On the Profit Motive and the Nuclear Arms Race
By Jason Sibert
The concept of nuclear arms control is losing ground with President Donald Trump tearing up the arms control agreements that have helped us and our geopolitical opponent Russia limit the size of the arsenals.
The rise of right-wing populism around the world doesn’t help the situation any. These extreme nationalist movements build their narrative around a mistrust of the other – Muslims, immigrants, and also other nation-states. If nations can’t trust one another, then they can’t build international norms on nuclear arms or anything else.
However, there is one group that is benefitting from this nuclear chaos – companies that benefit from the building of nuclear weapons. The fact that some profit from destruction is based on absurdity. Many citizens know little about these companies because their activities are rarely noticed.
As writers Richard Krushnic and Jonathan King stated in their story “Meet the Private Corporations Building Our Nuclear Arsenal,” the firms involved in the building and maintaining of nuclear weapons have no free-market competition because all firms involved must be approved by the government for security reasons. Krushnic and King also pointed out that the business model employed in the production of nuclear weapons is called “cost-plus.” This model means that no matter how many cost overruns occur in the projects, the projects are guaranteed a profit. There’s no way contractors will lost their money, regardless of how inefficiently the project was run or what the cost overruns were.
Given the amount of money involved, there’s little incentive for these companies to promote nuclear arms-control. They also have a vested interest in making sure that the American people feel a sense of insecurity and want more nuclear weapons. The International Campaign to Abolish Nuclear Weapons recently published a report, “Don’t Bank the Bomb” that listed the contractors and investors that are reaping the profits from nuclear upgrades that started under President Barack Obama and have continued under Donald Trump. These are familiar names like Boeing, Northrop Grumman, General Dynamics, GenCorp Aerojet, Huntington Ingalls, and Lockheed Martin. In nuclear design and production, the names are also well known: Babcock & Wilcox, Bechtel, Honeywell International, and URS Corporation. Aecom, Flour, Jacobs Engineering, and SAIC are the big names in testing and maintenance. Alliant Techsystems and Rockwell Collins are missile targeting and guidance firms.
The development of nuclear weapons falls not under the Defense Department but under the Department of Energy. Another reason why nuclear weapons profits are so high is that the DOE doesn’t audit subcontractors that depend on contractors for most of their business, as states by Krushnic and King.
The money spent by the government on nuclear arms is partially cycled to politicians in need of campaign cash. In a 2012 study for the Center for International Policy, “Bombs vs. Budgets: Inside the Nuclear Weapons Lobby,” William Hartung and Christine Anderson reported that for the elections of that year, the top 14 contractors gave nearly $3 million directly to Congressional legislators. In 2015, the defense industry used 718 lobbyist to lobby Congress for more spending on arms. Lockheed Martin, General Dynamics, and Boeing are the companies with significant nuclear contracts that lobby congress.
In today’s political climate, anything non-military is usually considered a waste of time and money and anything military is the opposite. Given the facts, the nuclear weapons lobby deserves at least part of the blame.
The intersection of money and politics can been seen in the reaction to the adoption of the United Nation’s Treaty on the Prohibition of Nuclear Weapons by 50 countries, although nuclear armed states failed to sign the treaty. After the treaty was signed, 30 companies quit investing in nuclear weapons, according to writer Mark Sullivan’s story “These Companies are Financing the Return of Nuclear Terror.” Norway’s Government Pension Fund and Denmark’s ABP divested in companies involved in the production and upkeep of nuclear weapons.
Given the facts, a larger question should be asked. Should there be a profit in making weapons for the government? As long as there is, we have a defense structure that maims the society it’s supposed to defend. We don’t have conversations about defense because of the profit involved. State-owned industries exists in all democratic nation-states, which also have mixed economies – economies where the market and government both play a role. State-owned industries are common in areas considered natural monopolies because they can capture economies of scale and achieve a public objective. In some countries, these companies operated in weapons manufacturing because of the economies of scale involved in the manufacturing.
Fannie Mae would be an example of a state-owned enterprise in the United States. It started in the 1930’s to expand the secondary mortgage market and increase home ownership. If weapons were made by state-owned enterprises and lobbying congress by these companies outlawed at the same time, would there be a new conception of defense? Would arms control be considered a more viable option?
Jason Sibert is the executive director of the Peace Economy Project.
