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Financialization and Militarization: An Empirical Investigation

Author

Listed:
  • Pelin Akçagün-Narin
  • Adem Yavuz Elveren

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

Suggested Citation

  • Pelin Akçagün-Narin & Adem Yavuz Elveren, 2024. "Financialization and Militarization: An Empirical Investigation," Review of Radical Political Economics, Union for Radical Political Economics, vol. 56(1), pages 70-100, March.
    • Handle: RePEc:sae:reorpe:v:56:y:2024:i:1:p:70-100
    DOI: 10.1177/04866134231167204
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    Keywords

    financialization; generalized additive models; Marxist economics; military spending;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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