No one knows what security challenges the United States will face in the next century. To meet the challenges of the Cold War -- America's longest and most complex struggle -- the United States created a set of institutions and societal relationships that let it prevail without sacrificing its way of life. As the new century approaches, those very institutions and relationships are at risk.

Many now believe that because of America's towering technological advantages, which were displayed so effectively in the 1991 confrontation with Iraq, no enemy will dare oppose U.S. forces with conventional weapons. Instead, future attacks will likely be "asymmetric," involving terrorism, sabotaging U.S. communications and financial systems, and poisoning cities' water supplies. Such assaults cannot defeat the United States but may cause panic and make appeasement tempting.

The interest in asymmetric threats reflects not only an awareness of the United States' relative strength but also a recognition that victory in war can stem from the ability to surprise as well as from the exercise of power. During the Cold War, the U.S. national security system overcame many more symmetrical than asymmetrical surprises. The Soviets' first nuclear tests, the invasion of South Korea, the Chinese entry into the Korean War, Sputnik, and the downing of Gary Powers' u-2 spy plane -- to name just a few -- were all symmetrical actions, but surprises nonetheless. America's sustained ability to meet all types of challenges and to generate some surprises of its own was obviously important to its Cold War triumph. This ability will be no less important to America's future security, which makes the rush to dismantle the institutional framework that underlay the Cold War victory so foolishly dangerous.

For many policymakers, the answer to these and any other security threats is technology and more technology -- an especially appealing prospect because the relevant technologies are being developed rapidly by thriving commercial markets without special government attention. U.S. military actions, in this view, will be executed remotely and precisely, for the most part avoiding casualties among U.S. forces and the innocent. High-tech advocates also argue that precision strikes will avert the need to mobilize U.S. society to any significant extent.

The high-tech strategy, however, does require mobilizing technological resources, not all of which lie waiting in commercial markets. Because U.S. security seems so easily purchased, the defense budget has largely become a pork barrel for defense contractors, communities near military bases, reservists, some labor unions, and the officer corps. The greed of these friends of defense ensures both that the Pentagon budget is bloated and that each dollar of it is less effectively spent than during the Cold War.

Winning the long showdown with Moscow was an amazing governmental achievement. American presidents and congressional leaders, never known for their cooperation and consistency, kept the same basic security policy in place for nearly 45 years. The United States sought to contain Soviet expansion while applying technological and financial pressure on the Soviet economy through a sustained military buildup. A nation normally wary of big government was nevertheless persuaded to spend more than $13 trillion on defense during this period, and it did so without bankrupting the economy or forfeiting political freedom. The U.S. military deployed tens of thousands of nuclear weapons -- many of them kept on high alert -- but did not blow up the world in the process. There is much to learn from this experience.


Historians seeking lessons from the Cold War tend to focus on the management of its crises, the wars in Korea and Vietnam, and such moments of great political drama as the Cuban missile crisis. But successful crisis management depends on the unique personalities of the presidents and their most senior advisers. Because crisis management is so personality-driven, little can be learned about the institutional relationships that were crucial to winning such a long societal test by examining the Cold War's most dangerous moments.

The real lessons of the showdown -- both for the management of future big-power confrontations and for the rest of government -- come from studying the management of defense resources: the day-to-day business of weapons procurement, the continuous mobilization of political support, and the preparation for a long war. The Cold War enlisted both a significant portion of the U.S. economy and much of its science and technology talent. Among the victory's many causes was the fact that America effectively managed the transition from the mass-produced and mass-equipped armies of World War II to the high-technology military force of today. The Soviet Union did not. The battlefields of Kuwait and southern Iraq proved this to the world in 1991, but Marshal Nikolai Ogarkov, chief of the Soviet General Staff, had already conceded the point in the early 1980s when he warned that the Soviets were falling seriously behind in developing modern weapons and military doctrine. America gained this important edge while significantly enhancing the quality of life for the average person in the United States, Western Europe, and Japan -- successes not missed by the captive citizens of the Soviet empire. The organizational innovations that melded public and private efforts in support of the West's defense were a tremendous success.

To be sure, the victory had costs beyond dollars and soldiers' lives. The threat posed by Soviet expansionism, though real, was easily exaggerated, spurring periodic bouts of national hysteria. Embellishing the red threat for bureaucratic advantage was part of the government process for starting and sustaining weapons projects, since ideas for such projects always exceeded obtainable resources. Such tactics, however, could frighten and confuse outsiders. And even though the resources made available to the Pentagon were not enough to implement most of the new weapons proposals, they were large enough to constrain the rest of government, delaying or blocking the implementation of social programs. Proponents of higher defense spending further confused national politics by overusing Cold War rhetoric.

U.S. allies tended to underplay the communist threat rather than exaggerate it. This allowed them to underinvest in the common defense effort, comfortable in the knowledge that the United States would defend them while it defended itself. Instead, the allies focused first on their economic recovery from World War II and later on gaining trade advantages. With rare exceptions, their military preparations did not approach America's. But most of them still criticized American anticommunism and willingness to use or threaten force in conflicts with the Soviet Union and its proxies. Only NATO functioned well as a military organization, but then again Europe was the crucial front in the Cold War.

America's open society provided domestic institutional arrangements that readily adapted to the Cold War's managerial and technological imperatives. As the U.S. government mobilized, the nation's pluralist constitutional arrangements forced public officials to negotiate with private citizens in order to gain their support for the long confrontation. The United States created new public-private partnerships that satisfied both military and libertarian ends. These contractual relationships divide into four categories:

Military-industry. The allocation of responsibilities between public arsenals and private firms in developing and producing weapons.

Interservice. The competitions for defense spending among U.S. armed services.

Civil-military. The relationship between civilian officials and the military in waging the Cold War.

Military-science. The ties between the military and America's vast scientific and technological capabilities.

Ironically, these successful relationships have been unraveling after the end of the Cold War. What was effective then is now often viewed with jealousy or suspicion. Only America's inherent geographic security and its post-Cold War lead in the quality of weapons and training prevent the resulting vulnerabilities from becoming immediate problems. Another Cold War would require reinstating these relationships to keep America's forces far ahead of its new rival's. Indeed, the effectiveness of these relationships won the Cold War.


Traditionally, the American military relied on a network of government-owned and -operated arsenals, depots, and shipyards for developing, producing, and maintaining the tools of war -- from cannons to ships to tanks. In times of war, contractors were often paid a premium to produce weapons and supplies. Wars were usually followed by scandals over the quality and cost of the contractors' materiel, but the lack of prospective business, not public outrage, usually led contractors back to commercial markets at war's end. The peacetime American military was small, with only modest needs for new weapons. The public arsenals and yards were the frugal, if not especially efficient, guardians of military technologies in the long, lean periods between wars.

The twentieth century brought dramatic changes. With the advent of flight, the military turned to private entrepreneurs to develop aircraft. The arrangement was intentionally conceived after World War I by aviation enthusiasts to promote civil aviation in the United States, but the military was able to leverage private investments to accelerate progress in aircraft design. Entrepreneurs and bankers risked their own money developing military prototypes in the hope that the business would soon evolve into a commercial equivalent of the automobile industry. Only limited government facilities were established in aviation, mainly for research and development rather than for production.

The biggest changes, however, came after World War II. Because both sides in the Cold War had nuclear weapons, they took great care to avoid direct clashes. Rather, their struggle revolved around armament development, ideological competition, and the occasional surrogate war. Within five years of its postwar collapse, the U.S. defense budget soared again, attracting the attention of contractors who had not yet fully converted to peacetime. And because the military now emphasized aircraft and missiles -- the delivery systems for nuclear weapons -- contractors held an advantage over the government.

The responsiveness of contractors proved crucial. Unburdened by civil-service restrictions, contractors could recruit the needed technical talent and vary their workforces to fit the military's fluctuating needs. Successful contractors constantly pushed the state of the art because the military demanded rapid development of technology to gain the upper hand against the Soviets. Civilian defense officials and military officers came to prefer private contractors to the public arsenals, recognizing the agility of a contractor-based procurement system. Furthermore, during periods of declining budgets, like the aftermaths of Korea and Vietnam, lobbying by private contractors helped maintain the coalition for weapons procurement.

In contrast, the Soviet Union relied exclusively on a public system for its weapons. The Soviets' concern for plant-based socialism and their failure to invest in production technologies dominated Soviet weapon development. The Soviet military had little influence on designs, production schedules, or costs, and their weapons showed it. New designs tended to follow American innovations rather than leading the technological race.

Since the end of the Cold War, however, the nimbleness of contractors has been replaced by the sclerosis of a politically captured defense procurement process. With no obvious strategic threat to the United States, politicians have become more willing to use the Pentagon budget as a jobs program. Strategic danger enhances the military's power in awarding weapons contracts, forcing contractors to focus on individual services' preferences in weapons designs and production schedules. The absence of any such danger lets politicians heed the military's desires less and allocate defense dollars to protect their districts or reelection opportunities -- witness the Navy's inability to concentrate all submarine construction in Connecticut, or the rush to supply compensatory business for a yard in Mississippi when the Navy unexpectedly assigned a new class of warships to another contractor. Defense companies have little incentive to be efficient or innovative because they can lobby Congress and the White House to alleviate competition.

To be sure, the defense industry is smaller than it was a decade ago, but that is a bad comparison; 1986 was the defense budget's Cold War peak. The more telling fact is that since the end of the Cold War, at most one military aircraft, ship, or armored-vehicle production line has stopped producing a weapon platform -- and that assumes that Northrop-Grumman's b-2 assembly plant in Palmdale, California, will not find a way to stay open as part of the present Pentagon-Justice Department policy of maintaining competition in the airframe sector. Because almost all the plants of the Reagan defense boom are still working, private contractors still employ more defense workers today -- 400,000 more -- than they did in 1976, when the Berlin Wall stood. The private arsenal system has proven harder to turn off during peacetime than the old public arsenal system was during the Cold War. Current proposals to increase the procurement budget to modernize the U.S. military are more about keeping American factories open than about reacting reasonably to new military threats.


The U.S. Army and Navy led largely independent organizational lives until World War II. But the development of the atomic bomb and its obvious power to awe politicians drove the services into a period of intense competition for jurisdiction over aircraft and missiles to deliver nuclear bombs far from American shores. The National Security Act of 1947 was intended to provide a framework for central defense management and interservice coordination, but it did not offer even a brief pause in a rivalry between the services -- now augmented by an independent Air Force -- that held sway through the mid-1960s.

The struggle was over strategic and budgetary dominance. American political leaders saw nuclear weapons as the answer to war with a numerically superior foe that was apparently willing to tolerate vast numbers of casualties. They also did not want to sacrifice the postwar economic recovery. An emphasis on nuclear weapons produced a cheaper military than one based on conventional weapons. Despite the general rearmament that coincided with the mobilization for the Korean War, the Eisenhower administration restrained the defense budget to avoid deficits. By promoting strategic bombing and winning jurisdiction over ballistic-missile development, the Air Force quickly won the lion's share of available defense resources.

Even among public bureaucracies, competition is an excellent spur to innovation. The Navy, unwilling to accept second place behind the Air Force, conceived of the Polaris ballistic missile as an alternative to the Air Force's strategic missiles. The Polaris was a solid-fueled ballistic missile, safer to handle and faster to launch than the liquid-fueled missile systems of the Air Force, and it was fired from a submarine, making it much less vulnerable to attack than land-based aircraft and missiles.

Interservice competition spilled over to other areas as well. The Navy developed more effective tactical aircraft than the Air Force, which forced the Air Force to use Navy-designed aircraft and tactics in Vietnam. And after some wildly misbegotten flirtations with nuclear weapons of its own, the Army challenged the emphasis on strategic nuclear systems by arguing for a renewed focus on conventional warfare. Such innovations as the Green Berets and assault helicopters were the result.

Unfortunately, limits were promptly placed on interservice competition as a goad for innovation. In an attempt to contain procurement costs for new weapons during the 1960s, Defense Secretary Robert S. McNamara began to encourage the services to adopt as much "commonality" as possible in their weapons designs. The flagship of McNamara's efforts, the TFX program that later developed into the f-111 fighter-bomber, was an expensive boondoggle that became an effective weapon system for the Air Force only late in its operational life and never joined the Navy's air arm.

Today, the misguided drive to avoid duplication in weapons development has expanded to a new, pernicious level under the banner of "jointness." By 2010, all of America's tactical aircraft technology will be targeted at a single project, the Joint Strike Fighter. If that aircraft runs into problems or if unexpected operational needs develop, the United States will not have any alternatives at hand. The best hope is that the competing influences of the Air Force and Navy, which are meant to fly different versions of the same basic airframe, will eventually split the project into two entirely separate successors.

Pressures against interservice rivalry are not limited to McNamara-like cost-cutters. The armed services themselves learned during the 1960s that competition gives civilians leverage over the military via the very interservice comparisons that can promote innovation. Such comparisons encourage rival services to reveal information about each other's weapons and unit performance that civilians can then use to develop budget alternatives. Splits within the military gave civilians potential political allies to enhance their credibility with the public. But enhanced civilian leverage did not favor the services' organizational interests, so they gradually overcame their mutual suspicions to form a more protective united front. Political leaders also came to discourage interservice competition because it was raucous and seemed wasteful to the public, who appreciated the virtues of duplication and friction less in a market of government agencies than they did in a market of firms. The result has been a gradual but very important change in the balance of power in civil-military relations.


The National Security Act of 1947 buttressed civilian control of the military by creating the post of secretary of defense to direct the armed services and manage their common support needs. Subsequent amendments expanded the secretary's staff and powers to manage all military operations. Although the services came to resent McNamara's exercise of this authority, they were not entirely the worse for it. McNamara did a great deal to foster a key Cold War institution: the expert civilian staff at the defense secretary's office.

Because the armed services bear the burden of fighting, they are intensely focused on physical threats to the nation's interests. But this focus must be balanced by economic and political considerations if the American political system is to create a sustainable defense policy. The defense secretary's task, as well as the president's, is to balance security against economic efficiency writ large and small and domestic and international political interests.

Pentagon officials could seek to buy more and more security, but in so doing they would risk bankrupting the economy. Tradeoffs have to be made. Similarly, choices have to be made among arms technologies. Does Washington want more aircraft or more missiles, more fighter aircraft or more bombers? Fears of the burden that defense spending might place on the economy were frequently expressed during the Eisenhower years. The United States fretted about the economic consequences of continuous mobilization. The Great Depression was still a vivid memory, and each recession generated political anguish. During McNamara's years at the Pentagon, thanks to his recruitment of RAND Corporation analysts for high-level positions, the department learned much about cost-benefit analysis and program budgeting. These economic tools are easy to ridicule when inappropriately applied, but they did give the military a much-needed lesson in the value of money, something easily forgotten in the rush to protect against foreign threats.

Most notably, the post-McNamara Pentagon learned from the disasters of "Total Package Procurement," under which McNamara had tried to plan multiyear budgets by assuming away technological uncertainties about the pace and cost of innovation. But as the 1980s failures in fixed-price contracts for developing and procuring advanced naval aircraft and ships indicate, these are lessons that some politicians conveniently forget in order to gain commitments for their favorite programs. Only so much acquisition reform can be effective or is really desired.

Raw politics, too, cannot be ignored in defense planning. This may mean buying some ships from a West Coast shipyard and keeping an Army brigade in Alaska. It may also mean finding room in the budget for more obvious pork, like subsidies for the merchant marine, the National Guard, and coal miners in West Virginia. The civilian secretary of defense is, fundamentally, there to assure that American values shape America's defense, that America's military includes minorities and women, and that something is provided for small as well as big businesses. There can be no defense without a supportive public. Efficiency is not always an important criterion in defense decision-making, but satisfying politically important interests certainly is.

The Goldwater-Nichols amendments to the National Security Act, adopted in 1986, began to undermine the system of civilian control. The chair of the Joint Chiefs of Staff (JCS) was given the clout to force parochial services to make tradeoffs. But the chair shares the narrow, defense-focused point of view of the service chiefs, so the new organization has in fact been able to keep interservice rivalry from escalating to a politically visible level. Elected politicians have been unable to balance defense commitments with civilian budget needs because they lack the political cover to cut defense budgets that interservice competition would provide. Finally, there is a danger in becoming dependent on a jointly managed military planning system that is focused too much on maintaining harmony among coalition members, the armed service chiefs, and the JCS chair.


It is hard these days to accuse the military of resisting the use of new technology. Warfare has become as much a contest between teams of scientists as between teams of warriors. The American military has been among the world's most nimble in acquiring and assimilating the benefits of research. The battleship admirals, those symbols of a military's tendency to cling to tradition in the teeth of clear evidence, have all but disappeared.

During World War II, independent weapons research produced not only advances in antisubmarine warfare but also the atomic bomb, the proximity fuse, incendiary weapons, penicillin, and dozens of other innovations. The military came to recognize science's value to warfare but resisted postwar proposals for a continuing autonomous role for scientists and even a civilian scientist's seat on the JCS. War had become a technological contest, but soldiers did not want to hand full power over military affairs to scientists.

The way around the problem was new institutions. The military helped establish a set of nonprofit organizations, now called Federally Funded Research and Development Centers (FFRDCs) and University Research Centers (URCs) -- organizations like RAND, the Institute for Defense Analysis, the Applied Physics Laboratory, and the Aerospace Corporation -- that give the government assistance but also depend on military funds and thus are not quite autonomous. These organizations let the armed services tap the technical expertise they need to build an advanced military without the constraints of civil-service rules. The FFRDCs help the services devise alternatives and at times even directly advise the military on contractor performance, but they do not compete with contractors for production contracts. They are captive advisers, free to give counsel but not free to question publicly the judgment of the military. This system let America adapt to the latest technologies without fear of being challenged politically by its own technical advisers.

Unfortunately, since the 1980s, for-profit firms have been challenging the FFRDCs and URCs. The "Beltway bandits" -- for-profit consulting firms located in Washington and other places convenient for government clients -- offer the same analysis and contract-management advice as their nonprofit counterparts but claim to be more efficient. They are also often staffed by retired military officers, giving them easy access to those who allocate contracts but reducing the independence and value of their products. As FFRDCs are replaced by fully private defense consultants, nasty conflicts of interest will arise as firms operate as both consultants and producers.


Since the Cold War, the public-to-private ratio in weapons acquisition has tipped too far toward the private sector. Nearly all government production facilities have closed, and most U.S. weapons research and development is in the hands of contractors. The driving force in the defense budget is not overseas threats but the need to sustain contractors with indispensable defense skills and technologies. This is done largely by awarding contracts for big weapons programs, offering politicians an irresistible combination of corporate success and continued employment for local constituents. The excess capacities built for the Cold War have not disappeared. Many bases have closed, but much of their work has been turned over to contractors. No wonder there is no post-Cold War peace dividend.

Interservice rivalry, too, has been tamed. Over time, the armed services found ways to collude rather than compete, and civilians have not challenged them here. Declining budgets may eventually threaten the united front of the services, but not yet. But this unity undercuts their incentive to innovate.

Since Goldwater-Nichols, civilians' ability to challenge the military has declined. In addition to the expanded role for the JCS chair, Goldwater-Nichols built up the military's Joint Staff so it could plan comprehensively and avoid the confusion and waste of separate services' efforts. But the enlarged Joint Staff serves mainly to check the influence of the civilian defense secretary and broker deals among the services. Its power grows as that of the civilians wanes. Not surprisingly, the civilian secretariat prefers to devote more and more of its time to foreign-policy planning, where the competition comes from the much weaker State Department.

These changes in relationships that worked so well in the Cold War are worrisome. Total reliance on private arsenals to develop weapons wastes money by encouraging continued investment in old systems while neglecting experiments with new designs. Contractors make more money selling additional copies of a known product than by risking technological or political failures in developing new ones, so they lobby for extended production runs rather than for research and development. As contractors' influence on the defense budget increases, procurement dollars are allocated less sensibly. Despite the advice of military strategy reviews like the December 1997 National Defense Panel report, which emphasized uncertainty and the dangers of overcommitment to particular technologies and weapon systems, defense-budget proposals now favor short-term spending increases for operations and updating existing platforms and weapon types.

National defense cannot be just a business. Few Americans will want to die for Raytheon, Boeing, or General Dynamics. And taxpayers will balk if they come to believe that the benefits of defense investments have gone into the pockets of arms-company executives. The United States should not encourage a closed system in which the military services assign contracts for weapons production and analysis to firms managed by their retirees. Some analysts wrongly thought that the Cold War was managed this way. Such a path was not America's past, but it may be its future. The desire for short-term political or economic gain should not be allowed to dismantle a structure that was central to victory in the Cold War and remains the key to America's ability to cope with an uncertain security future.

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