Abstract
Studies of the broad effects of military expenditure on industrial performance have tended to follow a common course. They open by drawing attention to an association between indicators of performance, such as rates of economic growth or movements in trade shares, and national commitments to military procurement. The strength of this association (usually negative in recent times) suggests causation, which is usually explained by the opportunity costs of committing scarce resources to military R&D and production, the complexity of military technology, and the bad industrial practices fostered by reliance on protected markets. These explanations are supported by drawing upon case-studies, circumstantial evidence, and the collective wisdoms of the day.
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Notes
See Mary Kaldor, Margaret Sharp and William Walker, “Industrial Competitiveness and Britain’s Defence Commitments”, Lloyds Bank Review, No. 162, October 1986, pp.31–49.
David Greenwood, “Note on the Impact of Military Expenditure on Economic Growth and Performance”, in (ed. Christian Schmidt), The Economics of Military Expenditures, (London: Macmillan, 1987), pp.98–99.
An excellent discussion of statistical shortcomings is provided by Frank Blackaby and Thomas Ohlson, “Military Expenditure and the Arms Trade: Problems of the Data”, in The Economics of Military Expenditure, 1988, pp.3–24.
See also Ron Smith and George Georgiou, “Assessing the Effect of Military Expenditure on OECD Economies: a Survey”, Arms Control, Vol.4 No.1, May 1983, pp.3–15.
Nearly all existing taxonomies of military products (e.g. those used in Jane’s publications) are strictly functional. Other taxonomies, such as the 3-digit SIC classification used by the Ministry of Defence in its contract coding, are too imprecise and lack (or have lost) a logical foundation.
See Bill McKelvey, Organisational Systematics: Taxonomy, Evolution, Classification, (University of California Press, 1982).
A stimulating analysis of the systemic and evolutionary nature of economic development is provided by Norman Clark and Calestous Juma, Long-run Economics: an Evolutionary Approach to Economic Growth, (London: Frances Pinter, 1987).
Although it will be sidestepped here, limitations in terminology pose serious problems. The vocabulary used in the study of technical change is meagre and weakly defined. What exactly is a product, technology, generic technology, component, system, production system, weapon system, information system . . .? It should be emphasised that the terms technology and product are not exchangeable. The former denotes an area of knowledge and material capability; a product is the result of technology being put into operation — it is the meeting point between capabilities and requirements.
For studies of these industries see “Telecommunications : Pressures and Policies for Change” , (Paris : OECD, 1983) ; William Walker and Mans Lonnroth, Nuclear Power Struggles : Industrial Competition and Proliferation Control , (London: George Allen & Unwin, 1983) ;
Lesley Cook and John Surrey, “The Offshore Petroleum Supplies Industry” , SPRU Occasional Paper No. 21, University of Sussex, 1982.
It is worth noting that the markets for military products and heavy electrical capital goods (including nuclear power stations) have been out of phase in the advanced industrial nations during the last fifteen to twenty years. As the latter declined in the mid-1970s, the former grew, a trend that is now moving in the opposite direction (the reverse has applied in France) . Whether or not there are causal links between these trends is open to question, but their contrary movement has been very significant for the large firms which straddle both markets.
These Japanese companies have nevertheless struggled to compete with firms specialising in civil mass markets such as Sony, Canon and Matsushita. It is interesting to note that the products being sold into these markets are becoming increasingly systemic as, for example, in the emphasis being placed on supplying “home entertainment systems”. But the initiative to move in this direction appears to be coming from the specialist firms, and not from the traditional systems suppliers.
The average annual UK expenditure on military electronics over the period ’1980–81 to 1984–85 was broken down as follows: radar — £192m; underwater systems (mainly sonar) — £293m; avionics systems — Z234m; radio and “The systems — £192.3m. See The General Electric Company PLC and The Plessey Co mpa n y PLC” , Monopolies and Mergers Commission, HMSO, Cmnd. 9867, Tables 5. 12 to 5. 15. However, these figures probably underestimate the expenditures on radio and line communications since they are partly subsumed into the other categories.
In the United States, for instance, the Department of Defense was among the strongest opponents of the ending of AT&T’ s monopoly, on the grounds that strategic command and control relied on a single integrated communications network. See Ashton B. Carter, “Telecommunications Policy and National Security” , paper prepared for the Brookings Institute Project on Technology and Government Policy for Telecommunications and Computers, May 1987.
A rare example of a near “civilian” equivalent is the whaling harpoon. The Norwegian firm Kongsberg historically specialised in the production of ordnance and whale harpoons.
See Ben Denkbaar , “Emerging technologies and the politics of doctrinal debate” in (ed. Frank Barnaby and Marlies ter Borg) , Emerging Technologies and Military Doctrine, (London: Macmillan, 1986) , pp.127–140.
An example of an attempted industrial reform that endea in frustration is provided by Mac Graham, ”Cruise Missile Development Programmes in the United States : a case-study in the determinants of weapons succession” , Doctoral Thesis, University of Sussex, 1987. Cruise missiles were initially intended to make certain classes of weapon platform obsolete, but ended up being assimilated by them resulting in even greater complexity.
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Walker, W., Graham, M., Harbor, B. (1988). From components to Integrated Systems: Technological Diversity and Interactions between the Military and Civilian Sectors. In: Gummett, P., Reppy, J. (eds) The Relations between Defence and Civil Technologies. NATO ASI Series, vol 46. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7803-5_2
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DOI: https://doi.org/10.1007/978-94-015-7803-5_2
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