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Excerpt: Unwarranted Influence

The following excerpt is from Unwarranted Influence by James Ledbetter. Listen to the Marketplace interview and learn more about the book.

The 50th anniversary of Dwight Eisenhower's January 17, 1961 farewell speech, which introduced the concept of a "military-industrial complex," has caused many to ask: What was the context? Why did a president who had been a five-star general, and had commandeered what was probably the largest military force amassed in the history of mankind to win World War II, seemingly change direction and warn against excessive military influence?

The launch of the Sputnik satellite, on October 4, 1957, hit the Eisenhower White House like a targeted missile. Whether it represented a scientific breakthrough for the Soviet Union is a matter that can still be debated. But as a public relations coup, it unsettled the administration more than any other event, including the Brown vs. Board of Education decision of 1954. The President set a defiant tone with his insistence that the first Sputnik launch was but "one small ball" thrust into the sky.

Years of unresolved debates over military budgets and readiness resurfaced with a nagging urgency. To the knowledgeable, the Sputnik launch implied that the Soviets now had the ability to hitch a nuclear warhead to a missile and launch it thousands of miles from their own soil, thus ushering in not only an expensive and disruptive new phase of the arms race but one in which they had the lead. White House advisors estimated that by as early as 1959, as a contemporary press account put it, "the U.S.S.R. could deploy enough intercontinental-range ballistic missiles to smash or paralyze the Strategic Air Command's U.S. bases. The attack could occur with a warning of no more than ten or fifteen minutes."

While the public was focused on the two Sputnik launches, Washington's elite was arguably more devastated by the release of an exceptionally well-timed panel study--delivered four days after the second Sputnik orbit--that appeared to show the Soviet military threat was even greater than the Administration thought. Entitled "Deterrence & Survival in the Nuclear Age," it was known informally as the Gaither Report after its panel chairman, H. Rowan Gaither of the RAND Corporation. The report--classified "top secret"--cited "spectacular progress" in Soviet military development after World War II. The Soviets, the authors claimed, had enough fissionable material for 1500 atomic weapons and had "probably surpassed" the U.S. in the production of nuclear-tipped intercontinental missiles. They proposed a massive military spending program that would not only match the alleged Soviet offensive capabilities, but commit more than $20 billion to a nationwide system of nuclear fallout shelters.

In the panic that ensued after the report's conclusions became known, many public figures--Democrats especially, but also including the nuclear physicist Edward Teller--compared the Sputnik launch to Pearl Harbor. Lyndon Johnson, the Senate majority leader, declared that "the Russians have beaten us at our own game - daring scientific advances in the nuclear age." Senator John F. Kennedy would make Sputnik a major issue in his 1958 re-election campaign. Demands for an American response--at a minimum, having the President appoint a "missile czar"--were nearly overwhelming.

The political fallout was considerable. Democrats on Capitol Hill were keen to find a scapegoat, and the Eisenhower Administration's earlier insistence on balancing military expenditures with fiscal restraint could easily, in panicked retrospect, be made to look as if the administration allowed itself to be outflanked by the Soviets. True or not, having to expend energy and political capital to defend against such charges robbed Eisenhower of his greatest political credential: his monopoly on issues of national security. As the White House prepared its responses, chief aide Arthur Larson wrote to fellow staffers: "More comments are reaching me on the Sputnick [sic] business...these from friends. Reaction of bewilderment is shifting to anger...DDE's prestige in his special area is slipping...I am amazed at the extent and depth of these reactions as I pick up my contacts around the country."

Despite the pressure, neither the President nor his most important advisers were moved to make fundamental policy shifts. Everything that could be done to launch a satellite was put into place, and missile budgets were increased (but not as much as some within the administration wished; Eisenhower was concerned that bumping up missile-related spending too high in the 1959 budget would "lead people to say that nothing had been done in the last five years.") But in general, the administration did whatever it could, short of releasing confidential data from U-2 spy planes, to convey that it did not share the conclusions of the Gaither Report.

The period following the Sputnik-Gaither crisis demonstrates Eisenhower's military-industrial-complex critique in its early stages. After all, who was behind the faulty intelligence and calls for military buildup in the Gaither Report? The leadership consisted of known and trusted Eisenhower advisers, but there could be no hiding the fact that the billions in increased military spending called for by the panel would benefit many of the very people making the recommendations. Two of the report's principal directors were Robert C. Sprague, who headed his own business of military electronics, and William C. Foster of the Olin-Mathiesen Chemical Company, a producer of gunpowder and ammunition.

From the studies he had conducted for the Army in the '30s, Eisenhower was keenly aware of the interdependency between the military and private industry. And while he believed that protecting the American economy and private enterprise was a critical mission for the military, that goal also involved ensuring that the military and the economy had to be restrained from merging into a behemoth that could threaten both. By the time of the Sputnik-Gaither frenzy in1957, it could be argued that just such a situation had come to pass, and Eisenhower glimpsed it in what might seem an unlikely venue--trade journals catering to the aerospace industry. Titles like Aviation Week and Air Force magazine were scarcely more than a decade old, yet they were helping set the tone of public debate over security policy. Like Congressional hearings controlled by Democrats, these publications became a venue for the largely unfiltered views of the military establishment. They were often harshly, even personally critical of Eisenhower and his Defense Department managers.

Shortly after the Sputnik launch, for example, Aviation Week editorialized that Americans "have a right to know the facts about the relative position of the U.S. and the Soviet Union in this technological race which is perhaps the most significant single event of our times. They have the right to find out why a nation with our vastly superior scientific, economic and military potential is being at the very least equaled and perhaps being surpassed by a country that less than two decades ago couldn't even play in the same scientific ball park. They also have a right to make the decisions as to whether they want their government to maintain our current leadership of the free world regardless of the cost in dollars and sweat, or whether they wish to supinely abdicate this position in favor of enjoying a few more years of the hedonistic prosperity that now enfolds our country. These are choices the citizens of this land must make for themselves. They are not decisions to be made arbitrarily by a clique of leaders in an ivory tower or on a golf course."

But perhaps more mesmerizing than the magazines' editorial content was their advertising. To flip through these publications in the late 1950s was to peer into an otherwise hidden America, where prosperity and security seemed to orbit solely around a single vast and growing industry. Aviation in 1957 was approximately an $11 billion business, with giants like Boeing, Douglas Aircraft, and General Dynamics bringing in more than $1 billion each in annual revenue (IBM that year had revenues of $734 million and General Motors about $10.8 billion). Nearly all of that revenue came from military contracts, and these magazines were where military contractors hawked their goods.

There were also ads for the raw materials needed to make planes and rockets: titanium, graphite, rubber, stainless steel, aluminum. Layered on top of that were dozens of subindustries that had sprung up after the war, many of which straddled the line between public subsidy and private enterprise: makers of helicopters, circuit breakers, aircraft bolts, aircraft engines, roller bearings, navigation and radar systems, aircraft spark plugs, rockets and much else. A typical full-page ad from January 1957, for example, hawks a product made by the Radio Corporation of America--RCA, at the time, the 25th largest company in America, with nearly 80,000 employees and well over a billion dollars in annual revenue. Most Americans associated it with radios and televisions, but RCA also--as this ad made clear--had a "defense electronic products" division that made guidance systems for Air Force planes. An illustration shows seven white Air Force fighters, each with its system trained on a large, black, unmarked aircraft. The copy promises readers, "Fire control radar tells WHERE TO AIM/WHEN TO FIRE!"

Most advertising seeks to sell a product or service to multiple customers. For leading-edge military products with national security implications, there was only one customer--the Pentagon. And thus, these journals were viewed with irritated fascination by the Eisenhower White House, and particularly by the speechwriter Malcolm Moos. In an interview, Moos recalled the trade publications specifically in the context of the farewell speech, noting that Peter Aurand, a naval attaché whose father had been a classmate of Eisenhower's at West Point, would "bring in these aerospace journals, talk about them, leave them on my desk. And it's astounding to go through them and see some 25,000 different kinds of related companies in this thing." Eisenhower's scientific advisor James Killian said that the President could not stomach the journals and their ads: "Repeatedly, I saw Ike angered by the excesses, both in text and advertising, of the aerospace-electronics press, which advocated ever bigger and better weapons to meet an ever bigger and better Soviet threat they had conjured up."

By 1959 Eisenhower had begun to see private military contractors as a self-interested, malign actor in the budget process. In a June meeting with legislative leaders about defense appropriations, he questioned an additional $85 million that had been put into the ATLAS program, an early intercontinental ballistic missile. Congressman Gerald Ford tried to reassure him with a variety of explanations: the Air Force had recently revised its cost estimates; the increase was much less than what many in Congress were proposing; other parts of the missiles appropriation had been reduced. But Eisenhower was not persuaded. According to the meeting notes, "The President protested the political pressures that the munitions industry brings to bear on the Congress, and especially the resort to full-page advertisements such as that by Boeing in regard to the BOMARC. He thought it was clear that other elements than the basic defense of the country were entered into the handling of these problems."

This outburst was sufficiently unusual that it was almost immediately leaked to the press. A New York Times reporter wrote that Eisenhower had let it be known that he "believed political and financial influences rather than military considerations alone were playing an unwarranted part in the defense debate." This was evidently a presidential theme in 1959; later that month, while discussing an upcoming Space Council meeting and the need for better coordination and single management of our national missile ranges, Eisenhower insisted: "We must avoid letting the munitions companies dictate the pattern of our organization."

Thus, a year and a half before the speech that caused so many Americans to wonder about Eisenhower's motives, he was well down the path of frustration with the influence, and confluence, of military and industrial power.

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