The War Industry as Economic Cancer

In testimony before Congress in 1969, economist Kenneth Boulding argued that “The war industry is a cancer within the body of American society. It has its own mode of growth, it represents a system which is virtually independent and indeed objectively inimical to the welfare of the American people, in spite of the fact that it still visualizes itself as their protector” (quoted in Joint Economic Committee 1969, 140). This chapter engages Robert Higgs’s work on the political economy of the military system. While Boulding identified the overall harmful effect of the military system on American society, Higgs’s scholarship offers us insight into the specific nature, operations, and harmful effects of the military system. We explore the U.S. military system by which we mean the integrated network of public and private actors. We first explore the unique nature of the military system to understand its overarching structure and features. Next, we explore the machinery of the military system. We discuss the incentives facing private and public participants and the important role played by the revolving door between the two arenas. Finally, we discuss the harmful economic effects, both immediate and long-term, of the military system