U.S. Monopoly on Global Weapons Trade

The 19th and 20th centuries have been the centuries of monopoly capitalism. As we move into the 21st century, there is a new cultural and economic phenomenon arising: monopoly militarism. That is the subject this case study attempts to explore “ U.S. monopoly on the militarization of the world” . The Global arms trade can effectively be referred to as “the global weapons monopoly."

Cold war and after
During cold war days, the United States did have a major competitor. For instance, the Congressional Research Service's data for 1990, the last year of the Soviet Union's existence, shows global weapons sales totaling $32.7 billion, with the United States accounting for $12.1 billion of that or 37% of the market. For its part, the Soviet Union was responsible for a competitive $10.7 billion in deals inked that year. France, China, and the United Kingdom accounted for most of the rest.
However in 2008, according to report from the Congressional Research Service (CRS), $55.2 billion in weapons deals were concluded worldwide. Of that total, the United States was responsible for $37.8 billion in weapons sales agreements, or 68.4% of the total "trade." US agreements with all of its customers include not only sales of very costly major weapons systems, but also the upgrading and the support of systems previously provided. The arms agreements involving a wide variety of items such as spare parts, ammunition, ordnance, training, and support services can have significant costs associated with them.
2008 Global Weapons Trade
When one nation accounts for nearly 70% of weapons sales, the term "global arms trade" should effectively be replaced by Global Weapons Monopoly.

Foundation for Monopoly – Military spending
It starts with technology. The United States has a budget for military research and development, for developing new weapons and new military equipment for intelligence and control. The budget just for developing, investigating, testing, engineering and developing new weapons, is as large as the next largest entire military budget of any country in the world. That is why the United States monopolizes the development of new military technology.
This was true even during the Cold War, apart from the budget of the former Soviet Union. The United States was always developing military technology that was 10 or 20 years in advance of what other countries could do. The end of the Cold War has allowed the United States even more than it did before to selectively release and market pieces of military technology. US itself keep some of it, only limited to it. A few allies like NATO countries, Israel etc , can get some parts of it while many other countries get lower level technology and some cannot get any at all.
Because of the economies of scale, because the U.S. military budget is about 10 times as large as the next military budget, the United States has been able to out-compete all other countries in producing and selling weapons on the global market thus running other countries effectively out of business.
Right now, the European arms industries are in the process of consolidating and becoming over the next few years, a single integrated arms business to emerge as an alternative to USA, even though they don’t have any threats like WARSAW pact to deal with in the current world. So, it may not be a 100% monopoly. It's kind of like monopoly capitalism tending toward monopoly, with a few little retrenchments here and there.

Financing
In addition to controlling military technology, the United States gives an enormous amount of military aide. Some of it directly in the form of foreign aide, some of it in the form of subsidized purchases of weapons, some in the form of guaranteed loans to countries to buy weapons and some to train the military in other countries. For example, Indonesia. The types for financing can differ and discussed below:
Foreign Military Financing: Congress appropriates grants to finance foreign nations’ purchases of American-made weapons, services and training. Between 1950 and 2005, the U.S. government has provided over $121 billion in FMF to militaries around the world.
Economic Support Fund: These grants are designed to promote “economic and political foreign policy interests of the United States” by “providing assistance to allies,” with the aim of “mitigating the root causes of terrorism.” While U.S. law makes clear that ESF is not intended for military expenditure, the grants are frequently used as a de facto military aid, with foreign governments using the funds to free up their own resources for military programs.
International Military Education and Training IMET grants are given to foreign governments to pay for military training provided by U.S. military officials and with U.S. weapons. In 2004, $91 million was allocated to train 11,000 solider/students from more than 100 countries.

Military to Military relationship
The United States military builds up relationships with the military around the world. It provides new technology thus undercutting other countries primarily western European. US not only undercuts their prices but also offer better offset agreements.
In all of these ways US not only solidifies a monopoly relationship with the military elites but also with the foreign policy elites, the people who work at institutes for strategic studies and in the Foreign Service. The people who develop concepts of the world and of international relations which then drive and determine the kind of choice points that governments will make along the way on totally different issues.
Differentiated pricing
Every country in the world covets weapons manufactured in USA. Cambodia ($304,000), Comoros ($895,000), Colombia ($256 million), Guinea ($200,000), Greece ($225 million), Great Britain ($1.1 billion), the Philippines ($72.9 million), Poland ($79.8 million), and Peru ($16.4 million) all buy U.S. arms, as does almost every country not in that list. U.S. weapons are coveted by presidents, generals and strongmen. The top five nations which made Foreign Military Sales agreements with the Pentagon in 2008 in terms of revenue are:
Saudi Arabia $6.06 billion
Iraq $2.50 billion
Morocco $2.41 billion
Egypt $2.31 billion and Israel at $2.2 billion
That's more than $15 billion in weapons right there. Some of these countries are consistently eager buyers, and some are not. Morocco, for example, is only in that top-ten list because it was green-lighted to buy 24 of Lockheed Martin's F-16 fighter planes at $360 million for each aircraft, an expensive one-shot deal, 30% more than the price quoted for allies. On the other hand, Saudi Arabia (which inked $14.71 billion in weapons agreements between 2001 and 2008), Egypt ($13.25 billion) and Israel ($11.27 billion) are regular customers. To sum up, the U.S. has a virtual global monopoly on exporting tools of force and destruction. Call it market saturation.

Improving on perfection: Getting more competitive

It used to be that the United States exported goods, products, and machinery of all sorts in prodigious quantities: cars and trucks, steel and computers, and high-tech gizmos. But those days are largely over. In one area, however, the U.S. is manufacturing products that are distinctly wanted and there the Pentagon is working hard to increase market share.

American global monopoly on weapons sales is neither accidental nor unintentional. The constant and lucrative growth of this market for U.S. weapons makers has been ensured by shrewd strategic planning. US is constantly thinking of new and inventive ways to improve its weapon trade monopoly.
How do you improve on near perfection? In the interest of enhancing that "competitive" edge in weapons sales, US is investigating the possibility of revising export laws to make it even easier to sell military technology abroad by making "wholesale changes to the rules and regulations on government technology exports" in the name of "competitiveness.". Government technology exports is of course an euphemism for weapons and other military technologies. These rules and controls are minimal in nature and are constantly under assault by the weapons industry. Bans on weapons sales to particular countries are regularly lifted through aggressive lobbying. The industry also works to relax controls on new technology exports to allies. Japan and Australia have mounted campaigns to win the ability to buy F-22 Raptors, potential sales that Lockheed Martin is now especially happy to entertain. In addition to revising these export controls, the issue of "dual-use" technologies is also being relaxed. These are not weapons. Included are high-speed computer processors, surveillance and detection networks, and a host of other complex and evolving technologies that could have military as well as civilian applications.

Lockheed Martin, Northrop Grumman, and other major weapons manufacturers have invested billions of dollars in research in exploring and perfecting such technologies, and now they are eager to sell them to foreign buyers along with the usual fighter planes, combat ships, and guided missiles. So the weapons industry and the Pentagon are arguing for "updating" the rules. With multiple billion trades already signed with countries such as Taiwan, Brazil, Indonesia and India this year, US is extremely well positioned to carry its monopoly well into the second decade of this 21st century.

References

1. http://www.ratical.org 2. http://www.worldpolicy.org/projects/arms/reports/wawjune2005.html 3. http://www.fas.org 4. http://www.controlarms.org/ 5. http://en.wikipedia.org/wiki/Arms_industry 6. http://www.tomdispatch.com 7. http://www.foreignaffairs.com/articles/49878/ethan-b-kapstein/americas-arms-trade-monopoly 8. http://www.countercurrents.org/