Note #4: The US defence industrial base

Is US imperialism facing a crisis? Note #2 commented on the Commission on the National Defense Strategy (CNDS) and the concept of “total mobilisation” used by Ernst Jünger in his 1930 book of that title. Reflecting on World War One and the newly emerging military-industrial societies in the West, Jünger reckoned (as does the CNDS) that great power wars are won, and “peace” (in reality, imperial order) is maintained, not through military spending alone but by marshalling a country’s social, economic, scientific, political and ideological resources to the singular end of military supremacy.

Ruminating on the CNDS report, I’ve taken a quick look at the United States’ defence industrial base (DIB) and its purported atrophy. Technically, the DIB is only one part of the broader industrial base (or manufacturing industrial base (MIB)); it’s the network of companies, research institutions, raw materials and labour that service the Pentagon’s immediate needs—from munitions, fighter jet and submarine production to data centres, intelligence and engineering personnel.1 The MIB is a broader gauge of the government’s “surge capacity”: the resources such as steel plants and car factories that could be reallocated (or requisitioned) to produce military equipment in the event of a major conflict. I might look at the MIB in a future note.

Evaluations of atrophy

In addition to the CNDS review, several reports claim that the DIB has atrophied and cannot provide the necessary equipment to sustain the US military in a great power conflict, particularly with China. An indicative selection, some of which conflate the DIB and the MIB, includes the 2024 Center for Strategic and International Studies report Rebuilding the arsenal of democracy:

The Pentagon’s 2023 National Defense Industrial Strategy:

The National Defense Industrial Association’s 2023 annual report:

The 2020 Center for Strategic and International Studies report Industrial Mobilization:

The 2018 National Defense Strategy Commission report Providing for the Common Defense:

And 2010’s Quadrennial Defense Review Independent Panel report Meeting America’s National Security Needs In the 21st Century:

These reports, among others, generally point to military budgets not being high enough, the pool of skilled workers not being large enough, a paucity of industrial facilities, and a lack of companies in the sector. Are the evaluations accurate? Or is there, in the words of the CATO Institute’s Scott Lincicome, a “manufactured crisis” that exaggerates US DIB decline?8 There is no shortage of vested interests—such as the National Defense Industrial Association and the not inconsequential bloc of war hawks in and around the Pentagon who write most of these reports—that stand to gain considerably from an expanding US war economy. So let’s look at ...

A few figures

Many reports cite reductions in military expenditure as a proportion of the economy as a critical measure illustrating the DIB’s erosion. That Pentagon funding has clearly and significantly declined, relatively speaking, can’t be questioned.

By other measures, however, “atrophy” seems a stretch. In absolute dollar terms, US military outlays have been robust this century. From 2000, the growth trajectory of US and Chinese spending is similar, for example. (As an aside, in terms of spending as a proportion of the economy, the US outlays are double those of China—and the gap has grown since the turn of the century.)

Moreover, the US maintains the largest share of major arms producers. The top five companies are all US-based and Pentagon aligned, and the country is home to ten of the 25 largest producers. Also, US arms export volumes have more than doubled since the turn of the century (that is, there is significant surplus production above the output consumed by the US military’s branches). In 2022, exports dwarfed those of China and Russia. (Although admittedly, Russian exports have collapsed because the Kremlin is now using pretty much all of its own output.) According to the Stockholm International Peace Research Institute:

How can the US defence industry credibly claim to be in a state of atrophy while at the same time dwarfing the rest of the world’s military spending and while being a leading supplier for about half of the world’s armies and air forces?

To be generous to the war hawks, one explanation could be that the privatised and outsourced procurement model might result in a lot of waste, and spending that primarily props up corporate balance sheets—perhaps akin to the US health system, which has higher budgetary outlays per capita, yet lower rates of coverage than the “socialised” health systems of comparable countries. Another issue could be more technical—related to the increasing sophistication of missiles and fighter jets, for example—something that Stimson Center director Dan Grazier calls the “death spiral”:

Yet the thing is, looking at output volumes we get a different picture from that painted by industry lobbyists. There certainly were boom-decline cycles in and following the Vietnam War, the second Cold War and the War on Terror. And the “peace dividend”-era following the collapse of the Soviet Union shows a particularly marked decline. Yet real industrial production volumes in the US defence and space equipment sector have doubled this century, are higher than any point in the last 60 years and continue to climb, according to Federal Reserve data:

Indeed, while there is no shortage of reports outlining the parlous state of almost every sector of US military production (Chris Bambery provided a generally uncritical summary at Counterfire a year ago), it would seem almost miraculous, were all the reports to be accurate, that Washinton proved capable of dramatically increasing output in the first decade of this century when it launched major invasions of Afghanistan and Iraq. Miraculous too, the increase in output in recent times. Six months ago, the Pentagon boasted about the expanded domestic production of a series of critical munitions since 2022, indicating the DIB’s capacity to increase output relatively quickly (note that these figures are out of date now—the production of 155mm munitions, for example, will reportedly reach 100,000 per month next year, a 600 percent increase in four years):

• 155mm Projectiles: 14,400 per month to 40,000 per month (178% increase)
• 155mm Propelling Charge: 14,494 per month to 18,000 per month (24% increase)
• GMLRS: 833 per month to 1,167 per month (40% increase)
• Javelin: 175 per month to 200 per month (14% increase)
• AIM-9X: 116 per month to 137 per month (18% increase)
• PAC-3 MSE: 21 per month to 42 per month (100% increase)
• HIMARS: 5 per month to 8 per month (60% increase)
• M777 Tubes: 11 per month to 18 per month (64% increase)

Further, none of these figures attempt to account for the (arguably spurious) claim underlying much of the reporting of the US defence industrial base: that production qualifies as part of it only if carried out within the borders of the US. Yet not only is much of the North American economy effectively a single unit encompassing Canada, the US and sections of Mexico. Parts of the network of US allies are also being integrated into the US industrial base and into war planning calculations as elements of a broader allied force structure and force posture—things not always reflected in either the figures or the reporting.

Australia, for example, has officially been defined as a “domestic source” of defence industrial capacity under Title III of the US Defense Production Act, as per amendments enacted by Congress in late 2023. Basically, the US officially includes both the UK and Australia as parts of its defence industrial base now. The idea that other parts of allied international military supply chains do not qualify seems somewhat of a nationalist distortion that underplays US capabilities.

This isn’t to say the reports are all tendentious or spurious. Figures relating to drone production and naval output show that the US is in a weak position relative to China. But the language of the reports often betrays what is really at stake: they are rarely, if ever, concerned with “defending” the continental United States, which no country has the remotest military capacity to threaten.

A “sustained high-intensity conflict” between the US and China would play out in the western Pacific and in the northern Indian Ocean. The US military, to maintain it’s position in Asia, must be capable not only of operating half way around the world, but of defeating a peer competitor in the latter’s own backyard. That is, the US strategists’ claim to be disadvantaged relates to US imperialism’s status as as an invasion force operating far from its own shores. That explains many strategists’ conspicuous focus on the decline of US shipbuilding: the capacity to export violence remains dependent on long-range naval supremacy.

So is “atrophy” of the DIB really the issue when the US can easily defend itself, and control the entire western hemisphere, with its current force structure? Only when viewed through an offensive frame does the hullabaloo make sense: in the view of US imperial planners, the scale of US military output must increase to preserve US supremacy well beyond North America. As such, the authors of the CNDS urge US lawmakers to prepare for a multi-theatre global war. The CNDS, then, is no defence strategy; it’s the blueprint for maintaining global supremacy written in the guise of defence and deterrence.

All this is to say that the reports of the death of the US DIB I think are exaggerated, and make sense primarily in the context of planning for a war against China, to be carried out in Asia. The myriad reports also ought to be viewed through the lens of “total mobilisation”, or the “all elements of national power” framework adopted by the CNDS. The accuracy or otherwise of their claims is perhaps secondary to their repetition as part of a broader motivation: subordinating more of the economy and of government to Pentagon prerogatives, and building a domestic atmosphere more favourable to militarism.

At any rate, this note is dragging on. In future newsletters, I might look at other “elements of national power” being mustered in this era of renewed great power competition. I also want to look specifically at the role Australia is assuming as US imperialism’s beachhead in South-East Asia.

The A-Z of Marxism

Have you ever listened to a lawyer, a politician or an academic and thought, “Why don’t they just speak in plain English?” Left-wing activists also occasionally use terms that aren’t much understood outside of our own circles. That’s partly because the socialist movement throughout its history has created a vernacular of working-class struggle, which we want to preserve and promote, even if it’s not widely used at the moment. So we’re creating an activist dictionary, “The A-Z of Marxism”, to help readers understand the language of socialism and trade unionism (including words in this very paragraph, such as “left wing”, “struggle”, “working class”, “activist”, “socialist” and “movement”).

Today’s entry is…

Class struggle

By “struggle”, Marxists don’t mean “difficulty”, as in “I really struggled to get out of bed this morning”, or “She is struggling to make ends meet”. Class struggle refers to the contest between bosses and workers (the two main social classes in capitalism) over the distribution of the economy’s wealth and over who exerts control or influence within society more generally.

For example, when we talk about “working-class struggle”, we mean the extent to which workers are standing together to fight for better wages, shorter working hours, democratic rights, and against discrimination and oppression in the workplace and in society, among other things. For workers, class struggle involves strikes or other industrial actions, and public displays such as mass street marches, which express collective power.