The High-Tech Arsenal of Democracy: Economic Strength and Scientific Innovation in the Evolution of Modern Warfare

Doug Livermore

 “We must be the great arsenal of democracy. We must apply ourselves to our task with the same resolution, the same sense of urgency, the same spirit of patriotism and sacrifice as we would show were we at war.”

-- Franklin Roosevelt, Dec 29, 1940

The ability to leverage financial capabilities to bankroll both technological innovation and large-scale production of war materiel has increasingly driven the evolution of modern warfare. There is every indication that these interdependent elements will continue to have an even greater impact on the international security environment in the 21st century and beyond. In his thesis The Western Way of War, Geoffrey Parker presents several common characteristics unique to Western societies that contributed to their military success.[i] Among these characteristics, the West enjoyed marked advantages related to financial mobilization and technological innovation that greatly explain the evolution of modern war. Certainly, other characteristics identified by Parker are still applicable, but these two characteristics had the greatest overall impact on the evolution of warfare.  Parker discussed how Western countries leveraged their burgeoning economies and financial institutions to fund large land armies and massive fleets with rapidly evolving technologies to both fight other Western states and ultimately expand into grand global empires. Such conferred advantages continue to have an outsized influence on modern warfare, and it is clear that this trend will continue to impact the future security environment. 

The ability and willingness to leverage inventive financial mechanisms, such as letters of credit, national banks, increased taxation, and bonds, provided those nations able to endure such debt burden immense advantages and heavily influenced the evolution and scale of modern warfare. By the middle of the 17th century, England had enjoyed immense economic power thanks to a global business market, and as such was willing to assume great debt to finance war and imperial expansion. The Bank of England was vital in allowing the Crown to field many impressively large armies and fleets that conveyed significant military advantage around the globe. At the end of its victorious Seven Years War in 1763 Great Britain had amassed a considerable debt of some 122 million pounds, with 4.4 million pounds in annual interest.[ii] During the next century’s Napoleonic Wars, the disparity between the financial systems of Britain and France was even starker, again providing advantages that contributed to France’s ultimate defeat. France depended heavily on taxation for revenue due to financial institution’s lack of confidence in Napoleon’s nascent post-monarchist regime, while thanks to, “its long record of fiscal probity, coupled with its open budgetary process in Parliament, Great Britain could continue to borrow a substantial fraction of its war expenditures.”[iii] Britain’s ability to bear heavy debt was instrumental in winning repeated important victories against France and others that could not afford such spending nor assume great debt over extended periods and were ultimately outmatched.

By the second half of the 19th century, the economic and industrial disparity between belligerents, perhaps most plainly demonstrated during the American Civil War, made the outcome of conflicts even more predictable. At the start of the American Civil War, the Union North controlled some 70% of the nation’s overall wealth, printed paper money backed by government credit rather than precious metals, sold war bonds to further fund war production, and could rely on advanced banking institutions and the ability to impose taxes and tariffs on imports. By comparison, the Confederate South only possessed about one million dollars backed by gold and was unable to borrow money or generate revenue through tariffs given the blockade of most Southern ports by the Union.[iv] The economic disparity between the North and South at the start of the war was so unambiguous that very few historians believe that the South had any possible hope of defeating the North. The financial and industrial clash between states proved among the most influential characteristics in the evolution of warfare. 

Emphasis placed on the financing, study, and fielding of technological developments has influenced the evolution of modern war at an increasingly rapid pace, often proving a deciding factor in determining conflict outcomes. The development of advanced naval vessels, firearms, and artillery allowed Western nations to overcome numerically superior foes and establish overseas empires in the Americas, Africa, and Asia. As previously discussed, Great Britain’s empire at its height stretched so far around that globe that it could truthfully be claimed that, “The Sun never sets on the British Empire.” While many examples exist, perhaps none are as glaring as the 1879 Battle of Ulundi, which ended the Anglo-Zulu War with a resounding victory for the British. Despite being outnumbered by nearly five-to-one by native Zulu warriors carrying shields and spears, the smaller British contingent decisively defeated the larger army  in no small part due to its modern rifles, ten modern cannons, and two rapid-fire Gatling guns they had brought on the expedition.[v] This pattern played out repeatedly throughout the colonial period, in which the technological superiority enjoyed by Western empires allowed them to expand their dominion around the world.

The increasing rate of Western technological innovation and industrialization, as demonstrated by the adoption of railroads and telecommunications in the mid-19th century, further accelerated the evolution of warfare. The American Civil War saw many of these new technologies employed in concert for the first time, leading many historians to consider this conflict as the first truly modern war. The Union North’s great advantage in railroad infrastructure allowed it to move supplies and troops between the Eastern and Western theaters of operation with a rapidity that the Confederate South could not hope to match with its own lack of railroad track and locomotives. The use of the telegraph exponentially increased the speed by which orders could be issued, supplies requisitioned, and intelligence on enemy activities conveyed to military leaders to spur action. When Confederate General Robert E. Lee’s Army of Northern Virginia crossed into Pennsylvania in June of 1863, telegraph reports prompted Union President Abraham Lincoln to dispatch the Army of the Potomac to intercept, ultimately leading to the Battle of Gettysburg and the pivotal defeat of Lee.[vi] 

Less than a half century later, the First World War witnessed the horrifically logical extension of this technological evolution in warfare, which saw the Central and Allied Powers facing off against each other in the muddy and bloody battlefields of the European Western Front. The ability to rapidly develop technologies, prototype, and field practical weapons became a prominent aspect in the evolution of warfare, particularly on the Western Front where the belligerents remained locked for most of the war in an action/reaction cycle centered on breaking the stalemate of the trenches. The construction by both sides of intricate trench and bunker fortifications led to the development, mass production, and employment of rapid-fire machineguns and submachine guns, poisonous gas, heavy artillery, tanks, and the first viable combat aircraft.[vii] While the victorious Allies implemented some lessons during the interwar period, it was the defeated Germans who best incorporated these teachings and unleashed upon the world one of the most technologically advanced militaries in 1939.[viii]

The dual elements of economic strength and technological innovation will continue to heavily influence the evolution of contemporary warfare. The 2018 National Defense Strategy refocuses the US Department of Defense on Great Power Competition and specifically addresses the importance of safeguarding economic strength and harnessing the National Security Innovation Base for military advantage.[ix] The US’s awesome economic and technological strength allows it to develop a military with greater lethality by modernizing key capabilities to create a smaller, agile, and more innovative force. Meanwhile, near-peer competitors such as China and Russia continue to develop asymmetric capabilities to try and negate US economic and technological superiority, forcing the US military to continue leveraging these same characteristics to evolve faster than these competitors. Economic strength and technological innovation were the two most influential elements in the evolution of modern warfare, and there is every indication that these trends will have increased importance for the international security environment in the 21st century and beyond.

End Notes