mjk@tty3b.UUCP (12/06/83)
T.C. Wheeler should have studied beyond Economics 101. That's when you learn that all the simple theories don't usually work. His basic claim (although it took him some 54 lines to illuminate it) is that defense spending is good for average people because the money trickles down to them from spending by the defense contractors. There's an element of truth there: money doesn't just disappear. But what we're really playing here is somewhat of a zero-sum game, as illustrated by the Federal budget fights over the past few years. How much for defense and how much for other things is the real question. The proper analysis, then, is a comparative one: given X dollars, what is the effect of spending it on, say, an MX missile versus a new hospital, or mass transit. This analysis highlights the wastefulness of defense spending. Marion Anderson, of Employment Research Associates in Ann Arbor, Michigan, has done a lot of work in the area of employment effects of government spending. She shows that defense- related industries produce the fewest number of jobs per dollar of spending. That's fairly intuitive: most defense firms are high-technology, and thus capital-intensive, not labor-intensive. She has identified the net loosers and winners from defense spending by industry, and calculated the effects of shifting the spending to other areas (e.g. education). I don't have the details here right now, but I'll post another article with them tomorrow. Of course, we should not base defense outlays entirely on their economic impact. We must spend as much as is needed for security. But what this analysis shows is that, since defense spending is so wasteful when compared with other forms of government programs, it should be kept to an absolute minimum. We have failed spectacularly at that, squandering hundreds and even thousands of billions of dollars on useless (and dangerous) weapons systems. The fact that our defense industry is privately owned and consistently profitable should give most people a clear reason why this is so. Interestingly, the International Association of Machinists, the largest trade union in the defense industry, agrees with Ms. Anderson's findings. Although obviously concerned with the impact on its members of cuts in defense spending, the IAM has a far-sighted enough view to realize that even more people would be employed if the money wasted on defense boondoggles could instead be spent on socially useful projects, such as building 185 mph trains and 80 mpg cars. It has funded a Conversion Project, which is studying ways of converting plants making war goods to plants manufacturing other products. Mike Kelly ..!ihnp4!tty3b!mjk
wetcw@pyuxa.UUCP (12/06/83)
If anyone would care to go back over the 54 lines, they would notice that I have nowhere advocated that DEFENSE spending was the panacea for economic growth. It does contribute in the areas of low-tech spending such as the maintenance of our standard weapons systems, the upkeep of our manpower requirements from fixing the roof on a barracks to the post laundry( all under private contract by small businesses). What I was getting at, perhaps not too clearly, was that spending, by the government, would best be served by building large ticket items which, when completed, can be scrapped and begun again. For instance, (this is only an example so don't get into a snit) build a battleship, in say Philadelphia. Now, to build a battleship, it requires a great many skills and jobs, from high-tech computer wizards to painters. For every person working on the job in Philly, there are perhaps 40 to 50 others who are producing the materials needed to supply those at the building site. Those supplies include everything from the paper the wizards are using to design the ship to the paint, brushes, and even the cans the paint comes in for the painters. This does not even include the enourmous amounts of steel and its fabrication. Once the ship is finished, it is sailed to Norfolk where it is dismantled and its parts reclaimed, and another ship started in Philly. In total, nearly a quarter of a million people would share in the cost of the ship. To build a hospital (not that I don't think that we need many more) is not an economically viable alternative as it has too much value as it stands. Further, once we have run out of places to build hospitals and schools, the economy goes belly up again. These are items that have a great deal of value and thus are protected and maintained so that a need for more of them is lessened. In a microcosmic view, thank God for rich people who buy a new car every year. By their doing this, they perhaps provide jobs for 2 or 3 people on the assembly line, not to mention the the support that those people require. This type of spending has been going on in this country for a long time. If anyone is interested in hearing about some of these projects that create something that is valuless, let me know. Finally, then I'll stop, my contention in the first place was that we should be dumping money into space projects. The argument that it is only a high-tech money drain is false as NASA contracts have proven over the years. The economey was never better than when NASA was in its heyday building rockets and buying goods from the marketplace. You have to see beyond the prime contractor to understand where money is being spent. The study that was mentioned that defense spending got less for the dollar never went beyond the prime contractor. The person who conducted the study, in all kelyhood, had a preconcieved notion as to how the study was going to end and made it do just that. I could go on for hours about this, with much better examples and arguments, however, some are already bored to tears. T (spread the wealth through jobs) C Wheeler
condict@csd1.UUCP (12/07/83)
Mr. "Spread the wealth" Wheeler attempts to reinforce his previous article on the economic benefits of nonsensical expenditure of materials and labor, using as a particularly nonsensical example the repeated construction and dismantling of a battleship. My fingers tremble and my nose itches at the very prospect of responding. Point one is that, although he spends most of the note defending the notion that this would involve a lot of parts and labor, and not just for the primary work, but in support of those workers as well (secondary spending), no one is contesting this notion. Yes, of course lots of jobs are required, -- created, if you wish -- in order to support this sad project. The argument lies in the benefit of these jobs, in whether they contribute to raising the average standard of living or some other measure of desirability. The implicit assumption he makes is that anything that "creates" jobs is good for the economy. While this may be true in the short run when there are not enough jobs to go around, it certainly cannot be viewed as anything more than a temporary fix of structural bugs in the way things are distributed. Look, once again, I implore you to use logic and common sense (which is in direct opposition to some popular economic theories): if the goal is for there to be lots of jobs, all we need to do is have the government hire everybody who is unemployed and pay them to flush their toilets after use. Think of how easy it is to create jobs! And surely these jobs are less expensive for the government to create and easier on the environment than the battleship jobs, because we don't have to import or go out and dig up any raw materials -- we manage to put all of our labor to "use" without wasting any of our precious non-renewable resources, such as scarce metals. To point out the silliness of this proposal another way, let us consider two versions of the US. In one, n people are employed directly or indirectly by the battleship loop, while in the other, which is otherwise identical, these n people are, say, repairing potholes in roads or building tractors. In which version is the US moving towards the higher standard of living. Can there be any question? (hint: all economic arguments are in- applicable here -- I said that everybody but the n people are doing exactly the same thing in both versions. It doesn't matter why.) You cannot use economic voo-doo to get something for nothing. The harder people work and the more efficiently they work at producing those goods and services, the possession or use of which is part of the definition of a high standard of living, the higher standard of living we will have. This statement is close to being a logical tautology. Making, then dissassembling a battleship does not produce any goods or services (only consumes them) so it certainly cannot produce anything that is needed to satisfy the definition of a high standard of living. It can only be used as a short term jolt whose purpose is to adjust the economy towards a state of higher (true) productivity. It is not obvious to me how it would be guaranteed to have this effect, or why there are not more desirable ways to achieve the same effect. M. Condict ...!cmcl2!csd1!condict New York U.
daver@hp-pcd.UUCP (daver) (12/11/83)
#R:tty3b:-25400:hp-kirk:12800006:000:1044
hp-kirk!daver Dec 9 17:27:00 1983
Lets go about doing the massive project of building the battleship and
then dismantling it as proposed. However, as long as no one is looking,
we can simply pretend to build the battleship. We still pay all the
workers so the money gets around, but we don't have to buy any of the
raw materials (we can still pay the domestic miners as though they were
actually supplying the materials but can avoid sending dollars overseas
in the case of materials not available locally) or use any of the
energy. The only people doing real work are the clerks preparing
monthly progress reports. As long as the entire job gets done before
congress or Jack Anderson notices what's happening no one will be the
wiser and we will have accomplished all the good points of the project
and not have any scrap material to have to try to get rid of (though
we can still pay the people who would otherwise have gotten rid of the
material).
Dave Rabinowitz
hplabs!hp-pcd!daver