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Robert Pollin: It’s not war that creates technological development, it’s the state investment

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I’m Paul Jay, in Washington, DC, and joining us again is Bob Pollin, from the PERI Institute. Thanks for joining us.


JAY: The argument goes like this when it comes to the military, militarization, and the economy: that the military’s played an important role in spill-off effect to the non-military sector of the economy. So the famous one’s the Internet. But there’s any number of pieces of technology that had been developed for the military that didn’t have commercial, public, you could say, application, and it’s a driving force that’s giving some of the dynamism to the US economy. So is that true or not?

POLLIN: It’s absolutely true that the industrial policy that’s taken place within the military, for a century, really, has developed all the major technical innovations that we’ve experienced in the economy. And you can point to jet aviation—well, aviation in general. You can point to the computer and the one you mentioned, the Internet. Imagine our economy without jet aviation, without the computer, and without the Internet. All of these were developed within the framework of the military sector. And the way the military was able to do it was to nurture these, supporting research and development, yes, decisively, but also supporting a guaranteed market, what we would call government procurement, creating a large-scale market that allowed these innovations to nurture over time without having to face, you know, the cruel test of the market within a year or two. And, in fact, there’s a very important book by Vernon Ruttan of the University of Minnesota, who poses the question: is war necessary for economic growth? And he’s a completely mainstream economist. His answer was “yes”. Now, it’s not that war was necessary for economic growth; his argument was that the industrial policy is necessary for economic growth. And the only way we’re getting industrial policy in this country is through the military. The implication is, if we could pursue a solid industrial policy through means other than the military, other than the Pentagon, we could see comparable kinds of benefits.

JAY: So your point is is if you do this under the—essentially for—somehow, psychologically, in the United States the military’s not considered big government. And I don’t know how Republicans and others get their head around that, but a big government here, and military as if it’s not connected to government over there. You’re saying if you drop this kind of psychological barrier and realize that it is about government expenditure, you can solve this, but you don’t have to do it through war.

POLLIN: Right. I mean you never had to do it through war. I mean, most of the activity around creating the computer was not, per se, for war. And, of course, now we can use the computer for anything. And so the point is now we face these gigantic hurdles in terms of maintaining a manufacturing capacity in Detroit, building a clean-energy economy, renewable-energy sector. And these new technologies that need to come on stream also require the same kind of nurturing that the computer, that jet aviation and the Internet received through the military. So what we need to do is create a similar kind of industrial policy that does the same thing. And there are two key features, and this book by Professor Ruttan emphasizes both: yes, support research and development, but equally important is the notion of a guaranteed market, procurement, because without that, the research and development, they won’t know where to sell it for a long time.

JAY: So your argument would go, then, if someone would say, “Where’s the money come from?” you’ll say, well, all this money that’s being spent now in the Pentagon, in supposedly more or less under that rubric to create jobs, get it out of the military sector and put it into infrastructure.

POLLIN: Absolutely. I mean, if we think about what are the real long-term challenges we face, obviously creating a clean-energy economy, fighting climate change is the crucial long-term issue for the survival of the planet. What about, you know, other issues? Job creation? What about creating decent school systems and a health-care system? These things also need to be nurtured through the same kinds of industrial policy, and they create more jobs in the process. So the military model is useful for understanding how you build industrial policy and not just rely on the rhetoric of a free market, ’cause we never had a free market in creating these major technologies that are the cornerstone of our economy. The aviation industry, computer industry, Internet—none of them were built on the basis of a free market.

JAY: Thanks for joining us.


JAY: And thank you for joining us on The Real News Network.

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Robert Pollin is Professor of Economics at the University of Massachusetts in Amherst. He is the founding co-Director of the Political Economy Research Institute (PERI). His research centers on macroeconomics, conditions for low-wage workers in the US and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the US. His latest book is Back to Full Employment. Other books include: A Measure of Fairness: the Economics of Living Wages and Minimum Wages in the United States, and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.