To be sure, the United States is the world’s largest arms exporter, with a third of international arms exports originating there. The next largest exporter, Russia, has one-fifth of the market. Saudi Arabia is the United States’ largest arms customer. In the last fiscal year, the United States sold $55.6 billion of weapons worldwide, an increase of 33 percent over the previous year.[1] Last May, Trump’s first foreign trip as president was a visit to the Saudi kingdom, where he signed an arms deal with an advertised value of $110 billion. Although this figure has been shown to be inflated, it remains true that Saudi arms sales make up an enormous share of American arms exports.
During the crown prince’s visit to the White House in March 2018, Trump eagerly waved a poster-board chart claiming that arms deals with Saudi Arabia would support tens of thousands of American jobs, notably in the swing states of Pennsylvania, Ohio, Michigan and Florida. He spoke in terms of half a million jobs to explain his refusal to stop “an investment of $110 billion into the United States.”
Experts have shown that Trump’s job figures are grossly exaggerated; in fact, the arms sales would likely help sustain about 10,000 American jobs and create a few hundred new jobs at most. Even allowing for a generous multiplier effect in the larger economy, Reuters estimates a total number of sustained and new jobs of 84,000 to 168,000—a fraction of what Trump claims.[2] Moreover, the robust American defense budget and a record backlog of orders also suggest little risk of layoffs for American workers if the deals did fall through. The deals will, however, create tens of thousands of new jobs in Saudi Arabia, which seeks the arrangement partly to help develop domestic industry and local expertise.
But the American weapons partnership with Saudi Arabia is about more than jobs and investments. The military-industrial economy is too old and wide for any one arms deal to matter significantly. In defending his commitment to the arms deal, Trump explained that if he canceled, the Saudis would simply work toward its goal of greater militarily independence and Russia and China would profit from America’s moral qualms.
With this logic, Trump articulated the actual purpose behind many arms sales since the twinned emergence of modern imperialism and modern industrial capitalism. While particular arms deals and arms-makers become scandals now and then, in the larger scheme, arms-making has been at the heart of industrialism and the spread of Western imperial power since the eighteenth century.
The real stakes of these arms sales are geopolitical—securing American influence in a region long understood as pivotal to Western imperial power. And there are vast industrial interests at stake in furthering that mission, apart from arms-makers. The US military is the country’s single largest consumer of fossil fuels. Oil companies and financial institutions also depend on Saudi money. So does the tech industry. Since 2016, the Saudis have invested $11 billion in private tech firms. The Saudi royal family owns 10 percent of Uber and a share in Lyft. Saudi money is the largest single funding source for US startups. Reflecting on how such industries have figured in the making of Western imperial power in the Arabian peninsula forces a reckoning with the US government’s relationship with these companies as much as with Saudi Arabia.
Empire, Arms and Modern Capitalism
The centrality of arms-making to modern empire and industrial capitalism was acutely apparent at that hinge-moment of history, the end of World War I—supposedly the war to end all wars. Many who survived it hoped to make a new world free of arms—and empire. After the United States joined the war in 1917, President Woodrow Wilson insisted it be fought in the cause of self-determination. But the war did not end empire, and many of the ongoing struggles in the Middle East are rooted in that failure, including Americans’ own imperial investments in war there.
During the war, the British Empire expanded into the Middle East, the former terrain of the defeated Ottoman Empire. Although the war was officially over in November 1918, Great Britain engaged in violent suppression of rebellion in these newly occupied territories, as well as in India, Ireland and Egypt. The British government drew on new military technologies, especially airpower, in these counterinsurgencies, partly to convince the weary British public that war really had ended. This strategy was the beginning of a covert form of colonial intervention that allowed empire to survive in an increasingly anti-imperial age. But many Britons recognized that military technology had made a new scale of mass death possible. They launched a movement against the arms industry for having driven humanity to an apocalyptic juncture.
The high wartime profits of arms companies like Vickers, then supplying bombers for aerial counterinsurgency in Iraq, were a scandal, as was members of parliament owning shares in such companies. Critics discerned a secret international: a complex of arms firms, banks and governments fomenting war out of greed. The Labor MP Hugh Dalton noted that the Ottomans had used Vickers’s guns against the British; he condemned directors of arms firms as “the highest and completest embodiment of capitalist morality.”
He was right, insofar as arms manufacturers had been crucial to the creation of modern capitalism since the industrial revolution in the eighteenth century. Military contracting for the wars of conquest that established Great Britain’s global empire helped drive the emergence of modern capitalism, although that transformation is often celebrated as a triumph of Enlightenment values. The British also spread arms around the world, equating their spread with the spread of civilization itself. They were convinced that having scruples about who they sold to would mean forfeiting profit, prestige and influence to their rivals, the French and the Dutch—prefiguring Trump’s anxieties about Russia and China.
Government-spawned innovation in firearms manufacturing soon drove industrial revolution in the United States, too. After decades of patient investment, the federal government enabled the production of firearms with interchangeable parts. The resulting American System of Manufacture was adopted in machine-tool, sewing-machine and other industries. British gun makers followed suit, adding bicycles, cars and other essential modern goods to their offerings. At the end of the nineteenth century, global arms sales were thriving. European and American arms companies obtained banking partners that gave loans to client states. Cartels formed as business alliances emerged to divide up world markets.
By this time, Great Britain was no longer an empire on the make, and the armed “native” began to seem a more threatening figure. The British began to police arms sales in the Middle East and South Asia especially and passed race-based laws on gun ownership in its colonies. World War I redoubled their concern: The Middle East expert Mark Sykes worried that enough arms had spread to “arm every black man who wants a rifle.”
In the 1920s and 1930s, global arms conventions tried to prohibit arms exports to Africa and the Middle East, but loopholes and vested interests—including the American arms industry—continued to confound control. The British themselves, captive to the old fear of forfeiting profit and prestige to rivals, subsidized the military strength of the two rival powers in the Arabian peninsula: Sharif Hussein of the Hejaz (Great Britain’s wartime ally against the Ottomans) and the Wahhabi-backed House of Saud in Najd, which vanquished the Sharifians in 1925. Some British MPs worried that the Saudis would turn their British arms against Great Britain next as the dominant power in the region.
A 1935 British government inquiry into the private manufacture of arms alighted on the truth that war was central to Great Britain’s economy, concluding that the line between military and civilian manufacturing was so blurry that it was impossible to say who was making or profiting from arms. Arms and their parts were central to industry in general—as they had been since the industrial revolution. The commission noted that “large numbers of people, of all classes…by reason of their employment, their business interests or by the holding of shares, may have a financial interest in war or the preparation for war.” Nationalizing arms production would require nationalizing all of industry, it concluded. Moreover, they argued—like their eighteenth-century predecessors—that it was better for Great Britain to supply arms to its own enemies than for rival powers to profit politically and economically from its principled abstention from such sales.
Shortly after the commission submitted its report, the Germans occupied the Rhineland, and Great Britain began rearming with the approval of Labor politicians like Dalton. World War I had taught the importance of not being adequately prepared as much as it had fomented distrust of arms-makers. As the commissioners had anticipated, intensification of arms-making had an enormous impact on the economy: Rearmament pulled Great Britain out of the Great Depression.
The United States Seizes the Baton
We live among this geopolitical and moral detritus of the end of World War I. Seizing the baton of global imperial power, including heavy reliance on airpower, the United States has long sealed its partnerships with authoritarian rulers around the world with arms sales. And once again, the Middle East is a key focus of those concerned with the spread of arms.
The confused British diplomacy in the Arabian peninsula enabled the rise of American power there. While serving in the wartime occupation administration in Iraq, one of Great Britain’s most influential Arabists, Jack Philby, developed a partiality for the Saudi cause. After resigning from government service in 1924, he moved to the peninsula and became chief advisor to Ibn Saud—and a bugbear to his government. (His son Kim Philby would become one of the notorious Cambridge Five in the Cold War—the ring of British double-agents working for the Soviet Union.) Standard Oil of California sought Philby out to broker the negotiations for an oil concession in the kingdom, and Philby obliged. Thus it was that oil was discovered in Saudi Arabia in 1933 under American auspices. For Americans as much as peoples of the peninsula, observes the writer Amitav Ghosh, the history of the “Oil Encounter,” whose consequences touch upon “every aspect of our existence,” is “a matter of embarrassment verging on the unspeakable, the pornographic.”[3] Avoided in imaginative life, that history is relegated to the abstract realm of security.
Through long institutional cooperation with the British during World War II and the Cold War, the American military and intelligence establishment learned the covert approach to intervention in the Middle East, most infamously in Operation Ajax, the joint Central Intelligence Agency (CIA) and British MI6 coup in Iran. In 1960, just two years after the Iraqi revolution finally forced the British to depart the country, the CIA attempted to assassinate the Iraqi head of state.
Arms sales were part of the American effort to secure influence in the region from the middle of the twentieth century. In the twenty-first century, American arms are on all sides of conflicts in the region. Islamic State fighters have them. The Taliban have them. American arms are on multiple sides of the Syrian conflict. Notoriously, the bomb that Saudi Arabia dropped on a school bus in Yemen last year was American. Forty children and 11 adults died in that strike, and many more were wounded. The United States has also supported the Saudi effort in Yemen with refueling and intelligence.
Arms manufacturing drives the US economy, but it also creates chaos around the world. Still, the Trump administration continues to ease the sale of arms abroad, eliminating regulations in the name of economic growth. The Arms Transfer Initiative aims explicitly to “expand opportunities for American industry [and] create American jobs,” according to Pentagon official Tina Kaidanow.
Top American contractors benefiting from this work include Lockheed Martin and Boeing. But these Silicon Valley and Seattle-based behemoths are far from the only technology firms to profit from defense contracts. Amazon, Microsoft and other tech giants also benefit from multiyear, multibillion-dollar Pentagon contracts. The fact that Silicon Valley is swimming in Saudi money is news now, but its growth has always depended on a robust supply of defense contracts. As the historian Margaret O’Mara puts it, “The American tech economy rests on the foundations of the military-industrial complex…[T]oday’s tech giants all contain some defense-industry DNA.”[4]
Tech moguls recognize the importance of defense contracts. Amazon spent millions this year lobbying for contracts for its facial-recognition technology, cloud-computing services and other products. “If big tech companies are going to turn their backs on the Department of Defense, we are in big trouble,” said Amazon’s Jeff Bezos. Lockheed Martin says it will defer to government decisions about Saudi arms deals; its sales in Saudi Arabia for 2019 and 2020 are in the range of $900 million. Government departments likewise consider industry outreach and relationships with potential contractors to be standard practices.
But some segments of American labor are increasingly uneasy about military contracts. Within Amazon, workers are deeply concerned that the company’s facial recognition technology may be used by the US Immigration and Customs Enforcement agency to track illegal immigrants. Hundreds have written to Bezos expressing their refusal to build a platform for government surveillance that violates human rights. Similar dynamics are unfolding at Microsoft and Google. Google employees have successfully stymied renewal of the company’s controversial Pentagon contract to provide artificial intelligence for analyzing drone footage.
The gun control debate also fuels such moral reckoning within major companies. Blackstone and JP Morgan pulled out of Saudi Arabia’s Future Investment Initiative—nicknamed “Davos in the Desert”—after the Khashoggi affair; both companies also tried to distance themselves from firearms manufacturers after the 2018 school shooting in Parkland, Florida. These moves have enhanced their brand appeal among many, although it is doubtful they have affected the gun industry as a whole—or the inequities systematically perpetuated by such wealth-consolidating firms. Still, they signify a search for a new capitalist morality, echoed by Silicon Valley investors belatedly cringing at the flow of Saudi money that provided tech companies with crucial liquidity for years.
In the aftermath of the Khashoggi affair, Venky Ganesan, a partner at the technology investor Menlo Ventures, told the Washington Post acceptance of such money would be a “real moral challenge” going forward.[5] Ro Khanna, Silicon Valley’s representative in Congress, is calling on the valley to acknowledge that Saudi activities are a “slap in the face” of the “Enlightenment ideals” at the heart of its work. (Here, again, the notion that pacific Enlightenment values drive innovation obscures the historic role of defense contracts, even in the growth of Silicon Valley.)
Rethinking Arms and Capitalism?
Apart from snubbing investment and canceling arms deals, the Khashoggi scandal and the famine in Yemen provoked calls for fresh Western intervention against Saudi Arabia. But in the Middle East, the struggle since World War I has been to shake off Western power. Intervention would be a break with the longstanding US-Saudi partnership but would nevertheless perpetuate the sense of imperial prerogative that has long governed Western relations with the region. Rethinking the place of arms-making in our economy will entail a remaking of that foreign policy and envisioning a different kind of postcolonial world.
The Enlightenment thinker Adam Smith gave us the mythic ideal of pacific economic transformation. He also offered advice on managing the moral qualms inevitably unleashed by capitalism: He prescribed restraint in sympathy, blocking out of “miseries we never saw,” limiting our sympathies to the immediate, visible effects of capitalism, lest our guilt become paralyzing. Perhaps because he was a man from the Bezos-owned world of the Washington Post broke the Smithian dam against American empathy with more distant victims of Saudi horrors in Yemen. Many are struggling to reconstruct that dam: “We shouldn’t trash [the relationship with Saudi Arabia] all over one thing,” urged one executive at Davos in the Desert.[6] But others, however haltingly, are trying to stake out a different path and hold the US government and industries to account.
By pointing out that nationalizing arms-making would mean nationalizing all of industry, the 1935 Royal Commission exposed the illusion of wider innocence implied by critics’ focus on the villainy of arms-makers. More than a hundred years after the end of the World War I, greater awareness of collective complicity in violence suggests an opportunity to more effectively revisit the lost causes embraced by those grieving survivors: the end of war and empire and the end of the arms-manufacturing that gives life to both.
Arms-makers do epitomize capitalist morality in that they have been at the heart of economic transformation since the industrial revolution, despite the determined efforts to alter that reality after World War I. The gun control movement and the criticism of America’s enabling of Saudi horrors are asking Americans to navigate toward a different economic morality. If government contracts remain essential to industry, governments might contract for something other than surveillance and military technologies.
In the eighteenth century, British fiscal institutions existed entirely to provide resources for war; building canals was outside their purview. But governments now have the option of promoting growth more effectively through other kinds of government contracts—welfare rather than warfare, including education, health care and infrastructure projects.
Moreover, major arms contractors of the past—Remington, Le Creuzot, Vickers—also at times manufactured typewriters, farm implements, electric shavers, bicycles, sewing machines, speedboats and rail material. After World War I, defeat forced the German arms-maker Krupp to turn “swords into ploughshares” by making typewriters, surgical instruments, household pipes and cinematograph machines. As the world faces environmental devastation, welfare rather than warfare contracts might offer a way forward; ploughshares are actually more crucial to security than arms. The US military’s current investments in renewable energy initiatives, biofuels, electric vehicles and other green technologies are disastrously undermined not only by its intense surveillance of climate activists but by its unending geopolitical ambition in the Middle East.
Endnotes
[1] Irina Ivanova, “Saudi Arabia is America’s No. 1 Weapons Customer,” CBS News, October 13, 2018.
[2] Mike Stone, “Exclusive: Defense Firms See Only Hundreds of New U.S. Jobs from Saudi Mega Deal,” Reuters, October 29, 2018.
[3] Amitav Ghosh, The Great Derangement: Climate Change and the Unthinkable (Chicago: University of Chicago Press, 2016).
[4] Margaret O’Mara, “Silicon Valley Can’t Escape the Business of War,” New York Times, October 26, 2018.
[5] Jeanne Whalen and Elizabeth Dwoskin, “Money vs. Morals: Khashoggi Killing Raises Questions in Silicon Valley about Saudi Investment,” Washington Post, October 23, 2018.
[6] Kevin Sullivan, “Despite Khashoggi Case, US Firms and Saudi Prince Show Up at ‘Davos in the Desert’,” Washington Post, October 23, 2018.
