What We Talked About At ISA: The U.S. Military-Industrial Complex, Part 2

21 Apr

Part two of a post on my presentation at this year’s ISA. Part one is here.

So what would be the normative-political case for the Military-Industrial Complex (MIC)? As Ledbetter notes, the defence industry never had a shortage of defenders, proponents, beneficiaries, and apologists. Various critiques of the MIC notwithstanding, numerous American commentators are now firmly united in the belief that their country needs a large defence budget in order to protect and project its identities and interests in the world. According to Maddow, this collective belief had a lot to do with the discursive and institutional success of the infamous “Team B” reports on Soviet power, which so profoundly enthused Ronald Reagan and his administration, leading to the gigantic military buildup in the 1980s. Maddow’s assessment is worth citing at length:

The Think Tanks and Very Important Committees of the permanent national security peanut gallery are now so mature and entrenched that almost no one thinks they’re creepy anymore, and national security liberals have simply decided it’s best to add their own voices to them rather than criticize them. But like we lefties learned in trying (and failing) to add a liberal network to the all-right-wing, decades-old medium of political talk radio, the permanent defense gadfly world can’t really grow a liberal wing. It’s an inherently hawkish enterprise. Where’s the inherent urgency in arguing that the threats aren’t as bad as the hype, that military power is being overused, that the defense budget could be safely and wisely scaled back, that maybe this next war doesn’t need us? The only audience for defense wonkery is defense enthusiasts, and they’re not paying the price of admission to hear that defense is overrated.

But knotted into the right-wing discourse on defence spending is a number of corollary arguments that are associated with a variety of lefty positions in the U.S. context.  America’s mainstream media outlets rarely fail to acknowledge how the twinning of the country’s economic and armed forces not only creates high-skilled jobs, but also – and critically – keeps them in the country. The move is mainly rhetorical. Not only have successive U.S. administrations encouraged American defence industry to globalize, but there is also little evidence to suggest that defence spending creates more jobs relative to spending on, say, health care or education (see, for example, Pollin and Garrett-Peltier, 2011). I would suggest, then, that what lies behind contemporary pro-MIC arguments is, in fact, a creative and complex combination of certain economic theories, (realist?) beliefs in war (or the threat of war) as a manifest destiny of the international system, as well as an overarching (liberal?) commitment to a powerful, sovereign state capable of exercising global leadership (aka., a “force for good”, in still favoured New Labour parlance.)

Let us revisit the pro-MIC rhetoric from the era of “Team B.” In a footnote, Ledbetter directs the reader to The Lonely Warriors (1970) by John Stanley Baumgartner, who is described as “one notable true defender of the MIC.” Written by an expert in public management and business administration, Baumgartner’s book makes three arguments for the MIC: 1) defending the free world is a moral thing to do (“Sputnik is only one example of the reasons for MIC”); 2) by definition, defence is a big enterprise and all big enterprises (directly or indirectly, the MIC employs one in ten Americans) occasionally make big mistakes, especially when they respond to the murky and changing specifications set by the government (“the tiger” or “the monster”) and its contracting officers; and last, 3) “unconscionable profit” is not so unconscionable in comparative terms (profit on sales, profit on investment, price/earning ratios etc. tend to be below the industrial average).

The first argument, as I will attempt to show in this post, is the trump card for the defenders of the MIC. States have a moral right to defend themselves, and so their governments must spend on defence. The aforementioned notion that the U.S. is not any state, but the indispensable nation, further reinforces this rationale. Next, because defence is a textbook public good and because of the risky/uncertain nature of international relations, governments must also constantly work hard to maintain their own arms industries (aka. the “defence-industrial base”) such that the state can defend itself even if its network of foreign suppliers is cut-off. What ultimately makes this argument persuasive in the nationalist age are the pervasive and powerful conceptions of the private/public and the inside/outside as well as the institutions and practices these conceptions execute in international life. This also means, conversely, that any attack on the MIC is at some level also an attack on the politics and ethics of these distinctions, as in the standard remainder that the costs of the war in X ought to include the costs borne out by all participants.

On the bold presumption that morality of statecraft might also arise from other forms of state security, this line of arguing can be extended further. As Mark Suchman and Dana Eyre have argued, defence spending is profoundly shaped by institutionalized normative structures that connect advanced weaponry with modernity and sovereignty. Note, for one, how the Internet or the GPS are routinely cited as examples of revolutionary technologies brought to you by the MIC (in the Reagan years, these were the Hubble telescope or the microchip; in the Eisenhower years, the television, fiberglass, and antibiotics and so on). That the desire for state-of-the-art technological development in the area of defence can overrule scientific and strategic concerns is evident in the studies of nuclear weapons and ballistic missile defence, the most recent example being Columba Peoples’ Justifying Ballistic Missile Defence (2010). Whether the underlying moral narrative centers on risk or prestige, the case for the MIC remains strong unless one is ready to accept a much broader politics of community, citizenship, security, and so on.

I will return to the morality of national defence; for the moment, let us consider how Baumgartner’s other two arguments might be related to the moral one. In a state-centric understanding of the world, it is certainly true that more-or-less pure public goods like national defence (as defined by nonexcludability and nonrivalrous consumption) face free rider problems and therefore go underprovided. So what can be done about it? In his “Public Goods, Politics, and Two Cheers for the Military-Industrial Complex” (Ch.2 in Higgs, ed., Arms, Politics and the Economy, 1990), Dwight Lee offers a classic response: “Given the latitude afforded by a rationally ignorant and apathetic public, the MIC will continue to do what all special interest do when given the opportunity, i.e., capture private advantage by imposing generalized cost in the form of waste and efficiency.”

In the public choice idiom, defence lobbies and complexes are not a solution to the undersupply of defence, they are the solution. Citizens (defined as consumers of physical security, which currently costs, depending on how one parses the military spending numbers, between $2000 and $3000 for every American resident) are ultimately better off with a predatory MIC, than with no MIC (a situation in which “there are no economic rents associated with the supply of national defence”). Negative externalities (anything from the unconscionable corporate profits to the academic grants handed out by defence and public works ministries) may thus not be so negative; and when push comes to shove (as, one may add, it does in the matters of national security) unwarranted influence in fact becomes quite warranted. What is more, there is no rational basis for reform: “the influence vacuum created by controls on the MIC would be quickly filled by the influence of other special-interest groups and they would gain control of most, if not all, of the resources away from the military.” For Lee, the defence of defence industry is a matter of “political realism.” The author is explicit:

We have no basis for criticizing those who pursue their self-interest through the political process even though we are convinced that this pursuit generates unfortunate social outcomes. When public choice economists advocate reforms for improving political outcomes, it is reform of the political institutions they have in mind, not moral reform of people who lack enthusiasm for putting the interest of others ahead of their own.

In principle, rents from military spending can be widely distributed – so long as “unintended consequences” like accelerated waste are controlled. Members of the U.S. House of Representatives are known to use tools like the committee system and cross-policy logrolling to channel military-related pork projects for their districts. (This goes double for members of the Senate, especially those who overstay in the defence appropriations subcommittee). As the financial crisis gathered pace in 2008, conservative economists went on record to argue that spending on military, police, and intelligence wares, equipment, and personnel was a tried-and-tested method of using fiscal policy to manage the national economy. What used to be a limited dimension of American politics, reserved mostly to Republican politicians in the so-called “gun belt”, was now being put forth as a blueprint for a stimulus comparable only to FDR’s “public works” campaigns during the Great Depression. This is an extreme position, but it does reveal a major double vision on the part of many contemporary commentators, think-tankers, and office-holders on the political right. Zakaria sums it up effectively:

Most talk of waste, fraud and abuse in government is vastly exaggerated; there simply isn’t enough money in discretionary spending. Most of the federal government’s spending is transfer payments and tax expenditures, which are — whatever their merits — highly efficient at funneling money to their beneficiaries. The exception is defense, a cradle-to-grave system of housing, subsidies, cost-plus procurement, early retirement and lifetime pension and health-care guarantees. There is so much overlap among the military services, so much duplication and so much waste that no one bothers to defend it anymore. Today, the U.S. defense establishment is the world’s largest socialist economy.

Zakaria’s framing of the Pentagon as the (second, third, etc.) “largest socialist economy” in the world draws from the anti-MIC discourse of the Cold War. It is a framing that invokes conceits such as “military Keynesianism,” old Marxist term popularized in the 2000s by the late Chalmers Johnson, as well as “Pentagon capitalism”, which was the name of one of the books Seymour Melman penned while under FBI surveillance. The rest of Zakaria’s paragraph must be understood in the particular context of a huge post 9/11 spike in defence spending. Up to one third of the present-day defence budget indeed goes to the spending on salaries and benefits, which, estimates the man who worked as the deputy secretary of defense in the second George W. Bush administration, have gone up by “almost 90% during this interval.” Any comparison between military and civil wages are misleading because the U.S. military base pay is a function of rank, location, time served, marital status and so on (many of which are a function of what the U.S. is doing with its military in a given context), and because “income” does not include assorted housing and health benefits that are rarely available in the civil sector (in the case anyone’s wondering, U.S. median income in 2011 was between $40,000 and $50,000 a year, depending on the source and measurement; according to Mother Jones, it is $31244 for the “bottom 90 percent”).

As a political trope, the MIC emphasizes the “I” and “C” over “M.” Zakaria selected his concluding words carefully, blaming rent-seeking on the “U.S. defence establishment”, not on the totalitarian welfare state-loving military rank-and-file. After all, how can one not “support our troops”? As politicians around the world know all too well, the best rhetorical strategy for defending defence is to talk about supporting “courageous men and women in uniform” because the phrase is a powerful reminder that the costs of national defence are not distributed equally among the citizens. Add “war” and/or some Big Militarized Threat to the rhetorical mix, and the case for defence is processed reflexively. (As George Lakoff might say, the idea of supporting our courageous men and women in uniform became physically instantiated in the synapses of brains of most Americans after 9/11. It is in the flesh!)

Little surprise, then, that most anti-MIC critiques tend to center on members of Congress, bureaucrats, lawyers, lobbyists, think-tankers, journalists and corporate types. Indeed, corporations and their representatives tend to win this particular unpopularity contest. In his biting 2000 take on the MIC in the George W. Bush era, William Hartung identified what he regarded as the five most rapacious rent-seekers: “U.S. policy is now based on what’s good for Chevron, Halliburton, Lockheed Martin, Boeing, and Bechtel, not what’s good for the average citizen.” It is the kind of statement most Americans tend to agree with. So short of trying to sell political realism à la Dwight Lee to the public, how does one even begin to make the case for the “I” and “C”?

One strategy is to place the American MIC in a historical-comparative context and demonstrate that it tends to operate under the rules of more-or-less free enterprise. This is the crux of an argument put forth by Aaron Friedberg, first in his 1992 IS article entitled “Why Didn’t the United States Become a Garrison State?”, and then in his 2000 book, which looks at weapons manufacturing, scientific R&D, and conscription in relation to other aspects of the American government in the middle years of the twentieth century. According to Friedberg, the U.S. won the critical early period of the Cold War (1945-1960) on the basis of its unique internal strength: a mix of the checks-and-balances constitutional structure, self-interested bureaucratic and business (especially anti-tax) politics, and the prevailing capitalist ideology. It was these “mechanisms” that prevented the creation of Soviet-style defence budgets, government arsenals, state-controlled scientific and research communities and so on, thus inhibiting “some of the worst, most stifling excesses of statism [that] made it easier for the United States to preserve its economic vitality and technological dynamism, to maintain domestic political support for a protracted strategic competition and to stay the course in that competition better than its supremely statist rival.” In short, the American MIC was elephantine, but not mammoth – and that difference could have been the difference between victory and defeat in the greatest political face-off of the twentieth century. (Friedberg’s argument, I can’t help but note, rests on my kind of ontology: America’s early Cold War strategy was not “not somehow dictated by objective, material circumstances or by some inescapable technological reality…[but was] strongly shaped by domestic, anti-statist influences.”)

Ledbetter is correct to describe Friedberg’s book as “influential.” At one level, it is a concrete demonstration of why even the most aggressive Ayn Randian anti-statist must agree that government has a necessary role in defending its citizens. (Compare with Samuel Huntington’s elaboration of the “anti-statist ethics” in his 1981 American Politics: The Promise of Disharmony). At the more fundamental level, the book offers a strong moral case for the MIC. What makes Friedberg’s narrative persuasive is the notion that the U.S. is a force of good in the world; once this premise is accepted, it is much easier to get in the swing of the overall argument. The author is admiringly candid about the political-normative framework underlying his story: “A brief word about my own biases: while I have not set out to write a morality tale, I do intend clearly to emphasize the long-term benefits to the health and vitality of the American regime of the anti-statist influences that are so deeply embedded within it. That does not mean, however, that I regard these influences as always and unreservedly positive, or that I intend to treat the postwar advocates of anti-statism as the unvarnished heroes of my story.” And “if the term refers to someone who not only rejoices in America’s Cold War success, but sees in it proof of the practical strengths as well as the moral virtues of the American regime, then I am an unrepentant triumphalist.” (When he wrote these words, it should be noted, Friedberg was involved in the Project for the New American Century.)

As Ledbetter notes, Friedberg’s triumphalism comes on very thin ice once his argument is extended to cover the work of statist power in what we would now call “homeland security.” Starting with the internment of Asian Americans during World War II (and earlier, I would add), and all the way to the current practice of warrantless wiretaps, there is much evidence to show that the American state has excelled at the garrisoning of its society, especially relative to its own founding principles. And what of the MIC as an “imperfect free enterprise”? Compared to, say, Fourth Republic France (to say nothing of the Soviet empire, which is Friedberg’s main reference point), the U.S. does in fact appear “highly resistant to centralized industrial planning” (notwithstanding the exceptional nature of nuclear weapons and so on). Cross-national comparisons like these have much rhetorical value, but they generally do not help with the central question: can the post-World War II U.S. defence sector be characterized in market terms?

Ledbetter’s, Higgs’ and Roland’s interpretations of this period of American history all say no.[1] At a fundamental level, the answer is theoretical, as suggested in the description of my ISA panel on “Markets and Militaries” (one of four sessions with the same title organized by Deborah Cowen and Emily Gilbert):

In light of the widespread militarization of zones of trade and commerce, and the phenomenal privatization of warfare, critics have begun to question the distinction between markets and militaries. No doubt we are witnessing meaningful shifts in the social and spatial ordering of accumulation and violence that demand closer scrutiny, yet the long history and complex geography of entanglement not only challenge the frame of ‘newness’, but prompt us to investigate the very salience of this conceptual divide. In different ways, a long list of scholars including Barkawi, Delanda, Foucault, Griggers, Mann, Mbembe, Melman, Mohanty, Neocleus, and Tilly have questioned the very separation of militaries and markets. Yet this distinction is linked to a series of other entrenched modern binaries (war/peace; military/civilian), and in sometimes subtle ways underpins many methods of socio-cultural, political-economic, and, importantly, spatial analysis.

In the abstract context, the manifest contingency of private/public and related modern binaries negates the “almost market” thesis. Here is how defence economists typically talk about it:

  • The defence market is a rare monopsony-oligopoly situation, where one buyer (in the U.S. context, this is technically the Pentagon, but with budget authorization and much else in the hands of Congress) is dealing with a few sellers (big defence consortia led by a handful of primes like Boeing). Once the product is completed, the seller becomes a monopolist: nearly all follow-on upgrades, maintenance, etc. remains with the same contractor. Over the long term, this situation blurs the line between the buyer and the supplier;
  • Price is usually not as important as performance or the timing of development and delivery. The sellers have a disincentive to compete over the price, and the buyer has an incentive to lowball the cost in its shareholder report (i.e., annual budget requests);
  • Product specifications are controlled neither by the buyer nor the seller. Almost by default, weapon systems are both technologically and politically uncertain: the product succeeds so long as the buyer continues to finance its development in the face of all sorts of changing requirements over the length of the development. To go back to Baumgartner’s book, what makes military acquisitions different from, say, railroads is the degree of politicization; in the times of peace at least, spending on killing machines always needs extra normalizing. Politicization goes the other way: the supplier lobbies the buyer to expand the product line, thus creating demand;
  • Related, the market, by default, is overregulated. Government guarantees, Baumgartner laments, come with all manner of strings attached, which can make the industry’s life difficult. But there is flip side to it: overregulation leads to a scramble for escape clauses and loopholes, which savvy contractors exploit to their advantage); and
  • The market is subject to severe boom-bust cycles. Profits, to go back to Baumgartner one last time, may be high, but they are extremely insecure relative to those in say, the financial complex. And on the flip side, just like Wall Street, the MIC and the state are in a long-term partnership: when the going gets tough, help is swiftly on the way.

Little wonder, then, that the defenders of the MIC like to concentrate on the “M” part. Calls to protect defence spending (such as this one) almost always come folded into the moral discourses on sovereignty, territoriality, democracy, and global leadership. For example, with the “control of the global commons” as the reigning defence policy/strategy in Washington, U.S. defending spending must remain big.

Could the second Obama administration – or, indeed, any presidential administration – on its own dilute the power of the U.S. defence establishment? The aforementioned perspectives on political communication, political institutions, network theory, and history suggest that the answer is no (or No He Can’t). What of discursive and institutional coalitions? Though the current attempt to curb defence spending is by no means revolutionary, it probably reflects a certain rebalancing of power within the American MIC. In addition to the reform-minded president, now successive defence secretaries have worked under the assumption that America’s long-term debt and the deficit problems might be more threatening than, say, China or terrorism. No less important is the fact that not all Republican presidential hopefuls in 2011-12 called for more defence spending. Most of them did (without offering corollary fiscal reflections), but there were two exceptions. The obvious exception is Ron Paul, whose musings on the U.S. empire abroad and its national security state at home reached relatively large audiences during the Republican primaries (Paul was in the business of building a political movement, rather than running for the candidacy, but  a question for a future post on the life of the American MIC is why he collected more donations from the rank-and-file than Mitt Romney and all other candidates combined.). The other exception is Newt Gingrich who more than once self-described as a “cheap hawk” (not to be confused with “chickenhawk”, which is how Paul described him at the some point). Add to this the recent musings of the far-right senator Tom Coburn from Oklahoma, and it appears that there may be a GOP faction favourable to defence cuts.

Real budgetary changes might well arrive, eventually making the American military arsenal less baroque (perhaps fulfilling the promise of the “revolution in military affairs” of the 1990s), but this alone will not turn the U.S. into an empire on the cheap, much less a peaceable republic invoked by both Ledbetter and Maddow. That particular future would depend on a host of events, one of them being an open, wide-ranging, and constructive debate on the executive war-making powers, which would involve the entire American political system, in all of its polarized glory. So think health care reform, and multiply by 10.

[1] While there is little evidence to suggest that early Cold War military procurements in the U.S. followed open and transparent bidding processes among would-be contractors, one must not jump the conclusion that contractors did as they pleased. Consider Eugene Gholz’ 2000 case study of the rise and fall the Curtiss-Wright Corporation, a giant of U.S. aerospace and defence industry in the early Cold War. Gholz uses this case to evaluate four propositions drawn from the social science and history literatures on the determinants of military procurement decisions: the MIC (corporations decide); the bureaucratic-strategic theory (bureaucratic politics determines outcomes); a technological determinist theory (best available technology tends to win); and the “market” perspective (best business plan, as vetted by Wall Street, carries the day). The fate of Curtiss-Wright, the author explains, constitutes a puzzle for the MIC theory: a instead of securing “unconscionable profits” through lucrative defence government contracts, the corporation folded (its research arm survived). What Gholz finds is that neither the “market” nor the MIC nor technology can explain the outcome; what can is the politics among Congress, the administration, and the military brass (Air Force and Navy procurement officers). Whether similar “separation” between the buyers and suppliers of military weaponry existed in a sufficiently large number of cases remains an empirical question, but the Curtiss-Wright story is an important addendum to Friedberg’s almost market thesis.

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2 Responses to “What We Talked About At ISA: The U.S. Military-Industrial Complex, Part 2”

  1. tina April 23, 2012 at 6:13 am #

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  1. Sunday Reading « zunguzungu - April 22, 2012

    [...] What We Talked About At ISA: The U.S. Military-Industrial Complex, Part 1 and What We Talked About At ISA: The U.S. Military-Industrial Complex, Part 2 [...]

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