Abstract
The modern defense industry emerged in the 1950s as Washington sold off plant and equipment built up during World War II. By the end of that decade, military production had been largely privatized, with nuclear warheads the outstanding exception. A more diverse set of organizations replaced the “military system of innovation” (to the extent such a label can be justified) earlier centered on the arsenals and supply bureaus of the armed forces and supplemented by inventors and firms that sold specialized equipment to the military. Rapidly increasing technological complexity, exemplified by supersonic aircraft, guided missiles, and computerized command and control networks, sparked widespread adoption in government and industry of new technical and managerial methods—“systems thinking.”
Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as reguired, 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.
—Dwight D. Eisenhower, “Farewell Address” January 18, 19611
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Notes
Paul A.C. Koistinen, Arsenal of World War II: The Political Economy of American Warfare, 1940–1945 (Lawrence, KS: University Press of Kansas, 2004), p. 54.
John Kenly Smith, Jr., “World War II and the Transformation of the American Chemical Industry,” Science, Technology, and the Military, Vol. 2, Everett Mendelsohn, Merritt Roe Smith, and Peter Weingart, eds. (Dordrecht, Netherlands: Kluwer, 1988), pp. 307–322.
Gerald T. White, “Financing Industrial Expansion for War: The Origin of the Defense Plant Corporation Leases,” Journal of Economic History, Vol. 9, No. 2, November 1949, pp. 156–183.
Margaret B.W. Graham and Bettye H. Pruitt, R&D for Industry: A Century of Technical Innovation at Alcoa (Cambridge: Cambridge University Press, 1990), pp. 468–469 and 491–492.
Bruce Brunton, “An Historical Perspective on the Future of the Military-Industrial Complex,” Social Science Journal, Vol. 28, 1991, pp. 45–62.
On the politics underlying the shift from a mixed public-private defense base to near-total reliance on private firms, see Aaron L. Freidberg, In the Shadow of the Garrison State: America’s Anti-Statism and Its Cold War Grand Strategy (Princeton, NJ: Princeton University Press, 2000), pp. 245–295. Freidberg stresses the ideological force of free-enterprise rhetoric and the contrasts drawn by those seeking to steer defense contracts to private firms with state control in Soviet Russia.
While firms sometimes reap high profits on defense orders, and the perception has been widespread that this is common, there has never been much evidence of abnormally large profit margins as a general phenomenon. See, e.g., George J. Stigler and Claire Friedland, “Profits of Defense Contractors,” American Economic Review, Vol. 61, 1971, pp. 692–694, which found profitability in defense to be above that in other sectors of the economy during the 1950s, falling to levels around the industry-wide average in the following decade.
The list of Cold War bail-outs included Lockheed, Grumman, Litton Industries, and Chrysler (at the time the Army’s favored source of tanks). Richard A. Stubbing with Richard A. Mendel, The Defense Game (New York: Harper & Row, 1986), pp. 36–39, 170, 184–190, and 214–215.
Scale economies result from efficiency-enhancing capital investments, such as automated production equipment. Learning economies stem primarily from “invisible” efficiency improvements as production workers find better ways to do their jobs. Early studies by economists of learning-in-production drew on World War II cost accounting records. From 1943 to 1946, for instance, Bath Iron Works built nearly 50 destroyers of essentially identical design. The first of these consumed some 1.5 million direct labor hours. At the end of the run, labor inputs had fallen by half. Because workforce turnover was low (meaning there were few newly hired employees to drag down productivity), because capital equipment did not change significantly, and because design modifications to the destroyers were inconsequential, the decline in labor inputs represents an almost pure example of learning economies. Henry A. Gemery and Jan S. Hogendorn, “The Microeconomic Bases of Short-Run Learning Curves: Destroyer Production in World War II,” The Sinews of War: Essays on the Economic History of World War II, Geofrey T. Mills and Hugh Rockoff, eds. (Ames: Iowa State University Press, 1993), pp. 150–165.
Harvey M. Sapolsky, “The Origins of the Office of Naval Research,” Naval History: The Sixth Symposium of the U.S. Naval Academy, Daniel M. Masterson, ed. (Wilmington, DE: Scholarly Resources, 1987), pp. 206–225. The Army managed the Manhattan Project (Vannevar Bush ruled out the Navy as too difficult to work with, based on his experience earlier in the war). Afterward, Congress, believing the atomic bomb too terrible to leave in the hands of the military, created the nominally civilian AEC to oversee both military and nonmilitary uses of nuclear energy. Successive reorganizations transmogrified the original five-person commission into the Department of Energy, which had defense programs budgeted at $9.6 billion in fiscal 2007 (with another $6 billion for cleanup of environmental hazards created in the past at weapons production and testing sites).
Institutional patterns diffused in considerable measure through personal networks, which at the time were relatively circumscribed since there were only a few research-intensive universities before the war and disciplinary fields in science and engineering were broader, with less of the specialization that followed in the 1960s and more permeable boundaries. Bush’s friend and deputy Warren Weaver, for instance, had come to OSRD from the Rockefeller Foundation, where he had funded Bush’s prewar work at MIT on differential analyzers (a form of analog computer), and after the war went on to serve as a member of ONR’s civilian advisory board. G. Pascal Zachary, Endless Frontier: Vannevar Bush, Engineer of the American Century (New York: Free Press, 1997), pp. 73–74, 315.
Harvey M. Sapolsky, Science and the Navy: The History of the Office of Naval Research (Princeton, NJ: Princeton University Press, 1990), p. 44.
Quoted in Michael H. Gorn, Harnessing the Genie: Science and Technology Forecasting for the Air Force, 1944–1986 (Washington, DC: Office of Air Force History, 1988), pp. 17–18.
Robert S. Leonard, Jeffrey A. Drezner, and Geoffrey Sommer, The Arsenal Ship Acquisition Process Experience (Santa Monica, CA: RAND, 1999).
Gorn, Harnessing the Genie, pp. 2, 59–60. Today, the Army, Navy, and Air Force each maintain scientific advisory bodies and the Defense Science Board serves DOD as a whole. Beginning in 1948, defense agencies also began sponsoring “summer studies” that brought together multidisciplinary teams of scientists and engineers, most of them academics and sometimes including social scientists, for problem-focused work on topics of interest to the military, along with summer schools that introduced younger scientists to defense issues and Pentagon patronage. The Navy organized the first summer study. J.R. Marvin and F.J. Weyl, “The Summer Study,” Naval Research Reviews, Vol. 19, No. 8, August 1966, pp. 1–7, 24–28.
Richard G. Hewlett and Francis Duncan, Nuclear Navy, 1946–1962 (Chicago: University of Chicago Press, 1974).
Benjamin S. Kelsey, The Dragon’s Teeth? The Creation of United States Air Power for World War II (Washington, DC: Smithsonian Institution Press, 1982), p. 43.
Robert Schlaifer and S.D. Heron, Development of Aircraft Engines [and] Development of Aviation Fuels: Two Studies of Relations between Government and Business (Boston: Harvard University Graduate School of Business Administration, 1950), pp. 11 and 35.
Quoted in Edward H. Sims, Fighter Tactics and Strategy, 1914–1970 (Fallbrook, CA: Aero Publishers, 1980), p. 244.
Stephen B. Johnson, The United States Air Force and the Culture of Innovation: 1945–1965 (Washington, DC: Air Force History and Museums Program, 2002), p. 11.
Jacob Neufeld, Ballistic Missiles in the United States Air Force, 1945–1960 (Washington, DC: Office of Air Force History, 1990), pp. 111–128;
Thomas P. Hughes, Rescuing Prometheus (New York: Pantheon, 1998), pp. 69–139.
The Navy’s use or nonuse of PERT—the acronym stands for Program Evaluation [and] Review Technique—in the Polaris program has become one of the well-known episodes in the spread of systems management. Harvey M. Sapolsky, in The Polaris System Development: Bureaucratic and Programmatic Success in Government (Cambridge, MA: Harvard University Press, 1972), describes PERT as “An alchemous combination of whirling computers, brightly colored charts, and fasttalking public relations officers …. [T]he [Polaris] Office won its battle for funds and priority. Its program was protected from the bureaucratic interference of the comptrollers and the auditors” (p. 129). “It mattered not how PERT was used, only that it was in use” (p. 124). Whether or not it contributed much to Polaris beyond insulation against micromanaging politicians and bureaucrats, by the early 1960s PERT had become a commonplace tool of project and program management, in the civilian economy as well as DOD.
The Navy’s Sidewinder missile, developed in the early 1950s, is perhaps the best-known example of a bootleg military project. See pp. 315–320 in David K. Allison, “U.S. Navy Research and Development since World War II,” Military Enterprise and Technological Change: Perspectives on the American Experience, Merritt Roe Smith, ed. (Cambridge, MA: MIT Press, 1985), pp. 289–328.
For other examples of innovations fostered by networks of officers in the intermediate ranks who begin by securing a few well-placed supporters able to help them get the funds needed to demonstrate feasibility and then go on to win the approvals necessary for full-scale development, see Vincent Davis, The Politics of Innovation: Patterns in Navy Cases, Monograph Series in World Affairs, Vol. 4, Monograph No. 3 (Denver, CO: University of Denver, Social Science Foundation and Graduate School of International Studies, 1967). Much the same thing happens in private firms.
T. Keith Glennan, as cited in Robert Frank Futrell, Ideas, Concepts, Doctrine: Basic Thinking in the United States Air Force, 1907–1960, Vol. I (Maxwell Air Force Base, AL: Air University Press, December 1989), p. 594.
Virginia P. Dawson, Engines and Innovation: Lewis Laboratory and American Propulsion Technology, NASA SP-4306 (Washington, DC: National Aeronautics and Space Administration, 1991).
“Swept-back wings, delta wings, wings with variable sweep-back, leading-edge flaps—all came from Germany during the war.” Ronald Miller and David Sawers, The Technical Development of Modern Aviation (London: Routledge & Kegan Paul, 1968), p. 173.
In a fly-by-wire (FBW) control system, computers and electronics replace electro-mechanical components, permitting trim adjustments at much faster rates and with far greater discrimination than the best human pilots. See, e.g., James E. Tomayko, Computers Take Flight: A History of NASA’s Pioneering Digital Fly-By-Wire Project, NASA SP-2000–4224 (Washington, DC: National Aeronautics and Space Administration, 2000). After initial development for the Apollo program, FBW was applied to the F-16 and then the F-117. With its faceted surfaces to reduce radar reflections, the aerodynamically unstable F-117 was sometimes called the “hopeless diamond” during conceptual design; such a plane could not stay aloft without computer controls. FBW offers further advantages to the military, including reduced vulnerability to enemy fire. During the Vietnam War, the United States lost many planes to ground fire that damaged hydraulics and caused loss of control. Electronic components, much smaller, are less likely to be hit.
R. Hatch, Joseph L. Luber, and James H. Walker, “Fifty Years of Strike Warfare Research at the Applied Physics Laboratory,” Johns Hopkins APL Technical Digest, Vol. 11, No. 1, 1992, pp. 113–123.
An “innovation system” is an analytical construct intended to help weigh the relative contributions of institutions including education and training, intellectual property protection, capital, labor, and product markets, and R&D. Richard R. Nelson, ed., National Innovation Systems: A Comparative Analysis (New York: Oxford University Press, 1993) provides an introduction. While the literature on national systems of innovation continues to expand, military technology has received relatively little attention beyond obligatory references to levels of R&D spending and occasional discussions of spin-off. The reasons begin with the recondite nature of high-technology weaponry, so unlike the commercial technologies that most analysts of innovation explore.
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© 2007 John A. Alic
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Alic, J.A. (2007). Organizing for Defense. In: Trillions for Military Technology. Palgrave Macmillan, New York. https://doi.org/10.1057/9780230606876_5
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DOI: https://doi.org/10.1057/9780230606876_5
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