WAIM: The Schindler's List Approach to Disarmament

Paying corporations to do less.

This is the first entry in the ‘What am I missing’ series. This series is for ideas I’ve pursued, and that seem obvious to me, except for a nagging voice that says there’s something I’m not seeing. I invite you, the community, to help me understand why this wouldn’t work.

I. Background

What you need to know to understand the argument

Milking Missiles: What is the military-industrial complex?

Many words have been written on America’s “Military-Industrial Complex”. The most famous of which comes from Eisenhower’s excellent farewell address:

A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peace time, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions....We annually spend on military security more than the net income of all United State corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every state house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

The entire speech isn’t very long, and is worth a read. For those unfamiliar with the term, the military-industrial complex means that we spend a lot of time manufacturing weapons and “defense” systems. A significant portion of the US economy is spent on weapons of war, even as we recognize that we have no intention of using them.

There’s an oft-quoted bit of trivia that the US spends more on defense than the next 9 countries combined, five of which are allies. Globally, the US accounts for 40% of the world’s defense spending.

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Me, Me, Me: How does this affect me?

We didn’t listen to Eisenhower, which means we find ourselves in a bit of a tricky situation. Our country needs to produce things so that people have jobs to generate money to stimulate the economy.

FDR had his ditch-digging programs¹, we have people building bombs and planes we have little intent to use.

But we can’t just stop! If we turned our defense spending to 0 overnight, immediately 2 million people would become unemployed. And that’s just aerospace and defense, it’s not accounting for knock-on effects down the line.

So we keep paying people to make more and more² bombs, because the alternative is massive, localized unemployment. Cities where the major employer is a defense contractor: places like Kansas City, Seattle, D.C., Orlando, St. Louis, Huntsville, Cedar Rapids, Dallas, Tampa, Denver, Phoenix, L.A., Syracuse, Buffalo, Nashua, Boston, Palmdale, Baltimore, and many more.

Like Eisenhower said, we can transition from defense to farming, but it takes time.

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II. What do we do?

Okay, I see what you’re saying. How we do we fix it?

Taking the wrong lessons from Schindler’s List

I mentioned knock-on effects. Defense contractors have subcontractors. Some of those subcontractors are dedicated, producing parts that will eventually become bigger parts that will eventually become subpanels on missiles. They’re very good at what they do, and very specialized.

In 2019, Apple attempted to move iPhone production to the US and was bottlenecked by a Texan supplier that could only produce 1,000 tiny screws a day. By the time the company was up to speed, Apple had found a different supplier. It takes time to right a ship of any size.

Can’t you see the problem?

Simply put, the issue is that we spend a bunch of money on defense we never intend to use, and have no way to escape this cycle without causing a lot of people to lose their jobs.

You haven’t mentioned Schindler’s List yet

An arguably minor part of Schindler’s List is that Oskar Schindler sets up a munitions factory that produces no munitions.

I’m suggesting, broadly, that we copy this idea.

The United States could give each of their contractors a time period, say five years, in which they can pivot to any other technology.³ During this grace period, the government will continue to pay the supplemental costs of the equipment manufactured.

What do I mean by supplemental costs? If Missiles “R” Us makes a rocket for $10⁴ and sells it to the government for $15, the government would pay Missiles “R” Us $5 and say “don’t worry about the rocket”. A precondition for this deal is that Missiles “R” Us cannot lay off any workers during this grace period.

Instead, with their guaranteed profit and no risk, they continue to pay their employees, while investigating different ways to remain profitable once this contract / grace period expires.

Take it Further: What about subcontractors?

In order to not dick over the subcontractors, Missiles “R” Us would need an accurate report of the profits for each of the pieces that they order from US suppliers. Foreign suppliers get cut off, we’re stimulating the American economy.⁵ If the missile cap costs $1 to produce and is sold for $3 to Missiles “R” Us, Missiles “R” Us pays $2 downward to Caps, LTD. Every American company in the supply chain keeps their profits without any of the actual expenses.

Instead of spending $15 for a missile, the government spends $10 for no missile. This is less spending, and frees up workers and corporations to pivot.

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III. What if you’re wrong?

Can’t do boom-booms without any boom-booms

The best counter-argument for the point I’ve just made is that occasionally, the United States does threaten to use its military might, or at least to throw around the weight that might provides, while couching it as a a consequence, rather than a threat:

Bob Woodward’s latest book contains an excerpt from a phone call between the US Secretary of Defense and the corresponding Russian Minister:

“If you [used a nuclear weapon], all the restraints that we have been operating under in Ukraine would be reconsidered,” Austin said to Defense Minister Sergei Shoigu, according to Woodward. “This would isolate Russia on the world stage to a degree you Russians cannot fully appreciate.

“I don’t take kindly to being threatened,” Shoigu responded.

“Mr. Minister,” Austin said, according to Woodward, “I am the leader of the most powerful military in the history of the world. I don’t make threats.”

If someone does invade the US, it sure would be a shame to be completely defenseless. Of course, it’s obvious that there is a spectrum between “biggest military in history” and “no military at all”, but it’s equally obvious to me that “bigger than the next 9 countries” is maybe a little too far down one end of that spectrum.

Lies, greed, and the invisible man

The second-best counter-argument is that this process is very easy to abuse! It requires an incredible level of transparency about margins. If I’m selling BoomCo 1,000 nuts a day for $20 and those nuts cost me $2 to produce, it’s in my immediate best interest to say they cost $5 instead. It’s all on the government’s dime at the end of the day, and they can’t audit all of us.

I have two thoughts here:

1. The government could spend resources to publicly audit some number of companies all the way down. They can make a spectacle of it, with extreme consequences (like being cut out of the program entirely). Ultimately, this hurts the workers for what is almost certainly the owner’s greed. This is effectively corporate means-testing.⁶

2. The government ignores it and eats the cost. They are still spending less money than they otherwise would be, and a dedicated contractor has it in THEIR best interest to get honest numbers out of their subcontractors. Missiles “R” Us is only getting $10 for that rocket, and they want to keep as much of that as possible. They know how much was going to the subcontractor when they were actually making caps.

Still, I recognize that “ignore the fraud pipeline” is not a compelling political stance.

We’re very good at what we do

The third-best counter-argument is that retraining is hard, and a lot of companies may not survive the purge. What if they’re really only good at making missiles? Do we really need specialized machinery at such a scale?

It’s true, this might just delay the unemployment curve. Right now we’re making a lot of expensive technology⁷ and selling it to a guaranteed buyer, which turns into salaries.

Watered down communism

What I’m describing (paying people to do nothing) sounds a lot like Universal Basic Income. Instead of having people get paid to sit around making missiles that the government buys, with each layer of overhead taking its cut, we could just have the government give people the money directly.

This does, of course, assume that we don’t need all those missiles anytime soon.

IV. Civility

This article is called “What am I missing”. I’m assuming that there’s something I’m not seeing here. My starting position is that I’m wrong! I welcome your insights, brilliant or otherwise, but don’t be insulting to me or others. This is a place of learning.

1. If you’re not familiar with the WPA, it was an initiative to employ millions of (largely unemployed) workers around the country making public schools, roads, parks, and the like. These days, the US population is significantly more educated, which many people have opined on over the years. I may become one of them yet.

2. ‘more and more’ may not be accurate: In 2023, military spending accounted for 13% of the national budget, less than the decade’s average of 15%.

3. In my ‘arguments against’ section, I point out that we might not want to do this for every contractor. I have full faith in the United States’ ability to invent a bureaucracy to determine which contractors are essential and which are superfluous.

4. In the interest of legibility, I’m keeping these numbers laughably small.

5. I suspect this is a prime place for someone with more economic or foreign policy knowledge to jump in an explain why this would be disastrous.

6. If you aren’t familiar with the term, means-testing is where you make sure that a person deserves a benefit (usually needing low enough income in order to claim wellfare checks or food pantry services), rather than assuming that anyone who shows up to claim it needs it in some way or another. Critics claim it spends more resources to police than it would cost to ‘incorrectly’ provide a service to someone who doesn’t ‘need’ it by whatever metric you are testing.

7. A ‘cheap’ fighter plane goes for $30 million.