The Economic Consequences of ICBM

October 21, 1957

The Soviet earth satellite is first of all a smashing propaganda victory. This is primarily what it was intended to be. It will have immense political and military repercussions. Its most important implication is that the Russians may really have the intercontinental ballistic missile of which they boasted in August. They may be expected to make full use of this implication in stepped-up efforts to threaten, cow, divide, and conquer the free world.

The one possible advantage of the launching of the satellite, from our point of view, is that it may shake us out of complacency and remind us more urgently that we are in a life-and-death struggle between two ways of life. The great danger is that some of us may react hysterically, draw the wrong conclusions, and take the wrong actions.

One possible error is to overestimate the Soviet achievement. What the Russians seem to have proved is that, in the field of physics and military weapons, they have developed scientists and technicians equal to our own. But the Russians have not yet proved that their physicists and military-weapon technicians are ahead of ours. This may depend on a point of fact that has not yet been established, and on which some American scientists have expressed skepticism that their satellite weighs as much as 184 pounds, as the Russians claim.

HOW THEY GOT THE JUMP

How the Russians got the jump on us in launching an earth satellite is, in retrospect, clear. We divorced our earth satellite project from our military ICBM efforts, divided responsibility for it, overlooked its huge propaganda potentialities, talked and boasted freely, and published our planned techniques in detail. The Russians read what we published, but published practically nothing themselves, and secretly drove ahead. The “cooperation” on the “International Geophysical Year” was all one way. In addition, the Soviets have kept us infiltrated with spies.

But perhaps the most important factor is that the Russians acted on the assumption that they were at war with us and we acted on the assumption that we were at peace with them. They hardly needed to send so many spies. Dr. J. Allen Hynek, associate director of the American program set up to trace the course of our own satellite when launched, is authority for the statement that the Russians are watching their own satellite, at 75 stations, through telescopes copied from an American model which he and Dr. Fred L. Whipple gave the Russians in June. But while we thought we were cooperating in a world scientific project, the Russians knew they were competing to be the first to launch an enormously powerful propaganda weapon, as an evidence of their possession of an intercontinental ballistic missile. They took no chances either on coming in second or on public failure. They made no announcement until the satellite had succeeded.

COMMUNIST PRODUCTION

One false conclusion into which we should not hysterically rush is that the “Socialist society,” as the Russians like to call their system, can compete with our free-enterprise system in overall production. I should like to mention here once more the recent study by Prof. G. Warren Nutter (see this column, Newsweek, May 27), who concluded: “Soviet industry seems still to be roughly three and a half decades behind us in levels of output and about five and a half decades in levels of per capita output.” We know from information from a thousand sources that the masses of the peoples behind the Iron Curtain are still wretchedly housed, clothed, and fed. Only a few weeks ago the Central Committee of the Communist Party and the government of Russia announced that the present five-year plan would be scrapped at the end of next year and would be supplanted by a new seven-year production schedule covering 1959 through 1965. Authorities on the Soviet economy interpret this as a left-handed confession that the five-year plan has been failing.

The most serious false conclusion to which we are in danger of coming is that, because of the Russian achievement, all plans for economy in government must now be thrown to the winds. Certainly our government-spending program has contained some false economies. But false economies are the inevitable result of false expenditures. True economy is another name for wisdom in spending. We must save on X to have enough to spend on Y. We must divide our expenditures in the most effective way. We allotted, for example, $110 million to our earth-satellite program. But since the end of the second world war we have spent some $40 billion to $60 billion on foreign aid—a ratio of about 500 to 1.

ECONOMY STILL NEEDED

It may now, indeed, have become pointless to increase our planned expenditures on earth satellites. But if we are really behind Russia, even slightly, in the development of an intercontinental ballistic missile, then we must make this immediately a “crash” program as well as a research program. For the Russian leaders, if they think they have a commanding lead for even a few months, are unlikely to sit idly by and give us time to catch up with them (as we gave them time to catch up on the atomic and nuclear bombs), but will immediately try to wring every possible diplomatic concession or surrender from us or our allies by veiled or open blackmail.

But if the “missile crisis” forces us to spend more in one direction, it can also enable us to save in other directions. If the threat of missile annihilation threatens countries near to Russia, we can obviously provide a far more effective deterrent by speeding our own missile program than by giving these countries more funds to support a few more token ground troops. And we can soon even cut out some present huge “defense” expenditures rapidly being made obsolete through technological advance.

Certainly neither our governmental expenditures nor our total taxes can be increased further without either weakening our economy in inflation or dangerously increasing the deterrents to total national production. Our long-run security depends as much upon the total strength of our economy as upon the development of specific weapons.