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Political economy of warfare
On February 28 this year, the United States and Israel jointly launched a military operation against Iran, in which the then supreme leader Ayatollah Syed Ali Khamenei, along with top military officials, was martyred. What began as a conflict aimed at destroying Iran's nuclear programme has now tak
Political economy of warfare
Nazrul Russell
Published :
May 17, 2026 00:02
Updated :
May 17, 2026 00:02
On February 28 this year, the United States and Israel jointly launched a military operation against Iran, in which the then supreme leader Ayatollah Syed Ali Khamenei, along with top military officials, was martyred. What began as a conflict aimed at destroying Iran's nuclear programme has now taken the shape of a complex regional war. This conflict is no longer confined to the military domain alone; rather, its economic impact has destabilised the global energy market. Naval blockades centred around the Strait of Hormuz and soaring oil prices have put the world economy at significant risk. Although a ceasefire has been in place since April 8 through Pakistan's mediation, Iran has repoprtedly enhanced its military capabilities and updated and finalised its list of potential targets for attack.
One important observation from this war is the remarkable success of small and low-cost weapons in contrast to conventional large and expensive weaponry on the modern battlefield. Iran has already launched more than one thousand suicide drones and over five hundred and fifty ballistic missiles. These include the widely discussed Shahed-136 (Kamikaze) drone and the Fateh-110 missile. To intercept these relatively inexpensive weapons, the United States and Israel have had to deploy extremely costly interceptor missiles. As a result, their high-end defence systems are becoming rapidly overloaded, and stocks of Tomahawk and THAAD missiles are being depleted. In contrast, while a drone costing around ten thousand dollars is used, an interceptor missile costing between one and three million dollars is required to counter it.
Not only in the Iran war but also in the Russia-Ukraine war, the effectiveness of small weapons has been evident. Russian T-72 and T-90 tanks and armoured vehicles have been extensively destroyed by Javelin and NLAW anti-tank missiles. In particular, tanks worth three to five million dollars have been destroyed using FPV drones costing between five hundred and two thousand dollars. On the other hand, MANPADS, such as Stinger missiles, have become a major threat to low-altitude aircraft and helicopters. From Afghanistan to the Ukraine war, small arms have proved to be effective. Attackers are now able to impose high defensive costs at a relatively low expense. This 'cost asymmetry' is transforming the traditional grammar of warfare.
In such asymmetric conflicts and urban warfare, large tanks or aircraft often prove less effective, whereas small, fast, and flexible weapons are more useful. Cheap weapons can be produced and replaced quickly, while advanced missile systems require significant time to manufacture. The ongoing Iran war has demonstrated that highly expensive air defence systems-such as the United States' Patriot and THAAD and Israel's short-range Iron Dome, medium-range David's Sling, and long-range Arrow-3-are struggling against swarms of low-cost drones. Mass deployment, or the power of numbers, is another crucial factor here.
When it is becoming clear that large objectives can be achieved with small and inexpensive weapons, why does the United States still primarily rely on billion-dollar F-35 fighter jets or missile systems worth hundreds of millions? The answer lies in the deep political economy of America's arms trade. It must be remembered that the military policy of the United States is closely intertwined with its economic interests. In the contemporary world, the arms trade is a vast economic and strategic instrument. According to data from the Stockholm International Peace Research Institute (SIPRI), during 2020-2024, the United States alone accounted for approximately 40-43 per cent of global arms exports, which is several times higher than that of the second-largest exporter. Its list of buyers includes more than 100 countries, among them major states include Saudi Arabia, Qatar, Japan, South Korea, India, and Poland.
The United States mainly leads in the sale of 'major arms' or large-scale weapon systems. These include fighter aircraft (such as the F-35 Lightning II and the F-22 Raptor), missile and rocket systems, tanks and armoured vehicles, warships, drones, and advanced technological weapons. In addition, small arms, such as rifles and ammunition, are also sold. However, in the international market, the strength of the United States primarily lies in high-technology large weapon systems. This is because these weapons are highly priced and are sold through long-term contracts.
Moreover, when a country purchases a major weapon system from the United States, it remains dependent on America for the next 20 to 30 years for spare parts, maintenance, software updates, cybersecurity, data support, training, technical assistance, and expert teams. This creates a service-based revenue stream, where 30 to 60 per cent of total income may come from after-sales services. For example, in the case of the F-35 fighter jet, long-term operation and maintenance costs are significantly higher than the initial purchase price. These services are provided by American companies themselves. In essence, the United States' arms business model is a long-term 'life-cycle business model'.
Not only economically, but through the sale of major arms, the United States also extends strategic influence over buyer countries. This includes intelligence sharing and 'strategic mutual defence agreements'. Often, such agreements include conditions regarding whom these weapons can or cannot be used against and with whom the buyer country may or may not enter into new arms procurement deals. At times, the United States can also maintain political pressure on these countries by threatening to suspend the supply of high-technology weapons or their spare parts. In fact, this long-term dependency forms the core foundation of America's global geopolitical influence.
Therefore, despite the effectiveness of small and low-cost weapons, the United States is unlikely to focus on their production and sale. This is because both profit and control are limited in the business of small arms. These weapons do not require significant after-sales services, spare parts, or technical support; in other words, buyer countries can manage repairs on their own without relying on the United States. As a result, there remains little scope for deploying American troops under the pretext of maintenance, conducting joint military activities, or engaging in intelligence sharing. Hence, by selling small and inexpensive weapons, it becomes difficult for the United States to sustain long-term economic and political influence.
Reports by SIPRI mention that 'actual warfare is crucial for evaluating the operational performance of weapons'. We have seen evidence of this during the Ukraine war, where drone technology advanced rapidly and the effectiveness of precision-guided weapons was tested. Not only evaluation, but every war also serves as a major promotional platform for advanced weapons. Therefore, the choice of weapons used in war is not determined solely by considerations of victory; it is also influenced by which weapons-producing countries or companies intend to market in the future and which systems they wish to promote.
According to a report by the Congressional Research Service, 'weapons proven effective in war tend to see increased export potential'. It is noteworthy that during the Ukraine war, after the effectiveness of the American-made shoulder-fired anti-tank guided missile FGM-148 Javelin and the lightweight rocket launcher system M-142 HIMARS was demonstrated, international interest in these systems increased significantly. Countries such as Poland, Lithuania, and Latvia rushed to acquire them. Consequently, demand rose for weapons produced by American companies Lockheed Martin and Raytheon/RTX. Furthermore, during the military conflict between India and Pakistan in May 2025, Reuters, citing US officials, reported that Pakistan used Chinese-made Chengdu J-10C fighter aircraft to shoot down two Indian fighter jets, at least one of which was a French-made Dassault Rafale. Following this incident, the image of the Rafale was affected, and interest in Chinese fighter jets increased among some countries. Even countries like Indonesia began reconsidering their procurement decisions with France, exploring the possibility of purchasing the J-10C alongside Rafale jets. In March last year, Bangladesh also expressed interest in acquiring the J-10C fighter aircraft.
If, in the ongoing Iran war, the United States had attempted to secure victory using small and inexpensive weapons and succeeded, then other countries around the world would no longer be interested in purchasing costly systems like the Patriot or fighter aircraft. Instead, they would prefer to buy low-cost drones or small arms from the United States, and eventually they would analyse these weapons and move towards local production. Therefore, if America begins large-scale production and sale of small and inexpensive weapons, many countries may initially purchase them, but over time that demand would decline significantly. As a result, the decades-old structure of the United States' arms business would collapse.
Therefore, the United States will seek to use the ongoing conflict with Iran to demonstrate the superiority of its high-technology fighter aircraft, interceptor systems, and air defence systems. This would encourage countries in Europe, the Middle East, and Asia to place more orders for expensive weapons. It is noteworthy that after the Ukraine war, arms imports by European countries increased by up to 155 per cent, a large portion of which came from the United States. If America were to subdue Iran using cheap drones, its military weapons promotion strategy would fail. Hence, for the United States, proving the effectiveness of its expensive weapons is more important than merely achieving victory on the battlefield.
Another possible reason why the United States is not shifting towards small and inexpensive weapons, despite their effectiveness, lies in the psychology of technological dominance. The United States perceives itself as the sole military superpower in the world because it possesses technologies that others do not. However, low-cost drone technology is now available to countries such as Iran, Turkey, and China. If the United States entered this arena on equal footing, its exclusive prestige would diminish. In essence, high profit, political influence, long-term dependency, and technological dominance-these four factors underpin the United States' continued preference for major high-technology arms.
Alongside this, the influence of American arms manufacturing companies is also significant. In US politics, the defence industry lobby is extremely powerful, and therefore it would never want the nature of warfare to shift entirely towards small and inexpensive weapons. Their investments are still centred on large and complex technologies. According to SIPRI's 2025 report, the total revenue of the world's top 100 arms-producing companies reached 679 billion dollars in 2024. Of this, US-based companies accounted for approximately 334 billion dollars-nearly half of the global total. The survival of companies such as Lockheed Martin, Northrop Grumman, and General Dynamics depends largely on large-budget military projects. If the Pentagon were to shift towards low-cost weapons, the profits of these giant companies would face a severe decline.
In conclusion, although the nature of warfare is changing, the economics of war does not always keep pace with such changes. The United States is now facing a dual dilemma. On the one hand, battlefield realities point towards the effectiveness of small and inexpensive weapons; on the other hand, national economic interests and global influence bind it to the model of large and costly arms. In the ongoing conflict with Iran, the United States is realising that its current approach is highly expensive, yet it is unlikely to retreat. It will continue to rely on high-technology, large, and costly weapons in the Iran war (and in any unforeseen future conflicts). Maintaining its dominance in the global arms market is more important for the United States than achieving victory in war. These political and economic constraints are preventing America from moving into the mainstream use of small and inexpensive weaponry.
Nazrul Russell is a writer, analyst and researcher and the author of the Amazon-listed book 'What Do Citizens Think'.
Nazrul Russell
Published :
May 17, 2026 00:02
Updated :
May 17, 2026 00:02
On February 28 this year, the United States and Israel jointly launched a military operation against Iran, in which the then supreme leader Ayatollah Syed Ali Khamenei, along with top military officials, was martyred. What began as a conflict aimed at destroying Iran's nuclear programme has now taken the shape of a complex regional war. This conflict is no longer confined to the military domain alone; rather, its economic impact has destabilised the global energy market. Naval blockades centred around the Strait of Hormuz and soaring oil prices have put the world economy at significant risk. Although a ceasefire has been in place since April 8 through Pakistan's mediation, Iran has repoprtedly enhanced its military capabilities and updated and finalised its list of potential targets for attack.
One important observation from this war is the remarkable success of small and low-cost weapons in contrast to conventional large and expensive weaponry on the modern battlefield. Iran has already launched more than one thousand suicide drones and over five hundred and fifty ballistic missiles. These include the widely discussed Shahed-136 (Kamikaze) drone and the Fateh-110 missile. To intercept these relatively inexpensive weapons, the United States and Israel have had to deploy extremely costly interceptor missiles. As a result, their high-end defence systems are becoming rapidly overloaded, and stocks of Tomahawk and THAAD missiles are being depleted. In contrast, while a drone costing around ten thousand dollars is used, an interceptor missile costing between one and three million dollars is required to counter it.
Not only in the Iran war but also in the Russia-Ukraine war, the effectiveness of small weapons has been evident. Russian T-72 and T-90 tanks and armoured vehicles have been extensively destroyed by Javelin and NLAW anti-tank missiles. In particular, tanks worth three to five million dollars have been destroyed using FPV drones costing between five hundred and two thousand dollars. On the other hand, MANPADS, such as Stinger missiles, have become a major threat to low-altitude aircraft and helicopters. From Afghanistan to the Ukraine war, small arms have proved to be effective. Attackers are now able to impose high defensive costs at a relatively low expense. This 'cost asymmetry' is transforming the traditional grammar of warfare.
In such asymmetric conflicts and urban warfare, large tanks or aircraft often prove less effective, whereas small, fast, and flexible weapons are more useful. Cheap weapons can be produced and replaced quickly, while advanced missile systems require significant time to manufacture. The ongoing Iran war has demonstrated that highly expensive air defence systems-such as the United States' Patriot and THAAD and Israel's short-range Iron Dome, medium-range David's Sling, and long-range Arrow-3-are struggling against swarms of low-cost drones. Mass deployment, or the power of numbers, is another crucial factor here.
When it is becoming clear that large objectives can be achieved with small and inexpensive weapons, why does the United States still primarily rely on billion-dollar F-35 fighter jets or missile systems worth hundreds of millions? The answer lies in the deep political economy of America's arms trade. It must be remembered that the military policy of the United States is closely intertwined with its economic interests. In the contemporary world, the arms trade is a vast economic and strategic instrument. According to data from the Stockholm International Peace Research Institute (SIPRI), during 2020-2024, the United States alone accounted for approximately 40-43 per cent of global arms exports, which is several times higher than that of the second-largest exporter. Its list of buyers includes more than 100 countries, among them major states include Saudi Arabia, Qatar, Japan, South Korea, India, and Poland.
The United States mainly leads in the sale of 'major arms' or large-scale weapon systems. These include fighter aircraft (such as the F-35 Lightning II and the F-22 Raptor), missile and rocket systems, tanks and armoured vehicles, warships, drones, and advanced technological weapons. In addition, small arms, such as rifles and ammunition, are also sold. However, in the international market, the strength of the United States primarily lies in high-technology large weapon systems. This is because these weapons are highly priced and are sold through long-term contracts.
Moreover, when a country purchases a major weapon system from the United States, it remains dependent on America for the next 20 to 30 years for spare parts, maintenance, software updates, cybersecurity, data support, training, technical assistance, and expert teams. This creates a service-based revenue stream, where 30 to 60 per cent of total income may come from after-sales services. For example, in the case of the F-35 fighter jet, long-term operation and maintenance costs are significantly higher than the initial purchase price. These services are provided by American companies themselves. In essence, the United States' arms business model is a long-term 'life-cycle business model'.
Not only economically, but through the sale of major arms, the United States also extends strategic influence over buyer countries. This includes intelligence sharing and 'strategic mutual defence agreements'. Often, such agreements include conditions regarding whom these weapons can or cannot be used against and with whom the buyer country may or may not enter into new arms procurement deals. At times, the United States can also maintain political pressure on these countries by threatening to suspend the supply of high-technology weapons or their spare parts. In fact, this long-term dependency forms the core foundation of America's global geopolitical influence.
Therefore, despite the effectiveness of small and low-cost weapons, the United States is unlikely to focus on their production and sale. This is because both profit and control are limited in the business of small arms. These weapons do not require significant after-sales services, spare parts, or technical support; in other words, buyer countries can manage repairs on their own without relying on the United States. As a result, there remains little scope for deploying American troops under the pretext of maintenance, conducting joint military activities, or engaging in intelligence sharing. Hence, by selling small and inexpensive weapons, it becomes difficult for the United States to sustain long-term economic and political influence.
Reports by SIPRI mention that 'actual warfare is crucial for evaluating the operational performance of weapons'. We have seen evidence of this during the Ukraine war, where drone technology advanced rapidly and the effectiveness of precision-guided weapons was tested. Not only evaluation, but every war also serves as a major promotional platform for advanced weapons. Therefore, the choice of weapons used in war is not determined solely by considerations of victory; it is also influenced by which weapons-producing countries or companies intend to market in the future and which systems they wish to promote.
According to a report by the Congressional Research Service, 'weapons proven effective in war tend to see increased export potential'. It is noteworthy that during the Ukraine war, after the effectiveness of the American-made shoulder-fired anti-tank guided missile FGM-148 Javelin and the lightweight rocket launcher system M-142 HIMARS was demonstrated, international interest in these systems increased significantly. Countries such as Poland, Lithuania, and Latvia rushed to acquire them. Consequently, demand rose for weapons produced by American companies Lockheed Martin and Raytheon/RTX. Furthermore, during the military conflict between India and Pakistan in May 2025, Reuters, citing US officials, reported that Pakistan used Chinese-made Chengdu J-10C fighter aircraft to shoot down two Indian fighter jets, at least one of which was a French-made Dassault Rafale. Following this incident, the image of the Rafale was affected, and interest in Chinese fighter jets increased among some countries. Even countries like Indonesia began reconsidering their procurement decisions with France, exploring the possibility of purchasing the J-10C alongside Rafale jets. In March last year, Bangladesh also expressed interest in acquiring the J-10C fighter aircraft.
If, in the ongoing Iran war, the United States had attempted to secure victory using small and inexpensive weapons and succeeded, then other countries around the world would no longer be interested in purchasing costly systems like the Patriot or fighter aircraft. Instead, they would prefer to buy low-cost drones or small arms from the United States, and eventually they would analyse these weapons and move towards local production. Therefore, if America begins large-scale production and sale of small and inexpensive weapons, many countries may initially purchase them, but over time that demand would decline significantly. As a result, the decades-old structure of the United States' arms business would collapse.
Therefore, the United States will seek to use the ongoing conflict with Iran to demonstrate the superiority of its high-technology fighter aircraft, interceptor systems, and air defence systems. This would encourage countries in Europe, the Middle East, and Asia to place more orders for expensive weapons. It is noteworthy that after the Ukraine war, arms imports by European countries increased by up to 155 per cent, a large portion of which came from the United States. If America were to subdue Iran using cheap drones, its military weapons promotion strategy would fail. Hence, for the United States, proving the effectiveness of its expensive weapons is more important than merely achieving victory on the battlefield.
Another possible reason why the United States is not shifting towards small and inexpensive weapons, despite their effectiveness, lies in the psychology of technological dominance. The United States perceives itself as the sole military superpower in the world because it possesses technologies that others do not. However, low-cost drone technology is now available to countries such as Iran, Turkey, and China. If the United States entered this arena on equal footing, its exclusive prestige would diminish. In essence, high profit, political influence, long-term dependency, and technological dominance-these four factors underpin the United States' continued preference for major high-technology arms.
Alongside this, the influence of American arms manufacturing companies is also significant. In US politics, the defence industry lobby is extremely powerful, and therefore it would never want the nature of warfare to shift entirely towards small and inexpensive weapons. Their investments are still centred on large and complex technologies. According to SIPRI's 2025 report, the total revenue of the world's top 100 arms-producing companies reached 679 billion dollars in 2024. Of this, US-based companies accounted for approximately 334 billion dollars-nearly half of the global total. The survival of companies such as Lockheed Martin, Northrop Grumman, and General Dynamics depends largely on large-budget military projects. If the Pentagon were to shift towards low-cost weapons, the profits of these giant companies would face a severe decline.
In conclusion, although the nature of warfare is changing, the economics of war does not always keep pace with such changes. The United States is now facing a dual dilemma. On the one hand, battlefield realities point towards the effectiveness of small and inexpensive weapons; on the other hand, national economic interests and global influence bind it to the model of large and costly arms. In the ongoing conflict with Iran, the United States is realising that its current approach is highly expensive, yet it is unlikely to retreat. It will continue to rely on high-technology, large, and costly weapons in the Iran war (and in any unforeseen future conflicts). Maintaining its dominance in the global arms market is more important for the United States than achieving victory in war. These political and economic constraints are preventing America from moving into the mainstream use of small and inexpensive weaponry.
Nazrul Russell is a writer, analyst and researcher and the author of the Amazon-listed book 'What Do Citizens Think'.
