The Impact of Military Spending: A Heterodox Approach 

May 20, 2024 Professor Adem Elveren 
The Impact of Military Spending: A Heterodox Approach 

Professor Adem Elveren 

Department of Economics 

American University in Bulgaria 

During the peak of the pandemic, United Nations Secretary-General António Guterres urgently appealed for a global ceasefire to combat Covid-19, declaring that “in our world today, we have one common enemy: Covid-19” (Guterres 2020). Since then, conflicts and wars have continued to emerge across the globe, fortunately not at the same rapid pace as the virus. The prolonged crisis of capitalism manifests in widespread economic downturns, democratic erosion, and persistent poverty alongside income inequality. This crisis mirrors historical precedents, resembling the period preceding the Second World War. Consequently, understanding the causes and consequences of military expenditure becomes imperative. 

Diverse economic perspectives offer valuable insights into the impact of military spending. Neoclassical economics views national security as a public good, assessing military expenditure through a rational choice framework focused on optimizing national interests. However, this approach overlooks historical contexts and the role of international institutions. Conversely, Keynesian models analyze military spending as part of government expenditure, with Military Keynesianism positing it as a counter-cyclical economic tool, albeit with limitations in distinguishing it from civilian spending. 

The liberal school adopts a historical lens, emphasizing the Military-Industrial Complex (MIC) as the primary driver of military expenditure (Melman, 1965). Despite offering institutional insights, the MIC framework falls short in explaining military spending’s systemic role within capitalism. Marxian scholars present a broader perspective, highlighting military spending’s function in capital accumulation and its role in maintaining hierarchical orders between core and peripheral countries (Baran and Sweezy, 1966). This perspective underscores military spending’s pivotal economic and strategic significance within capitalist economies. 

Moreover, while the post-Keynesian approach contributes to understanding the effects of military spending by considering the role of income distribution between workers and capitalists, feminist thought enhances understanding of the capitalism and militarization by drawing attention to ‘the happy marriage of militarism and patriarchy’, as well as the differing impacts of militarization on men and women. A critical feminist perspective on peace and security has significantly advanced our understanding of the root causes of conflict. It posits that the systemic origins of war lie within patriarchal, male-dominated sex-gender social structures (Cockburn, 2014). Feminist political economy analysis draws parallels between male heads of households and the masculine state, as both wield control over dependents under the pretext of acting in their best interests. Their unequal power dynamics are inherently violent, yet this violence is often obscured by notions of virtue and love (Young 2003, 6; True 2015: 419). It explains why men’s violence against women is widespread within private households, as well as why males overwhelmingly dominate state-sanctioned war and conflict (True 2015: 419). 

In light of these varied perspectives, it becomes evident that a heterodox approach, covering Marxist, instituonalist, post-keynesian, and feminist approaches, is necessary to fully comprehend the multifaceted role of military spending in the economy, surpassing the confines of narrow neoclassical paradigms. A heterodox approach can enhance the understanding of the impact of military spending on the economy in four main ways:  

First, military spending is determined not solely based on economic or strategic reasons, but domestic and international interest groups play a major role in sustaining high military spending. Therefore, an institutional perspective is necessary to better understand the causes of military spending. 

Second, the Marxist perspective argues that military spending is a product of the capitalist system, designed to sustain it. Threfore, it explains the role of military spending in the economy from a broader perspective. Also, this approach provides both theoretical and empirical discussion on how military spending affects profit rates. This is highly valuable because the profit rate is a key indicator of the health of a capitalist economy, offering valuable insights into the long-term impact of military spending on the economy.  

Third, the impact of military spending on economic growth is perhaps the most popular topic in mainstream defense economics. However, incorporating income distribution into the nexus of military spending and growth would yield more robust results.  

Finally, considering the mutually reinforcing relationship between militarism and patriarchy would substantially enhance our understanding of the root causes of militarism. It also shows how military spending reduces economic growth by lowering the productive capacity of the economy in the long run through its negative impact on gender equality.  

To sum up, the heterodox perspective would improve the social welfare analysis of military spending by broadening the understanding of its causes and consequences. 


Baran, P., & Sweezy, P. (1966). Monopoly capital: An essay on the American economic and social order. New York: Monthly Review Press. 

Cockburn, C. (2014). Feminist Antimilitarism: Patriarchy, Masculinities, and Gender Awareness in Antiwar Organizing. In I. Geuskens, M. Gosewinkel, & S. Schellens (Eds.), Gender and Militarism: Analyzing the Links to Strategize for Peace. The Netherlands: Women Peacemakers Program (WPP). 

Guterres, A. (2020). Now is the time for a collective new push for peace and reconciliation. 

Melman, S. (1965). Our depleted society. New York, NY: Holt, Rinehart and Winston. 

True, J. (2015). A Tale of Two Feminisms in International Relations? Feminist Political Economy and the Women, Peace and Security Agenda. Politics and Gender, 11(2), 419–424. 

Young, I. M. (2003). The Logic of Masculinist Protection. Signs, 29(1), 1–25. 


Adem Elveren is a professor of economics at the American University in Bulgaria. He earned his PhD in economics from the University of Utah in 2008. His primary research field is defense economics. He authored a report for the UN WOMEN examining the impact of military spending on gender inequality.