Introduction

This chapter describes with question — the macro-economic consequences of the military sector: that is, the effects of the existence, and of the changes, of the military weapons industry on the economic performance of the countries. It considers in turn: military expenditure as a cause of excess demand; bottleneck inflation; inflation arising simply from budget deficits; military expenditure and employment; structural consequences of high military spending in industrial countries; structural consequences of high military spending in developing countries; the problems of conversion. For the group of socialist countries the absence of firm figures for military expenditure makes it very difficult to examine the hypothesis of a connection between the trend of military spending and a slowing-down in the rate of economic growth. In many industrial countries, labour turnover in the typical manufacturing plant is about 30 per cent a year -one worker in three leaves his or her existing job in the course of a year.