¹ “The military force of the society, which originally cost the sovereign no expence either in time of peace or in time of war, must, in the progress of improvement, first be maintained by him in time of war, and afterwards even in time of peace.” Smith, Adam, The Wealth of Nations: Volume II Chicago: University of Chicago Press, 1976), 230Google Scholar.

² Calleo, David P., The Atlantic Fantasy: The U.S., NATO, and Europe Baltimore: The Johns Hopkins University Press, 1970)Google Scholar.

³ For a more detailed discussion of these developments, see Calleo, David P., The Imperious Economy Cambridge: Harvard University Press, 1982)Google Scholar.

⁴ Calleo, David P., “Inflation and American Power,” Foreign Affairs 59 (Spring 1981), 784CrossRefGoogle Scholar.

⁵ As Calleo describes it, “American monetary and fiscal policies were sucking capital from Europe, and the consequences were blighting Europe's domestic prosperity” (p. 101).

⁶ Carlson, Keith M., “Trends in Federal Revenues: 1955–86,” Federal Reserve Bank of St. Louis Review 63 (May 1981), 34Google Scholar.

⁷ Peterson, Peter G., “The Morning After,” The Atlantic Monthly (October 1987), 44Google Scholar. The real significance of even these larger deficits was (and is) a subject of debate among economists. One authority has recently argued that conventional methods of calculating the magnitude of the deficit without correcting for inflation are seriously misleading. Properly adjusted, the deficits of the inflationary late 1970s actually appear as real surpluses. See Eisner, Robert, How Real Is the Deficit? (New York: Free Press, 1986)Google Scholar. For a review of changing expert opinion on the significance of budget deficits, see Peterson, Paul G., “The New Politics of Deficits,” Political Science Quarterly 100 (Winter 1985–86), 575–601CrossRefGoogle Scholar.

⁸ Clayton, James L., “The Fiscal Limits of the Warfare-Welfare State: Defense and Welfare Spending in the United States Since 1900,” Western Political Quarterly 29 (September 1976), 364–83CrossRefGoogle Scholar.

⁹ He notes, for example, that “the unbalanced fiscal policy of the 1960s could not, of course, be blamed on military and space spending alone.” Concerning the 1970s, he points out that “while U.S. military expenditures did fall in the wake of Vietnam, the rapid growth of domestic social services more than offset that decline” (pp. 87 and 91).

¹⁰ Figures were calculated from tables in The United States Budget in Brief, FY 1989 Washington, DC: G.P.O., 1988), 102 and 116Google Scholar. For a review of spending on the various components of the budget during the Reagan years, see ibid., pp. 49–90.

¹¹ According to Carlson (fn. 6, p. 37), if there had been no change in tax policy, federal budget receipts would by 1986 have equaled 24% of GNP. AS things turned out, at that point revenues had fallen to around 18% of GNP while expenditures had risen to around 23%. Economic Report of the President, 1988 Washington, DC: G.P.O., 1988), 31Google Scholar.

¹² Nadiri, M. Ishaq, “Increase in Defense Expenditure and Its Impact on the U.S. Economy,” in Denoon, David, ed., Constraints on Strategy: The Economics of Western Security New York: Pergamon-Brassey's, 1986), 33–34Google Scholar.

¹³ Deficits averaged $157 billion for the years 1980–1987 and reached a peak of $221 billion in 1986. Economic Report of the President (fn. 11), 337. In 1986, the deficit equaled 4.9% of GNP. Peter Peterson (fn. 7), 44.

¹⁴ Interest payments went from 8.8% of outlays and 1.9% of GNP in 1980 to 13.8% and 3.1%, respectively, in 1987. U.S. Budget in Brief (fn. 10), 102 and 116.

¹⁵ During the Korean War, for example, defense budgets grew from under 5% of GNP to over 13% between 1950 and 1954 (as compared to a smaller than 2% increase between 1980 and 1987). While the war was going on, however, taxes were increased, civilian spending was permitted to fall as a percentage of GNP and, as a result, deficits increased only slightly. DeGrasse, Robert W. Jr., Military Expansion, Economic Decline New York: Council of Economic Priorities, 1983), 135–37Google Scholar. For a comparison of the Korea, Vietnam, and Reagan buildups, see Thurow, Lester, “How to Wreck the Economy,” The New York Review of Books, May 14, 1981, pp. 3–8Google Scholar.

¹⁶ Whether the aim of the government's policy ought to be the total, automatic elimination of yearly deficits is, of course, another question. For the case against reflexive budget balancing, see Eisner (fn. 7), 145–64. For a history of the balanced budget as a potent political symbol, see Savage, James D., Balanced Budgets and American Politics Ithaca, NY: Cornell University Press, 1988)Google Scholar.

¹⁷ For a range of estimates, see The Economist, February 20, 1988, pp. 25–26.

¹⁸ “The Pentagon Is Learning to Live With Less,” New York Times, April 3, 1988, p. E5Google Scholar.

¹⁹ William Kaufmann has suggested a variety of other reductions (especially in strategic nuclear and naval forces) that could save close to $370 billion over the next five years without requiring a withdrawal of U.S. ground forces from Europe. See Calleo, David P., Cleveland, Harold van B., and Silk, Leonard, “The Dollar and the Defense of the West,” Foreign Affairs 66 (Spring 1988), 854–55CrossRefGoogle Scholar.

²⁰ By one estimate, increasing the top marginal income tax rate from 28 to 30% could generate $76 billion in additional revenues over the next five years. Adding a 33% bracket would affect only a relatively small number of taxpayers, but could yield almost $30 billion over the same period. Higher taxes on beer, wine, distilled spirits, and cigarettes could bring in over $43 billion between 1989 and 1993. See Reducing the Deficit: Spending and Revenue Options Washington, DC: Congressional Budget Office, 1988), 285–88 and 351–53Google Scholar.

²¹ A flat 5% value-added tax (VAT) would yield almost $460 billion over the next five years. Even if items like food, housing, and medical care were excluded (to reduce what might otherwise be a disproportionate burden on people with lower incomes), a national VAT would still bring in over $260 billion during the same period (ibid., 342–45). For an analysis of possible taxes on consumption, see Walker, Charls E. and Bloomfield, Mark A., eds., The Consumption Tax: A Better Alternative? Cambridge, MA: Ballinger, 1987)Google Scholar. For a variety of other tax proposals, see “Doing the Unthinkable: Six Recipes for Raising Federal Taxes,” The New York Times, October 16, 1988, p. F2Google Scholar. Also see Stein, Herbert, “Tax the Rich, They Consume Too Much,” The New York Times, October 23, 1988, p. F2Google Scholar.

²² A $5 per barrel fee on domestic and imported oil would bring in $106 billion over five years. An oil import fee alone would yield $41 billion. A 12 cent per gallon increase in the tax on motor fuel would raise $57 billion. Imposing a charge on sulfur dioxide and nitrogen oxide emissions and on the production of hazardous wastes could bring in almost $12 billion in five years. See Reducing the Deficit (fn. 20), 351–56.

²³ For example, cancellation of a planned new NASA space station would eliminate $13 billion in expenditures between 1989 and 1993; elimination of the controversial Superconducting Super Collider particle accelerator would save over $2 billion during the same period. Ibid., 184–85 and 188–89.

²⁴ A 2% annual cap on pay increases for government employees might save as much as $21 billion over the next five years. Ibid., 259–61.

²⁵ In 1986, the federal government made payments of $455 billion to individuals, with the majority going to non-means-tested programs like Social Security and Medicare ($271 billion), civil service and military retirement benefits ($47 billion), and agricultural subsidies ($26 billion). By contrast, unemployment compensation amounted to only $18 billion. Peter Peterson (fn. 7), 61.

²⁶ Former Secretary of Commerce Peter Peterson estimates that, if retirement ages were gradually increased, initial benefits to those in upper income brackets were lowered, and taxes were imposed on benefits that exceed contributions, the federal government could save over $50 billion annually by the year 2000. Ibid., 69.

²⁷ One proposal calls for limiting cost-of-living adjustments on Social Security, railroad retirement, and other non-means-tested programs to 66% (instead of 100%) of any increase in the consumer price index over the next five years. Offsetting increases could be provided to the recipients of means-tested programs and Medicare benefits. This approach could save over $62 billion; assuming continued moderate inflation, however, it would leave beneficiaries 7% worse off in 1993 than they would have been under full price indexing. Reducing the Deficit (fn. 20), 145–49. Foran additional discussion of the entitlements issue, see Weidenbaum, Murray, Rendezvous with Reality: The American Economy after Reagan New York: Basic Books, 1988), 33–37Google Scholar. Also see Peterson, Peter G. and Howe, Neil, On Borrowed Time: How the Growth in Entitlement Spending Threatens America's Future San Francisco: Institute for Contemporary Studies Press, 1988)Google Scholar.

²⁸ See his discussion of “America's Budgetary Dilemma” (pp. 109–26). See also Calleo, Cleveland, and Silk (fn. 19), 851–53.

²⁹ The idea that uneven economic development is an important underlying cause of international conflict dates back to Thucydides; it was reintroduced in this century by Lenin. See the discussion in Gilpin, Robert, The Political Economy of International Relations Princeton: Princeton University Press, 1987), 54–56CrossRefGoogle Scholar.

³⁰ Kennedy later suggests that “the speed of... global economic change has not been a uniform one, simply because growth is itself irregular, conditioned by the circumstance of the individual inventor and entrepreneur as well as by climate, disease, wars, geography, the social framework, and so on” (p. 439). Scholars from a variety of disciplines have tried to explain why it is that growth rates are uneven across countries and why, in any one state, they tend to diminish over time. See Cipolla, Carlo, ed., The Economic Decline of Empires London: Methuen, 1970)Google Scholar; Olson, Mancur, The Rise and Decline of Nations New Haven: Yale University Press, 1982)Google Scholar; and Gilpin, Robert, War and Change in World Politics New York: Cambridge University Press, 1981)CrossRefGoogle Scholar.

³¹ For a review of early modern thinking on this subject, see McCormick, Gordon H., “Strategic Considerations in the Development of Economic Thought,” in McCormick, Gordon H. and Bissell, Richard E., eds., Strategic Dimensions of Economic Behavior New York: Praeger, 1984), 3–25Google Scholar.

³² Chan, Steve, “The Impact of Defense Spending on Economic Performance: A Survey of Evidence and Problems,” Orbis 29 (Summer 1985), 403–34Google Scholar, at 409. For a small sampling of the available literature, see Clayton, James L., ed., The Economic Impact of the Cold War New York: Harcourt Brace, 1970)Google Scholar; Dumas, Lloyd, The Overburdened Economy Berkeley: University of California Press, 1986)Google Scholar; Kaldor, Mary, The Baroque Arsenal New York: Hill & Wang, 1981)Google Scholar; Kennedy, Gavin, The Economics of Defence London: Faber & Faber, 1975)Google Scholar; Rothschild, Kurt W., “Military Expenditure, Exports and Growth,” Kyklos 26 (No. 4, 1973), 804–14CrossRefGoogle Scholar; Russett, Bruce, “Defense Expenditures and National Weil-Being,” American Political Science Review 76 (December 1982), 767–77CrossRefGoogle Scholar; Smith, Dan and Smith, Ron, The Economics of Militarism London: Pluto Press, 1983)Google Scholar; Starr, Harvey, Hoole, Francis W., Hart, Jeffrey A., and Freeman, John R., “The Relationship between Defense Spending and Inflation,” Journal of Conflict Resolution 28 (March 1984), 103–22CrossRefGoogle Scholar. Report of the U.S. President's Committee on the Economic Impact of Defense and Disarmament Washington, DC: G.P.O., 1965)Google Scholar.

³³ For an overview of this debate, see ibid., 405–10. See also Whynes, David K., The Economics of Third World Military Expenditure Austin: University of Texas Press, 1979)CrossRefGoogle Scholar.

³⁴ One recent study finds, for example, that, “if there can be any single conclusion about the effects of military expenditure on the economy, it must be that it depends on the nature of the expenditure, the prevailing circumstances, and the concurrent government policies.” Smith, Ron and Georgiou, George, “Assessing the Effect of Military Expenditure on OECD Economies: A Survey,” Arms Control 4 (May 1983), 3–15CrossRefGoogle Scholar, at 15.

³⁵ See, for example, an analysis of the probable macroeconomic impact of the Reagan buildup in Defense Spending and the Economy Washington, DC: Congressional Budget Office, 1983), 9–36Google Scholar.

³⁶ The claim that defense hurts investment is supported, for example, by a comparison of the 14 OECD countries in Smith, Ronald P., “Military Expenditure and Investment in OECD Countries, 1954–1973,” Journal of Comparative Economics 4 (March 1980), 19–32CrossRefGoogle Scholar. A similar study of 17 industrialized countries between i960 and 1980 found that “nations with a larger military burden tended to invest less,” but it concluded also that there was only “weak evidence that higher military spending correlates with lower real economic growth.” DeGrasse (fn. 15), 67–68.

³⁷ See the critique of Smith and DeGrasse in Adams, Gordon and Gold, David, Defense Spending and the Economy: Does the Defense Dollar Make a Difference? (Washington, DC: Defense Budget Project, July 1987), 14–19Google Scholar. For a brief critical overview of the literature on this question, see Greenwood, David, “Note on the Impact of Military Expenditure on Economic Growth and Performance,” in Schmidt, Christian, ed., The Economics of Military Expenditures (New York: St. Martin's, 1987), 98–103Google Scholar. After reviewing the performance of Britain, France, Germany, Japan, and the United States during the nineteenth and twentieth centuries, two researchers have recently concluded that “the defense-investment substitution effect is not quite as prevalent as many think.” Rasler, Karen and Thompson, William R., “Defense Burdens, Capital Formation, and Economic Growth,” Journal of Conflict Resolution 32 (March 1988), 81CrossRefGoogle Scholar.

³⁸ While Kennedy's work raises both of these issues, it does not provide definitive answers to either one. Although he has sometimes been criticized for doing so, Kennedy does not in fact maintain that postwar military expenditures caused America's economic decline. Indeed, his book contains no direct assessment of what the cumulative impact of that spending has been. As to whether defense spending at existing levels will be sustainable in the future, Kennedy strongly implies that it may not be, but he cannot be said to rule out the possibility altogether.

³⁹ Some authors have suggested, however, that the U.S. decline is not as severe as the usual indicators would seem to suggest. See Strange, Susan, “The Persistent Myth of Lost Hegemony,” International Organization 41 (Autumn 1987), 551–74CrossRefGoogle Scholar, and Russett, Bruce, “The Mysterious Case of Vanishing Hegemony; or, Is Mark Twain Really Dead?” International Organization 39 (Spring 1985) 207–31CrossRefGoogle Scholar.

⁴⁰ Down from 25.9% in i960 to 21.5% in 1980 (Kennedy, p. 436).

⁴¹ Down from 18.4% in 1950 to 13.4% in 1977. See Keohane, Robert, After Hegemony Princeton: Princeton University Press, 1984), 36Google Scholar.

⁴² Down from around 50% in 1945 to 44.7% in 1953 to 31.5% in 1980 (Kennedy, p. 432).

⁴³ In this sense, as one observer has pointed out, “the relative decline in American global economic preeminence occurred not in spite of America but because of America.” Brzezinski, Zbigniew, “America's New Geostrategy,” Foreign Affairs 66 (Spring 1988), 693CrossRefGoogle Scholar. For a similar argument, see Nye, Joseph S. Jr., “America's Decline: A Myth,” The New York Times, April 10, 1988, p. 31Google Scholar.

⁴⁴ By the seventies, U.S. and average European Community GNP growth rates were about the same, with the U.S. growing somewhat faster in the eighties. U.S. and E.E.C. per capita GNP growth rates converged in the seventies and remained roughly equal in the eighties. After lagging throughout the sixties and seventies, American manufacturing productivity seems finally to be increasing slightly faster than that of France and Germany. For figures, see the Central Intelligence Agency's Handbook of Economic Statistics, 1987 Washington, DC: G.P.O., 1987), 39, 40, and 43Google Scholar.

⁴⁵ Thurow, , “Budget Deficits,” in Bell, Daniel and Thurow, Lester, The Deficits: How Big? How Long? How Dangerous? New York: New York University Press, 1985), 122–24Google Scholar. Kennedy (p. 533) advances a variant of this argument when he suggests that declining world powers tend to “allocate more and more of their resources into the military sector, which in turn squeezes out productive investment and, over time, leads to the downward spiral of slower growth. . . .”

⁴⁶ This relationship is usually presented as an equation: Y = C + I + G + (X — M), where

Y = national income

C = consumption

I = investment

G = government expenditures

X = exports

M = imports

⁴⁷ According to one calculation for the period 1960–1979, 74% of U.S. gross domestic product went to military spending. The figures for Britain, West Germany, and Japan were 5.4%, 3.9%, and .9%, respectively. Fixed capital formation made up 17.6% of GDP in the United consumption made up 63% of GDP in the United States, versus 62.8% in Britain, 55.6% in West Germany, and 55.4% in Japan. See Oye, Kenneth A., “International Systems Structure and American Foreign Policy,” in Oye, Kenneth A., Lieber, Robert J., and Rothchild, Donald, eds., Eagle Defiant Boston: Little, Brown, 1983), 10Google Scholar.

⁴⁸ Thurow (fn. 45), 123.

⁴⁹ In fact, several comparisons of the composition of U.S. GNP before and after World War II suggest that the level of gross private domestic investment did not change very much (standing, according to one calculation, at around 14 or 15% of GNP in both 1929 and 1969 or, according to another, at 15% in 1930,1940,1953, and 1957). The increase in peacetime military expenditures after 1945 seems to have been made up for by a drop in the share of GNP devoted to personal consumption. For the first calculation, see Boulding, Kenneth E., “The Impact of the Defense Industry on the Structure of the American Economy,” in Udis, Bernard, ed., The Economic Consequences of Reduced Military Spending Lexington: D. C. Heath, 1973), 225–52Google Scholar. For the second, see Hitch, Charles J. and McKean, Roland M., The Economics of Defense in the Nuclear Age Cambridge: Harvard University Press, 1963), 39Google Scholar.

⁵⁰ The case for cuts in consumption is made in Peter Peterson (fn. 7). For an opposing view that favors reducing defense and increasing “public investment,” see Faux, Jeff, “America's Economic Future,” World Policy Journal 5 (Summer 1988), 367–414Google Scholar. See also Eisner, Robert, “To Raise the Savings Rate, Try Spending,” New York, Times, August 29, 1988, p. A19Google Scholar.

⁵¹ For an analysis of the various ways in which private and overall national savings might be increased, see Summers, Lawrence and Carroll, Chris, “Why Is U.S. National Savings so Low?” Brookings Papers on Economic Activity 2 Washington, DC: The Brookings Institution, 1987)Google Scholar.

⁵² Schultze, , “Economic Effects of the Defense Budget,” The Brookings Bulletin 18 (Fall 1981), 2Google Scholar. In the end, Thurow acknowledges this point by saying: “It is technically feasible foi America to spend more on defense than Japan and still have a world-class economy if we are willing to pay for it by raising taxes to cut civilian consumption.” Thurow (fn. 45), 124.

⁵³ “Defense spending is a form of consumption” (ibid., 122).

⁵⁴ In 1987, the federal government spent over $40 billion or almost 14% of the military budget on defense R & D. National Patterns of Science and Technology Resources: 1987 NSF 88–305 Washington: National Science Foundation, 1988), 15Google Scholar.

⁵⁵ Thurow, Lester, “America among Equals,” in Ungar, Sanford, ed., Estrangement New York: Oxford University Press, 1985), 175Google Scholar. Again, Kennedy (p. 532) makes a similar argument: “If the Pentagon's spending drains off the majority of the country's scientists and engineers from the design and production of goods for the world market while similar personnel in other countries are primarily engaged in bringing out better products for the civilian consumer, then it seems inevitable that the American share of world manufacturing will steadily decline, and also likely that its economic growth rates will be slower than in those countries dedicated to the marketplace. . . . “

⁵⁶ It is possible, however, that the effects of such a drain might be subtle, lagged, and hard to measure. Some experts have suggested that the competition for scarce research talent may, in the past, have bid up the cost of R & D and reduced the feasibility of some civilian projects. See Brooks, Harvey, “The Strategic Defense Initiative as Science Policy,” International Security 11 (Fall 1986), 184CrossRefGoogle Scholar. This possibility deserves further study.

⁵⁷ After decreasing in the seventies, the number of students receiving degrees of all sorts in science and engineering has increased steadily since the early eighties. The growth in doctoral degrees has, however, been due largely to an influx of foreign graduate students to American universities. The long-term implications of this trend for the U.S. economy are unclear, and depend in part on how many foreign students eventually settle and work in the United States. National Patterns (fn. 54), 28–30.

⁵⁸ A 1978 National Science Foundation survey found that 16.2% of scientists and engineers worked primarily on defense projects, with another 3.8% concentrating most heavily on work connected with the space program. DeGrasse (fn. 15), 102. Other analysts put the figure close to 50%. For a range of estimates, see Adams and Gold (fn. 37), 50–51. For a 1981 breakdown by specialty of skilled personnel involved in defense work, see Holdren, John P. and Bailey, F.Green, , “Military Spending, The SDI and Government Support of Research and Development: Effects on the Economy and the Health of American Science,” Journal of the Federation of American Scientists 39 (September 1986), 7Google Scholar.

⁵⁹ Drawing on N.S.F. survey data, a National Research Council report finds that, between 1972 and 1984, the fraction of scientists and engineers with bachelor's degrees working on projects sponsored by the Defense Department fell from 18.6% to 15.5%. The figures for researchers with master's and doctoral degrees fell from 23.8% to 19.9% and from 10.5% to 8.5%, respectively. National Research Council, The Impact of Defense Spending on Nondefense Engineering Labor Markets: A Report to the National Academy of Engineering Washington, DC: National Academy Press, 1986), 74–76, 9–10, and 91Google Scholar.

⁶⁰ For example, a 1987 report by the Defense Science Board found that, at one government laboratory, mean salaries were $14,000 less than at a facility operated by private contractors. The best researchers at the government lab could be paid no more than $72,000 a year; their private-sector counterparts sometimes made over twice as much. Defense Science Board, Technology Base Management (Washington, DC: G.P.O., December 1987), 16–17Google Scholar.

⁶¹ For recommendations along these lines aimed at satisfying “both national security and commercial needs,” see U.S. Congress, Office of Technology Assessment, The Defense Technology Base: Introduction and Overview—A Special Report, OTA-ISC-374 (Washington, DC: G.P.O., March 1988), 18Google Scholar.

⁶² Total R & D expenditures in the U.S. now equal 2.7% of GNP, around the same as in West Germany and Japan. When defense-related R & D is excluded, however, the U.S. total falls to 1.8% of GNP. By contrast, less than 10% of research in Japan and Germany is defense-related. Although the dollar amounts spent are smaller, these two countries have for over fifteen years been devoting more of their GNP to civilian research than the United States. National Patterns (fn. 54), 19–20.

⁶³ Economic Report of the President (fn. 11), 179–80.

⁶⁴ One author asserts, for example, that the much vaunted “spinoff' or “spillover” argument that military-oriented technological development produces massive improvements in areas of civilian application and thus does not retard civilian technological progress, makes very little conceptual sense, and more to the point, is massively contradicted by straightforward empirical observation. See Dumas, Lloyd J., “Military Spending and Economic Decay,” in Dumas, , ed., The Political Economy of Arms Reduction Boulder, CO: Westview Press, 1982), 13Google Scholar. For the opposite viewpoint, see Hitch and McKean (fn. 49), 82–83.

⁶⁵ Kennedy (p. 532) points out that there are “technical spinoffs from weapons research,” but he does not consider them sufficient to offset the other, negative consequences of defense spending.

⁶⁶ One proponent of considerable cuts in defense spending argues: Clearly, military research has yielded a large number of commercially viable products— including many of the breakthroughs in electronics, recombinant DNA, jet engines, fiberglass and other composite materials, and a major portion of communications technologies. Indeed, many of the inventions that have most altered the postwar world economy have evolved from military-related research. Markusen, Ann, “The Militarized Economy,” World Policy Journal 3 (Summer 1986), 503Google Scholar. For a useful survey of the military's role in the development of American technology, see Smith, Merritt Roe, ed., Military Enterprise and Technological Change Cambridge: MIT Press, 1987)Google Scholar.

⁶⁷ Brooks (fn. 56), 183.

⁶⁸ For these reasons, Harvey Brooks concluded in 1986 that “any viable U.S. industrial policy is likely to derive from military policy for many years to come if only because of the traditional reluctance of Americans to accept government intervention in the market economy” (ibid.). There is now some evidence of movement in precisely this direction. See “Bigger Role Urged for Defense Department in Economic Policy,” New York Times, October 19, 1988, p. A1Google Scholar.

⁶⁹ Measures of this sort could include changes in the tax laws and selective relaxations in antitrust restrictions prohibiting collaboration by major producers in the same industrial sector. See Report to the Secretary of Defense by the Under Secretary of Defense (Acquisition), Bolstering Defense Industrial Competitiveness (Washington, DC: Department of Defense, July 1988), 16–18Google Scholar.

⁷⁰ Jacques S. Gansler has suggested, for example, that the Defense Department could invest more heavily in developing certain kinds of manufacturing technology instead of focusing its R & D efforts so heavily on particular full-scale weapons systems. According to Gansler, “these manufacturing technologies could contribute significantly to the nation's ability to produce high-quality, low-cost military equipment, in addition to contributing to the long-term competitiveness of the nation's industrial base.” Gansler, , “Needed: A U.S. Defense Industrial Strategy,” International Security 12 (Fall 1987), 55–56CrossRefGoogle Scholar.

⁷¹ The list of suspects includes, but is by no means limited to, the following: systematically misguided management practices, poor labor-management relations, insufficient incentives for productive domestic investment, fluctuating government macroeconomic policies, a poorly designed tax code, a chronically overvalued dollar, and expanding government regulations. For entry into the vast literature on these subjects, see Scott, Bruce R., “U.S. Competitiveness: Concepts, Performance, and Implications,” in Scott, Bruce R. and Lodge, George C., eds., U.S. Competitiveness in the World Economy Boston: Harvard Business School Press, 1985), 13–70Google Scholar; Eckstein, Otto et al. , The DRI Report on U.S. Manufacturing Industries New York: McGraw Hill, 1984)Google Scholar; and Zucker, Seymour et al. , The Reindustrialization of America New York: McGraw Hill, 1982)Google Scholar.

⁷² Greenwood (fn. 37), 103.