The Communications Revolution
Program #8-94:  "Hi-Tech Jobs From Defense Conversion:  Can It Be Done?"
KPFA Radio - August 23, 1994

Panelists:  Carol Webb, Dr. Gregory Bischak, Dr. Kenneth Flamm 
Project Director: Jude Thilman
Host:  Jude Thilman
Executive Producer:  Bari Scott
Associate Producer:  Carol Klinger
Managing Editor:  John Rieger
Associate Editor:  Claire Schoen 
Feature Producer:  Alex van Oss


Introduction by Jude Thilman

       They call it dual use -- technology with civilian as well as military
applications.  It's a policy that promises to create jobs and keep stockholders
happy.  We'll look at defense conversion today.  I'm Jude Thilman and this is
"The Communications Revolution."

       The Clinton administration came into office and promised Pentagon
cutbacks, encouraging military contractors to transfer their weapons technology
into civilian use. It was hoped that the most advanced radar, missile guidance,
and computer tracking systems might now be used in transportation, education
and communication.  Some critics charge that it just isn't working.  Defense
contractors still want to build weapons and nobody seems ready or willing to
turn swords into plowshares.  We'll take a look at the dual use aspect of
defense reinvestment with a panel of experts.  

       From Monitor Radio in Washington, D.C., we are joined by:  Dr. Kenneth
Flamm who is Principal Deputy Assistant Secretary of Defense for Economic
Security, and Special Assistant to the Deputy Secretary of Defense for Dual Use
Technology Policy, Dr. Gregory Bischak, an economist and the Executive Director
of the National Commission for Economic Conversion and Disarmament.

       Here in the studios of KPFA in Berkeley we have Carol Webb, who is with
the South Bay AFL-CIO Labor Council focusing on economic conversion and is a
member of the Board of the Defense Space Consortium of Joint Venture:  Silicon
Valley.

Our discussion begins after this report from Producer Alex van Oss.


Feature by Alex van Oss:

(Narrator)  [typing sounds]  I don't know about you but I'm one of those people
who still manages to find a use for FOSSIL technology... like the manual
typewriter. It gives you good exercise.  It gets your fingers nice and inky
when you change the ribbon.  And it never crashes and erases your entire
manuscript. 

       It's not that I've got anything against computers.  In fact I've got one
myself, stored in the closet -- but it's a fossil too... 14 years old, and it
sorta works. [echo like in a closet]  In a way, my lifestyle is a little like
the United States economy because America, after the Cold War, is dealing with
a fossil in its closet.  A very expensive, state-of-the-art, yet soon to be
passe, military-industrial complex.  That is, the defense industry that eats
into the national budget, adds to the national debt, but is now in the process
of downsizing.  [moves out of closet] 

       Trouble is, how do you downsize all those top guns, and tracking
systems, and satellites, and computer networks?  And how do you downsize all
the hundreds of thousands of employees who design, or make, or manage these
systems.  How will they all pay the rent, now that they can't rely on a steady
Pentagon paycheck?  Now that the buck has stopped -- period.  [door closes]

       It's a vast and complicated picture.  Not all workers are threatened by
defense conversion, nor are all contractors.  In fact one of them, the 93 year
old TRW Corporation, is doing well.  TRW's into everything from satellite
communications to submarine warfare.  The company's lifeblood is high
technology, and changing technology.

       (Agee)  "Technology has always been, I think an engine for economic
growth, and certainly technology in the United States today, and over the next
10 years, will create more growth in the economy and more jobs.  It's just
going to be different than it was in the past."

       (Narrator)  James Agee is with TRW's Systems Integration Group.  As far
back as 1985, he says, TRW forecast a downturn in defense spending, so the
company branched into other areas, like airport security and "smart-highway"
systems.  They also found ways to apply defense technology to law enforcement,
for example, fingerprint identification.  (Agee) "One program that we used to
have, and still do to this day, is dealing with the sounds of submarines under
water.  It's the filtering of that noise, that information, and trying to pick
out of it significant details.  If you take that and compare it to
fingerprints, where you have a large number of ridges and points where the
ridges join and so forth -- there's a large amount of data that is contained in
a fingerprint.  The job that we have identified is to scan it, find the points
for identification and then use that information to go against very very large
databases of existing fingerprints."

       (Narrator)  TRW is doing well financially, but still has laid off
hundreds of workers.  And other high-tech firms in aerospace, electronics and
telecommunications have sent home thousands.  Critics charge that high
technology is a cover for automation.  For example, replacing telephone
operators with switching systems and computer voices. Barbara Warden is Deputy
Legislative Director with the United Automobile Workers.  Automation, she says,
has become a major labor issue. 

        (Warden)  "What we're wanting to make happen is, when companies make a
decision to move into high technology production, that there be conditions set,
especially f there's federal funding involved. That there be job retention and
job creation as conditions for those companies receiving grants or other kinds
of awards or other kinds of funding."

       (Narrator)  High-technology can threaten jobs.  On the other hand, when
it comes to telecommunications, it's a fact that many new consumer items have
been spawned within defense. And new areas of commercial production can, in
theory, spawn more jobs, says Andrew Jenks -- a reporter with the
trend-watching journal Washington Technology.  Take for example, the Internet. 

       (Jenks)  "The Internet itself was originally created by the Defense
Department in the 1960s to provide communication between Pentagon computers in
the event of a nuclear war.  And as a result, we now have this thing called the
Internet which is growing leaps and bounds, 30-million users, generating lots
of jobs.  And example that's having commercial impact is Global Positioning
Systems.  This is a network of 20 satellites the Defense Department put up to
provide tracking for soldiers so that they could know where they are relative
to the enemy [beeping].  Now we're seeing GPS receivers emerging in electronics
shops all over the place.  People that go hiking are beginning to buy them. 
The Intelligent Vehicle Highways Systems, cars will soon be outfitted with GPS
receivers as an option, and in fact it's already happening in Japan.  People
use them for navigating their boats..."

       (Salesman)  "This one will give you... this is your hypothetical 'away
point'... and then that's your boat, and then if you're off course to the right
or to the left, this boat will move and these graphics move towards you and
will give you the heading to correct your course to get to the point which you
would like to get to."

       (Buyer)  "So, I almost don't have to look at where I'm going, I can just
look at this little screen?

       (Salesman)  "You really should look where you're going."

       (Buyer)  "Okay, I'm sold.  Now, what's the cheapest one you've got?"

       (Salesman)  "They start at... $379.  The most expensive would probably
be in the $2,000 range.  This one will play music...." [digitized version of
"Anchors Away"]

       (Narrator)  It's unclear whether even GPS telecommunications can help
one navigate the shoals and hazards of the political system here in Washington,
D.C. where defense conversion has strong White House support.  Here is where
Dorothy Robine, a Special Assistant to the President for Economic Policy, has
helped steer technology development and defense conversion.  But instead of
"conversion," Robine prefers the term "defense reinvestment" in technology and
skills.  (Robine)  I think it presents tremendous challenges to the federal
government, both to assure, in the Presidents words, 'That the men and women
that won the Cold War are not left out in the cold.'  But also to assure that
we can meet future military needs with a smaller defense budget."

       (Narrator)  Dorothy Robine's been pushing the concept of "dual use." 
Instead of simply beating swords into plowshares, or squashing tanks into
toasters, dual use seeks to give incentives to telecommunications and other
high-tech programs that have both defense and consumer applications.  Take for
example flat panel screens for computers.  They're what make lap-tops possible,
and they're used in the new generation of fighter planes and tanks.  Because of
their potential market, Robine says we need to start making them en masse in
America.  Right now, most of them come from Japan.  

       (Robine)  "A flat panel display will be as essential to a general in a
war in the next century as maps were to George Meade at Gettysburg.  So we have
concluded that we need to try to jump start, or foster, manufacturing
capability in this country."

       (Narrator)  [typing]  Well... I might just be ready to turn in my old
fossil here for a lap-top, and "dual use" may be the savior for the defense
corporations.  Question is:  Do these technologies also promise a future for
defense workers?  Or will they, in the long run, eliminate jobs?  For Jerry
Agee, with TRW Corporation, now is a time of transition.  Jobs lost in
California may be jobs gained in the East, he says.  Jobs lost in aerospace may
show up as new jobs in telecommunications and information systems.  But what's
more, says Agee, this time of transition may be the harbinger of a future time
of return.  

       (Agee)  "For me personally, I'm a great believer in the pendulum.  That
it swings from one direction to another consistently.  And we'll probably see
defense and space come back again and perhaps in ways we don't yet envision,
but it will come back."  (Narrator)  "Like a new war, a new Cold War?"  (Agee) 
"I don't want to get into that." 

[digitized version of "Anchors Away"]

This is Alex van Oss, for "The Communications Revolution."


       ******

       Host Jude Thilman:  Do we need another Cold or Hot War to keep the
economy healthy?  It's been going on this way for so long, it seems Washington
can't get motivated to devote resources to anything other than weapons.  I'm
Jude Thilman, and let's pose the broad question to our guests.  Carol Webb,
with the South Bay Labor Council, AFL-CIO, Joint Venture:  Silicon Valley and
the Center for Economic Conversion, you have some very concrete experience in
this regard, why does it seem to you, or to me at least at this point, that
companies are not interested in civilian applications or even dual use?

       Carol Webb:  I think the bottom line, Jude, is that there's not enough
profit in it at the moment.  So, we have been approaching a local company, FMC,
where we've had enormous numbers of job losses, and said to them, "we're
interested...."  They have an enormous drive train technology which we think
would be very useful in advance transportation industries.  And we've said to
them, "How can we help develop this industry?  What would it look like to
replace building tanks with building electric buses?"  They say, "You can
guarantee markets, you can guarantee profits, we might be interested in talking
about this."  So, bottom line is, where are the profits in these new
industries? 

       Host:  If you can guarantee markets, if you can guarantee profits.... 
Now the government has, to some extent, tried to do this in some industries. 
Ken Flamm, you're the principal Deputy Assistant Secretary of Defense advising
the Defense Secretary on dual use.  How do you respond to this hesitancy on the
part of companies?  How is dual use going to work if companies want to be
guaranteed markets and profits before they'll begin to invest in it?  Ken
Flamm?

       Kenneth (Ken) Flamm:  Well, I think the bottom line is for a civilian
application to be attractive, there has to be some potential for profit in the
long run.  And if a company is unconvinced that they're going to earn a return,
even with some degree of assistance in getting into the market, then it just
doesn't look like a very likely application.  Electric cars sound good.  There
are some companies investing in electric cars and we are helping companies make
investments in clean energy technology for transportation purposes.  So I
suggest that the company that you're talking about is the exception rather than
the rule.

       Host:  Hmm.  Carol Webb, you're familiar with a lot of situations like
this, a lot of technologies that are not being developed into civilian use,
isn't that true?

       CW:     Well, we hear in Silicon Valley that there are really thousands
and thousands of technologies that sitting on shelves at Livermore
Laboratories, at local companies.  That there's really very little chance of
them ever being deployed or finding some way to put them to use commercially
and create jobs in the local community.

       Host:  So is it your sense that government needs to offer some dollars
by way of incentives to get them to do this? 

       CW:  Well, I think to help them take the technologies off, and also to
try to figure out, "What is the way that we are going to help companies or
encourage the development of new industries in our local communities?  What
kind of assistance are we going to need besides just technology assistance and
who's going to... if private capital is going to lead all of this and they're
not doing it, how do we develop really the push to try to create these new
industries in our community?"

       Host:  Greg Bischak, you're with the National Commission for Economic
Conversion and Disarmament.  Do you agree with Carol Webb's assessment that
you're going to need federal dollars to push private industry into this? 

       Greg Bischak:   I think it's not just a matter of federal dollars, but
that it is also a matter of reorienting the large defense firms.  Some are, in
fact, reorienting themselves, for example Hughes has, in fact, identified a
number of growth markets where there's relevant civilian applications of their
technologies.  But many are resistant.  Many are hunkering down trying to get a
bigger piece of a shrinking pie.  They see the defense market as a market of
guaranteed profits, something they're comfortable with.  Their management
style, their technology style fits with this.  And to some extent I think that
the defense tilts of the dual use program actually encourages them to stay in
defense applications, to look askance at commercial applications in many cases.
 And also, there's some doubt as to whether or not, in the case of markets that
are being driven by federal procurement, federal regulations, state
regulations, and city regulations -- perhaps in this case, clean air,
environmental "regs" -- it's not real clear how these regulations are going to
be, in the near term, or even in the longer term,  what the market will shape
up like.  So some of the producers are hesitant and, in part, this is due to
the battle of the big three auto makers over trying to role back some of these
regulatory standards.  Part of that hearkens back to the 1970s when people
tried to get into light rail transit.  We had Boeing Vertal that tried to
produce light rail cars.  What ultimately undermined their effort, to a large
extent, was:  (one) their defense culture where they were trying to produce
things just like they did in the defense industry for municipal markets; and
(two) the changing standards and regulation for the light rail industry and
transportation system.  We should learn from those lessons and not repeat these
errors in the post Cold War conversion.

       Host:  Well, Greg Bischak, you've just introduced a lot of points, and I
want to give you a chance to respond to them Ken Flamm, but tell us -- the
defense tilt of dual use, is that an accurate phrase?

       KF:  Well, I think you have to remember a couple of things.  First of
all there is a defense tilt in dual use in the sense that it is expected....  I
mean the Defense Department is in the defense business.  Defense is job one for
us.  We're here because we're here to defend the national security.  Now, it's
also true we have to be concerned about the industrial base.  And there is a
new philosophy that pervades the Department of Defense that says, "Where ever
possible, we're going to try to tap into that commercial technology, commercial
products, commercial systems, leverage off of commercial markets and contribute
to the commercial industrial infra-structure where ever we can with our
investments."  But you can't forget that the purpose of the Department of
Defense is to provide the common defense.  And we're in a regime of declining
budgets.  We have a lot of new challenges.  You look around you in the world
today and we have a lot of responsibilities we're trying to meet in the best
way we can.  We're doing all of this on declining dollars.

       Host:  Some critics would suggest, though, that this defense tilt is
true on behalf of military use, when in fact what the Defense Department should
be thinking about is the global economic warfare.  The defense of the United
States interests means economic warfare as well as military warfare.

       KF:  Well, I disagree.  I think that we're talking about is a system. 
As an economist I disagree with you.  I don't think it's global economic
warfare.  Global economic warfare says it's a zero sum gain.  That we can't
gain from being in competition and cooperation with one another.  So I... yeah
there are very real economic challenges, and this Department of Defense and the
Clinton administration recognizes, much more so than any previous
administration, I believe, that the national security of the U.S. rests firmly
on the economic infra-structure.

       Host:  Carol Webb.  Using this idea that Greg suggested of a defense
tilt on dual use versus Ken's suggestion of leveraging, using military dollars
to leverage civilian application.  Your experience with the centerpiece of the
defense reinvestment program, the TRP (Technology Reinvestment Program), has
been what?

       CW:  I wanted to respond about the dual use piece, the TRP grants and, I
think part of the problem is that it's become clearer and clearer that it
really is about developing defense technology and not about commercialization. 
And as people understand that, it's like, okay, what does that mean to local
communities?  But I think it has been heralded as kind of the center of the
conversion program of the Clinton administration.  Saying that this is how
we're going to get to downstream production, this is how we're going to get to
new industries.  And a recent Rutgers study showed that really on 16% of the
dollars (TRP dollars) went to technology deployment and close to 5% for really
downstream production.  So, it's like the tilt is really towards defense and
also it doesn't have, what we thought was, the promise of the Clinton
administration that was going to be job creating.

       Host:  You're listening to "The Communications Revolution."  You can
contact us via E-mail at kpfa@well.com.  And if you want to continue this
discussion on-line after the show, join our Internet IRC channel at trp8.  Ken
Flamm, what is your response to... is job creation part of your mandate?

       KF:  Well, you know, wherever possible we are going to seek ways of
creating new, high growth, high wage, good jobs in the future, but we have a
long term strategy.  We're investing in technology because over the medium and
long term we expect that to be the foundation of the future economy, and of our
future defense.  The bottom line is in the short run, that is over the next few
years, there's going to be some paying in the defense industry, there's no way
around that.  Our procurement dollars have come down something -- over 40%
since their peak in the mid to late 1980s and the industry is shrinking,
there's no way around that.  How do you cope with that?  Well, in the short
run, you try to help communities deal with those problems, you try to help the
people who are being displaced from those industries deal with that problem. 
We are putting substantial resources in those areas, we are working closely
with other government agencies to deal with those problems.  But the out, the
real long run solution to both the defense problem and the economic problem is
to invest in technology.  That is in creating the good jobs in new industries,
the jobs of the future that are going to provide for the economic growth of the
future.

       Host:  Well, I want to take a look at this premise that technology means
growth and jobs.  In the manufacturing industries which include high-tech, they
currently employ 16% of the national work force and that is down from 20% two
decades ago...

       KF:  Are you including software?  Software and services are technology
too.

       Host:  That might be so, I'm talking about just high-tech manufacturing.
 The trend among many people... many people say high-tech is just a cover for
automation and that the trend really is to lose jobs.  High-tech is not going
to produce jobs.  How do you respond to that?

       KF:  I respond to that by saying there have been studies for years and
years and years that have looked at the subject and generally, there's no
definitive answer.  There's no doubt that certain unskilled jobs, less skilled
jobs, are displaced by automation and technology, but it's also true that vast
new industries are created by technology.  And if you ask the question, "Is
there's any evidence that dual use technology is going to create these vast new
industries, these vast new jobs?"  I say look at the history of dual use
technology.  It is the Defense Department's investment in computers, for
example, which plays an important role in the development of the computer
industry, of the software industry, of the high performance communications
industry that is sweeping this country right now, and which your show's about. 
It is Defense Department investment that created the aerospace industry that
we're talking about, that has an aerospace industry that is unparalleled in the
world today in terms of the quality of the products and its dominance of those
markets.  Semi-conductors -- another good example -- there in Silicon Valley...
if you want to talk about how....

       CW:  We just lost, in the last ten years, 30,000 semi-conductor
manufacturing jobs, so I think that's part of the crisis and crunch is, what
kinds of jobs are we creating?  What's it look like and what's happening to the
whole middle-class manufacturing sector in this country that are being
displaced as defense disappears?  And how can we enter into that in terms of
creating new industries that are going to replace these?  Yes, there's new
industries being created, but at the same time we're losing thousands and
thousands jobs.

       Host:  Greg Bischak let's let you into this conversation.

       GB:  I think one of the key problems is that the path that's being
chosen by the dual use initiative is essentially going to skew our research and
development priorities, our industrial priorities, and I don't think that the
bets that are being made are really the right bets.  In fact, we're still
pursuing technological military superiority.  We're, essentially, still
experiencing the hang-over, the Cold War rivalry, with our now defunct rival,
the former Soviet Union.  And now the DOD, in justifying many of these
priorities that are in fact the key technologies that are driving the dual use
initiative, are being justified because we're facing more and more likely
enemies armed with Western technology,  advanced Western technology.  This
points to the fact that technology, in this case, is not the solution.  In
fact, what we need is to curtail the high-tech arms trade.  That there's other
ways of getting at security instead of simply pursuing military technological
security.  Reconvening the permanent five in the security council to talk about
curtailing arms trade is, in fact, a serious initiative that gets us around the
expensive path of investing in new high-technology to maintain air, land, and
sea military superiority.  The dual use initiative does not deal with the
excess capacity, which is immense in this country and world wide in the defense
industry, on the order of easily 40 to 50% excess capacity in the aircraft, the
space, the shipbuilding industries or even greater an excess capacity.  And
this is the centerpiece of our initiative.

       KF:  Before we get off too long on this, I think it is important to
recognize that overall the volume of defense exports and military trade have
shrunk considerably, over the last few years.

       Host:  But, Ken Flamm, would you agree that there is even, getting off
on the larger point that Greg was making, I want to ask a pointed question
about it....

       KF:  That this is slanted towards military uses?  I just disagree
entirely with that.  If you look at what we're investing in, it's basically
oriented in creating new commercial technologies that over the long run will
have relevance for defense.  But that's an enormously broad array of
technologies.  If you look at the historical record, again, in things like
software, and computers, and communications, and semi-conductors, and aircraft,
you name it, the evidence are that this is a high pay-off economic growth
strategy!  But that's not why we're doing it!  We're doing it for defense, but
it's good, it's beneficial that it has these economic impacts.

       Host:  The way I've been reading the terrain in the last few months, it
seems that the technology is more spin on than spin off.  Isn't that true? 
That from the civilian sector we're getting the newest, most cutting edge
technologies, technological development that's being, then, bought for military
use.

       KF:  In some key areas, that's definitely true.  If you're talking about
the rate....  It's not so much that defense is not pushing the technological
frontier key areas, because that continues to be the case.  I think that what
you're referring to is the fact that, in important ways, the rate at which new
technology is incorporated into fielded production systems has lagged in some
key areas, notably semi-conductors, notably computers, because it takes us so
long, through our acquisition procurement process, to incorporate that new
technology into the defense systems. 

       Host:  Not because defense suppliers are dinosaurs and are not cutting
edge competitors.

       KF:  I disagree with that.  In many cases, the defense suppliers are
identical to the commercial suppliers, it's just that we've encrusted the
system with so many bureaucratic and regulatory barnacles that even normal,
right thinking commercial folks have to slow down and react to the impossible
rules that we've imposed on them in the past.  We're doing something about
that.

       Host:  Right -- you've just heard from Ken Flamm who advises the Defense
Secretary on dual use.  We're discussing reinvestment of military high-tech
dollars into civilian products.  You've been hearing, also, from Carol Webb who
is with the South Bay AFL-CIO Labor Council and is on the Boards of the enter
for Economic Conversion and the California Network for a New Economy.  And also
Greg Bischak who is an economist and the Executive Director of the National
Commission for Economic Conversion and Disarmament.

       I'm Jude Thilman and this is "The Communications Revolution."

       We'd like to hear from you right now.  You can join our discussion with
questions and comments by calling 1-800-848-2298.  We'll be right back.


       ****break****

       (Robine)  "The Defense Department simply can't continue to afford its
own private defense industry, and it can't get the cutting-edge technology it
needs without bringing the walls down and integrating the defense and the
commercial sectors."  

       Host Jude Thilman:  That was Dorothy Robine, Special Assistant to the
President for Economic Policy.  Ken Flamm, what do you say about that
accusation?  Isn't it true that this fossilized military industrial complex
needs to be, sort of, blown out of the water to make room for a new way of
doing business?

       KF:  Well, a fossil is dead by definition.  Bottom line, I think, is
that if you look at... there certainly are defense industries out there.  And
our entire thrust is directing them away.  We've told them.  We've directed
them away from the defense orientation they've conventionally had on just
defense systems.  We've told them, basically, that in the future wherever
possible, we're going to eliminate the defense industry.  That is, and that's
an exaggeration, and what I mean by that is that we're going to try to break
down that barrier between defense and commercial.  Wherever possible we're
going to use commercial.  Now in some areas, where we have defense unique
products or systems, we're going to have to continue to rely on defense
contractors who have those capabilities, and, if necessary, we're going to make
sure we have the capabilities we require.  But we've basically put the defense
industry on notice, that they're going to be competing against a much broader
group of suppliers.  They are going to be in competition with commercial
suppliers of products and technologies, they're going to have deal with that
competition, they're going to have to change their ways to meet that
competition.  And we've also taken steps, for guys who are already in the
business, to try to help them adjust to that new reality.  We think the key
thing we can do is work with them and try to take the technology they've
developed for military applications and port it, move it, to commercial
markets.  But we also think it's important to get commercial firms into the
defense acquisition community supplying us with technologies and products which
we can afford, which will allow us to keep up with new technology.

       Host:  We're talking about defense reinvestment today.  You can call us
with your questions or comments at 1-800-848-2298.  Let's bring our first
caller into the program from Alameda, we hear from John.  Hello John.

       Caller #1:  Hello, I'm John Seraphy and I'd like to know where we can
get information or if I could get it mailed to my house on technologies for all
our subcommittees so that we can use the information and I'm a "high idea man,"
by the way.  I think 9 out of 19 ideas were mine, but for instance I circulate
twelve movies in a computer organization to help Science City and help the
others like Asset.  But how can we get the information?  Where do we get the
information?  Could you mail it to my house?  Could I give you my telephone
number later?  And, I have tremendous imagination -- ideals, through God,
Democracy....  I want to start the GDC Performance Center, by the way -- God,
Democracy and Capitalism.  

       Host:  Thanks, John, for your call.

       KF:  Can I give you a suggestion?  There's a telephone number: 
1-800-DUAL-USE.  Which will connect you to the advanced research projects and
the TRP Information Center.  TRP, by the way, is only one of the many dual use
programs that DOD has going, I can talk about that more.  But 1-800-DUAL-USE is
a good start John.

       Host:  Now, let's hear from Jennifer in San Jose.  Hello, Jennifer,
you're on the show.  Jennifer from San Jose.

       Caller #2:  Hi.  My name is Jennifer and my experience is that I'm a
computer operator.  I used to work for Lawrence Livermore and am currently
working for a bio-technical company.  My question is, I would like your
participants to talk about the role of private capital in the defense
conversion.  The example initially you gave,  earlier in the program, was
Internet, and now that it has gone more public, people are actually
capitalizing on that and making new jobs.  The other example I would use is
Unix.  It's like the public sector is taking over from the defense company
those kind of products.

       Host:  Jennifer, thank you very much for your call.  The Internet -- its
origins were in the defense industry and in our opening report for this
program, it was suggested that the Internet has created thousands of jobs.  Are
there other areas that any of you -- any of my guests -- can identify in which
the public sector is taking over something that originated with the defense
sector.

       KF:  I think Jennifer meant where the private sector is taking stuff
that originated with defense spending is the example, really, that she is
giving here.

       Host:  Well, it's her first question, I think I am also interested in
the public sector, but go ahead Ken, if you have examples.

       KF:  Well, sure there are many examples like that.  Internet is a great
example.  RISC micro-processors something defense department supported.  Of
course, that's a whole active area in the semi-conductor and computer
industries.  Computer timesharing, many advanced computer graphics....  The
Defense Department currently leads the research and educational world in things
like computer simulation and modelling.  It has helped sponsor work that is
spawning new jobs everyday now.  If you use a Macintosh computer, the "mouse"
attached to that computer builds on DOD research that goes back to the 1960s. 
The first "windows" or Macintosh-like interfaces for computers came out of
defense sponsored R&D projects....

       Host:  A very impressive list Ken...

       KF:  We can keep going.

       CW:  One of the things that we all like to talk about, it's like
industries in Silicon Valley like to say that they did this themselves, but we
are all very sure that there are public dollars that helped move this all
forward.  So, I would acknowledge that certainly in the Valley...

       KF:  Some of them aren't so shy.  If you go talk to some, they'll tell
you up front the role that the DOD and ARPA support played in the evolution of
Sun.

       GB:  Let's not overplay the DOD and ARPA at this point in time.  The
question is whether or not the DOD and ARPA's mission is exhausted.  In fact,
we have other national needs, bona fide needs, that are under-funded at this
point in time.  And after all, the DOD, in terms of total federal R&D dollars
absorbs at least 56% of federal R&D spending -- that's a generous estimate in
favor of the commercial application  -- wait a minute Ken.  The issue here is
we have a sustainable technologies initiative that the administration has put
forward.  But we don't necessarily have the money in the pipeline to deal with
serious issues of pollution avoidance, sustainable and zero emissions
manufacturing technology, alternative energy and transportation technologies,
and I don't think that we need to run these kinds of initiatives through TRP. 
If we want "green technologies" let's have a green R&D program.  There are huge
opportunity costs here and they will leverage serious private investment
dollars.  We're talking about a domestic and international market that totals
over $300-billion annually in the environmental goods and services market. 
This is the growth market of the future.  These are, in fact, the new missions
where I believe we have to be investing our R&D dollars instead of one that is
exhausted and busy trying to justify itself now, with essentially an overdone
military apparatus, which is still, if you look at the President's plan, going
to leave procurement at a higher level, in real terms, than it was in 1975. 
Research and development, in real terms, at a higher level than it was in 1975.
 Operations and maintenance in the DOD budget.  The only thing that's being
cut, in real terms, is the personnel -- or the military personnel -- and
perhaps the atomic energy defense missions will be cut too.

       Host:  Greg Bischak is with the National Commission for Economic
Conversion and Disarmament.  I really want to let our listeners get in on this.
 Our number is 1-800-848-2298.  Let's hear from Berkeley, Roman is on the
phone.  Welcome to the program, Roman.

       Caller #3:  Good morning.  My question is in reference to the example
given of the FMCs wanting guaranteed profits in terms of converting their
technologies to civilian use.  My question is that once they're guaranteed
money to research and developed this technology in the first place, during the
'80s, isn't there some kind of responsibility, given that the taxpayers pay for
the research in the first place, that they should somehow convert it without
having those guarantees?  Maybe they should take a risk now since they haven't
had to, in the first place, to develop the technology?

       Host:  Thank you very much for your call, Roman.  Carol Webb.

       CW:  I would definitely agree with that.  I think one of our concerns is
the enormous numbers of dollars that have been invested that don't lead to any
job creation.  And what is the responsibility, when there has been this kind of
public investment to then actually create jobs, and use this technology in a
way that's going to serve the community?  And I think what we've seen, for
years and years, in that case of FMC, billions of dollars invested in -- public
dollars -- invested in the company.  Now they are going to walk away.  Walk
away with the technology, with the jobs, and leave a piece of polluted land
sitting in the middle of the community.  So I think definitely there should be
some kind of job creation criteria that are connected to all these kinds of
investments of public dollars.

       Host:  Our number is 1-800-848-2298.  The topic today is defense
reinvestment.  Very quickly Ken, because I do want to let our listeners join
us.

       KF:  I'd just like to point out that we, too, think that jobs should be
created, but when you start talking about job creation criteria, you got to
remember, that if we're successful the jobs we're going to be creating are not
tomorrow, they're going to be four, five, ten years off.  And they're going to
be big jobs, big numbers.  So, when you start talking about job creation, the
big question to ask is when.  Nobody is talking about guaranteeing anybody
profits, by the way.  That may be what somebody wants, but that is not the
Department of Defense philosophy.  Furthermore, we agree that environmental
technology investments, such as Greg was taking about, are a good idea, that's
just not what we happen to be investing in, but there other folks in this
administration that are putting significant resources into it.  

       Host:  From Los Angeles, let's bring in Adrienne.  Hello Adrienne,,
welcome to the program.

       Caller #4:  Hi.  I wanted to discuss the past record of the defense
spending in this country.  They have "black budgets," we don't know, really,
how much is spent on them.  They have innumerable scandals and overruns -- $600
hammers and things like that.  It seems to me that we should be trying to
disengage ourselves from this whole thing and not turn over another portion of
our economy to this particular type of industry that has never been labor
intensive.  It has always been capital intensive, and it's our capital.  Is
there any possibility that we can go a different direction and just dump the
Department of Defense and call it a war department and activate it when we have
a war?

       Host:  Thank you very much....

       KF:  That's fine, and....  You'll excuse me if I get a little bit
perturbed when I hear that.  So, when the war starts, at that point we start
worrying about defense, right?  It just seems to me that that is not a very
realistic way to deal with the world we live in.  I just like to point out,
however, when you talk about our "bespeckled" record, you've got to think about
the big picture here.  We're a large organization that has been trying to do
something for the last 50 years, and certainly there are things that have been
done less efficiently than possible.  And this Administration's recognized
this.  We've been pushing to change the way we do business, we've been pushing
to change it.  I personally, however, and I bring this perspective before I
took this job in the not so distant past, I personally think that if you look
at the history of advanced technology investments by the Department of Defense,
it's a sterling history.  It's a history of how something can work.  And if you
look at the high-technology industry in this country there's no doubt in my
mind, and again I brought this perspective coming into this job, that if you
look at the history of high-tech in this country that it is integrally linked
up.  Our technological lead as high technology jobs that it's integrally linked
to the history of investments in advanced technology the Department of Defense
made since the end of World War II.  And do I think that is exhausted... should
we pack up our bags and go home?  The era of information technology is past.  I
disagree, I say wake up and smell the gigabytes.  There's a revolution going
out there that's going to revolutionize the economy and it's building on
investments that we've made for the last 50 years and I think accelerating
those investments in that information technology is a good thing, that's going
to make a future for this country.

       Host:  With all due respect, I think the popular lay image of Pentagon
dollars is $1,000 toilet seats and a lot of waste and fraud.  And you're waging
a valued fight today, Ken Flamm, to counter that image, but none the less that
image is in people's minds.

       KF:  That's your image perhaps, but I don't necessarily have to agree
with it.  If you say the acquisition process historically has developed a lot
of problems, I have to be the person that would agree with you.  I agree with
you 100%.  Bill Perry, the Secretary of Defense agrees with you, and we're
trying to do something about it, but if you look at that isolated -- not that
isolated, that portion of the defense budget which has pushed the most advanced
technology for defense and for this nation, I think that's a good record.  If
you look at the records of the Advanced Research Projects Agency, for example,
which is the flagship institution, leading the charge in dual use technology,
that's an outstanding record.  Now I challenge anyone to... I'm willing to
debate any time, any place, any where.

       Host:  We'll come back to the point many times.  Our number is
1-800-848-2298.  If you would like to join this challenging debate.  From Santa
Rosa we have Jack on the phone.  Hello Jack.

       Caller #5:  Hello.  In addressing this gentleman's most recent
statement, one of my close friends works as a technician at Mare Island Naval
Shipyard.  He is very upset with the fact that the work he's doing which is
heavy research and assembly of electronic components, are one of a kind pieces
designed for specific purposes or specific sets of weapons systems.  They're
not going to filter back into our society.  They're not going to contribute
anything but create more paranoia.  Number two, where does this great and grand
communications revolution going to relieve the pain and suffering which is
occurring with people on the street?  I think our finances need to be applied
to more humanitarian and compassionate purposes.  I'll take my response on the
air.

       Host:  Thank you very much for your call, Jack from Santa Rosa.  Greg
Bischak, it comes back around to the point you were making earlier.  Defense
grants, military investment are just pork barrel politics, is that right?

       GB:  Well there's two things.  One is that the research agenda which
ARPA and the rest of DOD has set out is really driven by defense missions that
emerged late in the Cold War and they're continuing to sell it.  Now they're
using different threats, but when you add up the Koreas, the Libyas, the Iraqs
and Irans, you don't get a boogey-man as big as the former Soviet Union.  You
can't justify these kinds of programs.  Nor can you justify the so-called
defense unique capabilities, the Seawolf submarines, the CVN-76 aircraft
carriers and everything else which is being built in the name of preserving a
defense industrial base.  But as Carol Webb can attest, we're halfway through
the defense industry downsizing, according to the Clinton plan, halfway through
the pain.  There's an estimated 1.3 - 1.4-million defense industry workers that
are going to be laid off.  Under this, we're about halfway through close to
700,000 being laid off now, that means there's another 700,000 that are going
to be laid off in these high skilled, high wage jobs.  And, it's not clear that
we need to spend more money on these things.  The conversion program was
supposed to be a job bridge between the declining industries and occupations of
the defense sector and the growing and emerging ones in both the private and
public sector.  The public sector needs are what are being under-funded at this
point in time.  When you take a look at serious national needs, the
environment, transportation the inner cities, rebuilding our cities, our
infra-structure.  You take a look at that, the civilian research and
development agenda that Clinton laid out is not being funded the way that he
promised.  The infra-structure program that he laid out -- there is zero change
in the President's public fixed investment budget in infra-structure, civilian
R&D retraining, and this is essentially what is happening.  We have no
channeling of these research and procurement dollars into these real critical
needs that this gentleman was speaking of and that's because these other
systems are sopping up the money.

       Host:  What comes to mind, in my mind, is what was referenced in the
earlier report about the fossilized defense industry that's owned by the
Defense Department.  And the question of whether we could... [interruption] let
me finish Ken....  That was a reference that the advisor to the President made,
she must have some basis for her opinion -- but the question comes to my mind
is that if we could harness all of those wonderful energies that you refer to
in the Department of Defense to something that is a grand social program, sort
of along the lines of what was done with the WPA and some of those things in
the '30s, instead of always having military agendas set to the investment
agenda.  

       CW:  I think, too, the fossilized industries at least created jobs for
working class, for communities.  It's like, an enormous percentage of folks
that work in defense are people of color and women.  And at least when we build
tanks in San Jose, we created jobs for people that lived there.  High-tech may
spin off some jobs in the future, but they're very technical, very
high-qualified people to do them.  So, the new kind of investment that we're
talking about does not create the kind of broad-based jobs that the old
fossilized defense industry created.

       KF:  No.  What it really means is that the United States is going to
have to make an investment in its people.  It's going to have to make an
investment in educating people, it's going to have to make an investment in
giving people skills, and it's going to have enable people to cope with the
changing world economy.

       Host:  Let's bring in Todd from Los Angeles, and keep the ball rolling
here.  Todd, hello.

       Caller #6:  Hi.  I think the question is... is Ken still there?  

       KF:  Yes, I'm still here.  I've made a valiant attempt to stick a few
words in here, but I'm right here. 

       Host:  You've had control of the floor most of the time Ken, let's hear
from Todd.

       Caller #6:  I've been involved over the course of the last two years
with forming a 501(c)(3) public/private consortium, along the lines and
inter-connected with some of the California delegations,  to specifically
address trying to re-tool.  Congressman Berman had put together a feasibility
study ...

       KF:  I didn't realize that Congressmen did feasibility studies for
corporations.

       Caller #6:  It's not for a corporation for public interest.  Out in
Burbank there is currently a consortium that's both public and private called
"Cal Star" which is electric vehicle, component based group.  The problem that
was posed to me through Professor Michael Starp at UCLA who had done the
feasibility study, was that we don't have the manufacturing base here in
California.

       KF:  For an electric car?

       Caller #6:  Yes, because, in other words, it's a viable conversion to
take all of the very skillful jobs that we're losing rapidly in aerospace and
defense here, and take that personnel, at least, and convert to what is this
imminent need of conversion.  I think that the question and/or -- I don't want
to pose it as a question -- or concern that hits very deeply for me is the
impasse that we've already experienced in this process.  Of where taking this
before a very high level -- at White House level -- there is a block that has
been introduced by the lobbying effort of Detroit, who are not so willing to
allow such readily available conversion to take place, not until they've
immersed or perhaps positioned themselves in a larger than fair way.  And I
think that that's something that you're not addressing and I want to give a
specific example so that the audience has some reality check on this.  One is
that in the process of so doing this on the private side, I've invested
significant money to take a piece of technology out of jet propulsion
laboratory, which is a direct liquid methanol fuel cell,  that is, as I
understand and believe, state-of-the-art that would revolutionize energy for
the 21st century.

       Host:  Can you get to your point Todd, because we need to move along.

       Caller #6:  The point is, is that in all of the great ideas and schemes
of things the defense and aerospace conversion, what we're still faced with is
those powers that be, that are and have been entrenched for some time in a
lobbying position in Washington, that are not willing to allow this conversion
to take place at any kind of realistic rate of where jobs are being lost and
need to be accounted for, and the economy is suffering and waning in the manner
that it is, in a fast enough, or in a proportional sense.

       Host:  I think it's a very good question and I thank you very much,
Todd, for posing it.  It is certainly not the first time in the U.S. history
that the auto industry wouldn't control industrial development from going in
one direction or another.  Isn't that true, who wants to take that on?

       GB:  I alluded to this earlier, the issue of the big three trying to
slow down the implementation of the clean air standards in California, is
clearly a battle that has to be waged for environmental quality, for changing
our transportation system.  Cal Star, which is a consortium of public and
private corporations and governments out in Southern California, trying to
bring some of the assets coming out of the defense industry into an emerging
market planned on providing key components -- it was not going to build the
whole car, it was going to do everything from designing standard chassis to
dealing with composites for fuel cells, to other kinds of components in the new
electric car, the clean car, the zero emission vehicle.  It's a good idea. 
It's not dead.  It's clear that the big three has blocked this initiative or
slowed it down to some extent although I don't think this initiative has been
entirely blocked by the administration by any stretch of the imagination, I
think it has given it some support.  I do think that this is a clear example of
how difficult conversion is when you're trying to move two large industrial
complexes, aerospace on one hand and the automobile industry on the other hand,
into what really is an emerging industry, a very important industry that's
going to require organized political pressure coming from the grassroots to
counteract some of these things.  I do think there's tremendous opportunity in
this area.

       KF:  I have an answer for Todd...

       Host:  From Long Beach -- let's move along, we only have a few minutes
left and we want to get to as many people in as possible.  Let's hear from
Tony.  Hello Tony, welcome to the program

       Caller #7:  Hello, thank you very much, I'll be as fast as I can.

       Host:  Thank you.

       Caller #7:  I would like to ask your guests there, are any one of you
familiar with a document that came out in 1950, April, written by Paul Nitzie
with Dean Atchison looking over his shoulder, called "NSC68"?

       Host:  Greg Bischak knows about it, but go ahead with your point Tony.

       Caller #7:  That was a document that was signed to keep the U.S. on a
permanent wartime economy more than a social economy and -- it's not really a
question, it's a comment I'm making -- I'm supporting the caller that called
previous that we have to have an economy that meets the basic needs of the
people, the masses, than for corporate, elite needs.  Because, in this
document, they talk about how we need to suppress unions, churches, school, all
opposing thought.  And this document, if you read it -- it's declassified now,
states how the U.S. economy will never ever be converted to a social economy,
but always for corporate, military economy.  And if that is the case, the
pretext for U.S. wartime economy has always been the Soviet Union, now that
cannot be used anymore so it cannot be hid behind the Pentagon anymore.  

       Host:  Alright, thank you very much for your call, I think we get your
point, a point that's been made by a few callers.  And it does speak to the
underlying logic of such a large Defense Department.  I mean, some people, Ken
Flamm, would argue that whole attitude of defense is, "build it and they will
come."  In other words build a weapon system, and it will be used.

       KF:  Au contraire, you missed the point completely.  You just don't get
it.  The bottom line is not "build it and they will come," the bottom line is,
"look for what we need in the private sector, in the commercial industry, and
we will go."  It is just the opposite.

       Host:  Greg Bischak, do you agree with that?

       GB:  Were it only so.  I think that the commercial integration project,
which is a nice idea that Secretary Perry and others propose to bring down cost
of our military apparatus, might work in certain areas where off the shelf,
high-tech components can be integrated into weapons systems.  But the fact is
that it isn't going to help the General Dynamics who produce submarines or
Lockheed who produce combat jets except at the margin.  I think that they also
realize now that the Armed Services are very dedicated to maintaining their
military specifications and requirements and that implementing these things is
going to be very difficult and that, in the longer term, we're going to still
have a dedicated defense industry, by in large maybe with fewer military
specifications to be met, but a lot of this off the shelf stuff that Ken keeps
talking about...

       KF:  I'm not necessarily talking off the shelf, I'm saying you can rely
on commercial capabilities to manufacture and provide products that are
tailored to defense needs as well.  You can still get it out of the commercial
sector, for the most part, using commercial systems, and most importantly,
commercial business practices.

       GB:  Were it only so, I would encourage it.  I think it is very
important to reorient the defense corporations to cost and quality norms that
are consistent with the commercial market, instead of the old military norms
essentially driven by performance and the military's technological
requirements.

       Host:  We're going to have to drop it right there, you get the final
word Greg Bischak, we're flat out of time.  So much more we could talk about,
but thanks to all of you very much Greg Bischak, Ken Flamm, and Carol Webb. 
Our thanks to Monitor Radio for their assistance and to all our listeners for
their listening and their participation.  Remember you can contact us by E-mail
by addressing us at kpfa@well.com.  Join us again, next time.

       I'm Jude Thilman for "The Communications Revolution."
.