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View Full Version : Issue: Economic: Government intervention in the economy & military-industrial complex




STA654
07-07-2007, 08:46 PM
What are your opinions about the necessity (existent or not) of government spending tax-payer dollars on the military to create jobs and stimulate the economy?


Q:Just going back to Eisenhower, occasionally you see his farewell address quoted, where he said, "We must guard against the acquisition of unwarranted influence...by the military-industrial complex." Forty-plus years have passed since that warning by Eisenhower. The U.S. military has increased exponentially. It now has what Chalmers Johnson calls an empire of bases. What are your views on the military-industrial complex?

A: I think Eisenhower’s warning was appropriate, but either he didn’t understand or else commentators don’t understand, but the military-industrial complex, as he called it, is actually the core of the modern economy. It’s not specifically military. The reason we have computers, the Internet, telecommunications, lasers, satellites, an aeronautical industry, tourism, run down the list, is because of a technique to ensure that the U.S. is not a free-enterprise economy. Some are more extreme than others in this respect.

So the Reaganites were extreme in opposition to free enterprise, exactly contrary to what’s being said. They virtually doubled import restrictions, more than all American presidents combined in the postwar era. They poured government money into the economy in an effort to carry out the project that was then called "reindustrializing America." You have to recall that in the early 1980s there was great fear that U.S. industry was being undermined by much more efficient Japanese production. American corporate managers had failed to adopt the modern techniques, such as lean manufacturing, that the Japanese had perfected. And they were, in fact, undermining American industry. Well, you can’t allow that. So the Reaganites poured government money into it to reindustrialize America.

And that’s the way the economy works. The core of it is the state sector. Right where we’re sitting is a good example. What’s MIT? When Eisenhower was making his speech, MIT was working hard, just like Harvard, with government research funds to reduce computers from massive creatures that filled all of these office spaces to something small enough so you could sell it to a company as a mainframe. When they got to that point, right about the time of Eisenhower’s speech, the head of one of the big projects pulled out and formed the first mainframe producer. Meanwhile, IBM was in there learning, on public funds, how to move from punch cards to computers. By the early 1960s, they were able to produce more advanced computers of their own, but not for the public. There is no consumer choice in this. They were doing it for the National Security Agency and other government agencies. In fact, it was years, it was literally decades, before private tyrannies, what’s called free enterprise, were able to take the results of public funding and market them. When Alan Greenspan talks about it, it’s the marvels of entrepreneurial initiative and consumer choice, which was approximately zero throughout the costly and risky period of development.

The same is true of the Internet. It was in the public system for thirty years. We’re supposed to be excited about trade and how wonderful it is. Maybe it is or maybe it isn’t, but trade is based on containers, which were developed at public cost in the U.S. Navy. Dave Noble did a very important piece of work on an important part of the economy, basically, computer-controlled machine tools, which were designed–not as a technological imperative but for doctrinal reasons, as he shows–as a way of deskilling machinists and placing more authority in the hands of managers. The technology didn’t have to be used that way. It could have been used the opposite way, as he points out. But it was used that way, and it was developed within the military, where just about everything innovative was developed in the high tech economy, under military cover.

This has little to do with military industry. In fact, it’s kind of interesting to look at the records of DARPA, the advanced research agency of the Pentagon (previously ARPA). In, I think it was 1971, in the context of a lot of antiwar pressure, Mike Mansfield introduced legislation called the Mansfield Amendment, which required that military funding by the Congress be used for military purposes. You take a look at the ARPA and DARPA reports before and after. They’re interesting. I did it once. Before that, they simply reported what they were doing, namely, creating the economy of the future. After that, the reports are divided sort of into two parts. The first part talks about possible military applications, which mostly are imaginary, and the second part is like the old reports: Here’s what we’re doing. It’s the economy of the future.

It’s going on this minute. MIT has projects right now on efforts to try to control the motions of animals by computers, and maybe even to pick up signals from human brains and translate them into commands to control what other organisms do. This is presented–and maybe people believe it–as the great new frontier in fighting wars. You will be able to get a commander to tell a pilot, just by thinking, "Anything that flies on anything that moves," or something like that. That’s pretty unlikely. But the point is, it is contributing directly to what may be the next advanced stage of technology and profits. If you walk around MIT today, around Kendall Square, you see small biotech companies, spin-offs of government-sponsored research in what will be the cutting edge of the economy, namely, biology-based industries. If you went around forty years ago (then to the new Route 128), you would have seen small electronics firms, spin-offs of what was then the cutting edge of the economy, electronics, under military cover.

So Eisenhower’s military-industrial complex is not quite what is generally interpreted. In part, yes, it’s military. But a main function of the military, or the National Institutes of Health, or the rest of the federal system, is to provide some device to socialize costs, get the public to pay the costs, to take the risks. Ultimately, if anything comes out, you put it into private pockets. And, again, this has to be done in a way that protects state power and private power from the domestic enemy. You have to say it’s to defend ourselves against Grenada or Russia or Guatemala or somebody. If you get people frightened enough, they won’t notice that their taxes are going into creating the profits of IBM and Merck twenty years from now. Why not tell them the truth? Because then they might not make these decisions.

You might argue that these were good decisions, like it’s nice to have computers. But that’s not really the point. The point is, who should make those decisions? Suppose you would ask people in the 1950s. Suppose there was some pretense among the educated classes or the power system, some belief that we ought to have something like a democracy. So then you would ask people, you would try to get an informed public to decide, do you want computers twenty-five years from now, or do you want health services now and schools today and jobs today and a livable environment for your children? What’s your choice?

I can make my guesses. But the point is that anybody with power was afraid of that choice. They’re deathly afraid of democracy, and therefore you can’t make the choice, and you must manipulate attitudes in the way Bernays described. You must pretend that we’re under threat of attack by Guatemala or Nicaragua if they get a MiG for self-defense against U.S. attack in order to frighten the public into accepting what’s actually happening. That’s the real military-industrial complex.
http://www.chomsky.info/interviews/200408--.htm (link)

Oddball
07-07-2007, 09:19 PM
The military-industrial complex, as a "stimulant" to the economy, is no more necessary than are food stamps.

Gee
07-07-2007, 09:26 PM
What are your opinions about the necessity (existent or not) of government spending tax-payer dollars on the military to create jobs and stimulate the economy?
Excessive "defense" spending is as unnecessary and harmful as its ever been. Read Bastiat's What is Seen and What is Not Seen:
http://www.econlib.org/library/Bastiat/basEss1.html

Yeah its old, but economists have understood the Broken Window Fallacy for ages. To argue that defense spending allowed for the creation of the internet and computers is completely false. The packet-switched networks were in development outside of DARPA, and computers have many uses outside of defense. What government spending does is allow those technologies to exist before they are really economical. In other words, politicians care so little about taxpayer money they'll spend it on technologies which are not anywhere near mature. So some people might mistake this for the government actually innovating.