Business · Fortune Technology
The ‘obscene economics’ of modern warfare show how the race to military supremacy is transforming, while U.S. rearmament relies on China
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The Iran conflict has confirmed a transformation in the economics of warfare toward cheap, mass-produced weapons, forcing a wholesale rethinking of military procurement, according to a recent report.
Key facts
- In particular, the regime has leveraged its Shahed drones, which cost only $20,000-50,000, forcing the U.S. and its allies to shoot them down with $4 million PAC-3 missiles or THAAD interceptors
- The Center for Strategic and International Studies put the tally at 45% of its Precision Strike Missiles, 50% of its THAAD interceptors, and almost half of its of PAC-3 missiles
- That includes the stealthy Joint Air-to-Surface Standoff Missile, the Tomahawk cruise missile, the Long-Range Anti-Ship Missile, and the Joint Direct Attack Munition guidance kit
- The Pentagon also understands the new economics of warfare that bring to mind a quote attributed to Joseph Stalin during World War II as he weighed the Red Army’s numerical advantage against Nazi Germany’s superior weapons: “quantity has a quality all its own
Summary
While the U.S. and Israel have decimated Iran’s military, the Islamic republic still has enough combat power to inflict meaningful economic and physical damage, said Noah Ramos, chief innovation strategist at Alpine Macro, in a note earlier this month. In particular, the regime has leveraged its Shahed drones, which cost only $20,000-50,000, forcing the U.S. and its allies to shoot them down with $4 million PAC-3 missiles or THAAD interceptors that cost $12 million-$15 million. “Even with interception rates above 90%, the value of asset protection is diminished given the obscene economics,” Ramos wrote.