America Inc? Innovation and Enterprise in the National Security State, by Linda Weiss

Jörg Michael Dostal on how the NSS has enabled the US to attain technological leadership to serve its geopolitical objectives

August 14, 2014

The US’ National Security State, contends political scientist Linda Weiss, ensures that America’s technological leadership serves geopolitical objectives. She begins her argument with the observation that “all the major advanced industries of the past sixty years have been pioneered in the United States”. Overall, her study holds that one should not misinterpret the US as a liberal and market-coordinated economy but rather as a “hybrid state”. In such a model, liberal capitalism’s shortcomings are compensated for by institutional networks that accommodate strategic policies facilitating basic research and innovation. Weiss suggests that “the NSS plugs gaps left by the so-called free market institutions” by providing federal research funding and high-risk venture capital to enable breakthrough innovations that in turn aid the foundation of new industrial sectors and economic growth.

America Inc?’s first three chapters and its conclusion will capture readers’ attention, ably blending a historical narrative about the emergence of the relevant Cold War institutions with descriptions of the working procedures that allowed the NSS to facilitate technological innovation. According to Weiss, the present-day NSS consists essentially of three federal departments (Defense, Energy and Homeland Security) and four agencies (CIA, Nasa, the National Science Foundation and the National Institutes of Health). Rather than following a single overarching strategy, the innovative capacity of the NSS is located in its multidimensional institutional structure. Within this framework, innovation policies follow a trial-and-error method: the federal government puts forward technological problem sets while matching them with the provision of federal venture capital to facilitate the early stages of research. Weiss discusses the Small Business Innovation Research programme at length, showing how federal seed funding works informally to certify start-up companies to attract additional private venture capital at later stages in the innovation effort. It also shows how the federal government facilitates the breakthrough of new products by offering guaranteed markets such as large-scale orders from the military.

While the NSS’ innovation policies were put in place to deal with first Soviet and then Japanese competition, since the 1980s there has been increased emphasis on facilitating what Weiss calls “spill-around” between military and non-military markets. She shows how the commercialisation of military innovations for non-military purposes helps to drive down adoption costs: in other words, Americans’ monthly smartphone bills help to recoup military research expenditure.

Weiss ends her account on a cautionary note. The offshoring of US manufacturing to Asia and the single-minded focus of US corporations on shareholder value, she suggests, will threaten the country’s future capability to turn technological leadership into substantial economic and geo-political advantage.

Although America Inc? makes interesting points and contributes to the larger literature on varieties of capitalism, it has shortcomings. First, it fails to explore the actual mechanisms for generating innovation. One looks in vain for historical case studies of particular episodes of US success or failure. Second, Weiss assumes (probably correctly) that few readers will read the study cover to cover. However, her way of dealing with this challenge is to repeat her core thesis in every chapter – an approach sure to exhaust all but the most cursory reader’s attention. Last but not least, there is a dearth of critical analysis of the NSS.

This monograph seems to have been written with a particular audience in mind: those US policymakers who require a political economy tract to restate the case for a long-term strategic approach to innovation policy. Weiss favours a “reconnecting effort” between US technological leadership, domestic manufacturing and skilled employment growth. Whether or not such policies require the NSS in order to be effective is another question.

America Inc? Innovation and Enterprise in the National Security State

By Linda Weiss
Cornell University Press, 280pp, £46.50 and £15.50
ISBN 9780801452680 and 479304
Published 6 March 2014

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