THE COLD WAR AND CORPORATIONS
Galbraith, John Kenneth
the COLD WAR and the CORPORATIONS by JOHN KENNETH GALBRAITH Mr. Galbraith, one of the world's most celebrated economists, is Paul M. Warburg professor of economics at Harvard. He is the author of...
...In the conventional view we could escape our commitment to the weapons competition without insuperable economic difficulty...
...These are easily obtained by a process that is routine...
...They see the result not as the image of reality but as the reality...
...and as it realizes further that this tendency is organic...
...It requires high spending on complex and sophisticated technology...
...Formal agreement to arrest the competition is excluded by the belief that it is more dangerous than the competition...
...For building this image, palpable fantasy may be more valuable than circumstantial evidence...
...Most goods perform commonplace functions—they suppress hunger, serve alcohol or nicotine addiction, move people gradually through heavy traffic, move waste products more rapidly through the intestinal tract, or assist in removing filth...
...Both systems must be evangelistic...
...At the highest levels of sophistication, scholars calculated the acceptable levels of loss in the event of nuclear war and weighed the comparative disadvantages of forty or eighty million casualties...
...But since, for that reason, the normal discounts do not operate, it is much more important that they be identified...
...We may wisely assume that, as in other matters, there are parallel tendencies here and that the weapons competition has an organic role in this society...
...The problem is what not to take for granted—and how...
...The path to salvation for the two great industrial systems is now clear...
...Meretricious argument, if it influences unimportant decision, is evidently undamaging...
...in high speed land and air communications...
...The power of the Cold War image in the United States has not been constant...
...If the entrepreneur sought to impose on the society in which enterprise was promoted by a tax system which fell resoundingly on the poor, the unions could be counted upon to come up with a countering doctrine...
...Whether it will be followed is less certain...
...So was the overt attack in Korea...
...And risks that would otherwise be unacceptable can be assumed in the civilian economy if they are protected by the much more nearly riskless weapons economy...
...By contriving an appropriate image of the position, prospects, problems, or dangers of the state, the industrial system can insure a reaction favorable to its needs...
...Historians, as distinct from official historians and autobiographers, are assumed to tell the truth...
...If the image is of a nation beset by enemies, there will be responding investment in weapons...
...It is the country that one can advise with effect as distinct from immunity...
...But it is less clear that the contrast in the system of economic management is so great...
...He is the author of several major works, including The Affluent Society and The Great Crash, 1929...
...It is devoid of danger of accident except to the passengers...
...It is also extremely important that we be aware of what, given the needs of the industrial system, can be made to happen most easily...
...It proceeded with vigor and even abandon...
...It is hard to compromise on the advantages of rigorous candor but it may be, as a practical matter, that this contrivance does little direct damage...
...There is no hope that they will serve a similar function in relation to the images of foreign policy...
...Fantasy and image-building also play an important role in the relationship between the industrial system and the state...
...It is occasioned by the difference in economic systems from which, primarily, are derived differences in individual liberty...
...The industrial system requires a large public sector for the stabilization of total, or aggregate, demand...
...Information from a friend or neighbor, in the absence of a specific reputation for falsehood, is assumed to be reliable...
...Anything that is roughly equivalent in scale and technical complexity will serve...
...It is not clear why agreements can be negotiated in good faith with the Communists on all subjects except disarmament...
...Yet it remains that the Cold War has elements of a self-fulfilling prophecy for it has cultivated the reciprocal mistrust which it assumes...
...Numerous weapons systems, some emerging from the armed services and some from firms identified with individual services, were put into simultaneous and overlapping development...
...It was highly objective...
...Only if we understand our situation is there a chance that matters will improve...
...It can no longer serve, as now, as the surrogate for action...
...The latter is supported by large sums of money...
...There is a large and unquestioned difference in the two systems in the role of politicians, writers, artists, and scientists...
...Obsolescence in a technological competition is a nearly perfect substitute for battlefield attrition...
...Given the remarkable destructiveness of modern weapons, it is necessary to assure ourselves that we are not dependent on their production...
...And since armies and cannon have always been in the public sector, government underwriting in this area had the fewest overtones of socialism...
...There is, in fact, nothing to the Marxian contention...
...It is extremely important in itself to know that our imagery is, in part, derived from the needs of the industrial system...
...For the same reason it helps us to know that part of our view of the world and of its politics originates not in our minds but in the needs of the industrial system...
...Only in a comparatively affluent country are people open to persuasion on how they spend their money...
...But the images of the state, in contrast, are taken very seriously...
...The incompatibility of the systems, and the associated evangelism, lead directly to military competition...
...a strong deterrent prevents this and sustains faith in the ultimate and necessary triumph of liberty...
...Liberty, not material well-being, is involved...
...On larger questions of foreign policy this tendency has been less clear...
...Rather, the discussion is an act of obeisance...
...For we do not know for sure to what images the Soviet are subject...
...Finally, the educational and scientific estate has been open to the view that Communist protestations in behalf of a policy of peaceful coexistence may not be a trick but could reflect a disinterest in nuclear annihilation...
...it serves an organic need of the industrial system as now constituted...
...Instead of contrast leading to implacable conflict, a more evident economic tendency is convergence...
...and as it comes to realize that foreign policy is based on an imagery that derives in part from the needs of the industrial system...
...For pundits and preachers on the probability of doom there is a very heavy discount, as there is for politicians discussing moral integrity, peace, and disarmament...
...The potential for the disastrous rise of misplaced power exists and will persist...
...These advantages of the weapons competition to the industrial system could not easily be sacrificed by the industrial system...
...This is an ultimate value that cannot be compromised in the face of any threat...
...It has shown that it can arouse the competitive passions of both countries...
...Military spending is highly serviceable in this regard...
...In the decade of the Fifties it reached something of a zenith...
...This pious expression of hope is also aptly liturgical...
...He is constrained in his expression to a spectrum of acceptable belief...
...and as it sees that the only corrective is its own scrutiny and involvement and that this involvement is not a matter of choice but an obligation imposed by its position in the economic and political structure, we can reasonably expect it to be much more effective...
...it would require far more effort by a President to reduce military spending by twenty per cent than to increase it by a like amount...
...Both countries, quite clearly, solicit belief for what serves the goals of the industrial mechanism...
...But these needs do not have to be met by weapons...
...In the field of international relations, especially since the onset of the Cold War, high public officials have invariably been more diligent in instructing other governments than their own...
...Having won belief, the arms competition seems normal, natural, and inevitable, as do the actions based upon it...
...As the educational and scientific estate grows in numbers and self-confidence...
...They have similarly led on other discussions with the Soviets on weapons control and disarmament...
...Still, there is merit in departing from the rules and addressing advice in this matter to the United States...
...The industrial system has not become identified with the weapons competition by preference or because it is inherently bloody...
...By its nature a technological competition is never resolved...
...Flat lies as to their performance are generally impermissible...
...Nothing in our time is more important...
...It also pays for innovation that may be useful for civilian production...
...To eliminate civilized life for all time in response to a short-run calculation that liberty might otherwise be endangered is also irrational...
...That the risks of agreed disarmament are greater than those of a continuing and unresolved weapons competition is also unproven...
...Thus the competition is protected from even the most adverse estimates of its outcome...
...The merest child watching television dismisses the health and status-giving claims of a breakfast cereal as "a commercial...
...There has been some tendency to question the validity of this imagery...
...in altering climate for better or worse...
...Copyright © 1967 by John Kenneth Galbraith...
...And it does not culminate in explosions of immeasurable effect...
...That the weapons competition, and the image of international relations on which it depended, originated partly in the industrial system was recognized with remarkable explicitness by President Eisenhower...
...not all involved will imagine that their use provides a formula for a long, happy, or infinitely inoffensive life...
...Management involves the creation of a compelling image of the product in the mind of the consumer...
...Rather, this has been the area where the largest amount of money to support planning was available with the fewest questions asked...
...It is also clear that we have already come some distance along this path in our relations with the Soviet Union...
...In consequence, belief is a good deal deeper...
...To this he responds more or less automatically under circumstances where the purchase does not merit a great deal of thought...
...It is held to be of the utmost importance to the international prestige of the United States that its vehicles be first to the moon, the other parts of the solar system and the less convenient reaches of the universe...
...No such constraint by organization or planning is required by the Western system of free enterprise...
...A war without fighting neatly obviates the danger that fighting will stop...
...For, apart from their general enfeeblement, their needs on these matters are far too closely aligned with those of the industrial system...
...It can only be tactical or a trick...
...To suggest that it is imagery is to be irresponsible, eccentric, or, conceivably, subversive...
...In response he establishes a system of discounts which he applies to various sources almost without thought...
...Dissent or even insufficient zeal could lead to loss of employment, other economic sanction, or social ostracism...
...Both are subject to the imperatives of industrialization...
...Nor may it be supposed that this imagery is confined to one side...
...It was they, not the university or official specialists on international relations, who instituted the steps leading to the partial test ban...
...The discount becomes nearly total for all forms of advertising...
...It is also richer than the Soviet Union, has greater scientific and technological resources and- tends, in consequence, to be the pace-setter in the weapons competition...
...And for very good reason...
...They persuade themselves...
...This competition is not a luxury...
...On this, survival of both the industrial and the nonindustrial populations of the world plausibly depends...
...People might assume success and then fail to apply the automatic discount which is their present better protection...
...And it is of prime importance to this effort that it be realized how much of past action has been based not on reality but on imagery and the sources of the latter...
...There must be agreement on arresting and eliminating the competition in lethal technology...
...The imagery of the industrial system strongly supports the space race...
...Failure to win belief does not impair the effectiveness of the management of demand for consumer products...
...A drastic reduction in weapons competition following a general release from the commitment to the Cold War would be sharply in conflict with the needs of the industrial system...
...Congressional committees, other public investigatory bodies, personnel security boards, and private magistrates in the motion picture and communications industries reasoned that if the struggle for liberty were so important it should be obligatory...
...In the past, imagery favorable to the entrepreneur was assured of close scrutiny because of the opposed pecuniary interest of the trade unions...
...The highly organized and planned system of the Soviets requires the subordination of the individual to the goals of the state...
...Escape from the weapons competition, with its attendant dangers, should follow the path of least rather than of maximum resistance...
...The regulation of aggregate demand requires that the public sector of the economy be large...
...Dissent seems eccentric and irresponsible...
...Disarmament is regarded as a serious threat to a balanced prospect for reciprocal destruction...
...To the competition with the Soviets was added the further zest of competition between the sponsoring services...
...But the space race shows that underwriting outside the area of weaponry is equally acceptable...
...No progress can be made in reducing the commitment to the Cold War without concurrent action of the Soviet Union...
...The educational and scientific estate has also been open to evidence on the growing pluralism of the Communist world with its adverse effect on the doctrine of uniformly hostile conspiracy...
...Herein is the power of a system that depends on belief rather than on compelled support...
...But a surrogate for the truth, in which minor or even imaginary qualities confer great benefits, is essential...
...In the past, this community has been ambiguous as regards the imagery of the industrial system...
...The notion that the arms competition is ultimately benign has small foundation...
...More often, perhaps, there is professional pride in a measure of workmanlike bam-boozlement...
...Stalinist oppression, later to be affirmed by the Soviets themselves, was no contrivance...
...The principal hope for such scrutiny, in conjunction with the political power to make it effective, lies with the educational and scientific estate...
...The latter contrast is stark and unshackled...
...A simple increase in consumer spending resulting from tax reduction or in public spending for housing or pensions would be no substitute...
...On the whole, it has not happened...
...These circumstances were highly favorable to the weapons competition...
...The industrial system wins belief for the image of implacable conflict (with associated features) that justifies its need...
...In relation to the needs of the industrial system, the space competition is nearly ideal...
...And, more important, the case is recognized, subjectively, as being meretricious...
...in exploring the ocean floor and the regions below the earth's crust...
...The revolutionary and national aspirations of the Soviets, and more recently of the Chinese, and the compulsive vigor of their assertion, were the undoubted historical source...
...One is to insure that skeptical scrutiny of official belief is an important political function...
...The Editors A lmost everyone who wins a posi-tive score in an intelligence test recognizes that the selling of goods— the management of demand for particular products—requires well-considered mendacity...
...University centers for the study of international relations, which had once concerned themselves with peace, became preoccupied with the Cold War...
...So are most journalists...
...In the early years of the Cold War, there was a fairly full acceptance of its tenets...
...It must be so if personal income and corporation taxes are to be large enough to have their indispensable stabilizing effect...
...The then Secretary of State, John Foster Dulles, saw its acceptance not only as an exercise in belief but as a test of religious ardor and moral stamina...
...The competition in space exploration is largely—although not totally—devoid of military implication...
...Safety depends on keeping innovations at a high level— although not at the highest possible level, for there are some things that are simply too expensive...
...In the main, this competition is technological—its decisive feature is the competitive development of weapons and weapons systems and related defenses...
...For, since ambitions are unrelenting and good faith lacking, there is danger of being tricked by negotiations into concessions which would allow the other side to destroy with impunity...
...Arms expenditures have no unique value for increasing aggregate demand...
...Close relations were maintained with the armed services...
...There are a number of reasons for this...
...The men who contrive, or in the more frequent case perpetuate them, do so with the utmost seriousness...
...It is necessary, however, that there be an image of the world which justifies or rationalizes the military expenditures that the arrangement requires...
...Doctrines of deterrence, war games, coalition architecture, and economic warfare became fashionable subjects for university research, reflection, and instruction...
...In economics, on such matters as the control of the firm by the market or the origin of wants with the sovereign individual, its tendency has been to underwrite the needed beliefs of the industrial system...
...Any other view of the economy is unsettling...
...A similar case can be made for competitive underwriting of the widest area of general scientific research...
...Though often cautious and deferential in their relations with the Congress, Secretaries of State have been bold and forthright in informing the Soviets of their error...
...The scientists have been peculiarly situated to see the dangers of the weapons competition, including the possibilities of conflict by accident...
...And while all expenditures, whether for arms or old age pensions or air pollution, add to demand, not all play the same role in underwriting technology...
...He noted just before leaving office that the "conjunction of an immense military establishment and a large arms industry" was something new in the American experience and urged that the nation "guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex...
...For nearly twenty years, the requisite image has been that of the Cold War...
...That this image owes its existence only to the needs of the industrial system is not suggested for a second...
...And the system's planning reaches its highest state of development in conjunction with modern military procurement...
...And the Cold War specialists within the scholarly community have become an increasingly alienated group...
...Thus could the image of the conflict with the Soviet Union be shifted from weapons competition to more general scientific and engineering competition, this would be equally satisfactory provided always that the costs are sufficiently great...
...The competition is held to be safer, so, although it is discussed, few associated with these matters take seriously the possibility of disarmament...
...But history must be separated from result...
...The Soviets would impose their system by force if they could...
...If we understand that we are subject to the imagery of the industrial system in these matters, and seek to act in accordance not with the image but with the reality of our situation, then it may be possible to make a bargain with the Soviets...
...The reality in the case of the United States and the Soviet Union is of two large industrial nations...
...One cannot replace the spending for armaments with private outlays for consumption and investment, such as would be encouraged by a massive reduction in taxes...
...This article is adapted from the book, The New Industrial State, soon to be published by Houghton, Mifflin Company...
...We would need to offset the decline in arms expenditure by increasing other public outlays or by cutting taxes or by both, and we would need to help those affected retrain, reeducate and relocate themselves...
...A measure of amiable cynicism is associated with the management of demand for cigarettes or soap...
...There has been general and growing suspicion of the doctrine of implacable conflict based on a bilateral confrontation of good and evil...
...There is not inconsiderable chance of accident...
...The larger educational and scientific estate has not been strongly receptive to the Cold War imagery...
...This, for both, means planning...
...This leads to introspection and scrutiny that would not, otherwise, be forthcoming...
...Conceivably, for nonlethal products, the Government should not presume to insist on truth in advertising...
...Since the aspirations of the Communists are implacable, there is no danger that momentary accommodation or easing of tension will lead to a reduction in outlays...
...None may minimize the difference made by the First Amendment...
...Nor was acceptance entirely voluntary...
...a small aristocracy of scholars did periodic duty with RAND...
...Yet, on examination, much of what is believed turns out to be fanciful...
...If it is one of a state in which liberty is threatened by controls, there will be resistance to regulation of various kinds...
...But two other steps are also necessary...
...Even a calculation that the competition may, at some point, lead to total destruction of all life is not a definitive objection...
...In an orthodox conflict the arrival of peace abruptly removes the support for further outlays...
...Discussion of disarmament must now result in action...
...and much more...
...To hold at a given level or, better, to allow modest increases from year to year, is the easiest of all...
...In their wake university specialists in Cold War strategy and the associated arms competition proliferated...
...They are not free men...
...It makes clear that the arms competition is being undertaken in lieu of successful disarmament instead of for its own sake...
...Being affluent, it does not greatly matter how they spend it...
...The other is to meet the technological and planning needs of the industrial system by ways that are less mortal than the weapons competition...
...Arms expenditure, like imperialism, is one of the necessary correctives...
...Similarly that from a teacher or a scientist on his subject, and that from a physician, prognoses of the effects of overeating, alcohol, and tobacco, and diagnoses of cancer apart...
...Scientists and engineers had similar association with the Services or defense firms...
...the management of aggregate demand can be served by different types of public spending, a possibility which he did not foresee...
...And it has now been amply shown that, by such management, the size of the market can be increased as employment or other considerations require...
...But the orthodox statement of the problem of disarmament, as the present analysis also amply shows, is deficient in two other respects...
...But agreement will be much less painful if competition continues and is encouraged and widened in non-lethal spheres...
...These would be formidable but feasible undertakings...
...And those who would make such a decision are themselves strongly subordinate to a system of belief...
...And without minimizing the required action, the orthodox discussion of disarmament almost invariably concludes by saying how welcome would be this challenging risk...
...we should take nothing for granted...
...It is a relentless, implacable, permanent struggle with the world Communist movement as led by the Soviet Union...
...Its mood has been one of growing skepticism...
...Both can achieve success by their similar economic tests of success at the same time...
...The market is not limited as Marx held...
...It underwrites the same highly developed planning as does the weapons competition and, hence, is an admirable substitute for it...
...Additionally, the ancient Marxian contention, still reflected in some modern Soviet propaganda, holds that a capitalist economy suffers from an inherently limited market...
...There would appear to have been a similar response to liberalizing trends in the Communist world with the accompanying implication that the appropriate policy is not one of conflict but of patience...
...The ruling passion will always be, in the words of Secretary of State Dean Rusk, "how to get on with their world revolution...
...And while the techniques differ with different meanings for individual rejection or dissent, planning always means setting aside the market mechanism in favor of the control of prices and individual economic behavior...
...There is always a chance that some day some true believer will react to the liturgy of conflict and provoke the ultimate conflict...
...As it has figured in more simplistic outline in the last twenty years, the relation of the Cold War to the needs of the industrial system is remarkably close...
...However, the process of building these images is a good deal less obvious than that by which the demands of the consumer are created...
...It was easy to imagine that the educational and scientific estate would come to have much the same relation, by identification and adaptation, to the state in these matters as the industrial system itself...
...Little or nothing of importance can truthfully be said about the way a product performs these routine functions...
...All features of this competition are closely congruent with need...
...As a result, though in public affairs as well as in private affairs, and for the same reasons, we are subject to contrivance that serves the industrial system, it takes a far greater effort of mind to see imagery as imagery and contrivance as contrivance in the field of public affairs...
...If the image is one of a country lagging in technological development in a world where that is a prime test of national success, it can insure investment in scientific research and technological development...
...It may also prove impossible...
...That is because modern man is exposed to a large volume of information of varying degrees of unreliability...
Vol. 31 • July 1967 • No. 7
