Restructuring the U.S. Defense Industry

Abstract

The collapse of the Soviet Union has spurred massive restructuring in the U.S. defense industry. But according to Eugene Gholz and Harvey Sapolsky, both of the Massachusetts Institute of Technology, the post–Cold War U.S. military drawdown has not been as extreme as many believe. Gholz and Sapolsky contend that the military-industrial complex continues to be plagued by surplus capacity and overproduction, both of which reflect a reaction to "Congress's pork barrel instincts" rather than to perceived U.S. national security needs. The authors offer a three-step policy recommendation to address the problem: U.S. government buyout of excess capacity, development of a "private arsenal system," and reassessment of the federal government's position of maintaining at least two suppliers in each segment of the defense industry.