The Bactra Review: Occasional and eclectic book reviews by Cosma Shalizi   10

Arm in Arm

The Political Economy of the Global Arms Trade

by William W. Keller

Basic Books, 1995
In 1972, in a fit of intelligence, the U.S. Congress established the Office of Technology Assessment to provide it with useful, unbiased information on technical subjects. It was exceedingly good at it, and damn cheap, so of course Congress killed it in September, 1995, on the grounds that we are now overflowing in quality information about technology --- this is the same Congress which thinks Doppler radars can be bought from the Doppler Company. In any event, before being axed, the OTA did a number of studies on the international arms business, and their director, William Keller, was sufficiently disturbed by what was learned to write a book about it on his own time.

Fifteen years ago, when the Cold War was still going strong, the weapons trade was an adjunct to it. Each side sold or gave arms to allies, or prospective allies, since these were needed to ``defend'' their clients against the other side and its clients. Arms were, overwhelmingly, exported from developed industrial countries to developing countries, which used them against other developing countries. In 1982, for instance, world arms exports totalled $72.7 billion (in 1993 dollars), of which 87% came from members of NATO or the Warsaw Pact, and 82% went to developing countries. The two sides exported in roughly equal volume, though the Soviet Union accounted for most Warsaw production, and the United States only for about half of NATO's. Overwhelmingly, only the weapons themselves were sold, and not the means to make them.

The world has moved on. Military budgets have been squeezed, and the total level of arms exports had dropped to $22 billion by 1993. Of this, less than three billion came from Warsaw Pact countries, including the Soviet Disunion, and fully $10.3 billion from the United States. Most international trade is between the industrial nations of North America, Western Europe, and the Pacific, but arms continue to from from those countries to the Third World, at roughly the same percentages as during the Cold War.

The production process, and the nature of what is sold, have however changed drastically. Production is increasingly shared between several countries --- two hundred international weapons projects were begun between 1985 and 1995 --- and while prior to the '80s almost all of these projects were organized by governments, they are now overwhelmingly corporate. Between such cooperation and direct investment, the arms industry is now globalized, and has been since the mid-1980s, i.e., before the end of the Cold War. Furthermore, it is no longer just selling hardware. The licensed production of arms, i.e. selling the production technology, has grown greatly, to the point where technology transfer ``has become an object of competition [in] itself.''

This diffusion of explicitly military technology goes together with the problem of so-called ``dual use'' technologies. If you can make semiconductors, you can put your chips in PCs, or in cruise missiles; a chemical industry skilled enough to make fertilizer is skilled enough to make mustard gas; commercial aviation can be turned into military aviation; and the possibilities for nuclear and biological technologies are obvious. Because of the legitimate use for such technologies, it is very hard to keep them from spreading, and where there is a dual use, we can be sure that, eventually, both options will be taken. This problem is probably worse now than in the past, since civilian technologies have caught up with or surpassed military ones in many areas, so much so that planners now speak of ``spin-ons'' rather than spin-offs. Naturally, industrializing countries which know how to make weapons are themselves producing them for export.

The justification for the trade has changed as well. Obviously, the Soviets are no longer trying to end what Lenin once called ``the delay in the world revolution,'' and the Americans are no longer trying to make the world safe for General Motors, since it is. Instead the sale of arms is justified on three major grounds: First, that it enhances what is variously known as ``stability'' or ``security'' for the buyers. Second, that it defrays the cost of developing new weapons systems, and maintaining the military-industrial complex for future use. Third, that it can be used to support the economies of the rich nations in politically useful ways --- e.g., by keeping open plants in important congressional districts, or allowing presidents running for re-election to make stirring speeches at fighter-plane factories, as George Bush did in 1992.

The stability argument is bogus, and its extension by some policy quacks to calling ``controlled'' nuclear and biological proliferation a good thing is simply mad. In practice, every arms sale your country's companies want to make is declared ``stabilizing.'' As explanations the second and third arguments have force; as justification they are very weak. As a means of socialist intervention in a private-ownership economy, the only advantage of encouraging the sale of weapons to poor countries over Keynes's proposal (take old bottles, stuff them full of bills, drop them into abandoned mines, fill the mines with garbage, and let market forces do what they do best), is that the military companies and their legislators are established, and garbage-miners and their legislators are not.

The raw economics of the situation provide another partial explanation:

In the West, defense budget cuts in the late 1980s and early 1990s reduced the overall rate of military production. But it was a double-edged sword. Reduced procurement in the United States and Europe spurred competition for arms markets in the Middle East and East Asia, and stimulated foreign military sales from the United States. Extreme overcapacity in the military industries of North America, Europe, and Asia forced major consolidations, cross-border mergers and acquisitions, and an accelerated rate of international cooperation among companies in the production of advanced weapon systems. [p. 86]
In other words, faced with a buyer's market, everyone is madly trying to sell. This is not quite as irrational as it sounds, because there are substantial economies of scale and scope, which also drive the industry towards expansion and consolidation. As Keller also says, this would all be ``natural and necessary in the conduct of multinational business in the civil sector.'' But the military sector is different. The companies in it are, in Keller's phrase, ``creatures of the state'' --- in the United States, part of the separate, planned military economy created after the Second World War; in other countries, partly or wholly owned by the government. Left to their own devices, they will act like other multinational corporations; but there is no compelling reason why they should be left alone.

This is all the more true because what they make are, when all is said and done, implements of death and destruction, the only things which are made to cause harm. If you arm the world to the teeth, you have no right to be surprised when those arms are used. If you are a have and arm have-nots, you can eventually expect those weapons to be used against you. This is exactly what happened during the Gulf War: from 1979 to 1990, Iraq imported over $80 billion worth of arms and armaments. The U.S. did not supply Iraq, but encouraged its allies to do so. (They didn't have to be pushed very hard.) The fact that the arms industry mostly pushes conventional weapons is irrelevant: Dresden and Tokyo showed that. And while no company has yet been caught exporting nuclear technology, German and French firms were deeply involved in the Iraqi chemical and biological warfare programs; probably others are implicated elsewhere. --- To show that those who make history are condemned to repeat it, the Bush administration used the Gulf War to sell great quantities of U.S. arms throughout the Middle East, usually with one eye on factories in strategic electoral districts.

The trade in arms could be slowed, or even eliminated, given political will, without dire consequences to the economies of the rich nations --- ten billion sounds like a lot, and it is if it's paying you dividends, but it's not much in an American GNP of seven trillion plus. This would merely delay the problems of proliferation. The Third World is not going to be satisfied with staying in industrially backward poverty --- why should it? Being no more virtuous than the West (or, if you prefer, the West having no monopoly on villainy), it shall forge its plowshares into swords. At that point, Western hegemony will be well and truly ended, and its self-subversion --- a process discerned by acute observers as long ago as the Russo-Japanese war --- will be complete. Even if you have no affection for Western dominance (and I do not), the prospect of a well-armed world, seething with religious, racial, nationalist and less classifiable hatreds, without a hegemonic power to keep some sort of order (I will not say peace), is far from appealling. Di avertant!

Keller is honest enough to say that he has no solutions, either to the immediate problems of an out-of-control arms industry, or the long-term problem of bringing the world out of poverty without turning it into a viciously armed camp, which he calls the ``paradox of proliferation.'' He suggests ``multilateral institutions,'' but his own account of the existing ones is far from re-assuring.

Keller's writing is like a grey plastic stacking chair: it's ugly, and not very comfortable, but it works. He has packed a great deal of useful information on an important subject into a small book, without reducing its contents to mush. We may look forward to the statesmen of the world tackling the grave dilemmas it presents with the skill and success for which they are justly famous.

xvi + 222 pp., tables and graphs, bibliographic end-notes, index
Economics / Politics and Political Thought / War
Currently in print as a hardback, ISBN 0-465-02667-2, LoC HD9743.A2 K45
12 December 1995