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Panelist discusses economics of SDI

[mk1]By Katie Schwarz

A panel of three speakers discussed whether Strategic Defense Initiative (SDI) research will be a burden or an impetus to the US economy at a seminar Tuesday.

Debate centered on the effect of large military expenditures on America's international trading position. Leo Steg, former manager of General Electric Co.'s Space Science Laboratory, expects SDI to lead to new technology for the United States to export. But MIT economist Lester Thurow contended that "Star Wars" would have little non-military relevance.

The speakers also disagreed over whether SDI represented a major diversion of resources needed elsewhere. Thurow and Bernard O'Keefe, chair of the executive committee of Edgerton, Grier and Germeshausen Inc., expressed concern about tying up too much of the nation's financial and human resources in the program. Steg, on the other hand, maintained that SDI "in its original form" -- the $2 billion research program approved by Congress -- would cost only about one percent of the gross national product.

O'Keefe and Thurow stressed the importance of the civilian economy. They warned that American industry is succumbing to Japanese competition, because the United States concentrates too much on the military. "The long-term viability of the US as a superpower depends on our economy," said Thurow.

Steg expects future progress

"What will we have to sell in the world?" Steg asked, answering, "high tech." SDI research will spur progress in all fields connected with it, he said. "You pick the field, there will be advances." Technology used in SDI could also benefit the civilian economy, he added, suggesting that the decentralized software network needed for SDI could be applied to a national power grid.

Steg discounted SDI opponents' claims that the program is not feasible, emphasizing that "whenever someone says `It's impossible,' someone has wiggled their way out." He compared SDI with the Apollo program. Both projects seemed "incredible" at first, he said, but the technical problems of Apollo were solved.

The $2 billion SDI research program is not unusual in terms of size or cost, and its political and economic aspects should not<>

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receive so much attention, Steg asserted. "My fond wish is that the program get the political and economic obscurity it deserves. Technically it's very interesting, but ... I wish it would go back where it should be."

O'Keefe suspects excess spending

Such a $2 billion program would be acceptable, said O'Keefe, but a full-blown SDI development program would divert national resources and harm America's world economic standing.

He expressed concern that SDI would grow to include not just research but testing and deployment, citing estimates that deployment could cost up to a trillion dollars. "There's nothing wrong with $2 billion for basic physics. There is, however, something wrong with fiddling with the ABM treaty or talking about full-scale testing and deployment."

The "tradeoff" between military and commercial investment is eroding the US ability to compete in the world market, and as a result "the comparative advantage that we had has shifted to the newly industrialized nations," he concluded.


Thurow sees economic imbalance


"Any society has to have some optimal mix between consumption and investment," Thurow claimed. Defense spending represents consumption, he continued, so that more defense spending means either less public consumption in other areas or less private consumption -- i.e., higher taxes.

But Americans will not be willing to reduce non-military consumption, he predicted, and the resulting federal deficits will drain money which would be "otherwise used for making America a more productive economy in the future." The Soviet Union, on the other hand, is more ready to sacrifice civilian consumption, and hence "you can't spend Russia into bankruptcy," he argued.

Military research also occupies too much of the nation's scientific talent, further hampering the commercial sector, Thurow continued. "Every society has a number of the brightest and the best, and if you put them all into defense, then obviously you have some problems elsewhere in the economy." He pointed out that President Kennedy included a drive for more education of scientists as part of the Apollo program, yet President Reagan has proposed no such effort.

SDI research is not likely to yield technology that is useful for non-military industry, he contended, pointing out that "of the great inventions affecting the civilian economy, few come out of the military area." He suggested that SDI work would be inapplicable to civilian needs because the technical issues of spacecraft design are remote from most non-military engineering. Furthermore, Thurow claimed that in military research, "a set of attitudes occur that are very counterproductive for the civilian economy."


Audience questions


A question-and-answer session following the panel focused on how likely it is for military technology to have civilian applications. Thurow took advantage of the discussion to contrast the American and Japanese economies.

Rich Cowan G challenged Steg to name ten civilian technologies that originated with the military. Steg responded, "You don't need too many ... one silicon chip will carry you a long way."

A second questioner objected to Steg's listing of various wrong forecasts of scientific progress, intended to cast doubt on pessimistic predictions about SDI. Steg's list concerned problems of man against nature, not prob[cx48p]lems in which there was an adversary, the questioner said. "I can predict what man will do ... I'll take the man's countermeasure any time over nature," replied Steg.

Scott Saleska '86 asked Steg why he opposed discussion of the political and economic aspects of SDI. "The research is to find out whether political and economic debate should happen," Steg answered.

About 100 students and faculty attended the discussion, which was co-sponsored by the MIT Technology and Culture Seminar, the Disarmament Study Group and Computer Professionals for Social Responsibility.

Tuesday's event was the second of a three-part series on SDI sponsored by the Technology and Culture Seminar. The third part, in February, will examine the initiative's moral and ethical aspects, according to Carl Kaysen, head of the Program in Science, Technology and Society,who moderated the discussion.