The arms race tends to change traditional relationships between the civilian and military sectors of the economy. The military sector covers more than the military forces themselves. It includes the firms and industries which serve them, the scientific institutions where their research is done, and the political establishments and ministries that owe their power to the arms race – a combination which has come to be called the 'military-industrial complex'. The military-industrial complexes everywhere become concerned to preserve themselves, and consequently to maintain the circumstances which gave birth to them. Fear of a potential enemy leads a country to set up a military establishment, and this establishment in turn acts to keep the fear alive. It will suspect and question the sincerity of any conciliatory moves from the other side, and in general act to preserve a political image of the world as one which will always require a nation to maintain a high state of military preparedness with an industrial capability to support this.
It has been estimated that military activities and the manufacture of armaments employ as many as 60 million people throughout the world. Half of them in industry, the other half in the armed forces. Global industrial production for military purposes has been estimated as having an annual value exceeding US$ 125,000 million. In some countries there are whole industries which make the greater proportion of their sales to the government for defence purposes, for example the aero-space and ship-building industries in the leading NATO countries.
A few months after the formal cessation of Operation Desert Storm of the Gulf War, the world's major weapons exporters gathered at the Paris Air Show. The cost of transporting much of the hardware was borne by the USA government, which brought 20 so-called "aircraft of Desert Storm" to Paris under the guise of flying training missions to France – thus saving defence contractors hundred of thousands of dollars in transport and handling fees, and taking full political and commercial advantage of the promotion of the high-tech weapons systems showcased on the world's television during the Middle East war.
In 1999 it was reported that the USA, the world's only remaining military superpower, was to embark on a military buildup unmatched since the peak of the Cold War. The proposal is for an increased defence budget of $112 billion over six years. Currently $265 billion is spent annually on the military. The weapons procurement budget alone is scheduled to grow 50 percent in the next half decade.
There has been strong consolidation of the U.S. defence industry – with encouragement and subsidies from the Pentagon – during the 1990's. This has left three major contractors: Lockheed Martin, Boeing and Raytheon. They supplement their power as employers with huge campaign contributions – more than $8.5 million in the 1997-1998 electoral cycle, according to the Center for Responsive Politics – and even bigger lobbying investments – nearly $50 million in 1997 alone. In addition, the industry supports policy institutes and front groups which produce expert reports, issue alerts and other influential materials arguing the critical need for more defence spending.