The Review of the Month entitled “The U.S. Imperial Triangle and Military Spending” by John Bellamy Foster, Hannah Holleman, and Robert W. McChesney (Monthly Review 60, no. 5 [October 2008]) carries on a valuable MR tradition. Monthly Review is one of the few voices on the left that has emphasized the necessity, from the point of view of capitalism, of this kind of military Keynesianism. Chalmers Johnson and Seymour Melman, who have written extensively on this issue, have tended to argue that other forms of government spending, a renewed New Deal, is possible.
There are a couple of caveats. While the authors do not confuse “Electric Charlie” and “Engine Charlie” as do so many, and they do know that Charles E. (Edward) Wilson did not use the term “Permanent War Economy,” I think it is also necessary to recognize that he did not, in his speech to the Army Ordnance Association in January of 1944 (see Army Ordnance XXVI [March/April 1944]) argue for any form of military Keynesianism. He was solely concerned with making sure that the “military-industrial complex” (also not his word) that had been built up during the Second World War did not come unravelled after the war. Ironically, the Army Ordnance Association had been set up for this very purpose in the aftermath of the First World War. To some extent, Wilson’s speech was a warning not to let this happen again. He was arguing not for military Keynesiansim but for gearing up for the war with the Soviet Union that most feared was coming.
The first author to use the term “Permanent War Economy,” and to mean by that a form of military Keynesianism that was contemporary capitalism’s only way out, a means of transferring wealth from the working classes to capital by means of government taxation, was Edward Sard. Using the pen name Walter J. Oakes he first proposed this argument in an article in the February 1944 issue of the Politics, a magazine edited by Dwight MacDonald. He followed up with a six-part series in the New International in 1951. During the 1950s he also wrote a series of articles on works by A. A. Berle, John Strachey, and others who still clung to the hope held out by Keynes.
Like Harry Magdoff, Paul Baran, and Paul Sweezy, Sard was one of the few who continued to argue that capitalism could only be saved, at least temporarily, by massive arms expenditures and an imperialist policy aimed at controlling the world’s raw materials. In the 1950s and ’60s, during the artificial prosperity induced by the Permanent War Economy, they were voices in the wilderness. Today, when we may be witnessing the end of the American Empire, they should be recognized as the prophets they were.