Responding to Defense Dependence: Policy Ideas and the American Defense Industrial Base

The 1970s and 1980s witnessed growing concern in the United States regarding the relative decline of the American economy and, for defense planners, the military's growing dependence on foreign production of weapons' parts and subcomponents—the guts of many critical weapons systems. The period also witnessed growing interest in industrial policy as a tool for promoting U.S. international competitiveness, defense sectors proving to be particularly attractive candidates for government economic intervention. This study traces the evolution of defense dependence and the U.S. government's response to this dilemma by examining policy ideas and experiments in four defense industries—machine tools, semiconductor manufacturing, ball bearings, and high-definition television technologies—explaining successes and failures, and reviewing prospects for expansion.