The ‘obscene economics’ of modern warfare show how the race to military supremacy is transforming, while U.S. rearmament relies on China
The conflict in Iran has confirmed a transformation in the war economy towards cheap, mass-produced weapons and forced a wholesale rethinking of military procurement, according to a recent report.
While the United States and Israel have decimated Iran’s military, the Islamic Republic still has enough combat power to cause meaningful economic and physical damage, Noah Ramos, chief innovation strategist at Alpine Macro, said in a note earlier this month.
The regime specifically used Shahed drones, which cost only $20,000-$50,000, forcing the United States and its allies to strike them with $4 million PAC-3 missiles, or THAAD interceptors, costing between $12 million and $15 million.
“Even at intervention rates above 90%, the value of asset protection diminishes given the obscene economics,” Ramos wrote. “This imbalance has dogged Western military planners since the early days of Russia’s invasion of Ukraine.”
He explained that such disproportionate attrition was the opposite of the Western model of precision lethality and was a deliberate part of Iran’s strategy: Mass casualties are a feature, not a flaw, because even the most advanced defenses can be defeated with sufficient volume.
Cost asymmetry is further exacerbated by severe production and supply chain constraints. For example, no new THAAD interceptors have been delivered since August 2023, and the next batch is expected to be delivered in April 2027.
At the same time US rapidly reduced stocks It was one of the most expensive munitions during the Iranian war. Center for Strategic and International Studies It accounted for 45% of Precision Strike Missiles, 50% of THAAD interceptors and almost half of PAC-3 missiles. CSIS estimated that it would take one to four years to restock seven major munitions to prewar levels.
“Decreasing ammunition stocks created a short-term risk,” the report said. “A war against a capable peer opponent such as China would consume munitions at higher rates than this war. Prewar inventories were already inadequate; current levels will constrain U.S. operations in the event of a future conflict.”
In fact, Alpine Macro’s Ramos pointed out that many critical components of various US munitions are deeply exposed to Chinese supply chains.
These include the stealth Joint Air-to-Surface Standoff Missile, Tomahawk cruise missile, Long Range Anti-Ship Missile and Joint Direct Attack Munition guidance set.
Ramos warned that the US military’s dependence on Chinese suppliers “poses a serious threat given geopolitical fragmentation or conflict over Taiwan.”
