Ever since President Dwight Eisenhower warned of the “military-industrial complex” in his Farewell Address, concerns about its influence have haunted US politics. This constellation of interests, headed by the “big five” defense contractors—Lockheed Martin, Northrop Grumman, Boeing, Raytheon, and General Dynamics—is said to be powerful enough to tailor US defense policy to its whims. For decades, such talking points were mainly heard on the left, but similar lines of criticism have lately gained currency on the right—another index of conservatives’ declining trust in American institutions. The war in Ukraine has obviously given such narratives a new lease on life. The only winners in the Ukraine war, we are told, are the defense contractors, who again get to ply their bloody trade at everyone else’s expense.
As appealing as this account might be, it is incorrect. Though many take it for granted that the arms industry is salivating over the carnage playing out in Eastern Europe, the mood on display among the representatives of various defense contractors at a recent congressional hearing on the state of the industry was far from cheerful. As Defense News reported at the time, industry representatives expressed wariness about scaling up production capacity, expressing skepticism about the government’s long-term commitment to the levels of spending that would justify such an expansion. Their reaction to the war in Ukraine seemed closer to a shrug than a cheer.
To understand why this is, we must grasp two very basic points about the US military. The first is that weapons purchases account for a smaller share of the defense budget than most assume. The sheer sums spent on weapons systems can be shocking, but these costs are usually amortized over decades. Procurement—that is, the purchase of new weapons systems—now comprises less than a fifth of the total Pentagon budget. Personnel costs, as well as operation and maintenance, eat up the lion’s share and look likely to keep growing in the years ahead. Hence, increases to the defense budget don’t necessarily amount to big profits for contractors.
The second point is that American defense contractors can only work when their sole customer—the US government—pays them to do so. The reason there isn’t as much enthusiasm about the war in Ukraine as many imagine is that in 2023, there is little reason to believe that money is forthcoming. Not only has congress become dysfunctional when it comes to the basic task of setting a budget, the United States is now running a $1.3 trillion dollar deficit.