MICHAEL T KLARE Political Economy of US Arms Sales IN THE early summer of 1973, while most Americans focused their attention on the unravelling Watergate scandal, the Department of Defence announced a series of major decisions which indicated a radical shift in United States policy on foreign military sales. First, on 26 May, the Pentagon confirmed that the United States would sell advanced armaments, including F-4 Phantom fighter-bombers and F-5E Tiger-II supersonic jets, to Kuwait and Saudi Arabia despite the fact that these countries are the principal financial backers of the Arab forces battling Israel.1 Next, on 5 June, the White House announced that President Nixon would exercise his option (under an obscure provision of the Foreign Military Sales Act) to waive statutory restrictions on the sale of "'sophisticated" military hardware to Latin America in order to permit sale of the F-5E fighters to Argentina, Brazil, Colombia, Venezuela, and Chile (still at that time ruled by the Allende government).2 Finally, on 24 July, Shah Muhammad Reza Pahlavi of Iran flew to the United States personally to select the weapons his government would acquire in a $10 billion weapons deal, the largest single arms agreement ever recorded. While in the US, the Shah became the first foreigner to place orders for America's newest jet aircraft—the F-14 Tomcat air superiority fighter—in the first instance of a Third World country being allowed to