The Ashes of Capitalism and the Ashes of Communism
John Kenneth Galbraith, 1984
John Kenneth Galbraith is professor emeritus of economics at Harvard University. He was appointed by President John F. Kennedy as Ambassador to India. He has also served as president of the American Economics Association and chairman of Americans for Democratic Action. Professor Galbraith believes that military spending is a powerful contributor to inflation, and a colossal drain on federal funds that could otherwise be allocated to public services.
Whiteley: Professor Galbraith, a problem of continuing concern to you has been the process of coming to terms with the Soviet Union in achieving a more enduring peace for our society. Where do you begin in your thinking?
Galbraith: Well, I see this as a sort of three-way, three-step process. I always reduce everything to a rule of three; I must be an inherent Trinitarian. The first step was to get an understanding of what nuclear war was like, to get an understanding that there was no possibility of a nuclear war - of surviving a nuclear war: that there was no objective that was worth a nuclear war, no realistic objective that was worth a nuclear war.
Whiteley: Education of both the people in our country and people in the Soviet Union...
Galbraith: Well, sure both the United States and the Soviet Union. For one, a nuclear war does not defend a country and it does not defend a system. I've put it the same way many times; not even the most accomplished ideologue will be able to tell the difference between the ashes of capitalism and the ashes of communism. That is the first step.
Whiteley: How are we doing on that first step?
Galbraith: On this first step I think we've made a good deal of progress. There was for a long while a tendency for people to put the devastating consequences of nuclear war out of their minds, what the psychologists call psychological denial. Well, I think that has been, in substantial measure, overcome. I think that people have come to realize the massive character of the destruction that follows nuclear war. This has been the accomplishment of a lot of organizations: Physicians for Social Responsibility (Helen Caldicott, whose been in this series of programs deserves a lot of the credit); the International Physicians, ABC with 'The Day After,' and writers, lawyers, a very important business organization, Business Executives for National Security, have all contributed to the awareness of what nuclear war is like.
Whiteley: Okay, the first part of your understanding is the need for our country, in terms of its citizenry, to begin to understand the problems of nuclear war. Does that occur in the Soviet Union as well?
Galbraith: I think there's no doubt that the fear, the perception of danger, I would go so far as to say, is perhaps greater in the Soviet Union than it is in the United States, this being the result of a different process of history. In the Napoleonic Wars, in World War I, in World War II, the Russians, and now the Soviet Union were the victims, and they were subject to massive disaster. So in a way the Soviet assumption, the Russian assumption is that 'we're a victim, that we're the people that get hurt.' Where on this much happier continent where we've had no similar devastation, at least since the Civil War, our assumption in the past has tended to be, well, we escape. War is something that happens in Europe or Asia or a long way away. Well, I think that we have come abreast of the danger and I don't think we can be in any doubt that the Russian perception of the danger of the threat, of the notion that they are likely victims, is any less than ours. I think it's greater.
Whiteley: You mentioned that you have a three-part concern, the first you see very clearly is awareness.
Galbraith: That's the first step, where I think great progress has been made in both of the Superpowers. The second step, very important in our case, was to get the process of negotiation away from the small specialized group that some people have called the 'nuclear theologians', who in effect said this is a complicated issue of seeing how little we can give away, how much we can extract from the other side; it's highly specialized. Only a few people can understand the nature of these weapons, the delivery systems, the targeting, the nature of the MIRV and the CRUISE, on down, and the MX. This kept the whole discussion to a very limited group of people who, in a way, had assumed responsibility for saying whether we should live or die. We wouldn't delegate responsibility over taxes, but we have delegated responsibility over death. And it was very important that we get the public, the larger public, involved in this. That we get it part of the democratic process. This was the great merit of the freeze, the great merit of saying let us stop where we are, let us get the agreement of the Soviets, which we evidently have, to stop where we are, and then go on and negotiate from there. I'm not suggesting the freeze is the final step, but I am suggesting that it was an enormously valuable step for getting democratic involvement.
Whiteley: One of the consistent Harris Polls has shown an overwhelming majority of Americans do favor this absolute policy.
Galbraith: And it's very important, too, that the people who are involved in the nuclear theology, the specialists, dislike this invasion. They don't know quite how to - they don't want to resist the freeze, but they keep saying, well, it oversimplifies; we are the people that understand. They do not particularly trust the democratic process, and the progress that has been made on arms control, from getting the public involved.
Whiteley: And for you this is an essential issue for our democracy.
Galbraith: This has made arms control part of the democratic process. We have, as I say, to go on from there, but this has been a very important step.
Whiteley: You mentioned that there were three points.
Galbraith: The third thing, which is where we haven't made progress, where we have, if anything, in recent years fallen back, is to establish the basis, the context, the atmosphere for negotiations, which requires a certain amount of confidence between ourselves and the Russians; a certain capacity for civil communication, a recognition that the systems are different, that there is going to be a continuing debate over their system and our system, their actions and our actions, but to recognize that we must have the degree of confidence which establishes the possibility of negotiation; the degree of confidence which establishes the possibility of mutual survival. There I think we have, if anything, slipped back. We've had bad rhetoric. We've had bad rhetoric on our side, we don't accomplish anything when we call the Soviets an 'evil empire,' we arouse antipathy, antagonism, and that brings them countering rhetoric, and this gets escalated, and here we have fallen back.
Whiteley: Okay. If improving the rhetoric is one part of this third concern, what else do you have?
Galbraith: Well, I say improving the rhetoric is one part. We have the reality of difference, but the rhetoric of animosity. This we must not have. The other is a more subtle point, perhaps: To understand that much of the old debate that's between the two systems, has an obsolescent quality. There was a time twenty years ago when one could think of a great Soviet empire, extending all the way from the Brandenburg Gate in Berlin to the Port of Haiphong. That has broken apart. Russia and China no longer have an association; there are considerable differences between them. There's been - the Russians have lost support in Eastern Europe, they've lost support from the western communist parties, and they've lost support in the third world. And forty years ago I was Ambassador in India; we in turn could count on the more or less automatic support of South America, Central America, African countries, and that has disappeared. But we're still talking, still debating with the Russians in terms of the rhetoric of world domination. I'm not being unilaterally critical of the United States on this. The Russians do it too. We both need to recognize that the age of the new imperialism is something that is past.
Whiteley: And a central common enemy is nuclear weapons.
Galbraith: And the central common enemy is nuclear weapons. We must look forward to the day when, in the words of one of my friends here in Massachusetts, we sit on the same side of the bargaining table and confront the enemy of both, which is nuclear warfare, nuclear devastation. There are some other things that we need to do, without getting into too tedious detail. There are some problems that we need to discuss with the Russians that we have in common; trade of course is one. We're extremely dependent on the Soviet Union as an outlet for our wonderfully efficient agricultural production, where their agricultural industry is not very good, not very well-managed, not very well-organized. They, in turn, have a great many things that they need from us. We need the market, they need the products.
Whiteley: What are the steps to better economic cooperation between the two?
Galbraith: Well, again, abandoning the rhetoric of conflict and realizing that we have a common interest here. I think we also need to abandon the rhetoric of conflict on the organization of our economies. In some ways, there again, we have the same problem. The Russian economy struggles with a mass of top-heavy (rigid in many respects) organization, structure, bureaucracy. And we are beginning to realize that we have a huge apparatus of the state, the government, and we also have some very large and not very efficient private bureaucracies. Our older industries are no model of efficiency. We have come to learn that we have problems of bureaucratic stasis, bureaucratic hardening of the arteries in some of our great corporations. Well, these are problems that are - this is a problem that is common to both countries in an age of great organization. These are problems that we have in common, and something can be done in a civilized way by continuing to talk, not about the differences, but about the common features of our economy. This is one of the purposes that took me to Russia this Spring, to have some discussions, some seminars, some lectures which had something to do with our common problems.
Whiteley: And your hope is that continuing exchanges of this sort create a different climate.
Galbraith: The abandonment of the rhetoric of the 'evil empire,' the discussion of common problems and the recognition - the frank recognition that there are great differences in the systems that we're not going to reconcile, is very much a part of this process of establishing the confidence that allows us both then to face the common threat of nuclear destruction.
Whiteley: As you've thought about improving relationships with the Soviet Union, you've done that in the context, for yourself, of a number of decades of careful writing and thinking about the relationship of economics to peace. Particularly, you've focused on arms control and military spending. One point you made is that each country has demonstrated its capacity to invest more and more money in arms if they think their vital interests are threatened. Why does that happen?
Galbraith: Well, I think in both countries we must face the fact that there is a military power. Dwight D. Eisenhower, in his most famous speech when he was leaving office, warned against the development of the military-industrial complex, a deathless phrase which is the combination of power of the civilian bureaucracy of the Pentagon, the Armed Services, the defense industries, their captive politicians in the Congress, and the huge power that is involved in the Pentagon budget: the huge capacity to purchase submission that goes with any large sum of money, well, this we have. This is a power of which we should all be aware, and again, I'm not being unilateral in my discussion. There is, we cannot doubt, a similar power in the Soviet Union. When I was there last spring, there's a huge new building which is in Moscow, it's the Defense Department. I said, that's your Pentagon. Well, I noticed that one of the people I was speaking to shrugged his shoulders in a rather nervous way. So that we have a dynamic force which goes very strongly in favor of the multiplication of these weapons.
Whiteley: That's occurring in both the Soviet Union and the United States. As an economist, would you contrast the effects on the Russian and our economy with those of West Germany and Japan at this time.
Galbraith: Well, one of the spectacular features of the post-war world economy has been the marvelous performance of the Japanese, and in slightly lesser measure, of the West Germans. One of the spectacular facts of the post-war economy, the post-World War II economy, is that out of that experience came first a system of official, and then a system of moral, restraints on the arms expenditure of those countries. The Japanese have spent something less than 1% of their gross national product on defense. Our expenditures have run, as a share of national defense six, seven times as great. The Japanese have had that money, have had that capital to plow into their civilian industry, to plow into their civilian technology, and that is a primary reason why the Japanese are now challenging us in world markets. And in lesser measure, the same situation is true as regards West Germany. There is an old assumption that somehow we have strengthened our economy by putting capital into military purposes, into military uses. That is not true. The military expenditures go to a relatively small, relatively sterile part of our economy, and the Japanese have had civilian capital for a much wider part of their economy. They've had the prestige which goes with industrial achievement in the world, and we've had the loss of prestige which goes from a diminishing industrial position. I don't want to say this has been the only cause of our failure, vis-a-vis, the Japanese. One should always suspect the one-cause, one-cure person. But that has been an important contributing factor to our relative industrial decline in comparison to the Japanese and the West Germans.
Whiteley: Which industries in our society have suffered most from the concentration of capital in engineering and other technological talent on the arms race?
Galbraith: Our old heavy industry; also the automobile industry, chemical industry. The old traditional industries have benefited very little from the arms budget, very little bit from the arms technology, and have suffered from the very high cost of capital which the large defense budget causes.
Whiteley: How does it cause that, from an economic point of view?
Galbraith: Well, the bidding up of interest rates, the bidding up of the cost of capital.
Whiteley: If the kinds of initiatives you suggest are successful, and we are able to achieve a relationship with the Soviet Union where we're no longer investing so heavily in the production of nuclear weapons, and the need for such an expenditure for the military, how do you go about affecting a smooth transition to a more civilian economy?
Galbraith: Well, there was a time - twenty, I suppose twenty-five years ago, when this was a good question, when one worried about what one did if one didn't have the sustaining effect of military expenditures on the economy. That concern, that worry, we can say categorically, is now obsolete. Because in these last years, we have developed a range of urgent civilian needs that are being sacrificed to The Pentagon. The cutbacks in our social expenditure, which have had the effect on the poorest of our people, are a case in point. But also, if you want to get on to sort of bricks and mortar, we badly need some of that expenditure for our highways; a word that I hate to use, for 'the infrastructure' of the economy. We have urgent need in our cities for a wide range of expenditures there, including everything from street sanitation to law enforcement to housing. And we have the continuing, and very pressing, needs of our educational system, which is very much on - should be very much on our minds. We're going to have the continuing pressures of an aging population, and the hope that our older people can survive in some comfort. So we have no longer any problem as to the alternative needs if we don't have the present Pentagon budget.
Whiteley: In sharing with us that there had been a relatively narrow range of industries that have benefited from our arms expenditures, you indicated that there have been a number of people in the Congress that have been particularly supportive, and yet on the other hand, there's a move in the country that has not yet been reflected in the Congress, of trying to change these priorities. Why hasn't this been translated into a changed public policy?
Galbraith: That's a good point. The Congress on this issue, I think, has lagged behind the public perception, and for a number of reasons. Perhaps the Congress always lags a little bit on these matters, the caution that afflicts all politicians facing election. There is also the very important effective arms expenditure. One is in principle suspicious of the Pentagon budget, suspicious of the military power. But then comes the specific question of a new plant, of a new technology that affects the particular congressional district or the particular state, and that disappears. One saw that in the whole discussion of the berthing of one of those old battleships. Generally speaking, the Congressmen or the Senators from the eastern states have been very sensitive on the question of the military budget; very sensitive on the question of the freeze. But then along comes these old battleships looking for a place to berth along the eastern seaboard, and you'll have an outbreak of competitive effort as to where they will go - in Massachusetts, or in New York, or in New Jersey I guess, or in Chesapeake Bay, all competing for the relatively minuscule jobs that are involved. That is a very vivid example of how military expenditures override good judgment.
Whiteley: Why has education not done a better job on this issue?
Galbraith: Well, I think it has done a not bad job. I'm not a defeatist on this point. We go back to what has been accomplished in the awareness of the consequences of nuclear war. A good deal of that effort came out of the universities, similarly on the freeze. So I'm not, I wouldn't be wholly depressed. I think it is still in the center of the - that the source of desire for a better system of more confidence in our relations with the Soviet Union - better civil communication - comes strongly out of our educational system. In any case, we can't afford to be depressed; we must keep on working.
Whiteley: What would you like people to know more about in order to exercise their role in a democracy more responsibly?
Galbraith: Well, I would like to - there were two things: I would like a more critical judgment of the Pentagon budget; that part of it which comes out of the internal dynamic for expansion. The idea - the dynamic of all great bureaucracies for their own expansion. I would like a much more critical judgment on that. And then, above all, going back to what I've said before, I would like to have a recognition of the fact that both we and the Soviets face the common threat of nuclear destruction, and that there is no likelihood that either capitalism or communism will survive a nuclear war.
Whiteley: Professor Galbraith, thank you for sharing with us today, your insights into ways to improve relations with the Soviet Union, and to work together toward a more enduring peace.