Public anxiety over the economy has generated a variety of proposals for what to do: raise taxes, lower taxes, increase public spending, decrease public spending, raise trade barriers, negotiate more freed trade treaties, and on and on. On top of that, the public is convinced that the size of the public debt and continued deficit spending are about to sink us into the swamp of Greece and Spain. The issues are poorly understood but deeply held beliefs about them are unshakable.
I want to suggest that something else is afoot, or at least I hope it is. It is a dramatic restructuring of the American economy to position it as a major competitor in a global economy in which America is one player among others, but not the singular driving force that can command the fortunes of others. That will require a coordinated public private partnership that rules out the romantic ideal of free enterprise unhindered by government regulation and interference.
The problem is that any one change in public policy affecting the economy will have a multitude of effects, often effects that will stagger the way business is done. Take, for instance, military spending. We can no longer afford to pretend that global peace depends on American military might flexing its muscle in every corner of the world. It is sad that there is warlike violence in so many countries, that human rights and simple justice are trampled in many places for so many reasons. Nevertheless, America cannot, and does not have the moral right to, intervene to impose Pax Americana. From a more selfish perspective, continuing to try will destroy our economy in the end. Other nations must work out their own problems. We may not like the way they do it, but it’s their life not ours. It amazes me that so many conservative types who demand limited government for themselves are lightning quick to demand that America impose it’s will on others, by force if necessary.
So what happens when we begin to resize our military establishment? I think we can safely disregard the hysterical paranoia about weakening our national defense. That’s a lot of nonsense. However, backstage from troops and equipment is an enormous weapons industry that employs many hundreds of thousands of workers earning high wages. Those industries will have to figure out some other product line for their highly skilled people to produce, or go out of business, and considering how slow, bureaucratic, and hide bound they are, it seems unlikely that they can easily adapt to a new more entrepreneurial way of doing things.
Consider a small example: if you build tanks, then tanks are what you want to keep building. A recent report (The Week, October 5, 2012) noted that the army has said that it needs no more tanks. It has enough, in fact it has 3,000 sitting in reserve, but tank building is what they do in Ohio, so congress mandated construction of 42 new tanks not because they are needed but to keep jobs filled. That is make work corporate welfare at its wasteful best. That one small example is replicated many times over on a much larger scale throughout the weapons industry, and is echoed in the public angst that comes with proposed base closures.
Somehow all that talent must be reoriented to non-weaponry, but making it happen gets very complicated. There is nothing easy about it. The weapons industry is irrevocably embedded in the fabric of our national government, so whatever is done must be a function of public-private partnership. It seems to me that a slow decade long transformation is the way to go. It would give the greater economy time to adjust. I wish it was as easy as just saying that, but we all know that industrial lobbying and congressional ineptitude will fight any change at all. That’s too bad because history suggests that the possibilities are enormous. No one can be certain what they are, but we know that products from micro-wave ovens to the innards of our communication devices were given birth in the weapons industry. I have no doubt that there is more ahead like that if we can make the turn.
If we fail to make the turn, we will simply become the weapons factory for the world with our economy dependent on a continued cycle of armed violence in a great many places. How immoral would that be?