Over the past four decades in the United States, as the country has slashed its welfare state and employers gutted traditional job benefits, growing numbers of people, especially from the working class, grasped for a new safety net – the military. Everyone recognises that the US armed forces have become a global colossus. But few know that, along with bases and bombs, the US military constructed its own massive welfare state. In the waning decades of the 20th century, with US prosperity in decline, more than 10 million active‑duty personnel and their tens of millions of family members turned to the military for economic and social security.

The military welfare state is hidden in plain sight, its welfare function camouflaged by its war-making auspices. Only the richest Americans could hope to access a more systematic welfare network. Military social welfare features a web of near-universal coverage for soldiers and their families – housing, healthcare, childcare, family counselling, legal assistance, education benefits, and more. The programmes constitute a multi-billion-dollar-per-year safety net, at times accounting for nearly 50 per cent of the Department of Defense budget (DoD). Their real costs spread over several divisions of the defence budget creating a system so vast that the DoD acknowledged it could not accurately reckon its total expense.

Most Americans would not imagine that the military welfare state has anything to do with them. After all, in the era since the end of the draft and the advent of the all-volunteer force, military service has become the province of the few: just 0.5 per cent of Americans now serve in the armed forces.

But the history of the military welfare state tells us a great deal about citizenship and welfare. Its rise correlated with and, in some instances, caused the decline of the civilian welfare state, creating a diverging and unequal set of entitlements. And the recent transformation of the military welfare state – a massive privatisation and outsourcing – signals an even more dangerous future for the civilian welfare state.

The US military has always performed social welfare of some kind or another. Over its long history, it provided daily support to its conscripts – food, shelter, clothing and medical care – and more elaborate benefits such as homes, family support and clubs for the career force and officers. The military also rewarded citizen conscripts for their faithful service during wartime. During the Revolutionary War, the Continental Army offered veterans land or a cash bounty. After the Civil War, the military offered veterans pensions. And after the Second World War, millions of former service personnel were guaranteed unprecedented education, training and housing subsidies.

Military leaders embarked on a new and more ambitious social welfare programme after 1973. That year, President Richard Nixon and Congress ended the draft and mandated an all-volunteer force. Military leaders could no longer force citizens to join – they had to convince them. And one of their most vital tools was social welfare benefits.

Unlike European countries that provided nearly universal social welfare to all citizens, the US had only a patchwork social welfare system consisting of various public and private safety nets. Military leaders stepped into the gaps between them. They decided, in the words of the army motto, ‘to take care of their own’. They expanded the benefits traditionally reserved for the relatively few members of the career force and officers to every single member of the volunteer force and his or her family.

This post-1973 military welfare state played a different role in US life than most earlier types of military welfare. For one, military welfare no longer served as a reward for the services of citizen soldiers. Instead, it sustained the volunteer force: it lured new recruits, supported them while on duty, and convinced them to re‑enlist.

The military welfare state post-1973 never stimulated social welfare for the populace: quite the opposite

More importantly, earlier versions of military welfare catalysed broader social welfare programmes for the US populace. Civil War pensions pioneered federal retirement and disability payments, and paved the way for civilian retirement pensions. Veterans’ healthcare after the First World War created the first model of government health provision. And the Second World War-era GI Bill vaulted millions of former civilian draftees and their families into the middle class, legitimising government support for education and housing for all Americans.

The modern military welfare state of the post-1973 era never stimulated social welfare for the populace. Quite the opposite. As a smaller number and narrower cross-section of Americans volunteered for military service in the late 20th century, the divide between the military and civilians grew. So, too, did the divide between the new military welfare state and the existing civilian one. From the 1970s to the early ’90s, while many civilian welfare programmes contracted, public and private unions declined, and employers cut private employment benefits, the military expanded its welfare functions.

How did this happen?

With the birth of the modern volunteer force, the military and its allies pursued a politics of separation. The generals who commanded the new military drew bright lines demarcating their own social welfare programmes from those for civilians. The chairman of the joint chiefs, General George S Brown, made the case for military service as a uniquely deserving vocation – more like a calling – and entitled to special benefits. From President Gerald Ford’s defence secretary Donald Rumsfeld down to army privates, military personnel disparaged any notion of ‘comparability’ between themselves and civilians. Some went as far as lampooning ‘nine-to-five’ civilians for working easy and self-interested jobs. Even as the recession of the 1970s spurred budget cuts for welfare programmes and public employee benefits, generals and admirals convinced Congress to shore up and enlarge military benefits.

During the 1980s, President Ronald Reagan drove the military welfare state to its apogee. Beginning with a speech at the US military academy at West Point in 1981, Reagan promised pay raises and generous benefits to recognise soldiers’ ‘honorable profession’. His unprecedented peacetime military spending provided an enormous budget for social welfare. First came a housing boom, then a childcare programme that became the US gold standard, then a raft of diverse family support programmes that did everything from easing marriages in crisis to providing free legal and financial counselling.

Reagan officials decried the shiftlessness of civilian college students as they cut aid to higher education

But Reagan did more than bankroll the military welfare state. He leveraged his support of military welfare to attack the civilian welfare state. The most obvious example concerned the revival and reinvention of the GI Bill. Though previously used as an education programme to reward veterans for service, Reagan brandished the new GI Bill as a weapon against higher-education assistance for civilians – the student loans and grants so many Americans had come to depend on. Reagan and his team cast these programmes as ‘benefits [given] to those who were not serving their country’, and thus undeserved. Reagan officials decried the shiftlessness of civilian college students as they cut aid to higher education. And they praised the sacrifice of young soldiers as they signed on to the new GI Bill.

Reagan also protected the military welfare state by aligning it with the Christian right. James Dobson of Focus on the Family and other right-wing evangelicals were welcomed onto military taskforces advising the army on new family support programmes. Dobson even sold his videotapes and brochures to military counselling programmes. Conservative Christians found allies in the military’s chaplain’s corps and officer’s corps, ensuring that the many new counselling and family readiness programmes shaded toward conservative Christian ideals of family life – two-parent, patriarchal families with wives who ‘submitted’ to their husbands’ authority. The alliance between the military welfare state and the Christian ‘family values’ campaign protected military welfare from associations with the welfare provided to civilians. And it fostered its continued growth.

As the military welfare state grew and prospered, it attracted some of the same opponents as had the civilian welfare state. Not everyone in the military or outside its ranks welcomed programmes that, in their view, mimicked the civilian welfare state – feminising the institution, encouraging dependency, and enlarging the state.

Some active-duty and retired officers feared social welfare would undermine the martial nature of the military and turn commanders into ‘social workers’. In the late 1970s and early ’80s, Robin Beard, a Republican congressman for Tennessee and a former naval officer – and, more recently, the Democrat Jim Webb, a 2016 presidential candidate and former senator from Virginia – charged that women soldiers and obligations to the wives of men soldiers turned the army into a ‘babysitting service’.

In the army, the largest and least popular of the services, opponents of military welfare also feared that welfare benefits attracted, as one general put it, ‘the dregs’ of US society. By the late 1970s, the army had trouble recruiting white high‑school graduates, much less anyone who had attended college. It had become nearly one-third African-American and, just as opponents of the welfare state used racist stereotypes to attack it, so too did opponents of the military welfare state, who likened the disproportionately African‑American soldiery to despised welfare clients.

By the early 1990s, military welfare skeptics both within and without the military gained ground. Leaders of the army’s community and family support services and its Morale, Welfare and Recreation unit latched onto the civilian agenda to ‘end welfare as we know it’, charging the military’s support programmes with encouraging ‘dependency’ among military personnel and their families. They worried about ‘overly dependent spouses’, and purged the word ‘support’ from their lexicon. Cued by family psychologists who studied civilian welfare programmes, the army pressed its families to become ‘self-reliant’. The army even changed its official motto from a promise to ‘take care of its own’, to an awkwardly worded, half-hearted pledge to ‘take care of its own so that they can learn to take care of themselves’.

An even more powerful attack on the military welfare state came from outside the military’s ranks, from a group rarely linked to the military – free‑market economists. While military leaders worried about welfare’s degradation of their instition, free‑market economists loathed the military welfare state’s extension of ‘big government’.

Clinton created the perfect environment for realising the free-market dream

Economists had first set their sights on transforming the military in the 1960s. The free‑marketer Milton Friedman guided the 1969 Nixon group that sketched the blueprint for the post-draft military. He advocated a vision of the military as an ideal free‑market institution. In Friedman’s ideal, cash payments and bonuses would drive enlistment, and the military’s traditional benefits and social welfare programmes – no better than any other government social programme – would be abolished. If abolition proved too difficult, the remaining services and benefits would be contracted out to the private sector.

The military successfully resisted the free‑market onslaught in the 1970s and even in the putatively pro-private‑enterprise Reagan decade of the 1980s, driving free‑market champions to decry the ‘pure socialism’ at the heart of the defence establishment. But free-marketers began to make inroads with their military agenda at the tailend of the 1980s and especially the ’90s. President Bill Clinton’s National Performance Review, popularly called ‘Reinventing Government’, created the perfect environment for realising the free-market dream. It imported corporate practices of outsourcing and privatisation in all government agencies, including the military. Clinton hired a Wall Street privatisation expert, Joshua Gotbaum of Lazard Frères, for the newly created post of Assistant Secretary of Defence for Economic Security at the Pentagon. His charge: privatise and outsource whatever he could.

Meanwhile the dramatic defence cuts that followed the end of the Cold War forced military commanders to slash spending and seek savings. Commanders and staff turned to corporate budget and management strategies such as Total Quality Management, strategic planning, and outsourcing. The army joined leading sectors of capital on the conference board, created a Captains of Industry Conference, consulted with business schools, and hired scores of consulting firms to help guide the outsourcing process. More and more, commanders chose to protect the ‘tip of the spear’ – weapons and infantry – and contract out and privatise military welfare. In the hopes of reducing budget lines, they gave up major elements of soldier and family support programmes, from housing to healthcare, and sent them into the private sector. In less than a decade, the military, economists and corporate advisors dramatically altered the military welfare state. A system that had ‘taken care of’ military personnel devolved into a privately contracted collection of services that all too often promoted ‘self-reliance’.

The transformation of the military welfare state has done no good for soldiers or civilians, or for social welfare in the US. For soldiers, it has meant fighting wars in Iraq and Afghanistan under leaders who expected them and their families to exhibit what the military came to call ‘resilience’. Though the term ‘resilience’ drew from new psychological literature on shaping positive reactions to trauma, its practical effect was to demand the same ‘self‑reliance’ among soldiers that the military of the 1990s had introduced. It was, at best, an unrealistic expectation given the unprecedented numbers of brain injuries, traumas and suicides suffered by military personnel and families during the extended conflicts.

When soldiers and their families did need support, they were likely to turn not to the military, but to private contractors: doctors contracted by national healthcare corporations, a multinational real‑estate corporation, or contracted social workers manning family support programmes. Placing support programmes in the hands of private contractors diminished the army’s ability to solve the problems facing military personnel and their families. The scandal in 2007 at the Walter Reed Army Medical Center in Washington, DC – with rodent infestation, languishing patients and unsupervised care – arose in no small part due to the poor performance of contractors at the facility. As the contractor Johnson Controls wrangled for yet more work at the facility, its administrators paid more attention to the dollars and corporate control than the day-to-day care of soldiers.

The military social welfare system that evolved in the 1990s failed to meet the needs of wartime soldiers in the 2000s. But the Pentagon has nevertheless continued on this path, making it clear that private defence contractors and their allies in free-market think tanks and politics are the real beneficiaries of outsourced military welfare.

They completely marketise military welfare and abandoned military personnel and their families to true self-reliance

Beginning in 2011, the DoD entertained requests to privatise more of its benefits – this time, a more radical privatisation of healthcare and a total restructuring and privatisation of pensions. Sponsored by the conservative think tank the Heritage Foundation and supported by the CEOs of global defence firms serving on the DoD’s Defense Business Board, and by former two-, three-, and four-star generals now assuming consulting roles in banking and defence firms, new healthcare and retirement proposals sought to replace existing programmes with privately held, market-based healthcare and retirement programmes. They offered vouchers and cash substitutes in place of defined and guaranteed supports. Using the rhetoric of ‘soldier choice’, the programmes decreased total benefits and increased private‑sector access to government funds and the money of military personnel.

Military personnel and their families would receive healthcare vouchers allowing them to either purchase whatever healthcare plan they chose from an array of private‑sector providers – or to purchase none. Instead of earning defined retirement benefits – pensions – soldiers, sailors, airmen and marines would participate in ‘defined contribution plans’, such as privately-held 401(k) programmes, in which a defined amount is contributed by the employer toward the employee’s retirement benefit. Or they could simply take a lump sum of cash.

The voucher and cash proposals represent the logical end point of both privatisation and self-reliance adopted by the military in the 1990s. They completely marketise military welfare and abandon military personnel and their families to true self-reliance. Every soldier and veteran will venture into the private sector alone, entering separate relationships with separate firms for separate health or investment services. If personnel endure poor treatment, they will face it unaided, without recourse to a chain of command. Military personnel and their families will be scattered. Their ties to the military will diminish.

With their retirement and wallets on the line, will military personnel rethink the distance they have for decades maintained from civilians? For many years, those in the military followed a solo path toward recognition and support in Congress. They avoided any association with civilian employees, public workers, or recipients of public entitlements. But now that military personnel are facing bold corporate gambits for their benefits, they see that the military welfare state is unravelling. They cannot deny their shared place alongside civilian workers, who have long faced a diminishing welfare state.

Why should civilians care about the military welfare state? The conversion of more military benefits to fully free-market models will not bode well for most Americans. If even the troops, whose symbolic status in US politics as a sacrosanct class can have their benefits outsourced and privatised, what chance do social programmes protecting civilians have? These have come under renewed assault, especially at the state level, among such Republican governors and presidential hopefuls as John Kasich of Ohio and Scott Walker of Wisconsin. In the past several years, they have eliminated collective bargaining rights, public pensions and Medicaid increases in their states. Inspired by their inroads against the welfare state, national Republican leaders in Congress, such as Paul Ryan of Wisconsin, have intensified their assaults on social security and the new Affordable Care Act at the federal level.

How will the rest of Americans resist the privatisation of social programmes if vaunted military personnel cannot? Divided by decades of divergent welfare states, military personnel and civilians might now face the shredding of both.