From: rich@pencil.cs.missouri.edu (Rich Winkel)
Subject: ARMS, POLITICS, & THE ECONOMY
Followup-To: alt.activism.d
Originator: rich@pencil.cs.missouri.edu
Organization: PACH
Distribution: na
Date: Thu, 27 Aug 1992 08:23:16 GMT

POSITIVE ALTERNATIVES
A Publication of the CENTER FOR ECONOMIC CONVERSION

Published quarterly. Materials in POSITIVE ALTERNATIVES may be 
reprinted if this publication and the CENTER for ECONOMIC CONVERSION are 
credited and a copy is sent to CEC.

** Written  4:46 pm  Aug 10, 1992 by dwalt in cdp:econconversion **
ARMS, POLITICS, & THE ECONOMY:
HISTORICAL & CONTEMPORARY PERSPECTIVES
edited by Robert Higgs
Holmes & Meier, New York, 1990.
295 pages
reviewed by Jay Siegel

It is often instructive to read the historical analyses written by "the 
other side." Most of the perspectives presented in this book are from a 
conservative viewpoint but there are, nevertheless, topics of interest to 
conversion advocates.

The chapter topics ranged from "Department of Defense Attempts to Close 
Military Bases - The Political Economy of Congressional Resistance" to 
"Baruch, the New Deal and the Origins of the Military-Industrial Complex."

The chapter on the origins of the Military-Industrial Complex (MIC) alone 
makes the book a good read. In it, the author, Jordan A. Schwart, presents 
a cogent argument claiming that the roots of the MIC go back to the First 
World War when the U.S. became a world power internationally but 
remained a underdeveloped country regionally, especially in the South and 
West. Schwarz contends that the MIC was originally intended as an 
unofficial national industrialization policy to develop the South and West. 
For example, the War Industries Board, created during the World War I, 
demonstrated how central planning attained strong economic growth, 
especially when coupled with funding from of the Federal Reserve system 
(1913) and general income taxation (constitutional amendment ratified in 
1913). 

Schwarz further argues that during the Great Depression, the central 
planning experience gained in the War Industries Board was transferred to 
the 30's New Deal programs, especially the Tennessee Valley Authority 
projects developing energy and infrastructure in the South and West. 

At first blush it seemed as if  Schwarz is blaming Roosevelt and New Deal 
Democrats for the MIC. However, he points out that during this period the 
Democrats were  fiscally responsibile, as they financed social and 
military spending through federal taxes and bonds. This was done on a  
pay-as-you-go basis.

After World War II, the MIC was institutionalized by the Cold War and 
eventually grew to be the third largest planned economy in the world. By 
then, it had lost its pre-World War II roots of economic development, 
social concern, and fiscal responsibility.

For the past fifty years, the MIC has been our only source of industrial and 
economic planning and the major source of federal or socialized 
investment. More importantly, there was a shift in political support for 
the MIC from the Democratic Party based in the North and South to the 
Republican Party in the new West and Sunbelt. The Republicans, who 
politically attack Democrats as taxers and spenders, are the military 
spenders.  Ironically, it was the Reagan administration's tax cut and 
willingness to incur large deficits that broke the link between the 
unofficial industrial policy of economic development through military 
spending and fiscal responsibility.

No wonder in this election year we face presidential candidates without 
any industrial policy, nor the fiscal means to carry one out if elected. This 
book provides valuable information in helping us understand the roots of 
this problem.
     JAY SIEGEL is on the Board of Directors for CEC

** End of text from cdp:econconversion **

******************************************************************
                     THE CENTER FOR ECONOMIC CONVERSION
                222 View St., Suite C, Mountain View CA 94041
                  Tel: (415) 968-8798    FAX: (415) 968-1126
                          Email: bdelson@igc.org
The CENTER for ECONOMIC CONVERSION is a non-profit public benefit 
corporation dedicated to building a sustainable peace-oriented economy. 
Founded in 1975, the organization serves as a national resource center and 
a catalyst for conversion planning. CEC provides educational materials; 
speakers; organizing assistance to conversion activists; technical 
assistance to workers, managers and public officials confronting military 
cutbacks; and research on conversion issues.

Beth Delson, Editor; Michael Closson, Executive Director; Joan Holtzman, 
Development Coordinator; Marie Jones, Conversion Planner; Susan Strong, 
Senior Research Associate; Rosemary Wick, Office Manager.
******************************************************************

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