Jordi Calvo Rufanges
War profiteering is explained with the military economy cycle which is based - as is most sectors of the economy - on neoliberal logic, the free market, privatization and reduction of regulations. It causes attitudes strictly related to personal enrichment and maximizing the economic benefit in the defense industry, forming the so-called neoliberal militarism. Moreover war profiteering goes beyond arms and defense sector. War needs lots of resources, not only weapons and armies, also logistics, transport, food, cleaning, translation services and private security. There are also wars for greed, which is not only power but also resources: oil, coltan, diamonds and whatever can be bought and sold in a market. Economic profits are part of war and wars are also made for profit.
Framework of war profiteering: the military economic cycle
The military economic cycle responds to an economic view of defense economics, also referred to as the 'arms cycle'. In any case both names refer to the cycle that describes the route that weapons production takes, from the decision to take military public budget to cover the alleged need for weapons to their final use.
The real beginning of the cycle starts in the arguments and discourses that legitimize the need for arms and armies depending on the identification of threats to a country's security and defense to justify high levels of militarization and armaments. Thus, security doctrines developed by governments - directly influenced by research defense, security, conflict and peace centers, popularly known as think tanks - establish a certain level of armaments and militarization development of a given society.
Besides the occasional or permanent influence of think tanks on the policies of a country, the need to maintain armed forces depends on the culture of defense, militarized education, military and arms history and tradition, and tolerance for weapons in a society. We also have to consider the role of civil society and the fact that social movements may also determine levels of armaments and militarism.
The assumption of the need for maintaining armed forces opens the way to a political decision strictly related to the military or arms economic cycle, decisions on the military budget that appoints certain measures to objectives of discourses, doctrines and other views on the defense needs of a country. Military spending includes research and development (military R&D) of new weapons and their production in the defense industry, which is financed partly by public budget. Hence, when it comes to military spending, military R&D, companies and military industries and arms purchases, we have to pay attention not only to the defense budgets of the states, but also to budgets of other ministries such as industry. Together they finance the whole military business cycle. The other elements that form a part of the cycle are the arms trade, which also includes financial institutions that hold the entire cycle, as well as shareholders of military enterprises that finance the industry operations and the arms trade.
The active role of the military-industrial complex in war profiteering
The “military-industrial complex” term came into use in Eisenhower's farewell speech as US president in 1961. He used this term to refer to the lobbyists with the most influence in the White House. The so-called military-industrial complex is made up of the set of people and business and political organizations, including senior military officers of the departments or ministries of defense, who have the desire to influence decisions on military policy, including armaments purchases.
A number of companies as well as many people including politicians and government departments related to military enterprises are involved in this so-called military-industrial complex, that can range from the defense industry to Interior, and Foreign Trade. On the level of administration, they form a part of the military-industrial complex, the high command of the armed forces, many of which have close ties to the arms industry and apply pressure to observe an increase in their weapons and equipment arsenals and thus, the ability to influence national and international policy. When it comes to the role of political office that has some defense responsibilities, a member of the armed forces or the military industry executive (sometimes being the same person), the revolving door phenomenon occurs in the defense sector.
The military economic cycle can generate political and economic dynamics that put a country and economy in an ideal state for those who take advantage of this cycle in which defense economics converts into a permanent economy of war. It’s important to analyze it to understand the military economic cycle as such: military spending, arms industries, exports and financing. Companies and individuals who are active in the military economic cycle comprise the military-industrial complex, which profits the most from war.
Jordi Calvo is Professor of conflict analysis and defense economics at the Universitat Ramon Llull, Universitat Jaume I and Universitat Oberta de Catalunya. Researcher of defense economics, peace and disarmament at the Centre of Peace Studies Delàs. Board member of the International Peace Bureau.