Historians have not yet devoted much study to the military-industrial complex. It has surfaced as a concept and concern only in very recent times. Moreover, well-developed bodies of theory and data are not readily available. The editors of the Journal of International Affairs have aptly summarized the situation:
Of all the political ideas that gained popular currency in the 1960s, the military-industrial complex is the concept perhaps most gravely deformed by public mastication. The debate of 1968 and 1969 over the influence of the military establishment in the United States proved, with few exceptions, consistently unsatisfying. After all was said, the concept of the military-industrial complex remained muddled and its attendant questions of international and domestic political influence were still unanswered.
Political leaders reflected the confusion of the man in the street, of business leaders, industrial workers, farmers, college students, and activists for conflicting causes. All were caught up in a dilemma—that armaments cause wars, and that arms industries create prosperity. At the same time, nearly everyone agreed that some military forces were needed for national security, and these in turn depended upon some kind of military industry.
Here we can see the great dilemma of U.S. military-industrial policy: Can the security of the United States be better served, can the economy of the nation flourish more, and can the attending evils of arms manufacture be better reduced or avoided by government or by private manufacture of munitions? This was a question to which leaders gave their attention from the early days of the Republic.
The American military-industrial complex may be said to have had its origins with Alexander Hamilton and Eli Whitney. Those two men of genius were in the vanguard of a group of imaginative men who set the course for the national arms policy of the United States. Hamilton emphasized government manufacture of arms, though he recognized the need to develop a private arms industry as well if what he conceived to be the defense requirements of the country were to be met. Whitney was the entrepreneur par excellence who saw opportunities for profit in making arms for the government.
In 1783, Hamilton, a twenty-eight-year-old former lieutenant colonel, presented a report on a military peace establishment to the Continental Congress. In it he called for the establishment of "public manufactories of arms, powder, etc." and proposed the employment of troops in the national armories. This, he maintained, would be far more economical than the importation of arms from Europe. But Hamilton's concern for domestic arms manufacture went beyond the possible economies. He thought independence from foreign arms makers to be essential for national security.
In his celebrated "Report on Manufactures" in 1791, Hamilton offered a program whose central theme was the development of domestic industries for national security. Hamilton would encourage domestic arms production by a protective tariff and by an annual purchase of weapons as an incentive for continuous manufacture. Still, in the long run, Hamilton looked to the desirability of government manufacture of all arms of war. His concern about the private manufacture of weapons was not that the private companies would become too powerful and would exert undue influence on national policy. It was that private companies could not be relied upon to provide the arms necessary for national security.
Eli Whitney of New Haven, Connecticut, desperately in need of capital, turned to the U.S. government with a fantastic proposal to manufacture 10,000 or 15,000 stand of arms at the very moment—when war with France threatened— that the government could not afford to turn down any halfway realistic proposal for making arms. As he followed the debates in Congress on proposed appropriations for arms procurement, Whitney decided that here was the best possible opportunity to get a government contract.
Whitney decided that the only practical way to produce 10,000 satisfactory muskets in the United States, where skilled armorers were few, was to reduce the complex steps of gunmaking to a series of more simple tasks, each of which could be done with less skilled hands, and to design machines that would duplicate some of the armorer's skill. For best results, it would be necessary to make parts precise enough to be inter-changeable. This would permit the maximum division of labor and make it possible to accomplish repairs simply by replacing parts.
One of the most important contributions to the development of a domestic arms industry was the act of 1808 for arming the militia. By this time the national armories were making 5,000 to 10,000 muskets a year, but relatively few were being delivered by private makers under contracts of 1798, and, even though they were admitted duty free, almost none were coming in from Europe, where the Napoleonic wars were raging.
The act of 23 April 1808 provided for the appropriation of an annual sum of $200,000 for arms and military equipment for the militia of the United States, by either purchase or manufacture. The purveyor of public supplies, Tench Coxe, advertised in newspapers of the leading cities for bids for contracts to make muskets. Between 30 June and 9 November of that year, Coxe let contracts to nineteen firms for a total of 85,200 muskets. The contracts were for five years, with one-fifth of the total number, in most cases, due each year. However, the time schedules proved to be unrealistic and a number of the manufacturers unreliable.
Unique among the states, Virginia took upon itself the task of manufacturing arms for its militia independent of outside sources. Authorized in 1798, the Virginia Manufactory of Arms, occupying an impressive building along the James River in Richmond, turned out enough weapons between 1802 and 1821 to arm all the county militia—58,400 muskets, 2,100 rifles, 4,200 pistols, and 10,300 swords.
Soon a national arms system based upon two national armories and a group of dependable private firms was fairly well established. Beginning with the funds appropriated for the arming of the militia, the government gradually developed a policy of providing orders for the most promising establishments on a long-term basis. As to the advantages of public versus private manufacture of military arms, there was much to be said on both sides. In the earlier period there was strong sentiment in favor of depending solely on national armories. The national armories were readily available and less expensive, and they established price standards for private contractors. Private manufacturers seemed more likely to improve models, and to experiment with new materials and new methods. Both were needed for the best possible system of arms production.
Recognizing that the military-industrial complex does exist as a powerful, if informal, structure in American military and economic affairs, the following questions arise: How did it get that way? What are its consequences? What can be done about it?
The forces that have driven the development of the military-industrial complex include the following: