Military Spending and Industrial Decline: A Study of the American Machine Tool Industry

Military Spending and Industrial Decline: A Study of the American Machine Tool Industry

Military Spending and Industrial Decline: A Study of the American Machine Tool Industry

Military Spending and Industrial Decline: A Study of the American Machine Tool Industry

Synopsis

"An incisive, illuminating diagnosis of what ails American industry. By diagnosing the development and decline of the one industry that is the foundation of every metal-using economy, Prof. DiFilippo's study of the U. S. machine tool industry also affords a model for defining the patterns of decline from which no U. S. industry is now exempt. A solid contribution to industrial economics." Seymour Melman, Columbia University

Excerpt

For more than three decades, the U.S. has advocated military spending as central to its national policy. But consistently high expenditures for defense have been disadvantageous to industry over the years. Indeed, as the chapters that follow this one will make evident, many of the problems the U.S. machine tool industry has had to contend with have resulted due to postwar military spending. Of utmost importance in this chapter, however, is to provide an explanation of how a permanent war economy has affected government action and how it has placed the American machine tool industry at a disadvantage relative to its major foreign competitors.

THE WAR ECONOMY AND ITS EFFECTS ON INDUSTRY

From 1950 to the present this nation has spent more than $3 trillion on defense. Through all of these years, the emphasis on military spending has varied, but essentially the fervid concern over national defense has remained salient. The emersion of supply-side economics in recent years, with emphasis being placed on sizeable and continuous increases in military spending, has taken attention away from Keynesian policy which was dominant throughout most of the postwar period.

As in the past, the manifest rationale for a growing military budget today has been the claimed purpose of national security. But more noticeably at the present time, the popular idea has become "security through strength." Beneath the rhetoric, however, the Keynesian stimulus resulting directly from defense . . .

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