Squandering the U.S. Industrial Base

By Pat Choate
Originally published at USA Daily

America first learned the importance of an assured military industrial base during the Revolutionary War, a conflict whose success was far from an assured thing. Success depended ultimately on the new nation’s ability to secure the arms and supplies needed to make war against England, then one of the world’s foremost military powers.

As Barbara Tuchman explains in The First Salute, the new nation -- long kept dependent on England for its military supplies -- had neither the domestic production of weapons and gunpowder, nor the raw materials, skills, and facilities for their manufacture.

In the first year, the Revolution was almost lost for the lack of ammunition. George Washington wrote that in the whole American camp there were not more than nine cartridges to a man. In the fight for Bunker Hill, the American's powder was quickly exhausted, forcing the Revolutionaries to use their muskets as clubs against the English.

In the fall of 1776, a desperate Congress sent Benjamin Franklin, the best-known American as head of a delegation to Paris where he sought French aid.  The Franklin Delegation succeeded.  But their inventory of purchases in 1777 illustrates just how dependent the new nation was on others for its most basic economic and military necessities.

Franklin bought eighty thousand blankets and eighty thousand shirts for the American troops.  They also acquired one hundred tons of powder, one hundred tons of saltpeter, 8 ships of the line, muskets, and 100 field pieces. Congress paid the French with a promise to deliver 5,000 hogsheads of tobacco. Franklin also persuaded the French Government to give the USA a significant grant of monies, which helped finance the fight with France's old adversary.

But buying the goods in Europe was only the first step.  They then had to be transported across the Atlantic Ocean through a British naval blockage. Tuchman documents how in the first three years of the Revolutionary War, goods were transshipped from Europe in a 4,000-mile, six-week journey to a tiny Caribbean island then owned by Holland ­ St Estates.  There, American smugglers would pick up the goods and take them on to the colonies, another journey of 1,400 miles and three weeks duration.

Without the Dutch and French supplies and their transport, the Revolutionary War would have been lost because America lacked the means to produce the weapons and goods it needed to defend itself.  It was a hard lesson, but one learned well by America’s Founders.

Soon, the vagaries of European politics taught the Americans another lesson, ­today’s allies may well be tomorrow’s enemies, further reinforcing the benefits of not depending on others, and of having a strong domestic industrial and military base. At the turn of the 18th century, France fell into revolution, Napoleon seized the Netherlands, and John Adams, our second President, barely avoided war with France, our original ally.

After victory, the men and women who fought the Revolutionary War made industrial and military self-sufficiency U.S. policy.  Never again, they proclaimed, would America be dependent on others for its prosperity and the means to defend itself.  Alexander Hamilton, the first Secretary of the Treasury, articulated that policy in a white paper commissioned by President George Washington and the U.S. Congress and released on December 5, 1791. Hamilton’s Report on Manufactures says, not only the wealth, but also the independence and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavor to possess within itself all the essentials of national supply. These comprise the means of Subsistence, habitation, clothing, and defense.

The possession of these is necessary to the perfection of the body politic; to the safety as well as to the welfare of the society; the want of either is the want of an important Organ of political life and Motion; and in the various crises, which await a state, it must severely feel the effects of any such deficiency. The extreme embarrassments of the United States during the late War, from an incapacity of supplying themselves, are still matter of keen recollection: A future war might be expected again to exemplify the mischief’s and dangers of a situation to which that incapacity is still in too great a degree applicable, unless changed by timely and vigorous exertion. To effect this change, as fast as shall be prudent, merits all the attention and all the Zeal of our Public Councils; 'tis the next great work to be accomplished.

For two centuries, industrial and military self-sufficiency was America's policy. It succeeded brilliantly. It protected against European adventurism in the 19th century.  It enabled the nation to become the richest, most industrialized country in the world.  And it allowed America to be the arsenal of democracy in the 20th century.

But with the collapse of the Soviet Union, America seems to have quickly forgotten the older lessons and policies that long served it well. Terrorists are seen as the principal threat to national security. The emergence of China -- a one-party, repressive, Communist state­as an economic, military power, and strategic rival is mainly seen not as a danger, but as a business opportunity. And global economics is treated as something analogous to celestial mechanics--a self-driven, self-correcting system in which markets balance supply and demand, assuring ever more growth
and development.

Consequently, industrial and military self-sufficiency are no longer U.S. policy.  Key industries are allowed to migrate to other nations. Key technologies are shared with potential adversaries. And the hollowing out of the U.S. industrial and defense base is accelerating as companies rush to low-wage, non-regulated production platforms in developing countries.

Today's leaders are undoing the very policy that made America rich and strong.  The question confronting this generation of Americans is whether this nation can remain strong and rich without a strong industrial base and a self-sufficient defense base.

This article is adapted from the U.S. Industrial Base and China, a report by Pat Choate and Edward Miller for the U.S.-China Security Review Commission

A USA Daily columnist, Pat Choate was Ross Perot's vice presidential running mate in 1996. Mr. Choate has served on two presidential commissions. A political economist, think tank strategist, policy analyst, and author of the best selling book " Agents of Influence ", Pat has also hosted a nationally syndicated talk radio show.

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