Globalism and the Death of Defense

"If you want peace, prepare for war."  Nearly seventeen hundred years ago, the historian Vegetius gave that advice to the Roman emperor.  Good advice, as true today as it was then.

Time was when America's overwhelming military and industrial strength kept the peace.  But now deliberate American weakness is embroiling us in a multitude of rarely reported hot skirmishes around the globe.  Good soldiers are dying, but you almost never hear about them.  This, while hard earned combat victories in Iraq and Afghanistan (and earlier in Viet Nam) have evaporated through premature withdrawal. 

Current intellectual fashion has it that, rather than military strength, the international network of trade among the Great Powers will forever keep the peace.  History says otherwise.  In June 1914, Germany and Britain were each other's principal trading partners.  In September they were slaughtering each other.  Over the course of history, instant change from peaceful trading to total war has happened a multitude of times.

Globalism – an ideology that has two major strains.  On the libertarian track are those who naively believe that free trade will always bring prosperity and peace.  On the totalitarian track are those who equally naively believe that nations are obsolete and that the future belongs to those who have escaped into the coercive "one world" to come.  Epitomizing the one-world believers are the fascist bureaucrats of the European Union and their American Chamber of Commerce counterparts.

The libertarians, on the other hand, are disciples of Adam Smith, David Ricardo, and the theory of comparative advantage.  I suppose I have more sympathy with the libertarian faction.  But Smith and Ricardo worked in a mercantile world where nations controlled all aspects of foreign trade through government-chartered trading monopolies (sound familiar?).  They also lived in the very beginnings of the industrial age, which was to give Britain a stupendous competitive advantage in international trade and the accumulation of riches.

We no longer live in the old industrial age, and comparative advantage now belongs to technology.  Creative America is the master of new technology.  Unfortunately, we cheerfully give that advantage away to our international competitors.

I became acquainted with globalism one evening decades ago in the post-Reagan era.  In Southern California, the premier yacht club is the Balboa Bay Club.  A friend had arranged a dinner there for me to meet with a senior executive at the old Hughes Aircraft Company.  After the meal, I was just getting started with a pitch on my new technology when a friend of the executive wandered by.  My presentation was aborted.  It was a disappointment, to be sure, but in its place I got a first-class education in globalism. 

The new arrival was the president of a major electrical and electronics supplier to the defense and commercial industries.  The conversation drifted into a discussion of the company's expansion plans.  Demand was much greater than the company could currently meet.  Where to put the new factory?  Well, for sure, it was not going to be in America.  Taxes were too high and regulations were too restrictive in our homeland, was the excuse.  The excuse was probably valid, but still, America needed the increased productive capacity.  It was important for national defense.  The issue of where to put the factory came down to whether southern France or northern Spain would have the most attractive incentive package.  In that now distant era, the proto-globalists had already sufficiently infiltrated our society, and our government, so as to put America at a competitive disadvantage.

A different case history illustrates more than just veniality – it demonstrates true stupidity.  A number of years ago, the military started a program to deploy a new constellation of satellites.  These satellites were critical to national defense.  This large program depended on certain critical technologies.  One of these critical technologies was the ability to make multilayer diffraction filters with special characteristics.  While there were several companies that made multilayer filters, there was only one that could meet the required specifications. 

Now, while the theory of multilayer filters is well understood by any optical physicist, meeting exacting specifications is a "black art."  Only technical wizards who know the "secret sauce" can produce them.  This meant that, at the time, there was exactly one optical company that had the required sauce to produce the filters needed for that constellation of satellites.  Accordingly, the Pentagon drew up a sole source contract to that company.  The company declined to accept the contract.  In fact, it could not legally accept the contract. 

It seems that the optical company was very busy supplying filters to industry – and making lots of money in the process.  The military part of their business was not small potatoes, but a major distraction.  A rational, but unpatriotic, business decision was made to sell off the defense portion of the business.  A European company snapped it up – together with all rights to the designs, design process, and manufacturing process.

Big problem.  The specific requirements for the needed filters were highly classified.  The European company was not cleared to even know about the project.  OK, said the Pentagon; there are lots of multilayer filter vendors who have the necessary clearances.  We will simply open the bidding.  Unfortunately, there were no shows.  No one else could meet the exacting specifications for the filters.

Panic.  The Pentagon had to let out R&D contracts so that various companies could fumble their way into discovering the secret sauce.  Eventually they did, so that problem was solved.  But in the meantime, years went by.  The satellite development was put on hold.  Armies of skilled workers sat around twiddling their thumbs while billions of dollars were expended just keeping that trained cadre from disappearing onto other projects.  Shame on the Pentagon, shame on the State Department, and shame on the Commerce Department for permitting that critical defense technology to be sold overseas.  Pure stupidity.  And billions-of-dollars costly, too.

The lesson here is that national defense depends on a great deal more than having a large, and competent, army.  The real muscle in our defense is industrial and technological and has been almost from our beginnings.  On Sunday, December 7, 1941, our Army and Air Corps were fourth-rate.  Our Navy was second-rate.  And our defense industry was just beginning to gear up for war.  Our defense industry, at the time, was nothing like as big as those of Britain, Germany, Russia, and Japan.  Three and a half years later, our Army, Navy, and now Air Force bestrode the world.  The real secret of our immense military power was the adaptability of our industry.

(By the way, anyone who says we can't build a wall is an idiot.  The proposed wall is trivial compared to what we can accomplish if we really want to.  Witness the Second World War.)

The real military muscle is industrial.  But industrial might is much more than plants and equipment.  "Know-how" and "can-do" are the heart and soul of industry.  But these old virtues are the consequence of "hands-on."  One does not learn these things from textbooks.  One learns them from on-the-job experience.  And that experience is confined to very few Americans when we set up factories in foreign lands.  Cheap overseas labor may be attractive to the penny-pushers who run most of our large businesses, but it promises to be ruinous to our nation in an emergency.

Consider the following scenario: the dictator of North Korea one day has indigestion.  He now has enough nuclear-tipped missiles to do real mischief.  Rather than simply executing a couple more generals, he decides it is time to teach the Japanese and South Koreans a lesson.  Up his missiles go, and down they come – into nuclear war.  Our treaty allies being at war, the U.S. is also now at war.  The problem is that China, North Korea's only ally, is also at war – with us.  We get many of our military critical supplies from China and its trading partners.  But no longer will that be the case.  Most international trade is shut down for the duration – too dangerous for our trading partners with China staring at them.

What to do?  High technology factories take years to build.  Manufacturing specialists take years, and even decades, to train.  We are not, in this scenario, happy campers!

Obviously, there is something wrong with theories about globalism.  Globalism is dangerous to national security.  Of course, if you believe that nations are obsolescent, then so what?  However, I am not in that camp.  So my question is, how do we preserve our security and still flourish economically in a global environment?

This is the realm of policy.  What policies provide simultaneous security and economic benefits?  My acquaintance at the Balboa Bay Club complained about taxes and regulations.  Some may call me an extremist, but that is where I would take a machete.  If, today, the U.S. has the world's highest business taxes, chop them down to the world's lowest.  More than that, if you really want to attract manufacturing back into this country, how about zero taxes on all revenues from manufacturing?  After all, businesses don't really pay business taxes; consumers do. 

Regulations have proliferated in recent decades primarily because hostile globalist greens have taken over many regulatory agencies.  Time to prune back the regulatory jungle.  More than that, I advocate a constitutional amendment that puts the responsibility for passing regulations back in Congress.  Agencies may propose, but Congress must pass – preferably with two thirds of both Houses affirming.

OK, so call me an extremist.  But I am with Vegetius.  "If you want peace, prepare for war."