America Inc.? Innovation and Enterprise in the National Security State by Linda Weiss (review)

This important book offers a detailed, documented account of how United States support of technological innovation evolved from simple contracting in World War II to a web of public/private, military/civilian collaboration the author calls “governed interdependence.” This quiet and momentous transformation occurred gradually, incrementally, pragmatically, and heterogeneously as agencies of the government sought ways to maintain American technological “primacy,” which they viewed as the surest guarantee of American security. Along the way, these agencies dismantled, or at least skirted, such fundamental American principles as walling off military from civilian realms and separating public from private enterprise. Only America’s institutional resistance to statism kept it from sliding into a command economy.

Linda Weiss, Professor Emerita of Comparative Politics at the University of Sydney, labels the engine driving this change the “national security state” (NSS). But hers is not the familiar, pejorative term implying American militarism. Rather, it is the collection of government agencies and private researchers who promote high technologies in the national interest. Her NSS includes the usual suspects, such as the Departments of Defense (DoD) and Homeland Security and the Central Intelligence Agency (CIA). Also included are some quasi-military agencies such as NASA, the Department of Energy, and the National Security Agency. More surprisingly, it includes as well some nominally civilian agencies, such as the National Science Foundation, the National Institutes of Health, and the Small Business Administration.

Professor Weiss’s NSS evolved not by design, but by expedience. Government agencies sought ways to promote technologies they believed to be in the national interest. They invented venture capitalism and funded many quasi-public firms to support selected enterprises. They used procurement policies to fund selected companies. They built up the capabilities of companies working on government projects. They created hybrid companies, mixing public and private ownership, funding, and operations to pursue innovative technologies. They even placed the National Cancer Institute at Fort Detrick, Maryland, to facilitate collaboration with the army’s Medical Research Institute of Infectious Diseases.

These innovative institutional arrangements violated virtually every American principle for sustaining free-enterprise capitalism with a “wall” between military and civilian realms. The mixing of public and private resources and activities blurred the prior distinctions between a free-enterprise, capitalist economy and a command economy, between products developed for military and commercial markets, and between free markets and “national industrial policy.” The old distinction between basic and applied research also eroded, as so-called mission agencies such as the Department of Defense or the Central Intelligence Agency strayed from applied research into purer forms. Serendipitous spin-off from military research into the civilian economy, or vice versa, gave way to intentional “spin-around,” in which mission agencies of the government promoted commercial developments that they could then purchase more cheaply and reliably off the shelf. Far from eschewing commercialization of the research they funded, government agencies came to promote it. IBM built its competence in computers working on the DoD’s SAGE early warning radar system and the software for Google Earth flowed from research supported by In-Q-Tel, the nonprofit venture capital firm funded primarily by the CIA.

Professor Weiss attempts to keep her story focused on the innovation itself and the agencies of her NSS that promote it. But the implications of her findings keep spilling into view. In her hands, this “governed interdependence” seems more important and less sinister than previous warnings about the military-industrial complex and national industrial policy seemed to suggest. Her analysis discounts cold war concerns that military procurement and R&D drained the civilian economy of resources and talent. Traditional, conservative Republican opposition to national industrial policy seems to have been overcome by sleight of hand, by invocations of national security, and by fear of Japan’s use of state-funded industrial development in the 1970s and 1980s. Indeed, other countries may well have grounds to protest that the NSS subsidizes some...