Cashing In The Real Peace Dividend: Restructuring Global Economies for a Post Cold War World

all right good afternoon welcome to the Institute on world affairs lecture series the new economic order today is last day we'll have one more lecture this evening with hazel Henderson her lecture will be redefining wealth and progress today's lecture is caching in the real peace dividend restructuring the National global economies for a post-cold war world our speaker is Lloyd Dumas who taught economics the City University of New York and engineering and Columbia University before becoming a professor of political economy at the University of Texas in Dallas he is author of the overburdened economy uncovering the causes of chronic unemployment inflation and national decline and also caught co-author of the political economy of arms reduction reversing economic decay and making peace possible the promise of economic conversion we also have copies of those books available back there he's also past year-and-a-half been working on the governor's task force for an economic transition for Texas making the converting the economy from a military one to an industrial one so if you'll help me welcome mr. Lloyd Dumas the past two years have been testament to how rapidly change can occur when a corner is finally turned the major threat that drove American foreign policy and conditioned nations allocation of its key economic resources since the end of World War two the military threat posed by the nations of the Warsaw Pact has disappeared yet the world hasn't miraculously become a peaceful and harmonious place great challenges still face us on a global scale but the greatest challenges to the security and prosperity of the nation are now economic and environmental not military to avoid getting stuck in the past and missing a chance to build a more prosperous and secure future we have to change our direction as the world changes as the nature of the problems change times of transition are always difficult they require us to develop a vision of where we want to be and just as important a practical and effective strategy for getting there to understand the extraordinary opportunities that these changes in the world have generated for us in the economic realm we first have to understand the economic impact of the path we have been following the economy is the part of society created to satisfy the human desire for material well-being the material standard of living is certainly not all that people want or need there's political freedom and security spiritual and moral guidance and so on people have created a variety of social systems to try to achieve the different goals without attempting to rank them in order of importance or value it's still possible to recognize that they are in fact different when society allocates the limited resources it has available to a social system designed to satisfy one of these needs it's by definition depriving the other socials systems of access to those resources that can't help but affect their ability to achieve the goals for which they were designed for most of the past half-century under the imperative of the Cold War along with a number of hot Wars the United States has given priority to the social system originally intended to provide for the nation's security the military and its support systems and Science and Industry although the output of the military sector has never been more than 12% and it's often been more to sit then more like six to eight percent of total u.s. output as measured against our GNP it has laid claim to a much larger fraction of some of the nation's most critical economic resources in particular the use of large amounts of one of the most economically critical critical of these resources engineers and scientists has become the hallmark of modern military development and production there the number isn't 6% or 8% or even 12% it's more like 30% perhaps even higher these people have tended to be the best and the brightest of our engineers and scientists simply because salaries and facilities have been better in the military sector given their lavish funding in effect this means that the 30 percent of the nation's engineers and scientists the military sector has claimed they actually represent 40 or even 50 percent of the nation's technological talent but why our engineers and scientists so critical to the economy the answer is they are the resolution of an important economic dilemma the vast majority of people in every country earned the largest part of their income in the form of payment for their labor that is wages and salaries therefore in order to have widespread and sustained improvement in the material standard of living of people overtime wages and salaries must continually rise high wages are not a problem as some have argued they are the means by which the economy's chief purpose improving people's material well-being is achieved for the broad mass of the population on the other hand wages and salaries are also a cost for most producers the largest part of their cost and if the largest part of their cost is high and rising that creates a powerful pressure on producers to raise prices but if producers raise their prices as fast as labor costs arising what economists call a cost push inflation is created and that destroys the value of the higher wages so if your wages going up 10% a year but prices are also going up 10% a year you're not getting anywhere there's no improvement in the material standard of living furthermore if that process of costs of labor pushing up prices continues it will force domestically produced products prices up relative to those charged by foreign competitors and domestic industries will price themselves out of the market the loss of markets leads to unemployment it also leads to imports rising relative to exports because domestic consumers increasingly find foreign products a better buy cheaper a better quality and people abroad and find the same thing so they stop buying products produced in your country and start buying products produce elsewhere therefore your people buy more foreign products imports rise people elsewhere buy less of your products exports fall and you wind up with trade deficits non-competitive industries chronic unemployment stagnated or declining standard of living result on the whole it's not a pretty picture so the dilemma is this how can you have high and rising wages and salaries without forcing price so the answer to that is invention and innovation finding better ways of producing more efficient production processes better tools with which workers can work improve designs for products that allow them to be produced more efficiently rises in the cost of labor or for that matter the cost of anything that producers need to produce materials fuels etc can be partially completely or even more than completely offset by improvement in product and process technologies and of course scientist engine and engineers are the key to expanding technical knowledge base and applying that knowledge to increasing productive efficiency therefore they're the key to resolving the economic dilemma it's important to note that this is not merely a theoretical possibility that I'm talking about it's an historical fact there is little doubt that the remarkable ability of American engineers and scientists to innovate was central to the spectacular record of rising living standards that made the American economy a model for much of the rest of the world at least until the past few decades when the u.s. made the decision to vigorously pursue the arms race after world war ii it was simultaneously deciding to allocate a large fraction of its engineers and scientists among other resources to the military sector it's unlikely that the negative economic impacts of such an allocation were well understood they certainly were unintentional but they're all around us today by interfering with the key mechanism that allowed wages and product quality to rise while product prices remain stable the arms race undermined the American economy at its historic source of strength the pace of civilian commercial innovation and invention slowed as the result of this in turn brain drain from the civilian to the military sector and as a result are crucial ability to offset costs with greater efficiency of production began to disappear from a position of extraordinary economic dominance at the end of World War two US industry slowly lost its competitive edge by the mid 1960s there was plenty of evidence that this process was well underway in 1971 America turned an important corner in its trade with the rest of the world a remarkable record of 77 straight years of trade surpluses exporting more than we important 77 years and that's not an average over the time that's every single year we ran a trade surplus for more than three quarters of a century that record in 1971 turned into two decades of continuing trade deficits importing more than we export that is still going strong the American standard of living reached a peak in 1973 and went into an ongoing downhill slide within a decade it was painfully clear that the historic pattern of rising living standards that had indeed been reversed as real income fell about five percent over that first decade it's sad to say but it's true that this generation of Americans now in college now entering the labor force is the first generation in this country's history that is looking at a lower standard of living than its parents we have reversed a remarkable record of continually improving the well-being of each succeeding generation during the 1980s we managed to paper over the obvious deterioration of the American economy by engaging in what is best known as an orgy of debt by cutting taxes at the same time we engaged in a large and prolonged military buildup we drove the National skyward in one decade the national debt more than tripled an interest on the national debt became one of the biggest items in the federal budget that is to say we added in the 1980s alone twice as much to the national debt as we had added in the two hundred years of our history preceding the 1980s by the late 1980s the interest on the national debt combined with the military budget just those two items alone accounted for 85 to 90 cents of every dollar of federal income tax collected from individuals families and corporations in the United States it's not a great surprise that it's been very difficult to balance the federal budget when we're using 85 to 90 cents of every dollar of federal income tax revenue just for paying interest on the debt and for funding the military budget it wasn't just the national debt of the united states that soared during the 1980s in 1980 the united states was a creditor nation internationally to the tune of some hundred billion dollars that means 100 billion dollars more was owed to Americans by people outside the country than Americans both to people outside the country we were a net creditor internationally to the tune of a hundred billion dollars and we had been a net creditor nation every year since 1914 seventy years by the beginning of the 1990s let me go back a step by the middle of the 1980s five years later we became a net debtor nation for the first time in 70 years and by the beginning of the 1990s we were more than four hundred billion dollars in debt Internet in other words we went from being the world's largest creditor nation internationally to being the world's largest debtor nation internationally in less than a decade I think that qualifies as an orgy of debt for a while this process of running up the National MasterCard bill so to speak created the appearance of progress in resolving our economic problems but it did nothing to address the underlying deterioration of American industrial competitiveness in fact it was worse than nothing all that borrowing made it extremely difficult to fund a variety of programs critical to rebuilding the nation's competitiveness not to mention programs of environmental cleanup or healthcare or programs aimed at addressing the tragic problems of drug addiction homelessness and hunger here in the United States and around the world if we had used that borrowed money to invest in new industrial equipment in a surge of commercial research and development in anything that's capable of generating new wealth with which to pay back the loans our indebtedness wouldn't be a problem but we didn't put it to such use so we're going to have to pay back all that we borrowed from those outside the country with interest out of our existing wealth and that will simply accelerate the decline in our living standard let me put it to you in a simple way it's not being in debt that's the problem it's what you do with the money you borrow if you went to the bank you developed a really good business plan starting up a new business and needed let's make it simple a million dollars loan to get this business going but you've really done your homework you had a good idea you know what you were doing you organized things well you sold the business plan to the bank they give you a loan they say okay it sounds good to us here's the loan I give you a loan for a million dollars you now a million dollars in debt you take the money you start building the business you work hard you get some breaks things go well you start generating new wealth from that biz with that new wealth you can pay back the million dollars you borrow with interest and you're still much better off than if you'd never borrow the money and therefore never started the business so it's not being debt that's the problem but suppose we take the same scenario you get a million dollar loan for the bank and then you think to yourself gee I've got a million dollars in the bank I can have a good time so you start traveling around the world and buying fancy clothes and cars and so on the problem is for the short-run everything looks great your standard of living zooms but when the bills come due you've got to pay it back out of your hide you have no new source of income to pay back that money if that doesn't work then borrowing the money is a tremendous disadvantage unfortunately what we did was more like the latter than like the former except we didn't have all that good at time tell you the truth at least had that going for us it's past time to get serious about rebuilding the economic base of this country we have to stop making excuses for our poor economic performance for inability to compete head-to-head with foreign producers we have to stop telling ourselves it's okay every time we lose you in another market because the computer industry or some other industry we haven't yet lost will save us or because we're becoming a service economy a post-industrial state what we are experiencing is not the evolution of an economy comparable to what happened when we stopped being mainly an agricultural society and became an industrialized country that's the analogy that's often given you know they say well in the past we went from being agricultural to industrial that was the first step and now we're going the next step from industrial to post-industrial to a service economy but that's not what's going on at all when we made the transition from an agricultural society mainly to an industrialized nation there was a tremendous growth in agricultural efficiency that pushed people off the farms and a tremendous growth in industrial productivity that pulled them into higher paying jobs in an expanding industrial sector but we are seeing now is people being pushed out of an industrial sector that is contracting because it's become relatively inefficient and is therefore losing markets and they're being pulled into those of them to get any jobs into lower paying jobs in a not very productive service sector this is not progressive economic evolution it's regressive economic decay and it's time to turn things around there is no serious prospect of getting the US economy back on a long-term viable growth path without a dramatic increase in the rate of civilian commercial technological progress and this cannot be done without a major infusion of engineering and scientific talent into the civilian sector there is no domestic source of enough technological talent to make this happen available in less than a generation but the military sector pleasant or unpleasant that's the reality fortunately we now find ourselves in an international situation so much improved that we have little reason to maintain anything near the level of military spending in general or military research and development in particular that we have maintained in the past half-century what appears to us to be a difficult economic problem what to do with all the people and facilities that are no longer needed in the military sector is actually an exciting economic opportunity it's nevertheless true that the process of economic conversion taking people and facilities through the transition from a military oriented to civilian oriented activity is not a simple process it will not automatically be handled by the market there is a wall between the military and civilian sectors in many ways they are different worlds that is especially true both for managers and for research and development activities the military sector is a performance driven relatively cost insensitive sector the products that come out of the military sector have to be capable of extreme performance under unusually hostile operating conditions people are after all shooting at the product it has to be able to operate in the desert one day in a dusty environment in a humid environment the next day in a jungle the next day in cold climates the next day is operating conditions of vibration and shock and stress and environmental dirt and so on they're very difficult for a product and the product itself has to perform to extreme capabilities because the perception is that if you can make a fighter plane that climbs a little more sharply or that goes a little faster that will give you a critical advantage in a battle therefore the performance stress is enormous in the military sector but cost is not a critical consideration the rule has been if you can make it perform do it will pay whatever it costs the civilian sector is almost exactly the opposite their cost is critical the key to producing people rather the key is producing products people want at a low enough price to be affordable and competitive products must perform well but it's not necessary that every conceivable increment of performance be squeezed out of the product and in general civilian products operate under much less hostile operating conditions think of it in simple terms your refrigerator your television set doesn't have to re-enter the atmosphere it doesn't get shot at it doesn't have to be able to work outside in the dirt you know it's operating in there much more normal conditions and nobody really cares if the refrigerator can cool two tenths of a second faster or even a minute faster it's not really important especially if it's expensive you know I encountered once when I was buying a refrigerator example just popped into my head maybe about eight or ten years ago two refrigerators side-by-side they seemed to have this saying cooling capacity the same energy efficiency and so on one was $150 more expensive so I called over the salesperson I said why is this machine more expensive and they said oh well it's made with space-age plastics you know from the space program and I said yeah and they said well that's it you know it's made with this and it's expensive so I said my refrigerator isn't gonna have to re-enter the atmosphere I'll take the cheaper machine and I think that's how consumers naturally behave so if you're gonna make that transition see these differences among others between the military and the civilian sector in its mode of operation have tremendous impact on the day-to-day functioning of engineers scientists and of managers depending on which business they're in for example military sector engineers are able to use the most exotic materials and they have to specify when designing products very exact tolerances what that means is when an engineer for instance if an engineer is designing a product and there's a rod in the product that has to be 2 inches long something the engineer has to say this rod has to be 2 inches long that's a specification known as a spec in short but they also know that it doesn't have to be exactly 2 inches long so they'll write a tolerance they'll say plus or minus 1/10 of an inch a hundredth of an inch a thousandth of an inch which means how close you have to get to exactly two inches for it to work right well in the military sector engineers and scientists are used to designing with very narrow tolerances because of the extremes of operating conditions and performance requirements to say it in very simple terms things have to fit together very well everything has to be very precise so they're used to specifying with very very narrow tolerances if you take the same engineer and you say the designer refrigerator it has a two inch rod non-refrigerated they'll make the same narrow tolerance because that's what they're used to and they don't even they know that works and they don't even know what difference it makes to man you factoring cost to say plus or minus a ten thousandth of an inch instead of saying plus or minus one hundredth of an inch but it makes a huge difference because if you have a very narrow tolerance you're going to cut some of those rods a hair too small and you have to throw them out and some of them to be a hair too long and you have to rework them which is expensive and you're gonna need more expensive equipment to machine them that precisely if you don't need that degree of precision you shouldn't specify it but if you don't even know what the relationship is between the tolerance the margin of error and the cost of manufacturing the rod how can you take it into account military sector engineers don't know because they don't need to know it's not part of their business and the same thing is true with specifying materials to give you a quick example Grumman aerospace once decided to go into the business of producing solar panels for people's houses solar panels for the roof pretty simple business it's a glass sandwich basically with a copper tube you run water through put a black backing on it serves a lot of heat heats up the water running through the tube it's a simple solar panel and it sits on somebody's roof so the engineers the aerospace engineers designing this specified titanium for the material to be used for the frame because it's strong and it's lightweight and they're used to dealing with titanium well titanium is perfectly fine except it's extremely expensive aluminum is just fine you know saving another few ounces doesn't mean anything when the thing is sitting on somebody's roof but you're not used to working with this materials to working with that material you know it works well so you said it's let's use that the result was they produce solar panels that were so expensive nobody could buy them and it concluded from that that they couldn't make a civilian product but you see that's wrong that's a very common conclusion and it's wrong because what it means is that people cannot be expected to move between these two worlds without some retraining and reorientation it's not that they're engineers were dumb or foolish it's just that they did know what they didn't know they didn't know this new business they had to operate in and the same thing is true with managers about a year ago I had a lengthy conversation with Ross Perot in his office his way before the presidential craziness so on that went on and I wanted to talk to him about conversion issue for various reasons I won't go into now and when I started to talk about the issue Ross looked at me and I said you know he said there's something wrong with what she's saying I wouldn't let a manager from a military company anywhere near a civilian company that I owned what the hell are you talking about and I said to him look Ross I understand what you're saying and I'm telling you why it doesn't work but you also know that those people are bright they're capable and they certainly can learn how to look at their job of managing from a different angle and then he asked me what they would need to know and we talked about it you know and after a long discussion he said yeah I guess you could do that well of course you can do that we're not made out of stone people can learn things sometimes people have said to me this can't be as big a problem as you're saying engineering is engineering the managing is managing what difference does it make what kind of company it is what kind of product it is so I thought long and hard about how to make this clear and I finally came up with an example it seems to work for most people for more than 20 years now I've been a university professor I've taught undergraduates and graduate students in two different disciplines over time I have a lot of experience of teaching and let's assume I can do it you know reasonably well suppose that somebody came to me and said next week we want you to start teaching second grade in elementary school it's teaching teaching is teaching right I'm a teacher if I'm a good teacher I should be able to do it but the thing is completely different context I can't walk into a second-grade class and say hi kids read chapter four for next week you know we'll talk about it I can't do things like that and I'll give you another simple example if I walk into my my classroom at the University and I noticed somebody seems to be upset you know somebody's got an expression I'm depressed or something like that I might say something to them I'd say you okay I might not but in any case it's not my business but if I'm a second grade teacher and I see my kids are upset I have to know why I have to help because otherwise they won't learn and they're not old enough to take full responsibility for their lives so it's of course it's teaching just like teaching at the University but in another sense is profoundly different that's why I use the term reorientation as well as retraining these engineers and managers have to learn not just some different skills they do need a few different skills but they also have to learn a fundamentally different way of looking at what they're doing and at the goals of what they're doing in order to do it properly and with that kind of retraining they can make the transition and make it well I want to take just a few minutes now to talk about something kind of different first say something about the process of planning and conversion let me give you a historical example and show the relevance for it and then I want to talk about something a little bit more perhaps a little more esoteric but I think very important to keep in mind in the year following in the year following World War two some 30% of the American GNP was shifted from military to civilian production in one year without causing the unemployment rate to rise above 3% the conventional wisdom is that that transition happened automatically as a result of natural market forces propelled by pent-up demand unsatisfied demand similar products built up during the war because of rationing while pent-up demand was clearly important but there was a great deal of advanced planning done by all levels of government and by the private sector in preparation for that reconversion as early as 1943 many state and city government set up agencies to plan post or public works projects to plan aid to private businesses and to do vocational training the GI Bill of Rights played an important role in providing benefits that allowed many of those who had been in the military to get the kind of training and education that they would otherwise not have been able to afford and not coincidentally the GI Bill of Rights is one the best investments we ever made in this country's history it paid back to the federal government in extra tax revenue just in this narrow calculation extra tax revenue collected from people earning more because they were hired trained thirty times what the program cost thirty times what the program cost that's what an investment of the right sort in education can do for an economy and for a government that's not a bad return on investment private national business organizations like the US Chamber of Commerce and the National Association of Manufacturers not exactly radical groups published reconversion planning reports as early as 1943 it was a private business group called the committee for economic development that had 40,000 businesspeople on local economic development committees throughout the country to assist business in planning early post-war production in general government at all levels assisted in retraining took care planning needed public works project that could service civilian markets and stimulated the economy as a whole but private business did all of the micro-level company reconversion planning at that time weapons and related systems were being produced by civilian companies who turned to military production to support the war effort that's why I referred to that shift as a reconversion they were going back to business as usual for them but today most military sector organizations have never done anything but military related business for them the military business is business as usual the shift the civilian economy activities is a move to entirely new territory for them yet I think the same basic mix of government and private sector responsibilities seems a good model for today that is the government should take care of planning public works of assisting and Retraining and so on but the companies have to do the factory planning it's a corporate planning job not a government planning job that kind of advanced planning if we began it now would help us to shift gears smoothly at the end of our 45 years war the Cold War perhaps we need something like another GI Bill of Rights this time for military sector workers to get them reconnected to civilian business well I want to briefly now go into another thing entirely and I'll say it only very quickly but I think it's worth saying one of the important things about talking about conversion about the issue of conversion is that it doesn't let you off the hook easily you can argue to stop doing something and that's a self contained statement but if you argue that something should be converted it immediately raises the question to what and to what to me doesn't just mean what gismo we're gonna make it this Factory it also means what kind of economy what kind of society do we want why why we have to shift gears and aim ourselves in a different direction why don't we think about what we really want to do and so I wanted to argue to you that there are ways of using economic relations if they're properly structured international economic relationships to do a large part of the job that we previously have relied on military power to do that is to try to deal with international conflict and generate security for the country for the nation and I'm not going to talk although it's part of the deal it's a small part of the deal I'm not going to talk about using economic sanctions in order to influence international behavior that's a separate topic but that's using a stick what I'm going to talk about instead is the possibility of structuring economic relations in such a way as to provide positive incentives for nations to settle their disputes without shooting at each other that's the issue and I think you can build what I refer to as an international peacekeeping economy I didn't say a peaceful economy I said a peacekeeping economy based on four principles four principles the first one has to do with balancing independence and interdependence as national strategies if everybody is dependent on external sources for the things they most critically need that makes them very nervous we fought a war in the Persian Gulf primarily because we were worried about critical external oil supplies if we had had a higher level of Independence with respect to these critical goods we wouldn't get so nervous about changes happening elsewhere now I'm not saying that that makes aggression okay that's it that's not the case but what I am saying is that countries that feel dependent on external sources for absolutely critical things like food and basic energy supply are liable to get very nervous whenever changes occur and to overreact and try to force access to whatever those resources are so we need to build the independence of nations on critical goods but at the same time we need to maximize their interdependence economically on everything else because another thing that helps you to avoid conflict is knowing that you need the other guys and they need you and that that comes to the second principle that economic relationships should be relatively balanced if you build a relationship which is exploitative all the benefit is flowing in one direction it makes people angry the people who are exploited are angry and ready to disrupt the relationship the first chance they get and it's expensive for the exploiter we don't usually think about that but the exploiter has to maintain a lot of force and control and attention and effort to keeping that other party under their thumb it sounds hard to believe but Adam Smith the founder of capitalism argued to the British 200 years ago that the best thing that Britain could do for its own economy was to get rid of the colonies and stop trying to dominate the world he argued that Britain should sever those relationships with the colonies and trade with them as equal partners that that would be better for Britain not just better for the colonies because he said in order to maintain these colonies we have to have a huge military we have to have all these colonial government establishments were draining Britain to keep these people under our thumb we'd all be better off if we'd stopped doing it interesting reaction to the fact that Martha that that Smith was an anti-imperialist but that's it that's a separate matter balanced relationships create incentives for peace and I'll give you one quick example the European Common Market if you were to go onto the street of any of the dozen common market nations today and interview people and just ask them what they thought the odds of a war between their country and any other common market country you want to name are in the next 50 to 100 years they would laugh at you I would say you must be crazy what kind of us did question is that they don't even think in those terms anymore but look at the history of those 12 nations you're talking about France and Germany and Britain and Belgium and the Netherlands those countries have fought countless wars with each other over the centuries they don't even think about shooting anymore and they still got plenty of conflicts why not the simple answer and there are many dimensions to the answer but one of the critical things is that they built a web of economic relationships among them that are balanced essentially and they all know that they have more to lose by disrupting those relationships than they could possibly compensate for even by winning a war against the other one so they don't think that way anymore there's something of a model in that for the world in general for the 21st century I think we can do a lot more with it and I'll just quickly state two other principles we need to pay more serious attention to development because the poverty and frustration of so many of the world's people are a breeding ground for conflict and war they can light the spark that will ignite a world war again let alone all these terribly devastating local wars that are going on we must take development seriously it's in everyone's interest to improve their conditions you cannot fight poverty and frustration with bullets it's as simple as that the only way to deal with this problem is by serious attention to development it's in all of our interests in the interests of peace in the interest of prosperity as well and the fourth principle is we have to minimize ecological stress because that also creates major sources of conflict from acute problems like Chernobyl which generated a lot of hostility internationally to chronic problems like acid rain which has the United States and Canada screaming at each other from time to time these long-term friends we have to do something to avoid depleting our resources as rapidly and polluting ours and our environment as much we can build International economy focused on these basic principles and conversion of our military sector opens up an opportunity to aim ourselves in a very productive direction now that can not only deal with the reemployment of the people coming out of the military sector but at the same time improve our national prosperity and our international prospects for a more peaceful world let me try to bring this to a close now the potential positive long-run economic impact of the shift in resources that conversion implies is enormous in scale and global in scope nationally it's the cornerstone of undoing the economic deterioration that has reversed the long historic pattern of improving living standards in America the infusion of critical resources from the military sector to the civilian is the key to rebuilding America's economic future and properly integrated with other development activities and guided by the principles of a peacekeeping international economy it can create a powerful impetus to both economic prosperity and national security to economic well-being on an international national and local level the shift away from the military emphasis of the past is underway and it should be sharply accelerated conversion offers a means to let us shift gears smoothly without serious disruption but it isn't magic and it isn't without cost it has to be properly planned and carefully implemented it's a complex process that cannot be done quickly and still be done well there is therefore little to lose and everything to gain by beginning the process of conversion now before all the cutbacks have been made before all the treaties have been signed let's do it now the vision of a more prosperous peaceful and secure world has sustained humankind through some of the darkest hours of its history and some of those darkest hours of our history have been in this century always there have been those who insisted that this dream was achievable always there have been those who held that it was nothing but a beautiful illusion our technological capacity developed rapidly our social and political maturity has lagged far behind increasingly we put our faith in our ability to manipulate the physical world and depended for our security on our ability to threaten and forcefully coerce each other finally and inevitably we placed in our own hands the capacity to bring the impressive history of our species to a quick and violent end but just when it seemed like the cynics had won a remarkable flowering of human freedom and creativity began nonviolent revolution swept over a series of Nations held firmly in the grasp of rigid authoritarianism the violent antagonism of two powerful alliances of Nations has melted away an attempt to overthrow the new freedoms and re-establish an iron hand in the world's largest nation the former Soviet Union was beaten back by the commitment and determination of ordinary people who wouldn't let the dream die the vision is reborn there's still far too much anger hatred and antagonism in the workmen weapons toward more productive and life enhancing activities in all of this conversion has a critical role to play the real peace dividend lies in making these changes and conversion is the mechanism through which we can begin the radical change in direction to which history now calls us