The Origins of the Military Industrial Complex and Its Historically Pernicious Influence on US War and Foreign Policy

As the Biden administration has illegally bombed Syria and Iraq – two countries that pose absolutely no threat whatsoever to the United States or Americans – the familiar policy of militarism has been reinforced by yet another U.S. president. However, it was a previous president who, on his way out of office in 1961, coined the term "military-industrial complex," and warned of the potential pernicious effects of the increasingly outsized influence of defense contractors over the budget and foreign policy of the United States.

Though the Cold War saw the expansion of an institutional defense industry, the seeds had actually been planted long before and a conscious decision to nurture them further was taken before World War II ended.

The Roots of the Military Industrial Complex

In 1864, President Lincoln expressed profound concern over the rise of corporations that had resulted from the Civil War and what it portended for the political and economic future of the country. Eventually, advancements in industrialization led to more mechanized and phenomenally more destructive warfare in the 20th century, with the outcomes increasingly dependent upon material production and technology. As a result, major corporations would emerge to provide the material of war and, in the process, became incentivized to keep wars and war budgets in place.

In World War I, military officers still played a critical role in the decisions to wage war which were based on previous strategies that were soon rendered outmoded due to a lack of technological expertise and inability to manage the more complicated industrial economics crucial to sustaining modern warfare. For expediency, government allowed responsibility for the war economy to be transferred from the Army to private industrialists who controlled the terms of war organization and procurement through the War Industries Board (WIB), a body composed primarily of corporate executives and bankers.

Once this arrangement was established it was difficult to put the genie back in the bottle. Many of the major anti-competitive trusts running the war economy through the WIB had long desired a relationship with the state that would facilitate public subsidy of their interests. The war effort had proven a convenient means to this end.

Between 1918 and 1941, formal patronage was fostered between the War Department and big business for the first time outside the context of an actual war. Drawing on the WIB model, the War Production Board instituted favorable tax and profit standards for major industrialists who again dictated policies within their own economic sectors during World War II, usurping substantial decision-making from state actors.

World War II and the major economic mobilization it necessitated greatly increased the incentives for war industries to maintain a militarist stance by the U.S. As detailed by historian Stephen Wertheim in his book, Tomorrow the World, foreign policy planners in the U.S. – led by members of the Council on Foreign Relations (CFR) – were alarmed by the Nazi takeover of France in June of 1942. The idea that Britain could also fall was seriously entertained for the first time. This prompted a major realignment in internationalist thought within the U.S. political class, from a rather restrained hegemony mostly confined to the western hemisphere and support for international law and disarmament, to a world order dominated by U.S. military supremacy. American national security was broadened to incorporate the objective of not allowing the U.S. to be denied action and influence around the world. This included free economic exchange with the acknowledgment that "trade would extend no further than force allowed, but force would be committed as far as trade necessitated."

The Soviet Union had largely been ignored in these planners’ thinking until the Soviets began turning the tide on the Germans in 1943. It was then recognized that the Soviet Union would emerge from the war as a significant world power that would have to be accommodated to some degree within the new U.S. global order. It was initially accepted that the Soviets would have a sphere of influence in Eastern Europe. This was permissible as long as enough economic and political openness was afforded to those countries so as not to undermine newly defined U.S. interests. Additionally, anti-Soviet hardliners, such as Leslie Groves and James Byrnes now occupied influential positions within the Truman administration. This set of circumstances increased the likelihood of a Cold War.

Since 1945, the power, reach and ambition of multinational corporations have expanded, including encroachment into areas traditionally considered part of the public interest and outside of its domain.

James Forrestal, a former Wall Street financier who served as Secretary of the Navy during WWII and later as the first Secretary of Defense, had come to the view that policy should be an instrument of maintaining capitalist investment. According to Nikhil Pal Singh’s in depth expose in The Boston Review: "Forrestal framed his own deference for hierarchy in terms of the prerogatives of corporate capitalism—the idea that practical men of business, rather than reformers and intellectuals, had won World War II and needed to be running the world going forward."

During a tense White House meeting in 1945, Forrestal advocated – against the advice of former Vice President Henry Wallace and then-Secretary of Defense Henry Stimson – the position of not sharing information on the atomic bomb with the Soviet Union. Forrestal persuaded Truman to agree to his view, thereby averting a possible trust-building exercise with the Soviets and encouraging the creation of a Cold War and an arms race.

All too happy to push this new arms race and maintain high military budgets were the executives of defense contractors, such as Lockheed, Northrup and Douglas. Defense spending had increased during WWII by over 13,000 percent and after the war’s end these companies had to scheme to maintain government subsidies for their industries and the huge profits that went along with them. A panel with representatives of the defense industry was created to lobby congress. After hearings that gave voice to defense executives’ gloomy forecasts of how the U.S. could fall behind economically and squander its hard-won position of global military superiority without continued largesse from the federal government, Truman was sympathetic but did not actually agree to significant defense budget increases until the Korean War erupted.

Unfortunately, this emphasis on running foreign policy with the mindset of a businessman – with little accountability – would be encouraged by the national security apparatus created by the 1947 National Security Act and Forrestal’s influence. It would later be exemplified by Robert McNamara, a former executive at Ford Motor Company, who presided over the disastrous Vietnam War as Defense Secretary.

Indeed it was during that conflict that the U.S. government got defense spending up to levels not seen since WWII, which included construction projects and the running of military facilities in Southeast Asia in addition to weapons production.

Toward the end of the Vietnam War in 1973 through the Carter administration, the defense budget dropped to its lowest level since 1951. But it would shoot back up during the Reagan years when the Cold War reached a dangerous level, with the two superpowers coming close to nuclear war in 1983.

The Cold War Ended but the Peace Dividend Never Materialized

As the end of the Cold War finally beckoned in the late 1980s and, along with it, the potential for redirection of resources to improve the living standards of communities across America, Seymour Melman—an expert on the military industrial complex (MIC)—noted that 50 percent of the discretionary federal budget at that time went to the Pentagon. We are spending even more than that today: $989 billion out of a total discretionary budget of $1.4 trillion (FY 2020) is spent on the national security state, including the Pentagon budget, supplemental allocations for our Middle East wars, and supporting institutions of the government. Meanwhile, the percentage of the discretionary budget allotted to “international affairs" (i.e. diplomacy, among other things) is in the single digits, which speaks volumes about our leaders’ priorities and approach to international relations.

What all that needless investment into militarism ultimately translates into is investment not made into the infrastructure for American citizens and their day-to-day needs. To illustrate this point, Melman also discussed the state of American domestic infrastructure by 1990 and how it had suffered from the diversion of resources into the MIC:

The American ruling class, by 1990, has become a state/corporate managerial entity. Together they control the military-industrial complex. . . . The war economy, in the service of extending the decision power and wealth of America’s state and corporate managers, has been consuming the US civilian infrastructure. Roads, bridges, the water supply, waste disposal systems, housing, medical care facilities, schools are in disrepair from coast to coast.

To make matters worse, the service aspect of warfare – things that used to be done by military personnel, such as cleaning and cooking – has now been "outsourced" to Private Military Firms (PMF’s). Of course, the more traditional work of state soldiers, like killing and destruction, is also done by PMF’s that have cropped up. More sophisticated, diversified and structured than historical mercenaries, PMF’s proliferated after the collapse of the Cold War which allegedly left a "security vacuum" in many parts of the globe. One PMF, Executive Outcomes, broke the stalemated civil war in Sierra Leone that had terrorized the population for four years. Another such firm based in Virginia, Military Professional Resources Incorporated, assisted the Croats in their revival against the Serbs in 1995, prodding them into negotiations.

While these feats may sound somewhat commendable on the surface, their winning advantage over the vanquished lies mostly in their higher degree of sophistication and technology. As World War I illustrates, once technological parity is reached between conflicting parties, wars of attrition and protracted destruction develop with disastrous long-term consequences for both civilians and the soldiers involved.

Investing in the Influence of Politicians and Media

Unfortunately, political leaders don’t tend to think well in the long-term, nor do they typically have the patience or vision necessary for solutions based on global justice and cooperation rather than power and money. Giving corporations yet more profit incentives in military matters, along with the minimal public and legal scrutiny that derives from operating under privatization, just makes it easier for political leaders to continue on with the insanity that made the 20th century the bloodiest in history.

The defense industry spends hundreds of millions of dollars through lobbying and/or funding the campaigns of politicians in order to get budget allocations and contracts worth billions. According to an Open Secrets report from February of this year:

Defense companies spend millions every year lobbying politicians and donating to their campaigns. In the past two decades, their extensive network of lobbyists and donors ha[s] directed $285 million in campaign contributions and $2.5 billion in lobbying spending to influence defense policy. To further these goals they hired more than 200 lobbyists who have worked in the same government that regulates and decides funding for the industry.

The Biden 2020 presidential campaign, for example, received $447,277 from Lockheed Martin and $236,614 from General Dynamics.

In addition to this direct investment in the political system, the defense industry funds numerous think tanks that provide "expertise" in the form of reports and articles that are frequently accepted for publication in major U.S. media outlets. These think tank "experts" are often also used by mainstream media journalists in their reporting on foreign affairs and defense issues. The funders of these think tanks are rarely, if ever, disclosed to consumers in the outlets that publish commentary by their staff. Influencing the range of debate in the U.S. in this way gives the defense industry a major advantage in furthering their agenda. Some of the think tanks that receive the most funding include RAND Corporation, Atlantic Council, Center for a New American Security, German Marshall Fund of the United States, Brookings Institution, New America Foundation, Council on Foreign Relations, and CSIS.

There is also the revolving door of politicians into and out of the defense industry. For example, the current defense secretary, Lloyd Austin, was a member of the board of a Raytheon-connected weapons company before accepting the post as head of the defense department. Secretary of State Antony Blinken co-founded West Exec Advisors in 2017, a consulting firm that facilitates contracts between Silicon Valley tech companies and the Pentagon. National Security Advisor Jake Sullivan’s last gig before joining the Biden administration was at a think tank that gets major funding from both the U.S. military and defense contractors.

Given all the influence that the defense industry has on the media and politicians, it’s no surprise that representatives of the MIC, as reported on by The Intercept in 2016, were stating openly that a Russian "threat" made for good business. All the negative implications of high tensions between the world’s nuclear superpowers for all of humanity were of no concern to these people when it came to fat profits.

Eisenhower was correct about his warning with respect to the potential growth and harm of the military industrial complex on the priorities of U.S. society. Unfortunately, his warning has largely gone unheeded.

Natylie Baldwin is author of The View from Moscow: Understanding Russia and U.S.-Russia Relations, available at Amazon. She blogs about Russia and U.S. foreign policy at