The MIC has been getting a smaller and smaller slice of the pie. It’s fighting back for power, relevance, and significance through the “War on
A look at the evidence…
There are three ways, that I can think of using data from the Bureau of Economic Analysis, to quantitatively measure its size through time:
First, the percentage of total federal government expenditures (defined as federal consumption and investment expenditures*) devoted to military
consumption and military investment expenditures can give us a good estimate of the size of the MIC relative to other federal government activities.
Second, the percentage of Gross Domestic Product devoted to military consumption and military investment expenditures can give us an estimate about
the size of the MIC relative to the rest of the economy. The following graphic, which I slapped together with the BEA data, shows these figures
You’ll notice a couple of interesting points. First, of all federal consumption and investment expenditures, those devoted to the MIC are by far
the greatest, making up about 67% of federal expenditures in 2006. About two-thirds of every dollar that the federal government uses to purchase
something is used towards military expenditures. Second, the overall size of the MIC is relatively small, compared to the rest of the economy, only
about 4.6 percent of GDP in 2006. Third, you’ll notice that both of these measures have a declining trend. The MIC seems to be less and less
important to the overall economy and federal budget over the years.
The third measure of the MIC is perhaps the most telling. It is the level
of military consumption and investment spending in dollars
adjusted for general price inflation
, i.e. measured in constant 2006 dollars. Again, slapping a quick graphic together with the data:
Obviously, there are some cyclical effects, corresponding to wars and the Reagan military build-up. However, the overall trend (looking past the
cycles) is increasing with time. The period after World War Two is a period of gradual general build-up of U.S. forces to near WWII levels (notice
that 2006 expenditures reach near 1942 spending levels). Although the trend may be that the relative importance of the MIC has been shrinking, the
actual size of the MIC has been growing with time.
Putting two and two together…
The relative importance of the MIC has been shrinking in the past 50 years (Figure 1). It is becoming less central to the functioning of the overall
US economy and has been becoming less of a spending priority relative to other government expenditures. However, the size of the MIC has been
steadily growing (Figure 2). The MIC has been getting larger; however, it has been getting relatively smaller.
Could the “War on Terrorism” or the “Long War” be the result of a constantly growing MIC fighting for relative significance and power? Could
the growing culture of world belligerency and militarism in the United States (as manifest in increasingly enforced “patriotism” and the
I think the numbers say “YES!”. Taking a big picture view, it seems the current forces we see at play in U.S. policy are dominated by the MIC in
a quest for post-Cold War significance. Significance is key to power in social decisions. For significance, the MIC needs an enemy or even better, a
perpetual war. What better boogey man that some ambiguous and nebulous network terror organizations that provide a constant threat everywhere? Or
Iraq? Or Iran?
* Note: The BEA’s measurement here does NOT count transfer payments (e.g. welfare, Medicare, Social Security, etc) as government consumption or