The Business of War (I)

The Business of War (I)

Written by Alfonso Elizondo

According to the vast majority of experts and war scholars, more is spent on weapons industry lobbies globally than was spent during the most tense years of the Cold War. Governments around the world have not stopped investing in this industry since the end of World War II, and in Europe there are powerful armies and sophisticated, very high-tech weapons that are rarely used.

Even worse is the situation in the US, where the Government invests more than 4% of its GDP in purchasing weapons. The so-called ‘Iron Triangle’, formed by the Pentagon, defense contractors and intermediaries who are very influential people in the various administrations, provide the large weapons corporations with billions of dollars. In 2008, Lockheed Martin, the world’s largest defense contractor, received more than $ 36 billion from the George W. Bush government becoming the company that charged the most for contracts with the US.


Military spending has grown out of control since 1945, despite the fact that the fall of the Berlin Wall put an end to the Cold War and the political, ideological and economic confrontation that had kept everyone in suspense for more than four decades. Before World War II, military spending worldwide was estimated at 48 billion dollars, while in 1972 it reached 240 billion dollars and 1.4 trillion dollars in 1990.


After the Cold War, military spending fell and reached its lowest in the mid-90s but rebounded again on September 11, 2001 with the attack on the Twin Towers in the US. In 2006 it exceeded the spending limit that existed during the political and economic clash between communist and capitalist countries. And despite the slight fall in 2012, military spending reached 1.75 trillion dollars, according to data from the Stockholm International Peace Research Institute (SIPRI).


This slight drop of 0.5% was due to the deep cuts made by the US and the European Union as a response to the global economic crisis at the time. However, China and Russia increased their investments in weapons. China spent 7.8% more on weapons during 2012, which meant a 175% increase in the last decade. Something similar happened with Russia, where military investment grew by more than 15% in 2012. Even so, the United States is still the largest investor in weapons in the world, with a budget 5 times higher than China’s. While the United States spent just over 668 billion dollars, China barely exceeded 150 billion.


On the other hand, after five years of economic and financial crisis in Europe, Brussels insists on ignoring the role played by military spending in its persistent crisis. While pensions and wages are declining, the weapons industry continues to benefit from new orders and payments of outstanding debts. Surprisingly, in times of austerity in 2010, military spending amounted to 194 billion euros, the equivalent of the combined annual deficits of Greece, Italy and Spain, according to a study by the independent think tank called “Weapons, Debt and Corruption“ which acknowledges the power of weapons industry lobbies in the EU.


This study reveals the high levels of military spending in countries that are at the epicenter of the current euro crisis. Greece has been the European country that in the last 40 years has spent the most compared to other countries in the military arena, with the percentage of its GDP spent on defense being twice the European average. At the same time, Spain’s military spending rose by 29% between 2000 and 2008 and it now has major problems with paying its debts.


Addendum: I will try to complete this geopolitical essay in Part Two.