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Economic Foundations of The "Rogue State"


By: Ismael Hossein-zadeh, Drake University, Iowa

Rogue state is a relatively new term that the US State Department has added to its foreign policy lexicon in the post-Cold War era. The term is said to be applicable to states that (a) support terrorism, (b) have developed or plan to develop missile programs and/or nuclear weapons, and (c) stir up regional or international tensions and are, therefore, "menaces" to world peace and stability. On all three accounts, the American state by far tops all other states, and is therefore, according to its own definition, the roguest state.

Architects of the term rogue state would, no doubt, cringe at this logical implication of their terminology, and would fiercely object to it. This is because, from their point of view, the US has a global custodial or policing obligation and is, therefore, justified in its accumulation of all kinds of destructive weaponry, including massive stockpiles of nuclear weapons. Furthermore, they choose to define terrorism in a narrow sense that does not include state-sponsored mass killings. Thus, conveniently, wholesale terrorization of, for example, Vietnamese civilians by the US armed forces during the Vietnam War occurred outside the official parameters of terrorism. The terrorization of the Palestinian people by the state of Israel falls into this same category, as does that of the Kurdish people by the Turkish state-both of which could be stopped if the US foreign policy imperatives so dictated or required.

The purpose of this essay is not, however, to engage in a polemic on the definition of "rogue states,"-the whole idea, beginning with the terminology itself, is a cheap, tasteless, disgusting and self-serving idea. My objective is, rather, to explore some of the economic interests that prompted and promoted this vulgar and offensive terminology.

Before the collapse of the Soviet Union, the Cold War atmosphere and the "threat of communism" provided a convenient rationale for the US military buildup. The demise of the Soviet Union and the end of the Cold War promised a somewhat peaceful or, at least, less competitive world. Accordingly, it promised what at the time (the early 1990s) came to be called "peace dividends"-a reference to the benefits that, it was hoped, many would enjoy in the United States as a result of a reorientation of part of the Pentagon' s budget toward civilian and/or social needs.

But while the majority of US citizens celebrated the prospects of those potential "peace dividends," the vested interests in the expansion of the Pentagon budget felt threatened, since they were more likely to benefit from war (actual or perceived) than from peace dividends. Necessity's being the mother of inventions, the useful term rogue state was coined to serve this purpose.

But proponents of military buildup did more than just coin the term. They also moved to foment regional tensions and instigate certain states to react in a manner that would make application of the term to them plausible. Saddam Hussein, the Iraqi dictator, was the first to fall into this trap of US foreign policy. "There is evidence that the [Bush Sr.] Administration's policy was to lead Saddam Hussein to believe that he could take over Kuwait with impunity. The purpose was to give him enough maneuvering space to cause a regional crisis, which would serve as a substitute for the waning "Soviet threat" to US interests. This new "threat," in turn, would provide a new rationale for the maintenance of the US military structure." (References cited in this essay could be obtained by contacting the author:

Six months before the crisis thus created, Business Week had predicted a "looming lethal shakeout" in the US weapons industry as a result of the cessation of the Cold War. "But the successful substitution of a Third World threat for the Soviet threat of the Cold War era removed the greatest threat of all to the US military-industrial complex-the 'threat' of peace."

As noted, there is disagreement between proponents of military buildup and those who favor a curtailment of that buildup; that is, between beneficiaries of war dividends and those of peace dividends. Beneficiaries of war dividends include defense contractors and other major industries connected to them (rubber, steel, and the like); business interests whose operations are limited to national markets, that is, protectionist or nationalist business interests such as textile, footwear, steel, and so on; the military establishment; intelligence agencies; the national security apparatus; key committees of Congress; and many politicians whose constituencies benefit from military establishments and industries in their communities. The fact that so many powerful social and economic interests have become dependent on strong military spending-and hence on the maintenance of either actual, fighting wars or of a tense international atmosphere requiring potential wars-is an alarming indication of the potential dangers of US military buildup.

Beneficiaries of peace dividends, on the other hand, include low, lower-middle, and working class people who would benefit from a reallocation of part of the Pentagon's budget to education, health care, housing, and a whole host of other social safety net programs. They also include representatives of nonmilitary (civilian) international capital who pay taxes for military spending while not benefiting from it; nay, they often lose markets to multinational competitors from other countries due to US military intrusions abroad.

Whereas the militarist conservatives (i.e. beneficiaries of war dividends) are generally in favor of gun-boat international diplomacy and the heavy handed, unilateral US dictates in international affairs, representatives of civilian transnational capital call for collective management of the world economy and political conflicts through multilateral institutions such as the World Trade Organization and the United Nations.

This does not mean that multilateralists are fervent advocates of democracy and equality between nations, but that they perceive the interests of multinational corporations to be better served by an enlistment of the cooperation of other major economic powers. In fact, they too, like their militarist rivals, believe in the necessity of an international "custodial" power, vested in the United States, for a stable world order. The difference between the two groups lies in the fact that the multilateralists emphasize economic rather than military strength and believe that US interests will be better served by consensus building or, if that fails, by coercive or arm-twisting tactics within the framework of multilateral institutions.

In the debate over military spending, the militarists have almost always managed to outmaneuver the advocates of curtailment of the Pentagon budget. Such was the outcome, for example, of the debate over military spending at the end of World War II. At that time, the Korean War and the "communist threat" were manipulated by the proponents of military buildup to overrule those who called for limits on military spending as the war ended. Likewise, as the Cold War tensions tended to subside in the early 1980s and, as a result, continued US military buildup was questioned, the flamboyant militarist President Ronald Reagan and his administration successfully averted curtailment of military spending by hyping the "threat of the evil empire" and the need for "star wars" defense capabilities.

Similarly, when the collapse of the Soviet Union in the early 1990s effectively marked the end of the Cold War era and, once again, potential beneficiaries of anticipated "peace dividends" demanded curtailment of the Pentagon budget, representatives of the beneficiaries of "war dividends" succeeded in averting restraints on military spending by creating the "threat of rogue states." Simultaneously, these representatives crafted a number of supplementary strategies designed to make that "threat" a credible rationale for military expansion.

The first of these strategies is to link the interests of the military-industrial complex to broad national interests, thereby camouflaging behind wider US interests the nefarious objectives of the beneficiaries of "war dividends." Secondly, representatives of the military-industrial complex define US interests in such broad terms that they include the "stability" of almost all world markets and resources, especially energy resources. Thirdly, they define "new sources of threat to world peace" in the broad framework of a "new multi-polar world," which goes way beyond the traditional "Soviet threat" of the bipolar world of the Cold War era. "The new sources of threat to world stability" are said to originate largely in the "unpredictable, unreliable regional powers of the Third World."

For example, General Carl Vuno, Chief of Staff of the US Army under President Bush (Sr.), told a House Committee that "In this increasingly multi-polar world, we face the potential of multiple threats-from countries and factors which are becoming more sophisticated militarily and more aggressive politically."

General Colin Powell, Chairman of the Joint Chiefs of Staff at the time, likewise argued before a Senate Committee: "With all these challenges and opportunities confronting our nation, it is impossible for me to believe that demobilization or hollowing out of the American military [at the end of the Cold War] is a feasible course of action for the future. The true 'peace dividend' is peace itself...Peace comes about through the maintenance of strength."

General A. M. Gray, commandant of Marine Corps at the time, similarly argued: "These [regional] insurgencies have the potential to jeopardize regional stability and our access to vital economic and military resource... If we are to have stability in these regions, maintain access to resources...we must maintain within our active force structure a credible military power projection capability with flexibility to respond to conflict across the spectrum of violence throughout the globe."

This small sample of statements by the spokespersons of the military establishment indicates how swiftly the forces of the military-industrial complex acted in the immediate aftermath of the Cold War to assign a global custodial role to the Unites States, which then "required" continued military buildup. To respond to "turbulences in the most vital regions," the new role called for a "discriminate deterrence"-a military strategy that "would contain and quell regional or local conflicts in the Third World with lightening speed and sweeping effectiveness before they get out of hand."

Following the strategy of "discriminate deterrence," other supplementary terms such as "low-intensity wars" and "mid-intensity wars" began to enter the lexicon of the Pentagon. "Low" or "mid-intensity" does not refer to the level of firepower and violence employed but to its scale compared to an all-out war on a global or broad geographic range. The "usefulness" of this military strategy was tested, first, in Panama, which resulted in a "surgical" removal of General Noriega from his presidential palace and his imprisonment in the United States and, then, in Iraq during the so-called "desert storm" incursion, with massive displays of high-tech military hardware that killed or maimed thousands of people.

Just as military strategy has been "perfected" by expanding the US military mission from the traditional "Soviet containment" to global militarism, so has the traditional economic rationale for military spending been supplemented by what the Pentagon calls "power projection capabilities." This concept has been promoted by the military establishment as meaning easier access to world markets and resources by virtue of military power. For years, the military-industrial complex touted military spending as a major stimulus of aggregate demand, hence a major market stabilizer, thereby linking its goals and interests to broad policy objectives of economic stability. This idea, known as military keynesianism, has since the early 1970s come under attack; not that military spending does not stimulate demand, but that it is a costly trade-off in terms of essential social needs. The emergence of economic powers such as Japan and Germany with no or very little military spending further weakened the case for military Keynesianism.

As a result, in its rationalization of military buildup, the military establishment has in recent years shifted the emphasis from military Keynesianism to the "power projection capabilities" of military spending. That is, from the traditional demand-or market-based rationale to a rationale of "extra-economic" measures that would use military muscle for economic gain, for extracting economic concessions, or for easier access to global markets and resources.

In brief, powerful social and economic interests in the United States have become dangerously dependent on strong military spending and, therefore, on the maintenance of either actual, fighting wars or of a tense international atmosphere requiring potential wars. The situation has become all the more dangerous as the forces of global militarism have successfully defined US national interests in terms of their own interests. Under the Cold War atmosphere, the mere "Soviet threat" was enough to justify continued military buildup. Today, justification of military buildup requires actual fighting-at least, occasionally. Such "contained" or "controlled" regional and/or local wars are often the products of strong, but submerged, socio-economic interests that determine US global strategy.

Ismael Hossein-zadeh teaches economics at Drake University, Des Moines, Iowa.

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