The Control Data Corporation and global value chains

In March 1976, Deputy Secretary of the Department of Defense (DOD), William “Bill” Clements invited William “Bill” C. Norris, CEO and Chairman of the supercomputer producer Control Data Corporation (CDC) to a closed-door meeting at the Pentagon. Secretaries and undersecretaries from the United States Army, Navy, and Air Force were to attend, as well as a selection of spokespersons from the public university system and private sector. Clements requested Norris come prepared with “any important aspect of Defense management or posture that… warrants perspective” and to be candid in his comments.

Preparing for the meeting, Norris wrote a note. The subject was “East-West trade.” The DOD was not giving enough “attention” to export administration, Norris penned. The fact that the Department was “inconsistent” in reviewing export applications for computer technology to Central and Eastern European countries created an “unhealthy,” “adversarial” relationship between industry and the military, he continued.

PRODUCTION MAINLINE

Wartime economic planning

This week, reports swirled regarding President Trump's invocation of the Defense Production Act—a 1950 law passed to manage production in the context of the Korean War—to meet the coming demand of crucial medical supplies to treat people with COVID-19. Much of the ensuing commentary has elided necessary distinctions between the Cold War–era DPA and the more memorable interventions into the productive capacity of the US economy that defined the Second World War. (For a helpful disaggregation, see this essay by Tim Barker; for a rundown of the DPA's history, see this summary from the Congressional Research Service.)

In his book, Arsenal of World War II (the fourth in a five-volume series on the political economy of American warfare), PAUL KOISTINEN provides a uniquely comprehensive and detailed account of the often misunderstood economics and administration of America's World War II mobilization effort.

From the book's introduction:

"An ironic legacy of the New Deal was that it helped create the partnership between corporate and military America that was destructive to reform. In the defense and war years, New Dealers took the lead in preparing the nation for World War II. Once hostilities ensued, the same reformers were at the center of devising the structure and controls essential for successfully harnessing the economy for war under stable economic conditions. Many of those same New Dealers became victims of the industry-military alliance that their mobilization policies and methods had assisted in bringing into being.

Despite advancement in weaponry, massive output was the critical World War II development, and that depended on successful economic mobilization policies. The political economy of warfare involves the interrelations of political, economic, and military institutions in devising the means to mobilize resources for defense and to conduct war. In each war, the magnitude and the duration of the fighting have dictated what the nation had to do to harness its economic power, but prewar trends have largely determined how this mobilization took place."

Link to the book page.

• Mark Wilson's 2016 book, Destructive Creation, also on the business-government relationships that defined the World War II mobilization effort. Link.
• A few recent articles on medical supplies: on the ventilator shortage; on mask production in China; on Taiwan's response to the virus; on the EU's plans to airlift masks; on China's increasing medical supply delivery to Europe.
• From Otto Neurath's 1919 "War Economy": "The main result of our investigation may be expressed as follows: war forces a nation to pay more attention to the amount of goods which are at its disposal, less to the available amounts of money than it usually does." Link to Neurath's collected writings on economics.