CHAPTER II - PROBLEMS OF ADJUSTMENT

Abstract

Predictions of resiliency in the economy as a whole in the event of armaments reductions tend to mask the difficult foreseeable problems of adjustment for segments of the American economy and for the individuals whose lives and careers are dependent upon defense spending. Despite the dispersal of beneficial ownership of major manufacturing enterprises among increasingly wide segments of the public, including many individuals and groups of individuals represented through pension, investment, and insurance funds spread throughout the middle or lower economic levels of society, the ideology of the free enterprise system places companies on their own to sink or swim as their ingenuity and relevance determine. Companies that have entered defense work have done so with their eyes open to the uncertainties of the field, and they have been fully compensated on a pay-as-you-go basis for their efforts. There are also factors affecting aerospace firms that constitute real or imagined blocks to interest in and commitment to civilian production. The industry is oriented toward producing products and systems with a very high degree of reliability, quality control, and advanced engineering. Even if the right product and the right conditions for its manufacture were developed, existing defense producers suffer major handicaps despite their admitted capabilities.