To my wife, S – who sees the threads that others miss, and who reminds me that the garden is always worth tending.

By Andrew Klein

In 1961, President Dwight D. Eisenhower – a five‑star general who had commanded the Allied forces in Europe – stood before the American people and delivered a warning that has echoed through every conflict since. He spoke of a “military‑industrial complex”, a permanent armaments industry of vast proportions, and he warned that we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military‑industrial complex. The potential for the disastrous rise of misplaced power, he said, exists and will persist.

Eisenhower knew what he was talking about. He had helped build the very apparatus he was warning against. And his warning was not heard. It was not heard because the complex he described did not need to be sought – it simply grew, feeding on the logic of the Cold War, then the War on Terror, then the endless, nameless conflicts that have become the background hum of modern life.

Today, the permanent war economy is not a theory. It is a business model.

The Eternal Budget

The numbers are staggering. In April 2026, the Trump administration proposed a defence budget of $1.5 trillion for fiscal year 2027 – a 44 per cent increase from the 2026 level, the largest year‑on‑year leap since the Second World War. The 2026 budget itself was already just over $1 trillion. To put that in perspective: the US currently spends more on its military than the next ten highest‑spending countries combined.

This is not a response to any identifiable threat. It is a cycle. Defence contractors need contracts. Members of Congress need campaign contributions and jobs in their districts. Military planners need to justify their budgets. Think‑tanks need funding. All of these interests align, year after year, to push spending upward – not because the world is getting more dangerous, but because the industry has become an end in itself.

In Australia, the same logic applies, though on a smaller scale. Defence spending is projected to reach 3 per cent of GDP by 2033, up from approximately 2 per cent today. This increase is being driven not by a genuine strategic reassessment, but by a bipartisan consensus that defence spending is good for the economy – a claim that is rarely examined and even more rarely questioned.

What Is a “Permanent War Economy”?

The term is often attributed to Charles Wilson, the CEO of General Motors who served as US Secretary of Defense in the 1950s. Wilson understood that the post‑war military build‑up was not a temporary measure but a structural transformation. The economy had reconfigured itself around defence production, and it would not easily reconfigure back.

A permanent war economy has two interlocking functions. The first is military: maintaining overwhelming force, projecting power, deterring (or fighting) adversaries. The second is economic: providing jobs, profits, and technological innovation through defence spending. The two functions reinforce each other. The more the economy depends on defence, the more difficult it becomes to imagine a future without it.

This is the trap that Eisenhower foresaw. Not a conspiracy – a system. No single actor is controlling it. Everyone is just following their incentives. The defence contractor wants to maximise profits. The politician wants to secure votes and campaign donations. The military planner wants to prepare for the worst case. The worker wants to keep their job. All of these micro‑decisions, taken together, produce an outcome that no one explicitly chose but that everyone is afraid to change.

How War Becomes “Profitable”

Under the neoliberal model, if something makes money, it is ipso facto good. War is no exception. Entire companies exist solely on defence contracts. Entire regions depend on military bases and weapons manufacturing. When a war begins, stock prices rise. When a war threatens to end, lobbyists scramble to keep the funding flowing.

This is not a side effect. This is the design.

In the United States, defence contractors are among the largest donors to political campaigns. Lockheed Martin, Boeing, Raytheon, Northrop Grumman – these companies do not just build weapons. They buy policy. Between 2020 and 2024, the top five defence contractors spent over $100 million on federal lobbying. Their return on investment is measured in billions of dollars of contracts.

In Australia, the same dynamic operates, though more quietly. The AUKUS submarine project, estimated at $368 billion, is a case study. Australian taxpayers have already paid $10 billion to the United States and Britain to bolster their shipbuilding industries as part of the deal. That is not security spending – that is wealth transfer. Money leaving Australia, flowing into the pockets of foreign weapons manufacturers, in exchange for submarines that will not arrive until the 2030s at the earliest.

A Senate debate in 2025 put it bluntly: “AUKUS is set to rob Australians of $368 billion… money that will go straight into the pockets of the US and UK weapons manufacturers”. That is not an investment in Australian security. It is an extraction dressed in camouflage.

Australia: Minor Player, Major Extraction

Australia is not a global power. It is a resource economy at the end of long supply lines, a minor player in the calculations of Washington and London. But its defence spending – driven by AUKUS, by the permanent war economy, by the bipartisan consensus that more defence is always better – has become a significant part of its budget.

The opportunity cost is enormous.

Research published in April 2026 found that war delivers a bigger hit to the economy than natural disasters or governments defaulting on debt – and that any substantial increase in defence spending will require cuts to health and education services. Australia is planning to increase defence spending to 2.4 per cent of GDP, with the Coalition promising 3 per cent. Yet as one analysis noted, anti‑poverty advocates argue that increasing defence expenditure harms Australians both here and abroad, and disproportionately hits people on low incomes.

The numbers tell the story. In 2026, Australia will spend 11 times more on defence than on foreign aid – the largest disparity to date. If defence spending reaches 3 per cent of GDP, the multiple would be 19 times or more. Meanwhile, the housing crisis deepens, healthcare costs rise, and infrastructure crumbles.

This is not an accident. It is a choice. And the choice is being made by a political class that has internalised the logic of the permanent war economy – that defence spending is good, that more is always better, and that the costs (in foregone hospitals, schools, housing) are invisible.

If Security Were Really the Priority

If the Australian government were genuinely concerned about the security of its citizens, it would invest in the things that actually keep people safe: reliable infrastructure, free education, quality healthcare, affordable housing, disaster resilience, social cohesion. These are the foundations of a secure society. Not submarines.

But the neoliberal model does not prioritise these things. It prioritises extraction. Wealth flows upward. Public assets are privatised. Services are cut. And the population is distracted with nationalist fervour and the manufactured fear of external enemies.

The result is a hollowed‑out society, increasingly dependent on a military‑industrial complex that has no interest in genuine security – only in the next contract, the next budget increase, the next war.

What Is To Be Done?

The permanent war economy is not destiny. It is a choice. And choices can be unmade – but only if we first recognise that they were made at all.

Eisenhower’s warning was not a prophecy. It was a diagnosis. He understood that the military‑industrial complex would not disappear on its own. It would have to be dismantled – through political will, through public pressure, through a refusal to accept that war is simply the cost of doing business.

We can start by asking different questions. Not “how much should we spend on defence?” but “what are we sacrificing by spending this much?” Not “how many submarines do we need?” but “what would a genuinely secure society look like?” Not “which enemy should we prepare to fight?” but “what would it mean to invest in peace?”

These are not naive questions. They are the questions that a functioning democracy would ask. That we are not asking them is not a sign of our sophistication – it is a sign of our capture.