Key to Getting a More Restrained Foreign Policy: Modify Defense Subcontracting? By Ivan Eland - Independent Institute

April 14, 2008

During the early days of the Clinton administration, Colin Powell, then Chairman of the Joint Chiefs of Staff, cringed when Madeleine Albright implied that because the United States had such a big, beautiful military, it should be willing to use it promiscuously overseas. After the debacle in Iraq, the growing group of those who desire a more restrained foreign policy—liberals, conservatives, libertarians, and independents—should still be cringing.

Thus, the problematical hyperactive U.S. foreign policy did not arise with President George W. Bush, but has existed through Democratic and Republican administrations since Harry S Truman was president. Although George W. Bush was especially gullible and incompetent in attempting his armed, nation-building fiasco in Iraq, the hyperactivity in U.S. foreign affairs is mainly structural.

In other words, pressures exist within what President Dwight Eisenhower called “the military industrial complex” to liberally employ the military overseas to justify the purchase of large amounts of expensive military hardware made primarily here at home. Most of the U.S. defense industry is made up of ostensibly private companies, with either no or only small amounts of commercial business, that essentially have become wards of the state. This dedicated defense industry works in collusion with the military services, to inflate threats to justify the need to buy questionable weapons, and with congressional representatives, to make the taxpayers pay the bill for those unneeded arms. In fact, when the big defense contractors choose subcontractors, they do not do so on the basis of getting the best subsystem for the best price (as is done in the commercial marketplace), but to spread the subcontracts over as many states and congressional districts as possible, to widen the political support for the weapons program. Therefore, it becomes almost politically impossible to kill a weapon system, even if its cost has become exorbitant, its performance has been poor, its schedule has slipped, or world events have made it irrelevant.

A recently publicized, egregious example of this much larger endemic problem is the effort by Lockheed Martin to modify existing helicopters (EH-101s) with new state-of-the-art communications and defense systems to createVH-71s, a fleet of 28 helicopters to carry the president on short trips to and from Air Force One, his Boeing 747 jumbo-jet command plane. The Navy, procuring the new helicopter for the White House, has had to halt the helicopter program in an attempt to rescue it. According to the Washington Post, the program’s costs have almost doubled from $6.1 billion in 2005 to $11.2 billion today, and the schedule has slipped significantly. Such cost, schedule, or performance slippage is common in defense programs, because little competition—the foundation of the commercial marketplace—exists at the prime contract or subcontract level in the defense industry. In addition, companies will purposefully bid with an excessively low price (“buy in”) to get the contract, and then count on the likelihood that they can charge the Defense Department big bucks when it comes in with changes to the very specific military requirements—which it inevitably does. In the case of the VH-71, Lockheed Martin has alleged that the Navy has added 1,900 requirements since the initial contract was signed. (The Navy denies this number, but does not deny that the requirements have become so demanding that the entire EH-101 aircraft has had to be completely redesigned to create a VH-71.) Thus, then Secretary of Defense Donald Rumsfeld’s comparison of the grossly inefficient U.S. defense industry with Soviet central planning was entirely appropriate—both being competition-free zones.

Although Eisenhower, a former general, first warned of the “military industrial complex” (which really should have been called the “military-industrial-congressional complex”), Harry Truman actually invented it. Up through World War II, the United States had no dedicated defense industry. Whenever a war arose, civilian factories converted to military production and then reconverted to commercial production once the war had ended. But Truman created the first dedicated defense industry in U.S. history, by giving steady defense business to “private” companies during peacetime. Thus, it was no coincidence that unlike the periods following all previous wars—including the first few years of the Cold War subsequent to World War II—the United States did not demobilize its military after the Korean War. Thus was born the first large peacetime military in more than 175 years of U.S. history. Even during the nuclear standoff between the superpowers during the Cold War, pressures to use the historically large U.S. forces in brushfire areas proved too intense to resist. So accompanying the atypically large peacetime military following the Korean War was an untraditional interventionist U.S. foreign policy.

Such facts should alarm those traditional conservatives who advocate a more restrained U.S. foreign policy but who are silent when anyone mentions cutting the defense budget. But if the Albright temptation is to be stamped out, cutting the massive base defense budget of well over $500 billion a year (not counting the annual costs of the wars in Iraq and Afghanistan), and the offensive power projection weapons contained therein, is a must.

But how can the defense budget be cut if all those defense companies are lobbying their senators and congressman for more of the largesse? Harry Truman’s legacy must be modified. A dedicated defense industry must be eradicated. The walls around the defense industry that impede competition must be pulled down so that firms with mainly commercial business can compete for defense contracts. The first step in this process would be to insist that the armed services ease their unique and overly rigorous requirements at the subcontract level. In other words, the U.S. military should be forced to use commercially available parts—or such parts that can be easily modified to military requirements—in their weapon systems.

Thus, in a “back to the future” move, subcontractors—like the entire war production machinery used to do in the old days—would be able to move in and out of defense production as military threats to the United States wax and wane. If subcontractors could move freely from commercial to weapons production and back, less pressure would arise to keep the defense budget high during times of low threat (for example: at present, terrorism doesn’t require much money to fight). With lower defense budgets and a more modest and defensively oriented military, the Albright temptation to intervene excessively around the world would also be reduced.

[Editor's Note: As I told Ivan, that's a good place to start, but I don't see any way to do it. No president is going to promote such a thing. (Ron Paul did, but he's not going to get elected.) Does anyone think the government is going to abandon the military/industrial/congressional pork merry-go-round voluntarily? How would we force them?

It's too much like trying to castrate a grizzly bear with a pocket knife. Sure, it might be done, but who's going to hold the bear while you cut?]

Donald A. Downs is Professor of Political Science, Law, and Journalism at the University of Wisconsin, Madison, and Research Fellow at The Independent Institute.

Mike Moore is Research Fellow at The Independent Institute, former editor of The Bulletin of the Atomic Scientists, and author of the book, Twilight War: The Folly of U.S. Space Dominance.

John Semmens is a research fellow at the Independent Institute, a research project manager in the Arizona Department of Transportation Research Center, and contributing author to the Independent Institute book, Street Smart: Competition, Entrepreneurship and the Future of Roads, edited by Gabriel Roth.

S. Fred Singer, an atmospheric physicist, is Research Fellow at the Independent Institute, Professor Emeritus of Environmental Sciences at the University of Virginia, and former founding Director of the U.S. Weather Satellite Service. He is author of Hot Talk, Cold Science: Global Warming’s Unfinished Debate (The Independent Institute, 1997).

Dr. James L. Payne is Research Fellow at the Independent Institute and Director of Lytton Research and Analysis and author of numerous books, including A History of Force: Exploring the Worldwide Movement Against Habits of Coercion, Bloodshed, and Mayhem,and he has taught political science at Yale University, Wesleyan University, Johns Hopkins University, and Texas A & M University.

Randal R. Rucker is Research Fellow at the Independent Institute, Professor of Agricultural Economics and Economics at Montana State University, and co-author (with E.C. Pasour, Jr.) of Plowshares & Pork Barrels: The Political Economy of Agriculture.

Charles V. Peña is Senior Fellow at the Independent Institute as well as a senior fellow with the Coalition for a Realistic Foreign Policy, senior fellow with the George Washington University Homeland Security Policy Institute, and an adviser on the Straus Military Reform Project.

William Ratliff is Adjunct Fellow at the Independent Institute, Research Fellow at Stanford University's Hoover Institution, and a frequent writer on Chinese and Cuban foreign policies.

Ivan Eland is Director of the Center on Peace & Liberty at The Independent Institute and Assistant Editor of The Independent Review. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and Ph.D. in national security policy from George Washington University. He has been Director of Defense Policy Studies at the Cato Institute, Principal Defense Analyst at the Congressional Budget Office, Evaluator-in-Charge (national security and intelligence) for the U.S. General Accounting Office, and Investigator for the House Foreign Affairs Committee. Full Biography and Recent Publications

Jonathan J. Bean is Research Fellow at the Independent Institute, Professor of History at Southern Illinois University, and editor of the forthcoming book, Race and Liberty: The Classical Liberal Tradition of Civil Rights.

Anthony Gregory is a Research Analyst at The Independent Institute. He earned his bachelor's degree in American history from the University of California at Berkeley and gave the undergraduate history commencement speech in 2003. In addition to his work with the Independent Institute, he regularly writes for numerous news and commentary web sites, including LewRockwell.com, Future of Freedom Foundation, and the Rational Review.
Full Biography and Recent Publications

Dominick T. Armentano is professor emeritus in economics at the University of Hartford (Connecticut) and a research fellow at The Independent Institute in Oakland, Calif. He is author of Antitrust & Monopoly (Independent Institute, 1998).

Alvaro Vargas Llosa is director of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. He is widely published and has lectured on world economic and political issues including at the Mont Pelerin Society, Naumann Foundation (Germany), FAES Foundation (Spain), Brazilian Institute of Business Studies, Fundación Libertad (Argentina), CEDICE Foundation (Venezuela), Florida International University, and the Ecuadorian Chamber of Commerce. He is the author of the Independent Institute books The Che Guevara Myth and Liberty for Latin America. Full biography and recent publications.

Pierre Lemieux is an economist and co-director of the Economics and Liberty Research Group at the Université du Québec en Outaouais and a Research Fellow at The Independent Institute in Oakland, California.

Alexander Tabarrok is research director at The Independent Institute, associate professor of economics at George Mason University, editor of the Independent Institute books, Entrepreneurial Economics, The Voluntary City (with D. Beito and P. Gordon), and Changing the Guard: Private Prisons and the Control of Crime.

Robert Higgs is Senior Fellow in Political Economy at The Independent Institute, author of Against Leviathan and Crisis and Leviathan, and editor of the scholarly quarterly journal, The Independent Review. Click here for a bio on Dr. Higgs, the noted economist and historian.

William Marina is Research Fellow at the Independent Institute in Oakland, Calif., and Professor Emeritus of History at Florida Atlantic University.

David T. Beito is a Research Fellow at The Independent Institute, Associate Professor of History at the University of Alabama, and co-editor of the book, The Voluntary City: Choice, Community and Civil Society.

William Marina and David T. Beito belong to "Liberty and Power," a group blog at the History News Network.

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Nicolas Heidorn is a public policy intern at The Independent Institute in Oakland, California.

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