The military-industrial-complex [would] cause military spending to be driven not by national security needs but by a network of weapons makers, lobbyists and elected officials.
— Dwight D. Eisenhower
There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.
— General Smedley D.
Neither the Iraq Study Group nor
other establishment critics of the
In light of fact that by now almost all of the factions of the ruling circles, including the White House and the neoconservative war-mongers, acknowledge the failure of the Iraq war, why, then, do they balk at the idea of pulling the troops out of that country?
Perhaps the shortest path to a
relatively satisfactory answer would be to follow the money. The fact is that not
everyone is losing in
Pentagon contractors constitute the overwhelming majority of these profiteers. They include not only the giant manufacturing contractors such as Lockheed Martin, Northrop Grumman and Boeing, but also a complex maze of over 100,000 service contractors and sub-contractors such as private army or security corporations and “reconstruction” firms. These contractors of both deconstruction and “reconstruction,” whose profits come mainly from the US treasury, have handsomely profited from the Bush administration’s wars of choice.
A time-honored proverb maintains
that wars abroad are often continuations of wars at home. Accordingly, recent
Meanwhile, the American people are
sidetracked into a debate over the grim consequences of a “pre-mature”
withdrawal of US troops from
Such concerns are secondary to the
booming business of war profiteers and, more generally, to the lure or the
prospects of controlling
(Because the role of oil is discussed
extensively by many other researchers and writers, I would focus here on the
role of the Pentagon contractors, both as a major driving force to the war on
The rise of the fortunes of the
major Pentagon contractors can be measured, in part, by the growth of the
Pentagon budget since President George W. Bush arrived in the White House: it
has grown by more than 50 percent, from nearly $300 billion in 2001 to almost
$455 billion in 2007. (These figures do not include the Homeland Security
budget, which is $33 billion for the 2007 fiscal year alone, and the costs of
the wars in
Large Pentagon contractors have been the main beneficiaries of this windfall. For example, a 2004 study by The Center for Public Integrity revealed that, for the 1998–2003 period, one percent of the biggest contractors won 80 percent of all defense contracting dollars. The top ten got 38 percent of all the money. Lockheed Martin topped the list at $94 billion, Boeing was second with $81 billion, Raytheon was third (just under $40 billion), followed by Northrop Grumman and General Dynamics with nearly $34 billion each.
Fantastic returns to these armaments
conglomerates have been reflected in the continuing jump in the value of their
shares or stocks in the Wall Street: “Shares of U.S. defense companies, which
have nearly trebled since the beginning of the occupation of
Major beneficiaries of war dividends include not only the giant manufacturing contractors such as Northrop Grumman and Lockheed Martin, but also a whole host of other war-induced service contractors that have mushroomed around the Pentagon and the Homeland Security apparatus in order to cash in on the Pentagon’s spending bonanza.
A highly profitable and fast growing industry that has evolved out of the Pentagon’s tendency to shower private contractors with tax-payers’ money is based on its increasing practice of the outsourcing of the many of the traditional military services to private businesses. “In 1984, almost two-thirds of [the Pentagon’s] contracting budget went for products rather than services. . . . By fiscal year 2003, 56 percent of Defense Department contracts paid for services rather than goods.”
What is more, these services are not limited to the relatively simple or routine tasks and responsibilities such food and sanitation services or building maintenance. More importantly, they include “contracts for services that are highly sophisticated, strategic in nature, and closely approaching core functions that for good reason the government used to do on its own. The Pentagon has even hired contractors to advise it on hiring contractors.”
Private security contracting, a
lucrative and rapidly growing industry, is a good example of the Pentagon’s
policy of outsourcing. These contractors operate on the periphery of
For example, MPRI, one of the largest and most active of these firms, which “has trained militaries throughout the world under contract to the Pentagon,” was founded by former Army Chief of Staff Carl Vuono and seven other retired generals. The fortunes of these military training contractors, or modern-day mercenary companies, like those of the manufacturers of military hardware, have skyrocketed by virtue of heightened war and militarism under President George W. Bush. For example, “The per share price of stocks in L3 Communications, which owns MPRI, has more than doubled.”
As the Pentagon’s manufacturing contractors such as Lockheed Martin make fortunes through the production of the means of death and destruction, they also create profit opportunities for service contractors such as Halliburton that, like vultures, follow the plumes of the smoke of deconstruction and set up shop for “reconstruction.”
For example, in the same month
(October 2006) that the
Jeff Tilley, an analyst who does
research for Halliburton, likewise pointed out, "
This led many critics to point out
scornfully that when around the same time Vice President Dick Cheney told Rush
Limbaugh that "if you look at the overall situation [in
The service and “rebuilding” contractors are frequently called “reconstruction rackets” not only because they obtain generous and often no-bid contracts from their policy-making accomplices, but also because they habitually shirk on their contracts and skimp on what they promise to do. For example, an investigative on-the-ground report from Iraq, sponsored by the Institute for Southern Studies and titled “New Investigation Reveals Reconstruction Racket,” showed that despite “billions of dollars spent, key pieces of Iraq's infrastructure—power plants, telephone exchanges, and sewage and sanitation systems—have either not been repaired, or have been fixed so poorly that they don't function.”
carried out by Pratap Chatterjee and Herbert Docena and published in the
Institutes’ Publication Southern
Exposure, further revealed that the giant Pentagon contractor Bechtel “has
been given tens of millions to repair
also showed that out of a $2.2 billion “reconstruction” contract with
Halliburton, the company spent only 10 percent on “community needs—the rest
being spent on servicing
The spoils of war and devastation in Iraq have been so attractive that an an extremely large number of war profiteers have set up shop in that country in order to participate in the booty: “There are about 100,000 government contractors operating in Iraq, not counting subcontractors, a total that is approaching the size of the U.S. military force there, according to the military's first census of the growing population of civilians operating in the battlefield,” reported The Washington Post in its 5 December 2006 issue.
The report, prepared by Renae Merle,
further points out, “In addition to about 140,000
The fact that powerful beneficiaries of war dividends flourish in an atmosphere of war and international convulsion should not come as a surprise to anyone. What is surprising is that, in the context of the recent US wars of choice, these beneficiaries have also acquired the power of promoting wars, often by manufacturing “external threats to our national interest.” In other words, profit-driven beneficiaries of war have also evolved as war makers, or contributors to war making.
The following is a sample of such unsavory business–political relationships, as reported by Walter F. Roche and Ken Silverstein in a 14 July 2004 Los Angeles Times article, titled “Advocates of War Now Profit from Iraq’s Reconstruction:”
• Former CIA Director R. James Woolsey is a prominent example of the phenomenon, mixing his business interests with what he contends are the country's strategic interests.
• Neil Livingstone, a former Senate aide
who has served as a Pentagon and State Department advisor and issued repeated
public calls for Hussein's overthrow. He heads a Washington-based firm,
GlobalOptions, Inc. that provides contacts and consulting services to companies
doing business in
• Randy Scheunemann, a former Rumsfeld
advisor who helped draft the Iraq Liberation Act of 1998 authorizing $98 million
• Margaret Bartel, who managed federal money channeled to Chalabi's exile group, the Iraqi National Congress, including funds for its prewar intelligence program on Hussein's alleged weapons of mass destruction. She now heads a Washington-area consulting firm helping would-be investors find Iraqi partners.
• K. Riva Levinson, a
• Joe M. Allbaugh, who managed President Bush's 2000 campaign for the White House and later headed the Federal Emergency Management Agency, and Edward Rogers Jr., an aide to the first President Bush, recently helped set up New Bridge Strategies and Diligence, LLC to promote business in postwar Iraq.
strong indications that these dubious relationships represent more than simple
cases of sporadic or unrelated instances of some unscrupulous or rogue elements.
Evidence shows that contracts for the “reconstruction” of
in the lull of the
August media doze, the Bush Administration's doctrine of preventive war took a
major leap forward. On August 5, 2004, the White House created the Office of the
Coordinator for Reconstruction and Stabilization, headed by former
Here we get a glimpse of the real reasons or forces behind the Bush administration’s preemptive wars. As Klein puts it, “a government devoted to perpetual pre-emptive deconstruction now has a standing office of perpetual pre-emptive reconstruction.” Klein also documents how (through Pascual’s office) contractors drew “reconstruction” plans in close collaboration with various government agencies and how, at times, contracts were actually pre-approved and paper work completed long before an actual military strike:
“In close cooperation with the National Intelligence Council, Pascual's office keeps ‘high risk’ countries on a ‘watch list’ and assembles rapid-response teams ready to engage in prewar planning and to ‘mobilize and deploy quickly’ after a conflict has gone down. The teams are made up of private companies, nongovernmental organizations and members of think tanks—some, Pascual told an audience at the Center for Strategic and International Studies in October, will have ‘pre-completed’ contracts to rebuild countries that are not yet broken. Doing this paperwork in advance could ‘cut off three to six months in your response time.’”
No business model or entrepreneurial
paradigm can adequately capture the nature of this kind of scheming and
profiteering. Not even illicit businesses based on rent-seeking, corruption or
theft can sufficiently describe the kind of nefarious business interests that
lurk behind the Bush administration’s preemptive wars. Only a calculated
imperial or colonial kind of exploitation, albeit a new form of colonialism or
imperialism, can capture the essence of the war profiteering associated with the
Classical colonial or imperial powers roamed on the periphery of the capitalist center, “discovered” new territories, and drained them off of their riches and resources. Today there are no new places in our planet to be “discovered.” But there are many vulnerable sovereign countries whose governments can be overthrown, their infrastructures smashed to the ground, and fortunes made as a result (of both destruction and “reconstruction). And herein lies the genius of a parasitically efficient market mechanism, as well as a major driving force behind the Bush administration’s unprovoked unilateral wars of choice.
Not only does the new form of imperial or colonial aggression, driven largely by the powerful interests that are vested in the armaments industries and other war-based businesses, bring calamity to the vanquished, but it is also detrimental and burdensome to the victor, namely, the imperium and its citizens. Contrary to the external military operations of past empires, which usually brought benefits not only to the imperial ruling classes but also (through “trickle-down” effects) to their citizens, U.S. military expeditions and operations of late are not justifiable even on the grounds of national economic gains.
Indeed, escalating US military expansions and aggressions have become ever more wasteful and cost-inefficient as they are hollowing out the public treasury, undermining social spending, and accumulating national debt. Viewed in this light, the new form of imperialism can perhaps be called “parasitic” imperialism.
War profiteering is, of course, not
new; it has always existed in the course of the history of warfare. What makes
war profiteering in the context of the recent
This is key to an understanding of
It follows that US troops will not
be withdrawn from
It is crucially important that
public attention is shifted away from the confining official narrative of the
war, parroted by the corporate media and political pundits, to the economic
crimes that have been committed because of this war, both in
Political Economy of U.S. Militarism
buy from amazon
Ismael Hossein-zadeh is a
professor of economics at
Counts 100,000 Contractors in Iraq,”
2. The Center for Public Integrity, “Report Finds $362 Billion in No-Bid Contracts at the Pentagon” (September 29, 2004)
3. Bill Rigby, “Defense stocks may jump higher with big profits,” Reuter (April 12, 2006)
4. The Center for Public Integrity, “Outsourcing the Pentagon” (September 29, 2004)
Esther Schrader, “Companies
Capitalize on War on Terror,”
6. Steve Young, “What Is Bad for America Is Good for Halliburton . . . Just Ask the Vice President,” OpEdNews.com (23 October 2006)
7. “War Profiteering,” by Source Watch (a project of the Center for Media & Democracy)
Counts 100,000 Contractors in Iraq,”
9. William D. Hartung, How Much
Are You Making on the War, Daddy? (
10. “War Profiteering,” by Source Watch (a project of the Center for Media & Democracy)
11. Naomi Klein, “The Rise of Disaster Capitalism,” The Nation (May 2, 2005)
12. As quoted in Klein, “The Rise of Disaster Capitalism.”
13. Josh Mitteldorf, “Why we’re not getting out of Iraq,” Op Ed News (December 8, 2006)
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