Choosing which grand strategy to use depends on how others can be influenced—however, this is only half of the matter. There is also an internal dimension where the power is developed that the external dimension of the grand strategy needs; this involves developing the necessary people, money, and materiel. While often overlooked, such resources are fundamental to turning grand plans into grand outcomes. In this ‘strategic synthesis’ the external and internal dimensions are not just opposite sides of the same coin but also influence each other.

There are two key aspects. Firstly, grand strategies operate through time. The resources needed to support and implement a grand strategy need to be available when required, but not before, or indeed after. Given enough time, considerable resources can be developed and turned into the instruments of the national power needed. This needs to be taken into account in the grand strategy.

Secondly, in developing resources the state can choose between a managerial approach—becoming deeply involved itself in developing the necessary resources and actively directing society—or manipulating global market forces and using incentives and regulations to develop the resources the grand strategy needs. The first was used by Australia (and others) in World War II and in the Vietnam War, but the second is more common in today’s wars of choice.

From June 2003 until January 2005 ^[1], the United States used a denial grand strategy to try to stop an emerging complex insurgency from unduly interfering with their occupation of Iraq. The aim of the approach was to create power immediately. A short-term market state approach was used to quickly access resources domestically and globally, through the mechanism of offering lucrative contracts, incentives and an only lightly regulated environment.

The most difficult matter was a shortage of volunteer military personnel. A managerial state could have adopted conscription but the market state instead made extensive use of commercial organisations—both domestic and international—to support and supplement deployed US military personnel. Without this large-scale use of private companies and personnel—many of whom were non-American—the occupation would have been impossible. In terms of money, rather than raising taxes as a managerial state might, the Bush administration embraced short-term supplementary off-balance sheet budgets and adopted deficit financing, selling bonds both domestically and internationally. Military training was increased but with only minor modifications, as the need was seen as short term. Existing types of equipment, rapidly produced on existing commercial and government production lines, were pressed into use, even though some (like soft-skinned Humvees) were unsuitable for the threat environment. In many respects it was a ‘steady-as-it-goes’ grand strategy resourcing approach that became progressively less viable as the insurgency gained strength.

With the war steadily worsening, a major strategic change ^[2] was needed. In early 2007, an engagement grand strategy that sought to work ‘by, with and through’ Iraqi domestic groups was adopted. More effort was directed to building durable Iraqi state institutions rather than to short-term fixes that would allow an early withdrawal. Reflecting this, the new long-term market state approach stressed mobilisation and the building of future power.

Considerable effort and time went to developing the military, civil service and contractor personnel to have the skills and training appropriate to the specific operation and theatre. Dedicated schools and training centres were established and optimised doctrine and tactics developed. Long-term materiel measures were instituted, with a strong focus on RDT&E and to mass production of new equipment optimised for the grand strategy’s needs. The fielding of better protected vehicles ^[3], IED countermeasures ^[4], unmanned systems and other innovative systems was on in earnest. Most of this was undertaken using private industry and research facilities, with incentives through market mechanisms to meet the grand strategy’s resource demands. Government agencies did little extra themselves, instead placing large number of contracts, less constrained than under earlier regulatory frameworks (and later criticised as ill-considered). The grand strategy’s resourcing approach however was now much better aligned with its external dimension demands and, contrary to many predictions of failure, success was claimed.

After this backwards glance at resourcing, my next post applies our grand strategy framework forward to leaving Afghanistan, and then later to emerging China.

Peter Layton is undertaking a research PhD in grand strategy at UNSW.