The war in Ukraine has exposed many truths, as a big war usually does. The fecklessness and disorganization of the Russian military. The importance of artillery (and artillery ammunition). People power in a country filled with patriots. And — perhaps unsurprisingly — the ongoing importance of low-level industrial experimentation and innovation.

Is overregulation crippling the U.S. defense industry’s greatest strength — the creativity and enthusiasm of U.S. citizens to build, tinker, and invent?

THE BIG STORY

Building a Better Military

Regulation stifles defense innovation at the federal and state level. Small businesses that can’t afford compliance lose out, and taxpayers and the military pay the price.

It was a gray and very cold March morning. Snow the night before had blanketed the ground with an inch of thin, light snow, so light that it didn’t crunch underfoot. I was standing outside a two-bay garage, a mechanic’s shop. Inside, a dozen men were welding, hammering, and otherwise fabricating a variety of tank and vehicle traps for Ukraine’s war of self-defense.

This was about a week after Russia’s invasion in February of 2022 — 8 days, to be specific, though with the day of travel it had taken to get to Lviv, it simultaneously felt like less and more. The war had taken over my life and consumed my waking and sleeping life. There was nothing for it — I had to pitch in and help, or go mad.

Of far greater interest to me than the mechanics — improvised engineers, we might say — were reports of the then-unorthodox improvised use of drones, both on the then-flexible front lines, and by groups of volunteers and paramilitaries hoping to slow what many described as Russia’s inexorable advance on Kyiv, Kharkiv, and Odesa. Off-the-shelf quadcopters being used for reconnaissance and artillery spotting, smaller and larger fixed-wing drones being used for the same, or as improvised missiles. Dozens of groups of young Ukrainian patriots coding software to be used with the platforms, using 3D printers to create bespoke components to modify the drones’ capabilities, imagining novel ways to fight a more powerful foe.

I remembered all this recently while watching a video about the U.S. military’s sprawl, how that led to the Littoral Combat Ship (or LCS), and why the ship failed. In what has become a familiar story, the LCS (similar to other complicated projects) ended up costing twice as much as originally projected, while managing to provide few or none of the capabilities promised.

One of the things the video describes is the problem of the military presenting industry with a list of requirements — tasks they wanted the LCS to be able to perform. A similar phenomenon drove the development (and expense, and fielding) of the F-35 5th generation fighter aircraft. Developers are constrained by what the military says it needs.

Another problem highlighted by the video is that industry benefits from a strange incentive model by which development and delivery of the required platform (be it a ship or a fighter or a tank) is rewarded regardless of success or failure.

A third problem — perhaps the greatest when it comes to innovation — is a feedback loop created by the consolidation of large defense companies in the 50s and 60s, and then another round of consolidation in the 90s after the end of the Cold War. This led to a situation in which certain businesses became so large that they were able to capture the industry, approaching the size and influence of monopolies, then using lobbyists and Congress to, in effect, write the terms by which they could do business.

Every country depends on its military to have a base level of competency: the equipment, weapons, and training needed to win in war. But the requirements and complexity demanded by the U.S. military and by the industry that services that military are such that it is nearly impossible for smaller businesses to do business on their own; to innovate, to expand, to compete on a level playing field.

Smaller businesses and groups of the type that gave Ukraine such a dramatic leg up against Russia during the opening months of Russia’s invasion, and which enabled the rout of tens of thousands of Russian soldiers from around Kyiv, Kharkiv, and Kherson, are practically nonexistent in the U.S. If one listens to the lobbyists, they’ll say that’s out of necessity — that an individual, no matter how clever, cannot hope to compete with a Lockheed Martin or Bell when it comes to manufacturing the type or amount of helicopters or airplanes needed by the military. And the military will say — does say — that the only bidders capable of winning contractors are those with a demonstrated track record and the ability to produce such and such number of ships, or planes, or missiles, or what have you.

That all makes sense, but it still doesn’t explain why U.S. Army and Marine Corps units field the Raven at the Company level, while Ukrainians field off-the-shelf quadcopters at the squad level — and why no drone used by the U.S. is entirely made of components manufactured in the U.S.

The U.S. military has been captured by the defense industry, and the defense industry has been captured by the legislation it’s helped write over the past few decades. Everyone loses — most of all, that garage of 24-year-olds with a mix of technical and engineering degrees somewhere on Long Island or in rural Pennsylvania who could, if given a chance, solve some of the most urgent questions facing America’s military.

What’s the answer? A mixture of deregulation, of opening up procurement to individual states (or groups of states), and of unit-level innovators, much as what happened at a tactical level across Afghanistan and Iraq during GWOT. And who better to rewrite the rules than those former lieutenants, captains, and staff sergeants who had to create and experiment in order to survive?

TOP READS IN MONEY & FINANCE

OpenAI struggles with its mission and vision as investors and Microsoft pressure it to restore its fired CEO, Sam Altman. Leadership 101: once a leader’s fired, you don’t put them back in charge, that bridge is gone.

By one measure, the office sector of commercial real estate is now worse than it was in the 2008-09 crisis: office managers are increasingly falling behind or defaulting on loans or mortgages, and banks are becoming unwilling to lend them more money. How many canaries have to die before the coal mine gets evacuated?

Online it can be fashionable for libertarians to complain about an excess of U.S. dollars in circulation. In the “real world” the problem is almost exactly the opposite of that, not enough physical dollars to go around.

Estate taxes change from state to state and from year to year. That’s caused a lot of trouble for some, and, occasionally, provided relief for others.

TOP READS IN THE MILITARY & FOR VETERANS

The Army and Marines know where to find potential recruits: anime nerds. Flash forward to a year from now when somehow recruiting numbers are even worse.

An app to “sublet” child care slots is being used on Air Force bases now — as always, one has to consider the risk to force protection, but there’s a lot of opportunity for development when it comes to optimizing services on bases.

I’m not trying to be a warmonger here, but surely “strikes against American forces” merit more of a response than sanctions!

TOP READS AROUND THE WORLD

This article is a must-read for anyone who has an ambition to rebuild a beautiful car in their spare time (helps if you’re an engineer).

Elon Musk seems increasingly unhinged online. He should probably just “log off,” as they say.

Meanwhile, DeSantis’s star is on the wane, and Nikki Haley is making a bid to be the “logical” alternative to Donald Trump. If I was a Republican, I’d feel a lot better voting for her than anyone else in the primary.

HUMOR

“Seriously? Another Dollar General?” brought me into this Duffel Blog piece about returning to one’s home town.