Do War Expenditures Constitute a Burden for Capitalism?

The United States and Israel have been heavily bombing Iran for over a month now. US spokespeople have announced that more than 11,000 targets have been struck during this period. Tens of thousands of expensive, high-tech munitions have been rained down on Iran – ranging from newly deployed next-generation missiles and Tomahawk cruise missiles, to nine-ton bunker-busters and precision-guided bombs. In addition, a large number of anti-air missiles have been used to prevent Iranian counterattacks. Taking into account not only the munitions used but also the operational costs of warplanes and naval vessels, it is not difficult to see that an enormous amount of money has already been spent on this war. In relation to this, some commentators argue that “the cost of the war is so high that the US cannot sustain it for long”, and suggest that, due to the burden imposed by these expenses, the US will be inclined to bring the war to an end.

The economics of war and the effects of military spending during periods of so-called “peace” have long been important subjects of debate. These issues have been approached and assessed from a wide range of perspectives. There exists plenty of anti-war commentary arguing that wars damage the economy, that public resources are squandered on military expenditure, and that, instead, investments could be made that would yield far more productive outcomes for the economy. However well-intentioned such arguments may be in their aim of strengthening anti-war and anti-militarist sentiments within society, they are ultimately useless –even harmful– interpretations, because they fail to present the real situation in all its interconnections. It is problematic to skip over the direct relationship between imperialist war and the interests of the capitalist class, and instead approach war from a moralistic, class-transcending perspective. Unfortunately, such approaches are extremely widespread within the anti-war camp – including among those who claim to be Marxists.

In anti-war struggle, it is meaningful to highlight the negative effects that war and military spending have on the living conditions of the working classes – in the sense of exposing these effects accurately. However, it is not correct to link such observations to conclusions suggesting that war damages the economy or increases the burden on capitalism, and that it therefore also has a deterrent effect on the ruling class. Those who adopt this approach, for example, argue that during war, states divert resources away from areas such as education, healthcare and infrastructure, and towards arms production, military logistics and combat operations. They add that producing a single tank means forgoing hospitals and schools that could have been built with the same resources, and that this directly reduces the welfare of society. They point out that war destroys factories, roads and energy infrastructure, and diminishes the skilled labour force through death, forced displacement and disability. They explain that wars are typically financed through tax increases, borrowing, and money printing that causes inflation, thereby destabilising the state budget. They maintain that war is not a means of stimulating the economy, but rather a phenomenon that leads to the waste of resources, destroys capital accumulation, reduces social welfare, suppresses long-term growth and generates crises. In doing so, however, they end up presenting a picture in which truth and falsehood are intertwined – a case of mixing chaff with grain.

There is no doubt that many of the phenomena cited are accurate in terms of how war impacts the workers’ side of the equation. But since when has capitalism been a system that pursues policies in the interests of the workers and for the benefit of society as a whole, such that we might expect it to serve the common good? When has capitalist production ever been organised with the needs of all society in mind? Is it not the case that commodity production takes place only under conditions that guarantee the desired level of profit for the capitalists who own the means of production? For capitalists, if it ensures the expansion of their capital, does it matter in the slightest what the commodity is – whether it is potatoes or bombs? The existence of a multi-billion-dollar war industry already provides a clear answer to that question. Furthermore, is it wars that cause crises, or is it crises that render wars necessary? Surely it is not too difficult to see that wars are waged in order to overcome the crises of capitalism – as the great world wars of the last century made evident.

Those who, ignoring the fundamental determinants of the war’s character, argue that war is caused by wicked, mad or ambitious politicians, and that besides all the problems wrought by war, it also generates terrible waste – such people, regardless of their intentions, end up causing the working class to be dragged along behind misguided politics. Without a proper grasp of the essential features of the imperialist system –the highest stage of capitalism– it is impossible for the working class to form a sound political stance on war. War is an indispensable component of capitalism, an aspect of it that cannot be avoided. It is the harshest form that imperialist competition takes under certain conditions. Imperialist competition at every stage makes armaments and investment in weapons development a necessity, and ensures that war spending becomes continuous. For this reason, war spending is not an “irrational burden” for monopoly capital – it is the necessary outcome of capital’s international struggle for redivision. War and military spending also function as crucial levers that stimulate the economy when capitalists need it, serving as a trigger for increased production. In other words, far from being a burden on monopoly capital, war spending is a requirement of the system’s very functioning.

Indeed, just as during the Second World War, we see today that the production facilities of steel and automotive monopolies are being integrated into the war industry. For example, Volkswagen – which announced that it would be shutting down production lines in its German car factories and laying off tens of thousands of workers – is now beginning to produce war materiel, including missiles, on those very same lines, and is receiving its first orders from Israel! The Trump administration is requesting an additional $200 billion military budget for the war on Iran, while the total military budget it is requesting for 2027 stands at $1.5 trillion. This represents a 50 per cent increase in the war budget. All of this indicates that, far from being halted due to “prohibitive costs”, the war is instead being planned for expansion onto new fronts.

Without demonstrating this indissoluble link between wars and the capitalist system, it is impossible either to understand war or to make sound assessments about its course. To ignore this link and claim that the cost of war will determine the decisions of the heights of finance-capital regarding the war’s course would be utterly nonsensical. For under capitalism, while the high profits generated by the war economy flow to the capitalist class, the cost is borne by the working class. Nevertheless, assessments suggesting that war costs constitute a burden in imperialist wars are never in short supply. Of course, every cost of war is a burden and a devastation for the working class. But as far as capitalism is concerned, far from war spending being a burden, for monopoly capital such spending means “monstrous profits”.

In an article written in 2008 titled “Reflections Through the Prism of Distant and Recent History”, Elif Çağlı responded as follows to those who argued that the US’s expenditures on the Iraq war had reached enormous proportions and that the war, having now become prohibitively expensive, was no longer sustainable:

“The view that military spending and military investments, unlike other categories of spending and investment, constitute a burden on capitalism can only mean either ignorance or wilful disregard of the characteristics of the capitalist economy. Yet, as revolutionary Marxism has long made clear, increases in military spending and the spread of wars are realities that accompany the great crisis periods of capitalism. Contrary to the mistaken views we are addressing, military spending –when viewed from the perspective of capitalist interests– does not represent a negative burden on the economy; on the contrary, it serves as a multiplier that accelerates economic functioning and lifts it out of stagnation. For this reason, regardless of what kind of stories are leaked to the outside world and the press in order to deceive public opinion during critical periods like the present, behind closed doors at the heights of finance-capital, what are discussed and decided are not matters such as how to end wars or how to cut military spending, but precisely the opposite. While certain intellectuals amuse themselves with the notion that US imperialism, due to rising war expenditures, can no longer sustain wars in the Middle East, the Caucasus, Afghanistan, etc., and will therefore shift to a peaceful policy, it is patently obvious how US imperialism is stoking its war machine against the danger of economic stagnation.”[1]

Are we not seeing all too clearly today the dimensions that US imperialism’s military spending has reached – let alone any reduction or any halting of wars? As an inevitable consequence of the spreading flames of the interimperialist war of redivision, military spending has increased enormously across the entire world. Even in the most recent data set of the Stockholm International Peace Research Institute (SIPRI) –the figures for 2024– this increase is clearly evident.[2] According to this, global military spending reached $2.72 trillion in 2024, an increase of 9.4 per cent compared with 2023, and this rise represents the largest annual increase seen since the end of the “Cold War”. The ratio of these expenditures to global Gross Annual Product is 2.5 per cent. An important aspect of the increase in military spending is that it has occurred not only in specific regions but across the whole world.

Looking at the ranking of the world’s top 10 arms production and military services companies according to 2023 weapons revenue data, the first five companies are all based in the United States. Among them, Lockheed Martin generated nearly $61 billion in revenue, and RTX $40.5 billion. These figures show that a colossal demand has emerged within the imperialist war economy, and that the opportunities for capital accumulation have increased enormously for the capitalist firms meeting this demand. Is it not clear that the bourgeoisie is more than willing to bear this “burden”?

While imperialist war causes the working class to become even more impoverished, to die, to be wounded, and to be displaced from their homes and lands, from the capitalists’ point of view it creates new opportunities for expanding their capital. Rosa Luxemburg once described this contradiction as follows: “The cannon fodder loaded onto trains in August and September is moldering in the killing fields of Belgium, the Vosges, and Masurian Lakes where the profits are springing up like weeds.” These words of Luxemburg’s clearly reveal the two faces of imperialist war. On one side: the blood and destruction of the working class. On the other: capital, growing by feeding on that destruction. Imperialist war is thus a form of brutality in which the cost is paid by the working class while the gains flow into the coffers of the capitalist class. But because this brutality is embedded in the very fabric of capitalism, no anti-war struggle that does not take capitalism itself as its direct target stands any chance of success.

Such an empty expectation –that the burden of war will force the rulers to retreat– will bring no benefit whatsoever to the working class. The working class must focus directly on the heart of the problem, namely capitalism, and organise its anti-war struggle as part of the struggle against capitalism. Effective methods of struggle such as strikes aimed at disrupting or halting the activities of the arms industry, or transport sector strikes that block the shipment of military materiel, are historical legacies of working-class struggle. Today, remembering these and transmitting them to new generations of workers has become an important task. It is the responsibility of all working people who oppose imperialist wars to strive to replace the ineffective activities of trade unions –which amount to little more than issuing anti-war declarations– with actions organised on this basis.