With the US the world’s largest military, by far, it makes sense that their own armsmakers often have a level of capacity far beyond overseas competitors. The Air Force is finding this is limiting to the competition for US business.
Air Force acquisition head Will Roper has suggested the solution for this may ultimately be having the US nationalize chunks of the military aviation industry outright, to ensure that a few different armsmakers survive.
And yet they’d survive only nominally. The nationalization would give the government an effective monopoly on those parts of the industry, but the US might spare the expense to prop up multiple design and construct facilities just for the sake of “competition.”
The nature of these many billion dollar plane projects means only a few could ever compete to begin with. Many have responded to the mounting cost by merging to share expenses. The Pentagon wants more than one contractor to choose from, even if they have to own them all.
Yet doing this necessarily will lead to consequences for state-run monopolies, replacing the profit motive at the company level with a new layer of bureaucracy. The companies traditionally seek Pentagon deals with lobbyists, and by hiring former Pentagon figures to gaudy contracts. It isn’t clear how well the military will be able to sustain this if they nationalize the companies.
The legality of nationalizing US industries remains shaky, with President Truman’s failed bid to nationalize the steel industry in the 1950s. The Obama Administration, however, did successfully nationalize General Motors, temporarily, under the guise of saving jobs.
Nationalizing to ensure competition is a very unusual notion, and that’s going to make advancing the case all the more difficult. Expect the big armsmakers to resist, as these huge plane deals tend to be wildly profitable.
… W8, the U.S. is going to have state arms companies like China? Aren’t we supposed to fear China setting the new normal???
The arms industry was fine until it became the MIC’s crony capitalism.
Crony statism is not an improvement.
It already is crony. Now, it is getting clearer who is the boss. Congressmen, or more precisely the corporation they work for — their party — will ensure that the money is secured for elections. After all, it is in their mutual interest to continue the illusion.
Yes, and that will get no better when Banker Biden of Delaware corporate ownership becomes the new leader to “reform” the corruptions of Trump. It is hopeless right now, on the corruption front line.
Perhaps they feel safe doing all sorts of tings — as come elections, we have not much choice.
“Expect the big armsmakers to resist, as these huge plane deals tend to be wildly profitable.”
That doesn’t seem to be how it works within the US system. Within our system, “nationalization” or some semblance thereof is encouraged/promoted by, not resisted by, the industry to be nationalized.
Take, for example, the industry of generating electricity. Competition drove rates so low that the providers BEGGED governments to make electricity a “public utility.” Then, having already “vertically integrated” things, they made their money selling coal, etc. to the “public utilities,” which as monopolies were able to jack up the rates at will to cover the increased input costs.
If the government nationalizes the weapons makers, the same people charging $100 million for a fighter plane at the moment will just jack up the price of bauxite by a factor of ten and make their money on the aluminum, etc. and the cost of the fighter will go up to $150 million.
There are many ways to cheat in this game. Teapot Dome Scandal was such cheating on the Navy’s oil supply. The original Steel Navy began with a private shipyard that took money and built no ships, failing after they disappeared the money.
However, since Elizabethan England introduced their Royal Dockyards, right through the ammo plants running in the US today, it can also be done right and work out very well.
The key is that politicians do have the power to be corrupt. Often they use that power to the full. Again, Britain’s original dockyards offer an example, which by the Napoleonic Wars were so corrupted in the provision of timber that the First Sea Lord (St. Vincent) created a government crisis by refusing to play along. He lost, corruption won, and ships rotted quickly at great cost. So even an honest and outraged top man is no guarantee.
” Competition drove rates so low that the providers BEGGED governments to make electricity a “public utility.”” Sounds like unfettered capitalism to me. Or, free market capitalism.
Capitalism is a mixed, state-regulated industrial economy. There’s no such thing as “free market capitalism.” As for “unfettered” capitalism, that would presumably consist of the state running entirely for the benefit of business interests as distinct from other political class concerns, which is unlikely.
“Nationalize” = Federal Reserve ownership. Public Fed balance sheet (the one they let us know about) is over 7 Trillion and rising. US Federal debt over 25 Trillion and rising. Rothschilds just got their own Air Force.
Precisely.
They are already nationalized. It all depends what is implied by “nationalization”. These companies have governments as their only customers. Taxpayer — the only source of “profit”. Competing with each other? It us a cartel as it is.
But if viewed from the perspective of governance — we have already privatized Congress, both parties, Pentagon bureaucracy is appointed in line with corporate preferences. From this perspective, nationalization is nothing more then a corporate merger, military-industrial-Congressional complex. This may cut the corporate costs, and spare them the games of pretending politicians matter. But it will not reduce costs. It cannot. There is no institution left that controls taxpayers money and assets in public interest. I doubt that there is anyone that even knows what it means. This will not make them smarter, or more competitive — will just find the way to “enhance” revenue stream in different directions.
Taxpayer will not be their boss. Taxpayer is just a well controlled revenue source. This nationalization is just acknowledging the reality — a more open and more efficient form of government privatization.
How can this in any way be compared to Chinese state (taxpayer) owned company, or for that matter any European state owned company. Taxpayers money is a monopoly money to our congressmen, and it would not be in the nature if the system to think of it as capital, to be treated as such.
No, we are an experiment in governance by privatizing public functions and institutions.
This is just a logical step in the process. This is not capitalism, and this has no name. For a capitalism to function — private and public funds should not commingle. When a private company invests private money in a warplane, it would be capitalism. If public money or other public assets are invested, costs accounted for and profits SHARED, that would be capitalism.
But this is not happening.
“Taxpayer will not be their boss. Taxpayer is just a well controlled revenue source. This nationalization is just acknowledging the reality — a more open and more efficient form of government privatization.
How can this in any way be compared to Chinese state (taxpayer) owned company, or for that matter any European state owned company. ”
Easily. In the Chinese and European state owned companies, the taxpayers are also just well-controlled revenue sources. Slight variations in propaganda do not constitute essential differences in the nature of the state.
Beg to differ. Let us take a Chinese state owned corporation. Depending on the product — it enters into a joint venture with whoever is involved in a project — private company, a local government or even University.
Everyone has their share of investment in capital, facilities, land, human resources. At the end of a successful project, they all cover their expenses and share profit commensurate with their investment.
State owned company insures that state expenses in any form — down to a paperclip — are accounted for. And share of profits — goes into taxpayers coffers.
China’s version of capitalism values ALL capital equally — private or taxpayers.
You can invest taxpayers money, but you cannot gift it. Investing means creating a state corporation — if a new one is required — to become a business partner to private sector investor.
We, on the other hand, issue a contract, all the cost is borne by taxpayers’ money, and government gets x number of products. Cost overruns are common, penalties companies pay for overruns are included into the cost of overrun.
Costs of maintenance, training, etc. is where big profit margins are made. And we can buy more at “special” price. Then President and our embassies become salesforce.
Chinese taxpayers EARN money, we just spend and spend. Across the table, our negotiating and technical teams are no match for corporate negotiators.
In China, professional corporate leadership hired by state and its Charter well defined — sits across the table from private corporate leadership.
China has VERY LOW TAXES as taxpayers money is well protected AND it earns money.
The model above works also in joint ventures with foreign companies.
China’s version of capitalism values the interests of CCP muck-a-mucks and their cronies.
The US version of capitalism values the interests of GOP/Democrat muck-a-mucks and their cronies.
That’s the difference between Chinese capitalism and US capitalism.
Ummm, there’s not much point arguing the differences between communism and fascism.
Under the libertarian spectrum, they are both just oligarchies.
The real challenge will be acquiring Russian mil tech so we can make bad copies of them like the Chinese.
Is this a backdoor bailout to Boeing shareholders? Didn’t the cold war demonstrate the superiority of nationalized industry and a command economy?
So this freedom soldier suggests that to keep the empire we won by defeating fascists and other socialist that we should surrender to them and adopt their slavery so we can fight some jihad’s and maybe have a nuclear war with China or Russia….
Apparently our officer Corp has been subverted by the enemies of the people….
Only at the political general/wannabe political brass level, and even there, probably not many would be comfortable with this.
Yest they wont nationalise health? The priorities of a failed state – weapons over lives.
Unfortunately, US health is mostly socialized at the state and national level. It’s just that it’s socialized even less efficiently than elsewhere.
Socialized medicine doesn’t work great without strong, persistent and consistent democratic oversight and will to exercise that oversight from the grassroots to elected reps.
Even Sweden had nursing home carnage over COVID-19.
In Canada, 80% of COVID-19 deaths happened in nursing homes, versus only 42% in the U.S..
In the U.S., one can say you get what you pay for. This is a universal reality, though.
Canada and other socialized medicare systems have no such excuse for the direct and ongoing failure of political and public will to properly fund medicare to meet real demand.
The US Navy was founded on Navy Yards, government owned shipyards to build and repair Navy ships. They also used commercial yards, spreading contracts about 50/50 for much of our history.
Close study of the total failure of the US mobilization efforts for WW1 led to a program of government investment in plant needed upon mobilization. They contracted with private companies to maintain and use it. That worked very well for the WW2 mobilization, supplemented by government operations like the Army’s Watervliet Arsenal and the Washington Navy Yard (that was actually a gun manufacturing facility). Today the US runs several ammunition plants that are government owned but run on contract, again supplemented by private contracts.
This can be made to work. It could also be badly abused of course.
Very true; theoretically, NATO is salvageable; almost any rustbucket can be saved with a good drydocking and modernization.
However, once overwhelmingly corrupted, what can be done? The MIC/Globalist war machine just wants to dodge port and keep sailing.