The War Profiteers

Note: I have no doubt the same general principles apply in this country. The loudest warmongers will have their hands somewhere in our pockets.

One of these days, I will update my reading on the Great War. So long as Asquith and Kitchener were running things, however, my understanding is that contracts were handed round a tight circle of suppliers. One of the side effects was a certain economy with the lives of our men – not enough shells for a big push necessarily kept the “Roll of Honour” somewhat less than obscene. Once Kitchener was dead and Asquith pushed aside, Lloyd George handed out the cost plus contracts as if they’d been confetti. The result remains burned into every family memory.

The commissions he was raking in doubtless had something to do with Lloyd George’s rejection of the Austrian peace feelers and the burying of Lord Lansdowne’s call for a negotiated peace. I’ve always thought it a great shame that, of all those who started or directed the War, only Nicholas the Bloody came to a bad end. For me at least, pictures of Lloyd George, Churchill et al. choking on the end of a rope would not have lost their power to thrill. We might also have avoided the second round of profiteering.

For the future, when I come to power, I will abolish the Army and replace it with an armed citizen militia. SIG

The War Profiteers:
New study shows pro-war commentators have material interest in perpetual conflict
by Justin Raimondo, October 14, 2013

The Founders were wary of establishing a standing army: they feared not only that it would become an instrument of domestic tyranny, as in Europe, but also that it would lead to … what we have today: a militarist caste that glories in – and profits from – war. As James Madison, the father of the Constitution, put it:

“Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. In war, too, the discretionary power of the Executive is extended; its influence in dealing out offices, honors, and emoluments is multiplied; and all the means of seducing the minds, are added to those of subduing the force, of the people…. [There is also an] inequality of fortunes, and the opportunities of fraud, growing out of a state of war, and … degeneracy of manners and of morals…. No nation could preserve its freedom in the midst of continual warfare.”

Those last phrases – “inequality of fortunes,” “opportunities of fraud,” and “degeneracy of manners and of morals” – ought to ring like alarm bells going off, especially in the context of recent history. For the last decade or so, we’ve been at war constantly, and this is due in large part to the dominance in American politics – and most particularly in our media – of those who stand to profit from war, materially and otherwise. Whenever a “crisis” is ginned up by the US and its allies – take recent events in Syria as an example – the talking heads start ululating for war, or at least some form of US intervention, and this sets the terms for what is usually a very one-sided “debate.”

I always knew, on some level, that these “experts” had some kind of monetary as well as nonmaterial interest in promoting interventionist policies, but even I was shocked to read this report from the Public Accountability Initiative detailing the extent of it. And while the PAI study deals only with the recent national discourse over whether to intervene in Syria, many if not most of the commentators profiled therein played similar roles in the run up to the invasion of Iraq and our ongoing wars in Afghanistan and Africa.

PAI profiled 22 commentators with strong financial ties to the military-industrial complex who, in the course of 111 media appearances (either televised or print), made the case for intervention in Syria in the vast majority of those occasions. Particularly egregious: Stephen Hadley, former Bush administration official, whose membership on the board of Raytheon, a major military contractor, was never disclosed – although his other credentials as a “defense expert” were touted by his hosts on CNN, MSNBC, and Bloomberg TV. An op-ed for the Washington Post somehow neglected to note this little detail. As PAI documents, Hadley makes a pretty penny from his expertise at ginning up wars:

“Hadley earns $128,500 in annual cash compensation from the company and chairs its public affairs committee. He also owns 11,477 shares of Raytheon stock, which traded at all-time highs during the Syria debate ($77.65 on August 23, making Hadley’s share’s worth $891,189). Despite this financial stake, Hadley was presented to his audience as an experienced, independent national security expert.”

Raytheon stock rose during the debate over Syria on the prospect that President Obama would soon be lobbing Tomahawk missiles – made by Raytheon – at Bashar al-Assad. Each missile costs $1.41 million: we launched half a billion dollars worth during the Libya adventure. Hadley was for that one, too. Notice that in that last link – an interview with Obama cultist Andrea Mitchell – Hadley is introduced as a former national security advisor “and is currently with the United States Institute of Peace.” What Mitchell doesn’t tell her viewers, who may think USIP is a real thinktank, is that the “Institute” is a US government agency devoted to rationalizing American foreign policy.

In these circles, however, the distinction between the public and the private is vague-to-nonexistent. If you take a good look at the PAI report, it charts commentators’ ties to various “consulting groups,” the biggest of which involve former US government officials as principals and/or founders. This is the central nexus of the War Party, a crucial network of interlocking elites who perpetuate our interventionist foreign policy and short-circuit – in most cases – opposition outside the Washington beltway.

Take, for example, the views – she once complained to Colin Powell “what’s the use of having this superb military if we don’t use it?” – are now being parlayed into some nice profits (although ASG doesn’t make their internals public, they do have quite a generous profit-sharing 401k plan).

The Albright component of Albright Stonebridge started out as the Albright Group, which had an affiliate, Albright Capital Management: ACM’s business was securing financing and investment opportunities in “emerging markets” (i.e. precisely those countries likely to find themselves the targets – or beneficiaries – of US intervention). In 2007 Albright was managing $329 million for a Dutch pension fund investor who opined that the former Secretary of State “sees a need for investing to create a middle class … There was an ideological background for Secretary Albright to get involved in this.”

There certainly was and is an ideological background, albeit not in the way Jelle Beneen, of PGGM, a multi-billion-dollar pension fund, meant it. The ideology behind the profiteering is crony capitalism, or oligarchical capitalism, as I prefer to call it, in which the coin of the realm is political connections rather than entrepreneurial savvy or technical innovativeness. What the novelist Ayn Rand called the “aristocracy of pull” is now clearly dominant in the US, where the wealthiest counties in the country are those surrounding Washington, D.C., and the amount of corporate welfare being ladled out in the federal budget has reached an all-time high.

This is the way it has always worked in the foreign policy realm: rich backers think up a profit-making enterprise which requires the support of the US government in order to turn a profit – often involving turning the US military into a company’s private police force. Their friends in Washington cook up a “national security” rationale for US intervention in the targeted area, and – bingo! We have the Panama Canal!

Some enterprising libertarian scholar really should do a taxonomy of the American political class: such a weighty subject is far beyond my humble capabilities, but I would venture to say that, if such a study were done, one of the findings would be the discovery of a certain subset that lives at the intersection of corporate and ideological interests in the foreign policy field. The influence of this small but powerful group of self-interested former and present government officials, and their corporate cronies, extends far beyond Washington: indeed, its tentacles encircle the globe, reaching into every parliament, every newsroom, and virtually every political party on earth.

Oh, but this is just a “conspiracy theory,” avers the political class and its apologists: there is no there there, they claim, and even if there were it’s pure coincidence, you understand, that the very people pushing our foreign policy of perpetual war just happen to personally profit from US meddling around the world.

It’s impossible to know what motivates people to believe or act in a certain way: oftentimes they don’t even have a clear idea themselves. Yet we can infer motives not only by their actions but by the consequences of those actions, and if the same people saying the same old thing keep getting richer saying it, then it is fair to draw certain conclusions – and if that’s “conspiracism,” well then so be it.

In the age of empire, when “the opportunities of fraud, growing out of a state of war” are manifold and “degeneracy of manners and of morals” is the rule in Washington rather than the exception, a political class mired in the last stages of corruption isn’t bashful about the great “inequality of fortunes” – but is none too eager to reveal the sources of both their wealth and the policies that made that wealth possible.

12 responses to “The War Profiteers

  1. Completely disagree re the Army.I favour professional Armed Forces,large,well-equipped,and ready to do what’s necessary for Britain.The Forces and the royals are about the only people in authority I respect.

    • The better the army, Mark, the bigger the wars it will be called on to fight. Look at that picture of one of my great uncles. The old Army, pre-Cardwell, couldn’t have been sent off so quickly and effectively to help the French, nor been so capable of indefinite expansion. I believe he was a glassmaker before he was put into a uniform and sent out to have his fingers shot away.

      We need the Navy – and the more Super Dreadnoughts we can give it, the better. We need the RAF, though not a bombing fleet. Standing armies are at best an excuse for the politicians to get up on their hind legs and talk about “our duties to the International Community.”

  2. I’m not sure I’d agree with you about Churchill, but the general thesis is interesting for now, and I will try to respond constructively on this point as I know you are a bit of a “Churchill-skeptic” now and then.

  3. I will be leaving the armed forces as they are, except for ordering an extra pair of carrier groups and ordeirng a celebratory flypast as I stand waving regally from a suitable podium. There will be much to do in my first 100 days, and an unhappy army is not part of that plan. My first major law will be the replacement of Guy Fawkes on bonfires with effigies of Mr Tony Blair (assuming the real one is not available), to be enforced by zealous interior ministry roundhead social complaince troops. Priorities, you know.

  4. The proportion of the American economy devoted to the military has been in DECLINE for half a century. It might have made sense to for smaller government people to concentrate on opposing military spending back when Jack Kennedy was President, but it does not make sense now.

    Nor is it the case that the “merchants of death” have caused any major wars – indeed their influence on whether or not to go war is just about zero.

    As for a People’s Militia replacing the armed forces of the Queen.

    A rather misguided idea – and one does not need to be Adam Smith (the trouble with a militia is that they will lose to a proper army) to understand that. After all even General Giap (the Communist general who the Guardian newspaper and the Economist magazine wrote fawning obituaries of) had, in reality, nothing but contempt for the “National Liberation Front” (the V.C.) in the South – he understood that militarily (as opposed to for media purposes) they were pathetic (as was proved in Tet Offensive – that media victory and military defeat for the VC).

    On the First World War I think the really interesting contrast is between the economic management of France and Germany.

    Germany famously tried “War Socialism” (which the Nazis brought back in the 1930s) where even the largest companies were really the slaves of the state – controlled in every aspect (the real meaning of “Corporatism” – which Hollywood idiots persist in thinking means the state is controlled by business, and actually means that the state controls business).

    France (by contrast) tried a less statist approach to war production

    The results (as noted by Ludwig Von Mises in “Nation, State and Economy”) were clear – French war production (in both scale and quality) was much better than German – in spite of Germany having (at the start of the war) a much larger industrial base, and France losing large scale industrial areas (to German attack).

    French businessmen set up new industries in areas of France where industry (other than farming and associated trades) had been unknown – they were incredibly flexible in ways that German industry was not ALLOWED to be.

    The French learned a lesson from all this…….


    It is difficult not to despair.

  5. In Britain – those contracts were not as good as they looked. As the government brought in a “war profits tax” after the war – bankrupting many enterprises. Including enterprises that had produced vital aircraft – thus undermining the British aircraft industry, and many other industries at a key time when they were trying to transfer to peace time production.

  6. Paul -the Germans beat the French in 1940 by the miltarty equivalent of a quick knockout.Sean-I can think of circumstances under which we will need to use large armies.

  7. Lloyd George was a very evil man. For him, the war was an opportunity; not just for himself and his career, but as a glorious opportunity to extend the State massively.

    My own view is that, in rational terms, Britain should have withdrawn after the first decimation of the British Expeditionary Force. It seems to me that most politicians only stayed in out of a sense of honour- not being seen to run away from the fight and leave allies in the lurch. But Lloyd George, by contrast, absolutely loved it, every moment of it. It was the big chance to become, like Germany, a statist “state machine”.

    I think Britain had only two evil Prime Ministers in the 20th century. One was Blair, the other was Lloyd George. I disagree with Sean about Churchill; from a non-libertarian position (i.e. the mainstream of the time) World War II was probably a war that, in some form, was going to have to be fought at some time or another. The alternative, in 1939, was a Europe dominated by the Nazis and an intolerable threat to Britain as a consequence. A further possible consequence may even have been a Nazi defeat by the Soviet Union, and then the Soviet Union extending as far as the English Channel. I do not thus blame politicians of the 1930s for making the choices they did.

    But Lloyd George; I blame him for a great deal indeed.

    • Well, we are agreed about Lloyd George and Blair. One day, I’m sure you will join me in wishing the Fuzzy-Wuzzies had got lucky with Winston at Omdurman.

  8. Mark – I was talking about World War One (not 1940 in World War II).

    But the World War II situation is interesting – France was undermined, by the Popular Front government of the 1930s (indeed there is a option in one of the World War II simulation games for there not to have been a Popular Front government in the 1930s – so that the French military is much stronger). And France was undermined in 1940 by active Communist sabotage (strikes, wreaking – you name it, the Communists in France did it).

    The alliance between the Communists and the Nazis in 1940 seems to have gone down the Memory Hole (or rather – it has been put down the Memory Hole).

    As for World War One.

    As Mises (a man who, unlike Rothbard, actually knew the leading German academics and political types of the time) never tired of pointing out…….

    German academia (the “Intellectual Bodyguard” of the German state) and the German political class, was committed to endless power (GeoPolitics – on a world scale). There were no limits on their desires.

    So had Britain allowed Germany to control the Low Countries and France (against a British tradition that no one power should control all the coast facing England – a tradition that goes back at least to the first Elizabeth) Britain would still have had to fight Germany later (and in a worse position).

    In short war was not optional – although this does NOT justify the lack of tactical understanding of such Generals as Haig.

    The war did NOT have to be fought as it was fought.

  9. I take it that Dr Gabb’s last comment, wishing that Winston Churchill had been killed by the Islamists in the Sudan, was a joke (although a very bad joke).

    It should be remembered that the Islamists in the Sudan did not “just” to exterminate or enslave all nonMuslims in North Eastern Africa (hence the attacks outside the Sudan itself) – they wished (like all sincere Muslims) to impose Islamic law all over the Earth.

    Like Imperial Germany in 1914 (with its ideology of endless conquest) had the Islamists in the Sudan not been fought where they were – they would have to have been fought somewhere else.

    By the way, and I apologise for my slowness, I now see that Mark’s point may have been that by becoming more like Germany – the France of 1939 was weaker than the France of 1914.

    France had a smaller population than Germany.

    The only advantage France had was that it was a less statist country economically.

    That advantage the French government flung away.

    France is today perhaps the most statist country in Western Europe (perhaps worse even than Sweden).