Cold War – Hot Profits

“I’ve found the job where I fit best!” – Artist: George Ropper

Anyone who was here state side during WWII can tell you of the rationing that went on. Everything was rationed. From bread to tires. They can also tell you that no matter what industry you were in, you were doing defense work. WWII took this country from nearly 30% unemployment to 0 unemployment over night. New businesses formed overnight to meet the demands. Struggling businesses like Willys Motors became major contractors.

There were factories and corporations making each other’s products to meet the demand of the military. RCA, Stromberg Carlson, and Bendix all making the same radios. Willys and Ford made the Jeeps. Whole towns grew up from nothing to support new ship and arms factories. One could say that nearly every corporation became a wholly owned subsidiary of USA Inc. The technology of the time expanded at a breakneck pace and the war paid for nearly all of it.

When WWII came to an end in 1945 the so called Cold War against what was called Communism began as well as a new war to fight it. Korea and the cold war kept many of these plants humming right along. And new defense systems needed new advances which meant lots of dollars for research and development and nearly all of it paid for by Uncle Sam. Working for a defense contractor – and at that time nearly all the major corporations were defense contractors – meant you could get whatever new and necessary equipment you needed to advance your project. And a lot of this made its way to the products that were sold to the general public as well.

Pretty sweet deal wouldn’t you say? Putting a good part of your research staff’s overhead on the government’s bill. And if the US military stopped being interested, you could also sell it to France or Egypt or Iran or Iraq or Israel or some South American country. And nearly every technical advance we saw had its origin or was advanced in some way through military material need – and I include NASA here . From television – improved for WWII, to computers – ENIAC for WWII became IBM.

Very few people complained about the merger of government and industry except President Eisenhower who used the euphemistic term Military Industrial Complex. Actually a form of codependency, where the US needed this arrangement just as much as industry did.

Reagan attempted to break it up after the fall of the Soviet Union but it was by then far to ingrained and in fact still flourishes as can be seen by this list of the top 20 contractors. Here is a PDF that goes into even greater detail.

And by what we have learned from Matt Taibbi and Yves Smith and others, this compact has been expanded to include the finance arena as well. With the Federal Reserve and Treasury’s union with Wall Street.

To look on this as separate entities to me seems just a but naive. We complain about the revolving door in Washington but to me it simply looks like intra-office advancement. Is it any wonder that there is little interest in Washington to change any of this ? That both parties like the idea of a corporate/government arrangement.

Getting government contract work was fairly easy especially if there was a military base nearby. I worked for a while for a very small company that did 80% contract work. But you had to be pretty clean security wise. President Harry Truman’s Executive Order 9835 initiated a program of loyalty reviews for federal employees in 1947 and if you failed these reviews, you could not get employed anywhere. You were essentially black listed.

My grandfather worked for years for a company that did nothing but missile guidance systems. My uncle was a head research chemist for a large company and at least 50% of what he worked on was government contracts.

Nearly all college and university research is defense related. The Center for Research in Electro Optics and Lasers (CREOL) at the university I worked for is primarily defense related work, so you have to be security cleared to enter most of it.

So if you want to understand what we are up against you would be wise to read Post-Soviet Lessons for a Post-American Century by Dmitry Orlov. About a two thirds of the way down is the section Similarities between the Superpowers.

It gives a good insight into how we came to mimic the same kind of political/economic paradigm the Soviets used and why it is as difficult now for any but the two main parties to get elected as it is for other parties in Russia now.  Some have even said we have a fascist state but I am not so sure that is quite it. More post Stalinist.

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One thought on “Cold War – Hot Profits

  1. cmaukonen

    And this just in from Alternet.

    An old bit of wisdom says: choose your enemies carefully, because over time, you will tend to become the very thing you most strongly resist. One of the most striking things about our victorious corporations now is the degree to which they’ve taken on some of the most noxious and Kafkaesque attributes of the Soviet system — too often leaving their employees, customers, and other stakeholders just as powerless over their own fates as the unhappy citizens of those old centrally planned economies of the USSR were back in the day.

    It’s not just that the corporations have taken control over our government (though that’s awful enough). It’s also that they’ve taken control over — and put serious limits on — our choices regarding what we buy, where we work, how we live, and what rights we have. Our futures are increasingly no longer our own: more and more decisions, large and small, that determine the quality of our lives are being made by Politburo apparatchiks at a Supreme Corporate Soviet somewhere far distant from us. Only now, those apparatchiks are PR and marketing executives, titans of corporate finance, lobbyists for multinationals, and bean-counting managers trying to increase profits at the expense of our freedom.

    With tongue only somewhat in cheek, here are a few ways in which Americans are now becoming a new lumpenproletariat, subject to the whims and diktats of our new Soviet-style corporate overlords.

    Dangerous it is to study too closely the arts of the enemy.

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