If these guys were properly cooperating and coordinating their
       efforts, I'm sure they'd all still be funded, but instead they are all
       duplicating (badly) the work of everybody else, and together they
       collectively cut themselves out of the market.

    Can you elaborate on this statement?  It sounds oversimplified to me.
    Do you mean to say that if the defense industry worked together better
    there would be no defense budget cutbacks?

What I'm saying is that a large portion of the software produced by
the defense dept is duplication of software that the commercial should
be producing and that other gov't depts are producing.  I've seen
reinventions of "Show ME" (an X-based conferencing aid), "InterViews"
(a C++ class interface to X windows), several ports of GCC and GDB
that, would they have been done properly, would now be in use by
commercial embedded customers, etc.  What I'm saying is that if they
could cooperate better, they could more easily adapt to serving
commercial markets instead of being thrown out of work.  The reason
they are out of work is the market's way of telling them "your work is
too expensive/not good enough".

      No university research project is going to write
    (eg) personal calendar managers that run under Microsoft Windows.

But universities do write (eg) personal calendar managers that run
under Emacs, under X, and under Unix, and I just read in the NYT and
WSJ yesterday that HP, Novell, and perhaps IBM have decided to join
forces with Sun after all in order to better standardize Unix and X to
confront Microsoft NT.  If the UNIX people are successful, Unix will
represent some sort of mass market.

Michael