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The American Defence Economy

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The Political Economy of the Arms Race

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Abstract

Despite a view which dates the beginning of the Soviet-American arms race to 1918,1 before the Second World War the USA allocated just one per cent or so of its national product to defence. The low quotient was consistent with a widely held conservative fiscal view that excessive military spending would unbalance the budget, and with a traditional strategy of maintaining a small peacetime professional army and rapid mobilisation of men and industry in wartime.2 After the war traditional forces reasserted themselves, and demobilisation was rapid. Between 1945 and 1947 military spending (in constant 1972 $s) decreased from $255bn. to $30bn., the armed forces fell from 3 100 000 to 391 000. Department of Defense military and civilian employment fell from 14.8m. to 2.4m. and total military-related employment from 25.8m. to 3.2m.3 The dominant conservative fiscal forces in Congress relegated military spending towards the end of the queue in the competition for federal resources. President Truman sought to establish a fixed 33 per cent ceiling irrespective of strategic requirements, arrived at only after essential domestic programmes had been funded. President Eisenhower likewise sought to limit defence spending to an equally arbitrary ten per cent of GNP despite pleas from the Joint Chiefs of Staff that the sums were inadequate.4

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  1. Department of International Politics, The University College of Wales, Aberystwyth, UK

    R. T. Maddock (Senior Lecturer)

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© 1990 R. T. Maddock

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Maddock, R.T. (1990). The American Defence Economy. In: The Political Economy of the Arms Race. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-09842-2_2

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