Financialization and Militarization: An Empirical Investigation

AKÇAGÜN NARİN P., Elveren A. Y.

REVIEW OF RADICAL POLITICAL ECONOMICS, vol.56, no.1, pp.70-100, 2024 (SSCI, Scopus) identifier identifier

  • Publication Type: Article / Article
  • Volume: 56 Issue: 1
  • Publication Date: 2024
  • Doi Number: 10.1177/04866134231167204
  • Journal Name: REVIEW OF RADICAL POLITICAL ECONOMICS
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, IBZ Online, International Bibliography of Social Sciences, Periodicals Index Online, ABI/INFORM, American History and Life, EconLit, Index Islamicus, Political Science Complete, Public Affairs Index, Sociological abstracts, Worldwide Political Science Abstracts
  • Page Numbers: pp.70-100
  • Keywords: financialization, generalized additive models, Marxist economics, military spending, PROFIT, ACCUMULATION, INVESTMENT
  • Ondokuz Mayıs University Affiliated: Yes

Abstract

Based on Arrighi, we empirically investigate whether financialization and militarization are mutually reinforcing phenomena in the United States. Military spending during the 1950-1960s in the United States counteracted the stagnation of the monopolistic stage of capitalism. Monopoly capital was transformed into finance monopoly capital as the intensity of financial capital increased during the late 1970s in response to stagnation. Considering alternative financialization variables and the profit rate in the financial sector, and using several parametric and nonparametric methods, we found a significant relationship between financialization and militarization in the United States for 1949-2019. The results suggest that the rise in financialization is parallel to the decline in the profit rates, leading to larger military expenditure in total, but with relatively smaller share in GDP. JEL Classification: C14, E11, G32