State of the Union 2011: Obama's "Sputnik moment"

Military analysis.
Jan. 25 2011 11:02 PM

Obama's "Sputnik Moment"

The lesson from the 1950s is that it takes more than private enterprise to revive American innovation. It takes lots of government spending.

Sputnik I. Click image to expand.
Sputnik I

President Barack Obama didn't say much about foreign or military policy in Tuesday night's State of the Union address. To the extent he did talk about it, he spent more time on economic agreements with India, South Korea, and China than on the wars in Afghanistan and Iraq—and, given the state of the economy and the nature of the political battles ahead, the balance was probably right.

But he did evoke a huge defense issue from a half-century ago—the signal wake-up security call that marked the years of transition from Dwight Eisenhower to John F. Kennedy, the single word that has symbolized ever since the fear of slipping behind in a dangerous world: Sputnik.

"This is our generation's Sputnik moment," Obama said. As a result, we need to fund "a level of research and development we haven't seen since the height of the space race," with particularly strong investments in biomedicine, information technology, and clean-energy technology. In the same section of the speech, he likened this funding effort to "the Apollo Project," which later put a man on the moon.

Yet later on in the speech, Obama proposed, starting this year, to "freeze annual domestic spending for the next five years," a step that, he boasted, would "bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president."

It's hard to see how he or the Congress can resolve this contradiction—Kennedy-esque vigor and investment on the one hand, Ike-like torpor and penny-pinching on the other. He said much of this extra money could be freed up by eliminating subsidies for the oil companies. First, good luck on that. And second, that alone won't free up enough.

The history of Sputnik, and the revival of the American economy that it spurred, is instructive.

Sputnik was the 184-pound satellite that the Soviet Union launched into outer space on Oct. 4, 1957. It was a first (the United States had tried once before, with the Explorer, but failed), and it shocked the world. Everyone had assumed the Soviets were technologically primitive; now it looked like they were ahead.

The achievement wasn't merely symbolic; it also meant that, if the Soviets could build a rocket to boost a satellite into orbit, they might also build a rocket to boost an intercontinental missile that carries a hydrogen bomb and comes back down on the other side of the Earth, blowing an American city to smithereens.

Edward Teller, father of the H-bomb, declared on national television that, with Sputnik, America had "lost a battle more important and greater than Pearl Harbor." In the U.S. Congress, Clare Boothe Luce, R-Conn., called Sputnik's beep "an intercontinental outer-space raspberry to a decade of American pretensions that the American way of life was a gilt-edged guarantee of our national superiority." Senate Majority Leader Lyndon B. Johnson's aide (and later presidential speechwriter), George Reedy, sent his boss a memo, emphasizing, "It really doesn't matter whether the satellite has any military value. The important thing is that the Russians have left the earth and the race for control of the universe has started." (His emphasis.)

President Eisenhower wasn't so alarmed; he regarded Sputnik as a stunt. He'd seen the top-secret CIA reports (which he did not share with Congress), concluding that the Soviets were still many years away from a workable ICBM. In this same period, many on the Hill, Republican and Democrat, were relying on leaks from the intelligence branch of the Air Force, which was far more pessimistic (and, as it turned out, inaccurate) about an impending "missile gap" in favor of the USSR.

John Kennedy ran for president in 1960, promising a "new frontier" founded on "vigor." Early in his term, he directly responded to Sputnik in two ways: He poured money into the Minuteman ICBM program (both before and after he realized that the missile gap was a myth). And he pledged to land an American on the moon by the end of the decade.

In the spring of 1959, Texas Instruments had introduced a new technology called the microchip. But it was very expensive and generated no demand from the private sector. However, these tiny chips would be needed to power the guidance systems in the Minuteman's nose cone—and in the coming Apollo program's space capsule.

It was the Pentagon and NASA that bought the first microchips. The demand allowed for economies of scale, driving down costs enough so that private companies started building products that relied on chips. This created further economies of scale. And so came the inventions of the pocket calculator, smaller and faster computers, and, decades later, just about everything that we use in daily life.

None of this was inevitable. It started only because of government investment. Obama made this same point in Tuesday night's address: "Our free enterprise is what drives innovation. But because it's not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support they need. That's what planted the seeds for the Internet. That's what helped make possible things like computer chips and GPS."

GPS was initially an Air Force program, designed to make bombs more accurate. The Internet was an internal communication program created by the Defense Advanced Research Projects Agency.

Obama could have gone back further. The first commercial computer, the IBM 1401 of the late 1950s, came about only because the first customers were government agencies, the Social Security program and the Veterans Administration, which required a computer with enough capacity to store data about the millions of Americans receiving government checks.

Toward the end of his speech, President Obama mentioned several entrepreneurs who in recent months have revamped their businesses to solve new crises and meet new demands. They're inspiring case studies. But if the U.S. economy is going to do big things—and Obama said, twice, near the end of his speech, "We do big things"—they often don't get there without a spurt of government funding.

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