Noam Chomsky Explains Gargantuan Waste Spending Through the Pentagon

 December 13, 1989, KGNU Radio

Caller:  "I'd like to ask you about . . . the Pentagon budget, which is only about 6 percent of the GNP, and military procurement is only 2 percent or 3 percent of the GNP. If you think that exists to benefit high-tech industries, it seems like it would make more sense for the government to directly fund high-tech industries if they wanted to do that. Probably the public would be even more supportive of it, like they are in Japan."

Noam Chomsky:  "The figures about percentage of GNP are almost totally meaningless. The point is that the corporate managers in advanced industry - this is true of electronics, computers, pharmaceuticals, etc. - expect that the government, meaning the public, will pick up the costly parts of the production process, the parts that are not profitable - research and development. That's got to be paid for by the public. Furthermore, the public, through the Pentagon, provides a state-guaranteed market, which is available for waste production if commercial markets don't work. That is a gift to the corporate managers. It's a cushion for planning. When something can be sold on the market, you sell it. If not, the public purchases it and destroys it. Furthermore, the public pays the cost while the corporation makes the profit. If you take a look at particular industries you can see how this works. 

"Take, say, the computer industry, the core of the modern industrial economy. I'm kind of smoothing the edges here, but the story is essentially accurate. You can put in tenth-order effect, if you like. In the 1950s, computers were not marketable, so the public paid 100 percent of the cost of research, development and production through the Pentagon. By the 1960s, they were beginning to be marketable in the commercial market, so the public participation declined to about 50 percent. The idea is that the public pays the costs, the corporations make the profits. Public subsidy, private profit; that's what we call free enterprise. By the 1980s there were very substantial new expenditures required for advances in fifth-generation computers and new fancy parallel processing systems, etc. So the public's share in the costs went up very substantially through Star Wars and the Pentagon, etc. That's the way it works. Percentage of GNP doesn't tell you anything relevant to this process.

"As to why the government doesn't just come to the population and play it the Japanese way, the answer is, in my view, and this has been the answer that business has given and I think they're right, that the public here wouldn't tolerate it. This is not a docile, submissive population like Japan. You can't come to the population here and tell them: Look, next year you're going to cut back on your consumption by this amount so that IBM can make more profits and then maybe ten years from now your son or your daughter will get a job. That wouldn't wash. What you tell people here is: The Russians are coming, so we better send up a lot of missiles into space and maybe out of that will come something useful for IBM and then maybe your son will get a job in ten years. Those last parts you don't bother saying.

Caller: "Who are you quoting? Are you quoting yourself or some analyst in the military or what?"

Chomsky: "What I'm saying is what politicians in the United States say."

Caller: "I've never heard them say that."

Chomsky: "You've never heard a politician in the United States say, the Russians are coming, we have to have more missiles?"

Caller:  "I've never heard them say that we need it because we have to fund some high-tech industries."

Chomsky:  "You didn't hear what I just said. I said that the last two sentences I added were not what is publicly said. How you do it in the United States is you say, look, we've got to defend ourselves, we need Star Wars, we need the Pentagon system, and the effect of that is to achieve what I just described with regard to the computer industry, or whatever. That is because this is a relatively free society.

"If politicians were to approach the public telling them, look, we've decided that next year you're going to cut back on your consumption so that IBM will make more profit, the reaction in the United States would be a healthy reaction: Who are you to tell me to cut back so that IBM will make more profit? If it's going to be a social decision of that kind, I want to take part in it. And that's precisely why business does not want to be put in those terms. They do not want social policy, which is going to organize people, to become involved in making decisions over investment. This issue has come up over the years, many times, in the business press. Go back to the 1940s where they point out there are two techniques: one technique is the military system, the other technique would be social spending, infrastructure development, hospitals, services, etc. or useful production. But the latter is no good. It will work from a technical, economic point of view, but it has all sorts of unwelcome side effects. For example, it tends to organize public constituencies. If the government gets involved in carrying out activities that affect the public existence directly, people will want to get involved in it."

-----Noam Chomsky, Chronicles of Dissent - Interviews With David Barsamian, pps. 178-82