The Arsenal of Democracy: A Tale of Four Arms Deals

Charles W. King

The United States is the world’s leading exporter of arms, more than the next two largest exporters, Italy and Germany, combined. The United State exported more than a billion dollars’ worth of small arms in 2013 according to the Small Arms Survey, a non-governmental organization supported by a group of western nations. The export of arms, from pistols and rifles to military aircraft and advanced technical systems represent not just an economic boon for the United States that incentivizes the continued growth of its arms industry, but a strategic asset for its foreign policy. Just as the United States controls the export of advanced technologies that it does not want its rivals or pariah states to possess (particularly nuclear and missile technology), it uses arms export agreements to bolster its allies and as an incentive.

The two most famous American arms export schemes are Franklin D. Roosevelt’s Lend-Lease program during World War Two and the Iran-Contra Scandal that rocked the administration of Ronal Reagan. Between 1941 and 1945 the United States exported $667 billion in 2017 dollars to its allies under Lend-Lease. Iran-Contra circumvented American law to fund the right-wing Contra rebels in Nicaragua with the proceeds of arms sales to the Islamic Republic of Iran, primarily missiles and also illegal. While these two programs differ greatly in scope, publicity, and legality they were both intended to provide material support to allies—long standing or of convenience—engaged in conflicts the outcome of which the respective administration felt it had a vested interest in. Today the supplying of arms to belligerents is highly controversial, and when doing so policy-makers must weigh the potential benefits of tipping the scale in a conflict, with the fallout, both domestic and diplomatic, of doing so.

Attempting to decide the winner in conflicts is not the only way that the United States uses arms exports to affect geopolitics. Bolstering the capabilities of allies and even competitors during peacetime can also be of strategic value. Sometimes it is possible to provide support with a direct American military presence, as the deployment of the US Army to West Germany did during the Cold War, and American AWACS Radar and Tanker planes did to the intervention in Libya in 2011. This is not always the case. In 1979 it would not have been possible to deploy American troops to the border between the Soviet Union and the People’s Republic of China. After recognizing the Sino-Soviet split American administrations sought to improve the People’s Liberation Army’s ability to fight their Soviet counter-parts, particularly against Soviet tanks. Even with the normalization of diplomatic relations between the US and China in 1979, this was a complicated task to accomplish. Eventually, the Carter Administration received the legislative approval it needed to let the PLA manufacture American designed anti-armor weapons in China under license, direct sales would have been politically impossible.

There is a third strategic use for arms exports that the US actively engages in; incentive and subsidy. The US government subsidizes the Iron Dome missile shield deployed in Israel, much of the money transferred to Israel as military aid comes right back to the United States as payments to US defense companies. This is not only good for the defense sector, but it encourages firms to perform research and development on certain kinds of technologies, like Iron Dome, that the US government wants to encourage but may not have a direct use for at the time.

The United States will remain the world largest exporter of arms for the foreseeable future. Arms sales are an important sector of the American economy. Arms export deals influence manufacturing and the development of advanced electronics and other technologies. They also provide considerable, if controversial, strategic options for American foreign policy. While picking winners may be the most obvious use, policy-makers should remember the utility of enhancing the capabilities of nations with similar interests during peacetime as a preventative measure.

Further Reading

Irene Pavesi, "Trade Update 2016: Transfers and Transparency," Small Arms Survey, (Geneva, Switzerland: Small Arms Survey, 2016).