War profiteering
Encyclopedia
A war profiteer is any person or organization that profits
from war
fare or by selling weapon
s and other goods to parties at war. The term has strong negative connotations. General profiteering may also occur in peace time.
's Vickers
Company sold weapons to all the parties involved in the Chaco War
. Companies like Opel
and IBM
have been labeled war profiteers for their involvement with the Third Reich.
, which results in higher prices and higher revenues.
's first Secretary of War
, Simon Cameron
, was forced to resign in early 1862 after charges of corruption relating to war contracts. In 1947, Kentucky congressman Andrew J. May
, Chairman of the powerful Committee on Military Affairs
, was convicted for taking bribes in exchange for war contracts.
, KBR
, Blackwater
and Halliburton
, have come under fire for allegedly overcharging for their services. The modern private military company
is also offered as an example of sanctioned war profiteering.
On the opposing side, companies like Huawei Technologies
, which upgraded Saddam's air-defense system between the two Gulf Wars, face accusations for dealing with Saddam Hussein
or nuclear aspirant Iran
.
like Lockheed Martin
, Boeing
, Northrop Grumman
, Raytheon
and General Dynamics
, to name a few. Old military material has to be discarded due to age or is lost due to fighting and new and different military material is needed by the military to maintain strategic advantages over the military technologies of foreign nations which are hostile or may become hostile.
, enormous profits were available by selling rationed goods like cigarette
s, chocolate
, coffee
and butter
on the black market. Dishonest military personnel given oversight over valuable property sometimes divert it to the black market. The charge could also be laid against medical and legal professionals who accept money in exchange for helping young men evade a draft.
, receive much political support in wartime. Defining 'excessive' accurately is difficult, however, and such legislation frequently allows some instances of profiteering to go unchecked while reducing the income of others' war-related business to loss-making levels.
in the context of the Iraq war draw heavily on the stereotype of the businessman profiteer. Slogans relating to 'blood for oil' have a similar implication.
Steve Clemons, a senior fellow at the New America Foundation
think tank
, has accused former CIA Director James Woolsey
of both profiting from and promoting the Iraq War.
The Center for Public Integrity
has reported that US Senator Dianne Feinstein
and her husband, Richard Blum
, are making millions of dollars from Iraq and Afghanistan contracts through his company, Perini
. Feinstein voted for the resolution
giving President George W. Bush the authority to invade Iraq.
Indicted defense contractor Brent R. Wilkes was reported to be ecstatic when hearing that the United States was going to go to war with Iraq. “He and some of his top executives were really gung-ho about the war,” said a former employee. “Brent said this would create new opportunities for the company. He was really excited about doing business in the Middle East.”
The War Profiteering Prevention Act of 2007 intended to create criminal penalties for war profiteers and others who exploit taxpayer-funded efforts in Iraq and elsewhere around the world. War profiteering cases are often brought under the Civil False Claims Act
, which was enacted in 1863 to combat war profiteering during the Civil War.
Major General Smedley Butler
, USMC, criticized war profiteering of U.S companies during World War I in War Is a Racket
. He wrote about how some companies and corporations increase their earnings and profits by up to 1700% and how many companies willingly sold equipment and supplies to the U.S that had no relevant use in the war effort. In the book, Butler stated that "It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war period. This expenditure Yielded $16,000,000,000 in profits."
. The image of the 'businessman profiteer' carries the implication of influence and power used to actively cause wars for personal gain, rather than merely passively profit from them. In the aftermath of World War I
, such profiteers were widely asserted to have existed by both the Left, and (fused with anti-Semitism
) by the Right.
Fictional character Lieutenant Milo Minderbinder
in the novel Catch-22
has been called "perhaps the best known of all fictional profiteers" in American literature.
The surname of the character 'Daddy Warbucks' in Little Orphan Annie
carries an obvious implication. This character is interesting for being an example of the stereotype of a war profiteer applied to a 'good guy'.
The Tintin
adventure The Broken Ear
features an arms dealer called Basil Bazarov who sells arms to both sides in a war. He is a recognisable example of this 'type', and specifically based on Basil Zaharoff
.
The character of Joe Walker in the sitcom Dad's Army
is an example of the second stereotype of a war profiteer while the character Rick Pym in the novel A Perfect Spy
is a more psychologically complex example.
Brecht
wrote the play Mother Courage and Her Children
as a didactic indictment of war profiteering.
In the 1985 film Clue
, Colonel Mustard was a war profiteer who sold stolen radio components on the black market.
The film The Third Man
features a war profiteer named Harry Lime, who steals penicillin from military hospitals and sells it on the black market.
The Suicide Machines
released their 2005 album, entitled War Profiteering Is Killing Us All
.
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
from war
War
War is a state of organized, armed, and often prolonged conflict carried on between states, nations, or other parties typified by extreme aggression, social disruption, and usually high mortality. War should be understood as an actual, intentional and widespread armed conflict between political...
fare or by selling weapon
Weapon
A weapon, arm, or armament is a tool or instrument used with the aim of causing damage or harm to living beings or artificial structures or systems...
s and other goods to parties at war. The term has strong negative connotations. General profiteering may also occur in peace time.
International arms dealers
Others make their money by cooperating with the authorities. Basil ZaharoffBasil Zaharoff
Basil Zaharoff, GCB, GBE , born Zacharias Basileios Zacharoff, was an arms dealer and financier...
's Vickers
Vickers
Vickers was a famous name in British engineering that existed through many companies from 1828 until 1999.-Early history:Vickers was formed in Sheffield as a steel foundry by the miller Edward Vickers and his father-in-law George Naylor in 1828. Naylor was a partner in the foundry Naylor &...
Company sold weapons to all the parties involved in the Chaco War
Chaco War
The Chaco War was fought between Bolivia and Paraguay over control of the northern part of the Gran Chaco region of South America, which was incorrectly thought to be rich in oil. It is also referred to as La Guerra de la Sed in literary circles for being fought in the semi-arid Chaco...
. Companies like Opel
Opel
Adam Opel AG, generally shortened to Opel, is a German automobile company founded by Adam Opel in 1862. Opel has been building automobiles since 1899, and became an Aktiengesellschaft in 1929...
and IBM
History of IBM
International Business Machines, abbreviated IBM and nicknamed "Big Blue", is a multinational computer technology and IT consulting corporation headquartered in Armonk, New York, United States. The company is one of the few information technology companies with a continuous history dating back to...
have been labeled war profiteers for their involvement with the Third Reich.
Commodity dealers
War usually leads to a shortage in the supply of commoditiesCommodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
, which results in higher prices and higher revenues.
Politicians
Political figures taking bribes and favors from corporations involved with war production have been called war profiteers. Abraham LincolnAbraham Lincoln
Abraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...
's first Secretary of War
United States Secretary of War
The Secretary of War was a member of the United States President's Cabinet, beginning with George Washington's administration. A similar position, called either "Secretary at War" or "Secretary of War," was appointed to serve the Congress of the Confederation under the Articles of Confederation...
, Simon Cameron
Simon Cameron
Simon Cameron was an American politician who served as United States Secretary of War for Abraham Lincoln at the start of the American Civil War. After making his fortune in railways and banking, he turned to a life of politics. He became a U.S. senator in 1845 for the state of Pennsylvania,...
, was forced to resign in early 1862 after charges of corruption relating to war contracts. In 1947, Kentucky congressman Andrew J. May
Andrew J. May
Andrew Jackson May was a Kentucky attorney and influential New Deal-era politician, best known for his chairmanship of the House Military Affairs Committee during World War II, and his subsequent conviction for bribery...
, Chairman of the powerful Committee on Military Affairs
United States House Committee on Armed Services
thumb|United States House Committee on Armed Services emblemThe U.S. House Committee on Armed Services, commonly known as the House Armed Services Committee, is a standing committee of the United States House of Representatives...
, was convicted for taking bribes in exchange for war contracts.
Civilian contractors
More recently, companies involved with supplying the coalition forces in the Iraq War, such as BechtelBechtel
Bechtel Corporation is the largest engineering company in the United States, ranking as the 5th-largest privately owned company in the U.S...
, KBR
KBR
KBR can stand for:* KBR - American engineering and construction company* Key-based routing* Royal Library of Belgium* The ISO 639 linguistic identifier code for the Ethiopian language Kaffa ....
, Blackwater
Blackwater USA
Xe Services LLC, better known by its former names, Blackwater USA and Blackwater Worldwide, is a private military company founded in 1997 by Erik Prince and Al Clark.. Xe is currently the largest of the U.S. State Department's three private security contractors...
and Halliburton
Halliburton
Halliburton is the world's second largest oilfield services corporation with operations in more than 70 countries. It has hundreds of subsidiaries, affiliates, branches, brands and divisions worldwide and employs over 50,000 people....
, have come under fire for allegedly overcharging for their services. The modern private military company
Private military company
A private military company or provides military and security services. These combatants are commonly known as mercenaries, though modern-day PMCs refer to their staff as security contractors, private military contractors or private security contractors, and refer to themselves as private military...
is also offered as an example of sanctioned war profiteering.
On the opposing side, companies like Huawei Technologies
Huawei
Huawei is a Chinese multinational networking and telecommunications equipment and services company headquartered in Shenzhen, Guangdong, China...
, which upgraded Saddam's air-defense system between the two Gulf Wars, face accusations for dealing with Saddam Hussein
Saddam Hussein
Saddam Hussein Abd al-Majid al-Tikriti was the fifth President of Iraq, serving in this capacity from 16 July 1979 until 9 April 2003...
or nuclear aspirant Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
.
Military contractors
Groups that profit from war are military contractorsDefense contractor
A defense contractor is a business organization or individual that provides products or services to a military department of a government. Products typically include military aircraft, ships, vehicles, weaponry, and electronic systems...
like Lockheed Martin
Lockheed Martin
Lockheed Martin is an American global aerospace, defense, security, and advanced technology company with worldwide interests. It was formed by the merger of Lockheed Corporation with Martin Marietta in March 1995. It is headquartered in Bethesda, Maryland, in the Washington Metropolitan Area....
, Boeing
Boeing
The Boeing Company is an American multinational aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001...
, Northrop Grumman
Northrop Grumman
Northrop Grumman Corporation is an American global aerospace and defense technology company formed by the 1994 purchase of Grumman by Northrop. The company was the fourth-largest defense contractor in the world as of 2010, and the largest builder of naval vessels. Northrop Grumman employs over...
, Raytheon
Raytheon
Raytheon Company is a major American defense contractor and industrial corporation with core manufacturing concentrations in weapons and military and commercial electronics. It was previously involved in corporate and special-mission aircraft until early 2007...
and General Dynamics
General Dynamics
General Dynamics Corporation is a U.S. defense conglomerate formed by mergers and divestitures, and as of 2008 it is the fifth largest defense contractor in the world. Its headquarters are in West Falls Church , unincorporated Fairfax County, Virginia, in the Falls Church area.The company has...
, to name a few. Old military material has to be discarded due to age or is lost due to fighting and new and different military material is needed by the military to maintain strategic advantages over the military technologies of foreign nations which are hostile or may become hostile.
Black marketeers
A distinction can be made between war profiteers who gain by sapping military strength and those who gain by contributing to the war. For instance, during and after World War IIWorld War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, enormous profits were available by selling rationed goods like cigarette
Cigarette
A cigarette is a small roll of finely cut tobacco leaves wrapped in a cylinder of thin paper for smoking. The cigarette is ignited at one end and allowed to smoulder; its smoke is inhaled from the other end, which is held in or to the mouth and in some cases a cigarette holder may be used as well...
s, chocolate
Chocolate
Chocolate is a raw or processed food produced from the seed of the tropical Theobroma cacao tree. Cacao has been cultivated for at least three millennia in Mexico, Central and South America. Its earliest documented use is around 1100 BC...
, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
and butter
Butter
Butter is a dairy product made by churning fresh or fermented cream or milk. It is generally used as a spread and a condiment, as well as in cooking applications, such as baking, sauce making, and pan frying...
on the black market. Dishonest military personnel given oversight over valuable property sometimes divert it to the black market. The charge could also be laid against medical and legal professionals who accept money in exchange for helping young men evade a draft.
Anti-profiteering measures
Making unreasonable profits from war is widely considered unethical and is deeply unpopular, so attempts to prohibit excessive war profiteering, such as the imposition of an excess profits taxExcess profits tax
In the United States, an excess profits tax is a tax, some say excise tax, on any profit above a certain amount. A predominantly wartime fiscal instrument, the tax was designed primarily to capture wartime profits that exceeded normal peacetime profits....
, receive much political support in wartime. Defining 'excessive' accurately is difficult, however, and such legislation frequently allows some instances of profiteering to go unchecked while reducing the income of others' war-related business to loss-making levels.
In the United States
Criticism of companies such as HalliburtonHalliburton
Halliburton is the world's second largest oilfield services corporation with operations in more than 70 countries. It has hundreds of subsidiaries, affiliates, branches, brands and divisions worldwide and employs over 50,000 people....
in the context of the Iraq war draw heavily on the stereotype of the businessman profiteer. Slogans relating to 'blood for oil' have a similar implication.
Steve Clemons, a senior fellow at the New America Foundation
New America Foundation
The New America Foundation is a non-profit public policy institute and think tank with offices in Washington, D.C. and Sacramento, CA. It was founded in 1999 by Ted Halstead, Sherle Schwenninger, Michael Lind and Walter Russell Mead....
think tank
Think tank
A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
, has accused former CIA Director James Woolsey
R. James Woolsey, Jr.
Robert James Woolsey Jr. is a foreign policy specialist and former Director of Central Intelligence and head of the Central Intelligence Agency .-Early life:...
of both profiting from and promoting the Iraq War.
The Center for Public Integrity
Center for Public Integrity
The Center for Public Integrity is a nonprofit organization dedicated to producing original, responsible investigative journalism on issues of public concern. The Center is non-partisan and non-advocacy and committed to transparent and comprehensive reporting both in the United States and around...
has reported that US Senator Dianne Feinstein
Dianne Feinstein
Dianne Goldman Berman Feinstein is the senior U.S. Senator from California. A member of the Democratic Party, she has served in the Senate since 1992. She also served as 38th Mayor of San Francisco from 1978 to 1988....
and her husband, Richard Blum
Richard Blum
Richard Blum may refer to:*Richard C. Blum, American investment banker and husband to Dianne Feinstein*Richard Manitoba, born Richard Blum, American musician with the MC5 and The Dictators...
, are making millions of dollars from Iraq and Afghanistan contracts through his company, Perini
Perini
Tutor Perini Corporation is one of the largest general contractors in the United States. At the end of 2010 it reported an annual revenue of approximately $3.2 billion. Tutor Perini is headquartered in Sylmar, California and works on many construction projects throughout the United States and...
. Feinstein voted for the resolution
Iraq Resolution
The Iraq Resolution or the Iraq War Resolution is a joint resolution passed by the United States Congress in October 2002 as Public Law No: 107-243, authorizing military action against Iraq.-Contents:The resolution cited many factors to justify the use of military force against...
giving President George W. Bush the authority to invade Iraq.
Indicted defense contractor Brent R. Wilkes was reported to be ecstatic when hearing that the United States was going to go to war with Iraq. “He and some of his top executives were really gung-ho about the war,” said a former employee. “Brent said this would create new opportunities for the company. He was really excited about doing business in the Middle East.”
The War Profiteering Prevention Act of 2007 intended to create criminal penalties for war profiteers and others who exploit taxpayer-funded efforts in Iraq and elsewhere around the world. War profiteering cases are often brought under the Civil False Claims Act
False Claims Act
The False Claims Act is an American federal law that imposes liability on persons and companies who defraud governmental programs. The law includes a "qui tam" provision that allows people who are not affiliated with the government to file actions on behalf of the government...
, which was enacted in 1863 to combat war profiteering during the Civil War.
Major General Smedley Butler
Smedley Butler
Smedley Darlington Butler was a Major General in the U.S. Marine Corps, an outspoken critic of U.S. military adventurism, and at the time of his death the most decorated Marine in U.S...
, USMC, criticized war profiteering of U.S companies during World War I in War Is a Racket
War is a Racket
War Is a Racket is the title of two works, a speech and a booklet, by retired U.S. Marine Major General Smedley D. Butler. In them, Butler frankly discusses from his experience as a career military officer how business interests commercially benefit from warfare.After he retired from the Marine...
. He wrote about how some companies and corporations increase their earnings and profits by up to 1700% and how many companies willingly sold equipment and supplies to the U.S that had no relevant use in the war effort. In the book, Butler stated that "It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war period. This expenditure Yielded $16,000,000,000 in profits."
In popular culture
The term 'war profiteer' evokes two stereotypes in popular culture: the rich businessman who sells weapons to governments, and the semi-criminal black marketeer who sells goods to ordinary citizens. In English-speaking countries this is particularly associated with Britain during World War IIWorld War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. The image of the 'businessman profiteer' carries the implication of influence and power used to actively cause wars for personal gain, rather than merely passively profit from them. In the aftermath of World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, such profiteers were widely asserted to have existed by both the Left, and (fused with anti-Semitism
Anti-Semitism
Antisemitism is suspicion of, hatred toward, or discrimination against Jews for reasons connected to their Jewish heritage. According to a 2005 U.S...
) by the Right.
Fictional character Lieutenant Milo Minderbinder
Milo Minderbinder
First Lieutenant Milo Minderbinder is a fictional character in Joseph Heller's most successful novel, Catch-22. As the mess officer of Yossarian's squadron, Minderbinder is a war profiteer during World War II, "perhaps the best known of all fictional profiteers" in American literature...
in the novel Catch-22
Catch-22
Catch-22 is a satirical, historical novel by the American author Joseph Heller. He began writing it in 1953, and the novel was first published in 1961. It is set during World War II in 1943 and is frequently cited as one of the great literary works of the twentieth century...
has been called "perhaps the best known of all fictional profiteers" in American literature.
The surname of the character 'Daddy Warbucks' in Little Orphan Annie
Little Orphan Annie
Little Orphan Annie was a daily American comic strip created by Harold Gray and syndicated by Tribune Media Services. The strip took its name from the 1885 poem "Little Orphant Annie" by James Whitcomb Riley, and made its debut on August 5, 1924 in the New York Daily News...
carries an obvious implication. This character is interesting for being an example of the stereotype of a war profiteer applied to a 'good guy'.
The Tintin
The Adventures of Tintin
The Adventures of Tintin is a series of classic comic books created by Belgian artist , who wrote under the pen name of Hergé...
adventure The Broken Ear
The Broken Ear
The Broken Ear is the sixth of The Adventures of Tintin, a series of classic comic-strip albums, written and illustrated by Belgian writer and illustrator Hergé, featuring young reporter Tintin as a hero...
features an arms dealer called Basil Bazarov who sells arms to both sides in a war. He is a recognisable example of this 'type', and specifically based on Basil Zaharoff
Basil Zaharoff
Basil Zaharoff, GCB, GBE , born Zacharias Basileios Zacharoff, was an arms dealer and financier...
.
The character of Joe Walker in the sitcom Dad's Army
Dad's Army
Dad's Army is a British sitcom about the Home Guard during the Second World War. It was written by Jimmy Perry and David Croft and broadcast on BBC television between 1968 and 1977. The series ran for 9 series and 80 episodes in total, plus a radio series, a feature film and a stage show...
is an example of the second stereotype of a war profiteer while the character Rick Pym in the novel A Perfect Spy
A Perfect Spy
A Perfect Spy by John le Carré is a novel about the mental and moral dissolution of a secret agent.-Plot introduction:A Perfect Spy is the tale of Magnus Pym, a long-time spy for the United Kingdom. After attending his father's funeral, Pym mysteriously disappears...
is a more psychologically complex example.
Brecht
Brecht
Brecht is a municipality located in the Belgian province of Antwerp. The municipality comprises the towns of Brecht proper, Sint-Job-in't-Goor and Sint-Lenaarts. On January 1, 2006 Brecht had a total population of 26,464...
wrote the play Mother Courage and Her Children
Mother Courage and Her Children
Mother Courage and Her Children is a play written in 1939 by the German dramatist and poet Bertolt Brecht with significant contributions from Margarete Steffin...
as a didactic indictment of war profiteering.
In the 1985 film Clue
Clue (film)
Clue is a 1985 comedy mystery film based on the board game of the same name . The film is a murder mystery set in a Gothic Revival mansion, and is styled after Murder by Death and other various murder/dinner parties of mystery...
, Colonel Mustard was a war profiteer who sold stolen radio components on the black market.
The film The Third Man
The Third Man
The Third Man is a 1949 British film noir, directed by Carol Reed and starring Joseph Cotten, Alida Valli, Orson Welles, and Trevor Howard. Many critics rank it as a masterpiece, particularly remembered for its atmospheric cinematography, performances, and unique musical score...
features a war profiteer named Harry Lime, who steals penicillin from military hospitals and sells it on the black market.
The Suicide Machines
The Suicide Machines
The Suicide Machines were an American punk rock band formed in March 1991 in Detroit, Michigan and disbanded in May 2006. During the course of their career the band released six full-length albums on the labels Hollywood Records and Side One Dummy Records...
released their 2005 album, entitled War Profiteering Is Killing Us All
War Profiteering Is Killing Us All
War Profiteering Is Killing Us All is the sixth and final studio album by the Detroit, Michigan punk rock band The Suicide Machines, released in 2005 by Side One Dummy Records. The band broke up the following year while touring in support of the album. The album's artwork and many of its songs are...
.
See also
- MercenaryMercenaryA mercenary, is a person who takes part in an armed conflict based on the promise of material compensation rather than having a direct interest in, or a legal obligation to, the conflict itself. A non-conscript professional member of a regular army is not considered to be a mercenary although he...
- War HawkWar HawkWar Hawk is a term originally used to describe members of the Twelfth Congress of the United States who advocated waging war against the British in the War of 1812...
- Rothschild family
- Military industrial complex