The arms export boom also provided Nixon with part of the solution to one of his early economic problems. Military exports, in the 1970s, became a substitute for Vietnam procurement. As US troops left Vietnam, employment in the US aircraft industry fell from around 850,000 late in 1968 to 500,000 late in 1972. Nixon in his first term in office seems to have thought that the way out of the defense recession was to convert defense factories to civilian production. He set up “adjustment” committees, commissioned studies of different kinds of government spending, and convoked aerospace executives to the White House to celebrate the coming of a “Social Industrial Complex.”
But the effort at conversion was more or less abandoned after 1972. Several aerospace companies made efforts to diversify production, converting some of their plants to providing, for example, mass transit cars. Most have now given up such “social-industrial” undertakings. This reversal was made possible, at least for some companies, by the export boom.
It is difficult to estimate how many jobs the US arms boom has created: Lieutenant Colonel Morse suggests—apparently on the basis of remarks by James Schlesinger, who attributed 100 jobs to each $1 million in sales—that more than a million Americans are employed in industry to fill foreign military sales contracts. This seems exaggerated. Many of the jobs are still to come, because the orders signed since 1973 call for deliveries to be made over several years. Yet the defense industries certainly suffered less in the recession of 1974-1975 than most other US manufacturing industries. The aircraft industry, in particular, has kept its employment at more or less the level of 1972, ending the earlier decline.
Even the numbers of jobs fail to reflect the real significance of arms exports. For export profits and export jobs are concentrated in a few corporations and a few states: in Northrop, for example, or Lockheed or Bell Helicopter. And the momentum of defense procurement—its political force—rests on specific sets of local relationships: between, for example, a defense corporation, its lobbyists and Defense Department sponsors, its unions and its congressmen.
For Nixon, finally, the increase in US arms exports fitted a much grander vision of US foreign policy. The Nixon Doctrine sets out the theory behind the arms export boom. According to the doctrine, the United States will no longer send troops to fight for its allies in Asia. Instead, US allies are intended to buy American armaments and to defend themselves with, for example, Northrop F-5E fighters. This year’s increase in US arms sales to poor developing countries is the fulfillment, as the Nixon epoch ends, of Nixon’s vision.
The change in arms sales is part of a more general alteration in US economic relations with other countries, and above all with developing countries. As early as the mid-1960s, the US began to move in its foreign economic business from aid to trade. It sent less food aid and sold more food for dollars. US banks made more foreign loans, as the US government reduced its foreign aid.
Nixon officiated over the completion of the change. The Nixon Doctrine applied by extension to economic as well as to military relationships. America’s Asian allies were meant to buy planes, made in the US. They were supposed to eat Iowa corn and Oregon wheat, buying their food with money borrowed from US banks. The three parts of the doctrine fitted together; for to buy US exports, developing countries went further into debt to US lenders.
The Nixon Doctrine in its strategic version rested on a sort of paradoxical bet: that the US, while cutting the costs of its foreign military involvement, could sustain the various alliances and commitments which this involvement had made possible. There is a similar recklessness in the economic versions of the theory. The Nixon Doctrine did not work in Vietnam or Cambodia. Will it work in the world food economy? Will the world financial order hold, as countries go deeper into debt, buying fighters and bushels of wheat?
The commercialization of US international economic relations is not something that can be turned back. The US is not the economic superpower that it was when the process began. It can no longer sustain the commitments and policies of the 1960s. It needs, instead, to face directly the problem of how to act in a world over which it has less control.
This was what Nixon failed to do. He did not conceive of a different policy for the US government. It was as though, instead, he threw up his hands and delivered US international economic policy to arms corporations and food corporations and banks.
There should be no need to argue against the expansion of the arms race to more continents and deserts. In the last twenty years, military spending by Third World countries has increased more than 10 percent a year, or twenty times as fast as in the US. Arms imports have increased even faster. But it is worth looking at how the modern arms business works in practice. The low farce of military sales is evident in the story of US exports to Iran.
The Iranian story shows, in particular, the political costs of the export business, and the folly of the view—Henry Kissinger’s, for example—that arms transfers are a “foundation stone” of US “foreign policy design.” Kissinger: “The United States cannot expect to retain influence with nations whose perceived defense needs we disregard. Defense supply links to these countries can significantly strengthen efforts to achieve cooperation on other issues—whether political, economic or cultural.”
Nixon came to Iran in 1972 as the Santa Claus of the Persian Gulf. And since May 1972, Iran has ordered more than $10 billion worth of US armaments. A recent report to the Senate Foreign Relations Committee explores the intrigues and deceptions that made this spree possible, as the US Army and Navy, the Departments of State and Defense, competed for the Iranians’ dollars.
“Each of the US services,” according to the study, “sought to persuade Iran to buy its weapons, in part because a large Iranian ‘buy’ of an item in a US service inventory could (1) reduce the per-unit costs to that service and (2) enable the service to recoup some of its prior investment for research and development.” The “sales competition” was “fierce.”
Civilians in the US government were almost as combative. The study describes State Department officials, together with the staff of the US Embassy in Tehran, as particularly relentless salesmen. They were not prepared “to tolerate open debate on possible adverse implications of unrestricted arms sales to Iran.” The Defense Department, by contrast, was divided over the wisdom of the program, with critics fretting that the military’s obsession with Iranian procurement was denying spare parts to the US services themselves. Kissinger’s salesmanship, some of the Defense Department critics felt, might eventually hurt “the regional security posture” in East Asia.
James Schlesinger plays a curious part in the comings and goings of Americans in Iran. As secretary of defense, he emerges as an opponent of the wilder excesses of the sales program. For example, he seems to have “expressed his view that the [Defense Department] should act as an ‘honest broker’ between the [government of Iran] and US industry, fending off the inherent pressures from the US services and industry to sell sophisticated arms, regardless of whether Iran needed or could handle them.”
The consequence of the Nixon-Ford arms boom is that the Iranians own an arsenal of advanced American weapons which they cannot possibly use without American help. They will be dependent on the United States not only for spare parts but also for soldiers and “technicians” to service their planes, fly their helicopters, and shine the gas turbines on their new destroyers. There are already at least 1,400 military and civilian Defense Department employees in Iran, and almost 3,000 people working for US military contractors; the Senate study suggests that by 1980 US contractors will have 36,000 employees and their dependents in Iran.
If the Shah ever decides to go to war—to enjoy more fully his planes and missiles—these people would be part of his military effort. US experts in Iran believe, according to the Senate report, that Iran could not use its more sophisticated weapons during the next five to ten years “without US support on a day-to-day basis.” In a war, therefore, the United States would become either Iran’s military ally, or the enemy responsible for subverting the Iranian war effort.
In most wars that Iran might fight, US technicians would find themselves directing missiles against other foreign technicians, either from the Soviet Union or from the US itself. Both sides would usually require spare parts from US factories. Indeed, there are few wars anywhere in the world in which one US company, Northrop, would not be involved through its F-5E fighter. Iran, Saudi Arabia, and Jordan—and most South American countries—have ordered this plane. In Africa, Tunisia, Morocco, and Ethiopia also have it on order. In East Asia, South Korea, Malaysia, Singapore, and Thailand have it as well, while Vietnam presumably maintains the F-5Es it inherited in 1975 along with billions of dollars worth of other American armaments.
The possibility of a war between Iran and its Arab neighbors has attracted some attention in the US. Saudi Arabia and Kuwait together have ordered almost as much from the US military as has Iran (although more of the Saudis’ spending goes for such projects as the construction of barracks and ports, engineering works by the US Army Corps of Engineers, and soon, apparently, a plant for desalting sea water). But there may be a more likely war to the east.
Much of Iran’s recent military expansion is intended for the extreme southeastern corner of the country, near the Pakistan border. A large air base and an army base as well are being constructed there; and the destroyers Iran is buying from the US will be based nearby in the Arabian Sea. The enemy to the east would be India. “Iran is especially concerned,” the Senate report says, “about the centrifugal tendencies within the Baluchistan regions of southeast Iran and Pakistan…. The Shah has stated that Iran would regard any attempt by India or another power to further dismember Pakistan as a threat to its own security.”
Iran, with its US helpers, could thus become part of the next war over the divided inheritance of British India. It would face Indians armed by the Soviet Union, Britain, France, Poland, and possibly even the US, Much of India’s recent orders are for sophisticated Soviet naval equipment, anticipating, perhaps, the Iranian naval buildup in the Indian Ocean. And India also, unlike Iran, has a domestic defense industry, now turning out frigates and rockets. India may soon start buying fighters from the US, for one of the Ford government’s last gestures in military salesmanship was to permit McDonnell-Douglas to promote its A-4 fighter in India.