re 5125 >On Thu, 8 Mar 2001, Rakesh Narpat Bhandari wrote: > >> Paul C, why would military development at least in the short run >> come at the expense of modernizing the means of production if the >> imperial country can import skilled labor and capital at will? > >The country doing the military spending may be able to import skilled >labour and capital "without let or hindrance", but they can't import >these things _free of charge_. Access to international trade doesn't >alter the basic trade-off that Paul is talking about. > >Allin Cottrell. But if the pool of the reserve army of skilled labor is sufficiently large on a global scale, then why must there be a tradeoff? If the imperial country imports foreign labor for its military projects, this need not raise the costs of skilled labor in the production of capital goods. Their wages may be held down by that same global reserve of skill labor which is hardly exhausted by the small additional demand from military spending. Of course there may be some crowd out effect from the state's financing of military research and development, but this was not the mechanism to which Paul C was referring. Paul C seemed to suggest that there was fixed sum of skilled labor, such that any diversion to the military came at the expense of the commercial sector. Of course that the US boom in the 1990s coincided with military spending dropping from 6 to 3% of GNP does suggest that Paul C may be correct that there is a basic trade off. But if the state borrows money which would have remainded idle, it's not clear that militarization at least in the short term is coming at the expense of the modernization of the means of production. Moreover, if militarization leads to war, then the consumption and destruction of the means of production may create scope for the investments by which the means of production can be modernized. The state debt can later be repudiated, inflated away, or even paid off. However, the incurring thereof in the period of militarization need not have come at the expense of modernizing the means of production. It's not clear to me that militarization has to be bad economics all the time. If it were, the history of capitalism would have been more pacific. Rakesh
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