Gold Diggers of 1965

Here are two very different books on what is surely one of the most important and frightening subjects in the world—the American “defense” economy. One is mild-mannered, one passionate; one anecdotal, one analytic; one essentially written from the viewpoint of the establishment, the other from that of the disestablishment. Yet for all their different emphases, the books complement and confirm each other to a large degree. For both are concerned with the same phenomenon—the interpenetration of the military, political, and economic interests of the nation—and both report the same conclusion—that the activities of this military-political-industrial complex make it difficult not to classify America among the more morally corrupt, politically irresponsible, and socially callous nations on earth. These are my words, however, not theirs, but they point up a final note of similarity between both diagnoses. Neither quite faces squarely the implication of its own argument—a fact that does not impair the very great usefulness of these works in other respects.

Written in a flat newspaper style, Mr. Duscha’s work largely consists of a series of “stories” that he learned about as a political and economic reporter for the Washington Post. The stories are not new—at one time or another they have all been in the papers—but here they appear as a virtually unrelieved parade of mismanagement, moral turpitude, and cynicism, the effect of which is to call to mind—and then to dismiss as trivial in scale and importance—such gamy episodes in American history as the transcontinental railroad land deals or the depredations of the Harding Administration.

Item: In 1952 the Navy ordered a fast jet seaplane from the Glenn L. Martin Company. The design, dreamed up by Martin and accepted by the Navy, was not exactly free of bugs. To begin with, the Martin engineers had made mistakes in translating wing tunnel data into actual configurations. Perhaps as a result of this, the wings were too heavy, and spray from the fuselage kept putting out the engines upon takeoff and landing. This was just as well since the engines were placed so close to the fuselage that they scorched the skin of the plane, raising it three times above its maximum permissible temperature. Two of these incredible airplanes were actually built. Both crashed. The entire program, finally discontinued in 1959, cost $445 million. The Martin Company was not penalized for its performance, or lack of it.

Item: In 1956 the Navy sold Congress on a plan to put up $20 million to build a huge moveable grid, 600 feet in diameter, in the hills of West Virginia. This “Big Dish” was to have been the largest moveable object man ever made, intended, or so the public was told, to be a great adventure in astronomy. Its actual purpose was to eavesdrop on Russian radio communication by catching the echoes off the moon. Within a year cost estimates were up to $52 million, then to $79 million. Meanwhile orders were placed for enormous steel structures, like 550 ton bearings—unfortunately before computers made it clear that the specified shapes would not bear the load. Estimates went up to $200 million, finally to $300 million. The whole project was obsolete as soon as the first satellite went up. It was abandoned, with $64 million already spent. There was no investigation.

Item: From 1950 to 1962 the Western Electric Company, a wholly owned subsidiary of A.T. & T., sold the Army 1.5 billion-dollars-worth of Nike missile systems on which it made the patriotically small profit of but 7.6 per cent or $112 million. Western Electric did not, however, manufacture the entire $1.5 billion worth of equipment on which this profit percentage was based. It made only about a quarter of the total—on which its profit ran to about 31 per cent. Meanwhile the same cosy game was played by its subcontractors. Douglas Aircraft Company, for instance, showed only 7.6 per cent of profit on its Nike work, including the work it farmed out. Figured on the work actually done by Douglas, its profit came to 44 per cent. Officials of all companies concerned solemnly declared that this was perfectly proper and normal procedure.

Item: In order to help the government stockpile nickel, the M.A. Hanna Company (Chairman of the Board, George M. Humphrey) signed a contract with the government in 1953. Among other things it enabled Hanna to buy a $22-million government-built plant for $1.7 million. Over the next several years Hanna sold nickel to the government, and watched approvingly as the government sold nickel to industry. Participating in these decisions was the Secretary of the Treasury (George M. Humphrey). Hanna’s profits were 57 per cent on sales, 457 per cent on capital. Humphrey’s percentage of ownership of Hanna was 14. The Secretary of the Treasury denied that these were unusually high profits or that politics had in any way figured in Hanna’s dealing with the government.

Unfortunately these examples are typical of Mr. Duscha’s parade of horrors. He introduces us to the cast of characters which makes waste on so grotesque a scale possible: the Congressional pork barreler, the Pentagon empire builder, and the industrial profitmaker (often accompanied by a favorite union leader). From time to time small figures like Senator McGovern of South Dakota, or Nelson of Wisconsin, or Clark of Pennsylvania appear in this book, protesting that Congress must reassert its authority over the military, or simply that this madness must stop. But nobody listens.

Mr. Duscha reports on this spectacle of timidity, greed, and blundering with brisk efficiency. However, what he gives us is essentially a newspaperman’s account and not a radical critic’s dissention. We are left with an impression of tremendous goings-on, but with little understanding of the subterranean forces at work. More serious still is his treatment of disarmament, of which he is a strong advocate. Perhaps it is in the nature of the reportorial approach to emphasize “examples” and to shy away from more penetrative thought. At any rate, Mr. Duscha gives us an impression of disarmament that is thoroughly misleading. To begin with, he tells us of the success stories of a few communities that have managed to plan their way out of military cutbacks, such as Presque Isle, Maine, or Wichita, Kansas. But these are only a few centers in a still defense-buttressed economy. The problem of reconversion is an entirely different matter when it is spread over the entire nation. To relocate industry and Labor en masse against a tide of ebbing defense expenditures, will take intervention on a huge scale and the expenditure of billions of dollars for new civic purposes. This in turn would require nothing less than a major political-economic realignment, and the effective rout of the alliance of interests whose strength, sticking power, and capacity for propaganda Mr. Duscha has so well described. Mr. Duscha’s few bland remarks about the need for planning, the importance of having the President assert his influence, etc., do not begin to come to grips with the problem. In fact they constitute an evasion of it, an unwillingness to follow the line of analysis down to its end. This is the main flaw in what is otherwise a commendable and enlightening book.

Seymour Melman is certainly not a member of the establishment. Some years ago, from his post as Professor of Industrial Engineering at Columbia University, Melman took on the whole establishment by pointing out that the government was maintaining so enormous a supply of nuclear explosives that it made sense only on the theory that each Russian had to be killed several times over to make certain he was dead. It cannot be said that he wounded the establishment mortally with this examination of “overkill” but he did provoke a full volley of attacks, indicating that he had hit in a vulnerable spot.

In Our Depleted Society the problem of “overkill” is the starting point for an analysis that goes far beyond these now familiar—although I am glad to see, reiterated—figures. Professor Melman is in fact interested in examining the impact of our material and social life of the unholy alliance of the military, industry and politics, the intimate workings of which are the concern of Duscha’s book. Briefly, Melman holds that our insistence on amassing excessive armaments has resulted in a drain on American capital and manpower, with the result that our economic and social plant is being depleted.

There is, unquestionably, something in what Melman says. Military research has crowded the laboratories of the aero-space companies with young physicists and engineers, diverting their energies from peace-time pursuits. It has fostered the growth of huge agencies, institutions, and enterprises whose sole rationale is to ensure the death of someone who, should war ever begin in earnest, would already be dead. Most serious and depleting of all, it has generated a climate of mild insanity, of deliberate misinformation, of barely controlled bellicosity and primitive xenophobia which go a long way, in Professor Melman’s opinion and in mine, in accounting for the anarchic mood of the younger generation.

Melman is excellent when he recounts the wastes of the Cold War, and points out the overlooked failures of the American material civilization (we rank twelfth in infant mortality; we have 22 million citizens who are functionally illiterate). But he is a good deal less than persuasive, however, when he relates all these failures to the drain of the military sector. It is one thing to show that the military machine gobbles up talent and tilts the tables of manpower allocation in its own favor; it is quite another to show that this talent and manpower, were it not absorbed by the military, would find the strategic uses that Melman suggests—or for that matter, any use whatever. The suggestion that we would grow faster, were the weight of a military establishment lightened, is not convincing unless it could be shown that there would be a growth of demand from some source equivalent to that given up by the armed forces. And when I read, in Professor Melman’s table (p. 308, 309) of the social improvements possible at various lightened levels of military expenditure, that the national debt could be reduced, I know that we are in for trouble. Economic irrationality is not much of an improvement upon the military psychosis.

To put it bluntly, Melman makes too many large claims and is often carried away by the momentum of his argument. I cannot attribute the goldreserve problem and the decline in the level of public health and the backwardness of the railroads simply to the existence of American capacity for “overkill.”

But this is the defect of Melman’s virtue, his passionate engagement with the forces of evil. More serious is a weakness that pervades the conclusion of the book. There Melman lays out in greater detail and with more thought and imagination than I have seen anywhere else the possibilities for redeploying the energies of an economy released from the nightmare of military dependence. Some of his ideas contain useful suggestions for rejuvenating tired industries; most however require a substantial enlargement of the public sector. Once we get down to cases, Melman puts aside the foolishness about paying back the debt. His “productive society in motion” has $6 billion a year in housing, $11 billion in education, $4 to $5 billion in water resources, plus railroad development (public), recreation, etc., etc. Excellent. Once again, however, we are faced with the same problem as that from which Mr. Duscha retreats. How is this major redirection of social and political and economic energies to take place, particularly in the face of the attitudes on which the military-industrial complex has been erected? If the needed attitudes of compassion, intelligence, and independence of thought already existed, the Cold War would not have lasted this long, J. Edgar Hoover would not be a national hero, Goldwater would not have got 25 million votes, and the American Legion would have disbanded voluntarily many years back. Melman’s is a much more interesting book than Duscha’s because it is analytical and bold, but it also fails to carry the conviction of its final message of hope. Perhaps I owe it to these writers to suggest my own view of these matters. First, it seems important to stress that the “defense” economy is not just ruthlessly imposed on the nation by the military, political, and industrial forces. It is also supported by the great majority of citizens who have been innoculated with the disease of suspicion and who have never had explained to them what a peacetime economy with a large public sector might accomplish.

Second, it is necessary to stress that realistic considerations of national security, in a world of intense nationalism, mutually distrustful ideologies, and jealously safeguarded nuclear striking forces, imply that the lowest level of armaments that can be hoped for will still necessitate expenditures of, say, one-quarter of the present military budget.

Third, the trend of foreign affairs is hardly apt to promote disarmament on a major scale. Short of a Russo-Chinese war to the death (with no dying shots aimed at us), I cannot see any impending dramatic event that would radically reduce our defense psychosis. On the contrary, the likelihood is a continued slow gain in the prestige and power of the communist world, as the Russian economy begins to yield more comforts and as the instabilities of the underdeveloped world play into the hands of local radical forces, communist or not. Thus the probable drift of international events is against a loosening of the defense complex.

For all these reasons I think we shall probably be saddled with the defense economy and its exactions for a very long time, indeed for as far ahead as one can risk a prediction. Nevertheless, there remains a possibility which, however slim, must not be overlooked. It is the possibility of the slow elevation of public opinion, above the miasma of unreasoning fear and discouraged apathy where it now lies. This will require above all the replacement of “defense”-minded politicians by “peace”-minded politicians: by this I mean not only a change in emphasis in international views, but in the willingness to utilize the enormous public capacities of the nation for civil purposes. It would be fatuous to declare that such a change can be accomplished quickly, or, indeed, that it can be accomplished at all. Yet in the long run the power of enlightened opinion is not to be brushed lightly aside. It is in the cause of informing the advance guard of this opinion that books like Duscha’s and Melman’s, for all their flaws, perform an invaluable service.