The Readers’ Corner:
As a result of World War II, US corporate after-tax profits soared from 6.4 billion to 10.8 billion dollars between 1940 and 1944. By 1945, only 100 American companies produced 70 percent of all US military output, and the ten largest of these companies produced one-third of this war production. After the unconditional surrender of Germany and Japan in 1945, the high profits of these few private corporations were threatened --a virtual peace scare, as Gabriel Kolko called it in his influential history of post-war foreign policy, The Limits of Power.
To protect these profits and maintain the U.S. military budget at the war-time level after World War II, President Truman sought bi-partisan support in Congress. Republican senate leader, Arthur Vandenberg (Michigan), was willing to co-operate: he eagerly endorsed the Democratic administration’s new military strategy, while warning the President that, if he wanted a large tax revenue to finance an inflated military budget in time of peace, he would have to “scare hell out of the American people!” Truman understood this advice, and the U.S. military budget during his administration rose to unprecedented levels. According to official statistics from the office of Senator J. William Fulbright (Arkansas): between 1946 and 1967 the federal government spent $904 billion, or 57.29 percent of it budget for military power, and only $96 billion, or 6.08 percent for social functions, such as education, health, labor and welfare programs, housing and community development. "Convincing the American people," observed historian Sidney Lens in his book, The Military-Industrial Complex,
that they ought to spend nine times as much on guns as on
In 1961, when the defense budget was $44 billion, America was spending $247 for every man, woman, and child in the country on the military. Over the following decades the US military budget has grown continually, until today, despite the end of the Cold War, the military budget request for fiscal year 2001 stands at $305.4 billion, which, today, represents something like $1,090 dollars for every man, woman, and child in America.[Readers are invited to visit atelier no. 2, article no.8, “Highlights of the FY 2001 Request,” from the Center for Defense Information (CDI).]
“History is bunk!” blurted Henry Ford, father of assembly line production, at the beginning of the last century. For Ford, the future had nothing to do with past. Society, he believed, was shaped not by forces derived from past events, but out of whole cloth, by gifted visionaries like himself, using a disciplined labor force as a chef de choeur might use the voices in his choir. More recently, Margaret Thatcher went one step further challenging the very concept of society: “What society? she replied to a journalist questioning the effects of her neo-liberal “reforms.”
“Society is bunk!” seems to be the theme of neo-liberal reformers who are busy engineering l’individualisme à outrance at the beginning of the new century.
Back in 1968, we were a young group of history students at Madison, Wisconsin, a team of beginners practicing original research by reading, writing, and publicly defending the essays we presented in Professor Harvey Goldberg’s social history seminars. We were brash, inspired, and full of ourselves; we wanted nothing less than to change the world.... Very often, we were made to realize we had done no more than re-invent the wheel.
I remember Professor Goldberg indulging us in what must have seemed to him very callow debates, listening and occasionally taking notes, while we criticized and defended one another’s research papers. On one occasion, I recall, some participants in the seminar became particularly vexed; one student angrily accused another of “wasting our time” with research which was simply “beating a dead horse”, everything he was saying had been said before, and better! Goldberg concluded that class with a memorable remark: “You know,” he announced quietly, “we are all intellectual midgets standing on the shoulders of past giants.” A silence fell over the room, as we slowly gathered our pens and papers and books --a bit ashamed of our arrogance, slightly more modest about our work, and a lot more cognizant of the intellectual landscape which now offered new problematics and expanding horizons for original research.
Over the past many days, the International Herald Tribune has been discussing the imminent tax reform, which is now being debated in the U.S. Senate. The controversial Republican proposal is to reduce federal taxes by 1.6 trillion dollars over the next ten years. “We have a cash flow coming into the U.S. Treasury,” President Bust told Pennsylvania businessmen recently, “and the fundamental question is what to do with it. We’ve got to be careful about overspending in Washington.” The ostensible concern is to prevent inflation by turning the money back to the private individual, thereby increasing consumer expenditures. “The American people have been overcharged,” Bush told legislators in his first address to a joint session of Congress, “and on their behalf, I’m here to ask for a refund.” (The magic refund figure most often cited for the average family is $1,600.) Actually, the new income tax structure, according to this proposal, would amount to a 5 percent reduction in taxes for the lowest income Americans (down from 15 percent to 10 percent), and more than a 6.5 percent cut (from 39.6 percent to 33 percent) for those in the highest income bracket. [See IHT, March 1, 2001] When U.S. Treasury Secretary Paul O’Neill was confronted with a statistical analysis showing that the Republican tax-cut proposal would yield the greatest benefits to the richest 1 percent of the U.S. population, giving them no less than “43 percent of the total tax cut,” he testily rejected the idea as “a nonsense set of statistics”. [For more information on Secretary O’Neill and his controversial decision not to divest his personal 100-million-dollar investment in Alcoa Corp. stocks, readers are invited to visit atelier no.15, article no.10, “Treasury Chief to Keep $100 Million Alcoa Stake.”]
The continued trend to shift wealth in America from the public domain to the private domain will inevitably lead to further reductions in public services and an increase in private user-fees. The newly formed Tax Relief Coalition is effectively pushing for such change today in the Washington, D.C. A March 5 article in the Washington Post reported on this new mobilization:
So far discipline is holding. After a breakfast pep talk from Mr.
[For more details on this new Republican offensive, readers are invited to visit atelier no.16, article no.8, and read Dan Morgan’s article, “Business Toes the Line on President's Proposal.”]
Meanwhile, there has been no significant effort to reduce military spending. The IHT reported in an article by William Pfaff, [see atelier no.2, article no.7, “America's Infatuation With Missile Defense Baffles Europe,”] that Europeans were “surprised” that the U.S. Anti-Missile Shield system was being seriously proposed by the Bush administration. If this is true and these Europeans are really “baffled,” perhaps they would benefit from a better historical understanding of the U.S. military-industrial complex and how it works. We recommend reading President Eisenhower’s Farewell Address to the American People (17 January 1961), in which he left little doubt about the future role of military industries in post-war America. “Until the latest of our world conflicts (i.e. World War II),” he explained, “the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well.”
This conjunction of an immense military establishment
For contemporary update of military industries and the government-industrial connection, readers are invited to visit atelier no.15, and read article no.9, Leslie Wayne’s piece, “For the Old Bush Team, A Whole New Ballgame, State Power and Connections Are Paying Off For Ex-Officials in Private Equity Business.”
"The hidden hand of the market,” wrote The New York Times foreign policy columnist Thomas Friedman, a few years back, in one of his more candid moments,
will never work without a hidden fist - McDonald's
[Readers are invited to visit the New York Times Magazine website and read Thomas Friedman’s article, "A Manifesto for the Fast World," first published in The New York Times Magazine, March 28, 1999.]
Friedman offers us, however, only half of the picture. If America’s international prestige, which has been thoroughly commercialized --from hamburgers to automobiles; from entertainment to footwear--, is really based on the potential violence of military might, nevertheless, U.S. political culture still includes electoral campaigns that require the acquisition of very serious debts --both political and financial-- that virtually every politician incurs when running for office. Together, this combination of militarism and financial dependency constitutes a system that truly requires an imperial dominance abroad and self-censorship at home, without which the American political economy would quickly dissolve --whether that eventuality would be for the better or for the worse is open to debate.... [For a graphic description of the political economy of indebtedness in Washington, D.C., readers are invited to visit atelier no.16, article no.6, “The Buying of the President: An Interview with Charles Lewis,” and article no.7, “LEGALIZED BRIBERY: George W. Bush, Corporate Candidate,” by Andrew Wheat. Also helpful is Ken Silverstein’s recent book, Washington on $10 Million Dollars a Day, How Lobbyists Plunder the Nation (1998).]