Militaries, finance, and (in)security

In US counterinsurgency doctrine, money has been characterized as “ammunition” and as a “weapons system.” Money is being wielded to win over the “hearts and minds” of the population, and to protect the lives of the occupying forces. Soldiers are taking on greater responsibility for spending money on reconstruction and development projects on the battlefield. Billions of dollars have been spent by the military in Iraq and Afghanistan on a wide range of projects including building schools, developing infrastructure, agricultural assistance, as well as microfinance. But military doctrine now extends to helping implement free-market economies, supporting business creation, setting-up banking facilities and promoting entrepreneurialism. In fact, economic development has been recast as a constitutive form of combat, not simply as a supplement to conventional warfare, or as part of post-conflict reconstruction. The use of money as a “weapons system” speaks both to a different kind of military and a different kind of war. Fighting and violence have not been replaced or even displaced, but are joined with new strategies and tactics that sit uneasily side by side. As soldiers have been retooled to be economic decision-makers, we need to better understand how money and markets are increasingly both the weapon of military intervention and the anticipated outcome.

Coleção Meira Mattos, 2021

The 20th and 21st centuries saw many cases of coercion by financial means both in war and peace. Throughout history, these financial sanctions have been weaponized by States to coerce countries that hurt their international interests. The deployment of these financial sanctions in a process structured for political purposes will be referred to in this text as financial warfare. There are several strategies that states can use in financial warfare. These different strategies can be used alone or together. The possibility of using such strategies is related to the capacities of each country. Therefore, it is relevant to classify and order the strategies of financial warfare. Thus, this article proposes an organization of these different coercion strategies of the use of money and the financial system in a typology that separates the practice of financial warfare in two different dimensions, bilateral and systemic. Such typology will be presented through several historic examples of the use of financial warfare.

Security Dialogue special issue on "Militarism and Security: Dialogue, possibilities and limits" Security has become a central preoccupation of the field of IR and the practice of global politics. In the process, it has become the subject of rich, interdisciplinary, conceptual, normative, and policy-oriented study among researchers and practitioners globally-and variously valorised as a critically contested concept and castigated as a policy lapdog. Security (its practice, performance and promise) seems to be everywhere and nowhere, as well as always and never. Yet, as security seeps into previously IRunfamiliar spaces, we lose sight of its limits in relation to other critical concepts and practices that also lie at the heart of IR. In particular, militarism, broadly understood as the preparation for war, its normalisation and legitimation, has never received the widespread and sustained focus it warrants in either traditional variants of security studies or in the various critical turns of the last decades. The prevalent emphasis on security has taken precedence over the study of the ways in which war and militarism continue to permeate societies the world over, in different forms and to different intensities. In our view, something is lost in the critical scholarly endeavour in this changing purview. But the issue is not necessarily to stake a claim for one concept over another. Rather, it is to ask how we are to understand the relationship between security and militarism, both as analytical tools and as objects of analysis.

Finance and Society, 2017

Marieke de Goede argues that there has traditionally been a close relationship between finance and both national security and the economic security of nations. Hence, "finance cannot be understood to be a new security concept" (Goede, 2010: 109, emphasis in original). This is because financial soundness is essential to individual and national economic security, and fiscal wherewithal is crucial to maintaining military presence. The smooth functioning of an economy enables the funding of military protection. Conversely, as the recent global financial crisis once again demonstrated, national sovereignty itself depends on economic solvency that is a function of the prudential financial management of firms and governments. De Goede discusses this two-directional relationship with respect to how finance plays an instrumental role in making it possible to maintain national security, and how finance itself directly relates to the viability of households and nations, which require a positive balance of outputs against inputs. She also addresses a third way to consider the relationship between finance and security in view of their historical and conceptual entanglement. From this perspective, the development of modern nation states is inseparable from financial instruments including, for example, those of sovereign debt. Considered historically, after World War II financial tools evolve, and "risk comes into focus as a technique [insofar as it is quantified] that bridges finance and security" (de Goede, 2010: 107, emphasis in original). In addressing the overarching question of what is novel in the relationship between finance and security, de Goede hones in on two recent phenomena that are helpful to put into relief against a longer timeline. These include President Barack Obama's response to the financial crisis, which deployed the rhetoric of national security in order to securitize global credit insolvency, as well as efforts to address the financial dimension of terrorism by targeting assets and controlling global finance so as to isolate terror networks. Thus the question of the relationship between security studies and finance takes on the problematic of whether there is a perennial dialectic of employing economics to secure military power on the one hand, and directly harnessing "financial instruments to … engender business security" on the other (de Goede, 2010: 109). The constancy of this dynamic is underscored by de Goede's dismissal of the end of the US commitment to a gold standard to back its fiat money in 1974 as the pivotal action underlying subsequent economic instability. Economic recession and depression have

Studies in Banking and Financial History, 2014

[Premieres lignes] Studies of financial systems are very often concerned with finding one main factor which determines whether or why the financial system of a country can be categorised as a ‘market based system’ or a ‘bank based system’. Explanations for why a country would adhere to one type or to the other can roughly be divided into structural or developmental. The first category of explanations relies on institutional factors such as the legal basis, the distribution of political power and so on which exert a constant and long-term influence on the financial structures. The second category is more concerned with the pattern of economic and financial development over time, and relies on the link between specific difficulties or challenges (regional imbalances, information asymmetry, relative backwardness) and the build-up of institutional solutions to these difficulties. Academic historians tend to rely more on the second approach, which lets them expand historical explanations and careful contextual analysis. There are two common conclusions to these distinctly different types of explanations. First, the convergence of financial systems is not only possible, it is more or less bound to take place given an open international goods or capital market. Second, path dependency is a very strong feature of financial systems, which can be explained by the ability of a complex set of institutions to harness and resist ‘pure’ market forces. In that respect, recent work by Youssef Cassis offers a vivid picture of the long-standing resistance of most financial centres to the relative decline of the national economies that host them.

PERI Working Paper, 2021

Based on Arrighi (1994), we empirically investigate whether financialization and militarization are mutually reinforcing phenomena in the US during the post-WW II period. Military spending during the 1950s and 1960s in the US, along with other external stimuli, such as a rising sales effort and expansion in finance, insurance, and real estate, 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 commonly used in the literature and the profit rate in the financial sector, and using several parametric and non-parametric methods, we found a significant relationship between financialization and militarization in the US for 1949-2019. The findings show that the decline in the profit rates lead to a decline in military expenditure. The overall 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.

This article searches for a preliminary, but structured, assessment of the international security landscape of the 21 st century. It focuses on the predictions of offensive realism (Mearsheimer 2001), which are contrasted with conceptual propositions about international standards of unipolarity (Wohlforth 1999; Diniz 2006) and data indexes on the international production of wealth, its allocations in means of military power and the appreciation of alterations in this correlation because of the 2008 Financial Crisis. The article points out that trends of power distributions do not widely favor Russia and China. However, because of the greater Chinese resilience to the crisis, the accumulated value of their military investments overcome all its neighbors and its large demand for natural resources in other countries or areas in dispute have led the organization of major systemic constraints when compared to the Russian case. The paper also shows that these dynamics of regional power do not allow reconsidering the U.S. military primacy. Finally, the article presents some final considerations of methodological and conceptual slant in order to advance on the research in international security.

1914-1918 Online. International Encyclopedia of the First World War (WW1), 2018

The Great War required war-making states to mobilize and sustain the financial resources for a global war on an unprecedented scale. What made war finance during the conflict so special is that this challenge had never been confronted in a world economy as large, deeply interconnected, and sophisticated as that which existed in 1914. This article outlines the monetary politics of the global " system " of war finance. It will incorporate perspectives on national economies, but integrates these to sketch the international and transnational aspects of financing the war. The article sets out the basic elements of the prewar financial system and its global dynamics; examines the different modes of war finance adopted by the belligerents; considers the Central Powers and the Entente as financial alliances operating in the global monetary system; describes the interaction of public and private entities; and surveys the long-term consequences of war finance on the world economy.

Social Anthropology, 2008

Western Balkans Security Observer-English Edition, 2006

We keep hearing that the army costs a lot. The only concrete fact substantiating such complaints is the GDP percentage appropriated for military purposes. However, it would be entirely justified to ask whether this spells the total “price” of military security in the states of the Western Balkans (Balkans, hereinafter). In the past few years budgetary expenditures were clearly insufficient to finance new security needs of the states in the region, such as army professionalization and downsizing. The impoverished states are still less capable of paying to “erase the traces” of their previous security policies. Namely, during the 1990s they invested billions of dollars into the purchase of already obsolete ordnance the destruction of which they are financing today. The citizens of the region are thus paying a “double price” of security additionally disguised by the fact that funds are drawn from the budget as well as out of it. In addition, the inflow of foreign donations for this purpose is increasing.