings.

Many analyses point to Trump's behavior on the world stage – bullying and racketeering more reminiscent of a mafioso than a statesman – as a personal character flaw. We argue that, while this behavior was shocking in how unvarnished it was, Trump marks the culmination of a decades-long trend that shifted US foreign policy from a regime of “legitimate protection” in the mid-twentieth century to a “protection racket” by the turn of the twenty-first. While the temperaments of successive presidents have mattered, the problems facing the United States and its role in the world are not attributable to personalities but are fundamentally structural, in large part stemming from the contradictions of US attempts to cling to preeminence in the face of a changing global distribution of power. The inability of successive US administrations – Trump and Biden included – to break out of the mindset of US primacy has resulted in a situation of “domination without hegemony” in which the United States plays an increasingly dysfunctional role in the world. This dynamic has plunged the world into a period of systemic chaos analogous to the first half of the twentieth century.

The concept of productive/unproductive work is relevant for better understanding the current capitalist economy. As the contradiction between production and the appropriation of surplus value by financial capital becomes more pronounced as it expands, it exerts intense pressure on the appropriation and redistribution of the surplus value. It puts different factions of capital into growing conflict with each other and defines the boundaries of the current geopolitical map of power. The maximization of profits in the productive sector carries on until the possibilities of greater profits are exhausted and the rationale of the capitalist system of exploitation becomes virtually meaningless. The current level of technology with Artificial Intelligence eliminates at the same time any technical impediment to planning an economy. It also has the potential to create the objective conditions for making the move to the most democratic forms of participation in planning.

Rosa Luxemburg is not an under-consumptionist stressing the tendency to stagnation, it is rather an under-investment perspective: the effective demand crisis results from the disequilibria determined by a vibrant capitalist accumulation, and stems from production rather than circulation. To show this, the chapter deals with three dimensions of Rosa Luxemburg's economic thought. First, how Luxemburg's approach in her 1913 book is related with some of her prior writings, especially Social Reform or Revolution? and the Introduction to Political Economy. Second, the re-reading that Luxemburg herself provided of her own argument in terms of a macro-monetary circuit model like the one we read in her Anti-Critique. Third and last, in which sense Marx's monetary labour theory of value was for her the essential starting point, which cannot be just set aside. This last point will be preceded by a détour, the critical consideration of some key papers by Kalecki on capitalism and reform, including his late paper with Kowalik on the ‘crucial reform’. The chapter concludes with some hints pointing towards an interpretation of capitalism and its recurring crises where exploitation and effective demand are both essential in accounting for the ascent and collapses of different forms of capitalism itself.