Forwarded from Clinton Fernandes (military/research)

[Louis Proyect <lnp3@xxxxxxxxx>]

Actually, Chomsky has always pointed to the importance of the Pentagon
system - not only to his work, but to the US economy's high-tech sector as
a whole. He has written extensively about how all US researchers working in
these fields, whether they realise it or not, are contributing to
technology that will be used by the US military and the high-tech sector of
the US economy.

But this is how the system actually works. It is not possible to stay "pure".

The internet, computers, telecommunications, space technology, satellites,
lasers, etc were all created by decades of public subsidy through the US
Department of Defense. After the risks and costs were borne for decades by
the public, the technology was simply handed over to a few thousand
super-rich families (sometimes called "the market" or "the private sector").

This system of socialism for the rich continues.

Sources:

For the Defense Department's role in fostering high-technology industries,
see for example, Kenneth Flamm, Targeting the Computer: Government Support
and International Competition, Washington: Brookings Institution, 1987,
especially ch. 3 (on the crucial role of the Pentagon in the computer
industry).

Also see Laura D'Andrea Tyson, Who's Bashing Whom?: Trade Conflict in
High-Technology Industries, Washington: Institute for International
Economics, 1992. An excerpt (pp. 88-90):

In its early years, up to 100 percent of the [semiconductor] industry's
output was purchased by the military, and even as late as 1968 the military
claimed nearly 40 percent. In addition, there was a derived defense demand
for semiconductor output from the military's large procurement of computer
output throughout the 1960s. Direct and indirect defense purchases reduced
the risk of investment in both R&D and equipment for semiconductor
producers, who were assured that a significant part of
their output would be sold to the military. The willingness and ability of
the U.S. government to purchase chips in quantity at premium prices allowed
a growing number of companies to refine their production skills and develop
elaborate manufacturing facilities. . . .

The government continued to pay for a large share of R&D through the early
1970s, providing roughly one-half of the total between 1958 and 1970. As
late as 1958, federal funding covered an estimated 85 percent of overall
American R&D in electronics. . . . [T]he military, which remained the
largest single consumer of leading-edge components throughout the 1960s,
was willing to buy very expensive products from brand-new firms that
offered the ultimate in performance in lieu of an established track record.

Also, Winfried Ruigrock and Rob Van Tulder, The Logic of International
Restructuring, New York: Routledge, 1995. An excerpt (pp. 220-221):

[O]ver the 1950s and 1960s, the Pentagon paid more than one-third of
I.B.M.'s R&D budget. The Pentagon moreover acted as a "lead user" to
I.B.M., providing the company with scale economies and vital feedback on
how to improve its computers. In the 1950s, the Pentagon took care of half
of I.B.M.'s revenues, enabling it to move abroad and flood foreign markets
with competitively priced mainframe computers. Thus, I.B.M.'s defense
contracts cross-subsidised its civilian activities at home and abroad, and
helped it to establish a near monopoly position throughout most of the
1950s, 1960s
and 1970s. Along similar lines, all formerly and/or currently leading U.S.
computers, semiconductors and electronics makers in the 1993 Fortune 100
have benefited tremendously from preferential defense contracts. . . . In
this manner, Pentagon cost-plus contracts functioned as a de facto
industrial policy.

The same mechanism can be observed in the aerospace industry. In the 1950s,
for instance, Boeing could make use of government-owned B-52 construction
facilities to produce its B-707 model, providing the basis of its market
dominance in large civilian aircraft. The National Aeronautics and Space
Administration (N.A.S.A.) has often played a role comparable to the
Pentagon. . . . [G]overnment policies, in particular defence programmes,
have been an overwhelming force in shaping the strategies and
competitiveness of the world's largest firms. Even in 1994, without any
major actual or imminent wars, ten to fourteen firms ranked in the 1993
Fortune 100 still [conducted] at least 10 per cent of their business in
closed defence markets.

Also, David F. Noble, Forces of Production: A Social History of Industrial
Automation, New York: Knopf, 1984. An excerpt (pp. 5, 7-8):

[B]etween 1945 and 1968, the Department of Defense industrial system had
supplied $44 billion of goods and services, exceeding the combined net
sales of General Motors, General Electric, Du Pont, and U.S. Steel. . . .

By 1964, 90 percent of the research and development for the aircraft
industry was being underwritten by the government, particularly the Air
Force. . . . In 1964, two-thirds of the research and development costs in
the electrical equipment industry (e.g., those of G.E., Westinghouse,
R.C.A., Raytheon, A.T.&T., Philco, I.B.M., Sperry Rand) were still paid for
by the government.


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