Next spring, almost one-third of the nation's best young engineers will leave the Massachusetts Institute of Technology to begin designing weapons, the latest recruits to a "permanent armaments industry of vast proportions," as President Dwight D. Eisenhower called it with some dismay a quarter-century ago.
Stu Schmill, 20, a fast-talking New Yorker, confirmed the allure of defense work as he sat with other nervous seniors wearing unaccustomed business suits while awaiting job interviews at MIT's career center. "It's just more interesting," he said, "than cars or trucks."
If Schmill eventually lends his talents to a weapons maker, he will join the 6 million people working for the military-industrial complex that so troubled Eisenhower. The U.S. defense establishment has absorbed between one-third and half of the nation's scientific talent since the Cold War began.
It has consumed more of the Gross National Product than in any other major democracy, averaging 7 percent each year, compared with less than 1 percent in Japan. By 1990, nearly enough will have been spent on defense during the Cold War -- $3.7 trillion in constant 1972 dollars -- to buy everything in the United States except the land: every house, factory, train, plane and refrigerator.
The sustained buildup of the past 35 years has led some to ask whether a permanent war economy has taken root, diverting talent and capital and thus crippling U.S. ability to compete with other industrial powers, particularly Japan. It also has raised questions about whether the arms industry is so well ensconced that it now shapes foreign policy, rather than serving it. To the Reagan administration, the spending has served as a tonic for the economy while strengthening national security.
"I don't see any more useful area to put an engineer to work than in securing our freedom and defending our country," William Howard Taft IV, deputy defense secretary, said in an interview. "My impression is that it's been very valuable to the economy over the past year or so."
Indeed, the value of military spending as a creator of jobs and prosperity has become dogma to congressmen and contractors scrambling for defense work. But it was not always so. From economic theorist Adam Smith to Eisenhower, any dollar devoted to arms was seen as a dollar diverted from more productive pursuits.
Today, some economists are returning to that view, suggesting that a large arms industry saps the nation's economic strength and, with its free-spending ways, infects other industries with inefficient carelessness. And they are asking whether the arms industry has become so influential, and the economy so dependent on its perpetuation, that the nation finds itself buying weapons it does not need.
Jerome B. Wiesner, former president of MIT, said he saw the industry and military encourage unneeded purchases when he served as science adviser to Eisenhower and President John F. Kennedy. Since then, he said, the defense establishment has become even more influential.
"It is no longer a question of controlling a military-industrial complex," Wiesner wrote recently, "but rather, of keeping the United States from becoming a totally military culture." Technology Flow Reverses
When the United States first pondered the need for a wartime arsenal in peacetime, the chairman of the House Appropriations defense subcommittee demurred.
"Nothing would please a potential enemy better," Rep. George H. Mahon (D-Tex.) said in 1949, "than to have us bankrupt our country and destroy our economy by maintaining over a period of years complete readiness for conflict."
Today, U.S. warships ply the seven seas, strategic bombers practice apocalyptic missions every day and heavily-armed helicopters patrol Europe's Iron Curtain. Yet the economy has hardly been destroyed; the arms industry and the American standard of living have risen side by side.
"Unquestionably, we can afford it if we want to," said Alice M. Rivlin, former director of the Congressional Budget Office.
For years, in fact, few doubted that the defense industry not only was affordable, but would tug the U.S. economy into the future. Computers, jet engines, even graphite tennis racquets, sprang from the space and defense industries.
The National Aeronautics and Space Administration still publishes an annual catalog of "spinoffs" and the Pentagon boasts of side benefits that will tumble from its "Star Wars" missile defense program, the Strategic Defense Initiative (SDI). But the reality has changed, as President Reagan's commission on industrial competitiveness reported earlier this year.
John A. Young, president of Hewlett-Packard Co. -- a major defense contractor -- who was chairman of the commission, said that military research is now so exotic, and so slow in reaching fruition, that it offers little commercial use. In fact, the commission found, the Pentagon is now a "net user" of commercial research. The historic flow of technology has been reversed.
As a result, the presidential commission, concluding that "our future ability to compete is questionable," took little solace from the U.S. lead in research and development funding. The federal government supplies half of those R&D funds, the commission said, with more than two-thirds channeled to space and defense.
"With this understanding of the federal role in U.S. R&D," the commission said, "there is cause for concern."
Where the money goes, the nation's engineers naturally follow. Young said Japan trains more engineers per capita and has no "huge defense establishment competing for talent . . . . It's one of the single most important reasons they're doing well."
Robert K. Weatherall, director of MIT's career center, noted that nearly two-thirds of his students end up in commercial enterprises. Many students today view the entrepreneurs of Silicon Valley as more innovative and less bureaucratic than the defense giants of the Los Angeles basin, he said.
But in some fields, Weatherall added, departing students find little demand for their talents outside the world of weapons.
"It's physicists, I think, who are most alarmed about how the world seems to have closed in around SDI," he said. "If they go on to higher degrees and then get off the academic escalator, they find themselves on a floor of the department store that sells only weapons."
Seymour Melman, an industrial engineer at Columbia University, has long argued that defense industries sap a nation's investment funds as well as its talent. Partly as a result, he said, industrial productivity in the United States, Britain and the Soviet Union has slumped, while productivity in nations with smaller arsenals, such as Japan and West Germany, has soared.
A Lockheed Corp. plant outside Atlanta turns out military transport planes for the U.S. Air Force and more than 50 other nations. But the most sophisticated machine tools stamping out those aircraft parts are made in Sweden.
"A choice is being made, not simply between guns and butter," Melman said, "but between guns and competence in the means of production themselves."
For every $100 of new capital invested in the civilian economy in 1980, he said, the United States put $38 into the military, compared to less than $4 in Japan. By 1988, he predicted, the military side in the United States will be claiming $87. Other economists argue that arms spending drains most basic industries while benefiting only aerospace and a few other sectors.
Similarly, a recent study by Employment Research Associates in Michigan found that only one-quarter of the nation's congressional districts, concentrated in 15 states, collect more from defense spending than they contribute to the defense budget in taxes.
Few blame the arms industry alone for U.S. troubles in world trade. Young cited other factors -- the price of the dollar, tax policy, the deficit -- and said, "It would be way too simple to just point at the defense establishment and say, 'You caused it.' "
After all, the government spends money on many "nonproductive" ventures, Rivlin added.
"How about national parks?" she said. "There's lots of things we do because we want to do them, and we don't worry about diverting economic resources from the economy. I think you have to be out to get defense to take that very seriously."
Furthermore, many people across the political spectrum contend that comparing U.S. defense spending with that of Japan or West Germany is unfair, because the United States has assumed a global military role since World War II.
Even in Los Angeles, however, in the heartland of the arms industry, some see clouds within silver-lined defense budgets. In the district of Rep. Mel Levine (D-Calif.), for example, defense is the chief employer. Levine said he welcomes the jobs, but worries about the consequences.
"While we're building technology on the cutting edge of the defense industry, defending western Europe and Japan, their engineers and scientists are building Sony stereos and BMWs which are gobbling up significant chunks of our domestic market," he said. "It's a very significant issue, whether you can be at the cutting edge of both the economy and the military."
Theodore Williams, chairman and chief executive of Bell Industries Inc., a high-tech firm in Los Angeles with about 2,000 employes, has largely shunned defense contracts.
"It's impossible to mix defense business with commercial or industrial business," he said. "Engineers tend to overdesign, without concern for cost . . . . In the commercial sector, if you bring that mentality into it, people couldn't afford to buy anything."
Williams, complaining that high salaries in arms factories drive up his costs by forcing him to pay competitively, also asserted that channeling engineers and research funds into weapons development has harmed U.S. business.
"We just are not competitive, we don't have the technology, and the bulk of our engineering talent is not being used to build our security -- economically," he said. "Defense spending is the reason." Industry Shapes Policy
In the foothills of the Rockies just west of Denver, 2,000 Martin Marietta workers are building Titan rockets designed to lift Air Force satellites into space. For about $2.4 billion, the company -- with help from General Dynamics, Aerojet General, McDonnell Douglas and United Technologies corporations -- will build and launch 10 boosters.
The contract, awarded earlier this year, rescued an industry that had appeared doomed. NASA's space shuttle, which can launch satellites from orbit, originally was intended to take care of the military's satellite-boosting needs.
But the Air Force reconsidered, opting for a new rocket system to complement the shuttle. The good news for industry came after Martin Marietta and other U.S. firms had failed to find a private market for their rockets and had turned to lobbying the Pentagon instead.
Edward C. (Pete) Aldridge, Air Force undersecretary, told Congress this year that the Air Force wanted new Titans for many reasons. Unlike the manned shuttle, they could be launched during war without personal risk, he said, and they offer backup in case one of the four shuttle vehicles fails.
But Aldridge said that the contract also was intended to keep the rocket industry humming.
"The defense industrial base is the cornerstone of readiness and modernization of our space capabilities . . . ," he said. "Our mutual concern, then, is one of keeping America in the space launch business."
If the needs of industry helped shape U.S. satellite policy, according to Wiesner, it was not the first such case. In 1950, he recalled, President Harry S Truman's Air Policy Commission reported that the aircraft industry, in a post-World War II slump, would have to produce 30 million pounds more of aircraft each year to stay in shape.
The next year, the Air Force revealed a Soviet air threat "capable of delivering a surprise attack against any part of the United States." This "bomber gap," the Pentagon said, required an urgent buildup of U.S. air forces -- precisely large enough to satisfy the commission's estimate of industry needs.
A decade later, Eisenhower said in his State of the Union message that the " 'bomber gap' of several years ago was always a fiction." Wiesner said he now believes the overstatement of the threat was most likely a "deliberate deception."
"Interestingly," Wiesner recently wrote in the Bulletin of the Atomic Scientists, "at no time after the truth was discovered did the creators of those distorted predictions show any concern about the unnecessary buildup they had stimulated or propose that the United States revise its objectives."
Wiesner was not suggesting a simple equation between profit motive and foreign policy. But in an interview he said that the size and influence of industry, the jobs it creates and the continual flow of its leaders into government tends to stimulate the arms race.
"The people who come out of industry into government are constitutionally anti-Russian and pro a very large military," Wiesner said, noting that the current secretaries of state and defense returned to government from Bechtel Co., a builder of overseas military bases. Aldridge, the architect of Air Force satellite policy, worked for Douglas Aircraft, LTV Aerospace and Systems Planning Corp. between stints in government. Gen. John W. Vessey Jr., recently retired chairman of the Joint Chiefs of Staff, now sits on Martin Marietta's board.
In an interview in the Pentagon this month, Taft said that preserving the defense industrial base remains a principal policy objective.
"In the modern world, you can't fight a war by just calling up a lot of people and being enthusiastic about it," he said. "You've got to have a lot of highly sophisticated modern equipment, and that is not going to be available to you if you start now, in 10 minutes, or even in two years. You've got to keep the industrial base up to date."
But Taft added that the Pentagon does not spend more than security demands simply to protect industry.
"You do need a certain level of business to keep enough people there for the industrial base," he said. "That, as it happens, is not more than we need right now to actually do our rebuilding . . . . The threats we face out there are very real."