During World War II, government fiat turned thousands of peacetime manufacturers into arms producers for the war effort. Factories that once made cars and home appliances were retooled to turn out weapons. Now, in the present recession, market forces appear to be doing effectively the same thing, threatening to throw even more of the weight of American industry (such as it remains) into the war business.
Last April, NPR had a report about how auto parts suppliers are turning to other industries. As the U.S. car market dries up, and with the "war on terror" going full steam ahead, the choice is easy for producers eager to maintain their profits and their workers. The reporter talked to Greg Rothermel, business development director of a supplier in Plymouth, Michigan:
Rothermel says the aerospace-defense industry has a big backlog of orders worth about $200 billion annually. TNT's business was about 25 percent aerospace-defense last year; he projects it will be up to 50 percent by next year. Revenues have grown from $10 million in 2003 to $12 million as of last year, since TNT began diversifying.
It's an offer more and more of these struggling outfits are unable to refuse. The car business is getting lost to foreign competition, but Pentagon policy ensures that it has to spend its billions at home. This amounts to a form of discretionary protectionism for a dangerous industry masquerading as patriotism.
Wouldn't it make more sense if, following President (and General) Eisenhower's warning about the military-industrial complex, our policy were to limit the commitment of civilian industry to the military? The more wages (and executive bonuses) come to hinge on the war business, the more war will seem like reasonable economic policy, and the less reluctance business leaders will have to wage it.
Yesterday, the New York Times reported that the problem is growing. According to a study by the Congressional Research Service, "Conventional Arms Transfers to Developing Nations," the United States market-share in the international arms trade -- already the world's largest of course -- is growing considerably. Our military-industrial complex therefore stands to benefit not only from wars we ourselves wage, but also those of our client states. This is nothing new; U.S. industry has long profited from the conflicts of others. But, in today's desperate economic times, such practices can proudly display themselves as "recession-proof" devices of recovery. And it certainly seems safer to depend on other people's wars than on our own.
These trends need to be taken for the threat to national and international stability that they are. In response, we must go out of our way to foster alternatives. This means sensibly considerable public investment in other necessary industries (and divestment from defense) to the point that they can compete with Pentagon contracts. The target industries should be pretty obvious, considering the crises that we presently face: health care, environmentally sustainable development, prison reform, social services, and international humanitarian aid. These are public responsibilities that have been tragically abandoned in the name of cutting spending, even while we continue to invest billions and billions into the future's bloodbaths.