The War Is Real. The War Economy Is Too, by Simon Pearson – 22 September 2026

Putinism is not an invention of the arms industry. European militarisation is not simply a neutral response to Russia. Any materialist account worth having has to be capable of understanding both.

There is a familiar argument about European rearmament that begins in the right place. Follow the money. Examine the contracts, the factories being expanded, the public expenditure being redirected and the corporations whose order books are filling up. The problem comes when the consequences of war are turned into its cause. Arms manufacturers profit from rearmament, therefore rearmament must ultimately exist because arms manufacturers require it. Russia becomes little more than the threat through which European capitalism legitimates something it already wanted to do.

I just can’t make that argument fit the material facts.

Russia launched its full-scale invasion of Ukraine in February 2022, an act the UN General Assembly described as aggression in violation of the UN Charter and has continued to describe in 2026 as a war initiated by the Russian Federation. Four years after the full-scale invasion, the UN was still describing the war in precisely those terms. Russia has also reorganised a substantial part of its own economy around sustaining the conflict. Its military expenditure reached an estimated $190 billion in 2025, equivalent to 7.5 per cent of GDP. Russia is not simply an ideological construction produced by NATO communiqués. It is a capitalist state using military force to pursue territorial and geopolitical objectives.

That doesn’t make the economic order being built in response politically neutral. European military spending rose by 14 per cent in 2025 to $864 billion, but the larger transformation can’t be measured simply by counting missiles or artillery shells. The European Commission wants defence production lines substantially expanded and delivery times shortened. It wants a genuine EU-wide defence market and has set a target of reskilling 200,000 workers for the defence industry. It also proposes measuring the sector through its contribution to GDP, employment, expanded production facilities and defence start-ups. These are the foundations of an industrial structure intended to last.

Capital doesn’t have to manufacture a crisis before it can accumulate from it. Rheinmetall can benefit enormously from European fear of Russia without having created Putin, the Russian state, the invasion of Ukraine or the strategic problem facing governments on Russia’s western border. Once contracts are signed and factories expanded, however, something changes. Capital has been committed, workers have been hired and political constituencies begin to form around continued production. The initial cause of increased military expenditure and the interests created by that expenditure are no longer the same thing.

That difference is easily lost because it is much simpler to imagine a single capitalist interest standing behind everything. States don’t work like that and neither does capital. European governments have interests in territorial security and in maintaining the institutions through which their own power is exercised. European defence manufacturers compete with American manufacturers. Firms dependent upon cheap energy don’t necessarily have the same interests as weapons producers benefiting from geopolitical confrontation. Finance can make money from rearmament without having identical strategic interests to the companies manufacturing the weapons. Capital is a social relation, not a committee meeting in which everybody agrees beforehand what history is going to do.

The fiscal response makes the restructuring unusually visible. The European Union spent years surrounding public expenditure with rules presented as hard economic constraints, yet defence has acquired its own exceptional treatment. By June 2026, 18 EU member states had activated the national escape clause allowing additional fiscal flexibility for increased defence spending. The mechanism permits deviations of up to 1.5 per cent of GDP from the normal expenditure path for defence while other spending remains subject to the existing framework. The Council states explicitly that other expenditure remains bound by the budgetary rules.

The conclusion is not that there was secretly an unlimited reservoir of money that governments maliciously withheld from hospitals and housing. Fiscal capacity is more complicated than that. What has been exposed is the political character of the rules themselves. Constraints presented as immovable can be altered when states decide that circumstances require it. The question raised by the present turn towards defence is therefore sharper than the familiar complaint that governments somehow found the money for bombs. It concerns why particular forms of state expenditure are granted exceptions that others are not.

Workers can’t be treated as spectators to this process or as people whose interests can be read automatically from their class position. A Ukrainian railway worker has a material interest in whether the railway remains under Ukrainian control. A nurse has a material interest in whether the hospital in which she works is occupied or destroyed. A Polish worker can regard Russian military power as threatening without having been manipulated into doing so by an arms-company advertising campaign. Homes, workplaces and political organisations exist inside territories, however historically contingent the borders around those territories may be.

There is an equally material contradiction on the other side. Military production creates jobs. It can create apprenticeships and maintain manufacturing capacity in places where civilian industry has been allowed to disappear. The worker employed producing artillery shells may dislike the war while knowing that a cancelled contract threatens the income paying the mortgage. A town hollowed out by forty years of deindustrialisation may experience a new defence factory less as the arrival of militarism than as the return of skilled industrial employment. None of this makes the arms industry socially benign. It shows why simply revealing that somebody profits from war doesn’t constitute an analysis of the social relationships produced by it.

Capitalism reproduces itself partly by making the reproduction of everyday life dependent upon wages generated inside capitalist production. A defence worker doesn’t have to believe in militarism to become materially dependent upon military expenditure. Once tens of thousands of workers, suppliers and communities have become incorporated into an expanded defence sector, reductions in spending cease to affect only shareholders. The industry begins to acquire a social base beyond the owners of the companies themselves.

Something similar happens inside the state. The EU’s Readiness Roadmap envisages expanded production capacity, military mobility corridors and a much larger integrated European defence market. These are not emergency consignments of ammunition that disappear when the fighting ends. They involve physical infrastructure and bureaucratic capacity. The more resources invested in them, the more interests exist in maintaining and using them. An external threat can therefore be perfectly real while the economic response to it gradually develops a logic that is no longer reducible to that threat alone.

This is why reducing the whole process to manufactured fear misses what is actually happening. Putin doesn’t become less responsible for invading Ukraine because defence companies profit from the consequences. Those companies don’t become disinterested public servants because the Russian threat is real. European states can have rational security concerns while also constructing an industrial system whose owners and workers will have material reasons to resist its dismantling later. None of those propositions cancels the others.

The harder question concerns what happens if the strategic conditions change. Production lines will still exist. Skilled workforces will still have jobs tied to them. Investors will expect returns and governments will have institutions organised around procurement. The European Commission is already seeking multi-year industrial demand capable of giving the defence sector greater stability and predictability. Once that infrastructure becomes embedded in European capitalism, military expenditure will have constituencies that didn’t exist on the same scale before the war.

A materialist politics loses something important whenever it turns Russia into little more than the villain required by Western capital. It also loses something when the reality of Russian aggression becomes a reason to stop examining what is being constructed in response. The war is real. The accumulation taking place around it is real too. The political economy now emerging from their interaction can’t be understood by pretending that either half of that equation is an illusion.

Simon Pearson is a writer and political activist in the UK.

This article first appeared on Anti-Capitalist Musings.

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