The Scientific Estate and
JEFFREY M. SCHEVITZ
Before the conclusion of World War II the need for a corporate‐ controlled military economy based on high-cost research, development, and hardware became obvious to that class "Who Rules America." 1 The need for such a military economy emerged with the decline in political colonialism, the rise of the need of the United States to take the place of Great Britain as the upholder of the worldwide capitalist system, and the recognition that the road to economic stability lay not with small‐ scale New Deal-type spending but with massive military spending. 2
The clear benefits of a fully coordinated, collectivized economy dominated by big business interests was first demonstrated by the war collectivism of World War I. At this time business found that it could mobilize and plan the entire economy, with each industry being run by representatives from its largest firms—a system which provided guaranteed profits through cost-plus contracts. 3 World War II demonstrated not only that big business could benefit directly by the guaranteed profits of a militarized economy, but that the only way a corporate capitalist economy could survive was through the use of government fiscal policy—massive government spending to prime the economy.
Although World War I also pulled the economy out of stagnation, the theory which explained the necessity of government spending to control business cycles was proffered by Keynes in the Interwar period. It was the demonstrated success of government wartime spending during World War II that made Keynes acceptable to the corporate elites. But Keynes