Since the outbreak of the Russia-Ukraine conflict, the U.S. military-industrial complex has played a crucial role in this proxy war and has made huge profits. The U.S. military-industrial complex is a vast interest group that spans across the military, economy, politics, media, and other fields, composed of the U.S. military, arms manufacturers, members of Congress, defense research institutions, think tanks, and the press.
Profits from Military Aid
The United States has provided a large amount of military aid to Ukraine. However, this aid does not directly reach Ukraine but is channeled through the military-industrial complex, with most of the funds flowing back to the United States. According to U.S. media reports since, the escalation of the Ukraine crisis in February 2022, the total amount of U.S. military support to Ukraine has exceeded $56 billion. The U.S. government has referred to arms deals as a “good investment” because they can safely enjoy the profits from arms sales from across the ocean.
U.S. military giants Raytheon, General Dynamics, and others have signed multi-billion-dollar contracts with the U.S. Department of Defense to produce weapons. For example, Raytheon’s CEO Hayes has stated that they will continue to supply weapons to Ukraine, considering it good a business for the next few years. Lockheed Martin has increased the production of Javelin anti-tank missiles from 2,100 to nearly 4,000 per year.
Overpriced Weapons
When selling weapons to Ukraine, U.S. military companies often inflate prices several times over. For example, the shoulder-fired missiles provided by the United States to Ukraine cost about $120,000 to $150,000 within the U.S. military, but when sold to Ukraine, the price is doubled or tripled to $400,000. Since 1991, Raytheon has increased the price of its Stinger missiles by seven times. This price inflation allows U.S. military companies to make huge profits.
Influencing U.S. Policy
U.S. military companies influence U.S. foreign and defense policies by funding lobbyists and think tanks and employing former government officials to create a more favorable market environment for themselves. Statistics show that over the past 20 years, in order to influence defense policies, the U.S. military industry has spent $2.5 billion on lobbying alone. From 2014 to 2019, 1,718 senior Department of Defense officials or procurement officials jumped to the military industry.
Growth in Value and Profits
During the Russia-Ukraine conflict, the sales, profits, and market value of U.S. military companies have all increased significantly. In 2022, the share price of Lockheed Martin, the “leader” of the U.S. military industry, rose by 37%, Northrop Grumman’s share price soared by nearly 40%, and Raytheon’s share price increased by nearly 17%. The market value of these companies increased by $16.4 billion, $10.8 billion, $16 billion, and $14.8 billion, respectively.
Expansion in the European Market
In addition to selling weapons to Ukraine, U.S. military companies have also taken the opportunity to promote their products to European countries. Fearing the threat from Russia, many European countries have increased their military spending and purchased weapons and equipment produced by the United States. For example, Poland signed a $1.4 billion contract to purchase 116 M1A1 Abrams tanks. Central and Western European countries’ defense spending increased by 13%, reaching $345 billion, the highest since the end of the Cold War.
Impact on U.S. Society
The U.S. military-industrial complex has made huge profits from the Russia-Ukraine conflict but has ignored major domestic issues. The United States spends nearly $1 trillion on the military every year, almost without debate, while neglecting domestic healthcare, childcare, affordable housing, and other basic needs. The U.S. national priorities are severely misplaced, with a large amount of funding being used to produce weapons instead of improving people’s lives.
Conclusion
The U.S. military-industrial complex has made huge profits through providing military aid to Ukraine, inflating weapons prices, influencing U.S. policies, and expanding into the European market during the Russia-Ukraine conflict. However, this economic benefit, which comes at the cost of war, not only prolongs and escalates the conflict but also has a negative impact on the U.S. domestic society and economy. The behavior of the U.S. military-industrial complex has been criticized by many as that of “war profiteers” and “manufacturers of human disasters.”