Military State Capitalism

By Melman, Seymour | The Nation, May 20, 1991 | Go to article overview

Military State Capitalism


Melman, Seymour, The Nation


MILITARY STATE CAPITALISM Clearly the war in the Persian Gulf was not the noble cause that George Bush said it was. But neither can it be comprehended solely in terms of Realpolitik or naked economic interest. Behind the U.S. war in the gulf lies a transformation in global political economy. This war and others on the Pentagon's drawing board stem from the normal operation of a military form of state capitalism. It has become the dominant form of political economy worldwide, independent of variation in economic superstructure, ideology, history and culture. With the United States and the Soviet Union as prime movers, their allied states, such as Iraq, were modeled after and incorporated into competing state managerial systems.

In state capitalism, the central government has primary control over capital resources and carries out the most important industrial management functions. In military state capitalism, military activity--building and operating armed forces and their industrial base--is the primary activity of government.

Capitalism is characterized by three basic features when considered in terms of social relations, rather than the money mechanics of Western business or the political mechanics of the Soviet bureaucracy: separation of the work of decision making from that of producing; hierarchical organization of decision making; and an imperative among the managers to enlarge their power both within and outside the hierarchy.

Managers strive to enlarge their decision-making power in many ways: They expand the scope and intensity of administrative controls (e.g., more details in accounting reports, greater frequency of reports, ever closer monitoring of production workers, preference for centralized control), thus justifying larger subordinate staffs; they strive to reach the top, thereby controlling more people; they undertake to increase the power of their hierarchy against competing managements, for greater control over market/production share. Indeed, managerial controls and their direct costs are expanded regardless of productivity and large effects on profits. Failure to strive for expanded control is an unthinkable act, a cardinal violation of managerial culture, and is punishable by expulsion.

Top managers of U.S. and Soviet industry, in private as well as government offices, give priority to enlarging their decision power over production and production workers. Control in that sphere gives managers leverage over many other aspects of society, from the kinds of goods available in stores to the content of textbooks and television programs. In the classic business schema, extension of managerial power operates via the "circulation of capital" in and around production--investing, selling, profiting, accumulating finance capital and reinvesting in ever-larger enterprises.

In the Soviet economy, the instrumental routines for expanding managerial power are through promotion in the core party and state organizations that constitute the nomenklatura. Using their monopoly powers, as in banking, the Soviet state managers appropriate finance capital via the money flow that accompanies division of labor and trade; they also direct the allocation of key physical resources. Furthermore, the common U.S.-Soviet managerial quest for extending decision power operates in diverse market conditions, from nearly pure competition to monopoly. At the state managerial level profit-and-loss accounting and criteria are nonexistent; money for operations is appropriated from the national income.

All this is what I mean by the social relations of capitalism, specifically of state capitalism, being a dominant form of political economy, independent of variation in superstructure.

Under military state capitalism the drive to expand managerial power leads to sustained international violence, as state managers bring their military assets into play. The Vietnam War is a case in point. …

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