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By definition it can't be the best because it has multiple roles. WW1 merchant ships were often equipped with 12pdr guns to help them fight off U-boats - such an armament would make it far superior to any of the ships that fought at Trafalgar, but would you call such a ship "the best".

That is a bad example as they as ages apart.

Its the best if nothing is better than it. The Galaxy when it was first introduced was the most powerful ship known. Thus the best.

It demonstrates how superior technology can make a ship look extremely powerful compared to purpose-built warships of lesser technology, but still be very weak compared with what that technology is capable of achieving.

You can complain all you like about how it could be better than it was but it doesnt stop it from being the best.

Maybe Starfleet feared creating a kind of mini arms race if they built something overly powerful so capped it at the Galaxys strength and spent the rest of their resourses giving it science capability.

Like the limit on naval gun size we had agreed to before WWII?

I think instead that Starfleet saw that, with the advanced tech in it, the Galaxy was going to be "good enough," so decided to add functions and roles to its design. Had they continued to expand any one primary role, she could have been far superior.

In that one roll.

Starships are expencive to build and maintain. Maybe they could only afford to field a certain number of ships and decided that they had better build multi role ships rather than sacrifice a wing of starfleet such as science or military.

Maybe starfleet wanted military parity(or a slight advantage) with the other powers, and feared that further upgrading the galaxy and militarising it,would be provokative and lead to an arms race??

Ana rms race against whom? Obviously, the Dominion was unknown; the Cardassians turned out whatever warships and materiel that they could; the two big bads - Kilngons and Romulans - seemed to have no qualms about churning out dedicated warships as much as possible.

very true, but like the idea of using subspace weapons or thalaron, there is always the chance of an escalation, the vor'cha or d'deridex may be an approximate match for the galaxy class, but if the federation were to further militarise, the klingons and romulans, hoping to continue parity or gain superiority, might further upscale their military and its development, it might be true that the norexan/valdore or negh'var was concieved purely to counter the dominion or borg, but it might also be possible that at least the negh'var was developed to counter the latest federation designs.

The Federation has a slight lead in power. If they were to make bigger and more powerful ships not only would it go against their morals but it would leave the Klingons and Romulans no choice but to build bigger and more powerful ships. And since they might not be able to field ships that powerful given their tech they may very well resort to superweapons. The federation knows this so only holds a slight lead.

Plus the federation, would hardly seduce other cultures if it appears militant and thus as a mild alternative to the other major powers

Any attempt by the Federation to "uphold its morals" by refusing to build proper combat orientated ships is sheer lunacy - those morals are of no use if the holder is overrun. As for the risk of an arms race, the Federation has conducted arms races with the Klingons in the past, and the result was Praxis going bang and the end of the Federation-Klingon Cold War. If the Klingons and Romulans start building superweapons, fine, two can play that game. Dig out the old Genesis specs. Even if it can't be made to work to create life it can certainly destroy it. Use either long-range torpedoes as used in "The Emissary" (the TNG ep, not DS9), the long-range probes Voyager used ("Scorpion Pt 1", "Extreme Risk"), or a variation on the Cardassian long-range smart missile ("Dreadnaught"). With a no-first-use policy they would be able to treat the weapons the same way as modern nukes.

The Akira has been around for quite awhile showing that starfleet does build ships for war. Other ships are also rather military like. The New Orleans class seems to be rather powerful and oldish deisgn.

Starfleet doesnt need a massive class of battleship because there was no call for one in any forseeable future. They could deal with the Klingons and Romulans with what they had quite nicely while still holding onto their peaceful image.

They only built the Sovereign in response to totally unforceable future, A wormhoe opening on the door step to a superpower on the other side of the galaxy. And the Borg. Something they could have never forseen (Disrgarding the idiocy we see in Enterprise).

So, they shouldn't build the most powerful warships they can, even though everyone else does, just because what they've got is "good enough"? "Good enough" never is. While they didn't know that the Dominion or the Borg were out there, they should still have built the most powerful warship possible with the technology available to them - just in case. Besides, even against the Romulans and KLingons it would have been a much better deterrent, rather than relying on jack-of-all-trades ships that are a bit more powerful than their Klingon or Romulan counterparts, to build a vessel capable of going through anything those species could build like a hot knife through butter. To build, not merely a ship capable of achieving space superiority, but space supremacy.

While they didn't know that the Dominion or the Borg were out there, they should still have built the most powerful warship possible with the technology available to them - just in case.

We know that ships are expensive as hell to build and maintain so building ships like that when not needed is stupid and irresponsibal.

I think it was you who gave the example of the major powers after WWI agreed not to build ships that were to big even though they were capable of it. This was because of the cost and the fear of were the arms race would end up.

Plus the resourses you spend on those powerful ships could be better used else where.

America is capable of having a larger and more powerful military than it does right now. But it has stopped building on it becuase they know they are powerful enough to fight others off.