#09: The Gun Industry

Table of Contents:

The Gun Industry
The Center for American Progress
Does the Gun Industry Promote Gun Violence?
Regulatory Oversight—The Gun Industry
The 1968 Gun Control Act
What’s New In The War Against The Gun Lobby?
Underground Gun-Makers & Ghost Guns
Does It Matter?

The Gun Industry

When we think of “industry” most of us conjure economic activity—processing raw materials—manufacturing vehicles—textiles—steel—computer hardware, etc. We envision groups of companies related based on their primary business activities. Industries are measured by gross revenues. The top five are Real Estate, State & Local government, Finance & Insurance, Health & Social Care, and Durable Manufacturing. Firearms fall into durable manufacturing, but are overshadowed by computers, autos, sports equipment, home appliances and aircraft. Except for firearms, the gross costs and revenues in all other industries are relatively easy to see, calculate, and evaluate.  

Calculating the depth, breadth, and economic significance of the American gun industry is a hit-and-miss effort, pun intended. US gun manufacturing is a mix of private and public ownership, so financial data is not always available. The financial health of the manufacturing side of the business is covered by financial and economic outlets. “Gun stores had revenue of about $11 billion, ‘IBISWorld[1] said in its 2018 report.’ Gun and ammunition manufacturers had revenue of $17 billion, but the majority of that revenue comes from the defense side of the equation: arms sales to the US and foreign governments.”[2] The total—$28 billion—is relatively small—not even close to the top twenty.[3] While it is frequently forgotten, American gun manufactures also supply the US Military with its guns. 

Glock is becoming U.S. special forces’ weapon of choice—they are literally going to war with it.[4]

The Center for American Progress

“The Center for American Progress is an independent nonpartisan policy institute is dedicated to improving the lives of all Americans, through bold, progressive ideas, as well as strong leadership and concerted action. Our aim is not just to change the conversation, but to change the country.”[5]

Created in 2003, it is a liberal Washington, D.C.-based think tank with strong ties to the Democratic Party. It exists as the left-of-center alternative to the right-leaning Heritage Foundation. John Podesta founded it. He was President Clinton’s Chief of Staff and served as Counselor to the President in the Obama White House. His goal was to “Build an organization to rethink the very idea of liberalism, a reproduction in mirror image of the conservative think tanks that have dominated the country’s political dialogue for a generation.”[6]

Politics aside, it is unquestionably the largest single website on the Gun Industry. It posts data, evaluates financial and social aspects of the gun industry, and has direct tag lines into the Stand Your Ground era. Among many other posts, essays, commentaries, and reports, the CAP says the American gun industry is “the overlooked player in a national crisis.”[7]

Does the Gun Industry Promote Violence?

The site is voluminous by any measure. It’s a nuanced look at the gun industry’s role in advancing and promoting gun violence. “The national conversation about gun violence in the United States focuses primarily on the harms caused by the misuse of firearms—the details of the incidents that take the lives of 40,000 people every year and grievously injure tens of thousands more. This debate often occurs in the aftermath of specific gun-related tragedies and tends to focus on the individual who pulled the trigger and what could have been done to intervene with that person to prevent the tragedy. But largely absent from the national conversation about gun violence is any mention of the industry responsible for putting guns into our communities in the first place.”[8]

Regulatory Oversight—The Gun Industry

The Bureau of Alcohol, Tobacco, Firearms and Explosives enforces Federal criminal laws and regulating the firearms and explosives industries. The ATF was established by Department of Treasury Order No. 221, effective July 1, 1972, which transferred the functions, powers, and duties arising under laws relating to alcohol, tobacco, firearms, and explosives from the IRS to the ATF. The Homeland Security Act of 2002 transferred certain functions and authorities of ATF to the Department of Justice. It coordinates with the industry “directly and through partnerships, to investigate and reduce violent crime involving firearms and explosives.”[9]

The 1968 Gun Control Act

Fifty-three years ago, in light of the assassinations of President John F. Kennedy, Senator Robert Kennedy, and Dr. Martin Luther King, Jr., Congress passed the Gun Control Act of 1968. It has been more or less effective since then as the primary statutory structure for the federal regulation of firearms. Theoretically, its mission is to “Keep firearms out of the hands of those not legally entitled to possess them because of age, criminal background or incompetency, and to assist law enforcement authorities in the states and their subdivisions in combating the increasing prevalence of crime in the United States.”[10] It requires individuals engaged in the business of dealing in firearms to obtain a federal license, prohibits transfers of firearms to certain persons, restricts the interstate transportation of firearms, and regulates importation of certain firearms not suitable for “sporting purposes.”

To achieve these admirable goals, the legislation requires federal licenses for anyone or any company transferring firearms in the country. To meet this goal, the act created a licensing scheme regulating interstate movement of firearms. Those engaged in the business of manufacturing, importing, or dealing in firearms were identified in statute and regulatory schemes as “federal firearms licensees” or FFLs for short. They must obtain a license from the Secretary of the Treasury. That gives them the right to ship, transport, and receive firearms in interstate or foreign commerce. FFLs are legally required to maintain records of all acquisitions and dispositions of firearms, and comply with applicable state and local laws in transferring firearms.

It was a victory of sorts for gun-control activists. Many were disappointed it didn’t include a registry of firearms or federal licensing requirements for gun owners. TIME magazine reported years later, “It may take another act of horror to push really effective gun curbs through Congress.”[11] Predictably, the scores of horrible acts, mass shootings, daily gun violence, and thousands of dead bodies have not yet emboldened Congress to take on the Gun Lobby.
At the signing of the U.S. Gun Control Act on Oct. 22, 1968, President Lyndon B. Johnson hailed the bill as the first step in disarming “the criminal, and the careless, and the insane. He also acknowledged that the legislation’s language fell short of his original vision, which would have required gun carriers to be licensed and would have established a national registration for guns — would-be regulations that remain controversial today.”[12] Even that far back, most people, including President Johnson knew why the criminal, careless, and insane would keep their guns and shoot at will. He said, “The voices that blocked these safeguards were not the voices of an aroused nation. They were the voices of a powerful lobby, a gun lobby, that has prevailed for the moment in an election year.”[13]

The moment has not yet passed. 

What’s New In The War Against The Gun Lobby? 

A 1986 law called the Firearm Owners’ Protection Act, championed at the time by the NRA, significantly weakened federal oversight over gun sellers, including a provision that does not require hobby sellers to have a federal firearms license. It “Amends the Gun Control Act of 1968 to redefine ‘gun dealer,’ excluding those making occasional sales or repairs. Exempts certain activities involving ammunition from current prohibitions. Permits the interstate sale of rifles and shotguns, provided: (1) the transferee and transferor meet in person to accomplish the transfer; and (2) such sale complies with the laws of both States. It also assumes the licensee to have actual knowledge of the laws of both States. Repeals certain recordkeeping requirements for the sale of ammunition (but retaining such requirements for armor-piercing ammunition). Revises the current prohibition against the sale of firearms or ammunition to certain categories of individuals by: (1) prohibiting such sales by all persons (current law covers only licensees); and (2) including as additional categories illegal aliens, dishonorably discharged members of the armed forces, and U.S. citizens who renounce their citizenship. Extends the prohibition against shipping firearms or ammunition in interstate or foreign commerce to include such individuals.”[14]

In 1993, Congress passed the Brady Handgun Violence Prevention Act, which requires a federal background check on U.S. firearm purchases. It contemplated a database system that would make people selling guns, if they were licensed gun dealers, check to ensure that the purchaser was not in one of those categories that was set up in the 1968 Gun Control Act. These private sellers need not run background checks on purchasers.[15] However, certain aspects of the Brady Bill were ruled unconstitutional in court in Printz v. United States.[16] Now the federal government uses aa instant check system instead of a five-day wait, but otherwise it survived and is still in effect today. However, one in five guns is sold today with no background check because of that gap under federal law.

Underground Gun-Makers & Ghost Guns

As though there were not enough problems because of the national lack in regulating corporate gun manufacturing, we have underground gunsmiths. “A segment of the firearms industry that operates with even less oversight than traditional manufacturers: homemade firearms, ammunition, and firearm accessories makers. There is a robust online community of amateur gun-makers offering tips and tricks for making guns at home and selling kits to allow people to do so that often come very close to the line of what is legally permissible. There are two primary concerns related to homemade firearms and accessories: First, these guns and accessories are often made using parts that can be purchased without a background check, creating an easy avenue for individuals prohibited from gun possession to evade that law and make guns at home. Second, homemade guns and accessories are often made with parts that are not required to include a serial number, rendering the finished firearm untraceable if it is later used in a crime.”[17]

Ghost gun makers do not engrave serial numbers on the frame or receiver of their guns, as lawful firearm and gun dealers do. “Current law requires them to conduct a background check before selling firearms, i.e., any weapon, including a starter gun, which will or is designed to or may readily be converted to expel a projectile by the action of an explosive. A firearm is also the frame or receiver of any such weapon. The ATF interprets this definition to include only fully finished firearms, frames, and receivers, meaning that those that are not technically finished and require a few additional steps before they can be used to make a fully functional gun are not subject to these legal requirements. Often referred to as ‘unfinished receivers’ or ‘80 percent receivers,’ these receivers generally only require a person to follow any of the myriad tutorial videos or guides online and use basic tools to complete the receiver by drilling a few holes for the selector, trigger, or hammer pins. Guns made at home using these unfinished receivers have become known as ‘ghost guns’ because they are untraceable when they are recovered after use in a crime.[18]

A former ATF special agent described the ease with which fully functional guns can be made at home using these parts: “If you can put Ikea furniture together, you can make one of these.”[19]

Does It Matter?

The gun industry is a primary player in the public health epidemic of gun violence. But it is not part of the national conversation about campus shootings, much less mass shootings off campus. It is the case that the gun lobby is more effective than the gun violence lobby is. Consequently, the gun industry is ineffectively regulated due to a “weak laws, restrictive caveats on ATF’s authority, and an overall lack of political will to seriously address the glaring problems with how gun manufacturers, importers, and dealers are allowed to operate.”[20]

[1] “Founded in 1971, IBISWorld provides trusted industry research on thousands of industries worldwide. Our in-house analysts leverage economic, demographic and market data, then add analytical and forward-looking insight, to help organizations of all types make better business decisions.” https://www.ibisworld.com/.

[2] Elizabeth MacBride, “America’s Gun Business Is $28B. The Gun Violence Business Is Bigger.” Forbes Magazine, Nov. 25, 2018. https://www.forbes.com/sites/elizabethmacbride/2018/11/25/americas-gun-business-is-28b-the-gun-violence-business-is-bigger/#2df83ea93ae8.

[3] Ibid.

[4] https://www.yahoo.com/now/see-gun-why-u-special-030000683.html 

[5] https://www.americanprogress.org/issues/guns-crime/reports/2020/08/06/488686/gun-industry-america/

[6]  https://www.influencewatch.org/non-profit/center-for-american-progress-cap/

[7] Article by Chelsea Parsons, Eugenio Weigend Vargas and Rukmani Baia, August 6, 2020. https://www.americanprogress.org/issues/guns-crime/reports/2020/08/06/488686/gun-industry-america/

[8] Ibid.

[9] https://www.federalregister.gov/agencies/alcohol-tobacco-firearms-and-explosives-bureau

[10] S. Rep. No. 90-1097 (1968)

[11] Olivia B. Waxman. October 30, 2018. https://time.com/5429002/gun-control-act-history-1968/

[12] https://gunsandamerica.org/story/18/10/22/50-years-since-landmark-gun-control-act-where-are-we-now/

[13] Ibid.

[14] https://www.congress.gov/bill/99th-congress/senate-bill/49

[15] https://www.congress.gov/103/bills/hr1025/BILLS-103hr1025enr.pdf

[16] In a 5-4 ruling, the Supreme Court held that the Brady Act provision was unconstitutional. Justice Antonin Scalia wrote the majority opinion. He stated that early federal statutes did not suggest that Congress thought it had the power to direct the actions of State executive officials. 521 US 898, (1997)

[17] https://www.americanprogress.org/issues/guns-crime/reports/2020/08/06/488686/gun-industry-america/

[18] Ibid.

[19] Alain Stephens, “What Makes a Gun a Ghost Gun?”, The Trace, December 5, 2019, available at https://www.thetrace.org/2019/12/what-makes-a-gun-a-ghost-gun

[20] “>https://www.americanprogress.org/issues/guns-crime/reports/2020/08/06/488686/gun-industry-america/>

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