Which is more effective - to stem the supply or reduce the demand?
There are no easy solutions for dealing with the supply of arms to non-democratic states. If it's profitable then there will always be firms willing to fulfil the demand. However, it should be possible for genuinely concerned governments to reduce the exploitation of international trade routes for supplying arms to non-democratic states, either through total embargoes or state control of the trade (i.e. stop non-state companies manufacturing them in the first place).
At the moment there is considerable influence from the arms 'lobby' represented by the largest weapons manufacturers - after all, it's a lucrative trade. As an example, there were 14 separate cluster bomb manufacturers represented at this year's Defence Systems and Equipment International show in London's Docklands: Lockheed Martin, EADS, Daimler Chrysler, Giat Industries, MBDA, Rhienmetall, RUAG, SAAB, Denel, General Dynamics, L-3 Communications, Northrop Grumman, Raytheon and Textron. When major 'car' makers are also developing weapons of such large-scale death, it makes you realise just how established the arms market is. Most of these firms will maintain that sales to non-democratic or black-listed states is not tolerated, and yet once arms have left the direct control of a supplier (for example, through an intermediary broker) it's doubtful whether much is done to ascertain or influence it's end destination. There is also likely to be the mentality within western states that if we're not supplying these dictators, then somebody less 'responsible' will and our armed forces will know far less about what they're facing.
On the demand side, short of removing those ultimately responsible for their subjects' fate, there is little that can be done. The most popular weapon in the world is the AK47, which can be made, cheaply and easily by a relatively competent manufacturer, anywhere in the world. Its simplicity is the key to it's widespread use. Stopping the supply from the west would not reduce the use of the AK, but probably increase it. But - and it's a big but - that doesn't mean we shouldn't be doing more to reduce the export of weapons to non-democratic states. The argument that just because someone else will do it if we don't doesn't justify the grey trade in illicit weaponry and our governments should undoubtedly be doing more to stem the flow. Of course we don't know how much our esteemed leaders owe to the arms lobby for their election in the first place... Mr Bush?....
To end on a faintly positive note. If you own shares, or have other indirect investments in the stock market, why not make the effort to find out how much of it is invested in firms that have some involvement, no matter how seemingly insignificant, in weapons manufacture - and then sell them. If you have a SAAB or a car from the Daimler-Chrysler Group (i.e. a Merc, Jeep, Smart, Dodge or Chrysler) why not consider changing to one that's a little less tainted. And finally, if you're considering a holiday in a far flung state, just make sure it's not one controlled by products made in your own backyard.
List of manufacturers: http://armstrade.blogspot.com/
List of cars: http://www.daimlerchrysler.com/