Mark Carney's Defence Industrial Strategy: A New Military-Industrial Complex for Canada
In a significant policy shift, Prime Minister Mark Carney has unveiled a comprehensive defence industrial strategy that positions military spending as a cornerstone of Canada's economic future. This ambitious plan, announced at Canadian Aviation Electronics in Montreal, marks a dramatic departure from Canada's traditional emphasis on peacekeeping and diplomatic solutions.
Eisenhower's Warning Echoes Across Decades
The strategy inevitably draws comparisons to President Dwight D. Eisenhower's famous 1961 farewell address, where he warned Americans about the "acquisition of unwarranted influence" by the military-industrial complex. Eisenhower cautioned that "the potential for the disastrous rise of misplaced power exists, and will persist," urging citizens to remain vigilant against threats to democratic processes.
Now, 65 years later, Canada appears to be embracing what Eisenhower warned against. Carney's government sees military investment not just as a security necessity but as an economic engine that will drive prosperity and create high-value employment across the nation.
The Economic Scale of Carney's Defence Vision
According to the Prime Minister's Office, the new defence strategy involves unprecedented spending commitments. Over the next decade, Canadian industry will have access to $180 billion in defence procurement opportunities and $290 billion in related capital investment opportunities.
The projected economic benefits are substantial:
- $125 billion in downstream economic benefits by 2035
- Creation of 125,000 high-paying careers
- 50% increase in defence exports
- 70% of defence acquisitions awarded to Canadian firms
- 240% growth in Canadian defence industry revenues
The Theory of Military Keynesianism
Economically, Carney's approach represents what critics call "military Keynesianism"—the belief that substantial government spending on defence can stimulate broader economic growth. This theory traces back to economist John Maynard Keynes, who advocated for government spending, including through deficits, to boost economic activity during downturns.
However, whether Keynes would endorse this particular application remains questionable. Robert Skidelsky, author of a definitive three-volume biography of Keynes, noted last year that "Keynes himself would have been depressed" by military Keynesianism, "but not surprised by the ease with which war fervour can be stoked up to justify Keynesian policies."
Criticism from Across the Political Spectrum
The concept that defence spending generates sustainable economic benefits faces criticism from both left-wing and libertarian economists. Analysts at Jacobin, a prominent voice of the American left, argue that the U.S. military-industrial complex has reached unprecedented and problematic levels.
Meanwhile, libertarian think-tanks like the Mises Institute and CATO Institute view military-industrial complexes as contributors to rising government debt and semi-corrupt practices without delivering meaningful economic growth. They argue that such centralized industrial planning carries significant risks and distorts market mechanisms.
A Centrally-Planned Industrial Strategy
What Carney has essentially created is a centrally-planned industrial strategy built on the premise that massive state spending and borrowing for military purposes will generate broader economic growth. This represents a significant shift in Canadian economic policy, moving toward what some observers describe as a Canadian version of the military-industrial complex Eisenhower warned about.
The strategy raises fundamental questions about Canada's economic direction and the role of government in shaping industrial development. As the plan unfolds over the coming decade, its success or failure will likely influence not just Canada's defence capabilities but its entire economic landscape.
