Arms Production, Economics of

Arms production is a general term for the production of military goods and services. It is not a defined industrial sector but cuts across many other sectors in the manufacturing industry, such as air- and spacecraft, chemicals, motor vehicles, transport equipment, and weapons and ammunition. While arms production most often takes place within companies which have both military and civilian production, it has some unique characteristics, that distinguish it from other types of production. First, it is the production of the means of violence, which has led to it being under a higher degree of state control and regulation than other types of production. Second, although to some extent the arms industry operates under the same economic conditions as the industrial sectors of which it is part, the fact that the home government is the sole or main purchaser of many products results in a monopsonistic market and specific state-industry relations that have given the arms industry rather different characteristics from those in commercial production.