Sunday, June 19, 2016

Death Merchants

Recently I binge watched "The Night Manager".  It is a six episode miniseries broadcast on AMC in April and May of this year.  It is based on the book of the same name by John le Carre.  Mr. le Carre is an astute observer of the intelligence business.  That was his line of business before he became a successful novelist.  So there is always an interesting subtext to his books.  And that subtext is prominently featured in the show.

The show centers around an arms merchant and an arms deal.  For a long time, and rightly so, the nickname of arms dealers was "Death Merchants".  They literally traffic in the machinery that enables the slaughter of enormous numbers of people.  The name has passed out of fashion but the business has stayed the same.  And the business as a business has not actually been around that long.

The first modern arms merchant was the Krupp organization.  For a long time arms were manufactured by governments in armories.  Then an armory was a manufacturing facility.  Now it is simply a place where military arms and equipment is stored.  Or, in a lot of cases, a former armory that has been repurposed for general public use.  So why did governments manufacture arms?  In a word, control.  Governments knew arms were extremely dangerous.  They wanted to maintain complete control.  The best way to do this was to keep all phases of the manufacture, distribution, and use of arms in house.

The Krupp family was one of the first civilian operations to challenge this.  The Krupps started out in the steel business.  In the late 1800's the steel business was evolving rapidly.  Most notably, the Bessemer process was introduced at this time.  This process made it possible to produce a number of different kinds of high quality steel cheaply and in quantity.  And one of the major uses of steel was in arms.  This was particularly true of artillery weapons.

Better steel made for better and cheaper artillery guns.  So the Krupps were able to introduce "new and improved" artillery guns.  And Germany was just coalescing as a country.  So selling solely to the German government restricted sales opportunities.  And the government was weak initially so they were in no position to block foreign sales.  This permitted the Krupps to sell all over Europe.  They made a lot of money doing this.

So what's the defense to a good artillery gun?  Armor.  And what's armor made of?  Steel.  So the Krupps were able to sell artillery pieces.  Then they were able to sell armor to the enemies of their customers.  This in turn created a market for a better and more powerful artillery gun.  Bingo!  Another round of sales as continued improvements in steel made it possible to create better guns.  And this in turn necessitated more and better armor.

The Krupp family invented the concept of an arms race and profited greatly from the invention.  And soon other companies got into the game.  And that's how we came to have the gigantic "defense" industry of today.  And this industry is still adept at playing the arms race game to justify yet another round of very expensive and very profitable "new and improved" military weapons.  The only real change is that the industry has diversified into all kinds of military gear and no longer restricts itself to just artillery pieces and armor.

So there are a lot of defense contractors out there that are hungry for the next sale.  And that's where arms merchants come in.  And the arms business has featured prominently in popular culture for generations.  The "Little Orphan Annie" newspaper comic strip, launched in 1924, featured a character named Daddy Warbucks.  Why "Warbucks"?  Because he was an arms merchant.  The Broadway show and subsequent movie "Annie" minimize this aspect of the character.  But that was not true in the first couple of decades of the comic strip's run.

In 2005 the Nicholas Cage movie "Lord of War" was an arms merchant/arms deal movie that had a lot of similarities to "The Night Manager".  And a more serious student of the cinema than I am can easily find many more examples of the movies and TV shows exploring the arms business.  And for the most part they follow a formula.  You have the good guys trying to shut down the bad guy arms merchant.  Reduced to its essence that is true of "Lord of War", "The Night Manager", and other examples of the genre.  At some level most people think trafficking in arms is a nasty business.  So the trafficker is the bad guy and the people trying to stop him are the good guys.

What is different about "The Night Manager" is that this show makes explicit the complicity of the government.  Le Carre is British and writes about Brits.  So in this case it is the British government that is looking the other way.  It was the British government misbehaving in "The Night Manager".  But other stories featuring other nationalities should also change the government because everybody does it.  Kudos to Mr. le Carre for having the honesty to shed light on this.   But it is also important to note that "The Night Manager" does pull its punches to some extent.  The government complicity is portrayed not as official policy but rather as the activities of "rogue elements".  Let me translate that.  The more appropriate operative phrase is "plausible deniability".

And that's where pretty much everyone gets this wrong.  The arms merchants are portrayed as operating outside the system.  They are independent agents.  But how real is this independence?  In the real world "independent" arms merchants exist to serve a purpose and that purpose is plausible deniability.  We are told these stories about independent rogue arms merchants because it makes us feel better.  And to some extent they exist.  But this is because there are numerous governments that need a mechanism through which to funnel arms to this group or that.  Often these groups are unsavory or an official connection is inconvenient.  But if the arms are funneled through an "independent arms merchant" then the problem is solved.

This is illustrated in the "Charlie Wilson's War" events.  I discussed this book and movie in a post I made back in 2011.  Here's the link:  http://sigma5.blogspot.com/2011/06/pakistan.html.  Mr. Wilson's War was the one the US prosecuted by proxy in Afghanistan in the early '80s.  The Russians (then the U.S.S.R.) had invaded Afghanistan.  We saw an opportunity to embarrass them by supporting a domestic opposition.  But for political reasons we need to keep our fingerprints off this support.  So what we did was to get Saudi Arabia to fund things.  We then got Israel and Egypt to front for the whole operation.

Egypt was particularly important because they are an Arabic country and not a hated western country like the US or Israel.  They were also important because they had huge stockpiles of Soviet weapons.  So when these weapons showed up on the battlefield we could say "They are not our guns -- go talk to someone else".  Everybody knew what was really going on.  Oh, the details of the Saudi - Israeli - Egyptian front operation only emerged much later.  But everyone knew the U.S. was behind the whole thing.  But we could "plausibly deny" it and others could "plausibly believe" us.  This smoke screen made it much easier on countries and people who generally supported tossing the Russians out of Afghanistan but for one reason or another needed to be able to put some public distance between themselves and the US.

The Charlie Wilson's War situation is a nice example where everything has since come out and we can now study the details of how it all worked.  But this situation where governments need a cut-out is actually common.  And it is common enough to keep an ever changing cast of "independent arms merchants" in business.  None of them are able to get into business or stay in business without the tacit support of one or more governments.  The trick for these people is to reliably service the needs of their sponsors while staying out of the direct line of fire of their detractors.

And it is another polite fiction that these people are a significant part of the problem.  They are all small beer.  The deal in "The Night Porter" was supposedly valued at $600 million.  That sounds like a lot of money.  But it's not.  The Stockholm Peace Research Institute is considered the best independent source for information on international arms sales.  In 2015 alone, the US exported over $10 billion dollars worth (in 1990 dollars) of arms.  The deal in the show was a $0.6 billion dollar deal.  It was a rounding error in the figure for US sales for one year.  The same study showed roughly two dollars of sales by the rest of the world for every dollar of US sales.  The size of the sale in the show is similar to say the sale of perhaps a dozen second tier fighter jets.  A routine sale like that wouldn't even make the news.

This whole focus on "independent arms dealers" allows us all to pretend that they are the problem rather than us through our governments.  And consider this.  A new assault weapon (AK-47, M-16, M-4) costs in round numbers $500.  How many Afghan subsistence farmers or Iraqi small business owners or Syrian sheep herders or other poor people swept up in war have a spare $500 laying around?  The answer is that very few of them do.  Yet these war zones are awash in assault weapons.  What's going on?  Well, some tax payer somewhere is funneling large amounts of money through some back channel or another to pay to get these kinds of guns into the hands of desperately poor people.

Trust me.  The company that makes the gun is paid full list price for the gun.  And over time there is another result.  Somewhere, Egypt in the case of Charlie Wilson's War, there are warehouses full of guns left over from this or that conflict or from one politically inspired arms deal or another.  The Soviets sold Egypt lots of arms back in the day to gain influence.  Now we sell arms to Egypt for exactly the same reason.

These stockpiles of no longer needed guns, bombs, etc. are then available to support large eruptions of violence at a different time or in a different place.  The "dead ender" forces that opposed us after 2003 in Iraq were amply armed.  How?  Well, over the years we had sold vast quantities or arms to Saddam.  These were stored in vast warehouses, armories, and ammo dumps that were left unsecured when we declared "Mission Accomplished".  The bad guys just hauled away these stolen weapons in stolen trucks and later pointed them at our troops.  And guess what?  ISIS did the same thing again a couple of years ago when the current Iraqi government bungled things in Ambar Province.

Guns don't evaporate over time.  If no one makes a concerted effort to get rid of them they just sit around until someone gets their hands on them and starts making use of them.  There has been a concerted effort to get rid of poison gas.  This effort has been surprisingly effective.  There has also been a concerted effort to get rid of land mines.  This has also been surprisingly effective.  Finally, there has been a concerted effort to get rid of nuclear weapons.  That goal looks impossible to achieve and I'm not sure it is a good idea.  But there has been substantial and successful efforts to reduce nuclear stockpiles, reduce "loose" nuclear material, and secure the remaining nuclear weapons.

But, while this is all to the good, these three categories represent a tiny fraction of the types of dangerous weapons out there.  And there is no progress on any of them.   An old saw councils us that "when you are in a hole the first step is to stop digging".  Yet, spectacular though the figures on arms shipments are, they represent only a small portion of new weapon production.  If we can't stop digging we should at least dig more slowly.

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