The Economics of Killing: How the West Fuels War and Poverty in the Developing World

The Economics of Killing

‘We live in a rich world and yet increasingly people are getting caught in the poverty trap and facing real hardship and pain. We know how to solve these problems – by disarmament and demilitarisation, and putting human and financial resources into dealing with the real enemies of humanity: poverty, unemployment, environmental crisis, etc. Vijay Mehta’s excellent book sets out the problems and solutions, and challenges us all to create the political will to implement policies which will bring about real change and give hope to humanity.’

Mairead Corrigan Maguire, Nobel Peace Prize Laureate 1976. Founder, Peace People, Belfast, Northern Ireland

‘The Charter of the United Nations starts in this way: We, the Peoples ... have resolved to save the succeeding generations from the scourge of war... But instead of better sharing and building peace through social justice and economy guided by the democratic principles – so well enshrined in the UNESCO’s constitution – and by the Universal Declaration of Human Rights, the sinister proverb if you wish peace prepare war has been secularly applied by male rulers. And plutocratic (G7, G8) groups have taken over the functions of the United Nations, and have placed the market in the very core of the world governance ... . The result is a profound financial crisis that hides the most urgent planetary challenges as access to food and health of all human beings, the environmental progressive degradation; the lack of horizons of the humanity worldwide.

The net balance is $4 billion per day in military expenditures while 70,000 persons die of hunger ... .

The book ... is extremely timely and provides – what is extremely important and must be underlined – not only excellent diagnosis but also appropriate treatments. And the first is to reduce the power of the military-industrial complex.’

Federico Mayor Zaragoza, Former Director-General UNESCO; President, Foundation Culture of Peace, Madrid

‘It is about time someone exposed the nefarious activities of the military-industrial complex that is destroying the foundations of civilized human existence. It has made killing a proifitable industry. This book is a must-read for all peace seekers.’

Arun Gandhi, Grandson of Mahatma Gandhi; President, Gandhi Worldwide Education Institute, Rochester, New York

‘Vijay Mehta depicts ways in which the Western powers can restructure their economies away from the reliance on the military-industrial complex towards making the twenty-first century an era of soft power for a more peaceful and sustainable future.’

Deepak Chopra, bestselling author, Peace is the Way, California

‘[B]rilliantly links the deepening economic crisis facing the West with the dynamics of militarism that is wreaking havoc on the planet, and thus destroying the prospects for a peaceful and just world and hastening the implosion of the United States. Everyone who cares about the future must read this groundbreaking book, and take action before it is too late.’

Richard Falk, United Nations Special Rapporteur on Human Rights for the Palestinian Territories; Professor Emeritus of International Law at Princeton University

‘Congratulations to Vijay Mehta on having grappled with this complex and too often sinister issue. The latest technology, with the clinically remote killing process of drones and the like, makes it all the more urgent and compelling. We are all involved. The subsidies by taxpayers to the arms industry are immense. Were that industry exposed to the full rigours of the market economy, it would be in deep trouble. It is a challenge to us all. Vijay Mehta helps us to face up to it.’

Lord Frank Judd, Minister for Overseas Development (1976–77); Minister of State for the Foreign and Commonwealth Office (1977–79); Director of Oxfam (1985–91)

‘This important book identifies the real crisis ahead for the world which is not narrowly environmental but the fact that with rising population we will not have enough food or oil or water to survive. That is the real reason that this book, pointing to the waste in military expenditure, offers the real alternative to starvation, which is cooperation to meet our needs.’

Tony Benn, former MP and Cabinet Minister; President, Stop the War Coalition, London

‘Vijay Mehta’s book is an essential read for young people, North and South, who must demand dramatic change in global resources management and response to the needs for universal human wellbeing. It presents the case for the implementation of new thinking necessary if they and their children are to have opportunities to live full lives. There must be a new realization that North–South human wellbeing and equality of opportunity requires that prosperity be global. The book exposes the reader to the vicious Northern military-industrial complex, and roles of the media and energy sectors, plus the corrupting role of the arms-dealing five permanent members of the UN Security Council in the profits of endless poverty. As power is shifting to the new emerging powers of the South, this book provides thought and hope that the Northern centuries-old model of brutal human exploitation and blatant use of warfare will be uprooted and changed to support socio-economic wellbeing, equal opportunity and sustainable prosperity. Nothing less will suffice.’

Denis Halliday, UN Assistant Secretary-General (1994–98); Former Coordinator of the UN Humanitarian Program in Iraq

‘Vijay Mehta lifts the curtain on a truth which many would prefer concealed. If we were to become instruments of peace instead of war and redirect some of the global trillion and a half dollars spent annually on war and weapons to real human needs there would be no need to create Millennium Development Goals. All those supporting humanitarian NGOs should read Mehta’s book and act on it.’

Bruce Kent, Vice President, Campaign for Nuclear Disarmament (CND), Movement for the Abolition of War, London

‘Vijay Mehta’s book shines a timely light on the role that Western governments play in perpetuating conflict around the world. It is particularly welcome in that it does not just identify and detail the problem – it puts forward an alternative, and one which anyone genuinely committed to peace, justice and equality cannot afford to ignore.’

Caroline Lucas, MP and Leader, Green Party, UK

‘Measured against their own proclaimed noble ideals, those in power in the imperialist Western states (and most countries elsewhere) betray their ordinary citizens and the overwhelming majority in the rest of the world. A global pact among elites is based on a hegemonic discourse claiming to provide development. But it is merely the ideological smokescreen for maintaining control over entrenched interests, based on a power of definition selectively used to fuel the further growth of a military-industrial complex. Such continued minority rule puts the future of mankind – if not the planet – at risk. Vijay Mehta’s powerful intervention reminds us of the need to mobilise for counter-models. It is a forceful appeal to find adequate forms of multilateral cooperation in search for an alternative future.’

Henning Melber, Executive Director of the Dag Hammarskjöld Foundation, Uppsala, Sweden

‘Vijay Mehta’s book is thought-provoking at a time of world economic crisis when fresh thoughts and approaches are sorely needed. I hope it will be widely read, especially by those who may, at first, find its substance unpalatable.’

Sir Brian Urquhart, Former UN Under-Secretary-General for Special Political Affairs

‘It is high time for a book like this to be written and read. We are beyond traditional international development cooperation. Globalisation and geopolitics have resulted in a complex network of economic, financial, political and military interests of countries and companies. Vijay Mehta’s study of the underlying power relations reveals unpalatable truths. It also points in a different direction: policy making based on true values concerning people’s development, transparency, equity and human rights.’

Jan Pronk, Former Dutch Minister of Development and Minister of the Environment, The Hague, Netherlands

‘This is a book to challenge and test our comfortable assumptions about how the world works, who wields power and what for.’

Dan Smith, Secretary General, International Alert, London

‘It should be obvious to every thinking person on the planet that killing people, maiming them, torturing them, dropping bombs on them, blowing up their homes or destroying their livelihoods is not an effective way to make the world a safer or more peaceful place. All war and violence has ever achieved is to fuel more hatred and to sow the seeds of the next conflict. So who benefits from the world’s insane, drug-like dependency on weapons and military force as the solution to every problem? Vijay Mehta lays out in this book how the world has got into this situation and how we can get ourselves out of it. The real solutions are all there right in front of our noses! The time has come to start implementing them.’

Tim Wallis, Executive Director of Nonviolent Peaceforce Europe, Brussels

‘Vijay Mehta clearly describes the connections that link the global machinery of war with global poverty. This book goes to the heart of the global problematique and should be read by anyone who cares about building a more decent, equitable and sustainable world order.’

David Krieger, President of Nuclear Age Peace Foundation, California

‘Vijay Mehta has thrown down a challenge to the hypocrisy of Western states that preach human rights and development but promote militarism and chaos. As this fascinating book makes clear, we have a choice to make between perpetual crisis, war and poverty on the one hand and the positive alternatives of demilitarisation, disarmament and social investment on the other. Mehta has issued a compelling call to arms against the military-industrial complex that sustains global capitalism. It is up to us to respond.’

John Hilary, Executive Director, War on Want, London

‘Vijay Mehta has written a very important book in the face of current global crises and the interrelated socio-political consequences of militarisation. This current paradigm needs to be overturned in favour of a structure of human rights and responsibilities, where justice is dealt with by law and not arms, and where economic resources are channelled into the real needs of our societies.’

Professor Julia Hausermann MBE, Founder and President, Rights and Humanity, UK

‘[This book] is a marvellous read, where Vijay has found exactly the right words to describe the present dangerous world situation, the urgency to solve it and above all, offering insights how to solve it. All this with due respect for our beautiful planet and all its inhabitants. Thank you for this, Vijay!’

Marjolijn Snippe, LL.M International Law, World Federalist and advocate of United Nations Parliamentary Assembly (UNPA), Netherlands

‘[This book] challenges politicians, corporations and the media who collude with the military-industrial complex for continuing wars and arms expenditure. ...Vijay Mehta skilfully illustrates a paradigm shift for reducing military spending and investing the resulting savings in civilian jobs, health care and education. This book is a must-read for anyone keen to understand the issues and seeking peaceful solutions, whether NGOs, GOs or engaged citizens around the globe.’

Dr Norbert Stute (MD), Founder, BetterWorldLinks.org, Germany & UK

‘Government aid budgets have been sorely compromised by insane spending on defence. As a result, we in the development camp are striving for ways to increase and improve aid delivery to meet the scale of humanity’s problems; half the world’s population is battling hunger and disease. My father’s book is the best-case scenario – it shows us how we can swap insanity for our shared humanity.’

Renu Mehta, Founder, Fortune Forum charity and MM Aid Model co-architect, London

To the heroes of Arab Spring, Occupy Wall Street and anti-corruption campaigners in India and around the globe. Your efforts resonate with millions across the world.

First published 2012 by Pluto Press

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www.plutobooks.com

Distributed in the United States of America exclusively by

Palgrave Macmillan, a division of St. Martin’s Press LLC,

175 Fifth Avenue, New York, NY 10010

Copyright © Vijay Mehta 2012

The right of Vijay Mehta to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

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Contents

Acknowledgements

Introduction

PART I MILITARY-INDUSTRIAL COMPLEX – POWER, MYTHS, FACTS AND FIGURES

1. How the West’s Addiction to Arms Sales Caused the 2008 Financial Crisis

2. What is the Military-Industrial Complex?

3. The Culture of Militarism and Global North’s Power of Definition

4. Europe and the Remaking of the Middle East

PART II MILITARY SPENDING AND ITS ILL EFFECTS

5. Negative Effects of Conflicts on Global and Human Security, Refugees, Forced Migrations and Urbanisation

6. War and its Ill Effects on Health, Environment and Development

PART III THE FOLLY OF CHRONIC WARS – FOR PROFIT, RESOURCES AND DOMINATION – MORE WEAPONS – MORE WARS – MORE PROFITS

7. Terrorism and Non-State Actors, and How to Make Them Stop

8. China’s Periphery – The Military-Industrial Mess That Could Destroy a Bright Future

9. The Emerging Conflicts – Other Future Fault-lines of the World

PART IV A NEW VISION, A NEW BEGINNING IN A NEW MILLENIUM – A PRACTICAL WAY OF REDUCING ARMS, ARMIES AND WARS FOR THE SURVIVAL OF HUMANITY

10. Averting Disaster – What Type of Global Security Architecture Fits in Today’s World?

11. Replacing the Military-Industrial Complex – Making the Twenty-first Century the Century of Soft Power

Epilogue – The Path Ahead

Appendix – List of Global Peace Organisations

Notes

Index

Acknowledgements

The book is the product of many years of peace activism and understanding the folly of militarism and chronic wars for profit, resources and domination. It also reveals the fact that military expenditure and the aid agenda are intertwined and unmasking the relationship can radically assist development.

Such a meaningful book could not be written without the assistance of numerous friends and colleagues to whom I’m grateful. Firstly, special thanks to James Brazier for excellent research and bringing the book to shape. Secondly, I am indebted to my excellent editor, Roger van Zwanenberg for direction, guidance and friendly hand for the publication of the book.

Thirdly, many thanks to members of my family, Renu, Sanjay, Ajay and Shanti for comments, suggestions and support. Lastly, thanks to Raceme and Abdul for other additional works for its completion.

The book is a humble attempt to show how the military-industrial model can be replaced by adopting equitable policies for disarmament, demilitarisation and working for sustainable development, thus ending the cycle of violence and poverty.

Vijay Mehta

London, June 2011

Introduction

‘Disasters require urgent action to prevent repetition,’ said the world’s most powerful economist in September 2010, addressing an audience at Princeton University. ‘We do not have many convincing models that explain when and why bubbles start...I would add that we also don’t know very much about how bubbles stop either.’¹ He urged the listening scholars to redouble their efforts to plug these gaps in their collective knowledge.

The speaker was Ben Bernanke, the chairman of the US Federal Reserve. Two years earlier the US central bank had faced what the chairman called the ‘most difficult challenges for economic policymakers since the Great Depression’. Just as the 1990s ended with the bursting of the dot-com bubble, the 1980s with Black Monday’s stock-market crash, and the 1970s with an energy crisis, another decade had finished in economic disarray. Major banks were collapsing and entire countries were facing bankruptcy. Economists had yet again failed to predict the crisis, but Bernanke saw no need for what he called ‘an overhaul of economics as a discipline’. The standard models were designed for ‘non-crisis’ periods, he concluded – presumably those brief gaps between the bubbles, the crises, and the slow, painful recoveries.

More interesting was what Bernanke did not mention. He did not describe what linked the financial crisis to the real economy. He did not mention the rapidly changing economies of Asia, or his country’s $14 trillion debt, or its persistent trade and fiscal deficits. He did not talk about its vast military expenditure, which imposes a financial burden on the US government that it cannot afford. He did not mention the inconclusive and bloody wars in Iraq and Afghanistan, which had already cost the US at least a trillion dollars.

The purpose of this book is to do what Bernanke did not: to join the dots between the world of finance, which collapsed so spectacularly in 2008; the real economy, where raw materials are fashioned into valuable objects for trading and the underlying motivation of war and militarisation. Once this analysis becomes clear, the astonishing gulf between the wealth and stability of some countries, and the chaos and poverty of many others, is not a natural gulf. The reasons why the vast mineral wealth of the southern hemisphere has not translated into vast actual wealth are, in the final analysis, much the same reasons which caused the US economy to go into spasm.

Underlying this state of affairs was an abusive trading relationship maintained through arms sales and repression. Wealthy democracies collude with light-fingered dictators to share the spoils of mineral extraction and cash crops. These kleptocrats grant military access to the West, which turns a blind eye to internal repression. ‘These local events don’t worry us,’ a French ambassador told Foreign Policy magazine, when it asked why French soldiers based in Djibouti did nothing as the African country’s government crushed pro-democracy protests in 2011.²

The abuse is fundamental to the system of trade, but mainstream journalism often misdirects the public along stale and fabricated narratives which blur the issue. Poor countries fail to develop, the story goes, because they pick the wrong leaders. Foreign companies have no choice but to pay bribes, we are told, because otherwise they could not do business, to the detriment of both sides. When it is discovered that the local dictator has stashed billions of dollars in London or Paris or New York, we are to believe that this was mere oversight on the part of Western authorities, who are then lauded for ‘freezing’ the stolen assets.

This is the ‘few bad apples’ account of failed development. Were it not for a few bad apples in countries such as Nigeria, Pakistan, Kazakhstan and the Philippines, these countries would today be prosperous, European-style democracies. Proponents of the ‘few bad apples’ theory shake their heads sadly and say that were it not for the crooks in charge, then free trade, foreign investment, and low taxation would have transformed the Southern Hemisphere decades ago. All along there is a hint of de Toqueville’s old aphorism, ‘People get the governments they deserve’.

One purpose of this book is to show that the ‘few bad apples’ theory is a fiction, one promoted by the West to serve its own mercantile interests. Western governments do not wish poor countries to develop into advanced economies, because they believe that were they to do so this would tilt the terms of trade against Euro-American national interests. The most obvious proof of this posture is their attitude to China, a country where industrial development has lifted 600 million people out of absolute poverty within 30 years.

China, it should be pointed out, is highly corrupt. Despite its many ‘bad apples’ at all levels of government it has nevertheless achieved GDP growth of almost 10 per cent a year, year in, year out, for over 30 years. This proves beyond all doubt that corruption does not necessarily prevent rapid development. The reason for China’s success is because its government acts in the interests of China, not of the West. Its bad apples might be corrupt, but they cannot be paid to follow orders from abroad.

This concept of national independence explains why the West vilifies some dictatorships and praises others. Western politicians rarely miss an opportunity to embarrass China’s leaders over their poor human-rights record.³ Yet they hold hands with⁴ the unelected leaders of Saudi Arabia, a country that is considered to be more repressive than China. It is extremely difficult to ignore such double-standards, yet somehow the media are fed with reverence for the senior military officers who are among the primary beneficiaries of military-industrial spending.

Across the world, the hirelings of the Western military-industrial complex control nations, working as cogs in a machine that transfers raw materials to the West at the minimum possible expense to the latter. The system’s leading brokers are the elected leaders of wealthy democracies, who sign the resource contracts during state visits. Paying off the locals, however, is delegated to the executives of the supposedly private military-industrial companies and their in-country commission agents. To further insulate the governments, Europe operates a chain of offshore havens in which such transactions can be hidden from prying eyes.

China’s military-industrial complex exists for the opposite reason. Its primary purpose is not to acquire basic materials from poor countries (although this is an expanding part of its remit), but to steal advanced technologies from rich ones. The Chinese leadership long ago realised that the difference between poor countries and rich ones is actually quite simple: rich countries have the people and equipment needed to produce valuable hi-tech products, what are today known misleadingly as ‘dual-use items’ (products, software or technology that can be used for both civil and military purposes). The Economist once pointed out that a Rolls-Royce aero engine, which tips the scales at six tonnes, is worth its own weight in silver. An average car, by contrast, is worth its own weight in hamburgers.⁵ Given that Peru, one of the world’s largest silver miners, can produce only about 200 tonnes of silver a year⁶ – equivalent to just 33 Rolls-Royce engines – one can understand why countries with a hi-tech manufacturing capability are so much richer than those which produce only commodities. At the end of 2007 Rolls-Royce’s order book was worth $90 billion.⁷ A result of its success in selling machines that few other companies can manufacture.

China has proven too big to be coerced into adopting ‘low road’ development. Smaller countries are less fortunate. Enormous state subsidies for military-industrial giants, exempted from fair-trade rules by the World Trade Organization, make it uneconomic for smaller countries to try to ‘catch up’ as China has done. Local leaders are bought off with bribes and promises of aid. Worst of all, the West arms its despotic local allies with lethal weaponry. It pays for resources with equipment which fuels local arms-races and wars. Conflict destroys a country’s ability to organise itself into a Chinese-style ‘catching up’ mode. Those who remain in the war-zone are starved, stunted, and deprived of education. The educated middle class flees to the West, where it helps to preserve the knowledge-advantage of its host nation. The investment funds needed for building up industry disappear into slush funds in offshore banks, where they collect interest for wealthy Europeans.

The military-industrial complex no longer operates in the interests of nations, if it ever did. It has acquired a deadly momentum of its own. In the twentieth century over 250 wars were fought and 160 million lives were lost. Militarism survived and thrived throughout a century in which communism, socialism and fascism all blossomed, withered and died. The broken, artificial states created by European colonialists in the twentieth century are the war-zones of the twenty-first century. Over two billion people subsist on less than $2 a day. Every 3.6 seconds, a person dies of starvation. Every 30 seconds a child dies of malaria. Every minute a women dies in childbirth.

There is another model of trade, an alternative to the cycle of financial, economic and military disaster that has operated