Converting to a Peacetime Economy

THE most costly failure, not just of the Bush administration but of at least the two preceding presidencies, has been the absence of planning for conversion to a peacetime economy. This failure becomes especially pronounced in the light of President George Bush's success in negotiating sweeping reductions of tensions with President Mikhail Gorbachev. All across the country today, hundreds of thousands of people employed in the armaments industries are worried about being thrown into limbo by cutbacks in military spending.

The federal government is obligated to create a planning commission that will study the multiple problems involved in economic conversion and prepare a plan to be put into effect promptly. A nation that has spent more than $1 trillion on war merchandise and military personnel in less than a decade should recognize that cutbacks cannot be mandated without serious consequences.

There is still time for the president to appoint a commission on conversion. Such a body can draw on a number of foundation and university studies already in existence. One that is especially deserving of scrutiny is by Prof. Seymour Melman of Columbia University. The heart of Professor Melman's proposals is contained in ``The Demilitarized Society,'' in which he emphasizes the need for a 10-point program:

1.Mandatory alternative-use committees. The knowledge base required for economic conversion begins within each major arms plant, laboratory, or military base. An ``alternative use'' committee in each unit representing management and labor would have access to data relevant to conversion possibilities.

2.Advanced conversion planning. The emphasis here is on developing information for rapid use as required. The information would focus on market requirements and the ``suitability of people and equipment for prospective new work.'' Economic opportunities and needs have to be identified. Materials and machinery have to be developed.

3.Advanced notification of contract termination. The federal government has the obligation to provide reasonable notice of discontinuation - perhaps a year - to arms manufacturers and to communities in which military bases are located.

4.Mandatory occupational retraining. The emphasis here is on managerial and specialized positions. The skills of military managers have to be converted into skills for domestic commercial enterprises. Administrators and managers whose work for the military has stressed production without regard to expense need to be retrained in the cost-consciousness that is an essential requirement in a competitive economy. The need for retraining of less-specialized production workers is not so acute.

5.Community economic-adjustment planning. Since conversion to civilian work will effect a significant relocation in the engineering-technical work force, resulting in many cases in the need for community relocation of the people involved, planning funds should be made available for blue-printing the necessary adjustments.

6.Decentralized control of alternative-use planning. Local groups should be heavily involved in conversion planning. A community's present and future needs are best understood by those on location. While overall coordination and integration are essential, funds should be provided for local assessments.

7.Income maintenance during civilian conversion. Even with the best plans in hand, managers and workers will not be able to move precipitately from a military to a civilian economy. The need for suitable unemployment insurance and income support must be anticipated.

8.Relocation allowances. Armaments factories generally carry a large administrative and engineering staff. The local civilian-conversion plants may not be able to absorb such personnel. Major industrial and geographic relocation is a reasonable expectation. The moving expenses of these households should be part of economic-conversion planning.

9.A national network for employment opportunity. Relocation should not be on a hit-or-miss basis but should be connected to a detailed and coordinated study of economic opportunities, locale by locale.

10.Capital investment planning by government. The nation has developed increasing needs in road building, water systems, waste-disposal operations, schools and colleges, libraries, public-health operations, housing, parks, communication and transportation systems. The large markets that are involved in remedying the long-term neglect of these needs will take up an important part of the economic slack in conversion; but these activities cannot be left to chance. If the present military-industrial plants, laboratories, and bases are to be reoriented, adequate capital investment by government on all levels will be essential. The justification for such investment is as directly connected to the national security as the military program itself.