I am the government of the country … you will do what pays us. You will make war when it suits you, and keep peace when it doesn’t … when I want anything to keep my dividends up, you will discover that my want is a national need … and in return you shall have the support and applause of my newspapers, and the delight of imagining that you are a great statesman.
Andrew Undershaft, arms manufacturer protagonist in George Bernard Shaw’s Major Barbara, 1905
An expensive arms race, under cover of the military metaphysic, and in a paranoid atmosphere of fright, is an economically attractive business. To many utopian capitalists, it has become the Business Way of American Life.
C.Wright Mills, The Causes of World War Three, 1960.
Introduction
This is a very short summary of the political economy of the arms trade. Like many things, the arms trade is more complicated than you think. But surprisingly, the more that you find out about it, the more sordid it actually appears. This is a story with few heroes, “it is a tale told by an idiot, full of sound and fury, signifying nothing.” Except the idiot has a brown paper envelope full of bribe money, and it signifies pitiless death, on a large scale.
We will also look at the “military metaphysic,” a coin termed by the American Marxist sociologist C. Wright Mills. Wright Mills defined this as the cast of mind that define reality as basically military…
When our reality and cast of mind is essentially defined militarily, how, we might ask, are we impacted as political, social, intellectual and cultural beings?
He argued that the power elite is hypnotised by a military metaphysics which induces them to keep piling up armaments in a race that serves no useful economic purpose and endangers mankind. Wright Mills was writing in the late 1950s and time has not withered the cogency of much of his analysis.
In the 5th Century B.C.E, Herodotus, the Greek historian, observed that no one is insane enough to prefer war to peace. I’m not sure this accurately reflects human history, either before or after Herodotus, and it certainly doesn’t resonate with the reality of those in the arms trade, the pusher men.
Size of the Trade
As we shall see, this is an industry that likes the shadows, and any assessment of its size must be viewed against that occlusion. However, we can get an idea from some recent figures produced by Oxfam. The world spent annually an estimated $112 billion on arms imports between 2018-2022. The top five-arms exporters – the USA, Russia, France, China and Germany - that account for over three-quarters of the global arms trade, together sold an estimated $85 billion worth of arms annually across that period.
Global exports of major conventional weapons in 2018-2022 were 4.8% higher than a decade earlier. Global military spending reached a record $2.2 trillion in 2022, enough to cover that year’s UN global humanitarian appeal ($51.7bn) more than 42 times over. In Sub-Saharan Africa, governments spent $19 billion on the military; governments across the whole of Africa spent less on agriculture than they did two decades ago.
In countries ravaged by conflict like South Sudan, military spending rose by more than 50% in 2022 while 7.7 million people (63% of the population) faced extreme hunger.
The Big Buyers
Market share in the import of major arms between 2019 and 2023, by country
India’s top position will surprise many, more on this later. Note that Saudi Arabia and Qatar have much smaller economies and populations than India so their arms imports are proportionally more significant.
The Big Sellers
Russia and China do not appear on this British government analysis as their figures are difficult to determine and confirm. Assume that they are in the Top Five.
Note that Israel has a much smaller population than the other countries on that list, so their arms exports are proportionally that much more important. Israel is the fourth largest supplier of military hardware to India, which has bought weapons worth $21.8 billion from Russia, $5.2 billion from France and $4.5 billion from America in the last decade.
Between 1997 and 2000, 15% of all Israeli arms exports travelled to India. By the mid-2000s, this had increased to 27%, with India broadening its range of purchases, such as surveillance equipment, drones and surface-to-air-missiles. Between 2000 and 2010, India spent around $10bn on Israeli arms.
Since Prime Minister Narendra Modi entered office in 2014, around 42.1% of all arms exports from Israel have landed in India, with Azerbajiain (13..9%) and Vietnam (8.5%) and the United States (6.2%) making up the other major customers.
According to The Stockholm International Peace Research Institute (SIPRI), weapons deliveries to India from Israel increased by 175% between 2015 and 2019.’
According to SIPRI, India's military expenditure in 2021 is the third-highest in the world, after the US and China.
Increasing hostilities between India and China seem to be driving an arms race between the two countries, together, they account for around 63% of the entire military expenditure for the Asia and Oceania region.
See:
https://www.middleeasteye.net/news/india-israel-arms-trade-numbers
Importance of the Trade to the Economy
Here we will focus mostly on Britain - as we are continually being told how important the arms trade is to our economy and international clout - and America, the behemoth of the arms trade that has sacrificed parliamentary sovereignty for that of the Military:Industrial Complex (MIC).
According to SIPRI, UK was the seventh largest exporter of major conventional weapons between 2018 and 2022 (behind the US, Russia, France,
China, Germany and Italy). Over this five-year period, aircraft were the UK’s main arms export, making up around a third (32%) of the total.
The Middle East was the largest market for UK defence exports over 2018-2022, accounting for 43% of the trade.
Perspective
Britain recorded £8.5 billion of arms exports in 2022, comfortably a record since the UK began publishing export data in 2008.
This represents 1% of total exports, 2.05% of total exports of goods.
https://commonslibrary.parliament.uk/research-briefings/cdp-2023-0188/
Armaments only account for around 0.2 per cent of UK jobs. Even when it comes to Britain’s manufacturing sector, employing just over 2.5 million people in the UK, arms account for around 3.2% of that employment.
Overall a small part of the economy, but vital to certain geographic regions that will need to be looked after if we move to more sustainable and less deadly industries.
https://caat.org.uk/alternatives/mythbusting/
Hand-Outs for Arms
Further, the net benefits from the industry need to be viewed against the massive subsidy that it received from the government.
A recent report by Common Wealth, suggests that long-term purchase orders and direct subsidies, which sometimes paid for more than 90% of private defence firms’ research and development budgets, were allowing leading defence companies to give billions of pounds to their shareholders on the back of that government support.
The report found that BAE Systems paid just 14.35% of its own R&D costs, despite boasting £21.25bn in revenue in 2022. QinetiQ, another major private UK arms manufacturer with a £1.58bn annual turnover, pays just 4.5% of its R&D costs.
“Subsidies, procurement spending and institutional support feed a toxic marriage between the UK military industry, its investors and its primary export customers,” according to Khem Rogaly, the lead researcher behind the report,“Sometimes, despite a steady flow of taxpayer cash, the goods aren’t delivered at all.”
“Arms companies are officially private companies, but they are supported by the state in a way no other sector is,” said Anna Stavrianakis, a professor of international relations at the University of Sussex, and one of two academics who endorsed the report.
“Asset managers like BlackRock, Vanguard and Capital Group own a significant proportion of the arms industry, meaning that arms production is effectively a system of corporate welfare. The costs are socialised but the profits are privatised.”
America: a Case-Study in Gunsmoke-and-Mirrors
The arms industry regularly uses the jobs argument as a tool of last resort in pushing the funding of relevant facilities and weapons systems. The actual economic impact of Pentagon spending has been greatly exaggerated and more efficient sources of job creation could, with the right funding, be developed; more on this later.
At the national level, direct employment in the weapons sector has dropped dramatically in the past four decades, from 3.2 million Americans in the mid-1980s to one million today, according to figures compiled by the National Defense Industrial Association, Those one million jobs in the defence sector represent just six-tenths of one percent of the U.S. civilian labor force of more than 160 million people. Weapons spending is a niche sector in the larger economy rather than a key driver of economic activity crucial to success.
Even with expenditure rising in response to the proxy-American war in Ukraine, the manufactured hysteria over China and the increasingly obscene support of the Zionist colony’s campaigns in Palestine, total employment in the defense sector will probably remain at modest levels relative to those during the Cold War, even though the current military budget is far higher than spending in the peak years of that era.
“Reductions in defence-related employment are masked by the tendency of major contractors like Lockheed Martin to exaggerate the number of jobs associated with their most significant weapons-making programs. For example, Lockheed Martin claims that the F-35 program creates 298,000 jobs in 48 states, though the real figure is closer to half that number (based on average annual expenditures on the program and estimates by the Costs of War Project that military spending creates about 11,200 jobs per billion dollars spent)….(a figure that is high compared to other estimates, see below)
It’s true, however, that the jobs that do exist generate considerable political clout because they tend to be in the states and districts of the members of Congress with the most sway over spending on weapons research, development, and production. Addressing that problem would require a new investment strategy aimed at easing the transition of defence-dependent communities and workers to other jobs (as outlined in Miriam Pemberton’s new book Six Stops on the National Security Tour: Rethinking Warfare Economies).”
See:
https://www.fairobserver.com/politics/the-us-congress-is-now-in-the-pocket-of-the-arms-industry/#
The Opportunity Cost of War
The peace of heaven is theirs that lift their swords, in such a just and charitable war
Shakespeare, King John
War, What is it Good For? Absolutely Nothing, Say It Again
Edwin Starr
Defence spending in the United States in particular appears to be sacrosanct: Reagan said that “defence is not a budget item.” Robert Reich has explained that it was made very clear to him that cutting defence spending was simply not an option (see Locked in the Cabinet by Reich, 1998.) Obama was criticised for “ravaging” military expenditure but in reality his final “base budget,” (the budget before the costs of fighting overseas wars, known as the Overseas Contingency Operations or OCO in Pentagon budgeting parlance) was the fourth largest since 2001, exceeded only by Obama’s own base budgets in 2010, 2011, and 2012.
National security is often cited as the reason for the need for these massive, untouchable expenditures. But America spends more on defence than the next nine countries combined. Is that not security enough? The USA accounted for nearly 40 percent of military expenditures by countries around the world in 2023, according to recently released figures from SIPRI.
America has long exaggerated security threats against it in order to sustain absurdly high military budgets. In the recent Netflix series on the cold war, the late, great Daniel Ellsberg and others explain how the early spy-plane technology revealed in the late 1950s that Soviet military capacity was nowhere near the levels that America feared or the Soviets liked to project. This did not lead to any dialing-down of cold war paranoia or cuts in the arms budget: paranoia over an outside threat is always good for national unity and manufacturing acquiescent consent, and of course a lot of politicians had armaments jobs to support in their constituencies.
The amount of jobs dependent on defence spending was definitely higher than it is now, but the positive impact on the economy of defence spending has always been exaggerated. Jobs created in this sector are heavily subsidised by governments and more expensive than any others. A University of Massachusetts study in 2009 showed that a billion dollars spent on a variety of other activities and priorities, clean energy, education and healthcare would produce more jobs than a similar amount expended on the military.
A billion dollars spent on the military would yield around 8,500 jobs, nearly 13,000 would result from spending the money on healthcare and approximately 18,000 from education.
See:
https://www.jstor.org/stable/45131150
Other studies have shown similar:
“The results from empirical analyses of panel data on 133 countries during the 1960-2012 period indicate that an increase in military expenditure/GDP of 1 percentage point reduces economic growth by 1.10 percentage points.”
https://www.tandfonline.com/doi/full/10.1080/10242694.2023.2259651
“The results of the study show that increased defence burden is harmful to the Nigerian economy, and there exists a negative long-run relationship between defence spending and GDP growth…. It is not sufficient to have cuts in military expenditure but such reallocation from defence should be directed towards productive investment in other sectors of the economy in order to generate economic prosperity and enhance the welfare of the citizens..
(defence expenditure results in) crowding-out of private sector investment, …retards economic progress ….and therefore, is an ineffective tool to stimulate the Nigerian economy.”
https://www.jstor.org/stable/24737375
Absolutely Nothing?
On the other hand, it has to be noted that much of the technology that makes our global, connected world possible is a product of military research and innovation. David Hambling shows in his excellent Weapons Grade: How Modern Warfare Gave Birth to Our High-tech World, how precision eye surgery emerged out of the quest for a "death ray,” transistors and silicon chips were designed to build better bombs etcetera.
It’s an entertaining read and much of it is undeniable, but it’s what you’d expect in societies driven by military imperatives and priorities. A significant amount of research time and money is spent on developing military capabilities, and as Hambling notes, since 1945 the relationship between business and military requirements has become very close: it’s inevitable that a significant amount of innovation has derived from military-based research.
We need to think about how much good could have emerged had such a huge amount of money, and application of expertise, been dedicated to civilian research aimed at solving humanity’s major problems rather than on new ways of killing people. This is the Opportunity Cost of military research, the point of this section.
Maybe the fact that we prioritise the military so much says something about us as a species, explains a human history shaped and directed by war and preparation for war, even in peacetime, and points to how we need to change if we are to save the future.
https://www.amazon.co.uk/Weapons-Grade-Modern-Warfare-High-tech/dp/0786715618
The Power of the Lobby, and the Metaphysic
Given that the arms trade is not that important to even the American economy, and the significant opportunity costs of the trade, why does the industry remain so powerful and influential? It’s the hard strength of the lobby, and more….
That power and influence is huge and undeniable. The title quote above from George Bernard Shaw is dramatic and theatrical but bears a very close resemblance to reality.
Some examples:
“Behind the scenes, arms firms have long urged Germany to increase its military spending. According to the German parliament’s lobby register, many of the companies now set to profit directly from the country’s increased defence budget…have collectively spent more than €6.4m lobbying parliamentarians since 2020. Asked to comment, a government spokesperson declared that “the government acts independently and at its own will”.
The €6.4m is likely only the tip of the iceberg, as the arms industry uses a plethora of lobbying strategies. These include bringing together influential politicians and high-level industry representatives in structures known as ‘societies’, which essentially function as lobby associations…..Of the 38 people on the German parliament’s defence committee, at least seven members – including the current chair and vice-chair, plus a former chair – are also members of one or more of these societies. In this way, the arms industry has privileged access to the corridors of power
At the European level, it seems arms trade lobbyists also have the ear of those in the corridors of power in Brussels. The amount the arms industry spent on lobbying the EU almost doubled between 2012 and 2017, and a huge increase in European military spending has since occurred. Defence budgets are mushrooming: a new €8bn European Defence Fund, for example, will for the first time make EU public money available for the research and development of high-tech military equipment, while ..the European Peace Facility, an off-budget initiative beyond the scrutiny of the European Parliament, finances the provision of lethal weapons to countries outside the EU.
The response to the war has been primarily a militarised one and large amounts of sophisticated weaponry has been sent in. This happened on the back of policies developed as a result of arms industry lobbying and positioning themselves as experts. It is likely that this trend will be further entrenched during the war, with arms companies using it as an opportunity not just to boost their profits, but to bolster their roles as key and necessary expert advisers on Europe’s security strategy.”
https://www.opendemocracy.net/en/oureconomy/ukraine-war-russia-germany-defence-military-lobbying/
“In the past two decades, the weapons industry has spent $2.5 billion dollars lobbying across the Pentagon, Congress, the State Department, and the White House, while donating millions to candidates across various political parties. With this concentrated lobbying power, these companies have expanded U.S. weapons sales to as many international clients as possible—without much regulation.”
“…major arms contractors have routinely greased the wheels of access and influence in Congress with campaign contributions to the tune of $83 million over the past two election cycles. Such donations go mainly to the members with the most power to help the major weapons producers. The latest figures from OpenSecrets, an organisation that closely tracks campaign and lobbying expenditures, show that new House Armed Services Committee chief Mike Rogers (R-AL) received more than $511,000 from weapons makers in the most recent election cycle, while Ken Calvert (R-CA), the new head of the defence appropriations subcommittee, followed close behind at $445,000. Rogers has been one of the most aggressive members of Congress when it comes to pushing for higher Pentagon spending. He’s a longstanding booster of the Department of Defense and has more than ample incentives to advocate for its agenda, given not just his own beliefs but the presence of major defence contractors like Boeing and Lockheed Martin in his state.
https://www.fairobserver.com/politics/the-us-congress-is-now-in-the-pocket-of-the-arms-industry/#
In Britain there are similar power dynamics but less overt. Andrew Feinstein’s The Shadow World: Inside the Global Arms Trade shows how British Aerospace (BAE), despite a policy of making no political donations, has been able to get succession of British governments to identify the national interest with that of British Aerospace.
BAE has a very shadowed past, even by the standard of this industry. Feinstein writes:
“(David) Leigh and his meticulous colleague Rob Evans had written a few articles about the British government and the arms trade, including US complaints about alleged BAE skullduggery in bidding for contracts in Eastern Europe. During their trawl through government archives they came upon the Stokes Report, a 1965 document that led to the setting up of the Defence Sales Organisation …. The report’s author, the industrialist Donald Stokes, remarked that ‘a great many arms sales were made not because anyone wanted the arms, but because of the commission involved en route,’ and that it was often necessary to offer bribes to make sales.’ He also reported that ‘good commercial agents…are better placed than an official to dispense the less orthodox inducements.’ These comments, and the corrupt UK-Saudi arms deal that follows the Stokes report, piqued the journalists’ interest. They began to dig deeper into BAE’s more recent business practices.”
Apart from the rampant corruption being accepted as part of the gig, I found it fascinating how the arms industry was able to create demand for arms that nobody really needed or wanted by offering huge commissions and bribes.
The corrupt deal to which Feinstein refers was the Al Yamamah, known as “Whose your Mamah?” as Mark Thatcher reputedly made so much money out of it. It was followed by the Al Salam deal.
Feinstein wrote in 2012 in The Shadow World:
“The Al Salam and Al Yamamah deals have almost single-handedly sustained the UK arms trade. Military exports to Saudi Arabia accounted for 62% of all Britain’s military exports from 1997-1999. In 1987-1991 it was 73%. As Mike Turner, CEO of BAE at the time, said shortly by a visit to Riyadh by Tony Blair in 2005: ‘the objective is to get the Typhoon into Saudi Arabia. We’ve had £43 billion for Al Yamamah over the last 20 years and there could be another £40 billion.’”
Both deals were incredibly shady, they attracted ethical criticism and an enquiry from the Serious Fraud Office (SFO). The lobbying around the deal and the government response to the SFO inquiry reveal the three main strands to the continuing power and success of the arms industry in the face of rational, cogent criticism:
The exploitation of fear and paranoia. The Saudis and the British used the fear of terrorist attack, the risk of a collapse in the UK/Saudi cooperation, and potential Islamist take-over of Saudi Arabia with massive security implications for the west if Al Salam did not go ahead. Blair sent an extraordinary memo to the head of the SFO about the importance of the deal to UK security. MI6 in later discussion refused to say that it agreed with the assessment.
Margaret Beckett, supposedly on the left of New Labour, as Foreign Secretary at the time instructed senior officials to dissuade the head of the SFO from continuing with the investigation. “Wardle was told he was pissing-off the Saudis big-time, and that this involved security, terrorism, the whole future of the middle east.”
https://www.theguardian.com/uk/2006/dec/16/armstrade.saudiarabia2
The Jobs Argument. The BAE corruption cases went on for a long time (eventually the company was fined a derisory amount compared to the size of the deals). In November 2006, Jack Straw, then New Labour’s Leader of the House of Commons, requested a meeting with the Attorney General to discuss the case. Straw was a big BAE supporter as they were an important employer in his Blackburn constituency. In November of that year, the Sunday times reported that the Saudis were threatening to cut off diplomatic ties unless Downing Street blocked the investigation, the Daily Mail printed a headline claiming that “50,000 British jobs were at stake.”
The Glamour and Glory of War. People don’t talk about this enough, I think it’s an important part of the military metaphysic that C.Wright Mills describes. People get turned on by strength and power, the “tough guy” is glamourised across Hollywood and Television, a vile bullying thug like Tony Soprano remains a cult hero. People have way too much respect for a near-deified military, particularly in America and Britain: politicians on the search for a cheap round of applause will mention “our brave boys” in some adulatory way, e.g. Michael Portillo invoking the SAS at a Tory Party conference a few years ago.
A strong military, and arms industry, is seen as a sign of national virility and power. A Britain that is still psychologically incapable of shedding the sense of humiliation from the loss of its empire (the role of humiliation, and the fear of humiliation, in shaping geopolitics in particular is also much neglected) can at least feel good about having a powerful arms industry that affords geopolitical clout above the country’s weight. The British army is also supposed to punch above its weight, a reputation that should be more threatened than it is by a series of failures whilst helping America in its succession of losing wars.
America is obsessed with its military might and being the world’s Number One Power. It loathes the idea of any real competition and this drives its geopolitical trajectory led by the Military:Industrial Complex. Americans fear humiliation deeply. The trauma of getting defeated by Vietnam was so bad that they needed a victory to start feeling good about themselves again, the defeat of mighty Grenada in 1983, population circa 90,000, was actually celebrated with a movie by Clint Eastwood, Heartbreak Ridge.
This latter takes us onto the rather pathetic glamourisation of war that is an unfortunate part of our culture and is an enduring feature of human history. Homer’s Iliad is basically a brilliant diatribe against the war mentality, despite being seen by some as a paean to the glory of war. Achilles is a contemptible arrogant character in the Iliad with few saving graces, lost in a self-obsessed search for glory, he is no hero. In the Odyssey we meet a dead Achilles, a sad little ghost:
“Say not a word in death's favour; I would rather be a paid servant in a poor man's house and be above ground than king of kings among the dead,”
he plaintively tells Ulysses.
However, the message is lost, many still see Homer as glorifying war and Achilles as a hero. This is partly because it’s almost impossible to strike the glamour of war from the way we think. William Manchester, the American journalist and author writes about this brilliantly in Goodbye Darkness, a memoir of his time in the Pacific War in World War Two. He talks about the unavoidable glamour of the military aesthetic, people get turned on by all the uniforms and their projection of a strong military masculinity. He says that if you want to de-glamourise war, take away all that macho bullshit. Dress the soldiers in pink skirts with frilly tops and high heels.
This of course will never happen but Manchester was definitely onto something. Maybe if the Military:Industrial Complex were made to dress in pink skirts and heels every time they visited Congress, the House of Commons or any other legislature, our politicians would be less inclined to adolescent awe at the tough guys, and we may have a chance of escaping the cycle of violence that edges us closer to armageddon every day.
Conclusion
Both Tony Blair and Barack Obama entered power as politicians that were seen as offering change, these were not men associated with the bellicosity of their respective countries’ dark, militaristic history.
Blair became notorious for his advocacy of the disastrous war in Iraq and involving Britain in that murderous farce that benefitted nobody but the arms trade, his legacy and reputation are dominated by that memory.
We saw above how Obama increased the base military budget. Also,
“There were ten times more air strikes in the covert war on terror during President Barack Obama's presidency than under his predecessor, George W. Bush. Obama embraced the US drone programme, overseeing more strikes in his first year than Bush carried out during his entire presidency.”
He also handed the Moloch that is Israel the biggest military deal in history.
Both Obama and Blair had military successes relatively early in their time in the respective top jobs: Obama in a hostage situation involving an American cargo ship captain and armed Somali pirates near the Horn of Africa; Blair in Sierra Leone. Both received plenty of praise for their decisive actions, and probably got the adrenaline and testosterone rushes that only conflict can inject. This, along with the economic and psychological pressures exerted by the arms lobby and its pay-rolled marionettes, probably influenced the unexpectedly militaristic ethos of their administrations.
The power of the arms trade has to be seen as a feature our flawed, aggressive humanity, fascinated by the ideal of the “hard man”: simplistic narratives that see it as a function of economic and geopolitical interests are not enough to give a full understanding. As in other areas that are igniting our race towards extinction, we need to change the way we think and interact with each other: the revolution in the head is the first step and directs the long march that follows.
We end with the words of Havelock Ellis, a less-than-wholly admirable character, but he was onto something here:
There is nothing that war has ever achieved that we could not better achieve without it.
Editor's Note:
The views and informations expressed in the article are solely those of the author and may or may not reflect the views of The International. We believe in providing a platform for a range of viewpoints from the left.
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