Military Industrial Complex (Issue)

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Is the relationship between the armed forces and the industries that provide them with weapons a safeguard or a threat to world peace and the American democracy? Perhaps no other issue has raised as much concern over the coalescence between economic and political forces as the military-industrial complex, which today has formed a matrix of government spending, foreign initiatives, and ideological commitments.

In 1948 President Harry S. Truman (19451953) submitted the second largest peacetime budget in American history to Congress, justifying it as necessary to meet the threat of totalitarianism in the world. The budget came to $39.6 billion, with around $18 billion earmarked for military spending and international affairs. Such spending created a new industry in the United States devoted to the production of weapons for the Pentagon. This industry, which became known as the military-industrial complex, became one of the largest industries in the United States and a crucial part of the economy. In a pattern similar to World War II (19391945) mobilization, entire corporations were supported solely by government spending. Unlike World War II, however, there was no end in sight. As long as the Soviet Union continued to exist there was a reason for military spending, even during peacetime.

Within the government, the voices of both private business and the military have only grown stronger since the turn of the century. While on the eve of World War II the relationship between the two was often onesided and seemed perpetually set against one another, by the 1970s private business and the military developed a formal and comfortable relationship of mutual support. Since the 1950s especially, military calls upon national resources have vastly increased and, for the most part, leading corporations have been the principal beneficiaries of that demand. While payrolls, research grants, and political influence were large enough to ensure a consensus for the system during the mid-to late-twentieth century the whole complex has been underwritten by a popular and almost unassailable anticommunist ideology. But some conservatives fear that the military-industrial complex keeps military spending at a level higher than that dictated by the strict needs of national defense. They claim it leads to economic dislocation at home and dangerous tensions abroad, and that the separate parts of the military-industrial complex will prove to be countervailing forces.

While the conjunction between economic and political forces may have been new during the Truman and Eisenhower eras, its roots lay deep in the mandates of Progressive reform which attempted early in the century to rationalize the U.S. economic system and integrate it with public policy. Even so, it was not until World War I that close ties among the military, the civilian government, and businessmen were formalized. Between 1914 to 1916, the federal government's efforts to mobilize people, raw materials, production plants, and transportation proved slow and incompetent. In August 1916, the task of planning mobilization was entrusted to the Council of National Defense (CND), which worked through the National Defense Advisory Commission (NDAC). In 1917, the CND was replaced by the War Industries Board (WIB) and under its auspices American industry was organized into commodity committees. These committees set prices, priorities, allocations, and other controls and mobilized under their own rules. Meanwhile, the military was torn by its own internal conflicts and competition and was in no position to plan the civilian economy. While business was organized along commodity lines, the military was organized along operational lines, and the two proved to be opposing. Answerable to neither a central planning agency within the military nor to the WIB, each military branch entered the market with large orders geared toward its own needs, plus necessary surpluses. In 1918, Bernard Baruch (18701965) took over the leadership of the WIB and was given enough authority to force the cooperation of the military. Throughout the rest of World War I, businessmen and military leaders worked closely, and usually harmoniously, to fill the needs of the wartime economy.

During the inter-war years the military and business leaders met regularly to draw up plans for economic mobilization in case of war. Meanwhile, the government facilitated coordination between the two and left military tactics to the military and the economy to business leaders. The result was a series of industrial mobilization plans drawn up between 1930 and 1939. In the end, the military realized the degree to which it was dependent on the cooperation and capacity of business for the materials it needed, while business became more aware of what the present and future needs of the military might be for supplies of all types. In 1933, President Franklin D. Roosevelt's (19331945) attempt to plan for economic recovery after the Great Depression adapted the scheme of the WIB for his short-lived New Deal program, the National Industrial Recovery Administration.

In 1940, the coming of actual mobilization after so many years of planning, unleashed a torrent of expenditures that dwarfed those of both World War I and the New Deal. Altogether, some $315.8 billion was spent during the war, with the War Department accounting for $179.9 billion and the Navy Department for $83.9 billion. In the end, a vastly inflated program of government spending and its heavy concentration in a few large corporations, like General Motors, Ford Motor Company, Chrysler Corporation, Bethlehem Steel, General Electric, United States Steel, Du Pont Chemical, and AT&T became the standard policy for the wartime economy.

As World War II was winding down, the alliance between the Soviet Union and the United States, brought together by a common foe, Adolph Hitler (18891945), was deteriorating. Tensions between the two nations had existed since the Russian Revolution of 1917, and within a few years after World War II the two powers were engaged in a Cold War. But while the government had been involved in coordinating a mutually supportive relationship between the military and business during World War I and World War II, the Cold War dramatically changed this policy. The policy of "containment" committed the United States to a peacetime military-industrial complex for the first time in American history. For the next 45 years there would continue to be a large standing army with inflated defense expenditures, and large corporations supplying the equipment and supplies.

But with the coming of the Cold War, many leading military and industrial leaders who had previously enjoyed a highly successful and lucrative wartime system of military-civilian cooperation during World War II, sought to preserve these advantages in the demobilization period. During World War II, both groups had kept one eye focused on the postwar period. In the military the desire to keep up budgets and the desire of the Army Air Corps for independent status fueled the arguments that the country should never again find itself unprepared for hostilities, and that the country was bound to honor new and global peacekeeping responsibilities.

Continuing the cooperation that existed between the military and civilian businesses during World War II was considered necessary to meet these new global peacekeeping responsibilities. The nation's new course began with careful consideration to the potential pitfalls. President Dwight D. Eisenhower (19531961) cautioned in his farewell address (1961) that though it was important for the country to have a strong national defense in times of peace as in times of war, the development of a military-industrial complex was not without its dangers. "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."

For the next three decades after World War II, huge military spending and a closely linked program of foreign aid combined to prime the pump of U.S. prosperity as no combination of domestic social programs had ever been able to do. Military expenditures ranged from $37 billion in the mid-1950s to just over $79.1 billion in 1969. The bulk of spending was done directly by the military for research and material and certain large firms were the beneficiaries of the funds. In 1969, Lockheed Aircraft Corporation received the largest single share, more than $2 billion, McDonnell Douglas with $1 billion and General Electric with $1.6 billion.

The Vietnam War (19641975) brought orders rolling in as the Air Force and Navy sought to replace planes damaged in combat, marking a peak in aerospace production. The industry had its share of valleys as well. Erratic defense budgets saw sudden buildups during the Korean War (19501953) and after the Sputnik launch, but just as sudden drops occurred in the mid-1950s and directly before the Vietnam War (19641975).

The scientific component of military technology had also grown significantly since World War II. The closer relationship between the military and business was paralleled by a similar closeness with scientists mostly housed in the big universities. By 1961 some 77 percent of all government spending for research and development was coming from the military.

In the 1990s, contrary to initial expectations, the military-industrial complex survived the end of the Cold War. It reorganized itself with a series of military-industry mergers encouraged and subsidized by the administration of President Bill Clinton (1993). The "Big Three" weapons makersLockheed Martin, Boeing, and Raytheonaquired a total of $25 to $38 billion in Pentagon contracts in the mid to late 1990s. If they continue to receive federal monies, these new military-industrial companies will earn billions more in the years to come. The Clinton administration's five-year budget plan for the Pentagon calls for a 50 percent increase in weapons procurement, from $40 billion per year in 1989 to over $60 billion per year by 2003.

How best to defend the United States in the post-Cold War period remains a hotly debated topic. Some critics argue that on issue after issuefrom expanding NATO, to deploying the Star Wars missile defense system, to rolling back restrictions on arms sales to foreign regimesthe arms industry has launched a concerted lobbying campaign aimed at increasing military spending and arms exports. They argue that these initiatives are driven by profit and pork barrel politics. Others claim that these measures are forward-looking and will create a safer, more democratic world.

Topic overview

American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions . . . . Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

president dwight d. eisenhower, farewell address, january 17, 1961

See also: Cold War, Vietnam War, War Industries Board, World War I, World War II


Koistinen, Paul A. C. "The 'Industrial-Military Complex' in Historical Perspective: World War I," in Business History Review, vol. 41 (Winter 1967).

. "The 'Industrial-Military Complex' in Historical Perspective: The Interwar Years," in Journal of American History, vol. 56 (March 1970).

. "Mobilizing the World War II Economy: Labor and the Industrial-Military Alliance," in Pacific Historical Review, vol. 42 (Nov. 1973).

Melman, Seymour. Pentagon Capitalism. New York: McGraw-Hill, 1970.

Pursell, Carroll W., Jr., ed. The Military Industrial Complex. New York: Harper and Row, 1972.

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Military Industrial Complex (Issue)

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