The context of that part of the speech is the changing paradigm of the American military, which Eisenhower addresses in the text of his speech.

A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions.

For the first 180 years of it's existence, the US did not have a large standing army, or the industry required to support one. When the US needed to fight a war, American industry would "turn their plowshares into swords".An army would be mustered, and armament factories quickly constructed to equip the army. After the war was over, the army would be disbanded except for a small core of regulars, and the armament factories would close doors or retool. In 1865, the US spent 1.17 billion dollars on defense, in 1870 that number was down to 100 million. In 1918, the US spent 13 billion dollars on defense, in 1922 it spent 1.1 billion. In 1945 the US spent 93 billion dollars on defense, in 1948 that number was down to 20 billion.

The concept of a military industrial complex is not a new one. European nations had robust standing armies and the military industry required to support them since the end of the Napoleonic Wars. The Prussian Army in 1866 on the eve of the Austro-Prussian war was half a million strong out of a population of just 21 million. Such a large (read : expensive) standing army required a large and influential defense industry to maintain. These large armies were necessary because European countries don't have the luxury of a year or more to convert their civilian industry to military production and train an army from scratch. If your country needed to train fresh recruits at the start of a war, the enemy would already be sampling the fine dining establishments in your capital by the time those recruits learned to tie their bootlaces.

The US looked to be returning to the pre-war status quo after WW2, then the Korean War broke out. The US military that had mobilized 12 million men to fight WW2 was just a shadow of it's former self; the men had been discharged to their civillian lives, tanks, ships, and aircraft had been scrapped, sold off, or mothballed. The only forces available to intervene at the onset of the Korean War were garrison troops stationed in Japan, and these poorly equipped soldiers were quickly overrun by the Soviet backed Korean People's Army. A mad rush ensued to rush forces to Korea, which included measures such as pulling tanks off of pedestal because there were no operational tanks in the continental US.

The Korean War showed that the US, with it's newfound global interests and superpower status, needed a military capable of reacting quickly to crises around the world. Such a military would require high peacetime defense spending, military involvement in civilian research, and a more active and powerful government overall. This was a new paradigm for the US, and Eisenhower's speech is a warning to not let this necessary empowerment of the Military Industrial Complex adversely affect the rest of American society.

Eisenhower was an impressively thoughtful man on matters of military and government activity, more than he was often given credit for at the time (there has been in the last 15 years or so a kind of "reevaluation" of Eisenhower by historians that has emphasized his shrewdness as opposed to the more common perception of him as being kind of anti-intellectual).

The way I like to talk about the context of the MIC warnings is to talk about Eisenhower's own experience of the "Sputnik shock." When the USSR put a satellite into orbit in late 1957, the American public and elite responses were both hysterical. It became a common trope to say that the Soviets had "beat" the US into space, were "five years ahead," were actually managing "scientific manpower" better, and were going to militarily put the US at risk in a way like never before.

From Eisenhower's vantage point, most of these concerns with hyperbolic. Yes, they had put a beach ball into space earlier than the US did, in part because the US had been investing in other priorities for many years before it accelerated its rocket research, but also because the Soviet Union knew US launch plans (because they were announced) and set its own deadlines to "beat" the US. The US wasn't really that far behind (a few months) in any event — certainly not "five years." The US was still the biggest scientific, technological, and economic powerhouse of the world. And Eisenhower also knew that it would take the Soviets several years to field ICBMs, and that in the meantime the US had ringed the USSR with nuclear-armed bomber bases. The long-term trends, he had long known, were that the USSR would come to a military "parity" with the USA, but they weren't there yet, and Sputnik didn't signal any kind of abrupt shift.

But the public discussion of Sputnik, as he put it, was "blinding." And this translated into a massive political lobbying for more defense funding. The initial Eisenhower plan for fielding ICBMs was to develop a few models and only deploy the top two systems. In the end some six systems were deployed, because Congress demanded it. Eisenhower was in the position of feeling like even he, the President of the United States, was utterly not in control of the unholy mixture of political patronage (Congress), industrial lobbying, and military desires for ever more technology, even if they didn't have a well-defined mission for it. And scientists, of course, were willing to lobby for such things as well if it got them what they needed for their own work.

This is what the MIC warning is about — it's a President saying, hey, there are some serious forces at work here that you all need to be aware of, and be careful of. These things are more powerful than you can imagine. It's not a conspiracy theory at all, it's a warning about emergent dynamics in the high Cold War, dynamics that were going to (he correctly intuited) lead to massive spending on arms development at the expense of spending on many other important things.

He did not mean it to be a slight against scientists — the kind of scientists he was looking at askew were those that had cozied themselves close to the MIC (think Edward Teller and Werner von Braun), not the ones working in universities and doing fundamental work. (He clarified this several times after his President's Scientific Advisory Committee took some offense about his address.)

Anyway, that's how I make sense of Eisenhower's speech and situation. He's not anti-military, anti-industry, or anti-science — but mix them all together with Congressional politics and a fearful population, and you end up with a sick system, one that can only spend money on death.

Zuoyue Wang's _ In Sputnik's Shadow: The President's Science Advisory Committee and Cold War America_, has a lot on the speech, Eisenhower's reaction to Sputnik, and the back and forth Eisenhower had about the MIC speech with his scientific advisors.