The alchemy of military spending

There may be a charitable way to interpret the following Wall Street Journal statement in a report on Putin’s replacement of his defense minister (“Russian Putin replaces defense minister in security shake-up,” May 12, 2014):

Military spending, which has risen to more than 6% of gross domestic product this year from 2.6% before the war, has fueled much of the country’s economic growth and helped the country weather the impact of Western sanctions to endure. Factories that produce shells and tanks have been operating in multiple shifts to cope, boosting employment and wages.

The Russian government’s propaganda makes similar claims.

Apart from pure propaganda, which of course we cannot suspect WJ The most obvious interpretation is Keynesianism with a vengeance: higher military spending and the destruction of military capital (and soldiers) should boost economic growth compared to what it would otherwise be. We might therefore wonder why the North Korean ruler’s military spending does not stimulate high economic growth there. And suppose that instead of spending 6% of Russia’s GDP, the government had spent 100% of it on military activities, that is, had spent all the country’s resources on war and preparation for war, wouldn’t there have been even more economic growth? ? resulted? I explored the mystery of this alchemy in another EconLog post, “SGZ as a Recipe for Economic Growth.”

The fact that the new Russian Defense Minister, Andrei Belousov, is presented as an economist adds an ingredient to the alchemical mixture. According to ReutersBelousov graduated from the Faculty of Economics of Moscow State University in 1981. Anyone can claim to be an economist – fortunately it is not a professional title that needs to be certified by the government, at least in free countries – but a degree from a Moscow state university in communist times is not the best bona fide evidence of mastery of the tools of economic analysis. As I suggested earlier, an economist who takes economics seriously could not remain in the service of a totalitarian state for long; and Belousov is a long-acting apparatchik.

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A caveat to the featured image of this post, the work of DALL-E and your humble blogger: it suggests that economics is a matter of money, which is not the case.