But the next question is, how do we prevent such debacles from happening? Simply slashing defense budgets seems unlikely to do the trick, for the simple reason that the companies that were politically powerful enough within the DoD would have the power to keep their favorite programs going. You can see this in the history of the F-35 itself, which survived the steep cuts in defense spending during the Great Recession, waste and inefficiency intact. Instead, what would likely get slashed in a round of austerity would be smaller, more speculative programs — the kind of forward-looking, innovative things we need to stay ahead of China and Russia. Those Great Recession years saw us fall behind China in certain categories of advanced missiles, and we’re now racing to catch back up.
… So yes, we need to make sure that boondoggles like the F-35 don’t get repeated, but the answer isn’t to simply slash top-line budgets or to cancel any big new weapons programs. Instead, I suspect that the right move is to introduce more competition to defense contracting — intentionally reducing the dominance of a few big contractors like Lockheed Martin and Raytheon so that they can’t produce boondoggles without losing business…
As for what exactly we should be spending our military budget on, I am not a military expert. My instinct is always to spend as much as possible on research and development, and to diversify our spending among a whole lot of different programs that might come in handy in the case of a great-power conflict (just as we started spending money on radar, heavy bombers, and other next-generation weapons years before World War 2 broke out).
That was from Noah Smith, Should the US increase of decrease its defense budget?
You’ll sometimes hear defense insiders talk about “competition” as a major problem of acquisition, but rarely do they internalize what that really means. Competition for a pre-defined contract among industry is good. Competition among the military services to define problems and deliver solutions is bad.
Therefore, defense insiders rarely talk seriously about the implications of competition. But as FA Hayek understood, competition is a discovery procedure:
By contrast, it is useful to recall that wherever we make use of competition, this can only be justified by our not knowing the essential circumstances that determine the behavior of the competitors. In sporting events, examinations, the awarding of government contracts, or the bestowal of prizes for poems, not to mention science, it would be patently absurd to sponsor a contest if we knew in advance who the winner would be. Therefore, as the title of this lecture suggests, I wish now to consider competition systematically as a procedure for discovering facts which, if the procedure did not exist, would remain unknown or at least would not be used.
Competition without diversification is a head scratcher. Here’s more on that last part from Noah Smith’s post, War got Weirder:
Furthermore, the technological surprises of the Ukraine war should teach us that military modernization is a process of diversification — it involves putting our eggs in a number of baskets, to make sure that whatever the successful weapons of the next war are, we have them in our arsenal. That means investing in a number of weapons systems and organizational changes, without downsizing our military during the process. And that will take money. Perhaps not much money — Biden’s proposed increases are barely larger than inflation — but some.
We can make a lot of educated guesses about the ways that war will get even weirder in the future (and there are many people whose guesses are much more educated than mine!). But the future of technology is never perfectly predictable, and with evil conquerors on the march, we need to be prepared for as many contingencies as we can.
And this part gives an interesting lens to today’s defense spending in a third post:
The Allies didn’t match Axis spending 1-for-1 — we outspent the Axis by a huge amount. Reliable figures are hard to ascertain, but by the estimates I can find, the U.S., USSR, and UK together outspent Germany and Japan by a ratio of 2 to 1.
The Pacific War was especially lopsided here. The U.S. outspent Japan by almost 5 to 1. And if you look at production of specific weapons, like warships, it’s just no comparison.
If you believe these numbers, then China and Russia together spend 86% of what the U.S. spends on its military, in effective terms. Add in the other NATO countries in the table, and the ratio is about 1.75 to 1 — still lopsided, but a little less lopsided than World War 2… Looking at all of these numbers, I definitely do not feel secure that the U.S. has overmatched our potential enemies. In fact, given China’s economic size, it’s pretty clear we have no hope of overmatching them the way we did to Germany and Japan in WW2 — at least, not anytime soon.
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