Scott Burchill
7 min readDec 7, 2023

War, or more often the threat of it, has long been a necessary economic stimulus in state capitalist societies.

In the twentieth century, the term military Keynesianism was coined to describe the transfer of public funds to privately owned military contractors who were largely shielded from market competition for the weapons of death they manufactured.

However, pump priming the economy in this way always requires a credible military threat, one that renders the public scared, dependent on the state for protection from an imminent danger, and therefore supportive of significant military spending. During the Cold War, Soviet Communism and allied threats posed by China, Vietnam and North Korea, played the role of a seemingly permanent enemy for the West.

Since the 1990s the pretexts have become more flimsy though equally effective: Iran, Libya, Iraq, Afghanistan and Islamist terrorism. More recently, the Russia threat has been revived after it invaded Ukraine. Israel’s campaign of state terrorism against Gaza, on the pretext of wiping out Hamas, follows the same pattern.

Given the Australian Government has decided to transfer $368 billion taxpayer dollars to privately owned American and British armaments manufacturers (such as BAE), a convincing justification for such extravagance had to be found.

China, nuclear armed and Australia’s most important trading partner, became the paradoxical choice for the Albanese Government after the ground had been carefully prepared by the Morrison Government and a compliant media, following three years of racism, hysteria (eg the SMH/The Age Red Scare series) and old fashioned Sinophobia.

“Chinese aggression”, its military build-up, plans to “invade Taiwan” and accusations of cyberattacks and other forms of meddling in Australia’s internal affairs, are the context for the AUKUS submarine announcement. Without a credible threat of this kind, the entire enterprise would be exposed as needlessly provocative and a costly waste of money. Or just a fraud.

Thanks to critiques of the decision by Paul Keating, Hugh White, Brian Toohey, Clinton Fernandes and others not known for their strategic intemperance, the Albanese Government must now struggle, both to sustain the credibility of the China threat, and justify its extraordinary response to it. I say “extraordinary” because they have taken the Morrison’s Government’s initial commitment to a new level.

Five points are worth noting:

(1) No matter how vociferously it is denied by Defence Minister Marles and others in the Government, the deployment of nuclear-powered Australian submarines with US naval personnel takes Australian defence policy well beyond “interoperability” with our ally across the Pacific. It effectively subcontracts Australia’s defence sovereignty to the Pentagon.

This constitutes a retreat from any residual thoughts of an independent foreign policy and meaningful strategic engagement with the Asia-Pacific region. The AUKUS submarine decision should be understood as a manifestation of US defence policy in East Asia, with Australia as a willing “sub-imperial” accomplice. I want to emphasise “willing”, not reluctant, as Australian foreign and defence policy is often presented by analysts. Australia has never been dragged kicking and screaming to do Washington’s bidding: we have always been enthusiastic participants. The Vietnam War and the war against Iraw were a perfect examples.

We are also seeing interoperability (and concomitant loses of sovereignty control) extended into other related fields: broader defence procurement, intelligence co-operation (CIC-A), Defence Trade controls which exempt the US and UK, policies towards Israel-Palestine and Ukraine, etc. It’s “all the way” again.

(2) Instead of locking Australia into a US-led adversarial posture with its most important commercial partner, including the rotation of increasing numbers of US marines through Darwin, cultivating a better diplomatic relationship with China and the region could be achieved at a fraction of the cost of this proposal.

A better resourced DFAT is long overdue. Such an entity might have advised the Government that Australia, the US and most of the world recognise Taiwan as Chinese sovereign land and going to war against a nuclear-armed state that wants to “invade” its own territory would be odd, illegal and catastrophic, regardless of what role Washington expects Canberra to play.

Although Canberra and Washington have different interests at stake, it would be difficult to find a better illustration of Australian ministers being socialised into Washington’s strategic world view. It seems the Government has abandoned the “defence of Australia” policy and reverted to “forward defence” under its current euphemism “impactful projection”.

This is little more than US naval policy masquerading as the modernisation of Australia’s military forces. AUKUS is an investment in US shipyards and Washington’s maritime strategy. A boon for contractors, but devastating for the local economy which desperately needs significant investment in public housing, public services, schools, universities and other modern infrastructure. The submarines, if they ever arrive, will effectively be US naval vessels deployed in the interests of US policy.

Don’t forget that none of the ministers or officials who commit the country to these astronomical military outlays will be in public office in the unlikely event they even come to fruition.

(3) China’s military build-up is being presented as an inexplicable threat, as if one can directly impute strategic intentions from the country’s military capabilities. China’s rise as a Great Power has been built on astonishing economic growth over three decades. It has more money to spend on military hardware, so it is doing what every Great Power — communist or capitalist — has always done. This makes China more capable, but has no necessary bearing on its strategic ambitions — which have never been coherently explained by Australia’s Sinophobes who have just rediscovered the China threat.

Given the US spends more on defence than the next ten countries combined, and has surrounded China with dozens of hostile military bases, no-one should be surprised that Beijing has responded to a growing sovereign threat which Australia now seems determined to inflate and amplify. It would be irresponsible not to.

Despite all evidence to the contrary, China’s motives are deemed nefarious and the West’s are assumed to be benign. How many independent states has China invaded over the last thirty years? How many has it illegally occupied? How many tyrants, autocrats and satraps has it maintained in foreign countries. How many overseas military bases does China have? How many foreigners has it murdered with drones? Compare the answers to these questions with Washington’s record and ask yourself which state constitutes the gravest threat to world peace?

China has never expressed an intention to attack Australia or any other country. It doesn’t need to, unless it is recklessly provoked by the hostility of the West. Given its successful commercial and trading outreach, aggression and conflict in the region’s sea lanes would only endanger China’s economic rise. The submarine deal must therefore rank as one of the most expensive boondoggles in modern history.

This approach will more than likely stimulate a regional arms race, which is hardly in Australia’s interests.

The proposed submarines are old technology, superseded by superior and cheaper battery-powered and hydrogen fuel cell alternatives, will not be delivered on time if at all, and will cost significantly more than current estimates.

Australia has no experience with, or installations for, nuclear-powered submarines.

And the submarine purchases lock Australia into UK and US military industrial complexes. So it’s really about maintaining US primacy in East Asia for the next five decades. There has never been a balance of military power in the region.

(4) With better and cheaper conventional alternatives, wasting billions of dollars on baroque defence technologies that we don’t require, which will soon be obsolete, may never be built,and which constitute an environmental danger, AUKUS will provide the next ten or more federal governments with a perfect excuse for not spending money on what the Australian people actually need and want.

What an extraordinary gift the so-called “left” of the ALP has bestowed on its political opponents, at the same time shackling any remaining ambitions it might still have for economic and social reform. This is what bipartisanship does: it denies the public meaningful political choices at the ballot box, ensuring policy continuity.

(5) The lack of any public consultation, due process, and the speed with which Albanese said “me too” to Morrison’s AUKUS commitments is a worrying breakdown of considered policy development and formulation. The ALP seems reflexively scared of product differentiation in foreign or defence policies. Bipartisanship in this highly contested area of public policy has surprised many old timers in the ALP, including a number of local branches that have rejected the AUKUS commitments.

Paradoxically, Wong and Albanese are suggesting there is a growing China threat at exactly the same time they are taking credit for “stabilising” and rebuilding the relationship after its collapse during their predecessor’s reign. And they deserve credit in unwinding trade sanctions and releasing Australians imprisoned in China. However, this will be a difficult circle to square, especially given the Sinophobia of the Morrison years was hysterical in at least two definitions of that word. In the 1980s even Kim Beasley and Gareth Evans realised that it made no sense to aim your military weapons at your most important trading partners. Beijing will have taken note.

Military Keynesianism is often justified to taxpayers for its domestic economic benefits. Unsurprisingly, Albanese is selling the AUKUS deal as an “investment” in “jobs” rather than detailing the nature of a threat which requires such an unprecedented and extravagant response.

Here lies the Government’s weak spot. It needs to convince the Australian people that it must transfer $368 billion to privately-owned military-industrial businesses in the US and UK to protect them from the very same country which, through a mutually lucrative trading relationship, holds the key to their future economic prosperity. To suggest this will be a hard sell fails to fully capture the enormous challenges the government has now surprisingly set for itself.



Scott Burchill

Dr Scott Burchill taught International Relations at Deakin University for 30 years