technological progress into low gear. To be sure, engineers and scientists who are trying to solve problems relating to the design of nuclear warheads or the accuracy of missile guidance systems occasionally come upon some bit of knowledge that is relevant to civilian production. But such an occurrence is rare, and each one is extraordinarily costly. Improving productivity in nonmilitary areas requires the concerted, continuous upgrading o f production techniques, processes, and machine designs. Without improvements in productivity, any increase in a firm s costs has to be passed on in the form o f higher prices. And that generates both inflation and unemployment. “Cost pass-along’’ behavior, in fact, has priced U.S. industries out of more and more markets, both domestic and worldwide. The role of military spending in these problems is not generally understood, but the severity of the problems themselves is widely recognized. Late last fall, Barry Bosworth, director of the Council on Wage and Price Stability, told a congressional committee, “We’re turning into the British situation of the early 1970s, where they had almost no productivity growth.” (In the same testimony, Bosworth called the slowdown a “ real puzzle.” ) Earlier, the cover story of the July 3, 1978, issue of Business Week (called “Vanishing Innovation") focused on the failure of U.S. industrial technology. As early as 1976, the annual report of the National Science Foundation had expressed the same concern. If the twin curses of inflation and unemployment are to be overcome, there is simply no substitute for substantial cuts in military spending. Putting those resources to more productive use, however, will require careful plans for converting defense-related plants to nonmilitary production. The mechanics of such a process are not hard to imagine. One model is provided by the Defense Economic Adjustment Act, introduced in the Senate by George McGovern (D-S.D.) and Charles Mathias (R Md.) in November 1977, and in the House by New York Democrat Theodore Weiss (and a number of co-sponsors) in January 1978. Essentially, the bill has three parts. The first establishes a Defense Economic Adjustment Council (in the executive office of the President), made up of one-third each cabinet members, representatives from nondefense business, and union representatives. The council would encourage both civilian federal agencies and state and local governments to prepare concrete plans for various nonmilitary public projects; it would pull together, in effect, a laundry list of potential government markets for any group wanting to convert a military facility. The council would also prepare and distribute a "conversion guidelines handbook,” a kind of how-to-do-it manual (not a set of requirements) for groups that wanted to develop such projects. The next section of the bill would establish an “alternative use” committee at every military facility of any size —bases, industrial plants, think tanks, laboratories, and so on—as a condition of eligibility for defense contracts. These committees—one-third each from management and labor, plus one-third from the surrounding community—would be independently funded. They would be responsible for drawing up specific conversion plans and would be entitled to all the information they needed for that purpose. The bill’s third section creates a ‘‘Workers’ Economic Adjustment Reserve Trust Fund,” funded by 1.25 percent of the gross revenue of every defense contract. This fund would provide any workers displaced by conversion to nonmilitary production with up to 90 percent of their first $20,000 —and 50 percent of the next $5,0 0 0 - in income for a period of up to two years. It would also allow for two-year continuation of fringe benefits tike pensions. And it would provide both retraining benefits and relocation allowances for workers permanently displaced by the changeover. Politically, of course, a bill like this one is some distance away from being passed. And conversion—in this year of a rising defense budget and the growth of organizations like the Committee on the Present Danger—is not exactly the most popular issue around. Still, there are some straws in the wind. A group called Members of Congress for Peace Through Law, which includes roughly 175 Senators and Representatives (approximately one-third of each house) has established an economic conversion task force. Some of those who are most interested in the defense dependency issue, like Representative Christopher Dodd (D-Conn.), are from areas that are heavily loaded with defense contracts. At the grass roots, a number of activist groups are keeping the issue alive. The April 1978 demonstrations aimed at converting the nuclear weapons plant at Rocky Flats, Colo., for example, brought together groups like the Clamshell Alliance, SANE, the Fellowship of Reconciliation, Environmental Action, and a number of religious organizations. In California, the MidPeninsula Conversion Project, located in the heart of a dense concentration of military industry in the nation’s largest defense contracting state, is working with a variety of constituencies on the possibility, of converting from military production to solar energy production(among other options). Connecticut's Trident Conversion Campaign and Colorado's Economic Conversion Project are engaged in similar activities. Nationally, potential support for conversion of defense facilities to nonmilitary uses may come from church groups, unions, and eventually from business itself. The June 1978 annual convention of Southern Baptists issued a call for transferring funds from "nuclear weapons to basic human needs.” (The New York Times reported that “the gesture was the latest in a series of signs that the disarmament issue is stirring religious leaders in evangelical circles as well as in the Roman Catholic Church and liberal Protestant denom ina tions .’’) The International Association of Machinists—one of the largest unions representing workers in defense-related industry—has come out for conversion. The United Auto Workers, a second large defense worker union, has also been quite supportive, and a number of other major unions have at least begun to dip their toes in the waters by taking part in discussions on conversion. The union interest in conversion, of course, is a direct reflection of the instability of most defense work. State and local officials may at some point soon see a similar interest. Even areas with high concentrations of military spending have witnessed the Defense Department’s fickleness; in spite of a record military budget last year, for example, the Pentagon announced plans to cut back another 107 military bases. Without conversion, cutbacks and contract cancellations can wreak economic havoc on a community and its region. With conversion, the effect may be exactly the reverse. A Defense Department report on the employment effects of 22 base closures around the United States shows a gain of nearly KING of ROME ELECTED HIGH QUALITY PRE-READ BOOKS PRINTS; OLD (LEAD) TOY SOLDIERS; MILITARIA 231-9270 8133 S.E. 13TH OLD SELLWOOD PORTLAND, OREGON 97202 BILL MATTHEWS ECECELES 2 1 0 8 N .W . G L I S A N S T . P O R T L A N D . O R E G O N 9 7 2 1 0 P H O N E 1 5 0 3 ) 2 4 R - 9 1 4 2 R O N H I N C K L E Y M A T T L A B A D IE 27,000 jobs after the facilities were converted—though years were required for the process because there had been no advance planning. Perhaps the most important constituency when it comes to planning for conversion is the workers at each defense plant. The best example of worker mobilization for this purpose comes from Britain. In 1974. faced with the prospect of immediate layoffs and long-term decline, the Lucas Aerospace Shop Stewards Committee began to develop a plan for nonmilitary production for the firm, which is Europe’s largest designer and manufacturer of aircraft systems and equipment. The committee, representing all 13 trade unions from 17 Lucas locations in the United Kingdom, circulated questionnaires to workers, asking for an inventory of job skills, available plant and equipment, and suggestions about alternative products. The result came to be known as the Corporate Plan. It was released, after 18 months of data collection, analysis, and evaluation, in early 1976. The plan includes a total of roughly 150 products. All meet a criterion of social usefulness—and many meet market standards of profitability. Among the product ranges specified in the plan are alternative energy sources, medical equipment, transport systems, and braking systems. Management at first refused to discuss the plan, or even to meet with the committee, on the grounds that it was not a recognized union organization. When the company announced in March 1978 that it would close several factories and lay off some 2,000 workers over the next two years, however, members of Parliament and other in- fluentials began to intervene. Finally, in late June of 1978, management agreed to meet with the Confederation of Shipbuilding and Engineering Unions, which had conveyed official status on the committee representatives through formal election at a delegate conference. According to the union side, the company agreed at this meeting to postpone its plant closures and layoffs, to provide facilities and information to help develop alternative product plans for two plants due to be closed, and to provide services such as market research. Management, however. has announced that the plant closures will be carried out regardless of any alternative production plans that may be developed. Economic conversion is a strategy for making peace possible—no more, no less. It is a hard-nosed approach, appealing to people’s self-interest as much as to their idealism. The nation’s economy must be relieved of the crippling burden of heavy military spending if it is to recover permanently from its present doldrums. And national security will continue to be an elusive goal as long as we persist in the fantasy that we need to add ever more sophisticated weaponry to the nearly incomprehensible pile we have already amassed. Yet until the fear of unemployment and other severe economic disruption can be laid to rest, the transfer of resources from the military sector to civilian production will continue to hit a political roadblock. That’s where planning for conversion comes in. Without it, we won’t get far. Lloyd J. Dumas is an associate professor of industrial and management engineering al Columbia University. Reprinted by his permission and Working Papers May-June 1979. Deco 30’s and 40’s collectibles and useables 316 SW 9th 223-0767 Mon.—11-7 Tues.—closed Wed.-Fri— 11-7 Sa t—2-7 *a state of insanity characterized by delusions of a pleasing nature GJEEVBU^ V 11
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