WAR PROFITEERING: HOW TO MAKE A KILLING FROM CONFLICT

6th August 2015 By ,   9 Comments

Throughout history lots of companies have made money from wars. But would a government ever make the decision to go to war for economic gain?

 

What is War Profiteering?

Scene from Iron Man starring Robert Downey Junior as Tony Stark, accused of War Profiteering

Tony Stark; War Profiteer?

War Profiteers sell weapons, services or other goods to groups at war in order to make a profit. In other words: making money from war.

War Profiteers can be arms dealers, scientific research groups, and companies selling commodities like oil. Private Militaries (mercenaries) also make money from war. Why fight when you can pay someone else to do it?

States or countries can also benefit from war by winning territory and gathering resources, and also strengthening themselves politically, strategically and geo-politically.

 

Wars means Weapons

A missile is fired from a jet. Selling weapons to both sides could be considered war profiteering

Is selling weapons to both sides wrong?

Arms dealers are often accused of war profiteering, which is fair given that is basically their job. Think; Tony Stark in Iron Man. War means fighting. Arms companies produce weapons and make a profit from the selling them.

Sometimes arms companies will even sell weapons to both sides in a conflict. Andrew Smith from Campaign Against the Arms Trade describes how international missile systems company MBDA “sold weaponry to the Gaddafi regime in 2007, its missiles were extensively used by the UK and French military in the 2011 war as well as being supplied to rebel forces. In this case they had sold weapons to both sides.”

Double sales equal profits. Great for business but morally questionable?

 

Techno-babble

SIRI, the iphone helper is an example of war profiteering. It was developed using military funding

“SIRI, tell me what war profiteering is?”

Companies profiting from conflict can sometimes create something useful.

Fun-fact of the day: SIRI, the iPhone “helper” was originally developed by SRI international. They took money from a military research group in the US department of defence in order to create SIRI. In fact according to military expert David Brown most of the tech in your iPhone comes from a military research background.

You can also thank military research for creating computers, GPS systems and the internet. Indirectly, the developers of this technology profited from war. Is this wrong, or is it OK because they made cool stuff that was eventually used by everyone?

Commodity, Oddity.

Oil fires up from a well in "There Will Be Blood". Oil companies have been accused of war profiteering

Oil; the number one commodity

Say commodity – think goods, or items that you need… or want.

Wars disrupt production of goods, and generally mean commodities are harder to come by. This usually means the price goes up.

Oil is one of the most important commodities in the world. So it’s no wonder that oil is linked to the most infamous military action in recent history;

Case Study: the Iraq War

Oil fields. Iraq's oil used to be nationally owned, the companies brought in have been accused of war profiteering

For Sale: Iraq’s oil fields

In an article for CNN, journalist Antonia Juhasz describes how the Iraq War in 2003 was “a war for oil, and it was a war with winners: Big Oil.”

Before the war, Iraq’s oil was controlled by the Iraqi government. Today, foreign companies control most of the oil. Juhasz describes how the invasion of Iraq got rid of the two things stopping Western oil companies from setting up shop there. First Iraqi dictator Saddam Hussain was removed. Then the USA pushed the new US-friendly Iraqi government to pass laws allowing foreign companies to get in on the oil.

So despite then-Prime Minister Tony Blair describing Iraq as “the central security threat of the 21st century,” some argue that it was all just about money. Several US military high-flyers have even admitted openly that the Iraq War was basically over oil.

Ex-Vice President of the United States Dick Cheney used to be CEO of contracting company Halliburton, which earned billions from the reconstruction work needed in Iraq after the war. Before the war, Cheney chaired a committee that published a report suggesting that the Middle East should “open up areas of their energy sectors to foreign investment.”

Translation: stop hoarding all the goods! Quite ironic, when you think that later his old company would pocket $278 million in a deal to dig oil wells in Iraq.

These examples don’t necessarily mean that political decisions on military matters are influenced by potential income, but it does raise the question of who calls the shots.

 

How much influence do private companies have over Politicians?

The Independent reports how the UK government made £12.3 billion granting export licences for weapons. The licences allow the export of weapons to countries listed as having human rights abuses. So the UK government considered these countries to have a dodgy record, but still allowed weapons companies to sell their goods there.

Perhaps this is due to pressure from the arms companies themselves. Andrew Smith explains that “politically, the arms industry/pro military lobby has always enjoyed a loud voice in the corridors of power. This is not least because of the revolving door between parliament and the arms trade.”

Ex-Defence Secretary Geoff Hoon was suspended from the Labour Party after offering influence in Parliament in return for cash. Owen Jones describes that when Hoon was an MP, military helicopter company AgustaWestland were given an order worth £1 billion for 16 helicopters. He writes that “they were obviously grateful: now out of Parliament, Hoon earns his way as the company’s Vice-President of international business.”

 

So would the UK ever go to war to make money?

War Profiteering - soldiers marching to war

Before we go to war we should really know why we’re fighting

Dr. Jonathan Gumz, a senior lecturer in Modern History at the University of Birmingham thinks that “getting a government to go to war purely for economic profit is not something that takes place in reality.”

He expands; “certainly, all wars start for a reason with a political gain in mind. But…with rare exception, few statesmen actually want wars but they miscalculate and then feel forced into a point where war becomes a more reasonable option.”

So, it’s unlikely the UK would ever go to war just in the interests of money. But even if countries are neutral (not involved in conflict) that doesn’t mean they won’t benefit from other conflicts around the world. A paper published by Dartmouth University argues that “the costs that wars impose on neutral countries are usually greatly exaggerated; in fact many neutrals profit slightly from the economic changes caused by war.”

“Neutrals fare well during wars because the economy—especially in this era of increased globalization—is inherently flexible and resilient.”

The paper argues that though wars are likely to disrupt trading patterns between neutral countries and countries at war, new agreements are quickly established. This is because during conflict, the country at war “cannot efficiently produce everything they need…and countries at war can least afford to ignore more efficient international sources of supply.”

 

Is War Profiteering wrong?

Is War profiteering immoral or not?

Is war profiteering immoral?

We’ve seen how military research has led to technological advancements such as SIRI. So far there is no proof that a decision to go to war was made solely to make money for the country, not that anyone would admit that. So does it matter if a few companies make money from oil or selling weapons?

War means people will be killed, and seriously injured. The argument against war profiteering is that nobody should benefit from the suffering of others.

Andrew Dey from War Resisters International believes that “if you build something and sell it to someone, you have a moral responsibility for what happens with that weapon.” So if you sell a gun, you are partly responsible for what is done with it.

The largest buyer of UK arms is Saudi Arabia, which has been described as one of the most oppressive regimes in the world. UK arms have also been linked to attacks against innocent people in Egypt, Hong Kong, Bahrain, Kuwait and other countries in recent years.

Andrew Smith says “government ministers and arms companies can’t simply abdicate themselves of responsibility for this.”

Even if you profit indirectly, like the scientists whose research into SIRI was funded by the US defence department, you are still taking money and benefiting because somewhere in the world people are dying.

It’s easy to suggest that perhaps arms companies should take a close look at who they do business with. We asked UK arms manufacturers BAE Systems whether they have a specific policy about who they deal with. They replied stating that they operate to “high standards of ethical business conduct as a responsible and trusted partner” and “trade only with legitimate governments and comply fully with UK and international export regulations.” Don’t know what other answer we would have expected though to be honest.

War Profiteering Explained; companies making weapons are likely to make a killing.

Is war profiteering ethically wrong? Or is it fair game? Let us know in the comments below.

 

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9 Comments:

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  10. David says:
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    This is all very interesting. When they have finished with the Middle East where are they likely to turn their attention. North Korea looks like the most obvious target. Or perhaps China. Russia is a no win situation.! Africa could make them some money via eradicating the Somali pirates. Alaskan oil fields.? My money would be on North Korea. What do you think.?

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