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1, Does American Prosperity Depend on Arms Production? ‘There are surface signs which help to spread this impression. Critics in the Communist world proclaim it as fact. What is the truth about this? America enjoys a relatively high Standard of living while devoting a sizeable slice of national resources and energies to making weapons of war. Gerteainiy manv iehs bave been created by military suroduction. This is not Mee BLY allaisy D eladlead fiery weed LIteELeu uy SPALL y PREVMIUCLIVGE, 2allo 9D FUE surprising, for it is just here that the government spends a lion’s share of the Federal budget. However, to believe that prosperity can be created through arms production, or that this patiern of spending is sacred and unchangeable, is to follow an illusion. Standards of living are measured by consumable goods and services. It testifies to the country’s amazing productive power that we do reach such a high standard. If afl of that power were turned into the production of consumable goods and service, or of creative leisure—and none into arma- ments—our standard of living could be markedly higher! American prosperity stems from our productiveness. To maintain general prosperity is to keep a steady flow of the total volume of things we turn out, so that we as consumers receive a steady supply of the things we need. Tt does not depend on how much is invested in one special field, such as weapons. In times of transition, when the make-up of some parts is shifting, it is of utmost importance to keep the éofa/ national spending—by consumers, business and government combined—at an even level. This can be done in different ways, and naturally some ways are better than others. But we can be certain of this: If we stop channeling a great part of our resources into the means of destroying human life and turn the same current into things which people need and can use, real prosperity should increase. Ts it true, as many believe, that a cut in defense spending will cause a depression, at least temporarily? It is not true if sensible policies are followed. Past experience does not show that defense cuts inevitably create in 1946 and 1947, when business and employment remained good. That was partly, of course, because of a large backlog of wartime saving. By contrast, in 1957 defense spending increased—more than $3 billion over the total for 1956—and yet industrial production declined the wholc year and unemployment mounted, leading into a quite definite recession. As it happened, changes in the tempo, of defense spending helped to deepen this recession; but, as before, the arms outlay was only one part of the picture. What counts most is the whole picture. 2