Economics of Military Spending
Semester 1; Level 3; Credits 10;
BUEC3140
Lecturer: Dr J Paul Dunne
Wednesday 12-2pm
Revised Reading List 29.11.94
General Texts:
Ron Smith and Dan Smith (1983)
"The Economics of Militarism", Pluto Press.
Keith Hartley (1991) "The
Economics of Defence Policy", Brassey's.
Gavin Kennedy (1983)
"Defense Economics", Duckworth.
Kapstein EB (1992) "The
Political Economy of National Security: A Global Perspective"
General Information:
Deger Saadet and Somnath Sen
"Military Expenditure: The Political Economy of International
Security", SIPRI/Oxford University Press.
Ruth Leger Sivard "World
Military and Social Expenditures",
Stockholm International Peace
Research Institute (SIPRI) Yearbook (annual)
ACDA (1991-2) "World
Military Expenditures and Arms Transfers", US Arms Control and Disarmament
Agency, Washington DC.
HMSO (various years)
"Statement on the Defence Estimates", Cmnd
HMSO (1993) "Defence
Statistics"
Background/ General Reading
Kaldor M (1983) "The Baroque
Arsenal", Abacus.
Keegan J (1983) "The Face
of Battle", Penguin.
Sampson A (1991) "The Arms
Bazaar", Coronet.
Project on Demilitarisation
(ProDem) Briefing Guides
1. The Triumph of Unilateralism: The Failure of Western Militarism
A1. NATO's Military Supremacy:
What is it For?
A2. Western Generals: The
Dangers from British and American Military Success.
B1. Militarism or Disarmament?:
Challenging the West's Technological Arms Race
C1. Western Hypocrisy on Arms
Conversion: Helping Military Industries Disarm in the East but not in the West.
The Political Economy of
Military Spending:
NB The readings in this section
will also be relevant for the rest of the course as we take a more detailed
look at aspects of the military economy.
General texts plus:
Baran P and Sweezy P (1966)
Monopoly Capital, London, Monthly Review Press.
Dumas L (1986) "The
Overburdened Economy", Univ of California Press.
Dunne P (1990) The Political
Economy of Military Expenditure: an introduction, Cambridge Journal of
Economics, Vol 14, no 4, pp 395-404.
Georgiou G (1983) The Political
Economy of Military Expenditure, Capital and Class, No 19.
Howard MC and J King (1992)
"A History of Marxian Economics: VolII, 1929-90", Macmillan. Ch 8.
Kennedy P (1987) The Rise and
Fall of the Great Powers, Unwin.
Melman S (1985) "The
Permanent War Economy", Simon and Schuster.
Pivetti M (1992) "Military
Spending as a Burden on Growth: An 'Underconsumptionist' Critique",
Cambridge Journal of Economics, 16, 373-84.
ProDem Breifing Guide No. 1
Smith R and Dunne P (1994)
"Is Military Spending A Burden: A Marxo-Marginalist Response to
Pivetti", Cambridge Journal of Economics, 18, 515-527.
Smith R (1977) Military
Expenditure and Capitalism. Cambridge Journal of Economics, Vol 1, pp 61-76.
Also a reply to comments in CJE (1978), no 2.
Smith R (1983) "Aspects of
Militarism", Capital and Class, Vol 19.
Seminar topic: What is the role of military expenditure in the
development of advanced capitalist economies?
Determinants of Military
Spending
General texts plus:
Borooah VK (1993) "Public
Choice: An Introductory Survey", Chapter 6 in Jackson (ed) "Current
Issues in Public Sector Economics", Macmillan.
Brown CV and PM Jackson
"Public Sector Economics", Blackwell.
Dunne P and Smith R(1992)
"Thatcherism and the UK Defence Industry", In Michie (ed)
"1979-92 The Economic Legacy", Academic Press.
Dunne JP and P Pashardes and RP
Smith (1984) "Needs, Costs and Bureaucracy: The Allocation of Public
Consumption in the UK", Economic Journal, 94, 1-15.
Georgiou G and R Smith (1982)
"Assessing the Effect of Military Expenditure on OECD Countries: A
Survey", Birkbeck College Discussion Paper no 124, August 1982.
Gleditsch NP and O Njolstad
(eds)(1990) "Arms Races", PRIO, Sage.
Hewitt DP (1991) "Military
Expenditure: Econometric Testing of Economic and Political Influence", IMF
Working paper WP/91/53.
Higgs R (ed)(1990) "Arms,
Politics and the Economy: Historical and Contemporary Perspectives",
Holmes and Mieir.
ProDem Briefing Guide B1
Smith R (1990) "Defence
Spending in the United Kingdom", Chapter 4 in Hartley K and T Sandler
(eds)(1990) "The Economics of Defence Spending", Routledge.
Smith RP (1980) "The Demand
for Military Expenditure", Economic Journal, Vol 90, pp811-20.
Seminar Topic: What determines the level of military spending in an
advanced capitalist economy?
Economic Effects of Military
Spending
General texts plus:
Abell JD (1990) "Defence
Spending and Unemployment Rates: An Empirical Analysis Disaggreated by
Race", Cambridge Journal of Economics, 14, pp405-419.
Cappelen et al
(1984)"Military Spending and Economic Growth in the OECD Countries",
Journal of Peace Research, Vol 21, No 4.
Chalmers M (1992) "British
Economic Decline: The Contribution of Military Spending", The Royal Bank
of Scotland Bank Review.
Chan S (1986) "Military
expenditures and economic performance", in "World military
expenditure and arms transfers", US Arms Control and Disarmament Agency,
US Government Printing Office, 1987.
Dumas L (1990) "Making
Sense out of Nonesense", Mimeo, University of Texas.
Dunne P (1994) "The
Economic Effects of Military Expenditure in Developing Countries", Mimeo,
School of Business and Economic Studies, University of Leeds.
Dunne JP and RP Smith (1984)
"The Economic Consequences of Reduced UK Military Expenditure",
Cambridge Journal of Economics, Volume 8, No. 3, September pp 297-310.
Dunne and Smith (1990) Military
Expenditure and Unemployment in the OECD, Defence Economics, Vol 1, pp57-73.
Edelstein M (1990) "What
Price Cold War? Military spending and Private Investment in the US,
1946-79", Cambridge Journal of Economics, 14, 421-37.
Gleditsch et al (1994) "The
Economics of Military Spending", Chapter 2 in "The Wages of
Peace", PRIO, Sage.
Gold D and G Adams (1990)
"Defence Spending and the American Economy", Defence Economics, Vol
1, 275-93.
Gold A (1990) The impact of
defense spending on investment, productivity and economic growth, Defense
Budget Project, February
Griffin LJ, Wallace M and J
Devine (1982) The political economy of military spending: evidence from the
United States, cambridge Journal of Economics, 6, p1-14.
Kaldor et al (1986)
"Industrial Competitiveness and Britain's Defence", Lloyds Bank
Review, October.
Paukert L and P Richards (eds)
(1991) "Defence Expenditure and Local Employment", International
Labour Office, Geneva, forthcoming.
Seagrim M (1992) "The
Effect of Defence Spending on the UK Economy", The Royal Bank of Scotland
Bank Review.
Smith, RP (1980) Military
Expenditure and Investment in OECD Countries", Journal of Comparative
Economics.
Seminar Topic: Is military spending a burden on advanced capitalist
economies?
The Military Industrial Complex and
the Arms Trade:
General references plus the
relevant chapter in the SIPRI Yearbook on Arms Transfers and Production, plus:
Broszka and Lock (eds)
(1993)"Restructuring of Arms Production in Western Europe", SIPRI,
Oxford University Press
Chalmers M (1985) Paying for
Defence: Military Spending and British Decline. Pluto.
Dunne P (1993) "The
Changing Military Industrial Complex in the UK", Defence Economics.
Dunne P and Smith R(1992)
"Thatcherism and the UK Defence Industry", In Michie (ed)
"1979-92 The Economic Legacy", Academic Press.
Edgerton D (1991) "Liberal
Militarism and the British State", New Left Review, 185.
Fine B (1993) "The Military
Industrial Complex: An Analytical Assessment", Cyprus Journal of
Economics, Vol 6, 1,pp26-53.
Hartley K and Hooper N (1987)
"Defence procurement and the Defence Industrial Base", Public Money,
Sept., pp21‑26.
Hartley K, Hussain F, and R
Smith (1987) "The UK Defence Industrial Base", Political Quarterly,
58, 1,pp62-72.
Kaldor M, Sharp J and W Walker
(1986) "Industrial Competitiveness and Britain's Defence", Lloyds
Bank Review, No 169.
Lovering J (1993) "After
the Cold War: The Defence Industry and the New Europe", Mimeo.
Lovering J (1993)
"Restructuring the British Defence Industrial Base After the Cold War:
Institutional and Geographical Perspectives", Defence Economics, Vol 4, pp
123-139.
Taylor and Hayward (1989)
"The UK Defence Industrial Base", Brassey's
Wulf (ed)(1993) "Arms
Industry Limited", SIPRI, Oxford University Press
Seminar Topic: Analyse the military industrial complex in the UK and
assess its impact and importance.
Disarmament and Conversion
General texts plus:
Anderson et al (1991)
"Converting the American Economy", Employment Research Associates.
Barker T, Dunne P and Smith R
(1992) Measuring the peace dividend in the United Kingdom, Journal of Peace
Research, Vol 28, no 4, pp 345-58.
Dunne JP (1994) "The
Economic Effects of Military Expenditure in Developing Countries", Mimeo.
Dunne P and S Willett (1992)
"Disarming the UK: The Economics of Conversion", Discussion Paper no
2, Centre for Industrial Policy and Performance, University of Leeds.
Gleditsch et al (1994) "The
Wages of Peace: Disarmament in a Small Industrialised Economy", PRIO,
Sage.
Hartley et al (1993)
"Economic Aspects of Disarmament: Disarmament as an Investment
Process", United Nations Institute for Disarmament Research (UNIDIR), New
York.
Leontief W and F Duchin (1983)
"Military Spending", Oxford University Press, Oxford.
Markusen Ann and Joel Yudken
(1992) "Dismantling the Cold War Economy", Basic Books.
ProDem Briefing Guide C1
Renner M (1992)"Economic
Adjustments After the Cold War: Strategies for Conversion", UNIDIR,
Dartmouth.
Schofield S and Quigley P (1994)
"Alternative Uses Better Futures", Bradford Arms Conversion Group.
Southwood, P "Disarming
Military Industries", Macmillan
Seminar Topic: Is there a "peace dividend" or a
"peace penalty"
Essays:
1. Critically assess the
"effective demand" or "underconsumptionist" view that high
military spending explains relatively good economic performance.
2. "We can only
understanding the military burden as a response to external threat"
Discuss with reference to the UK or the US.
3. Either
"Cuts in defence spending
are bound to lead to unemployment" Discuss
Or
"Defence spending reduces
investment and productivity and leads to economic decline" Discuss.
4. "The Defence Industrial
Base represents the most important, efficient and successful industrial sector
in the UK and needs support and protection" Discuss.
5. "Conversion policy in
the UK simply requires cuts in military spending, the market will sort out
everything else" Discuss.
Economics of Military Spending:
Mock Exam Paper
JPD 19.11.94
Answer 3 questions
1. "It is difficult to
accept a theory that sees military spending as an important tool in the
promotion of economic growth in advanced economies." Discuss.
2. "Defence spending can
only be understood as a public good" Discuss.
3. "The vested interests
involved in defence are powerful and the main determinant of the level of
defence expenditure" Discuss.
4. "Military expenditure is
at the expense of investment and so is undertaken at the expense of economic
growth." Discuss.
5. "There is neither theory
nor evidence to suggest a link between military spending and the level of
employment". Discuss.
6. "At the end of the Cold
War the restructuring of the defence industries makes concern for their future
unecessary." Discuss
7. "Conversion of the
military industries is no different to the conversion of any declining
industry." Discuss
8. "The UK's involvement in
the arms trade is both costly and abhorent." Discuss.
Questions:
Military expenditure has been
important for economic development in the UK and the US.
How can we explain the
allocation of military spending in the UK?
Discuss the channels through
which military spending can influence economic development
Economics of Military Spending:
BUEC3140
jpd 19.11.94
Suggested Exam Questions
1. Critically evaluate the
"Underconsumptionist" or "Effective Demand" approach to
understanding the effect of military spending on economic growth.
2. "We can only understand
the determinants of military spending in the UK as the result of optimising a
social welfare function where security is one of the arguments." Discuss.
3. What is the Military
Industrial Complex in the UK and why is it important?
4. "Military expenditure
comes out of consumption and so has little impact on the economic growth of
developed economies" Discuss.
5. "The evidence shows that
cuts in military spending will always lead to loss of jobs and
unemployment" Discuss
6. "The Defence Industrial
Base in the UK should be a source of pride rather than concern". Discuss.
7. Either:
Discuss whether or not there has
been a "peace dividend" in either the US or the UK as a result of the
end of the Cold War.
Or
"It is not possible to have
a successful policy of conversion from military to civilian production."
Discuss
8. "The involvement of the
UK in the arms trade can be justified on economic grounds". Discuss.