The Department of Defense’s recent report on the defense industrial base telegraphs a dangerous direction for the White House. This message to our country relies on alarmist rhetoric and archaic myths to drum up support for protectionist and crony-capitalist policies. This is bad news not only for taxpayers but also for economic prosperity and American security.
This White House’s protectionist policies generally do not improve national security or the defense industrial base. Instead, they tend to promote cronyism, monopolize weapons procurement, slow economic growth and strain relations with allies.
Simply put, when politicians get to pick winners and losers in the marketplace, they do so based on political expediency, not what’s best for security or the economy. This usually leads to taxpayers footing the bill for overpriced, flawed or unnecessary weapons systems supposedly produced by “key” manufacturers or industries that seek government protection against alternative technologies or foreign suppliers.
Such policies generally do not improve national security, but they do help explain why the Army is burdened with more Abrams tanks than it needs in order to keep Ohio’s tank factory in business; or why taxpayers pay to ship Pennsylvania coal to power U.S. military facilities in coal-rich Germany; or why the military is forced to buy domestically produced sneakers, tarpaulins and American flags at inflated prices; and a litany of other offenses rooted in political calculations.
Contrary to Trump administration’s alarmist claims about America’s ailing industrial base, figures indicate that the industrial base is as large as ever and has been growing at a fast pace. Moreover, this growth in industrial and manufacturing production, as well as gross domestic product, goes hand in hand with increased U.S. arms and total trade with the rest of the world. In this globalized world, it is virtually impossible to produce an advanced weapons system without foreign suppliers.
Take the American F-16 fighter jet, for example. It is the most popular fighter jet in the world. Built using a mixture of high-tech components from Germany, Israel, Japan and Russia as well as less-costly, commercially available components from Brazil, Poland, South Africa and Spain, this plane is a great value for money thanks to free trade. International collaborations like the F-16 project exemplify the benefits of free arms trade that enable the United States and its allies to maintain national security without breaking the bank.
To be fair, the Pentagon’s industrial base report does make some risk assessments and recommendations to improve military contracting practices that are laudable. But the thrust of the paper is devoted to justifying protectionist economic policies that will be bad for taxpayers and, much worse, bad for American national security.
In a new report from the National Taxpayers Union Foundation, I put these claims to the test, analyzing how liberalized trade policies have actually led to a broader defense industrial base and a stronger American national security:
Attempts to restrict international trade through policies like tariffs on aluminum and steel will only make the U.S. industrial base less productive and the economy less prosperous. In turn, a less productive and prosperous nation is less able to feed and defend itself.
Since the days of Adam Smith, economists have argued that free trade makes nations more prosperous. Free-trading nations tend to be more prosperous and peaceful, more technologically advanced, and more capable of defending themselves.
Strong economies make for strong defenses. This should elevate looming threats like trillion-dollar deficits and an entitlement spending crisis as the national security threats they are. Legislators should put fiscal prudence and national prosperity ahead of favored, politically connected firms. Continued regulatory reform, reducing government spending, and pursuing free trade relationships, is the best way to maintain a robust manufacturing sector and supply chain.
