U.N. Consultant On Economic Effects Of Disarmament

Press, Volume CII, Issue 30234, 12 September 1963, Page 16

U.N. Consultant On Economic Effects Of Disarmament

There were so many competing claims for the resources that would be released by disarmament that the real problem would be to establish a scale of priorities. said the professor of economics at the University of Leeds (Professor A. J Brown), speaking ait Lincoln College yesterday. Most of these claims would undoubtedly have been largely satisfied already were it not for the armaments race

Profe-ssor Brown, who spoke on “Economic and Social Consequences of Disarmament.” was a member oj a consultative group whichstudied this subject for the Economic and Social Council of the United Nations. In an address attended by 70 persons at the college, he said it appeared to be generally agreed that the world was spending roughly 120 billion dollars annually on armaments at present. This corresponlded to about onehalf of the total gross capital formation throughout the world. It was at least twothirds of—or by some estimates equal to—the entire national income of all the under-developed countries. Movements of Labour Studies on the assumption that military expenditure was replaced wholly by increases in expenditure on other kinds of goods and services suggested that, in the event of very rapid disarmament, some 5 per cent or 7 per cen t (including the armed forces) of the total labour force of the United States and 34 per cent to 4 per cent in the United Kingdom would have to find civilian instead of military employment and move from one industrial group to another. These shifts, he said, would be small if spread over a number of years, and would be greatly facilitated by the normal process of turn-over The higher the rate of growth of the economy, the easier the process of adaptation Professor Brown said that the world annual spending on

armaments was about 8 per, cent or 9 per cent of the total value of all goods and sec-i vices produced. Primary-producing countries and under-developed countries spent about 2 per cent on armaments. He thought New Zealand came "somewhere round about this figure.” as did Australia. Unofficial figures showed that the United States spent 10 per cent and the United Kingdom and France about 6 per cent. Major Spenders Seven countries covered about 85 per cent of ■ the world’s bill for armaments. These were the United States, the Soviet Union. China. France, the United Kingdom. Western Germany, and. Canada. It was an uneven burden, and for some countries it was heavy. Russia’s expenditure would be between 15 per cent and 20 per cent of the gross national product if it was measured on American prices. The world could easily absorb 8 or 9 per cent of goods and services that today was taken up with armaments

"There would be absolutely no difficulty in finding a need for the resources released by disarmament if you can provide for the reconversion or transition,” said Professor Brown.

A way. of providing for some of the transition waste put more expenditure into health services, education, and other forms of social investment.

Before one assigned the degrees of transition, Professor Brown said, one first had to try to identify the actual contributions made by each industry—each branch of economic activity—to military production. One had to try to decide how many people would have to diange their jobs in order that military production should be replaced by some other form of production. For the United Nations report it was necessary to

[make some assessment of what kind of production people might want to go in for other than armament production. For the United States the assumption was taken that armament production might be replaced by an equal percentage expansion of every other kind of production. Change in Britain

“In the calculation done for the United Kingdom we assumed that armament expenditure would be replaced by three equal parts," said Professor Brown. “Onethird would be replaced by increased production of goods for consumption. One-third we assumed might be replace*! by extra capital formation (extra building and machine production) and so on. and one-third we assumed might be replaced by increased exports increased foreign aid and other exports.

“We took as a guide to the position of these exports the position of the exports to the sterling area. We made these assumptions—they are arbitrary. But you can vary these assumptions a good deal without getting much difference to your answer.” i Professor Brown said that the consultative group looked to see how drastic the change would be if disarmament was to be introduced—how many jobs it would be necessary to remove from one industry group. "It works out for the American case, if you abolish armaments and every other kind of production in America is expanded by the same proportion, that about 4} million people would have to change their jobs," he said "They would have to change the industry in which thev worked—this includes 2 J million people who would have to change because they are members of the armed forces.

“The total number of people in the United Kingdom who would have to

change their jobs would be about 900,000 (including about 500,000 in the armed forces at the date of the study)."