Military Spending and Economic Stagnation

Abstract

Baran and Sweezy's analysis of the role of military spending in preventing economic stagnation in monopoly capitalist countries is tested with data from the 18 wealthiest capitalist countries. According to the Baran-Sweezy theory, the greater the role of military spending in an economy, the lower should be the level of unemployment and the more rapid the rate of growth. They also maintain that only military spending can play the role of preventing stagnation. These and related hypotheses are tested controlling for the factors of GNP, GNP/capita, and, depending on the hypothesis, the level of either military or nonmilitary spending. While the level of nemployment was found to be associated with the level of military spending as predicted, the rate of growth was found to be negatively associated. Nonmilitary expenditure was found to play a much more significant role in monopoly capitalist economies than does military spending. Overall, the Baran-Sweezy theory of the role of military expenditure on economic ...