As a crucial presidential election looms, with a world on fire and threats of multiple wars dotting the globe, we need to take stock of where America is and where it needs to go in the coming decades. Accordingly, it is time to celebrate one of the proudest American achievements: its “military-industrial complex.”
Spawned in a time of great distress during World War II, it won the greatest war in history and kept the Cold War from boiling over against a nuclear-armed peer rival, the Soviet Union. For over seventy years, it kept America and the free world stable, secure, and ready to confront any military challenge.
Today, it’s a shell of its former self. Thanks to shrinking funds, a changing industrial picture, and decades of vilification by critics on both the Left and Right, the American military-industrial complex’s decline has made us less safe, less secure, and more vulnerable to our enemies.
The most recent National Defense Strategy (NDS) report reveals that America is barely ready to fight a war against either Russia or China—let alone both. It concludes, “The threats the United States faces are the most serious and most challenging the nation has encountered since 1945.”
It’s the decline of that much-maligned military-industrial complex that’s made the once mighty America so vulnerable. At this current point, the U.S. Navy’s shipbuilding is at its lowest point in twenty-five years. Meanwhile, OSINT sources report that China has shipyards that can build thirteen naval vessels at the same time.
Now, Americans need to recreate a military-industrial complex, one fit for the challenges of the twenty-first century. In the meantime, it’s worth looking back in time to see what the first iteration did right.
The phrase “military-industrial complex” originates from Dwight Eisenhower’s farewell address in 1961, when he used the Cold War backdrop to warn Americans against “the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
For over six decades, critics used the image of the “military-industrial complex” to paint a frightening picture of runaway defense budgets, bloodthirsty weapons contractors, and warmongering generals—an American version of the very fascism that the country fought against from the Beaches of Normandy to the skies over Hiroshima and Nagasaki.
“Ike,” as President Eisenhower was casually called, and the critics were wrong. Far from posing a threat to liberty and the democratic process or taking over the American economy, military spending after Ike left office never rose to more than one-tenth of the total GDP, even during the Vietnam War. Today, the defense budget represents little more than half of what the country spends on healthcare. In contrast, our vaunted $876 billion defense budget barely registers at 3.5 percent of GDP—and next year’s proposed budget proposes to spend less than a fifth of that on new weapons and equipment.
The military-industrial complex also spun off technologies that are essential in today’s modern warfare, including computers and the Internet. Its largest and most innovative companies enabled the moon shot, which in turn spawned a host of other tech spin-offs from fuel cells to LED screens to laptops and CAT scans.
It was even strong enough to make sure that disastrous policy decisions by Washington, like the Vietnam War, didn’t diminish our ability to defend ourselves and our allies.
Yet, in retrospect, that network of institutions and companies dedicated to producing the best armaments for our military doesn’t look so bad.
With the end of the Cold War, defense spending shrank as politicians eagerly cashed in on the so-called “peace dividend.” A dozen of the leading American military contractors ate themselves up until only a few conglomerates remained, only four. One of those, Lockheed Martin, came together from seventeen separate defense firms or divisions of companies. Today, the revenues of the three biggest defense firms—Lockheed Martin, Raytheon, and Northrop Grumman—do not even equal half of Apple's global revenues.
Even more significantly, a recent Congressional Research Service report showed the Defense Department’s Research and Development (R&D) share of global R&D tumbled from 36 percent in 1960 to just 3.1 percent in 2019. “For more than seventy years,” the report concluded, “U.S. military technological superiority has provided U.S. and allied troops with superior weapons and systems, offsetting the size and geographical advantages of potential adversaries.” The shrinking away of that R&D advantage has had profound implications for our national security and that of our allies.
Meanwhile, China’s R&D expenditure rose by a factor of thirty-five from 1991 to 2018. That investment has paid off. A recent CSIS report revealed that China could acquire high-end weapons systems five to six times faster than the United States. Meanwhile, Secretary of State Anthony Blinken has admitted that China is helping Russia rebuild its defense industrial base by providing machine tools, semiconductors, and other essential equipment.
Overall, the picture is grim. But there are important steps we can take to bring about a new military-industrial complex, one geared to tackle the challenges of the twenty-first century.
Firstly, we need to change how the Pentagon spends the money it does have. A report by a Congressional Commission looking at reform of the defense budget system has proposed a series of major reforms in how the Pentagon allocates its resources to support our most important strategic goals and sustain the most advanced technologies. Congress has already signed on to implement many of these landmark reforms; the White House needs to do the same.
Secondly, it’s time to bring back the energies and drive of the private sector to rebuild our defense industrial base, just as we did during World War II and the Cold War. There are plenty of companies, including those in Silicon Valley, who are ready to step up and provide the foundations for a new high-tech military-industrial complex that could ultimately dwarf the achievements of the original through artificial intelligence, cyber, space, and quantum technologies. They are waiting for the right signals and policy from the Pentagon and Congress to take the lead in securing our defense future.
Finally, it means restoring a Pentagon R&D budget that looks more like it in the Cold War. Instead of just $2 billion of the defense budget going to basic research, a military-industrial complex will require tens of billions in funds dedicated to finding the competitive edge we’ll need to deter and prevail against near-peer adversaries, from missile defense and directed energy to space.
At the end of the Cold War, our military was ready to fight two major theater conflicts. The NDS commission report shows we’ll be lucky to win one. Today’s military-industrial complex is still good at developing and producing highly complex and expensive weapons like the F-35 Joint Strike Fighter or the Gerald Ford-class aircraft carrier. Yet, how valuable will these legacy weapons be in the twenty-first-century wars to come, when drones, artificial intelligence, space assets, and directed-energy weapons will offer a decisive edge? We can’t afford to wait to find out.
Read in the National Interest.
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