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WAR ECONOMY IS SHOWN TO HAVE NEGATIVE EFFECTS ON PRODUCTIVITY. CAPITAL & TECHNOLOGICAL BRAINS PREEMPTED FOR MILITARY ECONOMY YIELD NO USEFUL CIVILIAN PRODUCTS. THE COST-MINIMIZING PROCESSES WITHIN INDUSTRIAL FIRMS ARE ABRIDGED & REPLACED BY COST-MAXIMIZING MECHANIZIMS THAT YIELD NO DERIVED EFFECT OF FURTHER MECHANIZATION & PRODUCTS. EVIDENCE IS GIVEN OF INFECTION OF CIVILIAN ECONOMY BY MILITARY ECONOMY FEATURES. THESE DEVELOPMENTS ACCOUNT FOR HISTORICALLY-UNPRECEDENTED LOW PRODUCTIVITY IN US MANUFACTURING AFTER 1965. AA.

After twenty-five years of a nuclear-military arms race, it is possible to define significant limits of military power for national security. These limits apply with special force to the nuclear superpowers. These same limits of military power also define new requirements for a disarmament process.Underlying the long discussion of disarmament among nations has been the understanding that lowered levels of armaments produce mutual advantage: the prospect of physical destruction is reduced; and the cost of armaments can be applied to constructive uses. The arms race from 1946 to 1971 between the United States and the Soviet Union has not improved the military security of either nation, and the economic cost to these two countries has exceeded $1,500 billion.

A comparative study in Israel of 6 managerially controlled enterprises & 6 cooperatively administered enterprises is used as a means to determine if the introduction of industrial production requires the use of the managerial-hierarchical mode of decision-making, or if, through the study broader perspectives on options for organization are not possible. The criteria for the selection of the enterprises in the study were that each should represent a technically modern industrial operation, including substantial capital investment, & produce standard products for sale in an open market. The comparative productivity of labor in each type of enterprise was measured by contrasting output or net sales to inputs or production worker man-hours. A second measure, that of productivity of capital, was also used. The cooperative enterprises showed high productivity of labor, higher productivity of capital, larger net profit per production worker, & lower administrative cost. These results show that there is a cooperative mode of organization that is a workable alternative to managerialism for industrial operations, & that the use of machine technology does not itself exclude the use of cooperative decision-making. 6 Tables. S. Coler.

Conversion to civilian economy can be carried out efficiently if there is detailed planning at all levels: factory, firm, industry, state, and federal. The main opportunities for new domestic civilian markets are in economic development investment in the underdeveloped regions of the United States and in major expenditures for health, education, housing, and related services. Large foreign markets for capital goods await major United States investment in economic development. Pressures for solving market and conversion problems are being generated not only by prospects of disarmament but also by two new factors: domestic economic problems that press for solution and require a shift of resources from military uses and the appreciation that it makes no military or other sense to spend more for expensive overkill stock-piling.

First published 1961 by Ballantine Books, New York. ; Includes bibliographical references. ; Mode of access: Internet.