The story of the United States is one where warfare and commerce have been uniquely and deeply fused from the very beginning.
A Look at the Core Ideas
The U.S. military and private industry share a long-standing partnership, and today, commercial technology is increasingly the central engine driving defense innovation.
Last spring, Colonel Jeffrey Kain, the operations director for the U.S. Army in Europe, had a sudden realization: the logic of managing ammunition is remarkably similar to that of managing ice cream.
At the time, Kain was at home watching a video demonstration of a new digital system from Palantir Technologies. His unit had just adopted the platform to coordinate operations and monitor supply inventories. In the video, a manager from the fast-food chain Wendy's—a corporate client of Palantir—explained how the same system helped the restaurant precisely track inventory levels of mint chocolate chip Frosty ingredients across its U.S. locations.
"It was a lightbulb moment. I thought, 'We're doing the same thing,'" Kain recalled. "We're managing 155-millimeter artillery shells. The fundamental logic is no different."
Palantir's involvement in defense is but one recent example in a long history of profound interweaving between industry and national defense in America. Throughout history, war has created profits for some and spurred commercial evolution. The Crusades, for instance, gave rise to modern international finance and double-entry bookkeeping. However, the United States uniquely fused warfare with private enterprise on an unprecedented scale, creating a relationship of mutual empowerment and acceleration, often in unexpected ways.
"These are not simple business deals. This is a deep, strategic partnership to achieve U.S. national security objectives," said retired Army Lieutenant General Joseph Votel, who has long worked at the intersection of government and corporate defense cooperation.
Votel noted that the endurance of this partnership over two centuries is itself remarkable, and a subtle, persistent trend has emerged: the lead in innovation, particularly in research and development, cutting-edge technologies, new manufacturing processes, and emerging security domains like cyber and space, is gradually shifting from the military to the civilian commercial sector.
Over centuries, the bonds between the U.S. military, government, and commerce have deepened. In his 1961 farewell address, President Dwight D. Eisenhower, a retired five-star general and World War II hero, issued a stern warning about what he termed the "military-industrial complex."
He cautioned against the "potential for the disastrous rise of misplaced power" from the then-burgeoning permanent, large-scale arms industry.
The Foundation Laid by Washington
This system of military-industrial collaboration took nearly two centuries to fully form. In 1794, George Washington ordered the establishment of the national Springfield Armory. This government arsenal pioneered innovations that later became cornerstones of private industry: interchangeable standardized parts, assembly line production, hourly wages, and a system of full-time professional management.
The American Civil War was the first large-scale conflict in history where industrial might determined the outcome. The industrialized factories of the North could mass-produce munitions, an advantage the agrarian South could not match. The Springfield Armory, which produced fewer than 10,000 rifles in 1860, manufactured over 800,000 during the four-year war. The North's industrial growth also attracted waves of immigrants, providing a steady stream of recruits for the Union Army.
The Union military leveraged the extensive private railroad network, originally built for commercial trade, which was far denser than the Confederacy's sparse lines, further amplifying its wartime advantage.
The following half-century saw no major wars, and the U.S. military shrank. However, commerce and industry exploded with the industrialization momentum from the Civil War. The entrepreneurial spirit of the Gilded Age laid the industrial foundation for America's victories in the wars of the 20th century.
In 1898, inventor Nikola Tesla demonstrated a radio-controlled boat prototype in New York's Madison Square Garden. Like the Wright brothers' first flight in 1903, this technology initially received little military attention, but war soon changed that.
In the late 19th century, firearms designer John Moses Browning built a business by radically improving firearm mechanisms, eventually developing the highly potent heavy machine gun. The M2 .50 caliber machine gun, finalized after World War I, remains in production and widely used by militaries globally.
When the U.S. entered World War I in 1917, its formidable industrial capacity first supplied the Allies with a steady stream of materiel. Once American troops landed in Europe, this output directly altered the course of the war.
This model of industrial mobilization reached its zenith in World War II. President Franklin D. Roosevelt enlisted veteran industrialists to lead a massive, rapid expansion of private manufacturing. Production targets that would have seemed impossible months before the war were met. Automobile factories built warplanes; food canneries made ammunition crates. Early after Pearl Harbor, building a Liberty cargo ship took about eight months. By 1945, through extreme efficiency gains, the time was slashed to just one month. American factories also continuously supplied the Soviet allies with war materiel.
The Technological Arms Race of the Cold War
By the time Eisenhower gave his warning in 1961, the Soviet Union had emerged as an industrial and strategic peer capable of rivaling the U.S. America chose not to compete solely on scale but to leverage technological innovation to offset Soviet numerical advantages. Beginning with the space race, the U.S. military and domestic companies embarked on decades of deep collaboration that would ultimately reshape the global commercial landscape.
The U.S. Department of Defense funded private sector research into rockets, military aircraft, computers, and new materials for weaponry. The first digital computers were developed to simulate hydrogen bomb tests. The high-thrust jet engines developed for the C-5 Galaxy military transport in the 1960s formed the technological basis for the Boeing 747, the wide-body jet that democratized air travel in the 1970s.
During this same period, America was mired in the Vietnam War, facing immense logistical pressure. New Jersey shipping entrepreneur Malcolm McLean, who pioneered the containerized shipping model, was determined to win Defense Department contracts. He even funded the construction of a container port at Cam Ranh Bay in Vietnam.
Containers not only solved military shipping problems but revolutionized global trade. Empty containers returning to the U.S. stopped in industrializing Japan, loading up with affordable consumer goods for the American market.
While McLean's shipping business aided military logistics, the global standardization of containers relied on the military's strong push for shipping companies to adopt uniform specifications. "The government basically told private industry, 'You come up with standards, or we'll impose them,'" explained Marc Levinson, author of "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger."
The New Digital Battlefield
The United States did not win the Vietnam War, but the capitalist system prevailed in the Cold War. America began a digital transformation of "beating swords into plowshares": the Global Positioning System (GPS), developed for military use, was opened for civilian purposes; ARPANET, created to ensure communication survivability in a nuclear war, evolved commercially into the internet.
The dot-com bubble era spurred a civilian commercial boom, and the technologies soon extended into national security and military realms. In the late 1990s, PayPal enabled unprecedented scale in personal online transactions, which also bred fraud. Its founding team consequently developed a fraud-detection and risk-management system. After the September 11, 2001 terrorist attacks, founders like Peter Thiel realized the technology could be used to track terrorists, leading to the creation of Palantir in 2003.
During the wars in Iraq and Afghanistan, the U.S. military frequently turned to private firms to counter threats like improvised explosive devices, evolving from initial modifications to military vehicles to sophisticated digital security solutions.
A decade ago, senior U.S. defense officials recognized a growing risk of falling behind in digital technology. They proactively reached out to Silicon Valley—a region whose own growth had been partly seeded by military funding decades earlier—and found some of the first battlefield applications of artificial intelligence there, such as algorithms to locate elusive insurgents in Iraq.
Today, the U.S. grapples with the challenge of a shrinking domestic industrial base while simultaneously racing to implement commercial artificial intelligence technologies. As Colonel Kain discovered with the ice cream inventory system, many cutting-edge technologies are already mature in the civilian sector.
"The best technology in the world resides in U.S. commercial industry," said Cameron Stanley, the Department of Defense's Chief Digital and Artificial Intelligence Officer, recently. "So our digital transformation strategy is to prioritize the adoption of commercial technology wherever possible."
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