The Military-Industrial Complex

This paper first discusses the origins of the military-industrial complex in the United States. We then explore several ways that public choice economics can illuminate our understanding of the military-industrial complex. Specifically, we focus on the following issues. Defense contractors engage in rent-seeking, while politicians engage in rent extraction. As a special interest group, defense contractors reap concentrated benefits while dispersing costs on the broader public. A “revolving door” exists between the military and private firms, and military personnel move through it repeatedly. Democratic oversight of the military-industrial complex is limited by principal-agent problems and information asymmetries. We conclude by discussing some implications of public choice analysis, as well as how public choice perspectives on the military-industrial complex relate to other views on the political economy of war, militarism, defense, and imperialism.”

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