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The Russian invasion of Ukraine has sparked fierce political debate on the geopolitical consequences of the conflict. But less noticed and equally as important, the war has paved the way for a more sweeping militarization of what was already a global war economy mired in deep political and economic crisis. Geopolitical tensions and international conflicts may be tragic for those caught up in conflagrations such as in Ukraine — but advantageous for those seeking to legitimize expanding military and security budgets and open up new opportunities for capitalist profit-making in the face of chronic stagnation and social discontent.

In late March, the Biden administration, citing the Russian invasion, called for a $31 billion increase in the Pentagon budget over the previous year and on top of an emergency appropriation weeks earlier of $14 billion for Ukraine’s defense. Prior to the invasion, in late 2021, the U.S. government approved a nearly $800 billion military budget, even as, in the same year, it ended the war in Afghanistan. Almost overnight following the Russian invasion, the U.S., European Union, and other governments around the world allocated billions of dollars in additional military spending and sent streams of military hardware and private military contractors into Ukraine.

Shares of military and security firms surged in the wake of the invasion. Two weeks into the conflict, shares of Raytheon were up 8 percent, General Dynamics up 12 percent, Lockheed Martin up 18 percent and Northrop Grumman up 22 percent, while war stocks in Europe, India, and elsewhere experienced similar surges in expectation of an exponential rise in global military spending. Russian President Vladimir Putin, in the words of the managing director of AeroDynamic Advisory, a Pentagon contractor, is “unquestionably the best F-35 salesman of all time,” in reference to a spike in U.S. government funding for the Lockheed Martin jet fighter. Said one consultant to Boeing, General Dynamics, Lockheed Martin and Raytheon Technologies: “For the defense industry, happy days are here again. When the defense budget rises it tends to lift all boats in the industry.”

Militarized Accumulation

The Russian invasion — brutal, reckless and condemnable by any standard — has sparked debate on NATO’s proposed expansion into Ukraine and the role that it played in motivating the Kremlin. U.S. officials were keenly aware, in fact, that the drive to expand NATO to Russian borders would eventually push Moscow into a military conflict. “We examine a wide range of nonviolent measures that could exploit Russia’s actual vulnerabilities and anxieties as a way of stressing Russia’s military and economy and the regime’s political standing at home and abroad,” notes a 2019 study by the RAND Corporation, a Pentagon-affiliated think tank. “The steps we examine would not have either defense or deterrence as their prime purpose,” it states, but rather, “these steps are conceived of as elements in a campaign designed to unbalance the adversary, leading Russia to compete in domains or regions where the United States has a competitive advantage, and causing Russia to overextend itself militarily or economically.”

But the provocation could not be reduced to geopolitical competition, however important, as most observers were keen to do. Missing from the larger picture was the centrality of militarized accumulation — of endless low- and high-intensity warfare, simmering conflicts, civil strife and policing — to the global political economy. Militarized accumulation refers to a situation in which a global war economy relies on the state to organize war-making, social control and repression to sustain capital accumulation in the face of chronic stagnation and saturation of global markets. These state-organized practices are outsourced to transnational corporate capital, involving the fusion of private accumulation with state militarization in order to sustain the process of capital accumulation. Cycles of destruction and reconstruction provide ongoing outlets for over-accumulated capital; that is, these cycles open up new profit-making opportunities for transnational capitalists seeking ongoing opportunities to profitably reinvest the enormous amounts of cash they have accumulated. There is a convergence in this process of global capitalism’s political need for social control and repression in the face of mounting popular discontent worldwide and its economic need to perpetuate accumulation in the face of stagnation.

Wars provide critical economic stimulus. They have historically pulled the capitalist system out of accumulation crises while they serve to deflect attention from political tensions and problems of legitimacy. It took World War II to finally lift world capitalism out of the Great Depression. The Cold War legitimated a half century of expanding military budgets and the Iraq/Afghanistan wars, the longest in history, helped keep the economy sputtering along in the face of chronic stagnation in the first two decades of the century. From the anti-Communist fervor of the Cold War, to the “war on terror,” then the so-called New Cold War, and now the Russian invasion of Ukraine, the transnational elite, led by Washington, have had to conjure up one enemy after another to legitimate militarized accumulation and deflect crises of state legitimacy and capitalist hegemony onto external enemies and contrived threats.

The events of September 11, 2001, marked the start of an era of a permanent global war in which logistics, warfare, intelligence, repression, surveillance and even military personnel are more and more the privatized domain of transnational capital. The Pentagon budget increased 91 percent in real terms between 1998 and 2011, while worldwide, total state military budget outlays grew by 50 percent from 2006 to 2015, from $1.4 trillion to more than $2 trillion. (This figure does not take into account the hundreds of billions of dollars spent on intelligence; contingency operations; policing; bogus wars against immigrants, terrorism and drugs; and “homeland security.”) During this time, military-industrial complex profits quadrupled.

However, focusing just on state military budgets only gives us a part of the picture of the global war economy. As I showed in my 2020 book, The Global Police State, the various wars, conflicts and campaigns of social control and repression around the world involve the fusion of private accumulation with state militarization. In this relationship, the state facilitates the expansion of opportunities for private capital to accumulate through militarization, such as by facilitating global weapons sales by military-industrial-security firms, the amounts of which have reached unprecedented levels. Global weapons sales by the top 100 weapons manufacturers and military service companies increased by 38 percent between 2002 and 2016 and can be expected to escalate further in the face of a prolonged war in Ukraine.

By 2018, private for-profit military companies employed some 15 million people around the world, while another 20 million people worked in private security worldwide. The private security (policing) business is one of the fastest-growing economic sectors in many countries and has come to dwarf public security around the world. The amount spent on private security in 2003, the year of the invasion of Iraq, was 73 percent higher than that spent in the public sphere, and three times as many persons were employed in private forces as in official law enforcement agencies. In half of the world’s countries, private security agents outnumber police officers.

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These corporate soldiers and police were deployed to guard corporate property, provide personal security for executives and their families; collect data; conduct police, paramilitary, counterinsurgency and surveillance operations; carry out mass crowd control and repression of protesters; run private detention and interrogation facilities; manage prisons and participate in outright warfare. Now, these same private military and security firms are pouring into Ukraine, with some mercenary companies offering between $1,000 and $2,000 a day for those with combat experience.

The Russian invasion has accelerated but did not originate the ongoing surge in military spending around the world. It is notable that state military spending worldwide skyrocketed in the wake of the 2008 global financial collapse even beyond the post-9/11 spending hike, rising from about $1.5 billion in 2008 to over $2 trillion in 2022. The fact that this explosion in spending coincides perfectly with continued worldwide stagnation following the Great Recession suggests that the heightened militarization of the global economy is as much or more a response to this chronic stagnation than to perceived security threats. If bursts of militarized accumulation (such as that unleashed by 9/11, then by the 2008 financial collapse, and now by the Russian invasion) help offset the overaccumulation crisis further into the future, they are also high-risk bets that heighten worldwide tensions and push the world dangerously towards all-out international conflagration.

The Crisis of Global Capitalism

This crisis of global capitalism is economic, or structural, one of chronic stagnation in the global economy. But it is also political: a crisis of state legitimacy and capitalist hegemony. The system is moving towards “a general crisis of capitalist rule” as billions of people around the world face uncertain struggles for survival and question a system they no longer see as legitimate. Historically, wars have pulled the capitalist system out of crisis while they serve to deflect attention from political tensions and problems of legitimacy.

Economically, global capitalism faces what is known in technical language as “overaccumulation”: a situation in which the economy has produced — or has the capacity to produce — great quantities of wealth but the market cannot absorb this wealth because of escalating inequality. Capitalism by its very nature will produce abundant wealth yet polarize that wealth and generate ever greater levels of social inequality unless offset by redistributive policies. The level of global social polarization and inequality now experienced is without precedent. In 2018, the richest 1 percent of humanity controlled more than half of the world’s wealth while the bottom 80 percent had to make do with just 5 percent. The international development agency Oxfam reported in January that during the first two years of the coronavirus pandemic, the 10 richest men in the world more than doubled their fortunes, from $700 billion to $1.5 trillion, while 99 percent of humanity saw a fall in their income and 160 million more people fell into poverty.

Such inequalities end up undermining the stability of the system as the gap grows between what is — or could be — produced and what the market can absorb. The extreme concentration of the planet’s wealth in the hands of the few and the accelerated impoverishment and dispossession of the majority means that the transnational capitalist class, or TCC, has increasing difficulty in finding productive outlets to unload enormous amounts of surplus it accumulated. In the years leading up to the pandemic, there was a steady rise in underutilized capacity and a slowdown in industrial production around the world. The surplus of accumulated capital with nowhere to go expanded rapidly. Transnational corporations recorded record profits during the 2010s at the same time that corporate investment declined. Along with militarized accumulation, the TCC has turned to unprecedented levels of financial speculation and to debt-driven growth to sustain profit-making in the face of the crisis. If left unchecked, overaccumulation results in crisis — in stagnation, recessions, depressions, social upheavals and war — just what we are experiencing right now.

But there is a related dynamic at work in the global war economy: the need for dominant groups to suppress mass discontent and deflect the crisis of state legitimacy. International frictions escalate as states, in their efforts to retain legitimacy, seek to sublimate social and political tensions and to keep the social order from fracturing. All around the world, a “people’s Spring” has taken off. From Chile to Lebanon, Iraq to India, France to the United States, Haiti to Nigeria, South Africa to Colombia, Jordan to Sri Lanka, waves of strikes and mass protests have proliferated and, in some instances, appear to be acquiring an anti-capitalist character. Wars and external enemies allow the ruling groups to deflect attention away from domestic malaise in their effort to maintain a grip on power as the crisis deepens.

In the U.S., this sublimation has involved efforts to channel social unrest towards scapegoated communities such as immigrants or other marginalized groups — this is one key function of racism and was a core component of the Trump government’s political strategy — or towards an external enemy such as China or Russia, which had clearly become a cornerstone of the Biden government’s strategy well before the Russian invasion of Ukraine. U.S. presidents historically reach their highest approval ratings when they launch wars. George W. Bush reached an all-time-high of 90 percent in 2001 as his administration geared up to invade Afghanistan, and his father George H.W. Bush achieved an 89 percent approval rating in 1991, right as the U.S. declared the end of its (first) invasion of Iraq and the “liberation of Kuwait.”

It is unlikely that an increasing militarization of the world economy can in the long run offset either the economic or the political dimensions of the crisis of global capitalism. Global capitalism is emerging from the coronavirus pandemic with more inequality, more authoritarianism, more militarization, and more civic and political strife. In the U.S., class struggle is heating up, with a wave of strikes and of unionization drives in Amazon, Starbucks, and elsewhere in the gig economy. The current inflationary spiral and the escalation of class struggle in the United States and around the world point to the inability of the ruling groups to contain the expanding crisis. The drive by the capitalist state to externalize the political fallout of the crisis increases the danger that international tensions and localized conflicts such as in Ukraine will snowball into broader international conflagrations of unforeseen consequences.

As the Ukraine crisis continues to drag on and the global revolt escalates, there will be a radical reconfiguration of global geopolitical alignments to the drumbeat of escalating turbulence in the world economy that will feed new political upheavals and violent conflicts, making global capitalism all the more volatile. While it is hard to imagine a return to the status quo antebellum in Eastern Europe, in the larger picture, the Ukraine crisis is not the cause but a consequence of the general crisis of global capitalism. That crisis will only get worse. Fasten your seat belts; it will get much worse.

Crossposted from TomDispatch with permission.