292 Chapter Eightthe 1880s, when intimate collaboration between navy officers and pri
vate engineers and production experts entered into the development
of every important new device, foreign sales did begin to raise serious
questions about who had the right to sell what, and to whom. National
loyalty obstructed profitable dealing with potential enemies. By
operating in lands allied or aligned with the home country, this di
lemma could be sidestepped, at least as long as the diplomatic constel
lation remained unchanged. But patent-sharing agreements between
British arms firms and Krupp, some of which were honored even
during World War I years, raised the issue of which came first
—the nation or the firm, public good or private enrichment—and in
especially poignant fashion.^50
Overall, it seems clear that as arms firms became pioneers of one
new technology after another—steel metallurgy, industrial chemistry,
electrical machinery, radio communications, turbines, diesels, optics,
calculators (for fire control), hydraulic machinery, and the like—they
evolved quickly into vast bureaucratic structures of a quasi-public
character. Technical and financial decisions made within the big firms
began to have public importance. The actual quality of their weapons
mattered vitally to the rival states and armed services of Europe. After
1866 and 1870, everyone recognized that some newly won technical
superiority might bring decisive advantage in war. Each technical op
tion in arms design therefore carried a heavy freight of political and
military implications and had to be taken with an eye both to the na
tional interest and to the financial future of the firm within which the
new device was being developed.
Fast acting feedback loops thus arose whereby financial and man-
- Trebilcock, The Vickers Brothers is especially perceptive in treating the way private
managers strove to minimize risks and react rationally to the market they served. In a
series of articles he discussed these same issues more concisely and more generally. All
by Clive A. Trebilcock, they are: “Legends of the British Armaments Industry: A
Revision,” Journal of Contemporary History 5 (1970): 2–19; “A ‘Special Relationship’—
Government, Rearmament and the Cordite Firms,” Economic History Review 19 (1966):
364–79; and “British Armaments and European Industrialization, 1890–1914,” Eco
nomic History Review 26 (1973): 254–72. The last is an especially striking article. Trebil
cock argues that the scale and economic importance of public investment in arms
manufacture between 1890 and 1914 deserve comparison with the earlier effort gov
ernments made to build railroads. Both strategies for modernization used public credit
to channel massive investment along new lines where private capital would not, by
itself, have gone. He even argues that spin off from armaments affected local economies
at large almost as much as railroads had done earlier. At the peak of the official effort to
import new arms technologies, he calculates that Spain spent 2 percent of its national
income on the task (in 1906) while Japan devoted no less than 10.3 percent of its
national income to the same purpose in 1903. Other countries that went along this path
fell between these extremes; but in each case the effort was massive and made a major