WEBVTT

NOTE The National Security State

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I want to make an announcement before I start my talk about my address in case someone would

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like to write to me via snail mail. The address that's given on the schedule for me is out of

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date, but you can send me a mail at the Independent Institute at 100 Swan Way in Oakland, California,

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and an email address that ought to be good for a long time to come is rhiggs at independent.org.

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The email address that's given in the schedule is fine for now, but there's always a chance

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that I will finally get so disgusted with AOL that I will give that up.

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I threaten to virtually every day.

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The topic for this session complements the last session's topic in the sense that a

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term of art for people in the Rothbardian circle is welfare-warfare state and one of

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One of our insights is that these two are connected, and you heard a good deal from Professor Woods

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just last hour about welfare.

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I'm going to now talk about the national security state, which is the warfare side of the dyad.

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Suppose you wanted to have a permanent war.

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Now, why would you?

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Well, you might. Some people did, and still do, as a matter of fact. So it's not an absurd question.

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I've given some thought to how you would go about successfully conducting a permanent war,

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and it seems to me that at least the three elements are required.

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There would be some kind of overarching ideology to justify undertaking a permanent war.

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You need to convince people that this was an important and appropriate thing to do because

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they're going to be bearing various burdens in order to allow the conduct of a permanent

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war.

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They will have to pay for it, they will have to put up with various nuisances it creates

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and from time to time, they may have to die for it, so you need to make people believe

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that it's a worthwhile thing.

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In the case of the permanent war that began in the United States, sometime in the 1940s,

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we could have a lot of interesting discussions about exactly when, but this thing that used

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used to be known as the Cold War before that, that blew up in the face of the permanent

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warriors and had to be replaced by various demons du jour, had the ideology of anti-communism

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as its overarching justification. Now, when I say this, it sounds as if perhaps I'm thinking

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that communists are not a problem, and that's certainly not my belief.

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I think the communists, wherever they came to power, were extraordinarily evil people,

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and certainly the communists in the Soviet Union qualify as among the most evil people

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we know anything about in history.

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So it's not that there was nothing to think about, but at the same time the mere existence

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of communists in the Soviet Union was not in and of itself sufficient to justify all

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the actions that were undertaken.

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So there's another matter apart from the existence of the Soviet Union.

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You would also need, in addition to the ideology, some interest groups who stood to gain in

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a narrow way from participation in fighting the perpetual war.

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Ideology is a good thing.

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You need that, but you also need some people to join in because there's money to be made

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or office to be gained, things of that sort which are of immediate concern to political

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and Industrial Actors. And this is where the Military-Industrial-Congressional complex comes into play, and I'll return to that in a few minutes.

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Now even if you have interested political factions who stand to gain their own objectives from carrying on a perpetual war,

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And even if you have an ideological cover for it, you may find that the mass of society loses faith,

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particularly if the Cold War is being fought way out there somewhere.

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They don't have any immediate contact with it, and so they may grow weary of bearing the costs.

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They may grow skeptical of the reality of the threat.

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In order to awaken them to the urgency of the need for them to continue bearing the burdens,

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it's important that from time to time, new crises present themselves,

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or if they don't helpfully present themselves, you may have to create them

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so that they appear to have presented themselves in the mind of the public.

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So, crises help to reawaken the ideological force that sustains the actions from which the interest groups themselves are gaining in a narrow way.

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In American history, there have been a series of alleged weapons gaps that played this role, among other things.

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And it's almost amusing to go back and tell the story of the bomber gap, followed by the missile gap, followed by the anti-missile gap,

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Followed by the ICBM throw weight gap, followed by the hollowness gap, and so forth.

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If you're old enough, everything becomes funny after a while.

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I guess that was a gift that Mencken had, and he was able to look at the world with

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all its idiocies and laugh at it.

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I envy him, mostly it just makes me cry, but we can't all have that gift.

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One of the things that I think is helpful to bear in mind when you think about the conduct

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of the permanent war is that there are some who gain a good deal from it and some who

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People who lose a good deal from it, and so there's a potential conflict inherent in its conduct.

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People who are aware that they're on the losing end may take exception to its conduct and resist it in one way or another.

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Sometimes this is obvious as, for example, during the Vietnam War when draftees took exception to being sent to Vietnam,

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and so they left the United States to avoid the draft.

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At other times it takes other forms.

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It may take the form of mere tax resistance or reporting to the poll taker that I don't like Truman as much as I used to, things of that sort.

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There are many ways in which the civil struggle inherent in the conduct of the perpetual war can express itself

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And it's very instructive to follow that conflict. Some of it takes political form, some of it takes non-political forms.

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But it's very important to understand that process and why the winners win.

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Why is it that other people who have some role lose persistently?

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Now, if we go back to the end of World War II, we have the conditions that give rise to this permanent war, and that's odd, you know, we'd just finish the greatest war in human history and you'd think, well, ah, now, maybe this is the war to end all wars.

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After all, it was supposed to be when it began back in 1914, at least after the Americans came in.

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So finally we've wrapped up this great war and now we can have world peace and that's what FDR

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always told people that the United Nations would do. It would finally realize the dream of that

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the League of Nations had not realized and it would supervise international affairs in such a way as to

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repress aggressors and maintain world peace so we wouldn't have to worry about war anymore.

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more, at least nothing like the wars that had taken place in 1914 and 1939.

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At the end of World War II, the United States was a dominant superpower in the world, although

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on the Eurasian landmass, the Red Army was the big enchilada, and the Russians had effectively

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They had taken control of a number of countries in Central and Eastern Europe, and they made menacing noises.

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They had a lot of troops, so they did look as if they packed considerable punch.

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So they were a kind of superpower in their own right, but the United States was a global superpower.

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It had an enormous navy, it had the most advanced weaponry in its air force and its navy.

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It reigned supreme. No one could challenge it, particularly because only the United States had atomic weapons.

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And that was such a devastating advantage that the Americans felt they were in a position to basically dictate to the world,

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with the passage of time, it would become apparent that just having atomic weapons did not solve all problems, not even all military problems, but in the late 40s it looked as if it was a tremendous club for the U.S.

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Now, I want to recommend to you for the next stage of my talk here, the onset of the Cold War, the essay by Ralph Reiko in the Mises Institute book on the Presidency.

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It's a really splendid essay. I don't know of anything else I could recommend to you to understand the actions of the Truman administration.

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and in the beginning of the Cold War, this is a mightily disputed topic among historians

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and countless books have been written about it, blaming the Russians,

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blaming the Americans, blaming sunspots, whatever.

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But Ralph Reiko's essay is a very good starting point for you

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The Truman administration, feeling its oats by possessing these atomic bombs, decided that it would, so to speak, not take any guff from the Russians.

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and at the same time the military establishment and the civilian leadership of that establishment undertook to reorganize the military affairs of the country.

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A number of problems had become apparent during the war including the conflict within the army between the Air Corps which became the Army Air Forces during the war

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and the desire for autonomy, I mentioned yesterday that some of the aircraft manufacturers promoted

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that idea because they wanted to have their own department in Washington to help them

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sell their products. In fact, in 1947, the military establishment was reorganized in

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Something like its current form with the Joint Chiefs of Staff, Army, Navy and Air Force

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as equal departments in something called the Department of Defense.

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Previously we had always had from the beginning of the United States something called the

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War Department, but obviously there wasn't going to be any more war, there would only

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be defense.

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The United States is a peace-loving nation. It does not go to war, but it will defend itself globally if need be.

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In 1947, the National Security Act was passed, and that created a number of institutions that have been central to managing military affairs and defense affairs ever since,

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The National Security Council, which is the immediate venue for the President and his closest advisors to set military policy.

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The Central Intelligence Agency, which at that time was meant to bring together a number of different intelligence agencies,

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and some of them in the military departments and some of them elsewhere that had operated

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during the war so that the president would have access to a source of information about

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defense matters that was not fighting amongst itself.

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The CIA was supposed to be, as the name suggests, an intelligence agency, but virtually immediately

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it became a kind of James Bond operation, a kind of rogue military and general purpose

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This organization did everything from subsidized academics writing articles in Italy to equipping

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guerrillas in various countries of the world to subvert their governments.

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At the same time this military and intelligence organization took place, something new happened,

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Which was that from that time on these matters, military and intelligence matters became shrouded

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in immense secrecy.

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There had always of course been a certain amount of secrecy about these issues in the

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government but it had never been before as it was from that time onward.

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and all kinds of information became closely held and that was very important because it put a handful of decision makers in a position to know what other people didn't know and to therefore become the interpreters of world events to the citizens at large and very often even to the Congress which was not entrusted with this critical information.

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This meant that that small number of men, and they were always men of course, were in a position to ration information or, if need be, to create information, to falsify information, to lie, to make up information, to disseminate whatever ostensible information they thought appropriate in the circumstances.

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And no one else was in a good position to challenge what they had to say because everyone

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else stood at risk of being exposed as something verging on a traitor or perhaps at least a

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fool. They could always spring information on their critics and make them look bad if

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the critics became too troublesome. So this secrecy, this high degree of classification

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of Information became a hallmark of the management of defense affairs from the late 1940s onward.

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The Truman Doctrine, something enunciated by President Truman in 1947, was a new statement

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of how America would act in the world.

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This was elicited by what was going on in Greece, which interestingly enough was a place

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where the United States had no vital interest at stake whatsoever, one way or the other.

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Greece had some local communists who didn't even enjoy the support of Moscow, that's how

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pathetic they were, and they were fighting to take over the government of Greece and

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The President decided that the United States should assist the existing government of Greece

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in repelling the menace of these local communists.

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He made that a general policy doctrine that wherever communists threatened an existing

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government, the United States would come to the aid of the existing government.

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That was the Truman Doctrine.

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to be distinguished from something that was enunciated later by Reagan, the Reagan Doctrine

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being that the United States would come to the aid of insurgents if they were good guys

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in attempting to overthrow an existing government.

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So eventually we could have it both ways.

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We could flip a coin.

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Now, the Russians in a way behaved so clumsily in the late 40s that they made it easy for

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people who wanted to revive the warfare state, aside from their actions in Turkey and Iran

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and other places.

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These were not, in retrospect, unambiguous.

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They might be viewed as less threatening than they seem to be at the time, but the Truman

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administration presented them as at least the beginnings of communist aggression and

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undertook to intimidate the Russians to stop those actions and did so successfully.

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The Russians did remove their forces from Iran.

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They did stop threatening Turkey.

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So things seem to be settled but the affairs of Germany continue to present a management

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problem to the occupying powers and the difficulties of that management gave rise to the Berlin

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crisis in 1948 when the Russians decided that they would close access to Berlin which had

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had the odd position of being completely contained in the Russian sector of occupation, even

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though the city of Berlin was itself divided among the occupation powers.

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And when they did close off the highway and the railroads, the United States undertook

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to supply the people of the non-Russian sectors of Berlin by air with the so-called Berlin

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and Air Lift that went on for many months. Well, that was better than going to war with

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the Russians, no doubt, but it simply represented, manifested the fact that Russian-American

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relations were becoming very, very hostile and strained. In 1949, the Chinese communists

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The Soviets finally toppled the Chiang Kai-shek government on the Asian continent and forced the remnants onto Formosa.

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And the Soviets exploded an atomic bomb.

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And that came as a shock to American military planners.

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Planters. They were surprised that the Soviets had been able so quickly to build an atomic

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weapon. It's a little bit like the shock at Pearl Harbor. These Yale graduates in the

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State Department always thought that the Japanese were backward and primitive people. They couldn't

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shoot straight, and so when they proved capable of sinking battleships, that was a shock.

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Similarly, the Yale grads and the State Department in 1949 were shocked that these Russians,

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as stupid and blundering as they were, could build an atomic bomb.

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But that was the beginning of the arms race, and that's one of the hallmarks of the permanent

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war, arms race.

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We build some better weapon, they build one to match it.

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We build a defensive system, they build an offensive system to overcome it and vice versa.

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The arms race was a wonderful thing for people who design and build arms.

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It meant that there was always a new market.

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You could never saturate the market because you could always dream up a next generation

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of weapon and then build that.

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And in due course, the stockpile of even atomic weapons became unthinkably huge, enough to

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blow up this world and a thousand others like it many times over.

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And one wonders, exactly what were they intending to do with these weapons anyhow?

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That many of them.

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But the arms race was one aspect, another aspect was global surveillance.

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Since the communist menace was worldwide, you had to watch the whole world, which meant

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you had to have listening operations to see what radio transmissions were being made all

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over the world.

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You had to have aerial surveillance.

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You had to take pictures of what was going on all over the Soviet Union and China and

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other parts of the world.

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And you had to deploy your military units worldwide so that they would be in a position

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to what was called repel aggression wherever it might occur.

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And this was something, a risk that existed globally.

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So these are the kind of bare bones elements of the permanent war.

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Arms race, global surveillance, global military deployment.

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The United States had military units in over 100 countries all over the world, and still does, actually, although not so many as in the good old days.

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The fulcrum for moving from the old regime, as it were, to the permanent war was the outbreak

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of the Korean War.

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There was a lot of debating going on in Congress and between Congress and the administration

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in the late 1940s about adding to the military budget.

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What I've got up here in the bars, that shows billions of constant dollars spent for defense.

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And you can see after World War II, defense spending came way down, down here, not as

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low as it had been before World War II, it was still about three times greater than that,

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but it had come down enormously from wartime levels.

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And here during the early years of the Truman administration, the administration was trying

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to persuade Congress to bulk up military spending, and Congress didn't see any reason to do this.

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I mean, why? Where's the threat? And besides, we've still got all this weaponry lying around

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from the war. It was occupying fields in Arizona with B-29s as far as the eye could see, just

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So, as Dean Acheson later said about Korea, Korea saved us, and what he meant by that was that it solved the problem of persuading Congress to boost defense spending in order for the administration to carry out its policy of global containment of communism.

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So, with the engagement in the shooting war in Korea, defense spending went way up, as you can see here starting in the year 1951 and especially in 1952, 3 and 4, that's this peak, defense spending went up about 200% and most of that increased defense spending was not for the conduct of the war in Korea,

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It was for building up forces, especially in Europe and to some extent elsewhere in the world.

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So this was the onset of the Cold War and the military apparatus that was adequate to conduct it.

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Now you'll see when the Korean War ended in 1953, there is some retrenchment, but relatively very little.

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So we've gone from here to here and only come back to here.

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and that's where we stay this is a almost like a plateau there are some ups and

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downs associated here with the Vietnam War and then with the Reagan build-up in

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the 1980s and if and if my chart went beyond 1990 which I put in a couple of

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points to show you what what did happen here it does come back down but where it

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comes is if you look at today it's a level just about equal almost exactly

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are really equal to this base level of Cold War military spending.

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It's lower than during Vietnam, it's lower than during the Korean War,

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but it's about like sort of the classic period of the Cold War from the mid-50s to the mid-60s,

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or from the early 70s up to the late 70s.

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And if you add up all that was spent over the years, it comes from 1948 to today to something in the neighborhood of 16 trillion dollars in today's dollars.

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$16 trillion. During the period from 48 to 89, what you might think of as the period of the classic Cold War,

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military spending amounted to 7.5% of gross national product.

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So there's a very large amount of money at stake in the Cold War, and along with that went quite a lot of employment

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of People in the Armed Forces, quite a number of them civilians, as well as uniformed personnel,

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and several millions in the defense supply industries, aerospace and others.

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So this is what we're talking about, a substantial part of the American economy, and as I mentioned

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the other day, in some ways even more important than these magnitudes suggest because in terms

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In terms of, say, overall research and development spending, the military got resources far out

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of proportion to its overall economic magnitude.

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So the parts of the economy that were most responsible for setting the pace and direction

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of economic growth were predominantly military for several decades after the Korean War.

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At the same time that the Cold War began, there grew up a kind of consensus about foreign

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policy, a bipartisan consensus between the Democrats and the Republicans.

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The old isolationist views had been completely discredited and a few remnants who had represented

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that view before World War II died out in the early 50s or left office so that adherence

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of fighting this permanent war were everywhere. No one was against it, after all. Are you

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a commie? Otherwise you've got to support this. So the bipartisan consensus was very

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was very strong from the late 1940s up to about 1968.

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It didn't disappear, there continued to be a kind of bipartisan consensus,

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but it was not as strong after 1968 as it had been before

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during Eisenhower and Kennedy's administrations in particular.

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There was a kind of classic Cold War period in the 50s and 60s,

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in the 1960s and 1960s, and there was an institutional apparatus that I called the Military Industrial

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Congressional Complex. I just discovered recently, by the way, that although I thought I had

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invented the form that adds congressional, it actually had been put in a draft of Eisenhower's

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speech, which he gave in 1961, which presented the term military industrial complex to the

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world. And I think at the last stage of revising that speech, the congressional element had

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been struck from the terminology because Eisenhower decided he didn't want to offend Congress.

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But at all events, it's such an obvious idea that must have been thought of by many people

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besides Eisenhower and me.

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This complex contains kind of three powerful legs.

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The Defense Department and the Component Military Departments, Congress and in particular the

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military committees, the Armed Services Committee and the Appropriations Subcommittees are critical.

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The defense contractors in the private sector who provide military hardware, software, services,

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maintenance, and then on the periphery there are a number of other kinds of players that

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are involved, universities and think tanks.

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If you ever are in the D.C. area, you'll find that beltway bandits are abundant out

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They're in Virginia and many think tanks there are just adjuncts of the military in some fashion.

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Local governments often take a keen interest if there's any kind of military facility located

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in their jurisdiction. Labor unions, particularly in certain industries, aerospace workers,

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maritime workers, and then there are some cheerleading organizations, veterans organizations,

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and organizations for each of the armed services that try to rally the troops and the veterans

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to continually support those who are still serving in the armed forces and to lend their

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political clout, if they can marshal any, in service of making the military budget bigger.

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There's nothing unusual in this respect, and anybody who lives at the public trough always

271
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wants to get more. So the military is just like all the rest in that sense. There's nothing

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necessarily insidious about this. People who've had careers in the armed forces are likely to

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appreciate that way of life and to want to support their comrades. So this is just part of the

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Politics. But these players, as I've indicated, are peripheral. The main players are here. And then, of course, there's the Executive Office of the President. I haven't shown that, but that and the National Security Council is kind of sitting above the whole apparatus.

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So these are the interest groups, as it were, in a kind of fractional sense, a broad sense.

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Congressmen use the military budget as a giant slush fund to help them gain re-election, basically.

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So they try to steer military spending to their own districts.

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They try to select weapons projects that will end up helping people who support them.

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Defense contractors have an interest in just making money and making money without risk.

280
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And they've pretty much got that down to a science over the years.

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The people in the Armed Forces bureaucracies want careers, successful careers.

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They want lots of opportunities to rise through the ranks and their opportunities are better if there's more money available for what they do.

283
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More slots available for high level officers, more money to carry out whatever particular mission they happen to have in mind.

284
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So again, there's no conspiracy here.

285
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When we talk about the military-industrial-congressional complex, we're not talking about a cabal of people who get together and conspire.

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It's just that these people don't have to conspire. It's natural for them to cooperate with one another

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because everyone's interests can be served simultaneously in the same way.

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Some analysts like to say there's not one military industrial congressional complex, but there are a multitude of little mix depending on what weapon system you're talking about or what particular kind of military operation you're looking at at the moment.

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And there's something to that.

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There is conflict within the MIC

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as within any large collective enterprise.

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But there is also an overarching interest

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in getting military spending up.

294
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No one objects to that in general.

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There was a film I wanna mention as I go along

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because it's the finest source that has ever been created for understanding the Cold War and that's the film Dr. Strangelove.

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I've probably seen this about 20 times maybe and every time I see it there's something new.

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This is in my judgment the greatest film of all time and it is essential for understanding the Cold War.

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Vietnam was a real challenge to the warriors because it gave rise to much more visible objection, resistance, than earlier wars.

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At least you'd have to go back to World War I to find anything comparable.

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And there was little living memory of that as of 1965.

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Many people had become ingrained patriots as a result of growing up under New Deal regimentation

303
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in World War II, which is a kind of our version of the Great Patriotic War.

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And in Korea, which for some reason didn't elicit the kind of public protests that Vietnam did.

305
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It's interesting, however, as shown by political scientist John Mueller,

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that actual objection to the war followed exactly the same course in Korea as in Vietnam.

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Miller studied poll data, surveys of how people felt about the war.

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Do you approve or disapprove?

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And what he found was a kind of formula that fits exactly the same for Korea as for Vietnam.

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And the formula is every time the casualties rise by a factor of 10, approval of the war

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declines by 15 percentage points.

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And those data were just the same in Korea as in Vietnam.

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But in Korea, people did not mount big demonstrations in the streets.

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It may have been because the Vietnam War coincided with some social changes that made people

315
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more inclined to get out and demonstrate just as an expression of resisting authority in

316
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in general, which hadn't developed in the early 1950s.

317
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But the Vietnam War was a challenge to the warriors and particularly was a challenge

318
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after the Tet Offensive.

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I did some studies a while back and for these studies I conducted 193 sets of poll data

320
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taken all the way from 1950 to 1989 and I've used only polls that ask people the same question.

321
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Would you like to see defense spending increase, decrease or remain the same?

322
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These are all national random samples.

323
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They're all general.

324
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They're not targeted to some subset of the population so I believe they're comparable

325
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and I combine them into a measure I call the opinion balance and that is simply to take in any given year if I have more than one poll available I just take the average of them but however many I have I take the percentage of people who say they want more defense spending and subtract the percentage who say they want less so that's a measure of the direction in which the general public would like to see

326
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and the Increased Defense Spending Move.

327
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And as you can see, all the way from the Korean War here,

328
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where there's early, a lot of support

329
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for increased defense spending.

330
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This is the rally around the flag effect.

331
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We're sheep, we will be led.

332
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When the authorities tell us we have to now get out there

333
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and kill, we go and kill, at least in the beginning.

334
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And then when the dead bodies start coming back, people begin to have second thoughts.

335
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And as Mueller's results show, the more dead bodies that come back, the more second thoughts

336
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people have.

337
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So the Korean War got this high level of support for increased defense spending.

338
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And then during the non-shooting years, quite a bit of positive support, sometimes only

339
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a little.

340
00:43:29.320 --> 00:43:37.120
Right here in 1961, this is the Berlin Crisis that got people whipped up momentarily to

341
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resist the Russians. We didn't know what they were going to do next after they put up that

342
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wall. And then even in the early years of the Vietnam War, this is 1965, 1966, 1967,

343
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you see that there's positive support for increased defense spending.

344
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The missile crisis here came just after these data were collected.

345
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So it doesn't capture that.

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I didn't have any data for certain years.

347
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But look what happens here.

348
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From the early part of the Vietnam War, after the Tet Offensive, there's a massive, rapid

349
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turning against the war.

350
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And this expresses itself here in the form of a preference for reduced defense spending.

351
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That's a kind of proxy for get out of Vietnam, as it turns out.

352
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And this anti-military sentiment persisted for a long time through the 1970s, although

353
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it reached its greatest dimensions around 1970.

354
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Then it starts lessening.

355
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and you see it's pretty steady from that time on. It's still negative but finally it crosses

356
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over here about 1976 or 77. It becomes positive again during Carter's administration and finally

357
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then we have this 1980-81 response to the Russian invasion of Afghanistan and to the

358
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Hostage-taking by the Iranians in Tehran.

359
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So this got people as whipped up as I've ever seen them in my lifetime.

360
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A lot of people were foaming at the mouth because every night the media would show the

361
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Iranian boys running around pushing an American who was blindfolded and humiliating him and

362
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Americans wanted to definitely get back at those bastards.

363
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So they got whipped up about that, and that was helpful to the Reagan administration right

364
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at the start.

365
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But notice what happens, as soon as that little furor passes, the net anti-military sentiment

366
00:46:03.240 --> 00:46:09.360
set in again, and the Reagan administration was only able to sustain its military buildup

367
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by what you might think of as political and bureaucratic intransigence.

368
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They just kept pushing hard in spite of public opinion and managed to keep their buildup going up to about 1986-87.

369
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So you did have some turning points.

370
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You also had in Congress the Democrats becoming more dovish than they had been before,

371
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particularly when it came to issues such as arms control agreements and nuclear weapons.

372
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They might still give a lot of support to the military in general, but they became less hawkish, at least a portion of the Democratic Party in Congress, less hawkish in some respects.

373
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Now the Cold War ended, but as I've shown you before, military spending is still at the same level as the Cold War norm, so how did that happen?

374
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It's been 10 years since the USSR disintegrated, and it's certainly no threat in the classic sense.

375
00:47:28.820 --> 00:47:36.340
It's still a threat in the sense that the Russians have battle-ready ICBMs aimed at us, and that's a huge threat.

376
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But the threat is different there. The threat is the accident or breakdown of command and control,

377
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which would unleash an unintended nuclear attack, and that's a thing we ought to bear deeply

378
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in mind, and I think too many people have forgotten about it, but it's not the threat

379
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that we think the Russians are going to choose to launch a massive attack against us.

380
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I think they have better things to do now, and nonetheless, they maintain those ICBMs,

381
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And we do too. Again, plenty of firepower to blow up the world time and again. And one

382
00:48:17.720 --> 00:48:25.600
wonders why. It brings to my mind a phrase Seawright Mills used back in the 1950s. He

383
00:48:25.600 --> 00:48:31.280
called it crackpot realism. Say, the people who make these decisions think of themselves

384
00:48:31.280 --> 00:48:38.520
as hard-nosed, realistic men with no illusions, but actually they're more like madmen. And

385
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And if you look at the kind of means they select for the achievement of their ends,

386
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you find their madness to be more or less transparent.

387
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But nonetheless, they present themselves as knowing many things that we don't.

388
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Well, why don't I stop there?

389
00:48:55.160 --> 00:48:58.200
We've got about to six minutes for comments and questions.

390
00:48:58.200 --> 00:48:59.200
Yes, sir.

391
00:48:59.200 --> 00:49:22.200
Yes sir. What is the percentage of GNP, the military budget has really dropped off? It's less than 5% now. As a matter of fact, it's pre-World War II levels right now. At the same time, there's the other line that's going up of your welfare or warfare state.

392
00:49:22.200 --> 00:49:30.700
So, to what degree is the competition between the welfare recipients and the warfare recipients playing into this?

393
00:49:52.200 --> 00:49:54.200
Before it exceeded the military.

394
00:50:22.200 --> 00:50:29.120
got way ahead of the military budget and it's content that that divergence has

395
00:50:29.120 --> 00:50:35.360
persisted and and and will probably persist as far as I can see for some

396
00:50:35.360 --> 00:50:39.420
years now eventually of course that can't go on forever because you can't you

397
00:50:39.420 --> 00:50:47.080
can't have old-age pensions greater than the GNP of the world so something will

398
00:50:47.080 --> 00:51:06.080
I just wanted to ask if you could respond to a couple of points I have. First is, one of the few legitimate roles of the federal government under our Constitution is national defense, and you seem to imply that also there's a moral equivalent between the United States and communist Russia.

399
00:51:06.080 --> 00:51:28.080
I mean, are you aware that there has been a communist conspiracy for oral domination that's been publicized in the common terms, communist international, you seem to imply that this communist threat was illusory, there wasn't really any threat, it was just these corporate entities that wanted to make money that were manufacturing this artificial threat.

400
00:51:36.080 --> 00:51:41.920
But the threat they posed was continually being overstated.

401
00:51:41.920 --> 00:51:47.880
They were always described as having more military capability than they had.

402
00:51:47.880 --> 00:51:56.960
The CIA estimates of Russian productive capacity and of military capability were always inflated.

403
00:51:56.960 --> 00:52:04.280
The intelligence organizations, time and again, lied about what the Russians had done or what

404
00:52:04.280 --> 00:52:11.520
and what they were about to do, so that the reality was not good enough for these decision-makers.

405
00:52:11.520 --> 00:52:16.360
They had to make people more frightened than they would have been if they had simply been

406
00:52:16.360 --> 00:52:24.040
told the truth, because there were benefits to be had for the major players by making

407
00:52:24.040 --> 00:52:26.840
this a bigger problem than it actually was.

408
00:52:26.840 --> 00:52:40.000
I'm not suggesting there was no problem, but the Russians were always this kind of grotesque

409
00:52:40.000 --> 00:52:47.480
third world economy that had somehow managed to build a little rump of military technology

410
00:52:47.480 --> 00:52:48.480
on itself.

411
00:52:48.480 --> 00:52:54.680
And it's kind of a challenge to Misesian economics in a way that they were even capable

412
00:52:54.680 --> 00:53:03.960
of doing that, but that's all central planning could do, was build up by hook and crook a

413
00:53:03.960 --> 00:53:10.440
collection of tanks and missiles. That was a serious thing and I think the United States

414
00:53:10.440 --> 00:53:18.040
was well advised to make sure that they didn't harm us with that capacity that they had developed,

415
00:53:18.040 --> 00:53:28.360
But again, these people clearly exaggerated the threat.

416
00:53:28.360 --> 00:53:29.360
Yes, sir?

417
00:53:29.360 --> 00:53:30.360
Have you read the book May Day?

418
00:53:30.360 --> 00:53:31.360
No, sir.

419
00:53:31.360 --> 00:53:32.360
I would highly recommend it because it substantiates what you're saying there big time.

420
00:53:32.360 --> 00:53:33.360
May Day.

421
00:53:33.360 --> 00:53:34.360
Okay.

422
00:53:34.360 --> 00:53:35.360
I don't remember, but it's all about the U2 and the influence that it had.

423
00:53:35.360 --> 00:53:50.360
I don't remember, but it's all about the U2 and the influence that it had. It's very well written and very truthful.

424
00:53:50.360 --> 00:54:09.360
Q. Has anybody ever done any studies on what the costs are relative to fighting a guerrilla war or the amount of success a guerrilla warfare can have in the economic expenditures in a war like that, comparatively?

425
00:54:09.360 --> 00:54:15.360
The thing I'm aware of is, you know, the Revolutionary War and so many wars have been fought on the guerrilla wars.

426
00:54:15.360 --> 00:54:26.360
I think that a central military presence had a hard time and their costs were much greater than the cost of the guerrilla war.

427
00:54:26.360 --> 00:54:31.360
The guerrilla war, does anybody have any studies on that?

428
00:54:39.360 --> 00:54:52.360
The Russians all devoutly wish we didn't have to conduct a guerrilla war against an occupying power, but the chances that we're going to be occupied by anybody are next to nil.

429
00:54:52.360 --> 00:54:57.360
If the Russians had won the Cold War, it would have taken a different form.

430
00:54:57.360 --> 00:55:15.360
I was wondering, has anybody taken the military budget and said, if we arm the country, our chances of success if somebody was to come in and occupy us would be this, versus spending this amount of money on a centralized force?

431
00:55:15.360 --> 00:55:24.360
I don't know of anybody who would have an interest in making such a study. There's no money in that for Lockheed Martin.

432
00:55:24.360 --> 00:55:49.400
I think that's hyperbole because the Russian economy had been in process of

433
00:55:49.400 --> 00:55:56.480
collapsing for decades. We know, in this room, we know central planning can't work.

434
00:55:56.480 --> 00:56:01.840
As I said a minute ago, it's a miracle they could build up the armed forces. They did

435
00:56:01.840 --> 00:56:08.720
build up. But we also know now, particularly when we can get into the Russian archives,

436
00:56:08.720 --> 00:56:15.140
that that military force itself was far weaker than it was represented as being during the

437
00:56:15.140 --> 00:56:23.020
in the Cold War, the amount of maintenance they could do, the amount of training they

438
00:56:23.020 --> 00:56:26.020
could do.

439
00:56:26.020 --> 00:56:31.820
Somebody the other day talked about flying over and taking photographs of tanks in a

440
00:56:31.820 --> 00:56:35.860
line down there, but you don't know how many of them were running.

441
00:56:35.860 --> 00:56:40.100
And in the Russian case, your chances are pretty good that a lot of them weren't ready

442
00:56:40.100 --> 00:56:42.420
to be used.

443
00:56:42.420 --> 00:56:51.980
So the representation of the Reagan military buildup as the major reason for the collapse

444
00:56:51.980 --> 00:56:57.160
of the central planning regime, I believe, is much overstated.

445
00:56:57.160 --> 00:57:03.440
If there had never been a Reagan buildup, the Russian economy was doomed to collapse

446
00:57:03.440 --> 00:57:05.620
and very quickly in any event.

447
00:57:05.620 --> 00:57:08.860
So just perform a simple counterfactual.

448
00:57:08.860 --> 00:57:14.860
Now the usual argument is that the Russian economy was so bad they couldn't even hope to match.

449
00:57:14.860 --> 00:57:23.860
Well, they never had matched the U.S. except in a handful of selected categories like giant throw-weight missiles.

450
00:57:23.860 --> 00:57:26.860
But what good did that do them?

451
00:57:26.860 --> 00:57:36.860
So I think this argument is one that conservatives like because it makes them and their boy look effective.

452
00:57:36.860 --> 00:57:43.160
But I think the real action was coming from the inability of the centrally planned economy to produce.

453
00:57:43.160 --> 00:57:45.160
Joe?

454
00:58:06.860 --> 00:58:35.420
Well, let's take a break now.

455
00:58:36.860 --> 00:58:38.860
Thank you very much.