Tuesday, April 19, 2011

A Militarized Economy Cannot Balance the Budget

By John Perkins

"Disarmament, with mutual honor and confidence, is a continuing imperative. Together we must learn how to compose differences, not with arms, but with intellect and decent purpose." Eisenhower, 1961

While we send our love and support to those so horribly impacted by the earthquake and tsunami, we must not allow this shock to divert us from the tsunami headed our way. Our business and political leaders will try to use this terrible catastrophe as a diversion to hoodwink us into budgetary reductions that will fatten their wallets and leave us and our children devastated.

It does not matter on what side of the political fence you sit during the current budget debates. The fact is that if our leaders are not willing to take into account our over-dependence on a militarized economy and change it, we will never balance the budget. Our progeny will face an endless struggle to clean up the debris.

Each year the Department of Defense's tidal wave grows more menacing. We witness countless billions allocated for weapons research and development; nuclear warheads; and the secret and often illegal activities of the CIA, NSA, FBI, Homeland Security, and other "intelligence" agencies. We watch countries that are caught up in natural disasters and political upheavals and see how this "crisis elixir" attracts and profits predatory capitalists. Turmoil in foreign lands encourages U.S. hawks to party on at their military orgies. They stagger out to launch campaigns into new areas of conflict.

And they have the gall to do this under the guise of promoting democracy.

It is time for us to tell them that they are exposed, that we comprehend that what they are really doing is reaping huge profits and making other nations their financial servants for generations to come. Meanwhile, at home, we face severe cutbacks in social services, transportation, health care, the environmental and educational sectors, and other civil services.

Now is the time for us -- you and me -- to let our leaders know that we are no longer duped by their rhetoric. We understand they cannot bring our financial house to order without significant reductions in military spending. This includes calling our troops back from the Middle East and Afghanistan.

In 1961, President Eisenhower said, "As we peer into society's future, we -- you and I, and our government -- must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow." There is a very sad irony in those words. We need to let those who have followed Ike's footsteps to the halls of power in Washington know that we understand the relevance of those words to today's economic and military crises.

The United States accounts for almost 50 percent of the world's total military spending; yet our share of the world's GDP is less than 25 percent. This official budget does not take into account the money that is secretly allocated in the "black" budgets of the Pentagon, CIA, and other clandestine operations.

We must all ask ourselves:

How can a nation that prides itself on government "of, for, and by the people," justify hiding these black budget allocations from taxpayer scrutiny? How can a nation continue to prosper by ignoring its own long-term demise at the hands of a militarized economy?

If we truly want a real democracy to survive for generations to come, then we must demand extensive military reductions. We must demand a peaceful and sustainable path for our country and for the world at large. We must bring our soldiers home. We must protect ourselves from the tsunami that is building on Wall Street and in the halls of Washington DC.

The Permanent War Economy
An exerpt from Understanding Power: the Indispensable Chomsky

There’s hardly an element of advanced-technology industry in the United States that’s not tied into the Pentagon system—which includes N.A.S.A., the Department of Energy [which produces nuclear weapons], that whole apparatus. In fact, that’s basically what the Pentagon’s for, and that’s also why its budget always stays pretty much the same. I mean, the Pentagon budget is higher in real terms than it was under Nixon—and to the extent that it’s declined in recent years, it’s in fact had the effect of what they call “harming the economy.” For instance, the Pentagon budget started to decline in 1986, and in 1987 real wages started to fall off for skilled workers, in other words for the college-educated. Before that they’d been declining for unskilled workers, and they started to go down for the college-educated a year after the Pentagon budget began to drop off a bit. And the reason is, college-educated people are engineers, and skilled workers, and managers and so on, and they’re very dependent on the whole Pentagon system for jobs—so even a slight decline in military spending immediately showed up in real wage levels for that sector of the population.

Actually, if you look back at the debates which went on in the late 1940s when the Pentagon system was first being set up, they’re very revealing. You have to examine the whole development against the background of what had just happened. There was this huge Depression in the 1930s, worldwide, and at that point everyone understood that capitalism was dead. I mean, whatever lingering beliefs people had had about it, and they weren’t very much before, they were gone at that point—because the whole capitalist system had just gone into a tailspin: there was no way to save it the way it was going. Well, every one of the rich countries hit upon more or less the same method of getting out. They did it independently, but they more or less hit on the same method—namely, state spending, public spending of some kind, what’s called “Keynesian stimulation.” And that did finally get countries out of the Depression. In the Fascist countries, it worked very well—they got out pretty fast. And in fact, every country became sort of fascist; again, “fascism” doesn’t mean gas chambers, it means a special form of economic arrangement with state coordination of unions and corporations and a big role for big business. And this point about everyone being fascist was made by mainstream Veblenite-type economists [i.e. after the American economist Veblen] right at the time, actually—they said, everybody’s fascist, the only question is what form the fascism takes: it takes different forms depending on the country’s cultural patterns.

Well, in the United States, the form that fascism took at first was the New Deal [legislative programs enacted in the 1930s to combat the Depression]. But the New Deal was too small, it didn’t really have much effect—in 1939, the Depression was still approximately what it had been in 1932. Then came the Second World War, and at that point we became really fascist: we had a totalitarian society basically, with a command economy, wage and price controls, allocations of materials, all done straight from Washington. And the people who were running it were mostly corporate executives, who were called to the capital to direct the economy during the war effort. And they got the point: this worked. So the U.S. economy prospered during the war, industrial production almost quadrupled, and we were finally out of the Depression.

Alright, then the war ended: now what happens? Well, everybody expected that we were going to go right back into the Depression—because nothing fundamental had changed, the only thing that had changed was that we’d had this big period of government stimulation of the economy during the war. So the question was, what happens now? Well, there was pent-up consumer demand—a lot of people had made money and wanted to buy refrigerators and stuff. But by about 1947 and ‘48, that was beginning to tail off, and it looked like we were going to go back into another recession. And if you go back and read the economists, people like Paul Samuelson and others in the business press, at that point they were saying that advanced industry, high-technology industry, “cannot survive in a competitive, unsubsidized free-enterprise economy”—that’s just hopeless. They figured we were heading right back to the Depression, but now they knew the answer: government stimulation. And by then they even had a theory for it, Keynes; before that they’d just done it by instinct.

So at that point, there was general agreement among business and elite planners in the United States that there would have to be massive government funneling of public funds into the economy, the only question was how to do it. Then came kind of an interesting ... It wasn’t really a debate, because it was settled before it was started, but the issue was at least raised: should the government pursue military spending or social spending? Well, it was quickly made very clear in those discussions that the route that government spending was going to have to take was military. And that was not for reasons of economic efficiency, nothing of the sort—it was just for straight power reasons, like the ones I mentioned: military spending doesn’t redistribute wealth, it’s not democratizing, it doesn’t create popular constituencies or encourage people to get involved in decision-making. It’s just a straight gift to the corporate manager, period. It’s a cushion for managerial decisions that says, “No matter what you do, you’ve got a cushion down there”—and it doesn’t have to be a big portion of total revenues, like maybe it’s a few percent, but it’s a very important cushion.

And the public is not supposed to know about it. So as the first Secretary of the Air Force, Stuart Symington, put the matter very plainly back in 1948, he said: “The word to use is not ‘subsidy,’ the word to use is ‘security.’” In other words, if you want to make sure that the government can finance the electronics industry, and the aircraft industry, and computers, and metallurgy, machine tools, chemicals, and so on and so forth, and you don’t want the general public trying to have a say in any of it, you have to maintain a pretense of constant security threats—and they can be Russia, they can be Libya, they can be Grenada, Cuba, whatever’s around.

Well, that’s what the Pentagon system is about: it’s a system for ensuring a particular form of domination and control. And that system has worked for the purposes for which it was designed—not to give people better lives, but to “make the economy healthy,” in the standard sense of the phrase: namely, ensuring corporate profits. And that it does, very effectively. So you see, the United States has a major stake in the arms race: it’s needed for domestic control, for controlling the empire, for keeping the economy running. And it’s going to be very hard to get around that; I actually think that’s one of the toughest things for a popular movement to change, because changing the commitment to the Pentagon system will affect the whole economy and the way it’s run. It’s a lot harder than, say, getting out of Vietnam. That was a peripheral issue for the system of power. This is a central issue.

In fact, I've been arguing for years with friends of mine who are campaigning for “conversion” of the economy from military production to social spending that they’re basically talking nonsense. I mean, it’s not that business has to be told “for this many jet planes we could have this many schools, isn’t it awful to build jet planes?” You don’t have to convince the head of General Motors of that: he knew that forty years before anyone started talking about “conversion,” that’s why he wanted jet planes. There is no point in explaining to people in power that “conversion” would be better for the world. Sure it would. What do they care? They knew that long ago, that’s why they went in the opposite direction. Look: this system was designed, with a lot of conscious and intelligent thought, for the particular purpose that it serves. So any kind of “conversion” will just have to be part of a total restructuring of the society, designed to undermine centralized control.

And I mean, you're going to need an alternative—it’s not enough just to cut off the Pentagon budget, that's just going to make the economy collapse, because the economy is dependent on it. Something else has to happen unless you just want to go back to the Stone Age. So the first thing simply has to be creating both a culture and an institutional structure in which public funds can be used for social needs, for human needs. That’s the mistake that a lot of the “conversion” people make, in my opinion: they’re just identifying what’s obvious, they’re not focusing enough on creating the basis for an alternative.

WOMAN: What is the hope, then, for dismantling the whole military system?

There have to be large-scale institutional changes, we need a real democratization of the society. I mean, if we continue to have domination of the economic and political system by corporations, why should they behave any differently? It’s not that the people in the corporations are bad people, it’s that the institutional necessity of the system is to maintain corporate domination and profit-making. I mean, if the Chairman of General Motors suddenly decided to start producing the best quality cars at the cheapest prices, he wouldn’t be Chairman any longer—there’d be a shift on the stock market and they’d throw him out in five minutes. And that generalizes to the system as a whole. There is absolutely no reason why the people who own the economy would want it to be set up in a way that undermines or weakens their control, any more than there’s a reason why they would want there to be a political system in which the population genuinely participates—why would they? They’d be crazy. Just like they’d be crazy if they opened up the media to dissident opinion—what possible purpose would there be in that? Or if they let the universities teach honest history, let’s say. It would be absurd.

Now, that doesn't mean that there’s nothing we can do. Even within the current structure of power, there’s plenty of latitude for pressure and changes and reforms. I mean, any institution is going to have to respond to public pressure—because their interest is to keep the population more or less passive and quiescent, and if the population is not passive and quiescent, then they have to respond to that. But really dealing with the problems at their core ultimately will require getting to the source of power and dissolving it—otherwise you may be able to fix things up around the edges, but you won’t really change anything fundamentally. So the alternative just has to be putting control over these decisions into popular hands—there simply is no other way besides dissolving and diffusing power democratically, I think.

[Noam Chomsky, Understanding Power: the Indispensable Chomsky¸ pp. 73-76.]

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