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The Military Industrial Complex

The most spectacular and important creation of the authoritarian and oligopolistic structure of economic decision-making in America is the institution called "the militaryindustrial complex" by former President Eisenhower, the powerful congruence of interest and structure among military and business elites which affects so much of our development and destiny. Not only is ours the first generation to live with the possibility of world-wide cataclysm -- it is the first to experience the actual social preparation for cataclysm, the general militarization of American society. In 1948 Congress established Universal Military Training, the first peacetime conscription. The military became a permanent institution. Four years earlier, General Motor's Charles E. Wilson had heralded the creation of what he called the "permanent war economy," the continuous use of military spending as a solution to economic problems unsolved before the post-war boom, most notably the problem of the seventeen million jobless after eight years of the New Deal. This has left a "hidden crisis" in the allocation of resources by the American economy.

Since our childhood these two trends -- the rise of the military and the installation of a defense-based economy -- have grown fantastically. The Department of Defense, ironically the world's largest single organization, is worth $160 billion, owns 32 million acres of America and employs half the 7.5 million persons directly dependent on the military for subsistence, has an $11 billion payroll which is larger than the net annual income of all American corporations. Defense spending in the Eisenhower era totaled $350 billions and President Kennedy entered office pledged to go even beyond the present defense allocation of sixty cents from every public dollar spent. Except for a war-induced boom immediately after "our side" bombed Hiroshima, American economic prosperity has coincided with a growing dependence on military outlay -- from 1941 to 1959 America's Gross National Product of $5.25 trillion included $700 billion in goods and services purchased for the defense effort, about one-seventh of the accumulated GNP. This pattern has included the steady concentration of military spending among a few corporations. In 1961, 86 percent of Defense Department contracts were awarded without competition. The ordnance industry of 100,000 people is completely engaged in military work; in the aircraft industry, 94 percent of 750,000 workers are linked to the war economy; shipbuilding, radio and communications equipment industries commit forty percent of their work to defense; iron and steel, petroleum, metal-stamping and machine shop products, motors and generators, tools and hardware, copper, aluminum and machine tools industries all devote at least 10 percent of their work to the same cause.

The intermingling of Big Military and Big Industry is evidenced in the 1,400 former officers working for the 100 corporations who received nearly all the $21 billion spent in procurement by the Defense Department in 1961. The overlap is most poignantly clear in the case of General Dynamics, the company which received the best 1961 contracts, employed the most retired officers (187), and is directed by a former Secretary of the Army. A Fortune magazine profile of General Dynamics said: "The unique group of men who run Dynamics are only incidentally in rivalry with other U.S. manufacturers, with many of whom they actually act in concert. Their chief competitor is the USSR. The core of General Dynamics corporate philosophy is the conviction that national defense is a more or less permanent business." Little has changed since Wilson's proud declaration of the Permanent War Economy back in the 1944 days when the top 200 corporations possessed 80 percent of all active prime war-supply contracts.