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Economic Conversion: Obstacles and Strategies

Mary Ann McGivern, Board Member, Economic Conversion Project, St. Louis

Economic conversion was the catchphrase of 1990. Cold War tensions had finally eased.
The Berlin Wall was down, a peace dividend was forthcoming, and surely all our tanks
would be hammered into backhoes, just like after World War II.

Also known as defense or arms conversion, economic conversion is the process of
shifting a portion of Americas military defense resourcesfiscal, political, and
technicalto alternative uses in a civilian market.

In the 1990s, I was the director of the St. Louis Economic Conversion Project. About 16
percent of the regions jobs depended on military spending at Scott Air Force Base,
involving McDonnell Douglas and about 500 subcontractors. Our task was to retrain
management to find new customers and to design new products, using CAD and CAM-
operated high-tech equipment that could make anything. Jobs would be saved and the
U.S. would regain its global lead in manufacturing innovation.

The task was urgent. In response to budget cuts, McDonnell Douglas pulled its
subcontracts back in-house and laid off 10,000 workers.

Our regional task force worked with the Department of Defense economic conversion
office to offer worker retraining at MDC and management retraining for the
subcontractors. The company would learn how to view their products differentlyfor
example, the oxygen valves on a test pilots flight suit could be repurposed to make
reliable oxygen tanks for air ambulances. Firms could form temporary partnerships and
bid jointly on big projects.

But Scott Air Force Base stayed open and McDonnell Douglas was offered new, more
lucrative contracts making smart bombs and designing new communications modes.
MDC outsourced labor-intensive jobs to Mexico like threading the control board wiring of
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fighter planes into harnesses, and a plant with a thousand women workers in St. Charles,
MO was shut down.

Global Strategic Mandate

Heres what happened. When the Cold War ended, the army chose a new direction.

In Breach of Trust, Andrew Bacevich says army leadership saw troops without a mission
and Army Chief of Staff General Carl Vuono sought to fill the void with a Global
Strategic Mandate. Quietly, without direction from Congress, the Pentagon, or the
Clinton administration, he and his successor, General Gerald Sullivan, put flesh and
bones on the vision, disseminating an analysis brimming with confidence in the new
high-tech, lean professional army, prepared to solve problems around the globe.

This vision needed partners, and weapons manufacturers and Congress were happy to
oblige. Engineers proposed technology to make airplanes invisible, tanks and ships
invulnerable, and radar that could baffle enemies and allies alike. Congress gleefully
threw money at these new technologies that would elevate the U.S. military into its
rightful role as invincible leader of the free world for generations to come.

The Cost of this Mandate

Bacevich asserts the ensuing military debacle in Iraq and elsewhere is rooted in the
American peoples disengagement with the army. When we chose to replace the draft
with a volunteer force, those of us who didnt have a stake turned our backs. Whatever
the Pentagon did was fine with us as long as it didnt cost us blood or sacrifice.

But the cost has been high. Trillions of dollars spent, hundreds of thousands of lives lost,
civilian infrastructure destroyed, our nation disgraced, uncounted enemies created.

There have been subtle losses too. Enthralled by the glamour of weapons technology,
Congress funded the Defense Advanced Research Projects Agency (DARPA) at the
expense of basic research.

The making of weapons has become capital-intensive, no longer employing tens of
thousands of machinists and other skilled union labor. Weapons firms have hired the
best and brightest engineers away from civilian work. They have laid claim to capital
industrial capacity as much as moneyat the expense of civilian industry.

The Military Boondoggles

In March 2011, the New York Times ran a feature on the Pentagons biggest
boondoggles.

Based on a 2009 General Accounting review of defense acquisition programs, the
author found that two-thirds of the programs suffered from cost overruns and delays and
generally didnt meet modern military needs.

The systems reviewed included ballistic missile defense, the littoral combat ship, the
Ford class super carrier, the F-35 fighter, various so-called mine-resistant vehicles, a
robotic combat system, an Armed Forces intranet and a global information grid.
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The contracts for making these systems are still in force. They sprang from the Global
Strategic Mandate, which fostered a culture of contracting-gone-wild in thrall of high-tech
warfare. Cancelling them would save well over a trillion dollars without endangering U.S.
security.

Economic Conversion in the 21
st
century

Todays weapons systems are designed so narrowly and cloaked in such security that
there is no thinking outside the box. We are past the day when a subcontractor who
made the joystick for the F-15 could retool it for a sports car.

How can we recover that peace dividend and develop a peace economy?

1. Open up commercial patents submitted by military contractors
Arms makers, like all tech firms, patent everything. They shelve the patents that dont
meet weapons specifications, resisting open sourcing in the hopes of capital reward. I
suggest they be required to put every patent not used in three years into the public
domain. These patents dont involve state secretsrather, they range from paint
processing to electric circuitry to energy conservation. Making them available to
entrepreneurs would ignite a firestorm of industrial development.

2. Fund ARPA
The Advanced Research Project Agency, or ARPA, preceded DARPA. Congress used
to fund pure research. We need that funding today.

3. Cancel the boondoggles
I dont see how we can save the jobs of the men and women who make the F-35 and
littoral combat ships meant for high coastlines. But there are a lot fewer of them than
there were 25 years ago and we can help them find better jobs.

4. Lose the Global Strategic Mandate
Choose a different overarching mission for the U.S. Armed Forces. We left it last time to
the Army Chief of Staff. If we want something different, we have to be part of
conversation. What do we want from our soldiers?

5. End the volunteer army and go back to the draft
Bacevich sees reinstating the draft as the only way to save democracy. Reading Breach
of Trust, I was reminded of Rachel Maddows book published in 2012, Drift: The
Unmooring of American Military Power. Maddow demonstrates how we have drifted
away from our founding fathers efforts to make it difficult to go to war. The remedy to
our tendency to go to war is to put some citizen skin in the game. This would be
economic conversion writ large indeed.