Cooking the Books: Guns before butter (2025)

The Cooking The Books column from the April 2025 issue of the Socialist Standard

‘National security’, admirals, generals and air chief marshals are telling us, is ‘the first duty of any government’. In a sense they are right. The first duty of a government is to ensure security, though not of the population it rules over; it’s the security of its capitalist class, to protect them from being taken over by the armed forces of a rival capitalist state.

To do this, the government has to equip, train and maintain a military force armed with the most up-to-date weapons of individual and mass destruction that it can afford. This has to be paid for out of taxes that ultimately fall on the profits of the capitalist class. As the government’s ’first duty’, such spending takes priority over other government spending, as summed in the saying ‘Guns before butter’.

That was the heading of the editorial in the Times on 19 February. ‘To underpin Europe’s security’, it thundered, ‘Sir Keir Starmer must expand defence spending in a time of economic difficulty. That means taking an axe to the bloated welfare system.’ A week later Starmer announced that the Labour government would increase military spending to 2.5 percent of GDP by 2027 and later to 3 percent. Labour intended to take an axe to the welfare system anyway, so Starmer said that it was ‘overseas aid’ that would be cut to pay for this.

Paul Mason, the former Trotskyist who once wrote a book called PostCapitalism but now works for a thinktank financed by the Ministry of Defence, welcomed this as something he had been calling for. His job requires him to think up reasons why defence spending should be increased and one that he has deployed is that it will stimulate growth. Last July he wrote an article headed Rearm, And The Economy Will Grow (tinyurl.com/mrxezm3j ). His evidence for this was pretty thin:

‘Anecdotally, where defence investment is actually happening it is a major driver of growth. Barrow-in-Furness, according to one senior trade union contact, is starting to boom. The old Debenhams store, which shut down in 2021, is set to reopen as an apprentice training centre; hundreds of apprenticeships a year are being lined up.’

Given the way that GDP is calculated, any increase in government spending will increase GDP but this doesn’t mean that this will lead to growth in the longer term. In another simplistic propaganda piece last July, Defence spending: A waste of money? (tinyurl.com/7p7j7vbe ), Mason attempted to refute the argument that ‘defence spending reduces economic growth’. Since defence spending is paid for from profits and profits are the source of finance for growth in the sense of capital accumulation, it would seem obvious that defence spending tends to reduce growth.

Mason’s counter-argument was that extra defence spending would act as a better ‘fiscal stimulus’ than other forms of government spending but this assumes that the capitalist economy can be stimulated by government spending, as taught by Keynes but refuted in practice. In essence, he is advocating what has been called ‘military Keynesianism’. When he was a Trotskyist he might have called this a ‘permanent arms economy’. Only then he would have opposed it. Now he is advocating it.

Government spending on arms is a drag on capital accumulation but it is a necessary expense, and so not a waste, for capitalism. In that sense capitalism is a permanent arms economy.