I don`t know whether war is an interlude during peace, or peace is an interlude during war.
- Georges Clemenceau
Latest Weapons and Defence Trends: Jerome Starkey at London DSEI Expo 2023
The War Machine: Europe’s and America’s Dirty Little Economic Secret
While European economies struggle to keep pace, one industry is flourishing like never before: the war industry.
Defense contractors are popping champagne bottles as governments throw billions into their pockets, all in the name of "security."
But let’s call this what it is—a grotesque and profitable racket where the goal isn’t peace, but a never-ending, manageable war that keeps the money flowing.
For years, the U.S. has been pressuring Europe to increase military spending. And after Russia invaded Ukraine, European leaders finally saw their golden excuse.
NATO countries, which once dragged their feet on military investments, are now scrambling to funnel unprecedented sums into weapons production. In just a few years, EU military spending skyrocketed from 200 billion euros to over 320 billion.
And, guess what? That number is expected to go even higher.
The demand for artillery shells, tanks, and fighter jets is outpacing supply. The German weapons manufacturer Rheinmetall produced just 70,000 artillery shells in 2020. By 2027, it plans to crank out 1.1 million per year.
That’s not a response to a temporary crisis—it’s a commitment to an arms race.
And why? Because it’s damn profitable. The highest margins aren’t on high-tech jets or complex missile systems; they’re on something much simpler—bullets.
Pure, straightforward, mass-produced destruction. Rheinmetall’s ammo division boasts a 23% operating margin, far higher than the company's overall 13%. When your most lucrative product is something designed to kill as many people as possible, you don’t want peace. You want just enough war to keep the assembly lines rolling.
Where’s the Money Coming From? Who the Hell Knows.
Despite the rhetoric about "defending democracy," nobody in Europe has a solid plan for financing this war machine. Countries like Italy and Poland suggest issuing collective EU debt, while others refuse to entertain the idea.
The European Commission wants to be "ambitious" (translation: throw money at the problem), but no one has a clue where to find the cash.
The economy is sluggish, inflation is biting, and voters aren’t exactly thrilled about throwing billions into military budgets while their energy bills and grocery prices soar.
Meanwhile, defense firms are demanding long-term contracts and government guarantees before they ramp up production.
Why? Because they know how this game works. Today’s crisis is tomorrow’s forgotten news cycle. Nobody wants to be left holding billions in unsold tanks when politicians inevitably shift their focus elsewhere.
Governments are happily obliging, shoveling public funds into private coffers to “ensure security.” Security for whom? Certainly not the average citizen who’s seeing public services gutted in the name of national defense.
The Dirty Secret: It’s Not About Winning, It’s About Not Losing.
Here’s the real scandal: the Western world doesn’t want Ukraine to win. It just wants Ukraine not to lose. Because an outright Ukrainian victory would end the war, and an end to war means an end to profits.
This is about sustaining a conflict, not resolving it. Keep Ukraine well-armed enough to stay in the fight, but never enough to deliver a knockout blow to Russia.
This is why arms manufacturers are expanding cautiously. They need war to be the new normal. They need just enough fear, just enough uncertainty, just enough conflict to keep the cash flowing.
And the politicians play along because a booming defense sector masks the ugly reality of stagnating economies elsewhere.
If you can't create jobs in tech, manufacturing, or energy, why not just build more bombs?
America’s War Monopoly: The Ultimate Winner
And then there's the U.S., home to the biggest war profiteers of all. Lockheed Martin, RTX (formerly Raytheon), and Northrop Grumman dominate the global market.
Lockheed alone raked in an estimated $60.8 billion in defense revenue last year—nearly double that of Europe's biggest player, BAE Systems.
The U.S. isn't just arming Ukraine; it's selling to the entire world. And with Trump flirting with the idea of pushing NATO members to spend 5% of GDP on defense, the war economy could reach even more grotesque heights.
But here’s the kicker: even the U.S. can’t meet demand. There are bottlenecks everywhere. American firms can build artillery shells, but they lack the gunpowder to produce them in sufficient quantities.
Europe is scrambling to ramp up output, but critical raw materials—like the cotton used in ammunition—come from China, a country that isn’t exactly eager to prop up Western militaries.
The Inevitable Price Hike: Less Bang for More Bucks
This whole charade comes with another consequence: spiraling costs. More demand means higher prices. More spending means inflationary pressure.
European governments can pledge 3% of GDP to defense all they want, but they’ll soon find out that those billions won’t buy nearly as many tanks and planes as they think. Military inflation is real, and it’s going to bite hard.
This isn’t about security. This isn’t about morality. This is an industry that thrives on just enough war to justify the next contract, just enough instability to keep people scared, and just enough destruction to keep production running at full tilt.
The only ones who don’t benefit? The taxpayers, the civilians, and, of course, the people on the ground in Ukraine, who are fighting in a war designed not to be won, but to be sustained.
So, who wants to stop the war? Certainly not the ones making money off it.
Sincerely,
Adaptation-Guide
WE ARE READY! ARE YOU?
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