Defence At A Price

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THE NUCLEAR ARMS RACE[image, unknown] US defence spending and the economy

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Defence at a price
There's nothing like war, say some economists, to end a depression; and nothing like preparation for war to prevent recession. A delusion, according to Mark Gerzon, that is being fast shattered in the United States. Rea-an's promises of increased defence spending threaten to trigger a sharp twist in the downward spiralling economy and bring an unlikely coalition of pacifists and traditionally conservative groups who are simply not prepared for defence at any price.

War and peace. Jimmy Carter's aides called it `the Tolstoy issue'. The President hammered at it endlessly. The difference between the candidates, he said, were ,stark': trigger-happy Ronald Reagan would lead America into war: he would be prudent and safeguard the peace.

The economy. The `pocketbook issues' President-elect Ronald Reagan blamed the Carter Administration for rising unemployment and record-setting inflation. The free-spending Democrats would lead us into a depression, Reagan warned; the thrifty Republicans would stop inflation and `put America back to work'.

Military burden and national productivity 1960-1973 But never once did either candidate mention the link between the two. The only choice the Presidential nominees gave the American electorate was between spending a little more on the arms race - or a lot more.

They continued to assume that military arms equals national security, and that arms spending equals a strong economy. In fact, both assumptions are wrong.

Among major industrial nations, the correlation is clear: the higher the military spending, the lower the growth in productivity. Any thoughtful debate about inflation and unemployment - the consequences of declining productivity - must address the connection between the pace of the arms race and the growth of the economy. Many business and labour leaders are concerned that the arteries of technological innovation are hardening and fear mounts that America will soon suffer an economic heart attack.

To understand these growing fears, we must take a closer look at the rules behind the arms lottery. As wise consumers, when we buy a car or a refrigerator, we do comparison shopping. We weigh alternatives. We owe it to ourselves to think just as carefully about what kind of security we want - and the price we are willing to pay.

Does arms spending, first of all, equal security? Not even military analysts think so. Just ask most national security experts, for example: `What is America's greatest vulnerability?' They will tell you: `Our dependence on foreign oil'. As our edginess about the otherwise minor conflagration between Iran and Iraq illustrates, we are prepared to go to war - and risk nuclear annihilation - to keep the Strait of Hormuz open for our oil. The fundamental cause of war would not be military, but economic. Would we be more secure if our tax dollars were spent on alternative energy sources than on battleships to patrol the Persian Gulf? Is not economic weakness just as dangerous as military?

Similarly, ask most experts on the Soviet Union: `What is the USSR's greatest vulnerability?' They will tell you: `The questionable loyalty of the Eastern European bloc'. From Poland to Bulgaria, Warsaw Pact nations have watched their neighbours in Western Europe grow fat and sleek while they continue to inhabit a consumer wasteland. As the Polish workers' strikes symbolize, they want to live better. If Soviet-style communism does not improve their standard of living, then they will look for some other style.

For both superpowers, then, security is not merely a military question. Long-term security depends on the overall health of society, not just on the size of weapons' arsenals. As evidenced by the crescendo of debate about `declining productivity', 'reindustralization', 'zero-sum society', or the more alarmist `Is America Still Number One?', we are worried about our economic health. Americans are trying to explain a very unpleasant economic fact: our rate of economic growth, which in the past supported the arms race and the consumer economy, has dropped and shows no signs of recovery.

Does arms spending strengthen the economy? Until recently, most Americans believed that the two went hand in hand. Military research and development (R&D), it was said, triggered technological advances that had a `spin-off effect' throughout the economy. And economically, government spending for arms allegedly acts as a stimulus to a sluggish economy, assuring us of continued and steady expansion. The guns-versus-butter debate was settled, in effect, by the compelling argument that spending for guns ultimately put more butter on the table anyway. We got advanced weapons systems plus more jobs in a high-growth economy. It was too good to be true: we could have our ICBM's and eat it too.

This perception of economic reality smothered all ideas for stopping the arms race. If the arms race is to decelerate, such notions must change. And they have. The American people are beginning to recognize that the economic pie is, in fact, finite. For at least three reasons, we are reluctantly acknowledging this new reality.

The environment has demonstrated the limits of its endurance before pollution destroys the biological basis of our industrial society.

• Energy resources are limited and must be used with prudence, and at higher cost.

• The developing world have indicated their unwillingness to provide raw materials without higher prices.

Thus environment, resources and geo-politics converge on one central truth: scarcity. If citizens in developed societies want to maintain their present level of material comfort, their societies must learn to make more out of less: to be more productive, more efficient, more innovative. The key, as any high technology company knows, is research and development. R&D becomes the most critical sector of modern society. And the most economically secure nations will be those have the largest resources for R&D.

In a highly competitive international market, nations which forfeit technological leadership in key growth industries will enjoy smaller pieces of a fixed economic pie. More than ever before, they will have to choose between vast and unproductive expenditures on military-related R&D or long-term, intensive investment on new technology for energy, communications, transportation, and so on. If a nation invests in its civilian economy, the rate of economic growth will remain healthy. If it invests too heavily in the military, it will be afflicted by a debilitating disease called stagflation. Its symptoms: unemployment and inflation.

Almost nothing creates fewer jobs per dollar than spending on new weapons systems. A billion dollars spent for weapons production employs far fewer people than a similar amount invested in waste disposal, public housing, education etc. That billion dollars of tax revenue, if spent for weapons, is a productivity dead-end. The money goes to building `products' which (we hope) will become obsolete without ever being used.

Since mid-century, over thirty long years, the Pentagon's budget has been larger than the net profits for all US corporations. A sum greater than the total capital fund available to corporations has been disbursed for objectives that yield relatively few jobs, intensify inflation, reduce productivity, undermine balance of trade and retard innovation.

But the influential and decision-making public is soon likely to recognize the absolute necessity of devising a minimal deterrent rather than, as now, deterrence at any cost.

That such a coalition would be different than its predecessors is illustrated by the extraordinarily diverse constitutency that blocked the MX missile in Nebraska and is organizing to oppose it in Nevada and Utah. It embraces not only environmentalists and anti-war activists,who are few in these traditionally conservative states, but ranchers, Indians, recreationists, real-estate developers, tourism entrepreneurs and other small businessmen. They have united because they recognized thatthe MXwould tear apart the fabric of life. Although they want `security' they are practical men and women. They want it - but not at such a ridiculous price!

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Regan to the rescue, guns blazing. Photo: Camera Press

In a consumer society the arms race becomes a consumer choice. For sacrificing more than most Americans, what would Nevadans and Utahans get in return? They would be assured that, in case of nuclear war, their chances of immediate annihilation were the highest in North America. To incapacitate the MX the enemy would have to obliterate the state in which it was built. Cost, after all, is relative. When it becomes absurdly out of proportion to value, even conservative citizens rebel.

If this new anti-arms consensus emerges, it will be based on a fundamentally middle-class, conservative concern with material well-being and economic security. Like the tax revolt before it, which shook the foundations of state and federal government, the movement to cut military spending sharply could become politically irresistible.

What if Americans boycotted the arms race - if we stopped letting the war system get fat while we tightened our belts? In order to enjoy the enormous benefits of ending the arms race, we must develop new, alternative security systems.

Here are alternative forms of deterrence which, if implemented, would enable us to feel far safer than we do now. They are not panaceas; but they are steps in the right direction.

Minimal Deterrence. To deter attack, the superpowers do not need new MX systems or SS-20s, or any of the other `Star Wars' paraphernalia now on the drawing board. They need only SO-100 nuclear bombs capable of reaching their targets. Such a deterrent is sufficiently destructive to stop anyone but a madman from starting a nuclear war.

Defensive Deterrence. To defend itself, a nation needs only defensive weapons. This may sound obvious, but it is not. Our `Department of Defense' spends billions of dollars on aggressive weapons. They are following the old Roman adage: `The best defence is attack'. But to the adversary offensive weapons appear offensive, period. A defense budget which stressed defensive weaponry would stop inciting the other side. Instead of placing `ceilings' on the number of weapons, as do the SALT treaties, we should formulate treaties which permit investment in hardware to withstand attack but prohibit developing systems to launch attack. The result: more shields and fewer swords.

International Deterrence. As long as the only military actors on the world's stage wear national uniforms, any international conflict can escalate into global war. Every actor is presumed to have nationalistic motives for entering the fray. If Iraq and Iran are at war, who has the moral authority to intercede? Only an international force - comprised of soldiers from many countries and under the direction of an international body such as the United Nations - can perform the role of peace-keeper.

Economic Deterrence. There are a variety of ways of ensuring that `war does not pay'. Financing peace initiatives, for example, could come from a war tax. A percentage of every nation's military budget would be collected to support international peacekeeping forces. Similarly, an `arms sales tax' could be levied on all overseas arms sales with both the buyer and seller required to pay a fee into the peace fund. Nations which committed agression could be penalized ininternational trade and assistance. International agencies, such as the World Bank and the International Monetary Fund, could refuse as a matter of policy to fund projects in aggressor nations.

Moral Deterrence. The power of moral outrage on the one hand and moral authority on the other is greater than any weapon. From the overthrow of the Shah in Iran and Somoza in Nicaragua to the movements led by Gandhi in India and by Martin Luther King in the United States and by Catholic activists in Latin America and by human rights advocates in the Soviet Union - throughout the world the power of morality must be reckoned with.

Behind each of these alternative security systems stands a body of scholarship and research which explains in detail how these strategies have worked in limited ways in the past and how they could work globally in the future. If these systems seem imperfect or even dangerous, try a simple test. Compare them to living forever under the greater threat of nuclear annihilation.

Mark Gerzon is author of `The Whole World is Watching' and former Managing Editor of The World Paper

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