This is neoliberalism 101, you don't even have to bring up "military-industrial complex". The state is increasingly working with industry (pseudo-privatization), in return the industry increasingly influences state policy. The system keeps working as long as contracts keep going to a small group of big companies (the only ones capable of "working the system") and as long as the big companies can keep influencing politics.

It's simple math considering the "state" is just a collection of politicians easily influenced by fear-driven populism, media, money, nepotism, and their old private school friends. And on the other side there are extremely powerful billion-dollar defense contractors.