Dan Carlin — What Is Military Keynesianism?

1. 1. Foreign Policy Explained, Ep. 5: What is the Military Industrial Complex? – Learn Liberty (video): Professor Chris Coyne explains what the military industrial complex is. 
   2. Defense spending: Why we pay for the permanent war economy (blog post): Professor Thomas Duncan explains why it is so difficult to cut defense spending. 
   3. Foreign Policy Explained, Ep. 6: The Free Market and the Military Industrial Complex – Learn Liberty (video): Professor Chris Coyne explains that for military contractors, profit and loss are determined not by the market, but by a firm’s ability to navigate politics.

Dan Carlin:
There’s a whole rationale. It’s called Military Keynesianism, and you can go back and read the documents at the time. They’re very open about it. We had the Great Depression, and they tried all kinds of things to get us out of that. We were still in it when the gin up … 1940 to the second world war started. You go look at the production numbers and the economic numbers and the graph is almost straight up. Then in 1943 when it’s clear that the war will be over in a couple of years and the turning, it’s like an arm-wrestling match and it’s too far of a … they start thinking, “Okay, well what happens when we turn off the spigot?”
I had a great-uncle who had a small, little rubber plant in Orange County before the war. When the war started, the government gave him a huge amount of money to buy up all the land, we need all the … all of it. Then after the war they simply said, “Do whatever you want with it.” So he sold it and made a fortune just on selling the land. That’s the spigot. That’s the tap. There was this feeling that we could go right back to the Great Depression if you didn’t keep the spigot on. This unnatural amount of cash coming from taxpayers to military to build stuff that we might not even need, but it keeps jobs going.
That’s the thing. If I told you that we could get out of all these countries and the world would be fine, you might say that sounds great, but if I said yes, but we could also lose 250,000 jobs to people in the defense ind then when you have to say is it wo- but then one must ask, are these real jobs? Or are these jobs where Dave Rubin’s tax dollars are basically transferred to a guy who works in the defense … I mean is that really capitalism? We go after the socialist countries for being socialist. How different is it, military Keynesianism is a kind of socialism.
Rubin:
Right. We’re just transferring in a different way.
Dan Carlin:
Yeah and then when we don’t want the stuff … This is where you know it’s a bit of a shell game. If we were really concerned with defense, you would not give your best equipment to other people, right? You would not say, “This is our new M1-Abrams Tank and we have it.” But then when you give it to other people, what does that mean? That means they have the same stuff you do which means you’ve got to go build better stuff.
Rubin:
Right.
Dan Carlin:
If becomes a make work program if you will.
Rubin:
So how much of it is just that, that maybe this thing has grown so big, talking about budgets and military and all that, that reigning it back in would almost be impossible. Do you think it’s possible that we’ve maybe gotten too big, that somehow turning it back could have repercussions that we can’t even imagine?
Dan Carlin:
First of all start with, when you have a corrupt political system … Take for example the question of tanks. We just brought up tanks. Well there’s a famous story happened six months, a year ago, where it was a bit of a scandal because the government doesn’t want any more tanks. The military does not want any more tanks. We have lots of them, but they build tanks in important districts that have Senators who then go and argue that you would decimate my local economy if you don’t build more…. So they’re building more tanks than the military says they want because we have to keep the work.
See the military’s also smart. They locate and I love the US military by the way. I’m a military history guy. But they locate the various important facilities in places where there are powerful politicians and what have you. You have a real reason, I mean if you talk about cutting defense, you’re going to have for example Congressmen down in Southern California who have Marine bases that depend on that money, that feed families, that go into the local economies, but again, do you have a Defense Department for that?
If you got rid of that, does that mean you will suffer or does that mean … The true believers in capitalism would say, okay you will reallocate all that. If you believe that and I’m more a pragmatist. It’s an ideology but those funds will be located to more productive measures. It will be a form of creative destruction if you will. I think that’s a more logical question. Like if you talk about cutting the defense budget for example by 20%, the problem with that is, you haven’t cut the mission. If your job is to be the global policeman of the world, we’re not spending enough now. You have to match the funding …
Rubin:
Well I would argue that’s a problem too, as I think you would agree with me.
Dan Carlin:
Yeah, you have to match the funding to the mission, right? If our job is to defend the United States of America, we are wildly spending too much money.
Rubin:
Right.
Dan Carlin:
So here’s the thing that never gets debated. It’s like the dog that didn’t bark in Sherlock Holmes. The subject we never debate is allowing the American people a voice in foreign policy. Because if the American people are allowed to decide the foreign policy we don’t have this foreign policy and everybody knows it.