Military Spending and the Falling Rate of Profit in the United States

The relationship between militarism, military spending, and the development of capitalism has been widely debated among Marxist scholars, with no clear consensus. This article contributes to this discussion by examining how military expenditure relates to profit and output in the world’s largest military spender, the United States. Focusing on a single-country case study enables a more detailed analysis than recent cross-national research. After reviewing key heterodox theoretical perspectives, the study tests them using newly available data. Applying time-series cointegration methods, it empirically explores the role of military spending in capitalist crises and its connection to the profit rate. Findings indicate that military expenditure supported the profit rate until the early 1980s but has not done so since, reflecting structural changes in the military-industrial complex. JEL Classification: E11, H56.