Non-military Production Research Articles

The production of national defense and the macroeconomy

This study investigates the interactions between defense production and the rest of the economy. We develop a two-sector dynamic stochastic general equilibrium model with military and nonmilitary production. Inputs (capital and labor) are distributed between the two sectors. Calibration of the model to key targets of the US economy results in an elasticity of substitution between consumption of goods and services and national defense services of 0.56. The estimated complementarity between consumption goods and defense services results in positive spillovers across military and final goods production sectors, even when the nonmilitary production function is not directly related to military spending. We find that military spending is procyclical and that military spending as a percentage of output is countercyclical. Finally, investment-specific technological shocks to military equipment have a positive impact on nonmilitary output, although they reduce business investment.

Arms and the State: Sir William Armstrong and the Remaking of British Naval Power, 1854-1914 (review)

Reviewed by: Arms and the State: Sir William Armstrong and the Remaking of British Naval Power, 1854–1914 Kurt Hackemer (bio) Arms and the State: Sir William Armstrong and the Remaking of British Naval Power, 1854–1914. By Marshall J. Bastable. Aldershot, Hants., and Burlington, Vt.: Ashgate, 2004. Pp. xii+300. $89.95. Marshall Bastable's subtitle suggests that his subject is the Royal Navy's modernization and expansion in the decades before World War I, but his book offers much more than that. In challenging the prevailing historiography that sees Sir William Armstrong (1810–1900) as representative of the failure experienced by Victorian entrepreneurs, Bastable offers a valuable glimpse at the origins of military-industrial-political relationships from the British perspective and suggests that Armstrong's acumen in managing technological change put him ahead of his time. Armstrong was an established engineer when the Crimean War broke out. Responding to obvious shortcomings in British artillery, he proposed a revolutionary new breech-loading wrought-iron field piece that quickly earned a reputation as one of the world's best. Proving that to be true, especially against the equally innovative cannon designed by Joseph Whitworth, required not only engineering expertise but also the ability to navigate the social and political environment of the time. Armstrong prevailed, becoming the Engineer of Rifled Ordnance at the Woolwich Arsenal while preserving [End Page 652] the independence of Elswick, his private company that also sold ordnance to the British government. The relationship abruptly ended in 1863, when, despite the impressive technological advantages that Armstrong's guns offered, the government canceled its contract with Elswick because it could see no discernable strategic threats on the horizon. Rather than leave the ordnance business, Armstrong refocused and began selling cannon and warships globally. In doing so, Bastable argues, he was among the first to develop a world market for his wares, and he changed the armaments business forever. Even as Armstrong's fortunes waned in Britain, he made Elswick an international financial success. Britain was at peace, but much of the rest of the world was at war in the 1860s and 1870s. Armstrong capitalized on the absence of British governmental restrictions on his ability to export arms and aggressively marketed his technologically superior ordnance and innovative warships around the globe. As competitors like Krupps challenged Elswick with equally sophisticated technology, Armstrong's ability to navigate the political and social landscape became as important as technology in determining the company's success. Although it suffered occasional setbacks, Elswick succeeded more often than not and flourished abroad even as many of its Victorian counterparts floundered in rough economic times at home. This success also ensured that the company maintained an active research and development program when its domestic competitors and government arsenals did not. Elswick found itself well-positioned for the naval arms race that preoccupied the major and emerging powers from the late 1880s until 1914. Its expertise was appropriated by the British government for national goals, changing yet again how the company did business. Rather than managing its own affairs and selling to all available customers, Elswick found that the government now decided not only who got to buy what, but also what designs would be manufactured. Industrial capacity became more important than technological innovation; the company's interests could barely be distinguished from those of the state. In return, Elswick profited from increasingly large arms appropriations, much as it had before 1863, and the largesse continued through the Great War. However, when hostilities ended and the British government no longer needed Elswick's wares, the company could not make up lost sales by selling elsewhere, for the world was generally at peace, or at least pretended to be. Elswick tried to diversify into nonmilitary production, but, despite all its technological expertise, it could not overcome the economic downturn of the 1920s and 1930s or popular disdain for the "merchants of death" on whom the Great War was blamed. The social, political, and economic context in which the company operated ultimately exerted more influence on its fortunes than its ability to produce innovative technology, and Elswick disappeared in 1937. Armstrong's story is interesting, and Bastable's...

Economie en totale oorlog

J. Meihuizen, Noodzakelijk kwaad. De bestraffing van economische collaboratie in Nederland na de Tweede WereldoorlogThe economy and full-scale warMeihuizen concludes that the interests of the reconstruction had to take precedence over those of an honourable judicial process, as a result of which cases of economic collaboration seldom reached the courts. This essay argues that Dutch firms could not avoid manufacturing goods for the occupying forces because they were often relatively small-scale in nature and organised along the lines of a family business. If this type of firm refused to fulfil a German order and its competitor was willing to accept it, then it ran the risk of being squeezed out by the competition. This is why, in the Netherlands and elsewhere, as soon as a firm made the transition from a smallscale to a medium-sized family business it was inclined to work all-out for the occupying forces. This had nothing to do with free choice, but rather the will to survive. In addition to this, non-military production, even that which was geared towards keeping the people at home alive and healthy, supported the German war effort. In an economy where all military production is systematically maximized and manufacturing geared towards producing civilian goods is pushed back to a level where it can just about survive, all manufacturing becomes economic collaboration, thereby making the notion redundant. Consequently, the question that should have resounded throughout this study ought to have been whether a legal case could have been made against economic collaboration at all or whether this was doomed to fail from the start. Onderdeel van het discussiedossier Noodzakelijk kwaad.

Defense economic restructuring and conversion in South Africa

The aim is to examine issues of defence economic restructuring and conversion in South Africa. Under the new government, overall restructuring of the South African defence sector is occuring. With diminished defence expenditure, the military industry is encouraged to convert production capability to non-military products. The geographical implications of defence economic restructuring and conversion in South Africa are analysed in the context of international experience and debates. The Gauteng region emerges as the national ‘gunbelt’ of South Africa and contains an incipient military ‘industrial district’. In this particular region, the question of defence conversion is critically important for local policy makers and should be linked to new local economic development initiatives.

Anthropometry and the Design of Products for Non-Military Use: Needs and Limitations

Generating a civilian anthropometric data base for use in the design of consumer products as well as all types of non-military products involves redefinition of end users of the products and also the end user of the data. A survey of the needs of designers and engineers will be summarized. Case examples are used to illustrate the lack of awareness of the availability of already existing data bases.