The Misguided Focus of the US Military Industrial Complex

Reckoning today from Paris, France…

Sic transit Gloria imperii…

“Hey Bill,” writes a Dear Reader. “You are a sad excuse for a military analyst. You can criticize the military all you want, especially from your leftist headquarters in Paris. But when trouble comes, you’re going [to] wish you had US military forces to protect your sorry ass.”

Hey Dear Reader, your editor replies, go f**… Never mind. You may be right. Maybe history doesn’t work now the way it used to.

Our beat here is economics. But the US ‘security’ industry (aka US military) currently eats up about $1 trillion per year – which is a big part of the economy and an even bigger part of the federal budget.

When we talk about an upsurge in manufacturing, for example, we are talking about an industry that is making 40% of its output for the Pentagon. And when we talk about an increase in the use of energy, we could mention the world’s biggest energy user – also the Pentagon. And when we calculate the US federal deficit we could remind ourselves that every penny of it is about what America’s ‘security’ agenda costs.

Dear Readers will also recall that we are not the kind of economist you see on TV…the kind that wins a Nobel Prize with some elaborate mathematical proof of a proposition which is, on its face, preposterous. No, we are an old fashioned ‘literary’ economist…the kind that can barely do binomial equations, let alone calculus.

What we are interested in is how the world works. And we notice that the world of military spending works just like the rest of the world. That is, it obeys the law of declining marginal utility. You can put more in…but you don’t necessarily get more out.

But first, our dear reader above missed the point. First, we’re not criticizing the US military. We’re not criticizing the uniform, that is; we’re criticizing the man in it. He will always do what comes naturally – when he can get away with it; he will aggrandize his own position at others’ expense. He is a lazy, foul, half-witted, opportunist…always trying to do the least work for the most reward possible. That is to say, he is just like the rest of us.

Second, when the next real shooting war breaks out, we’re not likely to thank the Pentagon; we’re more likely to curse it. We’ll be sorry we spent so much money to produce such a fat, coddled and incompetent military industry.

Why incompetent?

Strategically, the proper job of a defense department is to defend the country…not to waste its resources stirring up trouble all over the world. It is meant to protect the nation against enemies, not create them.

It is also incompetent in a tactical sense. So much money, time and effort is spent fighting make-believe enemies – ‘terrorists’ or ‘insurgents’ – that it will most likely lack the equipment and the know-how to fight a real one.

We don’t have to know in detail how the US military will fail. Instead, we know that power and money corrupt…and enfeeble. You see, military power – like almost everything else you can mention in a family publication – is subject to the law of declining marginal utility…aka the law of diminishing returns. At some point, you can spend more…and get less. And when the real test comes, we predict, the US military will fail…it will be too corpulent, too slow, and too out-of-date to meet the challenge.

Military preparedness probably reaches the point of declining marginal utility when the armed forces are able to mount a credible defense of the nation and its borders – and no more. Thereafter, “the military-industrial complex,” as Eisenhower called it, becomes too inwardly-focused…on promotions, on procedures, on procurement…too self-serving. In a real war, it is usually humbled by a faster, cheaper, more modern enemy.

But it gets worse. A large, well-funded military is a tempting weapon. Keep it lying around, loaded…and someone is bound to get killed. After a while, the temptation to use a big army is irresistible. A large military is typically captured by the militarists, who want to use it for their own glory. At that point, the army is no longer an asset to the country it is meant to serve; it is a danger. It will enter into ruinous wars…turn against its own citizens…or both

But why does the US security industry focus on phony enemies…and insignificant threats? Because it is looking out for Number One. It is being human. It is taking resources from the productive part of the economy and redistributing them to itself…with no benefit, other than the aforementioned aggrandizement of the military itself, along with its contractors, suppliers, and its pet politicians.

The US military has more power and more money than any institution in the world. It has now been taken over by neo-con ideologues with their own crackpot agendas. It has the support of the American people and their government. We can imagine how this will turn out…badly!

And more thoughts…

“We got a call from our daughter last night,” said friends, whose daughter is staying at our house in Baltimore. “She is doing very well. She said she had a hard time sleeping at night because of the helicopters…but now she’s gotten used to it.”

“Helicopters? Oh yes…the police helicopters…”

We’ve gotten used to them too. We scarcely notice them. Soon, we probably won’t notice the drones either. And now we go through airport ‘security’ without noticing that it is absurd and unconstitutional.

They now have ‘security’ personnel at railroad stations too. A friend, recently making the trip from New York to Baltimore, reported that Homeland Security agents pulled some passengers aside to riffle through their belongings.

But you can’t be too careful, can you?

Actually, you can. Carefulness…aka security…costs time and money. Not only that, it breeds a timid, risk-averse population afraid of its own shadow. These patriots are easy to control…and easy to lead – even to their own destruction.

Remember the words of Ben Franklin:

People willing to trade their freedom for temporary security deserve neither and will lose both.

But another Dear Reader reminded us yesterday that poor ol’ Ben couldn’t even get on a plane in today’s America. At airport security would he meekly take off his coat, and put his shoes on the belt…and then hold his hands up in the air so the king’s agent…ooops, we meant TSA agent…could see him naked? Not likely. He’d probably be amazed…flabbergasted…at what mindless slaves his descendants had become.

“Surely you don’t actually believe that I intend harm to this flying machine or to the people in it, do you?”

“Sir, put you your shoes on the conveyor. And your belt.”

“Do you have a warrant for a search of my personal affairs?”

“Sir, you’re holding up the line…”

“By what right do you…”

At that point, the goons would probably be on him. They’d probably hit him with a stun gun and then hold him in jail…

pending waterboarding.


Bill Bonner,
for Markets and Money

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Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail Markets and Money.
Bill Bonner

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