*1973:Testing the Theory of the Military-Industrial Complex
Edited by Steven Rosen

Hard-copy text includes chapters by M. Reich on USA and V. Aspaturian on USSR
[Editor's introduction]

The theory of the military-industrial complex is now one of the most familiar ideas in political thought. It surprises younger students to learn that the modern version of the concept was formulated as recently as 1956 by C. Wright Mills in his classic, The Power Elite, and that the idea did not enter the vernacular of popular discourse until 1961, when President Eisenhower gave his famous warning in the Farewell Address [ID]:

(The) conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every State House, every office of the Federal 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.

In a mere fifteen years [as of 1973], Mills' theory, legitimized by Eisenhower, has come from relative obscurity to being one of the foremost analytical tools employed by laymen to explain events and tendencies, particularly unhappy ones, in American foreign and strategic policy. The theory is employed to explain the high cost of defense, the longevity of the Cold War, the persistence of anticommunist mythology, the "perverted priorities" of the Federal budget, the interventionist proclivities of American foreign policy, and even the generation of cultural values giving rise to riots and assassinations. The theory is part of the consciousness of every attentive student of politics and society.

Yet during this meteoric intellectual rise, very little scientific effort has been given to the systematic testing of the key propositions in the theory. One can search the pages of the scholarly journals for the years 1956 to 1970 and find only a few attempts to validate or invalidate the theory by rigorous examination of carefully-delineated hypotheses. For example, a recent literature search employing several computerized information bibliographies failed to yield a single reference to "military-industrial complex" in the American Political Science Review for these years (though there were references to several related and tangential topics). To a very large extent, the discussion has been left to polemics by both adherents and opponents of the theory.


Summary of the Theory

It may be useful to provide a working summary of the theory under examination, before discussing the papers. The following are the key propositions in the theory as argued by the leading proponents.

The prolonged state of international tensions that has existed since 1945 has been characterized by high levels of military expenditure by the major powers, especially the United States and the Soviet Union. These high levels of expenditure have given rise to powerful domestic groups within the major states who have vested interests in the continuance of military spending and international conflict. These domestic groups who comprise the military-industrial complex include (1) the professional soldiers, (2) managers and (in the capitalist states) owners of industries heavily engaged in military supply, (3) high governmental officials whose careers and interests are tied to military expenditure, and (4) legislators whose districts benefit from defense procurement. These core members of the military-industrial complex are supported by associated and lesser groups like the veterans and military service associations, labor unions tied to the defense industry, and scientists and engineers engaged in defense-related research. These various segments of the complex occupy powerful positions within the internal political structures of the major states, and they exercise their influence in a coordinated and mutually-supportive way to achieve and maintain optimal levels of military expenditure and war preparation, and to direct national security policy. On defense-related matters, their influence exceeds that of any countervailing coalitions or interests that may exist.

The military-industrial complex rationalizes high levels of military spending with an ideology of international conflict, mainly the ideology of the Cold War. Theorists disagree as to whether this ideology is a deliberately manufactured deception to mislead the public or whether it is a militaristic "false consciousness" [a mindset or concepts that relate to actuality in a mistaken way] that arises automatically as an unanticipated consequence of high military spending. Under the former version, the complex is a self-conscious conspiracy acting mainly in its own interest. Under the latter version, it is a coalition of special interests who wrongly believe themselves to be acting in the broader public or national interest. Either way, the complex requires an ideology of international conflict to guarantee its position within the political and economic structure of the society. Most theorists regard this conflict ideology as largely false and exaggerated in its description of supposed external dangers to the respective state.

To the conventional theorist, arms races are caused by international conflict and a cycle of mutual fear between opposing states. To the military-industrial complex theorist, the external strategic threat is merely a rationalization for arms policies that are in fact rooted in the self-aggrandizing activities of the internal military-industrial complexes. In the extreme version, this theory holds that wars are due to arms profiteering, military careerism, and the militarism that is produced by standing armies. Some of these analysts feel that the stock market averages respond favorably to war and unfavorably to peace; "war scares" are said to drive the Dow Jones up, while "peace scares" are bearish.

As argued by C.Wright Mills, the theory of the military-industrial complex applies to both capitalist and socialist states. In the latter, the professional military combine with the managers of state defense industries and with related functionaries within the Communist party apparatus and the ministries and bureaucracies. Despite the ideology of conflict between capitalism and communism, there is a considerable degree of harmony of interest between these complexes on the opposing sides, as both desire to maintain a state of conflict. The "hawks" on both sides want to keep the Cold War going.


The Findings Condensed

What, then, are the results of our testing of the theory of the military-industrial complex? Different readers of this diverse collection of studies will arrive at different conclusions. However, the following propositions are a reasonable condensation of the findings.

1. The U.S. and the Soviet Union have developed extensive industrial sectors oriented to military orders for their output. A byproduct of this development is the creation of a class of individuals whose interests are served by defense spending. The careers of related managers and (on the U.S. side) the profits of owners and shareholders are tied to high levels of military preparation.

2. These industries are in critical sectors of the economy. On the U.S. side, they include the largest industrial corporations and the crucial capital goods industry. On the Soviet side, they involve the core sectors of heavy industry, and the favorable share of resources allocated to all of heavy industry is due to defense needs. On both sides, the most powerful interests in the economy are substantially tied to continued high levels of military production.

3. However, neither economy needs military spending in the sense that the aggregate level of wealth is dependent on manufacture for defense. The majority of U.S. corporations derive only the smaller part of their sales from military contracts, and defense profits are not a disproportionate share of corporate earnings (i.e., profits are not higher in defense). On both sides, conversion from defense to social expenditures would hurt some sectors but help others. While such a transformation would be resisted by some of the most powerful sectors and would have very high transitional costs, it would not, in principle, be harmful to the economy as a whole in the long run. It would, however, entail substantial turnover in the composition of political elites and a wholesale revision of the priorities guiding resource allocation.

4. While military spending is good for business, war itself is not, at least not in the case of Vietnam. The response of the stock market averages to Vietnam de-escalation events indicates that the business community expected an end to the war to stimulate profits.

5. Industrial interests reliant on high military expenditures are associated with each other and allied with the armed forces bureaucracies in both the U.S. and the USSR. The political influence of the military and the industries is coordinated. However, the professional military elite are subordinated to political control by civilian leadership in both states.

6. The interests of the complex depend on the prevalence of fear of an external threat, which supplies the strategic rationale for the priority of military expenditures. This, in turn, depends on exaggerated Cold War thinking to perpetuate the arms race.

7. This ideology of conflict is promoted by the existence of the complex. However, "false consciousness" is not a fabricated deception deliberately engineered by the complex, but rather it is a product of the unconscious distortion of perceptions through "the prism of. . . self-interest."

8. Public policy is influenced more by the ideology of the complex than by direct expression of the complex's self-interest through crude lobbying and the direct exercise of influence. Thus, the immediate determinant of arms spending and hawkish behavior is unwarranted perception of external threat. Perception is an intervening variable between the complex's interests and state behavior. In the U.S., Congressmen from defense-dependent districts are not significantly more hawkish.

9. In general, the military-industrial complex is not best understood as a conspiracy, but as a subtle interplay of interests and perceptions.

10. This is not the only complex of political and economic special interests in the U.S. or the USSR. It competes with other groupings, such as the agricultural, urban, and educational complexes. It does not win every conflict over resource allocation, and it is weakened when confronted with hostile alliances of other interests. However, it generally exceeds the influence of any opposing interests within its issue-area, and tends to prevail unless the opposing political forces are fully alerted and mobilized.

11. These relationships are illustrated by the logic of weapons procurement in the U.S. The critical decision point in the adoption of a new weapons system is the determination to move from research and development to production and deployment. Projects tend to pass this threshold without resistance, especially if major industrial production lines are idle and the regeneration of corporate profits, sales, and employment requires a major new contract. Thus, the inner logic of the complex is sufficient to determine the commitment of resources to major arms procurement, provided that some construction of strategic needs is available as an official rationale.

12. Arresting this process of automatic procurement depends on the imposition of deliberate checks and balances: monitoring research and development at early stages to identify incipient commitments before they are highly advanced; carefully balancing the power of opposing bureaucratic and corporate alliances; and timing major production decisions so that they are taken when production lines are already occupied and corporate demands are relaxed. Without such delicate opposition of forces, new systems tend to generate spontaneously from the military-industrial sectors, and many of them will be adopted.

13. The most important long-run countermeasure to the complex is an alteration of threat perceptions to weaken the strategic rationale.

14. Cost-overruns are caused by deficiencies in the contracting process, not mainly by excess profits.

15. The defense industry is increasingly penetrated by international corporations whose ownership is based in the U.S. but whose operations and interests span the globe. The result is a trend to the multinationalization of the military-industrial complex.

16. The multinationalized complex may exercise new kinds of influence over arms races, the outbreak of war, and the magnitude and allocation of foreign military aid.

Overall, we may say that C. Wright Mills has been sustained in the essential propositions of his theory, though some of the more simplified conspiratorial versions developed by his most ardent followers must be rejected. Reviewing our summary of the theory at the outset, it is remarkable how well it has withstood critical evaluation, some of it from an obviously skeptical perspective. Contrary to some of our contributors (e.g., Slater and Nardin, Levine), we conclude that the theory of the military-industrial complex is a most useful analytical construct for both research and policy evaluation purposes.