Milliken, David

English

Digital Commons @ University at Buffalo School of Law

In the Public Interest Volume 1 Number 1 Article 5 4-1-1980 Military Overspending: What Is It Doing to Our Economy? David Milliken Follow this and additional works at: https://digitalcommons.law.buffalo.edu/itpi  Part of the National Security Law Commons Recommended Citation David Milliken, Military Overspending: What Is It Doing to Our Economy?, 1 Buff. Envtl. L.J. 11 (1980). Available at: https://digitalcommons.law.buffalo.edu/itpi/vol1/iss1/5 This Article is brought to you for free and open access by the Law Journals at Digital Commons @ University at Buffalo School of Law. It has been accepted for inclusion in In the Public Interest by an authorized editor of Digital Commons @ University at Buffalo School of Law. For more information, please contact lawscholar@buffalo.edu. Military Overspending:What is it Doing to Our Economy?by David MillikenThe American economy is seriously troubled. ThePrime Lending Rate recently reached twenty percent,with the inflation rate not far behind. Unemploymenthovers around eight percent. We are told that the "eraof limits" is upon us. "Austerity" is the federalbudgetary watchword.Yet, down the clean, cool corridors of the nation'slargest office building, the nation's largest spendercontinues on, as if the "era of limits" somehow forgotthis labyrinth of bureaucracy. President Carter's pro-posed 1981 budget asks for $142.7 billion for the Pen-tagon, an increase of three percent above inflation andprojects further increases over the next five years.Nearly two thirds of controllable federal funds will bespent by the military under this budget. Is militaryspending the uncontrollable, irreplaceable monstser itappears to be, destined to overpower every Presidentor Congress that attempts to tame it? Is it the tonic theeconomy needs, or can't afford to lose?The basis for this idea can be traced back to, 1941..Billions of dollars were spent by the U.S. in defeatingthe Germans and Japanese. When the war ended, theGreat Depression of the 1930's was no more. Militaryexpenditures provided dramatic evidence that it was acure for an ailing economy.Military Spending Decreases JobsIn W.W.II most of the weapons production waslabor intensive, requiring many workers. Today'sweapons production, however, is capital intensive -that is, it requires large amounts of raw materials, ex-pensive laboratories and technology, and employsfewer people. Consequently, massive military spendingcontributes to unemployment rather than helping tosolve the problem.This conclusion has been supported by several recentstudies. According to the Center for Defense Informa-tion, military employment per billion dollars hasshrunk from over 100,000 in 1964 to just 45,000 in1977. The same money could have created 53,000 jobsin civilian production, 71,000 jobs in anti-recessive aidto state and local governments, or 98,000 jobs in publicservice employment.Another study by Marion Anderson of the PublicInterest Research Group in Michigan (PIRGIM) foundthat one billion dollars spent on military industrycreates 14,000 fewer jobs than if spent in civilian in-dustry. Similarly, one billion dollars spent for militarypersonnel creates 30,000 fewer jobs than one billiondollars spent by state and local governments to hireteachers, police and firemen.In terms of Pentagon contracts returning tax dollarsto states, New York State loses more than any otherstate on military spending. An analysis published bythe Coalition for a New Foreign and Military Policyshows that a ten billion dollar increase in military spen-ding would yield a net loss of 52,000 jobs in New York;22,000 jobs in New York City alone. Locally, therewould be a loss of 2,500 jobs from the Buffalo area.The shrinking employment of the Pentagon isespecially evident in California where despite increas-ing military spending, total aerospace employment hasdecreased from a 1968 high of 750,000 to approximate-ly 440,000 in 1979. Locally, Bell Aerospace in Wheat-field, New York, has lost several thousand workersover the last decade. Moreover, even when militarycontracts are plentiful, employment in the aerospaceindustry is irregular and uncertain. When contracts arefinished, layoffs inevitably follow.Other Inflationary EffectsBesides exacerbating the unemployment problem,weapons spending has several inflationary effects onthe economy. First, massive Pentagon spending pumpsthe economy full of money but does not produce a pro-duct that consumers can buy. As a result, there is moremoney chasing fewer goods. And that's inflationary.Available products ihcrease in cost and the buyingpower of money decreases.A second inflationary factor is the way in which thegovernment buys its weapons. Initially, there is little, ifany, competitive bidding for contracts. When there iscompetition, it generally concerns design differencesrather than price. Moreover, most contracts in themilitary context are what is known as cost-plus con-tracts - they promise to cover the contractor's price,plus guarantee a predetermined, profit. Even regularcontracts turn out to be cost-plus: if a contractor seesthat it cannot fulfill the contract at the agreed price, bysuggesting the possibility of going out of business, itcan easily convince the government to agree to a higher.price. In some cases, this process has occurred severaltimes. Thus, there is no incentive to minimize costs.This has a severe inflationary effect beyond the factthat these weapons systems end up costing far morethan tfiey are worth. Since there is no incentive tominimize costs, military contractors can afford to payvery high prices for anything they need, from materialsto scientists and engineers. This forces the civilian sec-tor's costs up, since, in order to attract creative talentand procure materials, civilian industry must competewith the military industry.A third, related factor is the draining of engineersand scientists from civilian industry. According to Dr.Lloyd J. Dumas, a Columbia University economist,In The Public Interest page elevenApril 1980Military Overspending .between one-third and one-half of American engineersand scientists are employed in military or military-related work. This has seriously reduced the rate ofdevelopment in civilian technology, resulting in a pro-ductivity growth rate of about 1.6 percent since 1964,the lowest of any industrial nation in the world. Sinceproductivity growth is no longer able to offset risingcosts, manufacturers are forced to raise prices, causingfurther inflation.These inflationary effects add up to create higherunemployment. As American prices rise, Americangoods are frequently priced out of both foreign anddomestic markets, resulting in declines in business andjobs.Previous CommitmentsRemove Much of BudgetFrom Current ControlSocial Security ,$142.1Medicalcare$53.9Retred Federal employees$38.9Public assistance $20.2Otherentitlements for individuals$43.4Cn t lir ti $101.4'mL-IA Military$40.6OverkillNonmilitary" - $60.8(interest'-- $54.8)(includes general revenue stiarng)I I I f I i$91.8NonmilitaryS58.5Uncontrollable outlays are those thatthe Govemment is committed to spendunTess extraordinary legislation isenacted. Controllable outlays arethose that can be changed at the d s.cretion of the President or CongressThNe . yorknTVim/Jan, 2. 151Not only is massive military spending bad for theeconomy, it is also unnecessary. Several formerpresidential advisors, including former DefenseSecretary Robert McNamara, have testified to the"overkill" capacity of the U.S. nuclear arsenai.I.F. Stone pointed out in 1972 that only 2270 of themilitary budget was used for defense. This figure issomewhat generous as it includes the unnecessaryoverkill referred to by McNamara. The rest of the 75.1billion dollars-was spent on the Vietnam War (20%70)and the U.S. overseas military empire for the purposeIof "containing communism" (58%). This includes thestring of military bases the U.S. maintains around theworld from the Pacific to Western Europe and themilitary aid sent to non-Communist regimes in an ef-fort to insure their continued allegiance.Professor Seymour Melman of Columbia Universityhas calculated that the U.S. could provide nationaldefense for about ten billion dollars - 7% of Carter'sproposed 1981 military budget.When confronted with proposals to cut militaryspending, the Pentagon and its supporters invariablyrespond with horrifying tales of the "Soviet threat." Ifwe don't constantly upgrade and expand our' weaponssystems, the Russians will surely attack. We must notjeopardize our national security.The Pentagon has successfully used this tactic fordecades. Yet, after more than thirty years of anescalating arms race, we are less secure than when itbegan. Since the U.S. and the Soviet Union each hasenough firepower to destroy every person on earth, it isconceivable that a war between the two couldobliterate all life on the planet. This was not a possibili-ty before the development of atomic weapons.Moreover, the weapons being developed anddeployed today are not defensive in nature. Suchweapons as the cruise missile, the MX missile and theMARV (maneuverable reentry vehicle) systems are ex-tremely accurate (within 100 feet of their intendedtarget). Such accuracy is not necessary for attackingcivilian centers but is required for a successful attackagainst "hard" targets like missile silos. But whywould the U.S. attack a Soviet missile silo unless therewas a missile in it? And why would missiles still be intheir silos unless the Soviets had not yet attacked? Theidea that the Soviets might fire only some of theirmissiles, giving these very accurate missiles a defensivefunction is untenable. The main strategy used by bothnations has been Mutually Assured Destruction(MAD). By maintaining an overwhelming retaliatorycapability and being ever ready to completely destroyits adversary, each side make a first strike by the otheran exercise in suicide. The Russians know that anynuclear attack would invite the complete destruction oftheir country, including any missiles left in their silos.There is therefore no incentive-for the Soviets to showrestraint in an attack, and if their missiles were still insilos it would be virtually certain that they had not at-tacked. Hence, these weapons must be intended for apreemptive first strike and not for deterrence, as thePentagon claims.This conclusion was substantiated in 1977 by thenDefense Secretary Donald Rumsfeld: "The most am-bitious strategy dictates a first-strike capability againstIn The Public InterestIpage twelve April 1980Military Overspending...the enemy's offensive forces which seeks to destroy asmuch of his megatonnage as possible before it can beCbrought into play. An enemy's residual retaliation,assumed to be directed against urban-industrialtargets, would be blunted still further by a combinationof active and passive defenses, 'including ASW (anti-submarine warfare), ABM's (anti-ballistic missiles),anti-bomber defense, civil defense, stockpiles of foodand other essentials, and even the dispersal andhardening of essential industry."Not only does this type of thinking encourage theidea that nuclear war is a viable and winnable alter-native, it also makes the Russians nervous. In a crisis,the Soviets might more readily fire their missiles sothey wouldn't be destroyed in their silos. Adding aheightened readiness to launch an attack to the factthat several false warnings of attack have already oc-curred increases the possibility that we could all bedestroyed on the basis of a human error.Converting to'a Non-Military EconomyAlbert Einstein once said "the splitting of the atomhas changed everything save our modes of thinking."One mode of thinking that needs changing is our con-cep'tion of national strength. By the present measure ofstrength (i.e. military- power) the United States ranksnumber one. But in 1979 we were eighteenth in doctor-patient ratio, thirteenth in infant mortality and seventhin life expectancy. We need to realize that nationalstrength and security are dependent upon a healthysociety and economy rather than numbers of weapons.Of course, any unplanned reduction in militaryspending would result in widespread layoffs amongmilitary workers. A proposal which would avoid thisproblem is Planned Economic Conversion (PEC).PEC basically means planning ahead for a morepeaceful economy, avoiding mass layoffs and creatingnew. job opportunities.Such a proposal has been introduced in Congress bySenators George McGovern and Charles Mathias andRepresentative Ted Weiss. Among its provisions:-pay salaries and benefits to displaced workers forup to two years;-provide training and retraining for workers whoneed it;-mandate alternative use committees at eachdefense facility, with labor, management and com-munity representation;-require the preparation of alternative plans foreach facility to assure the development of future jobopenings before plant closings;-transfer government capital from military tocivilian purposes;-finance conversion planning through an assess-ment on contractor revenue.These proposals are not mere idle fantasy. The Pen-tagon's own figures show that it's been done before. In1933 a munitions plant in Muscle Shoals, Alabama wasconverted by the Tennessee Valley Authority into whathas become one of the major fertilizer research anddevelopment facilities in the country.Between 1961 and 1977, 75 communities affected bymilitary cutbacks received federal aid. Altogether,78,000 civilian jobs were created to replace 68,000military jobs.In the early 1970's, the AVCO engine plant inCharleston, South Carolina switched from producingArmy helicopters to building truck engines. It nowemploys more people than it did before the conversion.Military installations have also been converted intoeducational facilities. Forty-eight former bases nowhouse seven four year colleges, 26 technical schools, sixvocational schools and a variety of other educationalinstitutions. Student enrollment totals 62,000.Many other alternatives have been suggested. One ofthe most comprehensive plans was proposed by theCombine Shop Stewards Committee at LucasAerospace, the largest aerospace firm "in Europe, inBurnley, Lancashire, England. The Committee cameup with 150 civilian products that Lucas could producewith its present equipment and personnel inqtead ofweapons. They include such things as much neededkidney dialysis machines, alternate energy technologyand a low technology combined road-rail transporta-tion system which has already attracted the interest ofTanzania and China.Such alternatives may be possible locally at BellAerospace. However, in recent years when Bell'sMinuteman III contract has been endangered, localcongressmen have consistently ignored suchpossibilities. Instead, they have concentrated theirenergies on retaining inflationary, capital-intensivemilitary contracts. The result has been more layoffsand further decline at Bell. One promising note,however, is Representative John LaFalce's recent sup-port for conversion legislation.Between one-third and one-half of all the scientistsand engineers in the U.S. are employed in military ormilitary-related work. Perhaps, if all this creativetalent were rechannelled into socially useful pursuits,we would be able to make real progress in protectingand enhancing life instead, of further developing ourcapability for mass destruction.This article appeared in somewhat altered form in The Spectrum,31 July 1979. Reprinted by permission.In The Public InterestApril /980 page thirteen

Military Overspending: What Is It Doing to Our Economy?

https://digitalcommons.law.buffalo.edu/cgi/viewcontent.cgi?article=1066&context=itpi

Military Overspending: What Is It Doing to Our Economy?

Abstract

Similar works

Full text

Available Versions

Digital Commons @ University at Buffalo School of Law