Shana Marshall, “Regional Militaries and the Global Military-Industrial Complex,” in Joel Beinin, Bassam Haddad, and Sherene Seikaly (eds.), A Critical Political Economy of the Modern Middle East (Stanford, CA: Stanford University Press, 2020).
Jadaliyya (J): What made you write this chapter?
Shana Marshall (SM): There is a lot written by political scientists and sociologists about the role that militaries play in the politics of the Middle East, in particular how they factor into things like regime type, repression of domestic opposition, and the longevity of autocratic governments. This focus on militaries was especially visible in the aftermath of the 2011 uprisings, where the reactions of regional militaries often determined the fate of incumbent governments. It is important to examine how the interests of militaries influence domestic economic performance and policy-making, but most of this scholarship avoids structural factors like the global military industrial complex and the contemporary stage of capitalist development. The resulting narrative relies a bit too much on internal (endogenous) factors to explain outcomes, which I think is really problematic. I try to incorporate these issues into my chapter of this book—for example, how the globalization of production lines for weapons systems has brought many militaries in peripheral economies into the global military industrial complex, and what that means for their domestic political influence.
J: What particular topics, issues, and literatures does the chapter address?
SM: The chapter is meant to provide a general introduction to the literature on militaries in the Middle East, while pointing to factors central to political economy like class, circuits of capital, the global stage of capitalist development, and the influence of military-industrial agents. I try to provide a historical overview of the major approaches to studying militaries in the Global South, as well as some of the key contributions from Middle East scholars. So much of this work is characterized by the concerns of modernization theory in the decades after independence, and so it very much focuses on the internal nature of these states and the rise of corporatist social groups as they vie for power and position. Although this approach can produce useful schematics, it de-emphasizes topics such as surplus capital accumulation from high oil prices in the Gulf, which enabled the formation of robust commercial networks around weapons sales to the region. This fundamentally shaped the relationships between US/European governments and regional military institutions and influenced the industrial trajectories of Egypt and the Gulf States. Yet few theorists who examine regional geopolitics or militaries would discuss these dynamics in the context of surplus accumulation.
In this vein, my chapter examines the entanglements of regional militaries and their economic enterprises with foreign capital, including Gulf conglomerates, private US/European banks, and development banks, which see in them opportunities for extraordinary profits, given their exploitative labor regimes, privileged access to inputs, and politically protected status. The region likewise acts as a near-inexhaustible market for the surplus production of multinational weapons firms, which is also something I treat in the chapter. Capitalism’s relentless evolution is also present in the chapter, since I examine shifts in the location of military production and how this is related to capital circulation and changing regimes of technology.
J: How does this chapter connect to and/or depart from your previous work?
SM: I have written a lot on the economic and political activities of militaries in Egypt, Jordan, and the Gulf. But most of that was an attempt to use specific empirical material scattered in corporate filings, industry publications, press releases, and subscription-based industry intelligence materials to illustrate how militaries were using new financial vehicles to expand their foothold in the economy. This chapter was much harder, because the goal was not to highlight some new counterintuitive information or nuance, but to write a more summative piece that is legible to students, while not leaving out the interesting bits.
Because I wanted this chapter to really highlight global/structural factors I necessarily did not delve into the internal features of military enterprises so much as I would have liked. In other writings I’ve tried to think of the officer corps as a fraction of the ruling class—and conscripts in Egyptian factories as a hyper-exploited working class, for example. This helps us avoid treating the military as a monolith or misunderstanding critical incidents like armed forces members breaking up strikes, or using military equipment and personnel to protect the assets of certain domestic capitalists but not others, which I have examined in the Egyptian case elsewhere in other writing.
J: Who do you hope will read your chapter and/or this book, and what sort of impact would you like it to have?
SM: The amazing editors of this volume set themselves the unenviable task of constructing a text that could be used in classrooms. As someone who teaches a course titled “Political Economy of the Middle East,” I can attest to the difficulty instructors face finding core texts for such a seminar at the undergraduate or MA level. There are plenty of sophisticated analyses meant for consumption by other area specialists, but it is very challenging to find a text that is accessible to students without being reductionist. Of course, this is partly because students are socialized into adopting a vocabulary (“consumers,” the “free-market,” “free-trade” etc.) that is inherently adversarial to a critical approach. Conversely, concepts like “class”, which are central in this volume, are complex and far removed from their everyday vocabulary (although perhaps this is less true after the most recent financial crisis, which was formative for many current students).
In addition to being a pedagogical tool, I hope the book is a sign of new trends in Middle East studies. Other area studies subfields (Latin America, East Asia, etc.) have their own explicit political-economy publications: such as the Review of African Political Economy; Latin American Perspectives; European Journal of Political Economy; and the Journal of Economic Perspectives (North America and Western Europe). But there are currently none for Middle Eastern political economy. As far as I know, there are also no university endowed chairs or postdoctoral fellowships in Middle Eastern political economy, and no university press publishes a series in Middle Eastern political economy. I am not sure why this exception exists, but I think it has resulted in less radical materialist analyses among Middle East scholars (and by necessity, fewer students pursuing this line of study).
The increasing interest in global histories of capitalism does mean more regional scholars are researching and writing about the Middle East as it has been shaped by (and is also re-shaping) capitalism. I have relied heavily on Adam Hanieh’s books Lineages of Revolt and Capitalism and Class in the Gulf—which have been excellent texts for the classroom, as well as works by Aaron Jakes, Laleh Khalili, Kevan Harris, and many others. Now to link up these authors’ works with a reference text that can form the backbone for a course in critical regional political economy is something to celebrate.
J: What other projects are you working on now?
SM: Right now I am working on a project for Security in Context that examines the linkages between financialization and militarization. During my dissertation research I kept coming across obscure financial transactions (called offsets) designed to promote weapons sales. I ended up writing my entire dissertation on the effect these agreements had on political coalitions in the Middle East. We often think that, because governments are the primary customers for weapons-producing firms, the latter are somehow outside the capitalist system and not subject to its pressures. But supply chains for weapons systems are incredibly globalized, weapons firms have their own corporate venture capital arms, and private equity is shaping the nature of research and development almost as much as government procurement practices. The enormous financial assets of the Gulf Cooperation Council states have succeeded in pulling multinational defense firms into a new global hub for weapons development, and that process itself has created a new class of brokers and asset managers who deal specifically with finance in the weapons industry. The project involves Marxist economists, defense industry experts, political scientists, and arms control advocates, so we are hoping to use their diverse backgrounds and research skills to put together some foundational materials for this research agenda and generate interest among current graduate students and junior scholars in pursuing these connections.
J: What do you think is missing from scholarship on the military?
SM: I would really like someone to write comparatively about the military as a fraction of the ruling class under contemporary capitalism. Not only in their domestic contexts, but really looking at their place in transnational networks of industry, government, think tanks, and finance. For example, a high-ranking Egyptian military officer’s professional portfolio probably looks a lot like that of Lloyd J. Austin III, President-elect Biden’s nominee to head the Department of Defense, with a position in government, seats on various boards of directors, private investments in military firms, and advising/consulting gigs for various subcontractors. The wastefulness and incompetence of Egypt’s military industry (low-quality products, tainted goods, production runs of useless weapons) is a drain on the economy and often a farcical talking point, but it pales in comparison to its American counterpart. Here, billions of dollars go into producing weapons systems that the armed services themselves have asked Congress to stop funding because they no longer use them and they are too expensive to maintain. And when storage space for these useless weapons runs out, we gift them to corrupt, racist police departments or friendly dictators to use against their own civilians. There is the occasional piece of journalism or “public” scholarship bold enough to highlight some of these most glaring hypocrisies, but such a comparison is generally not considered a suitable topic for “serious” scholarship, which I think is extremely unfortunate. If we want to help our students think about these very critical issues, then we need to be the ones writing these introductions for them, because they are not going to get it from anyone else.
Excerpt from the chapter (from “The Middle East as a Cornerstone of the Global Arms Industry,” pp. 97-99)
It is not only strategic defense concerns or quotidian patronage politics that shape the way the global arms trade impacts the Middle East. Capitalism as a system requires constant growth. Firms (including weapons producers) must grow or die. They must accumulate sufficient profits to maintain or expand their market share by reinvesting in new machinery or technology and augmenting efficiency. Cutting labor costs by wage reductions is another common mechanism for enhancing profits.
This new capital formation subsequently allows for the accumulation of even greater profits. Such continuous growth can only be achieved by breaking down barriers to capital accumulation. In the weapons industry these include: arms embargoes, export restrictions, slack demand for new weapons, shortages of hard currency to purchase expensive systems, norms against the use of certain weapons, and the absence of new markets. In the Middle East and North Africa, many of these barriers are easily and cheaply overcome. Because of its wars, oil wealth, arms races, and “exceptional” status as a zone where certain norms do not apply, arms manufacturers consistently see the region as a source of growth. Consequently, they devote significant resources to marketing military equipment and technologies to the region.
Countries engaged in long-term hostilities are irresistible clients. During its war with Iran, Iraq hosted hundreds of Western companies who designed, built, equipped, and maintained military research and production facilities. Iraq also attracted tens of thousands of highly skilled foreign scientists, engineers, and technicians who relocated to Baghdad for lavish salaries. Other conflict dyads, such as Turkey and Greece, and Egypt and Israel, have experienced similarly high levels of foreign military sales and training. These four were the largest recipients of US foreign military aid for nearly two decades, obtaining over US$60 billion in grants and subsidized loans to purchase weapons between 1975 and 1994.
Today Turkey, Greece, Egypt, and Israel all have significant domestic military industries. In the mid-1980s, Turkey launched an ambitious program to expand its military-industrial base through partnerships with foreign firms. It now generates nearly US$7 billion in turnover annually, including a recent multi-billion-dollar tank deal with Qatar. Turkish governmental incentives have drawn many firms not initially engaged in arms production into the military sector, participating in the global trend of economic militarization.
From 1991 to 2018, US legislation allowed Israel, unlike any other recipient of military aid, to spend 26.3 percent of aid funds on goods and services produced in Israel. Historically, US military firms that established subsidiaries in Israel were able to profit both from exports to Israel and from the subcontracts granted to their Israeli subsidiaries. The 2016 Memorandum of Understanding that committed US$38 billion in US military aid to Israel from fiscal year 2019 to 2028 introduced a gradual requirement that all future aid be spent in the United States. Consequently, Israeli arms firms are seeking US firms as partners to qualify as suppliers for both Israeli and US government contracts. For more on these arrangements, see Joel Beinin’s chapter in this book. As in Egypt and Jordan, retired Israeli military officers frequently own or manage the local subsidiaries and subcontractors that reap the biggest benefits from joint production and research and development agreements with US firms.
Like wars, major diplomatic realignments create sizeable opportunities for arms manufacturers. Egypt’s abandonment of its alliance with the Soviet Union after the 1973 war and its realignment with the United States became a new profit stream for US arms manufacturers. The independence of Oman (1951), Kuwait (1961), and the UAE (1971) allowed them to diversify their sources of armaments. After exclusively purchasing British materiel, they began to place orders with suppliers from the United States and other Western countries. Establishing new supply relationships can entail a massive overhaul of existing weapons arsenals and windfall profits for military exporters of the new suppliers.
Similarly, winding down sanctions regimes and Western-imposed isolation in Libya (in 2004) and Iraq (after the US invasion of 2003) created openings for Western arms producers. The financial liquidity and economic diversification strategies of the Gulf states have made them a focal point for military firms, many of which have established sizeable subsidiaries and regional headquarters in the Gulf. The UAE has even provided advance funding directly to these firms to drive the development of next-generation weapons systems. In the early 2000s the UAE funded development of the Al Hakim series of guided munitions built by GEC-Marconi as well as updates to Northrop Grumman’s APG-68 Agile Beam Radar. In 2004, the UAE gave US$3 billion to Lockheed Martin to finance the development of a modified F-16 that made it more advanced than those flown by the US Air Force. These early export deals proliferate the most advanced technologies and incentivize host governments to finance further research and development for subsequent generations of weapons. This guaranteed and predictable demand has positioned weapons producers as among the world’s most profitable entities and has also stoked arms races in the Middle East and far beyond.