3 tables that constitute the Defence Burden, referred to in Michael Artis' article on Defence spending and the economy, show the relation between increased defence and employment in the American economy, the percentages of the gross national product spent on arms, and the profit made by some prominent firms in the "hardware" trade. The first table, labelled Manpower statistics in USA between 1940 and 1958, compares unemployment as a percentage of total labour force and int he thousands. The percentage peaks in 1940 with 14.6%, reducing to a low of 1.2% in 1944, before increasing slowly again to 5.5% by 1949, which wavered between 2.5% and 5% until an increase by 1958 of 6.8%. The second table indicates defence as a percentage of GNP at constant 1954 prices but excluding civil defence, in both the UK and USA, from 1950 to 1958. In the UK, defence percentages increased from 7.2% to a peak of 10.4% in 1952 and 1953, before decreasing slowly to 7.3% by 1958. In the US, percentages increased from 5.6% to 14.8% by 1953, decreasing to level at 10.4% by 1957. The third table indicates total profits and dividends in 1959 by company. The companies with the largest profits include Hawker-Siddeley, with 21,589 thousand in profit but only 1755 thousand in dividend, Vickers with 14,418 thousand in profit and 2816 thousand in dividends, and English Electric with 11,534 thousand in profits and 1925 in dividends. Rolls Royce, with only 8722 thousand in profits, has 1218 thousand in dividends.

What role does defence spending play in a capitalist economy: what would be the costs and “disadvantages” of disarmament? These questions are discussed by Michael Artis in this second article in the series, what’s wrong with capitalism?

the chief aim of this article is to provide an assessment of the economic problems and opportunities which a disarmament agreement would present to Britain. Nevertheless, a good deal will be said, in the course of the analysis, of the role which defence production plays in the American economy, since both the possibility and the ultimate success of a disarmament agreement depend crucially on American reactions.

Popular thinking on this subject is fraught with contradictions, of which one of the most acute is undoubtedly the conflict between the view that defence is a “burden” and a cause of inflation, and the view that production for defence is essential to the maintenance of full employment. The political implications of this second view have been noted in the local politics of California and the South of England alike; Clive Jenkins, in his recent study Jets and Jobs (published by UDC, 6d.) drew particular attention to an incident in the last General Election. He writes:

In Ian Mikardo’s General Election campaign in Reading an active Labour Party member took reprints from a piece I wrote for Tribune entitled Jobs and Bombs into the Aldermaston Atomic Weapon Centre, had it discussed in the Shop Stewards’ Committee and pinned to the notice board. The Labour candidate in the neighbouring constituency felt it necessary to produce a special leaflet for the atomic plant employees. Why? Because in teabreak discussions throughout the Centre, workers were arguing with anxiety about their employment prospects if bomb manufacture were suspended.

There are other, less obvious arguments about the role of defence production which will be encountered later, but it is sufficient at this stage to try to get a clearer view of its ‘Keynesian’ role.

There are, immediately, two aspects to this role: the first might be called the “general” or national Keynesian role, where production for defence is a guarantor of full employment in the whole economy. The second is a more limited and localised role, where defence production, or the particular way in which it is carried on, is designed to bolster the fortunes of a declining industry or a particular depressed area.