There are three main causes of capitalist militarism.
Firstly, there is the need to contain the domestic enemy - the oppressed and exploited sections of the population. As Emma Goldman argued, the military machine "is not directed only against the external enemy; it aims much more at the internal enemy. It concerns that element of labour which has learned not to hope for anything from our institutions, that awakened part of the working people which has realised that the war of classes underlies all wars among nations, and that if war is justified at all it is the war against economic dependence and political slavery, the two dominant issues involved in the struggle of the classes." In other words, the nation "which is to be protected by a huge military force is not" that "of the people, but that of the privileged class; the class which robs and exploits the masses, and controls their lives from the cradle to the grave." [Red Emma Speaks, p. 352 and p. 348]
The second, as noted in the section on imperialism, is that a strong military is necessary in order for a ruling class to pursue an aggressive and expansionist foreign policy in order to defend its interests globally. For most developed capitalist nations, this kind of foreign policy becomes more and more important because of economic forces, i.e. in order to provide outlets for its goods and capital to prevent the system from collapsing by expanding the market continually outward. This outward expansion of, and so competition between, capital needs military force to protect its interests (particularly those invested in other countries) and give it added clout in the economic jungle of the world market. This need has resulted in, for example, "hundreds of US bases [being] placed all over the world to ensure global domination." [Chomsky, Failed States, p. 11]
The third major reason for militarism is to bolster a state's economy. Capitalist militarism promotes the development of a specially favoured group of companies which includes "all those engaged in the manufacture and sale of munitions and in military equipment for personal gain and profit." [Goldman, Op. Cit., p. 354] These armaments companies ("defence" contractors) have a direct interest in the maximum expansion of military production. Since this group is particularly wealthy, it exerts great pressure on government to pursue the type of state intervention and, often, the aggressive foreign policies it wants. As Chomsky noted with respect to the US invasion and occupation of Iraq:
"Empires are costly. Running Iraq is not cheap. Somebody's paying. Somebody's paying the corporations that destroyed Iraq and the corporations that are rebuilding it. in both cases, they're getting paid by the U.S. taxpayer. Those are gifts from U.S. taxpayers to U.S. Corporations . . . The same tax-payers fund the military-corporate system of weapons manufacturers and technology companies that bombed Iraq . . . It's a transfer of wealth from the general population to narrow sectors of the population." [Imperial Ambitions, pp. 56-7]
This "special relationship" between state and Big Business also has the advantage that it allows the ordinary citizen to pay for industrial Research and Development. As Noam Chomsky points out in many of his works, the "Pentagon System," in which the public is forced to subsidise research and development of high tech industry through subsidies to defence contractors, is a covert substitute in the US for the overt industrial planning policies of other "advanced" capitalist nations, like Germany and Japan. Government subsidies provide an important way for companies to fund their research and development at taxpayer expense, which often yields "spin-offs" with great commercial potential as consumer products (e.g. computers). Needless to say, all the profits go to the defence contractors and to the commercial companies who buy licences to patented technologies from them, rather than being shared with the public which funded the R&D that made the profits possible. Thus militarism is a key means of securing technological advances within capitalism.
It is necessary to provide some details to indicate the size and impact of military spending on the US economy:
"Since 1945. . . there have been new industries sparking investment and employment . . In most of them, basic research and technological progress were closely linked to the expanding military sector. The major innovation in the 1950s was electronics . . . [which] increased its output 15 percent per year. It was of critical importance in workplace automation, with the federal government providing the bulk of the research and development (R&D) dollars for military-orientated purposes. Infrared instrumentation, pressure and temperature measuring equipment, medical electronics, and thermoelectric energy conversion all benefited from military R&D. By the 1960s indirect and direct military demand accounted for as much as 70 percent of the total output of the electronics industry. Feedbacks also developed between electronics and aircraft, the second growth industry of the 1950s. By 1960 . . . [i]ts annual investment outlays were 5.3 times larger than their 1947-49 level, and over 90 percent of its output went to the military. Synthetics (plastics and fibres) was another growth industry owning much of its development to military-related projects. Throughout the 1950s and 1960s, military-related R&D, including space, accounted for 40 to 50 percent of total public and private R&D spending and at least 85% of federal government share." [Richard B. Du Boff, Accumulation and Power, pp. 103-4]As another economist notes, it is "important to recognise that the role of the US federal government in industrial development has been substantial even in the post-war period, thanks to the large amount of defence-related procurements and R&D spending, which have had enormous spillover effects. The share of the US federal government in total R&D speanding, which was only 16 per cent in 1930, remained between one-half and two-thirds during the postwar years. Industries such as computers, aerospace and the internet, where the USA still maintains an international edge despite the decline in its overall technological leadership, would not have existed without defence-related R&D funding by the country's federal government." Moreover, the state also plays a "crucial role" in supporting R&D in the pharmaceutical industry. [Ha-Joon Chang, Kicking Away the Ladder, p. 31]
Not only this, government spending on road building (initially justified using defence concerns) also gave a massive boost to private capital (and, in the process, totally transformed America into a land fit for car and oil corporations). The cumulative impact of the 1944, 1956 and 1968 Federal Highway Acts "allowed $70 billion to be spent on the interstates without [the money] passing through the congressional appropriations board." The 1956 Act "[i]n effect wrote into law the 1932 National Highway Users Conference strategy of G[eneral] M[otors] chairman Alfred P. Sloan to channel gasoline and other motor vehicle-related excise taxes into highway construction." GM also bought-up and effectively destroyed public transit companies across America, so reducing competition against private car ownership. The net effect of this state intervention was that by 1963-66 "one in every six business enterprise was directly dependent on the manufacture, distribution, servicing, and the use of motor vehicles." The impact of this process is still evident today -- both in terms of ecological destruction and in the fact that automobile and oil companies are still dominate the top twenty of the Fortune 500. [Op. Cit., p. 102]
This system, which can be called military Keynesianism, has three advantages over socially-based state intervention. Firstly, unlike social programmes, military intervention does not improve the situation (and thus, hopes) of the majority, who can continue to be marginalised by the system, suffer the discipline of the labour market and feel the threat of unemployment. Secondly, it acts likes welfare for the rich, ensuring that while the many are subject to market forces, the few can escape that fate - while singing the praises of the "free market". And, thirdly, it does not compete with private capital -- in fact, it supplements it.
Because of the connection between militarism and imperialism, it was natural after World War II that America should become the world's leading military state at the same time that it was becoming the world's leading economic power, and that strong ties developed between government, business, and the armed forces. American "military capitalism" is described in detail below, but the remarks also apply to a number of other "advanced" capitalist states.
In his farewell address, President Eisenhower warned of the danger posed to individual liberties and democratic processes by the "military-industrial complex," which might, he cautioned, seek to keep the economy in a state of continual war-readiness simply because it is good business. This echoed the warning which had been made earlier by sociologist C. Wright Mills (in The Power Elite), who pointed out that since the end of World War II the military had become enlarged and decisive to the shape of the entire American economy, and that US capitalism had in fact become a military capitalism. This situation has not substantially changed since Mills wrote, for it is still the case that all US military officers have grown up in the atmosphere of the post-war military-industrial alliance and have been explicitly educated and trained to carry it on. Moreover, many powerful corporations have a vested interest in maintaining this system and will be funding and lobbying politicians and their parties to ensure its continuance.
That this interrelationship between corporate power and the state expressed by militarism is a key aspect of capitalism can be seen from the way it survived the end of the Cold War, the expressed rationale for this system:
"With the Cold war no longer available, it was necessary to reframe pretexts not only for [foreign] intervention but also for militarised state capitalism at home. The Pentagon budget presented to Congress a few months after the fall of the Berlin Wall remained largely unchanged, but was packaged in a new rhetorical framework, presented in the National Security Strategy of March 1990. Once priority was to support advanced industry in traditional ways, in sharp violation of the free market doctrines proclaimed and imposed on others. The National Security Strategy called for strengthening 'the defence industrial base' (essentially, high-tech industry) with incentives 'to invest in new facilities and equipment as well as in research and development.' As in the past, the costs and risks of the coming phases of the industrial economy were to be socialised, with eventual profits privatised, a form of state socialism for the rich on which much of the advanced US economy relies, particularly since World War II." [Failed States, p. 126]
This means that US defence businesses, which are among the biggest lobbyists, cannot afford to lose this "corporate welfare." Unsurprisingly, they did not. So while many politicians asserted a "peace dividend" was at hand when the Soviet Bloc collapsed, this has not came to pass. Although it is true that some fat was trimmed from the defence budget in the early 1990s, both economic and political pressures have tended to keep the basic military-industrial complex intact, insuring a state of global war-readiness and continuing production of ever more advanced weapons systems into the foreseeable future. Various excuses were used to justify continued militarism, none of them particularly convincing due to the nature of the threat.
The first Gulf War was useful, but the quick defeat of Saddam showed how little a threat he actually was. The Iraq invasion of 2003 proved that his regime, while temporarily helpful to the Pentagon, was not enough of a menace to warrant the robust defence budgets of yore now given that his military machine had been smashed. This did not, of course, stop the Bush Administration spinning the threat and lying to the world about (non-existent) Iraqi "Weapons of Mass Destruction" (this is unsurprising, though, given how the Soviet military machine had also been hyped and its threat exaggerated to justify military spending). Other "threats" to the world's sole super-power such as Cuba, Iran, Libya and North Korea are equally unconvincing to any one with a firm grasp of reality. Luckily for the US state, a new enemy appeared in the shape of Islamic Terrorism.
The terrorist atrocity of 9/11 was quickly used to justify expanding US militarism (and expanding the power of the state and reducing civil liberties). In its wake, various government bureaucracies and corporations could present their wish-lists to the politicians and expect them to be passed without real comment all under the guise of "the war on terror." As this threat is so vague and so widespread, it is ideal to justify continuing militarism as well as imperial adventures across the global (any state can be attacked simply be declaring it is harbouring terrorists). It can also be used to justify attacks on existing enemies, such as Iraq and the other countries in the so-called "axis of evil" and related states. As such, it was not surprising to hear about the possible Iranian nuclear threat and about the dangers of Iranian influence even while the US military was bogged down in the quagmire of Iraq.
While the Bush Administration's doctrine of "pre-emptive war" (i.e. aggression) may have, as Chomsky noted, "broken little new ground" and have been standard (but unspoken) US policy from its birth, its does show how militarism will be justified for some time to come. [Op. Cit., p. 85] It (and the threat of terrorism which is used to justify it) provides the Pentagon with more arguments for continued high levels of defence spending and military intervention. In a nutshell, then, the trend toward increasing militarism is not likely to be checked as the Pentagon has found a sufficiently dangerous and demonic enemy to justify continued military spending in the style to which it's accustomed.
Thus the demands of US military capitalism still take priority over the needs of the people. For example, Holly Sklar points out that Washington, Detroit, and Philadelphia have higher infant death rates than Jamaica or Costa Rica and that Black America as a whole has a higher infant mortality rate than Nigeria; yet the US still spends less public funds on education than on the military, and more on military bands than on the National Endowment for the Arts. ["Brave New World Order," Cynthia Peters (ed.), Collateral Damage, pp. 3-46] But of course, politicians continue to maintain that education and social services must be cut back even further because there is "no money" to fund them. As Chomsky so rightly says:
"It is sometimes argued that concealing development of high-tech industry under the cover of 'defence' has been a valuable contribution to society. Those who do not share that contempt for democracy might ask what decisions the population would have made if they had been informed of the real options and allowed to choose among them. Perhaps they might have preferred more social spending for health, education, decent housing, a sustainable environment for future generations, and support for the United Nations, international law, and diplomacy, as polls regularly show. We can only guess, since fear of democracy barred the option of allowing the public into the political arena, or even informing them about what was being done in their name." [Op. Cit., p. 127]
Finally, as well as skewing resource allocation and wealth away from the general public, militarism also harms freedom and increases the threat of war. The later is obvious, as militarism cannot help but feed an arms race as countries hurry to increase their military might in response to the developments of others. While this may be good for profits for the few, the general population have to hope that the outcome of such rivalries do not lead to war. As Goldman noted about the First World War, can be, in part, "traced to the cut-throat competition for military equipment . . . Armies equipped to the teeth with weapons, with highly developed instruments of murder backed by their military interests, have their own dynamic functions." [Op. Cit., p. 353]
As to freedom, as an institution the military is based on the "unquestioning obedience and loyalty to the government." (to quote, as Goldman did, one US General). The ideal soldier, as Goldman puts it, is "a cold-blooded, mechanical, obedient tool of his military superiors" and this position cannot be harmonised with individual liberty. Indeed, "[c]an there be anything more destructive of the true genius of liberty than . . . the spirit of unquestioning obedience?" [Op. Cit., pp. 52-4] As militarism becomes bigger, this spirit of obedience widens and becomes more dominant in the community. It comes to the fore during periods of war or in the run up to war, when protest and dissent are equated to treason by those in power and their supporters. The war hysteria and corresponding repression and authoritarianism which repeatedly sweeps so-called "free" nations shows that militarism has a wider impact than just economic development and wasted resources. As Bakunin noted, "where military force prevails, there freedom has to take its leave -- especially the freedom and well-being of the working people." [The Political Philosophy of Bakunin, pp. 221-2]