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Date: Wed, 8 Jul 1998 15:24:52 -0400
From: Charudatt <charu@iced.com>
Subject: public spending via military

Krishna_Vallabhaneni@lcc.com wrote
> I heard on National Public Radio that the U.S. Interstate Highway
System
> was designed by the Defense Department during the Cold War years.  If
this
> is the case, should leaders in India look at ground transportation
needs
> from a national security point of view?  What are you're feelings
> concerning this idea?

My overriding thought is that we should understand the dynamics
of these cases before we seek to replicate them. Designating
essential public spending to be military spending is inefficient
and generally less accountable.

In the US since central economic planning is considered
anathema, governmental economic management was and still is
usually wrapped into military spending. In India a bunch of guys
in South Block get together and make up a plan and say- 

"over the next 5 years this is how we're going to direct long term
strategic public spending, we know what's good for you, and if
you don't like it, too bad, we have the power to tell you to shut
up and take it". 

In the US that approach wouldn't work so well,
so instead, a plan for strategic public spending on things like
highways, airports, and subsidies for research in high-tech,  and
so on is made and then the spending is justified on the grounds
of the catch-all "National Interest/Security" which is not
questionable in PC [Patriotically Correct] discourse. 

One problem with this framework for doling money on the grounds
of "security" is that it is inefficient. For example, if it is a
public priority to develop efficient air transport vehicles, it
is probably more efficient to directly contract the development
to an aircraft manufacturer, rather than subsidizing  this
manufacturer indirectly by awarding the manufacturer military
contracts at grossly inflated costs which are then diverted to the
[private] development of new planes.

For an excellent article on this topic analysing US public
spending cloaked as "National Security" see:

http://www.infoasis.com/people/stevetwt/Chomsky/PentagonSystem_Chom.html

-Charu