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. Butler
Neither the Iraq
Study Group (ISG) nor other establishment critics of the Iraq war are calling
for the withdrawal of US troops from that country. To the extent that the ISG
or the new Congress purport to inject some "realism" into the Iraq
policy, such projected modifications do not seem to amount to more than
changing the drivers of the US war machine without changing its destination, or
objectives: control of Iraq's political and economic policies.
In light of the fact
that by now almost all of the factions of the ruling circles, including the White
House and the neoconservative warmongers, 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 Iraq.
Indeed, while the Bush administration's wars of choice have brought unnecessary
death, destruction, and disaster to millions, including many from the Unites
States, they have also brought fortunes and prosperity to war profiteers. At
the heart of the reluctance to withdraw from Iraq lies the profiteers'
unwillingness to give up further fortunes and spoils of war.
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 [1]. 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 US wars abroad seem to be largely reflections of domestic
fights over national resources, or public finance: opponents of social spending
are using the escalating Pentagon budget (in combination with drastic tax cuts
for the wealthy) as a cynical and roundabout way of redistributing national
income in favor of the wealthy. As this combination of increasing military
spending and decreasing tax liabilities of the wealthy creates wide gaps in the
federal budget, it then justifies the slashing of non-military public spending
-- a subtle and insidious policy of reversing the New Deal reforms, a policy
that, incidentally, started under President Ronald Reagan.
Meanwhile, the
American people are sidetracked into a debate over the grim consequences of a "premature"
withdrawal of US troops from Iraq: further deterioration of the raging civil
war, the unraveling of the "fledgling democracy," the resultant
serious blow to the power and prestige of the United States, and the like.
Such concerns are
secondary to the booming business of war profiteers and, more generally, to the
lure or the prospects of controlling Iraq's politics and economics. Powerful
beneficiaries of war dividends, who are often indistinguishable from the policy
makers who pushed for the invasion of Iraq, have been pocketing hundreds of
billions of dollars by virtue of war. More than anything else, it is the
pursuit and the safeguarding of those plentiful spoils of war that are keeping
US troops in Iraq.
(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 Iraq and a major obstacle in the way of withdrawing from
that country.)
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 Iraq and Afghanistan, which are fast approaching $400
billion.)
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 [2].
Fantastic returns to
these armaments conglomerates have been reflected in the continuing jump in the
value of their shares or stocks on Wall Street: "Shares of U.S. defense
companies, which have nearly trebled since the beginning of the occupation of Iraq,
show no signs of slowing down. . . . All the defense companies -- with very few
exceptions -- have been doing extremely well with mostly double-digit earnings
growth. . . . The feeling that makers of ships, planes and weapons are just
getting into their stride has driven shares of leading Pentagon contractors
Lockheed Martin Corp., Northrop Grumman Corp., and General Dynamics Corp. to
all-time highs. . . ." [3]
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 taxpayers' 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." [4]
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
U.S. foreign policy by training foreign "security forces," or by "fighting
terrorism." Often these private military corporations are formed by
retired Special Forces personnel seeking to market their military expertise to
the Pentagon, the State Department, the CIA, or foreign governments.
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." [5]
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 US forces lost a record number of soldiers
in Iraq, and the Iraqi citizens lost many more, Halliburton announced that its
third quarter revenue had risen by 19 percent to $5.8 billion. This prompted
Dave Lesar, the company's chairman, president and CEO, to declare, "This
was an exceptional quarter for Halliburton."
Jeff Tilley, an
analyst who does research for Halliburton, likewise pointed out, "Iraq was
better than expected. . . . Overall, there is nothing really to question or be
skeptical about. I think the results are very good."
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 Iraq] they're doing remarkably well," he must have been talking about
Halliburton [6].
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."
The report, carried out by Pratap Chatterjee and Herbert Docena and
published in the institute's publication Southern
Exposure, further revealed that the giant Pentagon contractor Bechtel "has
been given tens of millions to repair Iraq's schools. Yet many haven't been
touched, and several schools that Bechtel claims to have repaired are in
shambles. One 'repaired' school was overflowing with unflushed sewage."
The report 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 U.S. troops and rebuilding oil
pipelines. Halliburton has also spent over $40 million in the unsuccessful
search for weapons of mass destruction." [7]
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 U.S.
troops, Iraq is now filled with a hodgepodge of contractors. DynCorp
International has about 1,500 employees in Iraq, including about 700 helping
train the police force. Blackwater USA has more than 1,000 employees in the
country, most of them providing private security . . . MPRI, a unit of L-3
Communications, has about 500 employees working on 12 contracts, including
providing mentors to the Iraqi Defense Ministry for strategic planning,
budgeting and establishing its public affairs office. Titan, another L-3
division, has 6,500 linguists in the country." [8]
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. [9]
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 Iraq.
- Randy Scheunemann, a former Rumsfeld
advisor who helped draft the Iraq Liberation Act of 1998 authorizing $98
million in U.S. aid to Iraqi exile groups. He was the founding president
of the Committee for the Liberation of Iraq. Now he's helping former
Soviet Bloc states win business there.
- 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 Washington lobbyist and public relations specialist who
received federal funds to drum up prewar support for the Iraqi National
Congress. She has close ties to Bartel and now helps companies open doors
in Iraq, in part through her contacts with the Iraqi National Congress.
- 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.[10]
There are strong indications that these dubious relationships represent
more than simple cases of sporadic or unrelated instances of some unscruplulous
or rogue elements. Evidence shows that contracts for the "reconstruction"
of Iraq were drawn long before the invasion and deconstruction of that country
had started. In a fascinating report for The
Nation magazine, titled "The Rise of Disaster Capitalism," Naomi
Klein describes such long-projected "rebuilding" schemes as follows:
"Last summer, 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 US Ambassador to Ukraine Carlos Pascual. Its mandate is to draw up
elaborate 'post-conflict' plans for up to twenty-five countries that are not,
as of yet, in conflict. According to Pascual, it will also be able to
coordinate three full-scale reconstruction operations in different countries 'at
the same time,' each lasting 'five to seven years.'" [11]
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
preemptive deconstruction now has a standing office of perpetual preemptive
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 paperwork 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 recent US wars of aggression. As Shalmali Guttal, a
Bangalore-based researcher put it, "We used to have vulgar colonialism.
Now we have sophisticated colonialism, and they call it 'reconstruction.'"
[12]
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 US wars of
choice unique and extremely dangerous to world peace and stability, however, is
the fact that it has become a major driving force behind war and militarism.
This is key to an
understanding of why the US ruling elite is reluctant to pull US troops out of
Iraq. The reluctance or "difficulty" of leaving Iraq stems not so
much from pulling 140,000 troops out of that country as it is from pulling out
more than 100,000 contractors. As Josh Mitteldorf of the University of Arizona
recently put it, "There are a lot of contractors making a fortune and we
don't want that money tap turned off, even though it is borrowed money, which
our children and grandchildren will have to repay." [13]
It follows that US
troops will not be withdrawn from Iraq as long as antiwar voices are not raised
beyond the premises and parameters of the official narrative or justification
of the war: terrorism, democracy, civil war, stability, human rights, and the
like. Antiwar forces need to extricate themselves from the largely diversionary
and constraining debate over these secondary issues, and raise public
consciousness of the scandalous economic interests that drive the war.
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 Iraq
and here in the United States. It is time to make a moral case for restoring
Iraqi oil and other assets to the Iraqis. It is also time to make a moral case
against the war profiteers' plundering of our treasury, or tax dollars. To
paraphrase the late General Smedley D. Butler, most wars could easily be ended
-- they might not even be started -- if profits are taken out of them [14].
NOTES:
1. Renae Merle, "Census
Counts 100,000 Contractors in Iraq," The Washington Post (December 5, 2006).
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),
5. Esther Schrader, "Companies
Capitalize on War on Terror," Los Angeles Times (14 April 2002).
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).
8. Renae Merle, "Census
Counts 100,000 Contractors in Iraq," Washington Post (December 5, 2006).
9. William D.
Hartung, How Much Are You Making on the War, Daddy? (New York: Nation Books,
2003); Chalmers Johnson, The Sorrows of Empire (New York: Metropolitan
Books, 2004); Ismael Hossein-zadeh, The Political Economy of U.S. Militarism
(New York & London: Palgrave-Macmillan, 2006).
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).
14. Smedley D. Butler, War Is a Racket (Los Angeles: Feral House,
1935 [2003]).
Ismael Hossein-zadeh is a professor of economics at Drake University, Des
Moines, Iowa.He is the author of the newly published book, "The
Political Economy of U.S. Militarism." His Web page is cbpa.drake.edu/hossein-zadeh.