It’s not that steep for the low-volume high-margin equipment built by the military industrial complex. The whole point is to produce a relatively small amount of expensive products with minimal capital investment, not to take advantage of economies of scale to produce large amounts of equipment efficiently. The former is much more efficient at converting taxpayer dollars to private profits.
Comparing this arctic vehicle program to China’s second-most modern tank isn’t exactly comparing apples-to-apples, but it’s nevertheless instructive. An Arctic vehicle is going to be more expensive than a comparable vehicle not designed for Arctic use since it needs a lot of special equipment to operate in cold temperatures for a long time, but it’s still basically just a metal box with tracks and an engine. A modern tank is a very heavy steel/advanced composite box with a larger engine, tracks, a cannon, and a bunch of other advanced equipment like thermal scopes, radar, lasers, and so on. More materials total, more moving parts, more low-tolerance parts, more high-tech parts.
Even still, the Chinese Type 99 tank costs 2.5 million USD (3.4 million CAD), $2.4 million less per unit than these $5.8m unarmed Arctic vehicles. You might think that a tank should cost more than what’s functionally an advanced truck for use in extreme enironments, or that they should at least be the same price, but not so fast! The Type 99 is made by Norinco, a large state-owned company that produces huge amounts of equipment. They take in $82 billion per year but only make 1.7 billion in profit. I don’t know who will be making these arctic vehicles, but one possibility is Lockeed Martin. They have a comparable revenue of $75 billion, but they make a net profit of $5 billion. This means that Lockheed Martin is three times as efficient at turning taxpayer dollars into profits as Norinco, hence proving the superiority of our system of free enterprise compared to asiatic communism.
The whole point is to produce a relatively small amount of expensive products with minimal capital investment, not to take advantage of economies of scale to produce large amounts of equipment efficiently.
Lacking your psychic powers, we’re going to need a citation showing that’s “the whole point”.
Milton Friedman said it most succinctly in Capitalism and Freedom (1962): “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” He argued in short that a corporation’s sole responsibility is to increase shareholder value, and this argument is the foundation of modern business practives.
If a defence contractor were to produce affordable (i.e. low margin) products, they would be shirking their holy duty to the shareholders, the money would be invested elsewhere, and they would go out of business. China can get away with doing it since they just have a state-owned company do it cheaply, but that’s authoritarian (bad). We, being principled democratic states, can only buy what the free market has to sell.
It’s not that steep for the low-volume high-margin equipment built by the military industrial complex. The whole point is to produce a relatively small amount of expensive products with minimal capital investment, not to take advantage of economies of scale to produce large amounts of equipment efficiently. The former is much more efficient at converting taxpayer dollars to private profits.
Comparing this arctic vehicle program to China’s second-most modern tank isn’t exactly comparing apples-to-apples, but it’s nevertheless instructive. An Arctic vehicle is going to be more expensive than a comparable vehicle not designed for Arctic use since it needs a lot of special equipment to operate in cold temperatures for a long time, but it’s still basically just a metal box with tracks and an engine. A modern tank is a very heavy steel/advanced composite box with a larger engine, tracks, a cannon, and a bunch of other advanced equipment like thermal scopes, radar, lasers, and so on. More materials total, more moving parts, more low-tolerance parts, more high-tech parts.
Even still, the Chinese Type 99 tank costs 2.5 million USD (3.4 million CAD), $2.4 million less per unit than these $5.8m unarmed Arctic vehicles. You might think that a tank should cost more than what’s functionally an advanced truck for use in extreme enironments, or that they should at least be the same price, but not so fast! The Type 99 is made by Norinco, a large state-owned company that produces huge amounts of equipment. They take in $82 billion per year but only make 1.7 billion in profit. I don’t know who will be making these arctic vehicles, but one possibility is Lockeed Martin. They have a comparable revenue of $75 billion, but they make a net profit of $5 billion. This means that Lockheed Martin is three times as efficient at turning taxpayer dollars into profits as Norinco, hence proving the superiority of our system of free enterprise compared to asiatic communism.
Lacking your psychic powers, we’re going to need a citation showing that’s “the whole point”.
Milton Friedman said it most succinctly in Capitalism and Freedom (1962): “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” He argued in short that a corporation’s sole responsibility is to increase shareholder value, and this argument is the foundation of modern business practives.
If a defence contractor were to produce affordable (i.e. low margin) products, they would be shirking their holy duty to the shareholders, the money would be invested elsewhere, and they would go out of business. China can get away with doing it since they just have a state-owned company do it cheaply, but that’s authoritarian (bad). We, being principled democratic states, can only buy what the free market has to sell.