Defense Contractors Do Not Start Wars, and Six Other Slogans Examined

Every war in history, according to a certain kind of bumper sticker, was started by a man in a suit who wanted to sell more missiles. It is a wonderfully efficient theory. It explains everything, and anything that explains everything has usually explained nothing. The attack on Pearl Harbor? Profit. The invasion of South Korea? Profit. The Peloponnesian War? Presumably some very early spear lobby.

I want to take the slogan seriously, which is more than its fans do, because it has a grain of something real in it, and the grain is more interesting than the loaf. So let us line up seven popular claims, test each against the record, and hand down a verdict on each. Folks, you will be surprised how many of them fall over when you lean on them.

Slogan one: "Defense is most of the budget"

The claim: the Pentagon eats the lion's share of everything Washington spends.

The test: it is true of one slice of the budget and false of the whole. Defense is roughly half of discretionary spending, which is the part Congress sets each year through appropriations. But discretionary spending is itself a minority of the budget. The bulk of federal spending is mandatory: Social Security, Medicare, Medicaid and similar programs that run on standing law, plus interest on the debt. By 2019, defense was about 15 percent of all federal outlays and about 3.2 percent of GDP, according to the figures in the budget's historical tables. In 1953 it was about 70 percent of the budget. The full figures are in Defense Spending as a Share of the Economy, From Korea to the 2010s.

The verdict: false. It is the largest piece of a small slice. The people who say it use "the budget" to mean the part they are looking at.

Slogan two: "Defense contractors start wars"

This is the headliner, and it deserves the longest hearing.

The test starts with the Constitution. Under Article I, Section 8, Clause 11, Congress has the power "To declare War." Contractors do not hold that power. They do not command armies, they do not conduct diplomacy, and they do not choose which governments attack which. A contractor can lobby, and lobbying is a real thing with real influence, but lobbying for a larger budget is a different act from causing a war.

Now look at how wars actually started. The Japanese attacked Pearl Harbor on December 7, 1941. North Korea invaded South Korea on June 25, 1950. Al-Qaeda attacked New York and Washington on September 11, 2001. Confederate batteries fired on Fort Sumter on April 12, 1861. In none of these did a procurement officer start the shooting. In each, the decision to fight was made by an adversary with its own aims, and America's contractors were, at the outset, either unprepared or lightly employed.

There is a harder case for the theory, and it is worth meeting. Wars where the American decision to fight was a choice, such as Vietnam and Iraq in 2003, are disputed. But the record of those decisions shows presidents, advisers, intelligence assessments and congressional votes, argued over in public, with theories of the national interest on every side. It does not show boardroom directives. You may think the decisions were wrong, as many conservatives do about particular conflicts. Explaining a mistake of judgment by pointing to a conspiracy of profit is a way to avoid doing the harder work of finding out what the officials believed.

The verdict: false. Contractors make what the government orders. The deciders sit in the White House and in Congress, and that is where accountability belongs.

Slogan three: "Eisenhower opposed a strong military"

The claim: the general who warned of the "military-industrial complex" was against defense spending.

The test is Eisenhower's own text. In his farewell address of January 17, 1961, he said that "a vital element in keeping the peace is our military establishment," and that "our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction." He then said that the conjunction of an immense military establishment and a large arms industry was new in American experience, and that "in the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex."

Read both halves. The man who warned against undue influence is the same man who said the arms must be mighty. He was the Supreme Allied Commander in Europe, a five-star general, and a president who kept a very large military, built the interstate highway system partly on defense grounds, and fought the Cold War with a strategy of deterrence. He feared the influence of the complex, and he insisted the military must be strong. Quoting only the first half turns a balanced warning into a slogan.

He went on in the same speech to warn against more than the military side. The farewell also warned that public policy could become the captive of a scientific-technological elite. The warning is broader than the slogan, and Eisenhower's Farewell Warned About More Than the Military-Industrial Complex reads the whole address.

The verdict: false. Eisenhower wanted a strong military and a vigilant citizenry. Those are not opposites.

Slogan four: "Procurement is mostly profit"

The claim: the money the Pentagon spends on weapons ends up as shareholder profit.

The test is the structure of contracts and of the companies. The profit on defense work is regulated in ways most commercial sales are not. Cost-type contracts reimburse allowable costs and add a negotiated fee. The Truth in Negotiations Act, enacted in 1962, requires contractors to disclose cost and pricing data on large negotiated contracts so that the government can see what it is paying for. The profit is a modest share of the price, and most of the money goes to labor, materials and subcontractors.

That does not mean the system is efficient. Because most of the money goes to labor, materials and subcontractors, cost growth is what hurts. The programs in Zumwalt, the Littoral Combat Ship and the Lessons of Procurement Failure wasted money not through fat profit margins but through changing requirements, immature designs and shrinking buys. The taxpayer was cheated by management failure, not by a dividend.

The verdict: mostly false. Profit is a small share of the price, and the real waste lies in the way programs are run.

Slogan five: "The industry keeps getting bigger and stronger"

The claim: the arms industry grows ever larger as the budget swells.

The test is the 1990s. After the Cold War, defense spending fell, as the earlier table shows, and the industry shrank with it. In 1993, Pentagon leaders invited the chief executives of the major defense companies to a dinner and told them, as it was later reported, that the budget was going down and that the department expected the industry to consolidate. The meeting came to be called the Last Supper. In the years that followed, the field of prime contractors went from dozens to a handful: Lockheed merged with Martin Marietta, Northrop acquired Grumman, Boeing absorbed McDonnell Douglas, and Raytheon bought Hughes's defense business. Within a few years, five giants stood where many had before.

That is the opposite of an industry that grows when the budget falls. Consolidation is what happens to an industry whose customer cuts demand. And it left its own problem, which is that a single customer facing five suppliers has less competition than it needs. A fair conservative will note that the government's own policy shaped that market, and that fewer suppliers means less competitive pressure on price. The problem of an industrial base that has shrunk is the subject of The Shipbuilding Gap with China Is an Industrial Story Before a Navy Story.

The verdict: half true, and for the opposite reason. The industry grew in some periods and shrank in others, and the deepest consolidation followed a cut. The danger it presents today is concentration, not endless growth.

Slogan six: "Peace would be bad for the arms business, so they want war"

The claim: a rational contractor wants conflict.

The test is the behavior of the companies themselves. After the Cold War ended, the response of the industry was to merge, to diversify and to scramble for commercial business, because peace had cut its revenue. That much is true. But wanting a bigger budget and wanting a war are very different things. A war disrupts supply chains, puts the workforce at risk, strains the company's relationship with the government and makes the order book harder to manage. A steady, large peacetime budget is far better for a contractor than a hot war, and a deterrence strategy that works is the best business model of all.

The more important point is that the claim describes a motive without a mechanism. For a contractor to cause a war, it would have to move a president, a Congress and an electorate. Any theory that says it can must explain how. The American system has dozens of centers of power and a free press, and the war votes in the history books were taken on the floor of Congress.

The verdict: false. Contractors want orders, and war is a bad way to get reliable orders.

Slogan seven: "Congress is the victim of the lobbyists"

The claim: Members of Congress would cut the defense budget if only the contractors would let them.

The test is where the real pressure comes from. The most powerful political force in defense procurement is not the lobbyist but the district. A member who represents a plant, a shipyard or a base has a direct interest in keeping it open, and the contractors are skilled at spreading their suppliers across many states and districts, so that more members have a stake in each program. Programs survive long after the military has asked to end them, because cutting them hurts constituents who vote.

This is a real issue, and it is one on which Eisenhower's warning has teeth, because he said the influence might be "sought or unsought." But note that the force behind it is the ordinary politics of jobs, which operates on every kind of federal spending, from highway projects to agricultural supports. The way to deal with it is to demand that Congress vote programs up or down on their merits, in public, with the whole-life cost on the table. Blaming contractors alone lets members off the hook.

The verdict: partly true, and aimed at the wrong target. The pull of local jobs is real, and the people who answer for it are the ones who vote on the budget.

The argument in numbers

Let me put the discussion into a short numbered argument, in the order a skeptic would meet it.

One. War is a decision of government. Under the Constitution, the power to declare war and to fund it belongs to Congress, and the power to command the forces belongs to the president. A contractor holds neither.

Two. The money is smaller than the slogan. Defense is about 15 percent of outlays in the late 2010s and a minority of the whole budget, and profit is a modest slice of the price.

Three. The industry shrinks when the budget falls. The 1990s consolidation is a record of an industry responding to cuts, not driving wars.

Four. The real defects are management and concentration. Requirements creep, immature designs, five suppliers where there were many, and the pull of districts are the things to fix.

Five. Eisenhower's warning was about vigilance. He asked citizens to watch the relationship between the military and industry while keeping the arms mighty.

Why the slogan survives

If the slogan is so weak, why does it last? The answer is that it is a good story. It offers a villain with a face, an explanation that needs no knowledge of foreign policy, and a license to skip the harder question of whether a particular war was wise. The coverage of defense policy often leans on it, because it fits into a headline and it flatters the reader.

But a conservative should be the first to resist a theory that explains the world by a single hidden hand. We distrust central planning because the world is too complicated for one mind to run, and the same humility ought to apply to explanations. Wars have causes: ambition, fear, miscalculation, ideology and the choices of governments. A tidy cartoon of the arms dealer is much easier to draw.

The better response to the genuine concerns, the cost overruns and the cozy relationships, is not a slogan but an audit. The Pentagon Has Never Passed an Audit, and Conservatives Should Mind argues for exactly that, and Follow the Defense Bill From Markup to Signing, a Citizen's Guide shows where citizens can watch the process.

The case in brief

1. Defense is the largest part of discretionary spending and a modest part of the whole budget, about 15 percent of outlays by 2019.
2. Wars are started by adversaries and decided by governments, and the Constitution places the power to declare war in Congress, not in any company.
3. Eisenhower's 1961 address demanded mighty arms and a vigilant citizenry in the same breath.
4. The record of the 1990s shows an industry that shrank and consolidated when its budget fell, leaving concentration as the real problem.
5. The valid concerns, cost growth, immature programs, district politics and too few suppliers, are best met by audits, competition and public votes.

What you can do: pick one major weapons program in your state, find its cost history in the Government Accountability Office's reports, and ask your representative how many times Congress has voted on it in public.