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JIM WALLIS AND BISHOP L. T. MATTHIESEN Pho to by Henry Varg as How Much . Continued from cover Lloyd Jeff Dumas, associate professor of political economy at UT-Dallas, believes there is a connection between the gloomy economic news and the massive military spending represented by Pantex. That spending, he says, beginning in the years immediately following World War II, set in motion the processes that led to our current economic decline, a decline characterized by both unemployment and inflation. Dumas offered his theories to an August 7-8 citizens’ hearing in Amarillo on the economic, moral, and medical impact of nuclear weapons facilities. Other participants included Sojourners editor Jim Wallis, Lutheran minister John Backe, Amarillo Bishop L. T. Matthiesen, and Ruth Tiffany Barnhouse, a physician and Southern Methodist University theology professor. Attendance was sparse maybe a hundred people on this August weekend, although one participant ruefully noted that it was larger than a recent peace march in this city of 150,000 people that attracted eight hardy souls. “At least we weren’t much -of a target for the beer bottles being thrown,” she said. “A lot of strange things are going on in the economy these days,” Professor Dumas observed, mentioning not only high unemployment and inflation, but also a decaying infrastructure and declining productivity. “The U.S. is falling behind in civilian-oriented technology,” he said. “Why suddenly isn’t our technology keeping up?” The answer, Dumas believes, requires a brief lesson in basic economics. “The material well-being of any society is primarily determined by the way it uses its productive resources,” he said, explaining that there are two types of productive resources consumer goods, which add to the immediate material standard of living, and producer goods industrial equipment, machinery, and materials which contribute to our standard of living in less immediate ways. There are other goods, Dumas explained, which can be produced, and which use up labor, fuels, and machinery, that are neither consumer goods nor producer goods. Military equipment, for example. “What can you make with a nuclear warhead?” he asked. “It uses up productive resources, and it has some , use and some value, but it doesn’t have economic value. It does have an economic cost because it absorbs resources that could be used to make things that do contribute to our material well being.” According to Dumas, military expen ditures are particularly inflationary because people who work in defense industries don’t buy the products they produce; they buy consumer goods. The firms they work for buy producer goods. They add to the demand for consumer products, but they don’t add to the supply. “That creates the possibility for more money chasing after fewer goods,” Dumas explained, “which is a classic economic prescription for inflation.” A simple solution to the problem of too much money chasing after too few goods is to reduce the amount of available money in other words, to raise taxes. That’s usually not politically feasible, and as Dumas pointed out, “the Reagan administration, at least until a few days ago, was talking about how it was going to cut taxes, along with expanded military production.” In 1964, the economist noted, the inflation rate was between 1 and 2% per year; unemployment was approximately 3.5%. In the latter part of the 1960s with an escalating Vietnam War, taxes were not increased to offset this injection of mon ey; consequently, by the end of the 1960s, the inflation rate had more than tripled. Although military spending is inflationary, a more critical issue, Dumas believes, is that the military sector takes productive resources labor, machinery, talent from the civilian economy, diverting engineers and scientists, and capital. For the past 30 years or so, between a third and a half of all engineers and scientists in the U.S. have been tinkering full-time on military projects, trying to solve military \\problems. “Now it’s true,” Dumas said, “that technologists, people doing research, don’t always know what they’re going to find by definition they’re looking for new knowledge; they’re exploring unknown areas. It is nevertheless true that what they find is very strongly conditioned by what they are looking for, by the kinds of problems they’re trying to solve. With a third to a half of the engineers and the scientists in the country devoting their attention to solving problems like making neutron bombs, these people have not been devoting their attention to `How do you make automobiles more efficient?”How do you produce steel more efficiently?’ How do you produce plastic more efficiently?’ ” The development of new technology, finding better technologies of production, has historically been a major contributor to this country’s economic growth. According to Dumas, studies indicate that more than 50% of the growth historically in this country is due to the development of technology. Those scientists and engineers building better bombs are, of course, ignoring technology devoted to increasing productivity. Productivity growth, predictably, slows down when this country devotes 75% of its productive resources to military research. Japan, on the other , hand, devotes approximately 3%, and Germany, 20%. The military budget, every year since 1951, has represented a larger sum of money than the total after-tax profits of all U.S. corporations, Dumas reported. Money gobbled up by the military deprives production capital investment. There’s no money for improved machinery, for new factory equipment. A government can take only so much in taxes before a political backlash sets in, so if that government devotes the biggest chunk to the military roughly half our income-tax dollars then how much is left to finance, for example, a decaying infrastructure? Local governments are scrambling to find operating expenses; they lack the revenues they need to maintain basic goods and services. 12 AUGUST 20, 1982 telp.cicor