HOW MUCH FOR A KALASHNIKOV?

By Taylor Marvin
Staff Writer

This post is an adaption of a series first published at PROSPECT Blog.

A few months ago I had an interesting conversation with a UCSD history professor who had recently traveled to Lebanon on business. While there, he met a Syrian friend who urged him not to travel to Syria for fear of “armed gangs” roaming the streets. The professor was puzzled: was his friend implying that Syria’s overwhelmingly non-violent protest movement was armed and violent? Yes, his friend replied, explaining that the anti-government protesters were thugs and heavily armed, because anyone in Syria could buy an AK-47 for $2,500. Laying aside the interesting question of why the professor’s Syrian friend chose to relay the Assad regime’s anti-protester propaganda, how reliable is this price? Can you get an AK-47 in Syria for $2,500, a price many times an average worker’s monthly salary?

AK-47 rifle.

First off, why specifically the AK? The AK-47 and its myriad variants are the last half century’s definitive weapon of warfare. First invented in the Soviet Union in the late 1940s, the AK assault rifle was designed to be easy to manufacture, exceedingly simple to operate, and virtually indestructible. The design Soviet weapons designer Mikhail Kalashnikov eventually settled upon fit these requirements perfectly. Manufactured from stamped steel and with simple, rugged components, the AK line’s effectiveness and reliability became legendary — many anecdotes relate the AK’s ability to reliably fire when packed with mud or sand, dependability that was an obvious contrast to the notorious unreliability of American Vietnam-era M16 rifles. Throughout the Cold War the Soviets widely exported inexpensive AK line rifles to client states at extremely low cost, distributing staggering numbers of individual weapons throughout the world: 100 million AK variants are estimated to have been produced, compared to 8 million of the comparable American M16. The huge numbers of AKs produced and the widespread availability of its 7.62 x 39mm ammunition, combined with its easy of use, have made it extremely popular in armed conflicts, and AKs are featured on the flags of both Mozambique and Hezbollah.

So, how much for an AK in Syria? Interestingly, the $2,500 price reported by my professor’s Syrian friend is actually abnormally high. AK-47s are typically much cheaper simply because so many have been produced that even the high demand doesn’t overwhelm the supply. Out of the 100 million AK line rifles manufactured, only one tenth were legally produced in Soviet arms factories or under license — the rest are unlicensed locally produced copies. The wide proliferation of locally produced AK variants have dramatically lowered their retail prices around the world. For example, in small rural Kenyan town in 1986 an AK could be purchased for 15 cows. By 2005 the price had fallen to four cows.

The best investigation into current prices of AK line rifles is Phillip Killicoat’s 2007 paper “Weaponomics: The global market for assault rifles.” Killicoat found prices for AK variants to vary widely by location (figures in 2005 US dollars):

  • Western Europe: $ 990
  • Asia: $631
  • Eastern Europe and former Soviet States: $574
  • Americas: $442
  • Africa and Middle East: $ 267

Prices vary even more at the local level: in Beirut in May an AK in good condition started at $1,600, rising to $3,750 for a short-barreled variant; probably an AKS-74U, an AK line carbine firing a smaller, intermediate-caliber cartridge designed in the mid-1970s to partially to replace the AK-47 and its modernized AKM successor in Soviet service. If my professor’s Syrian friend is referencing the price for the popular AKS-74U the figure he gave is actually low.

Why this abnormally high price? High demand within Syria probably plays a role. It’s well documented that when people are nervous about the future small arms prices rise dramatically. Returning to Lebanon, in 2005 an AK-47 cost roughly $300. By the start of the Israel- Hizbollah War in the summer of 2006 the price had risen to over $900. Today the Lebanon price is even higher: as of May an AK in good condition cost $1,600, according to reporting by Time. Time also notes that the majority of small arms sold today in Lebanon are shipped to Syria to fill demand there. These weapons are resold for even higher prices once they’re smuggled into Syria.

That would put our $2,500 well over the 1986-2005 average, especially for the Middle East. However, on second though this disparity does make sense. Overall world prices have been increasing, averaging $534 in 2005 from a low of $448 in 1990 (though the sample size for 1990 is much smaller and potentially problematic). Additionally, the Syrian police state has done a much better job than its often anarchic neighbors at restricting small arms imports. This supply bottleneck would imply a higher Syrian retail price much closer to the Western European, rather then Middle East, average. This makes the $2,500 figure credible or even low, even though it’s far above the mean world retail price. Though the vast majority of Syrian democratic protesters are unarmed, at least some Syrians are willing to pay a large sum for firearms.

But what explains this wide variance in small arms prices by region? The same factors that determine the market prices of all consumer goods: supply and demand. Supply varies widely by regions, with the availability of AK line weapons in a given region limited by how widely the Soviet Union exported weapons there. During the Cold War, the Soviet Union supplied client states around the world with literally millions of AK, RPK and RPD line assault rifles and light machine guns. Millions more knockoff weapons were manufactured by unlicensed local producers. However, Soviet small arms exports were not homogenous: more weapons were supplied to client states in Africa or Asia than in Latin America, because the Eastern Hemisphere was home to most Soviet-aligned states. Today millions more AK line weapons are circulating in Africa than in the Americas, lowering the local African average price relative to the world mean. Of course, not all small arms are Soviet era weapons. But Western small arms exports paled in comparison to Soviet production during the Cold War, and the world firearms trade remains dominated by Soviet designs. In regions where the Soviets exported more weapons, we can expect supplies to be greater and retail prices lower.

Supply is not wholly determined by Cold War-era Soviet export practices. Government regulatory capacity is also a determinant of small arms supplies. For obvious reasons, governments are leery of unrestricted small arms sales, and attempt to restrict the availability of weapons if they can. Regional AK prices support this theory — prices tend to be lower in regions with less capable governments, and higher in regions that tend towards more stable states. Stable governments also keep military arms from leaking into the private market. AK line rifles that were originally supplied to Eastern European communist governments have tended to remain in the hands of security forces or safely locked away in government arsenals. In Africa, this is less likely to be the case — frequent coups and government turnovers allowed large number of government weapons to enter the private retail market, forcing down local prices. This is part of why AKs sell for nearly twice as much in Syria than neighboring Lebanon — Syrian borders have historically been tightly controlled by security forces, suppressing illegal private arms imports, while Lebanon’s often chaotic politics have allowed black market arms to enter and exit the country freely. Of course, this relationship goes both ways. The supply of AK line weapons tends to be greater in unstable regions and lowers the local price, while conversely the demand and willingness to pay for small arms is likely to be higher in war-torn regions, creating a complex two-way relationship between supply and price.

Now let’s look at the other side of the equation: demand. Even at their least costly, AK line weapons are expensive by world standards — $250 remains a lot of money in most of the world. However, the demand for arms is thought to be largely inelastic, meaning that small arms customers tend to be willing pay whatever price they can afford. This suggests that as per capita income rises, local arms vendors will raise their prices as well, maximizing their revenue while remaining able to sell their wares. If we compare average 1986-2005 regional AK prices to income per capita per region over the same time window, we see that they largely match up:

GDP per capita by region, 1980-2016 (US$). Source: International Monetary Fund, September 2011 World Economic Outlook:

AK Average Regional Price, 1986-2005:

  • Western Europe: $ 990
  • Asia: $631
  • Eastern Europe and former Soviet States: $574
  • Americas: $442
  • Africa and Middle East: $ 267

This supports the story that small arms prices vary with GDP per capita. However, there is also reasons to suspect that rising incomes could lower the local AK market price. In economist terms, AK line weapons are inferior goods — as buyers’ incomes rise, they tend to trade up to a more desirable and expensive rifle. This theory makes intuitive sense: while the AK’s legendary reliability makes it a superb infantry arm, its rugged construction and generous machining tolerances make it less accurate than other common assault rifles like American M-16 and M-4 variants and the German G-3. This suggests that the small arms market will be less dominated by AK line rifles in regions with higher average incomes.

Osama bin Laden and a AKS-74U. Image by journalist Hamid Mir.

Is this theory credible? We know that demand for specific types of firearms is sensitive to consumer preferences, just like other consumer goods. For example, short-barred AKS-74U carbines regularly sell for over twice as much as standard-length AK variants. While this is partially due to the AKS-74U’s short length, which makes it easier to use in urban, close quarters combat, this price difference is also likely due to prestige: Osama bin Laden famously favored the AKS-74U, and the weapon appears in many of his videos. The AKS-74U itself is often referred to as the “Osama” model, and it’s no accident that it is particularly popular among armed groups with ideological links to al Qaeda.

Because income’s effect on AK market prices is predicted to work both ways, we can assume that income has an ambiguous influence on AK prices. Because local GDP per capita generally matches up with observed AK market prices, it appears that market prices generally rise with income. Of course, because government capacity is strongly related to GDP per capita this observed price rise is likely due to both a higher customer willingness to pay and restricted supply.

We can expect the substitution effect away from AK line rifles to be more common in regions where competing assault and battle rifle designs are available. Soviet-designed weapons dominate the world small arms market. However, there are regions where competing non-Soviet rifle lines are more common, specifically Latin America and Asia. Let’s take a look at the weapons supplies of non-governmental armed groups in one of these regions, and see if this supports the substitution theory.

AK line prices in Latin America are some of the lowest in the world. While this low average price is likely due to the reduced regulatory capability of regional governments, it’s also possible that it’s due to competition from non-AK rifles. As an example, let’s look at the weapons supplies of FARC, an infamous leftist Colombian insurgent group:

Image by Scott Dalton/AP, via The Guardian.

Image by Scott Dalton/AP, via The Guardian.

Most of the assault rifles carried by FARC fighters in this photo are AK variants. However, we can also see a German G-3 in the hands of one of the fighters in the first row. Here’s another example:

Image by Time/CNN.

Image by Time/CNN.

While the woman on the right is armed with an AK variant, her companion on the left is holding what appears to be an Israeli-manufactured IMI Galil rifle. FARC isn’t the only example of American armed groups equipped with rifles other than AKs: Mexican drug cartels frequently use American-manufactured M-4 carbines in addition to AK line rifles. AK line rifles still dominate non-governmental small arms supplies in Latin America, but they’re comparatively rarer than in regions where Soviet arms exports were more numerous. Of course, non-Soviet arms are used in Africa and Asia — Taliban fighters frequently carry antique knockoff rifles based on prewar British designs — but AK line weapons face more competition in Latin America. Due to the substitution effect noted above, this could depress the local AK market price in regions where competing assault weapons designs are more common. But to really demonstrate a tendency to substitute away from AK line weapons, we need proof that AK competitors are seem as more desirable by fighters with access to them. Again, FARC’s weapon choices are a good example. Here are two pictures of FARC leader Raúl Reyes, who was killed by the Colombian military in 2008.

In the first picture Reyes is armed with an American AR-15-type rifle. The posing of the picture on the right makes the design of Reyes’ rifle less obvious, but it appears again to be a AR-15-type weapon. The fact that a leader of a virulently anti-US group would choose to publicly adopt an American rifle design is compelling anecdotal evidence of a tendency to move away from AK line rifles when competitors are available. However, it’s worth noting that Reyes practice of carrying a weapon was almost purely symbolic — as a high-ranking commander, he almost certainly never expected to actually engage in direct combat. It’s possible that for fighters seeing frequent combat the reliability of the AK series would make it preferable.

While the weapons choices of Reyes and FARC are anecdotal, they also mirror the weapons practices of a variety of non-governmental armed groups around the world. The supports the income substitution effect theory, and the idea that AK series rifles are an inferior good. While there’s evidence that this substitution effect exists, the relationship between AK market price and regional income suggests that it’s drowned out by the more powerful effects of inelastic demand and restricted supply in comparatively high-income regions. Though the determinants of small arms prices are complex, these three inputs — availability, local demand and substitution effects — are a good start to understanding them.

Title image by Wikimedia user Alex07.

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One response to “HOW MUCH FOR A KALASHNIKOV?

  1. Pingback: Century c39 everything US made? - Page 3·

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