The Term Military‐Industrial Complex has a clearly defined history. It was first used by President Dwight D. Eisenhower in his farewell address in January 1961, when he warned that “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 the disastrous rise of misplaced power exists and will persist.”

The term soon came into widespread use because it seemed to fit and explain some of the new military realities of the time: the persistent high military spending in peacetime, which was unprecedented in American history; the persistent and costly arms race between the United States and the Soviet Union; and the persistent and seemingly pointless U.S. military involvement in Vietnam. The 1960s–1970s saw a flood of writings about the military‐industrial complex, a flood that crested during the last years of the Vietnam War. By the mid‐1980s, however, the term had largely fallen out of public discussion.

Whatever the ebb and flow of language, the concept reflects an enduring reality. Since the beginning of the Industrial Revolution in the late eighteenth century, every great power has demonstrated a close connection between its military and its industry. Industrial development led to military advantage (e.g., the British steel industry and the Royal Navy) and military needs led to industrial development (e.g., the German Army and the German steel industry).

This military‐industrial connection existed even in the commercial United States. Eli Whitney developed the mass‐production process in 1798 while seeking a better way to manufacture U.S. Army muskets. For a century and a half thereafter, the U.S. government arsenal system was a military‐industrial complex of the clearest and simplest sort.

The arsenal system was not the most common pattern of military‐industrial relations in the United States, however. Normally, commercial demands first called an industry into being, and then the U.S. military, following the lead of the militaries of other great powers, applied the products of the new industry to military purposes. The expanding American steel industry after the Civil War soon found a market in the new steel‐hulled U.S. Navy, but its major markets remained civilian. The next waves of American industry—successively the chemical, electrical, and automobile industries—also developed because of civilian, not military, demand.

Beginning in the 1930s and continuing through World War II and the Cold War, this pattern of civilian production leading military production was reversed. The next waves of American industry—aviation (later aerospace), computers, and semiconductors—were brought into being by military demand, and their products only later found civilian applications.

Two world wars reinforced the connection between the military and industry. In both wars, the largest defense contractors were the largest industrial corporations (in World War II, these included U.S. Steel, Bethlehem Steel, Dupont, General Electric, Westinghouse, General Motors, and Ford). However, when these wars were over (as after all previous U.S. wars), these American corporations quickly converted from production for military purposes back to production for commercial markets. With the minor exceptions of the U.S. government arsenals and shipyards, the military‐industrial complex in the United States was a reality only in wartime.

A new kind of military‐industrial complex came into being in the 1950s. The comprehensive national strategy presented in National Security Council memorandum No. 68, a call for Cold War, rearmament, seemed to legitimate, and the experience of the Korean War seemed to necessitate, a permanent military‐industrial establishment, in peacetime as well as in wartime or at least in cold as well as hot war. After the Korean War, the Eisenhower administration did not undertake drastic reductions in military spending like the reductions after previous wars but rather maintained military spending at the level of about 10 percent of GNP. Much of this spending went for the procurement of weapons systems, especially aircraft and missiles. Moreover, several large corporations, particularly those in the aerospace industry, became completely dependent upon military contracts (e.g., Lockheed, General Dynamics, North American, McDonnell, and Grumman). Eisenhower himself presided over the institutionalization of the military‐industrial complex that he would later warn against.

Many of the major military contractors were clustered in California and Texas. This concentration within particular states and congressional districts meant that their representatives in Congress became representatives of the contractors and of the military‐industrial complex more generally. These representatives often became members of the House and Senate armed services committees, where they heavily influenced military procurement. The military‐industrial complex thus developed into the “iron triangle,” composed of congressional committees, military services, and military contractors.

During the two decades of the greatest public discussion about the military‐industrial complex in 1960–80, several arguments were put forward about its consequences for public policy:

Military Keynesianism.

Some analysts argued that the military‐industrial complex promoted military spending as the way to use fiscal policy to manage the national economy, a military version of the macroeconomic prescriptions of John Maynard Keynes. This led to persistent and massive federal budget deficits.

The Depleted Society.

A related argument was that the military‐industrial complex diverted resources from investment in long‐run economic and social development into spending on nonproductive military weapons, depleting society instead of developing it. In particular, there were too many engineers devoted to developing military products and not enough developing commercial ones. This seemed to explain why Japan and Germany, which had much lower military spending per capita than the United States, were more successful in international commercial markets. This led to persistent and massive U.S. trade deficits.

The Follow‐on System.

It was also argued that, in order to preserve particular military contractors and their production facilities, the military‐industrial complex promoted weapons systems that were merely new variations or “follow‐ons” of previous systems from a particular production line. This led to a sort of technological stagnation.

The Gold‐plating Syndrome.

A related argument was that, in order to maintain the profits of military contractors, the military‐industrial complex promoted excessive spending on superfluous features of weapons systems, often referred to as “waste, fraud, and abuse.” This led to fewer numbers of more expensive weapons.

Each of these arguments was highly controversial when first made. This is not surprising, given the high stakes in military expenditures that were involved. By now, however, most analysts of military procurement agree that there is substantial evidence supporting each as they apply to much of the period from the 1960s to the 1980s.

It was also argued, especially at the height of the Vietnam War, that the military‐industrial complex put strong and persistent pressure on U.S. leaders to undertake military interventions and an adventurous foreign policy. Yet the evidence is largely against this argument. The U.S. military services, at least the army and the Marines, have consistently been reluctant to undertake military interventions. The military services generally have been in favor of the procurement of new weapons, but not the employment of them.

Whatever the power of arguments about the influence of the military‐industrial complex on weapons procurement during the Cold War, they are much less relevant to the current era. The end of the Cold War and the fiscal constraints imposed by federal budget deficits brought an end to military Keynesianism. American society is certainly depleted in many ways, but its current problems do not include too little investment and too few engineers for commercial products. The follow‐on system is less evident, since a major defense contractor (Grumman) was allowed to go out of business, and other production lines have shrunk greatly. There is still ample gold‐plating—waste, fraud, and abuse—but it can now be seen as a sort of welfare system (like public works during the Great Depression) for a limited number of distressed localities.

A military‐industrial complex still exists, but it is now a much smaller part of the U.S. economy than it was during most of the Cold War (military spending in the late 1990s is less than 3% of GNP). Because of this relatively small size, the military‐industrial complex no longer seems to have consequences that are really damaging to American interests. The major problems now seem to arise from other complexes—perhaps the financial, medical, educational, or entertainment complexes—and from the complexity of America itself.
[See also Consultants; Economy and War; Industry and War; Procurement; Weaponry.]

Bibliography

Mary Kaldor , The Baroque Arsenal, 1981.
Thomas L. McNaugher , New Weapons: Old Politics: America's Military Procurement Muddle, 1989.
Gregory Michael Hooks , Forging the Military‐Industrial Complex: World War II's Battle of the Potomac, 1991.
Ann Markusen et al. , The Rise of the Gunbelt: The Military Remapping of Industrial America, 1991.
Jacob A. Vander Meulen , The Politics of Aircraft: Building an American Military Industry, 1991.
Ethan B. Kapstein , The Political Economy of National Security: A Global Perspective, 1992.
Ann Markusen and and Joel Yudken , Dismantling the Cold War Economy, 1992.
Raymond Vernon and Ethan B. Kapstein, editors, Defense and Dependence in a Global Economy, 1992.
John L. Bois , Buying for Armageddon: Business, Society, and Military Spending since the Cuban Missile Crisis, 1994.

James Kurth