In a recent article , I discussed how according to the Stockholm International Peace Research Institute Yearbook 2011, America spent nearly $700 billion in military expenses 2010 or about 43% of the entire global military spending. The US military expenditure as a percent of GDP is a much higher rate than other wealthy countries, a reflection of the large military commitment the United States has outside of its borders. As of December 2010, there were 7 countries that had 10,000 or more US military personnel deployed: Afghanistan, Germany, Japan, South Korea, Iraq, Italy, and Kuwait.
It is tempting to debate the cause and effect of the major expenditures of the US military and the impact of US troop deployments on global affairs. That is, did the large military expenditure drive America's need for a major global military presence or did the need for a major presence drive the large expenditure? As we find ourselves trying to sort out cause and effect, we should recall President Eisenhower's farewell address warning that, "in the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."
The phrase 'military-industrial complex' triggers the question of which countries are the largest exporters of military equipment and which companies are the largest players in this space. Not surprisingly, the United States is by far the largest arms exporter, with Russia being the only country with more than half the value of military exports. In order, the top 5 in 2010 were the United States ($8.6 Billion), Russian Federation ($6.0 Billion), Germany ($2.3 Billion), China ($1.4 Billion), and the United Kingdom ($1.1 Billion). In fact, the United States has been the largest exporter in 9 of the last 10 years (in 2002 the Russian Federation topped the list). None of these five top exporters are in the list of top five arms importers.
When we examine which countries had the largest amount of arms sales, we see that American companies dominate the list. In 2009, the largest was Lockheed Martin, which accounted for $33 billion in arms sales and employed 140,000 people. The second largest company in terms of arms sales was BAE systems (United Kingdom) but the third (Boeing; $32 billion in arms sales; 157,000 employees; 47% of total sales being arms related), fourth (Northrop Grumman; $27 billion in arms sales;120,700 employees, 80% of total sales being arms-related) , fifth (General Dynamics; $26 billion in arms sales; 91,700 employees; 80% of total sales being arms-related), and sixth (Raytheon; $23 billion in arms sales; 75,000 employees; 93% of total sales being arms-related) are all American companies.
The numbers and American history are clear. The military is big business in America. The United States government accounts for a huge percent of the world's military expenditures, American troops are heavily deployed throughout many countries in the world and American companies dominate the market in terms of military exports, military technology as well as overall arms sales.
As Americans look for ways to trim the federal budget, analysts will point to the 20% of the federal budget that goes to the military, the fact that the US military budget has roughly doubled in the last decade and that the US spends a far higher percent of its GDP on military than other wealthy countries. Those analysts will mention that the failure of the super-committee was supposed to trigger mandatory cuts in the military budget. These analysts will logically conclude that most Americans will support their recommendation that America should make reasonable reductions its enormous military budget.
And then, a TV host will mention that the defense industry employs many Americans, with the US government being its largest customer. And some politician, whose home state houses many defense industry employees, will declare that any budget cut to the military is a treasonous act against America's safety. Someone will shout about threats from Iran, Iraq, Afghanistan, North Korea, Russia, Al-Qaeda or some other organization. A bomb will go off somewhere in the world and we will fear for our safety. And then, unless the public is vigilant, soon serious conversations about reducing the massive military budget will once again be buried away for a discussion in the very, very distant future.
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Data Notes: The estimates of number of US personnel deployment are from December 2010 and do not include contractors or dependents. The list of top arms exporters is limited to arms transfers only and doesn't include revenue associated with governments being paid for their military protection, like the "sympathy budget" that Japan pays to the United States. In the graph, the "rest of the world" represents the countries for which data was reported by SIPRI. Non-state actors are not included on the SIPRI list