The people who run the U.S. defense industry aren’t real big on metaphors, and yet many of them subscribe to a distinctly metaphorical view of how military spending ebbs and flows. The prevailing view in the sector is that Pentagon spending occurs in waves that crest every 20 years or so, after which demand gradually recedes for a long time before once again beginning to build.

This pleasingly cyclical pattern is a pretty good description of how the postwar period has unfolded, but it looks nothing like the pattern of U.S. military outlays during the previous 150 years. However, because none of the executives running defense companies today were around for the previous 150 years, the “wave theory” of military demand seems more plausible than it really is. In fact, being engineers and financial types, they have unconsciously transformed the metaphor into a mechanistic model for the sector, complete with business cycles and inflection points. Keep reading →