Detour on the Road to Serfdom

Does government intervention in the  economy lead inexorably to tyranny? So it would have us believe, the doughty  Austrian school.

This essay is not a frontal assault against the Austrian School. It attacks a theory that is popular among Austrians, but is by no means central to Austrian methodology. On the contrary. what I have called the Hayek Effect  plays a minor role in Austrian thinking, and its abandonment would do little damage to the structure of its ideas.

Although I direct my criticism against two of the Austrians’ main thinkers, I do not reject wholesale the theoretical contributions of either Ludwig von Mises or Friedrich Hayek. On the contrary, I find that von Mises’ critique of socialism was prescient and has been confirmed, among others, by the a posteriori observations of the foremost homegrown critic of East European communist rule, Janos Kornai.. Although I criticize Hayek’s noted wok The Road to Serfdom, I sympathize with the  aversion he expresses to excessive state domiation of society.

Von Mises theories of socialism and of interventionism

Von Mises distinguishes between socialism = economic planning, where the state takes over running firms, from interventionism, where property reains in private hands, but the state places restrictions of various types on the private capitalist’s decision-making. The difference between socialism and interventionism, according to  von Mises, is that interventionism leads inevitably to socialism. So once a country has embarked on the road of interventionism, the last astop is always socialism, which implies complete lack of civil liberties, democracy, etc. thus restrictions of economic freedom lead to restrictions on political freedom. 

See Ludwig von Mises and Interventionism

Von Mises lists a number of arguments against socialism which have stood the test of time and were prominently noticeable in the planned economies of eastern Europe between 1948 and 1988.  His objections are principally that in socialism no one would have an incentive to work because they would all get paid anyway, etc. I won't go into detail of his arguments, since I agree with them on the whole.

Von Mises then goes about proving that interventionism leads to socialism. His exhibit A is price controls. Cite von Mises, Wilensky on price controls in health insurance. Harold Wilensky: Rich Democracies: Political Economy, Public Policy and Performance, University of Californis Press, 2002, pages 600 et seq.

I accept von Mises’ theory of how price controls lead to comprehensive regulation. However von Mises provides no evidence that other sorts of interventionism likewise have the dreaded snowball effect. In any case he provides no examples, but instead concludes triumphantly that his conclusions for price controls are also valid for other controls.

It is by no means obvious why that should be so. I have cudgeled my brains to contrive some kind of model where this necessity takes place, but in vain, alas.

Consequently we must conclude that von Mises not only fails to prove his point, but actually seems to be arguing himself into a trap, which he then adroitly avoids by simply ceasing to discuss the issue at all.

Hayek took over von Mises’ thesis in The Road to Serfdom and provided a number of extremely feeble arguments to back up the price control argument presented by von Mises.  I go into detail on this subject in my essay Why Hayek Sucks.

But suffice it to say that no persuasive argument is presented to back up the Hayek effect. Indeed, Hayek proves that he has no viable theory of the relative between politics and economics.

I now proceed to empirical verification of the Hayek Effect.

I shall argue firstly synchronically, comparing political liberties in two small eurn countries that have dramatic difference in economic structure, but not very big ones in political freedom.

Then I proceed to a diachronic analysis of Sweden. My argument is simple:

See Close Call on the Road to Serfdom

Von Mises simply declares dogmatically that all government intervention is bad. He nowhere attempts to prove it, except with respect to a single sector of interventionism, namely price controls.

 

Ludwig von Mises and Interventionism

Von Mises gives a very restrictive definition of interventionism, i.e. government measures affecting the economy,  and then proceeds to attack it. But as a result of the restrictive original definition, his assault is along a narrow front and his criticisms are consequently directed against a rather minor set of government measures. There are many instruments of economic policy that he fails to criticise or even mention when attacking interventionism so narrowly defined!

The reason for this seems to be that many more mechanisms of state influence exists nowadays than in von Mises’ time. Accordingly von Mises’ critique appears at first blush to be dated and inadequate to provide an effective critique of most contemporary economic policy instruments.

Interventionism, says von Mises, “does not seek to abolish private property in production; it merely wants to limit it.”

Mises writes:

We must distinguish between two groups of [interventionist policies]. One group directly reduces or impedes economic production (in the broadest sense of the word including the location of economic goods). The other group seeks to fix prices that differ from those of the market. The former may be called “restrictions of production”; the latter, generally known as price controls, we are calling “interference with the structure of prices.

In a footnote he gives his reasons for omitting a third group:

There may be some doubt about the suitability of a third group: interference by taxation which consists of expropriation of some wealth or income. We did not allow for such a group because the effects of such intervention may in part be iden­tical with those of production restrictions, and in part consist of influencing the distribution of production income without redirecting production itself.

Henceforth in this essay I will refer to the first type mentioned as “type 1 interventionism” and to price fixing as “type 2 interventionism”.

He fails to include in interventionism any government measures that instead of hampering private business, stimulate it. Nonetheless common sense seems to require that these too be included in interventionism. However we know from other writings of von Mises that he denies that government measures can ever have any stimulating effect on business. Hence he is not inconsistent on this point. His inconsistency is with the facts.

He excludes from his definition of interventionism  the following:

1       “Partial socialization of the means of production”

2       “Government measures that use market means”

Von Mises’ theory of how interventionism leads to socialism restricts itself to discussion of price controls. Other forms of interventionism are ignored. This is his account:

When the unhampered market determines prices, or would determine prices if government had not interfered, the proceeds cover the cost of production. If government sets a lower price, proceeds fall below cost. Merchants and producers will now desist from selling—excepting perish¬able goods that quickly lose value—in order to save the goods for more favorable times when, hopefully, the control will be lifted. If government now endeavors to prevent a good’s disappearance from the market, a consequence of its own intervention, it cannot limit itself to setting its price, but must simultaneously order that all available supplies be sold at the regulated price.

Even this is inadequate. At the ideal market price supply and demand would coincide. Since government has decreed a lower price the demand has risen while the supply has re¬mained unchanged. The available supply now does not suf¬fice to satisfy the demand at the fixed price. Part of the de¬mand will remain unsatisfied. The market mechanism, which normally brings demand and supply together through changes in price, ceases to function. Customers who were willing to pay the official price turn away in dis¬appointment because the early purchasers or those who per¬sonally knew the sellers had bought the whole supply. If government wishes to avoid the consequences of its own in¬tervention, which after all are contrary to its own intention, it must resort to rationing as a supplement to price controls and selling orders. In this way government determines the quantity that may be sold to each buyer at the regulated price.

A much more difficult problem arises when the supplies that were available at the moment of price intervention are used up. Since production is no longer profitable at the reg¬ulated price, it is curtailed or even halted. If government would like production to continue, it must force the produc¬ers to continue, and it must also control the prices of raw materials, semifinished products, and wages. But such controls must not be limited to a few industries which govern¬ment meant to control because their products are believed to be especially important. The controls must encompass all branches of production, the prices of all goods and all wages, and the economic actions of all entrepreneurs, capi¬talists, landowners, and workers. If any industry should re¬main free, capital and labor will move to it and thus frustrate the purpose of government’s earlier intervention. Surely, government would like an ample supply of those products it deemed so important and therefore sought to regulate. It never intended that they should now be neglected on ac¬count of the intervention.

In Interventionism, von Mises  devotes twice as many words to price-setting as to type 1 restrictions. I think this reflects his opinion of their relative importance.

From von Mises’ broad definition of interventionism, we must conclude that such measures as hygiene standards for food vendors, medical degrees for doctors, indeed any measure to standardise production and trade and to make them more predictable, make tradesmen more honest, etc. are interventionism and consequently undesirable. In several  places he admits that many people favor certain  restrictions even when they hamper efficiency, and that they do so on the grounds that a non-economic goal is being thereby served, whose importance warrants disregard of economic efficiency. He does not dispute this argument, but neither does he espouse it, but rather shrouds himself in Sibylline ambivalence.

I think this ambivalence betrays an unresolved dilemma in von Mises’ theory: how are we to draw a dividing line between type 1 interventionism and the measures the government must make in order to establish and assure continued operation of a market? Does building a Stock Exchange and requiring brokers to do business inside the building, to facilitate comparison and control, likewise constitute an abominable type 1 restriction?

Von Mises prudently refrained from going into detail about how type 1 interventionism could lead to socialism. Indeed it is difficult to see how type 1 interventionism would be able to obtain the requisite dynamic spreading effect. The inexorable spreading out of government control of type 2 is a direct consequence of the fact that the price charged by a seller of a raw material is the cost paid by the buyer of such raw material who will transform it into something an intermediate good, sell it to a consumer goods manufacturer, etc. There is a clear causal chain connecting all successive transactions. But in type 1 interventionism we search in vain for any mechanism that could make the original government measure spread, unless it be evasion. [Check].  

Although von Mises has not provided any evidence that type 1 interventionism tends to snowball, he calmly concludes that the conclusion from type 2 is also valid for type 1: “Our analysis thus reveals that in a private property order isolated intervention [unspecified, and hence encompassing both types 1 & 2] fails to achieve what its sponsors hoped to achieve.”

Where he does criticize type 1 interventionism specifically, it is only because it allegedly reduces productivity or otherwise renders the economy inefficient. No mention here of any snowball effect.

Mises claims in defense of his thesis that “The old liberalism which built its economic policies on the teachings of classical economics therefore categorically rejected all such interventions.” This is nonsense. In several places in The Wealth of Nations Smith espouses government action [check].

Von Mises is no doubt right in rejecting price controls. I suspect that it is largely due to von Mises’ writings that price controls have fallen into such disrepute. Their rejection has become conventional wisdom. 

State Planning

Von Mises’ critique of state planning is restricted to his 1919 article denying the possibility of rational price calculations in socialism. Other than that his efforts were directed against interventionism.

What role do open-market operations  play in von Mises’ scheme of things?  (Namely, when the government purchases or sells good in order to give them away or sell them at a different price). Presumably he deems them inefficient.  

Kicking Thomas Sowell’s African-American Posterior

II find particularly mendacious and  revolting the claims of the notorious ideologue of monopoly capital and lackey of the financial oligarchy Thomas Sowell in his lick-spittle and servile adulation of the fat-cat business élite  setup come what may. Sowell – it's important when uttering his name to mispronounce the ow dipthong so it sounds like “so” and not like “sow”, with its unpleasant porcine associations --  is the great economic prophet of the US right. His word is law unto them.

I make a great effort to be objective  when assessing the  merits of writers, especially  if I  sense an ideological conflict.  Consequently I started reading some of Sowell’s popular books with as open a mind as I could muster  -- which is pretty goddam open compared to most people. However very soon Sowell’s output started distastefully reminding me of East German communist propaganda, from the time I was studying economics in West Berlin. East German TV was a gas. The propaganda was so thick you could eat it with a spoon. Well, Sowell is just about the same, only from a different viewpoint. His propaganda lies are numerous and egregious. Of course he's a clever fellow and would never say anything that is a demonstrable falsehood. But by making the right noises, omitting certain vital facts and using suggestive vocabulary,  he gives to an economically unsophisticated reader a distinct impression of reality that is at complete variance with the  truth. His discussion of how US household earnings have changed over the last 3 decades – with its tough-ass private-enterprise Republican ideology that impoverished the masses and showered fabulous wealth and power on a tiny group of parasitical financial oligarchs  – is a masterpiece of evasion and diplomatic pauses while he waits for the reader to draw the right conclusions without having to actually lie to him. 

He actually pulls off the master stroke of discussing at length variations over time of household income without mentioning a single number! He keeps his cards very close to his chest. It's all about more of this and less of that, while about the same of the other. Now if that isn’t phony like hell, I’d like to know what is.

Typical of his approach is the way he treats the delicate issue of executive salaries. It's a sore point in the US, where in 30 years executives have gone from earning only 100 or 200 times as much as an assembly-line stiff to earning thousands and even tens of thousands as much. Since all the data clearly show that variations in executive pay – variations over time and variations between different companies -- are not correlated with variations in profits, he faces the difficult task of persuading the reader – without a shred of evidence to back him up -- that the system rewards effort and punishes incompetence. In other words his mission is to convince the reader that the current US capitalist setup is fair. If you do a good job, you will be rewarded, if you screw up, your ass is grass. Which is a total and absolute lie.

This operation is called “legitimizing the system,” and is a vital ideological stabilizing factor in any society. Only in some societies it's easy to show that everyone gets his piece of the action. Those are societies that really are fair, or pretty close. However when you're tasked with legitimizing a colossal rip-off like communism, or the latest –  monstrously iniquitous -- incarnation of American capitalism, it gets dicey.  

His solution to this severe  propaganda challenge is masterful. Stalin would have loved it. He naively remarks that well, um, he can't think of a single reason why a company would pay lavish salaries, bonuses, fringe benefits and stock options – not to mention golden parachutes – to an executive if that executive weren’t producing MONSTROUS profits for the company. Now your average Joe-Sixpack reader reasons as follows, and quite rightly, too: "Well, this Sowell – excuse me, So-ell – guy must be a pretty smart cookie, if he's got a sinecure at the Hoover Institution and whatnot, big-shot perfessor, written stacks of books and stuff. Well if a guy like that can't think of a single reason, it has to be because THERE ISN’T ANY REASON! Meanwhile Sowell is gazing absent-mindedly into the distance, like a cobra ready to pounce, but not letting on, waiting for the reader to reach the appropriate conclusion without actually lying to him.

Well, actually , he IS lying, because I'm sure he can think of a HELL OF A LOT of reasons why those shit-heel executives  should be doing hard time instead of jetting off to see their lovers in Paris.  But although he's telling a blatant lie, it's difficult to prove, because he isn’t  actually misstating an objective fact that you can disprove by pointing to a statistical bulletin.  He's just saying something about what's going on inside his brain, namely he can't think of something.  And what goes on inside your brain is a subjective matter that  is out of bounds for prying questioners. Challenges are easy to deflect through  cunning sophistries. His last-ditch line of defense is to plead senile idiocy.

In discussing high pay for corporate executives, Sowell claims that they must be worth what they earn or they wouldn’t earn it.

I retort: Currently (2008) the main component of high executive salaries is stock options. Stock options are offered to encourage executives to pursue policies that favour the shareholders, by making the exec a shareholder himself. However this has had the effect of making executives try to maximize share price, not nec profits.

Secondly, there is a distinction between short-term and long-term profits. The financial capitalism that prevails now is obsessed with short-term profits. Corporate raiders burden their newly acquired companies with debt so that they can vote themselves huge dividends which they then remove from the company, leaving it with a scarcity of investment capital and consequently with poor long-term prospects. This not conventional profit maximization as we know it.

In a word Sowell is relying on an unchanging model of profit maximization whereas in reality profit maximisation means different things at different times. He refuses to recognize the irrational elements in capitalism, especially financial capitalism. I presume he also denies the irrational herd behavior of the financial markets, whose existence has been proved beyond any doubt.

He bases his arguments on hypotheses of rationality which he does not bother to justify empirically.

For example: “Any serious explanation of corporate executives’ salaries must be based on the reasons for those salaries to be offered, not the reasons why the recipients desire them. … Why then do corporations go so high in their bidding for top executive talent? Supply and demand is [sic] probably the quickest short answer …” (Economic Facts and Fallacies, pages 141-142) Whaddya mean “probably”? There are stacks of empirical studies that research the reasons. There is no need to resort to speculating. Nonetheless Sowell Olympically ignores data to make simple little arguments whose validity presumably holds for all time, regardless of the characteristics of the economic period in question.

This is a typical right-wing approach to economic argument. Whenever possible resort to general reasoning based on a simple-minded presumed rationality. Same thing with Murphy (The Politically Incorrect Guide to Capitalism).

This turkey draws a vast salary as a resident scholar or something like that at the Hoover Institution. Can't the Hoover institution afford a couple o research assistants for Prof. Sowell, so we don’t have to rely on his intuition all the time? There being so much good data lying around. 

Actually I was just kidding. If Sowell says “he assumes” something, and that something is an empirically verifiable assertion of fact, then it is extremely unscientific to presume when you can simply assert.  

On pp 124-153 he charges certain authors with cynical manipulation of figures because they say average household income has stagnated for 35 years. He counters that income per capita has increased by 50% in those same years, because the size of households has diminished. However Sowell himself conceals the fact that this increase in per capita income is the result, not of higher real wages, but of the fact that Americans now work longer hours than before, and many women have joined the labour force. In other words their income has grown, but only because the fraction of household members working outside the home has increased and so has the  number of hours worked by each employed worker, on average. [check figures]

It's interesting that he mentions only two figures, both of them ratios. No absolute figures, no additional data. I'm sure there's a reason for keeping his cards so close to his chest. 

Another point of mine is that as families shrink, the ratio of home-made consumption to store-bought consumption rises. A Family of 6 people  is likely to sit down  together  and eat a meal produced  by the matriarch. 3 families of 2 people each are much more likely to buy takeout or whatever.  Consequently they depend on the market for everything. Thus if real wages remain stable and families become smaller, people become poorer, because they don't produce anything at home.

Definitive proof: Obama born a Keynesian

Definitive proof: Obama born a Keynesian

https://en.wikipedia.org/wiki/Economic_policy_of_Barack_Obama

Reagan-Thatcher: NITE OF THE LIVING DEAD

Arch-Perps of Neoliberalism 

Free trade versus protecting infant industries: the Eurodrone project

The issue of whether it is preferable to produce goods at home, or instead import them from abroad, is one of the oldest topics in economics. Those who favor international trade point to the low price and high quality of certain goods imported from countries that have greater skill and better equipment for producing these items. On the other hand those who prefer domestic production often argue that when a country starts producing a certain good with which it has no prior experience, the quality of the resulting products will be poor and expensive to produce, so domestic goods of that sort will be unable to compete on an equal footing with competing goods imported from countries long specialized in their production.

However a country’s expertise and its consequent ability to produce the good in question at a suitable mix of price and quality,  can easily vary with time, and as a matter of fact it invariably does. Thus for centuries the clock and watch industry in Germany’s Black Forest[1] was based on a handicraft practiced by traditional artisans in small workshops and later medium-sized factories. However once precision mechanical clockwork was replaced by electronic devices, the Black Forest lost its competitive advantage in manufacturing clocks and watches and the industry disappeared. 

Consequently when a country envisages establishing a new industry, it faces the issue of whether the so-called “infant industry” will need temporary protection from the rough winds of foreign competition. Once such industries have been set up, their owners invariably try to prolong the protection from foreign competition as long as they can. In many cases the new domestic manufacturer class has managed to perpetuate protection and thus reap a constant extra profit at the consumer’s expense. 

Therefore if infant industries are to be granted protection, only producers should benefit who are unlikely to influence government policy making in the future. This means that the government must be independent of their political support, because the producers in question are politically powerless. 

For example, for several decades after 1949 Taiwan was ruled as a military dictatorship by a military and bureaucratic elite of mainland Chinese who had fled mainland China after their defeat at the hands of the Communists. This government was thus a quasi-colonial regime on which local manufacturers had little influence. Accordingly the government was free to reward or punish local manufacturers as it saw fit, and it imposed a strict quality control system that prevented manufacturers from exporting shoddy goods and established Taiwan as a source of high-quality manufactured goods. 

On the other hand in Argentina the coddled manufacturing class soon bribed the politicians into perpetuating their privileges and inefficiency, so Argentina was largely self-sufficient in manufactures, but their quality was mediocre so they never managed to export much. See Governing the market, by Robert Wade.     

This issue remains as crucial as ever, as revealed by these news reports translated from German. 

The German government has decided to buy an Israeli drone instead of its competitor from the US, which is cheaper and somewhat better. The following two articles from the German media strongly suggest that Germany made this decision largely because Israel has promised technical assistance toward joint development of a European drone by Germany, France, Italy and perhaps Spain, but not Britain. The Israeli technical assistance will take the form of a maintenance contract for drones to be awarded to a European firm that appears to be acting on Germany’s behalf. Strangely enough, the other prospective participants in the propective development of a Eurodrone, namely France, Italy and Spain, as well as Britain, have all bought the American competitor’s product, the Predator B from General Atomics. Accordingly it seems that Germany alone is footing the bill for the know-how transfer from Israel. Presumably Germany has already figured out how to put the bite on its chums when the time is ripe.

In any event, Germany appears to have opted for a sirt of infant industry policy in the field of drone manufacture.

A number of other important issues are involved. The German government justifies its aversion to the US prodct in part by reference to the  Predator’s sinister reputation for killing both combatants and non-combatants in sundry parts of Asia and Africa. The German left for its part fears a trend toward self-reliant fighting machines that might eventually become fully independent of human control.  

  

Bundeswehr leases drones from Israel - Outrageously expensive rent https://www.tagesschau.de/inland/drohnen-129.html

Updated June 4, 2016 04:55 a.m.

The Bundeswehr is slated to get drones that can be fitted with weapons. The Defense Ministry has decided to lease an Israeli model, although the purchase of American systems would have obviously been cheaper. By Christian Thiel, tagesschau.de [a news web site]

This week Ursula von der Leyen tours the International Aerospace Exhibition at Berlin-Schönefeld but will give a wide berth to the booths displaying armed drones. The minister’s PR consultants wish to avoid at all costs images of the Defense Minister against such a bellicose backdrop. It has already been decided that such remote-controlled unmanned aircraft, capable of being equipped with missiles and bombs, will soon appear in the Bundeswehr’s arsenals, A new European fighter drone will be developed in the next few years - most likely by the Airbus Group.

A bridge solution costing more than half a billion euros

But since the drones won’t be ready at least until 2025, a temporary solution has been proposed. In January von der Leyen announced what the solution will be. She stated that the Israeli manufacturer IA1 wishes to lease four to six Heron TP type drones. In other words, temporary leasing. And for a handsome price, too: the Federal Republic will pay EUR 580 million for a handful of Heron TP type drones. Mind you, not to buy them, but only to lease them.

Greens expert Tobias Lindner has doubts about the economic efficiency of the Heron deal. Lindner is a Green member of the Bundestag [parliament] and is on its Budget and Defense Committee. He finds the price too steep. Accordingly he has many questions for the Defense Ministry: "The ministry has not been able to explain why the Heron TP was selected," he says in an interview with tagesschau.de. He states that there is no lack of competing products on the market.

Isn’t buying cheaper than leasing?

This phrase seems to refer to the competition, namely General Atomics in the United States. This company had offered the Germans a comparable number of Predator type drones for sale for only 400 million euros. Britain recently agreed to purchase 16 Predators for the equivalent of barely 540 million euros. All this makes Lindner suspicious: "I want the Federal Ministry of Defense to tell me: is the decision that was made actually the most economical solution?"

Off the record, even top German generals concede that in some respects the cheaper US drone performs somewhat better than its Israeli counterpart. The Predator can carry a heavier weapons load, flies faster and can stay aloft longer. These were probably the reasons why not only Britain but also Spain, France, Italy and the Netherlands bought the American device.

The USA is upset about the deal

The CEO of General Atomics, Linden P. Blue, argues thus: "There is some interoperability among systems and this provides a certain logistical efficiency," The Americans are quite angry about the German decision. They are currently intensively lobbying the German politicians who influence the budget in order to persuade them - after all, millions of euros are at stake. A report marked confidential is in the possession of tagesschau.de. It is from the defense technology attaché at the German Embassy in Washington, DC. The report predicts that General Atomics will continue to make efforts "to seek contact with top officials and discuss this issue with members of the Bundestag."

In von der Leyen’s office at the Bendler Block in Berlin, top officials meanwhile point to the alleged advantages offered by the Israeli drone. The Bundeswehr already uses its unarmed predecessor model, they say. Accordingly retraining will supposedly be much easier than it would be for the American device.

[Does this reflect] political instead of military priorities?

Even deputies from the [governing] coalition [parties] suggests that the decision was not made so much on military as on political grounds: they claim that von der Leyen does not want to buy from the Americans because their Predator drones have an image problem. The United States deploys the devices for missions that are extremely controversial from the standpoint of international law, to wit for the targeted killing of alleged terrorists. This circumstance and the ensuing widespread public disapproval of such weapons systems had already been a problem for the drone plans of von der Leyen’s predecessor in office Thomas de Maiziere. On the other hand purchase [sic] from the Israelis was less problematical, at least in Parliament. For decades, very intense but extremely discreet armaments cooperation has been going on between Germany and Israel – for the sake of the “reason of state” postulated by Chancellor Angela Merkel and all her predecessors, who strongly stress Israel’s right to exist.

How Airbus benefits

And then there's Airbus, too: The deal with the Israelis includes that the giant European armaments firm will perform the servicing and maintenance of Heron drones. Airbus thus intends to accumulate know-how on the unmanned planes, as shown by the grounds -- classed confidential -- alleged for the Heron decision. They stress the smooth cooperation with Israel and "the decisive advantages offered by the Heron solution for expanding industrial skills with a view to building the planned European drone."

Tobias Lindner of the Greens considers such grounds unpersuasive: "I fear that again industrial policy is being pursued and that I will receive no answer to my question: What is the best solution for the troops?" He and his colleagues on the Budget Committee are also upset that Airbus will continue making money with the maintenance of the Heron drones, even if the Group's own Euro drone is not completed on schedule - not a completely unlikely scenario, as shown by the delays – some of them lasting years -- on other Airbus projects like the A400M transport plane, the Tiger and NH90 helicopters, and last but not least the Euro-Fighter.

Heron TP - First combat drones for the German armed forces

http://www.bundeswehr-journal.de/2016/heron-tp-erste-kampfdrohnen-fuer-die-bundeswehr/

Berlin. The Bundeswehr [German armed forces] will be equipped with type Heron TP drones from the Israel Aerospace Industries (IAI) armaments firm. The Kölner Stadt-Anzeiger [a German newspaper] was the first to report this today Tuesday (January 12). Later in Berlin the Defense Minister Ursula von der Leyen announced to the media this decision made by Inspector General Volker Wieker. The latter had at the same time decided against the competing product Predator B from the American drone manufacturer General Atomics Aeronautical Systems. The new Israeli systems for the Bundeswehr – negotiations are taking place for procuring up to five Heron TPs, which will be leased from IAI and used principally for reconnaissance purposes.

But they can also fire missiles at ground targets and are therefore commonly known as combat drones.

Even before von der Leyen's press release, Bundestag deputy Tobias Lindner (Greens) had confirmed that "one year after the Minister’s programmatic decision to procure armament- capable drones for the Bundeswehr, an Israeli model" was selected.

The Heron TP (TP stands for “turboprop”) will be procured as a temporary solution and will later be replaced by a drone jointly developed with other European countries, which will also be designed for carrying weapons. Already in May 2014, Airbus Defence & Space, Dassault Aviation of France and Alenia Aermacchi of Italy jointly submitted detailed development proposals to political leaders.

Bridging solution expected to last until 2025

In her statement on Tuesday before the media representatives, the Defense Minister again mentioned the successful experience using the IAI Heron 1 UAV – suitable solely for reconnaissance purposes, and also on lease -- in Afghanistan (see also here).

On the subject of the Heron TP, von der Leyen said in Berlin: "We have decided, together with Parliament, that we will cooperate with France, Italy and Spain to develop a Euro-drone However it will not be ready before 2025. Accordingly there is a gap that we must bridge." As a bridge solution, she announced, the Inspector General decided to negotiate with the Israeli manufacturer IAI for leasing the Heron TP unmanned aircraft. Von der Leyen continued, "Then, when the ... contracts [are] ready for a decision, we will review this again in detail with Parliament. However the general course to be followed is now decided. We are planning on an armament-capable drone, which will be the standard for the foreseeable future. It is important in order to protect our soldiers deployed on foreign missions."

As Thorsten Jungholt, the editor of Die Welt, today wrote in his comment on the procurement decision, "according to government sources," the Bundeswehr will probably lease "three to five Heron TPs" from IAI. The UAS will be operational as of 2018. The German party to the deal, just as previously, will be Airbus Defence & Space (Airborne Solutions). The budget for the project, including guided missile weaponry, is estimated at 580 million euros, according to Jungholt in Die Welt. 

Leftists warn of a "trend towards weapons systems becoming autonomous."

As expected, the opposition was quick to react. For the political camp of the Greens and The Left, the topic of drones -- especially combat drones – is a red flag.

The defense policy spokesperson of the Left caucus, Christine Buchholz, waxed indignant: "Procurement of combat drones is not about filling a capability gap, it’s about the ability to murder by remote control!" The legislator fears that getting involved with combat drone technology starts a trend towards weapons systems becoming autonomous, The cabinet would thus be contributing towards an arms race that might ultimately lead to production of fully automated combat robots.

Buchholz implores: "The Bundeswehr needs no combat drones, because they do not protect our own soldiers, but instead are used for killing people thousands of miles away. Already, thousands of civilians have become the victims of drone strikes."

The Greens fear increasing "removal of the constraints restricting warfare"

Agnieszka Brugger, the spokeswoman for Alliance 90/Greens on security and disarmament matters, was likewise critical. Brugger suspects that "with this decision, Ms. von der Leyen is clearing the way for combat drones". The defense minister is blind to the risks associated with these "highly controversial weapon systems".

The member of Parliament cites the following grounds for her opinion: "Combat drones are deployed, more than almost any other technology, for uses contrary to international law and are encouraging removal of the constraints that restrict warfare. The increasing use of these supposedly precise weapons systems is responsible for a great number of civilian casualties and has contributed to the escalation of violence in many conflict areas. The cabinet committed a serious blunder by saying nothing about this to its key partners. And now it is actually joining the group of countries desirous of possessing combat drones. Moreover so far the cabinet has done scarcely anything to fulfill its pledge to promote an international ban on autonomous weapons systems."

Brugger also scolds the Social Democrats: "Instead of facing up to their responsibility, each one of them expresses a completely different viewpoint on this issue. The SPD should be loyal to its tradition as a party of peace and thwart the procurement of combat drones."

For the Christian Democrats, drones are an "indispensable additional tool for conducting operations"

Of course the Christian Democrats react very differently. Henning Otte, the defense spokesman for the CDU-CSU parliamentary caucus, described today's choice by the cabinet as follows: "Drones are an indispensable additional tool for conducting military operations, because they enable us to protect our soldiers in the field as effectively as possible, The Bundeswehr already has extensive experience in the use of Heron 1 type drones, which are being used in Afghanistan for reconnaissance. Unlike [sic] its predecessor, the Heron TP offers better performance."

Moreover he states that the German Air Force is already familiar with the Heron system. Training and supplies need not be switched to match a different system. This saves time and enables swifter deployment of the Heron TP system.

Moreover, Otte continues, choosing the Heron is a decision in favor of Europe and a future European drone, "Several European countries, including Germany, plan by 2025 to develop a European drone jointly. By means of the transition Heron TP solution, the Bundeswehr and the European manufacturing consortium can gain the valuable experience they need in order to develop a new generation of European drones."

A very special Luftwaffe unit

The first unmanned, remotely controlled aircraft (Remotely Piloted Aircraft, RPA) of the Heron TP type was put into service by the Israeli Air Force in February of 2010. It had supposedly made it maiden flight four years earlier, in July of 2006.

The armament-capable reconnaissance drone has a wingspan of 26 meters and is 14 meters long. It has a maximum take-off weight of 5,300 kilograms and can carry a payload of 1000 kg. The manufacturer specifies an operating altitude of 45,000 feet (13,716 meters) and a maximum flight time of up to 36 hours. The Heron TP is propelled by an 895 kW (around 1217 horsepower) turboprop engine.

If the deal with IAI is perfected, these Israeli drones will be assigned once more to the Luftwaffe’s 51^st Immelmann[1] Tactical Squadron stationed at Jagel Air Force Base. This squadron is our air force’s only flying unit qualified to operate airborne reconnaissance missions, whether manned or unmanned, for purposes of both imaging and sensing signals.

This was the goal pursued when on January 1, 2010 the 2^nd or Immelmann airborne reconnaissance squadron was restructured for operating unmanned reconnaissance systems. The Heron 1 aircraft belonging to the squadron, as mentioned before, have been deployed in Afghanistan since March of 2010 .

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[1] Named after a World War I air ace, a rival of the “Red Baron”, Manfred von Richthofen. 

    

     

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[1] https://en.wikipedia.org/wiki/Black_Forest_clockmakers

https://de.wikipedia.org/wiki/Uhrenproduktion_im_Schwarzwald

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