There is a piece by James Fallows in the Atlantic on the US military's Joint Strike Fighter program, giving the history of the race off for the contract between (mainly) Boeing and Lockheed. The point of all this is that the military has traditionally decided what it wants in its hardware, and then has got contractors to build what it wants to exact specifications, almost from scratch, regardless of the cost. This sometimes gets you exactly what you want, and what noboldy else has, but also sometimes ends up with you paying $500 for a toilet seat. In the rest of the economy, generally you are trying to get as much as you can for a given amount of money, and therefore you try to use mass-produced, off the shelf components as much as you can, and you compromise on functionality if you can't afford everything on your wish list.

The JSF is something new, an attempt to take market discipline to an enormous military contract. Fallows wonders if it will work. The winner of the contract was Lockheed, a company that exists to be a defence contractor, and a company with quite frankly an appalling record of cost overruns. This was against Boeing, a company that is at least somewhat used to market discipline, due to its main business being commercial airliners. The decision was made on the basis of Lockheed having a technically better aircraft - having a better solution the short-takeoff vertical landing requirements of the Marines. This is a traditional non-market-based, military decision. This is perhaps a bad sign. Whether Lockheed is the actual company to make the first seriously cost-controlled fighter jet program work remains to be seen.

One of the greatest successes of the old style, define what you want to do and the invent the technology regardless of the costs approach was probably NASA in the 1960s. None of the technology to put a man on the moon existed, so everything was invented at enormous cost. The normal economy wouldn't have invented most of the technology needed for decades, but willpower and resource allocation let it happen. (NASA is a civilian agency, but it has traditionally used the military approach and it is a customer of the same aerospace companies). However, the approach failed in the 1980s and 1990s. Nasa built a collossal white elephant (the Space Shuttle) and then couldn't cope with the resources and the willpower not being there any more. A lot of the technology needed for what NASA wanted to do existed in the civilian economy by this time, but they did not do a good job of adopting technology. NASA adoped an approach called "Better, cheaper, faster" for its space probes in the 1990s, the idea being that rather than deciding what we want to do, inventing the technology and then figuring out what it will cost, we figure out how much money we have, and what technology exists, and then we decide what we can do. This seems good in principle, but as it ended up, generally this meant that such things as proper testing have been cut out and Mars probes have failed. I don't think there is anything wrong with this approach in principle, but NASA's culture didn't seem to be able to cope well with it. I don't know if Lockheed's can cope any better. I hope it can.