I flew into the Minneapolis-St. Paul airport today, and that provides the perfect occasion for a sermon about cutting the Pentagon's budget. I realize that doesn't seem to make sense, but bear with me.
Some weeks ago I questioned the logic of a New York Times story that warned of the woes that could befall our economy if the Pentagon's research budget is slashed. But I didn't manage to address all of the arguments made in the story, and I promised to return to the subject in the future. The future has finally arrived.
The Times piece, after asserting that Pentagon research spending "played a key role in the blossoming of high technology as a driver of the nation's economic growth," cites as evidence the sea of technology companies that are in the Pentagon's vicinity. Tech companies "built large campuses employing thousands of workers, mostly around the growing Tysons Corner crossroads." And "other clusters of technology companies grew up around universities that have been large recipients of military research money, creating Silicon Valley in California, the Route 128 corridor around Boston and the Research Triangle in North Carolina, where the Army opened its Research Office in 1958."
Let's suppose, for the sake of argument, that without early Pentagon spending that reached the West Coast, the area known as Silicon Valley would today be known mainly for garlic farming. To convey why this fact wouldn't be testament to the virtues of Pentagon spending, let's take a look at an earlier era in America's technological history. And what better prism through which to look at that era than... Minneapolis?
There was a time when grain mills, powered by river water, were at the forefront of technology. In Minneapolis there are vestiges of that time--great old mills with big old signs protruding from their tops on stilts: Gold Medal Flour, Pillsbury. Both of these are now owned by General Mills, which itself got its start in Minneapolis as the Minneapolis Milling Company. In short: Minneapolis was to milling what Silicon Valley is to electronics.
Why Minneapolis? Well, it had the basic prerequisites: a river to drive the mills, access to grain growers and to markets (access afforded partly by the same river that drove the mills). But Minneapolis wasn't alone in possessing those things; it just got a jump on alternative locations. And once an emerging industry takes root in a given place, the logic of that locale becomes self-reinforcing: Because the talent is there, and the transportation infrastructure is there, and the mill-building know-how is there, that's where the talent and know-how and capital continue to flow.
So what serendipitous thing happened that led to early milling success here and thus is responsible for Minneapolis becoming the milling center it became? I have no idea. But let's suppose it all started when some local woman lent her nephew enough money to start a small mill. By the logic of the New York Times story, this would be an argument for encouraging aunts everywhere to lend their nephews money.
My point is that (1) the microelectronics revolution, like the milling revolution, was inevitable; (2) once it happened, it was probably going to have an epicenter, a place that attracts the lion's share of the talent and capital; (3) where that place turned out to be might well be where crucial seed money happened to first become available; (4) none of this means that, absent this particular bit of seed money, the microelectronics revolution would have been any less momentous or contributed less to the nation's economic welfare as a whole; it just means that the revolution might have had a different epicenter.
Is it possible that this epicenter would have been in some other country had the Pentagon not planted the seeds for it in Silicon Valley? It's conceivable, but given how economically dominant America was in the wake of World War II, I'd call it unlikely.
Anyway, that's the kind of counterfactual question you'd need to address to mount a strong argument that Silicon Valley is a testament to the value of
a big Pentagon budget. I'm not saying that such an argument can't be made. I'm just saying that that argument wasn't made in that Times piece. I'm also saying that, if Silicon Valley weren't in Silicon Valley, it would still be somewhere. Maybe in Minneapolis.