Atanu Dey On India's Development

Benefits of Weapons Trade

Once, as punishment for disobeying his mother, Sam Clemens was made to paint a fence. Like all boys he disliked being forced to do chores. He began to think of some way to get out of it. When his friend John showed up and declared that while he was going for a swim, Sam will have to continue his work. “Work?” said Sam, “A boy does not get to paint a fence everyday.” Sam continued to appear to be enjoying his painting and soon enough John was pleading to take a turn at it. Sam says, “No, it is skilled work.” Finally, John bribes Sam with part of an apple to have the privilege of painting the fence. By the end of the day, Sam gathers a whole bunch of toys and all his friends end up doing the painting and thank him for the opportunity.

Years later Sam, writing as Mark Twain, included that in the story of Tom Sawyer’s adventures.

What brought that story to mind was the recent jubilation amongst some commentators and political observers of the US-India partnership in defense, trade, and other matters international highlighted by Prime Minister Manmohan Singh’s visit to the US. The US will — among other deals — sell arms to India.

I am delighted whenever barriers to trade — political, physical, philosophical, ideological, or merely idiotic — come down because in general there are gains from voluntary trade of goods and services. The gains from trade are well understood enough that there is little point in flogging that horse. Except for the corner cases, of course. Does trade in “bads,” in contradistinction to “goods,” such a great idea? The natural instincts of an economist is to reply “it depends.” It depends on what the “bad” is I suppose and on what sort of externalities arise from such trade.

Take, for instance, trade in weapons of mass destruction. Is it welfare enhancing? The seller of these weapons clearly profits from the trade. What about the buyer? Does it really promote the security of the buyer? These questions bear investigation. While the answers may all be very trivially obvious for some, it is not at all clear to me. Though the perception may be widely shared that buying weapons is good use of scarce resources, it could also be wildly incorrect.

The reluctance of the US when it comes to selling arms to developing countries is like Sam’s reluctance to let his gullible friends paint the fence for him. When he finally relents, the friends are happy and suitably grateful to him for his magnanimity. Only in few trades are all the gains one-sided but trade such as these are exemplars of that set.

My concern here is development and the factors that lead to development. In an interdependent world, India’s development is connected with the state of development (or underdevelopment) of other parts of the world. The state of development of the global economy is of course geographically diverse, but it also has a temporal component to it. Some countries developed earlier than others. And this has some interesting implications.

One of the implications of being a late-comer in economic development is that one has the advantage of being able to adopt advanced technologies from developed economies. By judicious adoption of imported technology related to economic goods, development can be accelerated.

Information and communications technologies (ICT) developed by the US is available to India at a much earlier stage of its development than was the case for the US. Catching up is quicker. That is the happy part of the story. But when it comes to economic “bads,” the story is equally depressing. Adopting advanced weapon technology is extremely costly for developing nations and can hobble development immensely.

The US had passed its age of being a subsistence economy for a long time before it started on its path to developing weapons of mass destruction. Its agriculture was booming, it had a huge manufacturing base, its people were literate and educated, it had a massive stock of housing, its institutions were mature, and so on. Given that foundation, it could afford the luxury of going into the research and development of weapons, and built the most advanced and expensive military hardware in world. The unfortunate part is that there are countries like India which have hundreds of millions of people stuck in the subsistence phase of development. And the leaders of these under-developed countries eye the expensive military hardware and salivate. They are forced to attempt to keep up with their neighbors in their competition to get as many shiny nuclear-tipped missiles as possible.

If I was made the global dictator temporarily, and was given the power to make only one absolutely binding and enforceable global law, it would be to ban weapons trade altogether. If neither India nor Pakistan could buy nuclear subs and missiles, fighter jets and bombers, the ordinary people of these countries might have a better shot at a human existence.

From this point of view, the tragedy of the world is not so much that there are so many poor countries, but that there are those rich countries that have surplus resources to devote to developing weapons that ultimately starve the poor. And the leaders of these poor countries fall all over themselves in praising the foresight and the wisdom of the leaders of the rich countries for giving them the opportunity to buy these weapons.

Mark Twain had unusually praiseworthy words for India. He would have been pleased by the increased tries between India and the US. But I am sure that he would have been saddened by the irony in the celebration of some in India at the chance to buy American weapons.

  • http://www.suhitanantula.com Suhit Anantula

    Atanu:

    One of the unwanted side effects of WMD trade is what you have effected and the other is that US is using India as a tool for balance of power in Asia.

    It has japan, and japan has lost its usefulness as a strategic country than before withe asdency of China.

    Pakistan has been used from the 1950s as a lever against India and to keep India in check and to waste India’s resources.

    now India is being trained to be a barrier to China.

    The US Imperial Strategies (as any imperial strategy would be) of divisiveness is working well in many parts of the world.

    We need to emulate the Latin American countries getting together on trade and the European Union in building collaboration and cooperation.

    This is the only sound way of solving this. Economic Strength is the basis of power in this world and the more the Asian countries can work together and solve their economic problems the better for us and the lesser the influence of US on Asia.

    Suhit

  • Desi

    Perhaps it is not too bad to be used as a tool in the imperial strategy of the US, if the end result will make India itself powerful. Why not avail of the resources that India can get from the US to counterbalance China? China is India’s long-term adversary regardless of whether India accepts the resources from the US. India may as well get all the help it can.

    However, I recognize the pitfalls in following this strategy. The danger is that India may be reduced to just a client state of the US and become – arrgh – a larger version of Pakistan. I also agree with the points made by Atanu on the larger issue of weapons trade.

    I think the most important thing forIndia is to learn enough from the US (and everyone else) to create a sophisticated arms industry within the country. While expenditure on weapons takes away valuable resources, it is unfortunately the price we must pay for protecting ourselves from the descendents of Mohammad Gahuris and Mao Zedongs of the world. For this purpose, it may in fact be better to co-develop weapons with Russians as they need hard currency more desperately than the US.

  • http://tarunsblog.blogspot.com TTG

    It is not in weapons trade that the ban has been lifted, but in weapons-grade material. Big. Difference. Weapons-grade material is also used in nuclear reactors to give people electricity. Something which India might need…

    http://www.economist.com/printedition/displaystory.cfm?story_id=4198960

  • http://www.deeshaa.org Atanu Dey

    TTG, the US has been selling (and is promising to sell more) weapons of mass destruction to third world countries for a while.

    The true weapons of mass destruction are the guns and fighter planes and subs and ships that are routinely sold. A few squadrons of fighter planes send millions to an early grave — not as dramatic as a mushroom cloud but more painfully through chronic starvation and disease.

  • http://tarunsblog.blogspot.com TTG

    Sorry, I assumed your post was referring to the recent “foreign-policy breakthrough” that Manmohan Singh has achieved. As for the rest, you’re, correct, but let’s not forget that there have been some benefits for mankind in general, which the necessity of War helped bring to fruition.

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