A hidden cost of military research: less national security

A hidden cost of military research: less national security – science and politics

Daniel S. Greenberg

The U.S. Department of Defense is the nation’s, maybe even the world’s, biggest spender on research and development. It spends about 75 per cent — that will be $45 billion this fiscal year — of the money the federal government allocates to R&D. With the Pentagon expected to ask for an even larger share in fiscal 1988, Americans should focus on a question with ruinous implications: How can the U.S. survive economic competition with nations that devote little of their scientific talent and financial resources to military goals? Case in point: Japan, where only two per cent of the government’s research and development money is devoted to military projects.

Sure, America must do defense research, and lots of it. But national security doesn’t begin and end with keeping the Soviets at bay with the latest high-tech hardware. It also includes inventing and making goods that enable the U.S. to compete successfully in international markets. Increasingly, America isn’t coming up with the civilian products needed to attain that goal. If this pattern persists, the country may some day find itself in the absurd position of having a formidable and hugely expensive strategic defense system standing guard over an industrial rust bowl.

Japan, West Germany, and those newcomers to high-tech, South Korea, Taiwan, and Singapore, among them manufacture the world’s best and/or lowest-priced cameras and other optical devices, computer chips, consumer electronics goods, advanced industrial equipment, cars, scientific instruments, and on and on down a long list of job-producing, moneymaking products. The U.S. remains pre-eminent in only a few civilian fields — notably commercial aircraft and high-powered computers. But across the board America is a world beater at developing and building military equipment. Even when the arms industry produces one of its clunkers, it’s never for lack of R&D spending.

The old argument is that America, with twice the population of Japan, four times that of West Germany, and a higher per capita income than either, is so much bigger and richer than the compe- tition that it can splurge on military research and still prosper on the civilian front. This argument doesn’t hold as much water as it used to, and analysts have identified a number of shortcomings of American industry that have nothing to do with how much the Pentagon spends on research and development; they include: costly capital, short-sighted management, regulatory burdens, adverse exchange rates (at least until recently), predatory lawyers, uncaring workers, and foreign trade barriers. So why zero in on Defense Department R&D spending when so many other ills must be cured? And when private enterprise finances a huge amount of research and development for civilian purposes? If all the government and industry money spent on research and development in the U.S. is bundled together, the military’s share works out to a less alarming 30 or so per cent of the total. Beyond that, the National Academy of Engineering recently concluded that America has enough engineers to meet its needs, and that defense spending is an antidote to unemployment among them.

Along with many other observers, I used to buy the comforting notion that, when it came to research, the U.S. could do it all. But the deterioration of American industry drove me to re-examine the question of whether the U.S. is overdosing on military research. The answer: an emphatic yes.

James Melcher, who heads the Laboratory for Electromagnetic and Electronic Systems at MIT and confines his own research to electric power transformers for civilian use, views the Pentagon’s growing role in R&D with alarm. He says MIT is ”hooked on military research.”

A few blocks away, in the hangar-like building that houses MIT’sPlasma Fusion Center, researchers and technicians gaze dolefully at the vast, multimillion-dollar fusion mirror machine that they’ve been building for four years. It’s part of a national program to achieve a clean, safe, limitless source of nuclear power. The machine is near completion, but the word from its spon- sor, the U.S. Department of Energy, is that it won’t go into operation. As an economy move, the department has drastically cut the money for it. Barton Lane, a theoretical physicist, has worked on the machine from its inception. ”People in fusion energy research are getting out of the field,” he says. ”They’re going into the Strategic Defense Initiative. That’s where the jobs are today for these kinds of skills.”

MIT has been an intimate partner of the military since the pioneering days of radar during World War II. But its president, Paul Gray, recently warned that the Pentagon’s expanding appetite for R&D is ”cause for concern,” because it ”may draw talented people, including students and faculty, away from other promising lines of inquiry.”

Are the worries expressed at MIT and in other universities merely the lamentations of oversensitive academics? Listen to Simon Ramo, a founder of TRW Inc., a large defense contractor and an influential Republican. As far back as 1980 he wrote: ”In the past thirty years, had the dollar totals we spent on military research and development been expended instead in those areas of science and technology promising the most economic progress, we would probably be today where we are going to find ourselves technologically in the year 2000.” Since Ramo wrote that, the cost of research and development programs in the Department of Defense has tripled.

By any pertinent measure — money, percentage of gross national product, or relative numbers of scientists and en- giners devoted to military research and development — the United States allo- cates far more resources to this area than any of its industrial competitors. And that disparity will grow if the Strate- gic Defense Initiative accelerates from preliminary planning to big spending.

Of the estimated $125 billion that will be devoted to civilian and military R&D in the U.S. this year, $61 billion will be spent by the federal government; almost all the rest will be spent by industrial firms paying for their own research. Because it comes in big chunks and is unaffected by business’s impatience for profits, Washington’s bundle is especially potent in setting the direction of science and technology.

And that direction has been toward security-related activities, not only in the Defense Department but also in the CIA, NASA, and the Energy Department. In President Carter’s last year in office the federal government’s military and civilian research and development budgets stood at about $15 billion each, reflecting the long postwar practice of keeping them about neck and neck. Then, accelerating a military buildup that had been planned under Carter, the Reagan administration greatly enlarged the Pentagon’s R&D budget.

Meanwhile, when inflation is taken into account, there has been a reduction in federal support for civilian research, particularly in applied fields, which yield commercially important advances in energy, health, and industry. There has also been a radical shift in the government’s civilian research priorities; the balance of spending has shifted toward basic research, mainly in universities. This research is needed, but by definition it’s remote from the market place and, because virtually all of it is openly published, the whole world can make use of it — and does.

The spending by America’s main industrial rivals is markedly different. Besides Japan’s aforementioned two per cent R&D allocation for the military, there’s West Germany’s ten per cent and the Southeast Asian nations’ virtual zero. The latest figures show the U.S. spending 1.9 per cent of its GNP on civilian research. For Japan the number is 2.6 per cent, and for West Germany, 2.4 per cent. The congressional Office of Technology Assessment (OTA) sums up the situation as follows: ”In the Japanese economy, R&D directed at commercial applications is given a high priority; in the United States, commercial R&D suffers by comparison.”

The National Academy of Engineering recently compared the American and Japanese electronics industries and found that ”Japan’s semiconductor industry is made up of at least ten major entities [corporate or government research centers] that pursue long-range research and development on a scale matched by only a few American companies.”

Laboratories are today’s gold mines, and scientists and engineers are the producers of the precious ore — new knowledge and techniques for employing it. Oddly enough, the Pentagon’s share of this manpower has never been measured accurately, though it’s obviously substantial. The National Academy of Engineering and the OTA both estimate that defense industries absorb about 20 per cent of the nation’s engineers. But some observers think the true figure is far higher. Lloyd Dumas is a professor of political economy and economics at the University of Texas at Dallas and the author of The Overburdened Economy, a critique of American industrial performance. He estimates that 30 per cent of U.S. engineers do military work, and notes that Japan not only undertakes a negligible amount of defense research but also, with a population only half that of America, trains more engineers. Deduct the engineers going into military work in the U.S., Dumas says, and it turns out that Japan’s civilian industries are employing more than half again as many engineers as their American counterparts.

Lester Thurow, a professor of management and economics at MIT’s Sloan School of Management, estimates that 40 per cent of American scientists and engineers are employed on military projects. ”The United States now has economic competitors who are its technological equals,” he warns. ”When our nation had a technological edge over its international competition, it could be somewhat relaxed about diverting investment funds and scarce talent to military efforts. We can’t afford that attitude today.”

Another observer, Yoshi Tsurumi, a professor of international business at Baruch College in New York, writes that ”defense industries have come to pre-empt seven out of ten new engineering and science graduates, leaving makers of civilian goods to scramble for a dwindling pool of less trained people.”

But surely in addition to producing high-tech armaments, those military R&D dollars are also boosting the civilian economy through so-called spin-offs? In the early post-war years, the Army Signal Corps financed a lot of the research that led to solid-state electronics. The KC-135 aerial tanker that Boeing built for the Air Force was modified for the civilian market as the workhorse 707. Isn’t the process still at work?

Far less than it used to be, says Erich Bloch, a former IBM laboratory director and vice president who now heads the National Science Foundation. For one thing, he says, ”in most cases, civilian technology is now more advanced than that used by the military.” Beyond that, ruggedness, high performance, small production runs, and damn the costs are the chief characteristics of high-tech military goods. In contrast to military goods, high-tech civilian products must be cost-competitive, and their designers don’t have to contend with the rigors of the battlefield or the harsh environments of the deep seas or outer space. The cherished goal of civilian design is a standardized product with huge production runs to amortize the costs of research and development and tooling up.

Thus it’s no surprise that OTA has concluded that ”in no case can recent military spending [for electronics research] in the United States, France, or the United Kingdom be shown to have stimulated commercial developments in a major way.” Another OTA study reported that ”the class of technologies important for national defense is far too narrow to provide consistent and cost-effective support for the nation’s commercial industries.”

In some cases where civilian industry could benefit from military research, the Pentagon has withheld important information on grounds of national security. Robert Young, a professor in the department of industrial engineering at Texas A&M, told a congressional hearing last year about a pioneering program in integrated computer-aided manufacturing (ICAM) sponsored by the Air Force Materials Laboratory. ”A problem with ICAM is that the dissemination restrictions preclude widespread distribution of the results,” he testified. Young noted that the Air Force program had been terminated, and that the only ICAM research in the

U.S. is being done by a ”severely underfunded” program at the National Bureau of Standards. ”It’s ironic that we have many national laboratories funded at tens of millions of dollars per year to study all sorts of esoteric things, and yet we can’t adequately fund a single facility to study a primary source of our nation’s well-being — manufacturing.”

Bruno Weinschel, 1986 presidentof the Institute of Electrical and Electronics Engineers, which has 270,000 members around the world, was one of the first of the many millionaires to rise out of home- basement electronics shops. Weinschel Engineering, which he started with $20,000 in 1947, now has more than 300 employees at two plants in Maryland. Its principal product, microwave attenua- tors — devices that calibrate the flow of electric power — are standard equipment in U.S. and other Western space satellites and in radar equipment around the world. ”If seventy per cent of federal research goes into very interesting projects,” he says, ”the government will attract some very bright people, and then they’re not available to the civilian economy. Defense takes some of the very brightest people.”

He adds, ”Defense has bad R&D habits. It’s not interested in being cost-effective. It seeks solutions, not the optimization of costs.” One result of this, says Weinschel, is that ”it’s hard to get people with defense R&D experience adapted to civilian economics. I’ve tried to hire those people, but I had to let them go.”

Weinschel sells his products to the government, but says he hasn’t taken any government research contracts in years. ”You can’t be sure of the production potential once you’ve worked out a design for the government,” he says.

His attitude is fairly uncommon, says Tsurumi: ”When American manufacturers see an opportunity to go military, they usually do it. Why? Civilian markets are highly competitive and military markets are not.” U.S. firms, he says, no longer manufacture subway cars. Lockheed has given up making commercial aircraft. Some firms seek customers in both markets, but, according to Thurow, they ”separate their military production from their civilian production so that the civilian side won’t be corrupted by the cost- plus, custom-made ambiance of military production.”

Seymour Melman, a professor of industrial engineering at Columbia, is the author of several books on the woes of the American industrial economy. He bristles with indignation when he says, ”Defense industry pays the highest starting salaries and promises fast promotions. But those in the military get spoiled for civilian uses. They’re trained to be indifferent to costs.”

American manufacturers and educators, he says, are abandoning the needs of their own country: ”We don’t give courses here on elementary manufacturing proc esses. Manufacturing firms used to take our graduates. Now there are hardly any inquiries.

”Meanwhile, manufacturing is dying in the U.S. Look, there’s a market here for electric trolleys, but we buy them abroad. If you wanted to recruit people in the U.S. to make them, you couldn’t get them. You can’t get the guys who came up through military research to do it. Production competence is going to pieces. Cost-minimizing is hard work, and you don’t get experi- enced at it working on military contracts. But the kids coming out of school today go in unprecedented concentrations to military R&D jobs.”

Melman adds that in the 1970s Boeing Vertol, which made militaryhelicopters, tried unsuccessfully to expand into the manufacture of subway and trolley cars. Describing that venture in a recent article, he wrote that the firm ”followed the military practice of dispensing with thorough prototype testing: engineers took the cars straight from the drawing board into pro- duction. Naturally, when the cars were put into actual use, mainly by the Massachusetts Bay Transportation Authority, they repeatedly broke down . . . After several lawsuits, Boeing Vertol went back to producing military helicopters.”

Last spring President Reagan awarded the National Medal of Science and Technology — a kind of Congressional Medal of Honor in research — to 26 of the nation’s leading scientists and engineers. At a ceremony in the White House the President described the winners as being ”on the cutting edge of human achievement.” Their contributions, he said, were essential to national prosperity and defense. The proceedings drew a large contingent of TV cameramen and soundmen, as well as still photographers. They were all clustered on a raised platform at the rear of the East Room. As I stood near them, I couldn’t help noticing that all their equipment was made in Japan.

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