Is the arms trade not good for the economy?

A conservative estimate places the extent of subsidy to arms exports at £900 million each year. The MoD’s own estimates show that 65,000 jobs are sustained by military exports, just 0.2% of the national labour force. That works out at over £13,000 per job each year. A MoD report concluded in 2001 that halving military exports over a two-year period would lead to the loss of almost 49,000 jobs, but that 67,400 jobs would be created in non-military sectors over the following five years. This is an enormous amount of money which would in fact create far more jobs in other, less capital intensive (and risky) sectors such as health, education, environmental technology or transport.

The ECGD insures UK exporters against payment default and subsidises the interest rate paid by buyers of UK exports in all sectors. However, on average, between 2000 and 2003, while arms deliveries made up only 1.6% of all visible UK exports, they accounted for 43% of the ECGD’s guarantees.

95% of the debt owed directly to the UK by developing countries comes from the ECGD. The tax payer is charged millions and developing countries impoverished, all in the name of granting the arms industry a commercial privilege denied to other industries and surely contrary to the conceptions of free trade which dominate international economics. More over, these are international companies. It doesn’t make sense any more to think of them as entailing benefits along strictly national lines.

Do we not need it for national defense?

Most of the weapons and components produced by the British arms industry are produced for export. Yet this export activity actually costs the British tax-payer a substantial amount of money. The international market regards domestic procurement as an indicator of a product’s worth. If the domestic buyer (the MoD) fails to purchases the product then a foreign buyer is unlikely to take a chance. Consequently the MoD finds itself under considerable political pressure from a government anxious to buttress the domestic arms industries; itself subject to intense insider lobbying from the relevant corporations.

A particularly blatant example of this process can be said in the MoD procurement of Hawk jets from BAE systems in 2003. BAE made an unsolicited bid to supply the Hawks and demanded that the contract be awarded without opening it up for competition. At the time the Treasury estimated that it would cost an extra £1 billion to award the contract uncompetitively. This comes at a time when UK troops are chronically undersupplied and the MoD routinely complains of funding shortfalls. Rather than supporting “our troops”, the anti-competitive practices of the arms companies are actively harming them.

If we didn’t do it surely someone else would?

Can you imagine a heroin dealer saying this is court? It’s a moral fallacy: put it in any other context and you see how obviously wrong it is. It also relies on seeing thing in national terms which are increasingly anachronistic. If it doesn’t accrue some benefit to Britain then it doesn’t matter if ‘someone else’ does it.

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