Technology, the Military and the Decline of the Market System: the Case of the Gap Instrument Company
| Date | 01 March 1974 |
| Author | Carol Contes,Peter Goudinoff |
| Published date | 01 March 1974 |
| DOI | 10.1177/106591297402700104 |
| Subject Matter | Articles |
80
TECHNOLOGY,
THE
MILITARY
AND
THE
DECLINE
OF
THE
MARKET
SYSTEM:
THE
CASE
OF
THE
GAP
INSTRUMENT
COMPANY
PETER
GOUDINOFF
and
CAROL
CONTES
University
of
Arizona
UCH
of
the
literature
on
American
military
policy
is
devoted
to
dis-
m
cussion
of
a
phenomenon
known
as
the
&dquo;military-industrial
complex.&dquo;
1
j.
This
focus
was
given
impetus
by
President
Eisenhower’s
farewell
address
when
he
said:
The
conjunction
of
an
immense
Military
Establishment
and
a
large
arms
industry
is
new
in
the
American
experience.
The
total
influence
-
economic,
political,
even
spiritual -
is
felt
in
every
city,
every
statehouse,
every
office
of
the
Federal
Government.
We
recognize
the
imperative
need
for
this
development.
Yet,
we
must
not
fail
to
comprehend
its
grave
implica-
tions.
Our
toil,
resources,
and
livelihood
are
all
involved;
so
is
the
very
structure
of
our
society.
In
the
councils
of
government
we
must
guard
against
the
acquisition
of
unwarranted
influence
whether
sought
or
unsought,
by
the
military-industrial
complex.
The
potential
for
disastrous
rise
of
misplaced
power
exists
and
will
persist.’
One
criticism
in
the
military
policy
literature
is
directed
at
the
apparent
insti-
tutionalization
of
cost
overruns
in
weapons
systems
procurement.
For
example,
in
reviewing
the
C-5
transport
program
Senator
Proxmire
found
a
cost
overrun
of
$1.959
billion.3
When
Peck
and
Scherer
studied
the
development
of
twelve
major
weapons
systems
they
discovered
that
&dquo;cost
optimism&dquo;
had
averaged
220
percent.4
It
is
the
purpose
of
this
study
to
examine
one
such
episode,
its
somewhat
unique
resolution,
and
to
offer
an
explanatory
hypothesis
as
to
how
and
why
such
events
occur.
The
case
involves
the
Gap
Instrument
Company
of
Hauppauge,
New
York,
and
the
United
States
Navy.
In
1971
the
Navy
saved
the
Gap
from
bankruptcy
by
purchasing
17,141
shares
of
non-voting,
non-convertible
Class
A
Preferred
stock
issued
by
the
company.
Gap
had
contracted
to
produce
thirty-one
Mark
53
attack
consoles
that
were
to
be
installed
on
two
classes
of
Navy
ships
that
were
then
under
construction.
Vessels
lacking
these
fire-control
components
&dquo;would
be,
by
one
characterization,
only
very
large
yachts,&dquo;
according
to
Rear
Admiral
Roland
Freeman,
Chairman
of
the
Navy
Contract
Adjustment
Board.5
1
See
for
example:
Senator
William
Proxmire,
Report
from
Wasteland:
America’s
Military-
Industrial
Complex
(New
York:
Praeger
1970) ;
John
Kenneth
Galbraith,
How
To
Con-
trol
the
Military
(Garden
City:
Doubleday,
1969) ;
Bruce
M.
Russett,
What
Price
Vigi-
lance ?
(New
Haven:
Yale
University
Press,
1970) ;
Stephen
E.
Ambrose
and
James
A.
Barber,
Jr.,
The
Military
and
American
Society
(New
York:
The
Free
Press,
1972),
Part
II;
James
R.
Kurth,
"A
Widening
Gyre:
The
Logic
of
American
Weapons
Pro-
curement,"
Public
Policy,
19
(Summer
1971),
pp.
373-404;
Stanley
Lieberson,
"An
Empirical
Study
of
Military-Industrial
Linkages,"
American
Journal
of
Sociology,
76
(January
1971),
pp.
562-84.
’ U.S.
Dept.
of
State,
Bulletin,
Vol.
44,
February
6,
1961.
3
Proxmire,
op.
cit.,
p.
55.
4
Merton
J.
Peck
and
Frederic
M.
Scherer,
The
Weapons
Acquisition
Process:
An
Economic
Analysis
( Boston :
Harvard
Business
School,
1962),
p.
24.
5
Letter
to
the
Navy
Contract
Adjustment
Board
from
its
Chairman,
Rear
Admiral
Roland
Freeman,
June
16,
1971,
p.
4.
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