Tuesday, August 30, 2005

Global weapons market

The US sells more weapons to developing countries than anyone else. You may think, "so what, it's a free market and if someone wants to buy them, we should be glad to sell them." If you think a little bit further, you might have reservations about stinger missiles shooting down American helicopters in the future or M16s killing American troops. If you think even further, you might wonder if flooding the world with more arms makes sense in a time of rising terrorism. One step more and you might say to yourself, this isn't the kind of world I want to live in. But there are even greater global ramifications to this.

In a different context, Thomas Pogge argued recently that the global order -- including markets, such as the weapons market -- hinders the growth of democracy in developing countries (see his essay in Archibugi, ed. Debating Cosmopolitics).

The world suffers a huge inequality of income, wealth, and standards of living, and this disparity has boomed over the past thirty or so years. On one hand, some economists say the gap is best explained by pointing to countries that do not place a premium on economic growth (through minimal taxes, free enterprise, fewer services, etc.) over other considerations, often citing corrupt elites in developing nations as a central problem. Others -- like Amartya Sen -- say that investing in social services such as health and education yields steady, if slower, economic growth and a better, more equal quality of life. Pogge suggests that both common explanations misleadingly place the causality of global inequality on developing countries. The case has been made in other contexts, but it's worth at least roughly summing up Pogge's version:

1. The rules of the global order are shaped by more powerful nations thinking in terms of their national interests. These rules enable these countries to gain further from the global arrangement. This increases inequality as well as the lopsidedness of international bargaining power.

2. The political and economic elite of poor countries deal with a domestic polity that is poorly educated and income poor. They also deal with an international sphere that is often wealthy and may promise great benefits. Self-interested politicians will find the latter to be more beneficial to their interests, including their ability to stay in power. This might also mean doing things that are not beneficial, indeed harmful, to their own people -- including allowing toxic dumping, lax labor and environmental regulations, etc.

3. The international borrowing privilege allows legal obligations and penalties to be imposed on an entire country, regardless of a corrupt leader's unpopular debts. This then means that a democratic government that comes into existence after a corrupt government still inherits those debts and the legal obligation to repay them. This takes away from possible structural reforms and domestic investment and creates further instability for that government. Instability and a weak democratic government can be a dangerous mix.

4. Furthermore, the international borrowing privilege enables corrupt governments to stay in power. A corrupt leader can maintain his rule by borrowing further or by buying arms and funding a military needed to suppress a discontented population. The purchasing power is often gained through selling off natural resources (as pretty much all over Africa, for example). One can argue that such resources ought to be the heritage of the people of that country.

5. Rinse and repeat.

Where does the arms trade fit into this scenario? Weapons sales often serve to fund corrupt governments in the name of further control over that nation's natural resources and economic capacities. They also often serve to sustain corrupt, anti-democratic political and economic rule. Countries that live under such rule have far greater difficulties developing economically and politically in more equitable and democratic ways. In fact, the opposite has been the case for at least decades.

In the age of widespread ostensive acceptance of democracy, the growth of global inequality generates serious doubts about the sincerity or even efficacy of democratic government and rhetoric. Indeed, the global powers have largely set the terms of what counts as legitimate, democratic government. Guns, not butter.

In Salon:
The United States is the largest supplier of weapons to developing nations, delivering more than $9.6 billion in arms to Near East and Asian countries last year.

The U.S. sales to the developing countries helped boost worldwide weapons sales to the highest level since 2000, a congressional study says.

The total worldwide value of all agreements to sell arms last year was close to $37 billion, and nearly 59 percent of the agreements were to sell weapons to developing nations, according to the Congressional Research Service report....

Developing countries are the weapons' primary buyers. And the U.S. has been the most active seller for the past eight years, resulting mainly from agreements made in the aftermath of the first Gulf War. The U.S. was responsible for more than 42 percent of the deliveries to developing nations in 2004.
See also this article in the Boston Globe on an IPS study:
The chief executives of the defense industry's largest companies are taking home paychecks that have more than doubled in the past four years -- far greater than the average 7 percent growth for all corporate CEOs, according to an independent study based on documents from the Securities and Exchange Commission.

Among the top three dozen publicly traded companies that do business with the Pentagon, pay for top corporate executives has skyrocketed since 2001, rising by an average of 200 percent compared with all top-tier chief executives at large, according to the annual study to be released today.

In one example, compensation for William H. Swanson, chief executive of Raytheon Company in Waltham, more than doubled to $5.3 million over his predecessor Dan Burnham's salary in 2001, according to the study by the Institute for Policy Studies, a liberal Washington think tank. After helping rescue the struggling company a few years ago, Ronald N. Tutor, CEO of Perini, a construction management firm in Framingham with reconstruction contracts in Iraq and Afghanistan, took home $14.3 million, the study found.

1 comment:

Scats said...

Got here from Majikthise. Great post. More please!