Arms and the Man Who Sells Them

In the old days, the “merchants of death ” sold arms for profit, and let the bullets fall where they might. Today, the U.S. government sells them for policy reasons (and profit), and argues Senator McCarthy (Democrat, Minnesota), the results are no less disastrous. A member of the Senate Foreign Relations Committee and one of the earliest critics of the Pentagon’s controversial arms sales program, McCarthy is the author of the forthcoming THE LIMITS OF POWER (Holt, Rinehart and Winston), from which this article is adapted.

PROGRAMS decided upon in years past to support specific objectives of the national interest can assume a kind of life of their own; they tend to become vested interests which may be self-perpetuating. Over the years, the Military Assistance Program appears to have assumed such a character. Inaugurated to respond to the military challenge of the cold war in Europe, there is evidence that its survival today tends to put a military mark on American foreign policy and to create situations and conditions that lead the United States to react in military terms when a political response is preferable.

The United States is today the principal source of conventional weapons throughout the world. The United States government, largely through its military assistance and arms sales program, is the world’s leading supplier of arms. The United States government itself has assumed the role filled by the widely scorned munitions makers during the interwar period.

With the development of a Soviet military threat to Europe following World War II, the United States entered into the North Atlantic Treaty. It was evident, however, that a war-torn and economically prostrate Europe could not maintain sufficient defense capability to deter the Soviet threat. The United States, therefore, under the

Mutual Defense Assistance Act of October 6, 1949, began to provide grant-military aid of three types: 1) machinery and materials to permit Europe to increase its own production of defense items, 2) direct transfer of U.S. military equipment, and 3) assistance in the production and use of military equipment and training of personnel.

Under the successive foreign aid acts, these three forms of military assistance have remained at the center of our aid programs. Between 1950 and 1966, the United States gave or sold to other nations over $35 billion worth of military materials or support under our foreign aid program. According to the Defense Department, the United States program of grants plus sales has been running around $3 billion per year since 1961.

We provide arms, equipment, and training to countries allied or associated with us through the North Atlantic Treaty and through the network of pacts that are the legacy of the John Foster Dulles era: SEATO (Southeast Asia Treaty Organization), ANZUS (Australia, New Zealand, United States Security Pact). In addition we have provided military aid to a wide range of countries in such categories as “Forward defense areas” — that is, countries on or adjacent to the borders of the Communist world, including the Republic of China (Taiwan), Iran, the Philippines, South Korea, Greece, and Turkey (the last two countries are also allied to us through NATO); to countries that have given us military base rights, such as Ethiopia, Libya, Spain, and our NATO ally Portugal; to the “Alliance for Progress security countries” — virtually every country in Latin America; and to additional countries in Asia, Africa, and the Middle East which have, or which are judged to have, what is described by the Defense Department as a “free world orientation.”

Consider the case of Latin America. Tensions between the Latin-American states are not high at present, particularly in comparison with the Middle East. Even so, our Military Assistance Program, through grant aid and increasingly through sales, appears to be expanding, in spite of attempts by Congress to put some limits on it.

A new round in the arms race there, moving from subsonic jets in the direction of the more sophisticated and more expensive jets, was apparently precipitated by the U.S. decision in 1965 to provide fifty U.S. Skyhawks to Argentina. It is said we hoped to appease the Argentine military so that they would be less inclined to overthrow the civilian government. A military coup did take place, however, on June 28, 1966, and on the same day the United States reduced the promised number of planes to twenty-five, claiming that they were needed for Vietnam. (The sale of twenty-five planes was allowed to go through.)

The Chilean military, moved by what Argentina had been promised, pressed their government to acquire planes of comparable sophistication, and when refused by the United States, the Chileans made a deal with the British for planes. This, in turn, inspired reaction by Venezuela, which began negotiations for some U.S.-model jets from West Germany; Peru began negotiating with both the United States and Britain for planes, and Brazil also was reported to be in the market.

While the Military Assistance Program in Latin America is small compared with that in other areas, it has become quite controversial. There is widespread feeling that Latin-American nations have little valid reason for maintaining even the existing level of their air forces. State Department officials are always quick to point out that in percentage terms Latin-American defense budgets are small, “among the lowest in the world,” as former Assistant Secretary of State Lincoln Gordon has stated. But what is important is not the percentage, but the fact that money which should be spent for social and economic development is being sacrificed to pay for even relatively small quantities of arms.

The case of India and Pakistan has frequently been cited as the outstanding example of damage the Military Assistance Program can do. Pakistan, which has recently been receiving military assistance and arms from Communist China, is formally allied to us through SEATO and is reported to have received from $1.5 to $2 billion in U.S. military assistance over the decade prior to the outbreak of fighting, allegedly for defense against Communism. India refused U.S. military aid until its borders were attacked by China, but it had been receiving arms from the United Kingdom. In the end United States arms were used by both sides against each other.

U.S. arms deliveries to India and Pakistan were suspended at the time of the fighting. On the strength of the adherence of the two countries to the Tashkent Agreement, deliveries have been resumed on what the State Department calls “a case-by-case basis.”

UNITED STATES government funds also are used to promote arms sales; in fiscal year 1965, $500,000 of military assistance funds were programmed for sales promotion. The director of the Military Assistance Program, General Robert Wood, explained to the House Appropriations Committee in 1964 that the training program is the foot in the door for the arms salesman. “We bring officers over here from other countries,” General Wood explained, “with a view to looking at equipment which they might buy. . . . Then we have a program to train certain countries in some of our equipment in the expectation they will buy the equipment. This is really sales promotion.”

In spite of the efforts of the Congress, it appears, at least by the Defense Department’s own statistics, that the Military Assistance Program is continuing to grow rapidly. Statistics can be misleading. For example, Secretary McNamara maintained that the Defense Department’s request for less than $1 billion for the program for fiscal year 1967 was in line with the recommendations of the Clay Committee that the program should be reduced. But the money appropriated by Congress is only for the grant-aid (that is, weapons given without expectation of reimbursement) and credit-assistance portions of the program. Grant-aid programs for Europe are being replaced by sales programs, and sales are playing an increasingly large role in the programs for the developing countries. Because of the decrease in grant aid to European countries, it has been possible to increase programs in other areas, while still appearing to reduce the total budget request. Thus, in 1956, Ethiopia was the only country in Africa receiving military grant aid, in the amount of $4.8 million. By 1961 the number of African countries in which there were at least small programs totaled seven; in 1962 it had increased to fourteen countries, the Ethiopian program having more than doubled to $10.9 million, and the total for the continent having increased almost fourfold, from the $4.8 million figure in 1956 to $17.8 million in 1962. In 1963 the total for grant-aid military assistance to Africa rose to $26 million, in 1964 to nearly $28 million. In 1965 it dropped to $17.4 million, but for 1967 the Administration requested a total of $31.8 million, the highest figure ever. These figures are not large in absolute terms, but when one considers the level of development of the countries involved — Mali, with a per capita gross national product of $65, Guinea with $70, Liberia with $175, and Sudan with $102 — it can be seen that in such small areas even a small number of arms can be highly significant. Latin America shows a similar increase in the grant-aid program.

In the budget presentations to Congress, the entire program of military assistance to Vietnam for fiscal year 1967 was removed from the Military Assistance budget and incorporated into the budget of the Defense Department because, as Administration officials testified, the sums for Vietnam were now so large that they were “distorting” the Military Assistance Program. For fiscal year 1968, expenditures for Laos and Thailand and for such categories as NATO infrastructure and support for international organizations were also moved from the Military Assistance budget to the regular Defense Department budget on similar grounds. This budgeting change weakens political control of these programs, which involve essential considerations of foreign policy, and makes them subject entirely to Defense Department control.

Although the Secretary of State has official responsibility for the military assistance and arms sales program, the tendency of this program to move ahead at its own momentum has caused serious questions to be raised about whether political control is effective. The 1967 study by the Senate Foreign Relations Committee staff suggested that such control was more theoretical than real:

How and by whom the major decisions on arms sales are made is something of a mystery. There is reported to be a State-Defense Coordinating Committee for arms sales policy consisting of members of Treasury, the State Department, the Defense Department, and presumably the Arms Control Agency and AID. Whether the full Committee actually meets is uncertain. One thing is clear, however, from testimony the Foreign Relations Committee has already heard: the Arms Control and Disarmament Agency, despite its charter, does not sit at the high table when decisions on the sale of arms are made. Another open question is whether the Agency for International Development or the Bureau of the Budget actually participate in the process of making a decision to sell ... or have only the option of attempting to overturn a promise of arms sales already made to another country. A program of this magnitude is bound to have implications for our foreign policy. United States military aid is usually, if not invariably, accompanied by the stationing of U.S. military personnel in the country receiving the arms to supervise, advise, assist, and draw up plans, in accordance with Defense Department procedures, for the utilization by the country of additional U.S. equipment. In essence, these U.S. military advisers act as on-the-spot salesmen, attempting to make certain that the country concerned obtains its military equipment from the United States and not from a competitor, political or commercial. These military advisers sometimes assume more direct roles.

The object of the training aspect of the program is to indoctrinate other countries in our methods and equipment and to establish good relations with those who will be tomorrow’s procurement officers or tomorrow’s military junta members.

One of the chief positive features of the program, in the eyes of its defenders, is its use as an important element of United States foreign policy. Secretary of Defense Robert McNamara, in testimony before the Senate Committee on Foreign Relations in April, 1966, described its role:

The United States is the focus of power in the free world struggle for national independence and economic progress; but the United States cannot be everywhere at once, doing everything the best. The balance of forces and the options necessary in today’s challenging world can be achieved only with staunch friends, well armed and ready to do their parts of the job.

The military assistance program is designed to foster that balance of forces and those options. It helps support military forces that complement our own Armed Forces.

Military assistance provides essential arms, training, and related support to some 5 million men in allied and other friendly forces, who help us hold the line against aggression in all its forms and guises. These men are critical to our forward strategy.

That the Vietnam War does not sustain this argument is perhaps the most obvious challenge to the validity of Secretary McNamara’s case. The “5 million men” are nowhere to be seen, while the United States has committed in Southeast Asia over half a million men, exactly the kind of situation from which the Military Assistance Program, according to Secretary McNamara, is supposed to save us. As far as the “staunch friends, well armed and ready to do their parts of the job,” are concerned, one may again cite Vietnam. Few countries have received as much U.S. assistance as has Vietnam, both during the French colonial period and since. Yet by all evidence, despite over a decade of U.S. training and supply, the South Vietnamese Army is unable and perhaps unwilling to fight, has been incompetently led, is crippled by an enormous rate of desertion, and essentially is incapable even of providing security in key areas, while the Americans bear the brunt of the fighting.

THE Military Assistance Program in Latin America, it is argued, differs from that in other areas in its emphasis on civic action as a justification for increased spending. Civic action refers to the use of local military forces in nonmilitary projects of benefit to the country, such as road construction, digging of wells, and so forth.

The emphasis on civic action is a product of the Defense Department theory of counterinsurgency developed in the vast apparatus of quasi-academic social science research organizations supported by the department’s research and development budget. The counterinsurgency theory accepts that insurgency is the product of such conditions as poverty and an unfavorable public image of the government, particularly of the military. Civic action is preventive action, it is said, and will discourage popular support for insurgency and improve the image of the military among the general population. As applied to Latin America, in particular, the civic action theory is based on the widely accepted presumption among the “tough-minded liberals” that in Latin America the armed forces constitute the one stable and democratic element and are a potential instrument for social change.

As a recent study has pointed out, the effect of civic action in the Latin-American countries has not been proved and may at best be of only transitory value. Where U.S. military missions have evaluated the effects of civic action, the study shows, the reports usually state that it has improved the image of the military but cite as evidence only an increase in favorable publicity in the press. A basic question is, perhaps, whether the support of the military in Latin America is, in the long run, in the United States’s interest.

The rest of the program in Latin America, according to the law, is supposed to be only for internal security purposes, but it has not been possible for the Congress to hold the executive branch to that policy. At the 1966 Senate Foreign Relations Committee hearing on military aid, when asked what the fifty jet aircraft had to do with internal security in Argentina, Secretary McNamara admitted, “ The answer is nothing — absolutely nothing.”He then defended the sale by saying that had we not sold the Argentines the planes, they would have bought them from another nation (presumably Britain) at a higher price.

Henry Kuss, the head of arms sales for the Defense Department, testifying before the House Foreign Affairs Committee in 1966, cited what he called the significant relationship of these arms sales to our foreign relations:

Military sales are . . . small in terms of our total annual defense spending, accounting for less than 4 percent oF the total. However, at the same time, receipts from military sales account for about one-half of the deployment costs of our forces, measured in balance-of-payment terms. The ability of this country to follow a forward strategy is heavily influenced by the balance-of-payments costs attributable to such a strategy. Thus, foreign military sales are of major interest to the Nation because they facilitate arrangements for our security throughout the world.

This balance of payments argument is curiously circular. Unmentioned is any reflection on the way in which the further proliferation of conventional arms throughout the world, by contributing to rising tensions and by serving as the somewhat provocative mechanism by which we attempt to set up bastions on the very borders of the Soviet Union and China, makes the deployment of troops and our forward strategy necessary.

The Senate Committee on Foreign Relations dealt with the balance of payments argument in its report on the 1966 Military Assistance and Sales bill, stating its view that “the U.S. balance of payments is not in such a perilous condition that it has to be salvaged by taking blood money from poorer countries.”

THERE IS increasing disparity, in my judgment, between the stated and real aims of our military assistance efforts and a widening gap between the program and the requirements of the world situation it was designed to meet. The principal purpose of our military aid, whether it be in the form of grants or sales, is said to be to strengthen the deFenses oF the free world against Communist aggression and subversion. But over the years significant changes have occurred in the program.

Military assistance today, as distinguished from Lend-Lease assistance under which we supplied arms to our World War II allies, has taken on new and far-reaching aspects, It has greatly increased in quantity and has spread over a large geographical area as the number of independent nations in the world has grown. But the qualitative changes in the program may be of even greater significance.

First, military aid is no longer confined to containing Communism or to short-term, “one-shot” arrangements or even to the supply of weapons. Rather we now undertake relatively long term programs of continuing cooperation with the recipient state, involving a high degree of institutionalization, with exchange programs for training and with the dispatch of military missions to reside in the countries receiving the arms, to supervise their use as “advisers,” and to turn out annual five-year plans for the acquisition of additional U.S. equipment.

Second, the type and range of aid appear to have changed. The United States program not only provides the basic material and services required to establish and maintain armed forces, but also the direction and planning for long-term improvement, modernization, and development of the military capability of the country. Thus programs that began only with training have moved, with our encouragement, into the area of equipment acquisitions, as plans for development and modernization proceed. A frequent argument presented to support expenditures for weapons is that the money is really only being used to “modernize” the forces or to replace out-of-date or obsolete equipment. As we know from the requirements of our own armed forces, obsolescence and modernization are open-ended conditions.

Third, the goals of military assistance efforts appear to have undergone change. In spite of assurances by Administration spokesmen that the existence of well-supplied troops on the borders of the Communist world — and as far from it as Africa and Latin America — adds to the strength of the free world and relieves the pressure on the United States to keep even greater numbers of Americans under arms, few people believe that U.S.-equipped Iranians, or South Koreans, or Greeks, not to mention Bolivians or Peruvians, actually deter the Soviet Union or China. Our deterrent is nuclear, and the strength of our “staunch friends,” to use Secretary McNamara’s phrase, particularly those in the developing countries, does not add measurably to the strength of that deterrent.

The primary goal of military assistance now seems to be to develop client states, to erect militarypolitical bastions, to preserve for to upset) regional balances of power, and increasingly to maintain friendly or favored regimes against internal subversion, usually defined as Communist subversion.

The arms sales program has also raised questions because of its somewhat questionable financial practices, and in August, the Senate initiated moves to restrict them. Most of the industrialized countries that have been buying arms in recent years have paid cash; but for the developing countries credit sales outweigh cash sales by about seven to one. These credit sales have been made possible by the Defense Department’s ability to provide credit and to guarantee payment by the United States government of private loans should the purchaser default. Thus countries which would normally not be considered acceptable credit risks on the commercial money market or by the ExportImport Bank have been able to obtain credit for arms purchases; repayment has been guaranteed by the full faith and credit of the government of the United States. By law, the Defense Department has been required to keep as a reserve only one quarter of the amount of the loan it guarantees. Thus, the Defense Department’s revolving credit account, which had grown to over $300 million by 1967, was able to support over $1 billion in arms sales on credit.

Another dubious practice has been that of the Export-Import Bank, which has given the Defense Department a kind of blank check for arms sales credit. Because the Defense Department was guaranteeing repayment, the Export-Import Bank, as if preferring not to know where the money was going, could shut its eyes.

Although the Defense Department has not been required by law to charge any interest at all for credit arms purchases, most of the U.S. governmentguaranteed loans made through private banks and the Export-Import Bank have borne an interest rate of about 5.5 percent, thus adding substantially to the already burdensome external debt service requirements of the developing countries. Some of the same countries that have complained that 3 percent is too high an interest rate to pay for economic development loans have been willing to pay 5.5 percent or more for nonproductive arms loans.

An assistant director of the U.S. Arms Control and Disarmament Agency admitted to the Senate Foreign Relations Committee that there was no formal consultation with his agency on Defense Department sales, that their opinion on the advisability of the sale of jet fighters to Iran had not been requested, and that they did not have the kind of relationship with the Defense Department that permitted coordination on these matters.

President Johnson proposed to the Disarmament Conference meeting in Geneva in 1966 that “countries, on a regional basis, explore ways to limit competition among themselves for costly weapons often sought for reasons of illusory prestige.” On April 19, 1966, the United States delegate to the Disarmament Conference elaborated further the principles by which nations might undertake, on a regional basis, to limit conventional arms.

It seems to be a case where the right hand of the government, in this case the Defense Department, does not know what the left hand, or the Arms Control Agency, is doing or trying to do, for it is busily promoting what the other agency is supposed to be controlling.