alt Hacker NewsSure, the concept of money is only meaningful / valuable to humans.
But isn't there a conceptual difference between the "owners" of the Tomahawk factory vs. the people who are actually putting the missiles together?
Sure, the concept of money is only meaningful / valuable to humans.
But isn't there a conceptual difference between the "owners" of the Tomahawk factory vs. the people who are actually putting the missiles together?
Of course, but it’s not so clear in terms of the question you asked, and certainly not in terms of government procurement.
Those workers are often organized and unionized. They exert tremendous political influence to, say, require the factories to employ unionized labor and extract above market wages. Surely the differential between union and market wage should factor into your margin calculation?
The factory owners are only too happy to oblige. If you have a cost-plus contract with the government (so a contract that guarantees a certain margin), then the only way to get more absolute profit is to have higher costs. Defense procurement is best thought of as being totally price insensitive. In fact, almost everyone in the chain benefits from higher costs: the workers, the suppliers, the corporations, the military leadership, the politicians, and their constituents. The only people hurt are those future casualties of a less capable national defense, mainly soldiers.