We’re talking governments, not consumers. The government can do all kinds of crazy stuff to contractors that economic theory doesn’t account for, such as dictat

We’re talking governments, not consumers. The government can do all kinds of crazy stuff to contractors that economic theory doesn’t account for, such as dictating the amount of profit the contractor gets to make and mandating that the weapon system be manufactured by another company because of any number of reasons. A war, or any kind of emergency, can increase the odds of the government doing crazy stuff. It’s not good for a contractor when the government decides they should make 5% profit when the stock market that year is going up by 10%. Having a large, old inventory of weapons the government maintains can be profitable for the contractor because they can sell support for those systems that no one else can. This support alone can employ hundreds of engineers and bring millions a year to a contractor. You can’t do that if the weapons are all fired. This is all in service of keeping the government happy. The government, state department specifically, can decide which countries the contractor can export the weapon systems too. The set of countries the government will allow this for will be bigger if there is no conflict the government is involved in. Defense contracting is a very counter intuitive business.