Recession Is Dangerously Good for the Arms Business

During World War II, government fiat turned thousands of peacetime manufacturers into arms producers for the war effort. Factories that once made cars and home appliances were retooled to turn out weapons. Now, in the present recession, market forces appear to be doing effectively the same thing, threatening to throw even more of the weight of American industry (such as it remains) into the war business.

Last April, NPR had a report about how auto parts suppliers are turning to other industries. As the U.S. car market dries up, and with the "war on terror" going full steam ahead, the choice is easy for producers eager to maintain their profits and their workers. The reporter talked to Greg Rothermel, business development director of a supplier in Plymouth, Michigan:

Rothermel says the aerospace-defense industry has a big backlog of orders worth about $200 billion annually. TNT's business was about 25 percent aerospace-defense last year; he projects it will be up to 50 percent by next year. Revenues have grown from $10 million in 2003 to $12 million as of last year, since TNT began diversifying.

It's an offer more and more of these struggling outfits are unable to refuse. The car business is getting lost to foreign competition, but Pentagon policy ensures that it has to spend its billions at home. This amounts to a form of discretionary protectionism for a dangerous industry masquerading as patriotism.

Wouldn't it make more sense if, following President (and General) Eisenhower's warning about the military-industrial complex, our policy were to limit the commitment of civilian industry to the military? The more wages (and executive bonuses) come to hinge on the war business, the more war will seem like reasonable economic policy, and the less reluctance business leaders will have to wage it.

Yesterday, the New York Times reported that the problem is growing. According to a study by the Congressional Research Service, "Conventional Arms Transfers to Developing Nations," the United States market-share in the international arms trade -- already the world's largest of course -- is growing considerably. Our military-industrial complex therefore stands to benefit not only from wars we ourselves wage, but also those of our client states. This is nothing new; U.S. industry has long profited from the conflicts of others. But, in today's desperate economic times, such practices can proudly display themselves as "recession-proof" devices of recovery. And it certainly seems safer to depend on other people's wars than on our own.

These trends need to be taken for the threat to national and international stability that they are. In response, we must go out of our way to foster alternatives. This means sensibly considerable public investment in other necessary industries (and divestment from defense) to the point that they can compete with Pentagon contracts. The target industries should be pretty obvious, considering the crises that we presently face: health care, environmentally sustainable development, prison reform, social services, and international humanitarian aid. These are public responsibilities that have been tragically abandoned in the name of cutting spending, even while we continue to invest billions and billions into the future's bloodbaths.

Cross-posted at WagingNonviolence.org.

Follow Nathan Schneider on Twitter: www.twitter.com/nathanairplane

Comments

[Vajara]

Let's face the fact that the US is just one Big Arms Dealer no matter what the economy faces. We sell arms to anyone who will buy them and then they are used against our troops--eg. Afghanistan, Iraq. The NRA has more power than Congress and the President put together. We are one Big killing, Big Mac Killiing machine. And, we have to ask ourselves, "Who Cares?"

[Tim303]

"We could be plunged into a devastating nuclear peace."
Peter Cook, Bedazzled

[Billy Hell]

Excellent article and assessment of the military industrial complex, thank you very much Nathan.

[buttonz]

Schneider has NO idea what he is talking about. Does he not understand that in WWII the US and other countries ENTIRELY committed their nations to war???? It was to such an extent that even food had to be rationed and people starved (even in the US). We are light years from that. The War on Terror and the Military Industrial Complex hardly have a relationship. All they really do is provide light weapons, equipment, and light vehicles which is the cheapest thing to manufacture. There is however a Military Service Complex in which much of the costs of the war goes to civilians and contractors which provide almost entirely logistical services (transporting, moving and providing supplies, etc)-- this has NOTHING to do with turning our manufacturers into weapons providers.

In fact, we are at an all time low for weapons procurement, it will be at least a decade before start building any new tanks, years before we start building fighters and bombers to replace our aging fleet, and our shipyards hardly produce at a rate to maintain the number of ships in our fleet.

Even the major weapons purchases made in the Middle East hardly keep our Military Industrial Complex in business which has been hard hit this decade.

[Raster]

And your alternative for a replacement business? People will scramble and scrounge for ANY money-making business they can get, especially during this possible coming depression. I'm sure their workers are even more supportive of arms business to keep their families above water. You know, what with woefully inadequate unemployment payments and NO health insurance coverage..­.

[William50]

We do live in dangerous times. In fact America does make money from arms deals, the sale of older ships and planes,plus the parts the need is a keep people working in America deal. Because the military has to buy American and because a senator can see that if he supports the military he supports jobs at home you will not see a slowing of this growth. Added to this is the knowledge that the world is going to become more dangerous to America when the oil problem grows you must understand that America, while we do not have to save the world still has to maintain an edge in military hardware or again be faced with the same position we were in in 1937 to 1941. (second rate tanks, airplanes that were not as good) but great manufacturing ability which we do not have now.
When all are equal you will still have those who are unhappy---George Washington and his band or terrorists, because of this America will have to be willing and able to fight with the best weapons or you kind sir will be forced to take a knee as a slave nation....

[nathanschneider]

Thanks for your comment. Note that the purchasers of these arms are not "right-wing crazies" in the U.S. but, in fact, our military and the militaries of other countries. Interestingly, the Times report notes that the leading purchasers of U.S. arms in the developing world are all Arab countries.

It would be nice if you were right that people don't buy weapons when they need to be feeding their families, but unfortunately that doesn't seem to be the case.

[Crowhaul]

"but Pentagon policy ensures that it has to spend its billions at home"

This is key. And such a simple point: Money spent at home benefits us all. Money spent abroad does not.

Isn't it time we introduce legislation to keep other industries' capital at home as well?

This would have immediate impact on our domestic economy. (And if we can't legislate it , then we can certainly tax foreign-spent capital heavily, while taxing domestically-spent capital lightly...­.it'll have the same desired impact.)

http://www.leftista.com/?p=58

[nobillary1]

Looking at this logically, the recession can't be the REAL reason for the upsurge in arms buying because in a recession, people don't have the money to splurge on items like that. They're too busy trying to feed and clothe their families, aren't they?

Come on now Nathan, you know very well it's not the recession. It's because we have a black president and the right-wing crazies can't stand the thought of a black man in the White House!