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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.

Peace, war and international security is an area in which economists are often conspicuous by their absence, to a degree that rivals the importance of economic issues to the problems at hand. It is getting to the point where the supposed ‘imperialism’ of economics in the social science (Fine, 2001) is reversed and the political scientists, international relations and other such groups exclude the economists and take on the economics themselves. It is not unusual to find studies of post-conflict reconstruction in which economics is surprisingly found to be important. In the case of the World Bank, it came as a great shock to the other social scientists when economists started to argue that economics might have a major role to play in understanding civil wars (Collier et al., 2003). Economists do have the gift of overstatement and a tendency to state unpleasant truths in a clear and precise way that can disturb other social scientists, whose indignation and overreaction reflected this. More recently the debate has reached a more civilised recognition of the complexity of such issues (Arnson & Zartman, 2005; Berdal & Malone, 2000).

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.

To discuss the historical roots of contemporary geopolitical economy, this paper aims to explore the complex and influential analysis of Tilly's formation of European national states as a predominant type of territorial political organization in contemporary world. To do this, Tilly described different eras of dominant organization of warfare in relation to state organization: patrimonialism, brokerage, nationalization, specialization. In this paper, we explore the link between the organization of military power and trade policy. We are trying to answer the question, if it is possible to credibly state a connection between the trade policy types pursued by selected states in specific historical periods and Tilly’s eras of dominant form of organization of warfare. For this purpose, we developed a typology of trade policies of important states throughout the history, using the economic history research of leading experts in the field. Our conclusion is that such a connection – between trade policy and Tilly’s eras of organization of warfare – can be made and that this connection is solidly supported by economic history. Our analysis may be of value for any critical assessment of international trade relations in contemporary geopolitical economy – and of influential cosmopolitan interpretations of the liberal trade regime of 19th century or globalization in 20th century.

The disintegration of the SFRY, which had its roots in the late 1970s and 1980s (Delevic, 1998), started with the decision of the Slovenian and Croat governments in 1990 to seek independence from Belgrade. The event triggering the outbreak of war in Slovenia was the takeover of Yugoslav custom houses by the Slovenia government, which prompted the YPA to intervene militarily, pitting a well-armed conventional army against the security forces of a nascent state, largely consisting of milita-style Territorial Defense Units (Lucic & Lynch, 1996, pp. 183–185). The EC and the United States moved quickly to impose an arms embargo against Yugoslavia following the military escalation of the crisis in June 1991. This was followed by resolution 713 of the UNSC (1991) imposing a “general and complete embargo on the delivery of weapons and military equipment to Yugoslavia” on 25 September 1991. During this early stage of the conflict, there was agreement among the key international actors (USA, Russia and the EU) that the conflict in Yugoslavia had to be contained and that the breakup of the federal republic should be avoided at all costs, not least because it would set a dangerous precedent for other parts of Eastern Europe. Some permanent members of the Security Council (such as France, Russia and the United Kingdom) sympathized with the Serbian position vis-à-vis the break-away republics and while the decision to apply the arms embargo on Yugoslavia as a whole was justified by the fact that none of the republics had been recognized as a subject of international law, policymakers must have been aware that they were putting Slovenia and Croatia at a military disadvantage through this decision (Lucic & Lynch, 1996, pp. 295–300).

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.

Bertil Ohlin was a most active commentator on current economic events in the interwar period, combining his academic work with a journalistic output of an impressive scale. He published more than a thousand newspaper articles in the 1920s and 1930s, more than any other professor in economics in Sweden.

Here we have collected 10 articles by Ohlin, translated from Swedish and originally published in Stockholms-Tidningen, to trace the evolution of his thinking during the Great Depression of the 1930s. These articles, spanning roughly half a decade, bring out his response to the stock market crisis in New York in 1929, his views on monetary policy in 1931, on fiscal policy and public works in 1932, his reaction to Keynes’ ideas in 1932 and 1933 and to Roosevelt’s New Deal in 1933, and, finally, his stand against state socialism in 1935.

At the beginning of the depression, Ohlin was quite optimistic in his outlook. But as the downturn in the world economy deepened, his optimism waned. He dealt with proposals for bringing the Swedish economy out of the depression, and reported positively on the policy views of Keynes. At an early stage, he recommended expansionary fiscal and monetary policies including public works. This approach permeated the contributions of the young generation of Swedish economists arising in the 1930s, eventually forming the Stockholm School of Economics. He was critical of passive Manchester liberalism, ‘folded-arms evangelism’ as well of socialism while promoting his own brand of ‘active social liberalism’.