Why military spending is bad for the economy

 |  NCR Today

We may disagree about how much of a defense we need or what it is exactly that we are defending. But it is morally wrong to say that we must build the weapons because we need the jobs.

When I moved to St. Louis in 1972, I was astounded by the pervasive impact of McDonnell Douglas on the region's economy. About 16 percent of employment depended on Pentagon dollars. The endless refrain was, "We have to build the weapons because we need the jobs."

But the truth is that military spending is bad for the economy. I've written about this before, but there was a big complaint about my blog earlier this week that Pentagon budget cuts would result in unemployment. The truth is that we'd create more jobs by just putting the money back in everyone's pockets than by making weapons, training soldiers and fighting wars.

The Pentagon drains the economy of capital, skilled labor and technology.

By capital I mean machine tools and productive capacity more than money. By the 1990s in St. Louis, when the Berlin Wall was torn down and peace was breaking out, MDC and its 500 subcontractors viewed themselves as arms manufactures and had no solid plans for making anything else. Ideas like health care technology, clean energy, prefab housing and mass transit went abroad. The industrial capacity was focused on arming its single government customer.

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Those other high-tech ideas, both product and process, went to Europe and Japan. Meanwhile, skilled labor ran machine presses or studied the tail vibrations of fighter planes instead of setting up machine tools to spec or designing better televisions. Those jobs went to Taiwan and Korea.

Besides this drain of capital, labor and technology, military spending is inflationary. Arms manufacturers can afford to spend top dollar for both employees and equipment, driving up costs for commercial industry.

And weapons don't enhance commerce. The best you can hope for from a tank or a missile is that it rusts out. The worst is death and destruction. Automobiles, on the other hand, drive highway construction, gasoline delivery and repair shops.

Finally, if instead of putting the money saved from the military budget back in our pockets, Congress spent it hiring teachers, nurses and park rangers and on infrastructure repair, we would have twice as many jobs as Pentagon spending generates.

Spending money on the military is a value choice. It is a choice to put our treasure -- our capital, labor and technology -- into things of war instead of improving our standard of living.

There's another example of a culture diverting its capital, labor and technology away from human needs, the Middle Ages when society built the cathedrals. That was a value choice too.

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July 14-27, 2017