THE ALLIANCE AND THE PERPETUAL WAR ECONOMY
Even in times of peace, the industries of war drive the Alliance economy
Aiko Adebayo, PhD – Senior Economic Columnist, The Atlantic Observer Quarterly
June, 2170
In September of this year, after more than eight years of bloody war on Ashoka, the final contingent of Adelaide troops will return home to Earth. It is an important landmark as one of the bloodiest conflicts in human history tepidly draws to a close, at least on Ashoka.
Adelaide-signatory nations have contributed forces to the conflagration in the eastern Orion since the first days of the war, and for long stretches of the fighting constituted the majority of Alliance forces in theater. For this commitment to the Alliance, Earth has lost almost three million sons and daughters. In a war so massive in scale and costly in lives, it should come as no surprise to those paying attention that defense manufacturing is reaping a princely, if ghoulish, profit. But the profit margins of war profiteers isn’t the most shocking, or pressing, issue. It’s how much the modern economy, and perhaps the Alliance itself, depends on the continued manufacture of arms for the Alliance and Adelaide militaries.
Noted economist Dr. Jonathan Mmolawa first theorized what he termed the “perpetual war economy” in 2123. The 2108 Rebellion was still fresh in mind, and millions of Earthborn troops were still deployed to the colonies. Such a large conflict could have understandably been assumed to have caused an economic contraction the Alliance should have only just been recovering from. But that was not the case. The Alliance economy was expanding at rates most economists of the time theorized as unsustainable; a disastrous collapse was the prevailing prediction in academia. Dr. Mmolawa dissented from his contemporaries. Building on the earlier economy theory of the “spacecraft economy,” he theorized that while the normal boom and bust cycle of capitalism would continue in the medium term, the effects of the “busts” would become increasingly negligible until they dwindled to nothing – due the growing importance of the defense industry as the underpinning of the interstellar economy.
Dr. Mmolawa’s theory has been critiqued heavily, both by contemporaries and later scholars, and not without justification. His expansive definition of the defense industry included industries such as mining and shipbuilding in the same group as rifle manufacturers and missile producers. It drew heavily, and some critics charged even plagiarized (right down to the name) on the work of Ed Sard and his “permanent war economy.” His theories on the gradual defanging of economic downturns were shown to be faulty, with the Crash of 2141 and the 2155 flash crash standing as prominent examples. Mmolawa himself even went so far as to call his ideas “deeply flawed” as early as 2137.
But Dr. Mmolawa got one thing exactly right. Even when discounting the more spurious inclusions in his definition, the arms industry has continued to grow – sometimes steadily, and of late, exponentially. In the estimate of studies conducted by the Calcutta Institute, defense and defense-related industries account for anywhere from thirty-two to forty-one percent of all economic activity in the Alliance. And in an estimate from the Lunar Center for Economic studies, using a modified version of Dr. Mmolawa’s definition, that number climbs to anywhere from forty-three to fifty-four percent of all economic activity.
How could this be the case? The answers are simpler to find than one might think.
The Alliance Navy is the largest concentration of spacecraft under the control of a single entity in existence. Over eight hundred warships have the Alliance flag painted on their hulls. And with President Hedlund’s landmark “Thousand Ship Navy” defense initiative having passed through the halls of congress, that number is set to climb even higher. The shipyards of Mars and the Belt and Sanctuary and Boro are set to go into overdrive. But even without the TSN, military shipyards already churn out ships at a shocking rate – new classes of warships are approved, old classes are retired and sold off into the civilian market or broken down into salvage and spare parts. This is one component of Mmolawa’s perpetual war economy: the continuous construction, purchase, and decommissioning and selling off of warships. This alone provides for a sizable portion of the Alliance economy; add in ships produced for private security firms, law enforcement, national militaries, and colonial militias, and the number climbs even higher. And that is just what the defense world refers to as “capital ships.” Add in thousands of drones, fighters, shuttles, and various other types of small craft. Then there are also the thousands of defense platforms that litter the orbit of nearly every planetary body in Sol and the inner colonies, plus the military stations found throughout human space. And when it is considered that the profits derived from large military contracts help fuel civilian shipbuilding, the total economic activity accounted for by the “warship industry” becomes truly staggering.
Move past the ships themselves to their individual armaments. Space vehicle weapons manufacture (rail guns, both large and “small,” missile batteries, point-defense-cannons, etc.) is itself a sizable area of activity. But where the true money is made is munitions – the individual rounds fired by rail guns and PDCs, the missiles launched. The Alliance Navy equips capital warships with compliments of hundreds of missiles, and possesses a stockpile of over five million – the exact number is classified. These missiles are fired in large number during regular training and exercises, and so more are always being made even during “peace”; the numbers of missiles fired in battle is even more. In the 2162 Battle of Point, Ashoka’s moon, the Alliance Navy estimated the over 15,000 missiles were fired in a period of five hours.
This number is impressive – but becomes much less so when compared to the number of rounds fired by PDCs in the same period. What necessitates the launch of so many missiles in battle is the high “casualty” rate produced by effective electronic counter-measures and point-defense. What is point-defense? Thousands upon thousands of tungsten rounds flung in great clouds and long streams into the void in the hope of destroying incoming fire. An individual round stands little chance of intercepting a missile; a cloud of two hundred is more or less a guarantee. The more effective a PDC network, the more missiles that need to be fired, meaning more PDC rounds, meaning more missiles, and so on ad nauseam. The Navy estimates that in the same five hour period in which 15,000 missiles were launched, two million tungsten rounds were fired from Alliance PDCs. With rounds expended in such great numbers, the production of continuous replacements is lucrative. And while the Battle of Point stands out as a particular moment of extreme use, training, exercises, anti-piracy operations, and smaller engagements use up more than enough rounds to keep manufacturers pumping out munitions for eternity. There is also the larger rounds fired by superstructure mounted and broadside rail guns to consider; while not expended in anywhere near the same amount as PDC rounds, they still make up a hefty portion of the Navy’s arsenal.
And where do manufacturers get that tungsten? We arrive at why Dr. Mmolawa including mining in his original definition of the defense industry. While mining in general of course primarily delivers materials to the civilian sector, tungsten mining in particular almost exclusively deals with the arms industry. With thousands upon thousands of tons of tungsten mined, processed, and turn into weapons every year, business is booming. Every major mining company has a “tungsten branch”; the metal is so lucrative that there are even firms that mine it exclusively. The importance of the metal to the world of defense is also why the Interstellar Brotherhood of Tungsten Miners is one of the most powerful unions in existence, perhaps only second to the Spacefarers’ Union. And all of this talk of tungsten is not meant to allow us to forget the defense applications of iron, titanium, platinum, aluminum, copper, gold, lead, and more.
Beyond shipbuilding and space vehicle weapons manufacture, there is also the world of personal protective armor, small arms, crew serve weapons, artillery, drones, tanks and other land vehicles, aircraft, watercraft, expert systems, communications equipment, bases…the list goes on and on. The defense industry is expansive and touches all sectors of the civilian economy in one way or another. The implications for the present and the future are unpleasant to think about.
With Adelaide commitments to Ashoka coming to an end, for now, one might be forgiven for thinking the defense industries share of the economy might contract. But that is not case, and perhaps never will be the case. While the war on Ashoka is winding down, the wars on Garnet, São Pedro, in space, and elsewhere continue. And even if those conflicts were to come to a nebulous and unsatisfying end, fighting would continue. The corner humanity has backed itself into demands it.
In 1935, United States Marine Corps Major General Smedley Butler pronounced “war is a racket.” As of 2170, General Butler has been proven wrong – war is not a racket. It is the fundamental underpinning of the human economy.