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2. Two Basic Problems: General Research and Military Research
The problem of science and technology in our modern world is really a twofold one, and the two problems should be strictly separated, instead of confused as they now are in the public mind. Problem A is the general allocation of resources into science and technology, as compared to the other sectors of the economy. Problem B is the allocation of needed resources into the military sphere, specifically of military technology. The first problem is a general economic problem, the second a specifically military one. As to the first problem, the solution follows swiftly and easily from our general premises: it is solely the job of the free market economy. Any government meddling with this job can only distort and disrupt the economy, injure the efficient workings and development of science and technology, and substitute unwanted coercion for individual freedom.
What of Problem B, the allocation of resources between the Civilian and the Military? Here we must consider the general function of government in the military sphere. Granting to government the virtual monopoly of force, the American System has been to entrust the use of that force for defense of person and property to the government. Having a virtual monopoly of defense, the government taxes private citizens to the extent needed for their defense against enemies foreign and domestic. In the American System, domestic defense has been the function of states and localities; military defense against foreign countries, the job of the Federal government. The Federal government, therefore, sets its budget to attain a certain level that it desires for military defense, and military research and development is certainly part of that defense.
The allocation of resources to military purposes, then, is under the American System the job of the Federal government. And yet this does not simply end the matter. For the government has the responsibility: (1) of never forgetting that scarce resources are always being allocated, and therefore that what the military gains the civilian sector loses; and (2) of leaving, wherever possible, military matters in the hands of the private economy, both on grounds of maximizing economic freedom and of maximizing economic efficiency. The first is a mode of thinking to which any government bureaucrat, civilian or military, is uncongenial, and which he must learn: learn to realize that more military means less for the private economy, and to remember that the armed forces are a derivative, a dependent upon a strong and healthy civilian economy. Army tanks depend on sound and healthy iron and steel factories, tank manufactures, railroads to move them, etc., unless we are to have complete socialism—which we have seen cannot work either—the military must rely on a myriad of private goods and services in order for it to function (including paper!).
This brings us to the second responsibility; to leave as much of military affairs as possible in private hands. Thus, the government needs planes; who should manufacture them, private industry or government? Not only would government manufacture of aircraft be hopelessly inefficient by its very nature, it would also cut against the basis of American society. Far better, then, for the government to tax or borrow the funds with which to buy the military products of private enterprise, rather than to manufacture the goods itself.
This principle is largely recognized in the field of material production. Why, then, shouldn’t it hold for military scientific research? Private research and development, contracted for with government funds, is a far better policy, from any angle, than direct government research. (See below, on the Hoover Commission Task Force agreement with this view.) This is the principle for the Republican Party to follow in the area of military technology. In short, government, even in the military sphere, should function only as a consumer rather than a producer, purchasing equipment and research produced by private firms. This is the most efficient method, as well as the one most consonant with free enterprise. And note: this applies only to military research and development; all non-military work should be purely in private hands, both as consumers and producers.
Another important consideration: to the extent that the government still considers it militarily vital to employ technicians itself rather than purchase the services of private firms, it should hire these personnel on the free labor market rather than conscript them. Pushing back the frontiers of science, discovering new products and new methods, requires free, untrammeled minds who delight in the work they do and get paid according to their value; the work cannot be done by men who are drafted into forced labor for a sum far below the worth of their product. Slaves might perhaps be useful for sweeping floors or digging ditches; they cannot be successfully used for creative work, requiring ability and originality. And this, of course, raises another question, as pointed out in the Cordiner Report to the Department of Defense: more and more, modern military forces in the nuclear age, depend upon the skills and creativity of trained technicians, rather than on untrained doughboys. Is it not then one of the requirements of the nuclear (and bacteriological) age that we scrap the draft as obsolete and rely on the eager voluntary services of skilled technicians hired at the market prices that they deserve?
In all these problems, there is another basic question that we should not overlook: isn’t freedom, rather than coercion, not only the best way to spur efficiency and scientific advance, but also the way to show the peoples of the world (including the peoples of the Soviet bloc) that the American way of freedom can beat the Soviet way of coercion at any time and on any ground? If, on the contrary, we try to race with the Soviets by employing essentially Soviet methods, which ideology will come to look better to the peoples of the world? The more we stress free and voluntary methods in our competition with the Soviets, the more do we show that we believe our own speeches on the merits and glories of freedom; the more we rely on coercive or statist methods, the more do we undercut our own ideology, appear as hypocrites to the nations of the world, and thus contribute to the ultimate victory of the Soviet ideology.