Abhijit Bhattacharyya | War and peace in Europe: Arms sellers real winners

War is a good time to create wealth and ensure healthy balance sheets

Wars start and wars end. Warriors die. The surviving non-warriors pay the price of a miserable life. At the end, the diplomats and politicians step in as harbingers of “peace at last”, signing treaties and agreements after failing miserably to stop a war that led to death, devastation and destruction. They talk of “peace in our time” as they await the next war.

Just look at the Treaty of Versailles (June 28, 1919) and the manoeuvres since then. Wars will continue as long as the human race exists, mainly because wars and wealth creation are two sides of the same coin. Historically, mayhem and manslaughter have been easiest and best way to make money by select groups of men who invariably claimed to be the saviours and rulers of their times.

Let’s begin with facts and figures of the human cost of the Second World War (1939-1945). The worst of results for the belligerent states. Though accurate figures never surfaced, and the best of record-keepers can’t say with confidence that the stated casualty figures are correct, consider the baseline estimates.

Russia (then USSR) lost more than 27 million (combatants and citizens) in 1941-1945. Germany 7.5 million; Poland 6.5 million; Japan two million; Yugoslavia 1.8 million; Hungary 8.5 lakhs; France 8.2 lakhs; Greece 5.5 lakhs; Austria five lakhs; Romania 4.7 lakhs; Italy 4.1 lakhs; UK four lakhs; Czechoslovakia four lakhs and all other European states 4.3 lakhs. Outside Europe, China lost 15 million (due to war and civil war); Japan two million and India 3.5 million within the country, owing to the famine in Bengal created by the British and India’s hereditary trading class.

Besides the millions of starvation deaths within, 90,000 Indians died overseas, fighting with British forces and those of other Commonwealth countries.
Therefore, as the 2022 Russia-Ukraine war rages through Europe, easily the most volatile “cockpit of killing and killer conflict”, as shown by the First and Second World Wars, it’s time to assess potential consequences.

Make no mistake: food, fuel and finance will be the first to fall in the line of casualties across continents; followed by an environment disaster due to the sustained heating of the atmosphere caused by high-tech kinetics of the belligerents. From production to distribution to consumption, the unanticipated bottlenecks are bound to wreak havoc on the poor, with a combination of sloppy performance and unbridled greed of middlemen in supply lines as found from the history of profit-making in wars.

There will also re-emerge old factories producing new fighters, warships, etc as things look up for corporations who till recently were grumbling about the shrinking military budgets of European nations and the virtual end of big-ticket wars after troop demobilisations in the Middle East to Afghanistan. War is a good time to create wealth and ensure healthy balance sheets. The signs are too stark to be missed.

On February 27, Germany, that had been the most aggressive in starting the Second World War over 80 years ago, enhanced its military budget by 100 billion euros ($113 billion for 2022). The German Chancellor’s historic “policy shift” announcement understandably had an electrifying effect. Overnight (Monday, February 28), arms maker Lockheed Martin’s stock jumped 3.77 per cent in pre-market trading; followed by General Dynamics (3.96%); Northrop Grumman (4.47%) and Raytheon Technologies (5.23%). Thus, the German defence budget, that rose from $36.7 billion in 2015 to $51.3 billion in 2020, shows an unprecedented jump today; rising to a record $165 billion in 2022, thus climbing to the third largest defence budget slot, after the United States ($720 billion-plus) and second-ranking China’s $200 billion-plus.

Contextually, however, besides the Russian ops in Ukraine, the dramatic defence budget hike is due to the German Army chief too, whose uncharacteristic outburst against his own country’s inability to make forces combat-ready, neglect of soldiering and reduced budgets hit the political bosses hard. Clearly, countering Moscow seems to have gripped the prosperous German economic powerhouse. Is history coming back with a vengeance, with an aggressive Germany getting ready to confront the Russians in Ukraine?

Clearly, the Russia-Ukraine conflict has fundamentally destroyed and changed several systems. The first casualty is the globalisation attempt to make economics interdependent to avoid war. Second, the dockyards dominance of corporations over countries is unlikely to be sustained. Third, Europe’s grandeur is threatened by an inevitable and universal law of decline. Development economics could give way to deterrence and defence economics. Welfare may be substituted by warfare economics. The post-Cold War decade of the 1990s had badly hit Europe’s defence industry. Its combat aviation industry, except for the multinational Tornado and France’s Dassault, had hardly anything to offer. Its naval dockyards had shrunk due to reduced orders. The merger of mega corporations had to be resorted to for survival.

As shown by its long history, over centuries, “war” has been an obsession with Europe despite it being the cradle of glorious achievements, with a plethora of intellectual geniuses in almost every sphere of life. In fact, this strange recurrence of catastrophic war appears to be Europe’s bane and ordained destiny of self-destruction. Both the First and the Second World Wars, in terms of their human tragedy, stands as the best example till today.

What then will be the aftermath of the Russia-Ukraine conflict, which both belligerents appear to signal as a virtuous war for survival or extinction? Simply put, its main victor will be the “arms bazar”. In 2020, active armed conflicts occurred in at least 39 nations (five more than in 2019). But they were not as lucrative as the present Russia-Ukraine conflict appears; as there were only two “major armed conflicts with more than 10,000 deaths (Afghanistan and Yemen)”. The war in Europe now opens up a new vista of vast opportunities for all major arms manufacturers. The boardrooms of the defence corporations must be chuckling with joy with these developments after the Chinese-origin Covid-19 pandemic.

Military spending increased in 2020 only in four regions. The highest rate of 5.1 per cent growth was in Africa, at $43.2 billion; Europe’s four per cent increase stood at $378 billion; the Americas rose by 3.9 per cent to $853 billion and those in Asia-Oceania by 2.5 per cent to $528 billion.

For “merchants of death”, war opens a window to generate cash and a golden opportunity for wealth creation. Contextually, it is interesting to note that even the greatest of German philosophers, Professor Hegel of Heidelberg University (1816-1818), had admired and rejoiced over Napoleon Bonaparte defeating his own country (then Prussia) at the Battle of Jena (1806).

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