Do Governments Profit from War?

Introduction

If there is a country who profits from war, it is only the USA. I’ll explain with the parties involved and network of money flow in Iraq.

First of all when the war started, the defense companies made money as weapon sales increase, then the banks made money as they the ones who financed the war through loans to defense companies & US treasury bonds. Then once most of the war was done, Oil giants got their drilling rights and started exploiting Iraq’s oil then after that the IMF steps in and loans money to the government for rebuilding the country, now this money is used to give American companies contracts to build unnecessary infrastructure in the country they have destroyed.

So all this is a creative scheme in which Oil giants, defense companies & the big banks end up making money. The government increases its deficits to new highs and American taxpayers end up paying for these unnecessary wars. That is why even during times of the Iraq war in 2003 the stock market bull phase was strong. So the government itself doesn’t gain anything much from war but the companies involved in the business of war make tons of money and even lobby for such wars.

A Country does not profit from war but a handful of individuals and they do so by providing things that are needed to wage war. Down through history these people have often provided the funds and/or war goods to wage war to countries.

A good example is Shell Oil. During WWII, Shell Oil sold products in both America and Nazi Germany. They went through Switzerland in order to sell supplies to the Nazi’s.

The royal family of the United Kingdom is setting on huge stock piles of gold provided by Hitler at the start of the WWII. Switzerland is also holding on to huge stock piles of Nazi Gold and accounts of people that died during WWII, because survivors did not have the proper paperwork to claim what is rightfully their property.

Another good example, Halliburton provides the vast majority of goods to the US Military and former V.P. Dick Cheney owns a great deal of stock. The war on Saddam made Halliburton some $39 billion in profits and Cheney’s share was some $34 million! In other words Cheney made a great deal of profit from war he helped to start.

Citizen Nixon broke up the peace talks between America and North Vietnam which is treason. The Military Complex rewarded him with several hundred million dollars. When Nixon became President he thanked the Military Complex by ordering up huge bombing campaigns.

War has always been about making profits.

Person or organization that profits from warfare or by selling weapons and other goods to parties at war. The term has strong, negative connotations. General profiteering may also occur in peace time. One example of war profiteers were the "shoddy" millionaires who allegedly sold recycled wool and cardboard shoes to soldiers during the American Civil War.

Others make their money by cooperating with the authorities. Basil Zaharoff'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.

Scientific research

War provides demand for military technology modernization. Technologies originally designed for the military frequently also have non-military use. Both the state and corporations have gains from scientific research. One famous example is Siri, the artificially intelligent “personal assistant” that comes standard on all newer Apple iPhones. Siri was a spin-off of CALO, a project funded by the government military development group, DARPA. CALO is an acronym that stands for “Cognitive Assistant that learns and Organizes”

Commodity dealers

War usually leads to a shortage in the supply of commodities, which results in higher prices and higher revenues. Prior to the invasion of Iraq in 2003, oil production was controlled by the Iraqi government, and was off limits to western companies. As of 2014, foreign owned private firms dominate Iraqi oil production.

Politicians

Taking bribes and favors from corporations involved with war production have been called war profiteers. Abraham Lincoln'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.

The state

Though war initially had the objective of territorial expansion and resource gathering, the county may also profit politically and strategically, replacing governments that do not fulfill its interests by key allied governments.

More recently, companies involved with supplying the coalition forces in the Iraq War, such as Bechtel, KBR, Academy (formerly known as Black water) 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 such accusations.

Black marketers

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 II, enormous profits were available by selling rationed goods like cigarettes, chocolate, coffee and butter on the black market. Dishonest military personnel given oversight over valuable property sometimes diverted rationed goods 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.

Ways in which governments benefits from wars are as follows:

· Producing weapons (including aircrafts, tanks, ships, and so on) and selling them. This business doesn't actually need any war but just the idea of a war.

· Conquering new territory. This was the main reason of a war in ancient time, but minimal nowadays. Recently wars were mainly used to split (e.g. Ex-Yugoslavia) that to unify.

· The business of reconstruction. A war gives destructions but later you need to rebuilt and this is a good business for countries who won the war and can control the reconstruction.

· Improve influence over other countries. Winning a war, nowadays it means having the possibility to control its politic for several years after. The main example is the power that still has US over Europe (also URSS had in the east but already lost).

· To destroy the power of someone that is against you. An example is the war in Libya against Gheddafi, his main mistake was to be against US.

· Getting popularity in own country. Especially in past, winning a war politicians was getting approval from own people. An example can be the war in Eritrea (a very poor country in Africa) by Mussolini that has just this aim.

· To show your power to others. Even in recent years, we had wars with mainly the goal to show to others countries (not directly involved in it) own power.

· To test new weapons (or even to use old ones getting obsolete). When you have to understand if your investment in technology are good, the best way is to use them in a conflict. Similarly when you have too many weapon and somehow you need to destroy them in a "smart" way. These are the main reasons why despite all war is still a good business.

In any case, to give an example of a country who gain the maximum benefits from wars (at present days) we need to mention United States.

Why in fact they are so strong and politically powerful? Because they won 3 big wars in last century and they got all profits from it. The war are the two so called world war plus the "Cold War". They also participated to several others wars (Korea, Vietnam, gulf war etc.) but main results were from the three mentioned.

U.S. got biggest advantage from the two world war cause they were not fought in America but in others places. For this reason US was able to sales weapons to all countries involved and later get the maximum profit (both economic and political) from reconstruction. The effect of Marshal Plan are still visible and it was the way how U.S. overpassed Europe.

Considering this, it is not a surprise that U.S. is the country that nowadays is then dot involved in conflicts (directly or not directly). Simply U.S. perform the best in case of a war (or an idea of it).

Six Companies profiting the most from wars

(1) Lockheed Martin

Arms sales: $36.44 billion
Total sales: $46.13 billion
Profit: $3.61 billion
Employees: 126,000

Maintaining its position as the world’s largest defense contractor, Lockheed Martin's revenue from arms sales totaled $36.44 billion in 2015. The company’s reach into military and defense technology is difficult to overstate. Lockheed and its subsidiaries manufacture many of the U.S. military’s workhorses, including the F-16 and F-22 fighter jets, the Black Hawk helicopter, and the Vector Hawk unmanned drone. The company also designs and manufactures air-to-air missiles and missile defense systems.

Like many other major defense contractors, Lockheed’s biggest customer is the U.S. government -- accounting for 78% of the company’s 2015 net sales, the vast majority of which came from the Department of Defense.

(2) Boeing

Arms sales: $27.96 billion

Total sales: $96.11 billion

Profit: $5.18 billion

Employees: 161,400

Chicago-based Boeing is not nearly as dependent on federal spending as other major U.S. contractors. Less than one-third of Boeing’s 2015 revenue of $96.11 billion came from its defense, space, and security operations. The remainder was attributable to Boeing’s commercial airplane business. Of the revenue generated from defense contracts, 62% came from sales to the U.S. Department of Defense.

Like many large U.S. manufacturing companies, including top government contractors, widely expected higher military spending under President Trump will certainly help Boeing. Favorable outcomes under Trump are not guaranteed, however. While the Air Force signed deals with Boeing last year to design parts of Air Force One, for example, Trump, citing concerns over cost, called for the deal to be cancelled.

(3) BAE Systems

Arms sales: $25.51 billion

Total sales: $27.36 billion
Profit: $1.46 billion
Employees: 82,500

Some 93% of BAE Systems’ $27.36 billion in 2015 revenue came from defense contracts. The company manufactures a range of military equipment, including war ships, munitions, amphibious combat vehicles, and fighter jets. BAE is the company behind the Harrier jet, capable of take-off with a short runway, as well as vertical landings. Cyber security and intelligence services also comprise a small share of the company’s business.

Though BAE Systems is headquartered in the U.K., deals with the British government comprise less than a quarter of the company’s annual revenue. BAE’s biggest clients are in the United States, with corporate and government contracts comprising over a third of the company’s total 2015 revenue. BAE’s other major markets include Australia and Saudi Arabia.

(4) Raytheon

Arms sales: $21.78 billion
Total sales: $23.25 billion
Profit: $2.07 billion
Employees: 61,000

Waltham, Massachusetts-based Raytheon is known for its missiles and missile defense systems. According to the company, 13 countries use primarily Raytheon air and missile defense. This January, the U.S. Navy awarded Raytheon a $235 million contract to supply missiles for Aegis cruisers and destroyers.

Raytheon purchased cyber security provider Websense in 2015 for $1.9 billion. The deal was an indication of the growing threat of Cyber-attacks as well as Raytheon’s effort to diversify and move into commercial markets and away from dependence on defense contracts.

(5) Northrop Grumman

Arms sales: $20.06 billion
Total sales: $23.26 billion
Profit: $2.0 billion
Employees: 65,000

Northrop Grumman was awarded in October 2015 the highly coveted $80 billion contract to supply the U.S. military with 100 long-range strike bombers. The deal is the biggest from the Pentagon in more than a decade. The B-2 Spirit stealth bomber is the predecessor of the newly named B-21 Raider.

The company's 2015 arms sales, valued at $23.26 billion, included $1.8 billion for the F-35 fighter jet program, $1.1 billion for the E-2D Advanced Hawkeye early warning aircraft program, and $947 million for the Saudi Arabian Ministry of National Guard Training Support program.

(6) General Dynamics

Arms sales: $19.24 billion
Total sales: $31.47 billion
Profit: $2.97 billion
Employees: 99,900

General Dynamics manufactures and sells a range of military equipment, including ammunition, amphibious vehicles, armored vehicles, and combat tanks. In addition, General Dynamics owns Bath Iron Works, a naval shipyard that is currently under contract to build the U.S. Navy’s new Zumwalt Class DDG-100 destroyer. The ship costs approximately $4 billion.

Well over half of General Dynamics’ revenue comes from arms sales, the vast majority of which are through contracts with the U.S. Department of Defense. Only 13% of the company’s 2015 revenue came from contracts with foreign governments.

Definition of War

War is a state of armed conflict between states, governments, societies and informal paramilitary groups, such as mercenaries, insurgents and militias.

Features of War

Tangible/intangible aims:

Tangible war aims may involve (for example) the acquisition of territory (as in the German goal of Lebensraum in the first half of the 20th century) or the recognition of economic concessions (as in the Anglo-Dutch Wars).

Intangible war aims – like the accumulation of credibility or reputation – may have more tangible expression ("conquest restores prestige, annexation increases power").

Explicit/implicit aims:

Explicit war aims may involve published policy decisions.

Implicit war aims can take the form of minutes of discussion, memorandum and instructions.

Positive/negative aims:

"Positive war aims" cover tangible outcomes.

"Negative war aims" forestall or prevent undesired outcomes.

Types of War

Cold War

A cold war is a state of conflict between nations that does not involve direct military action but is pursued primarily through economic and political actions, propaganda, acts of espionage or proxy wars waged by surrogates. This term is most commonly used to refer to the Soviet-American Cold War. The surrogates are typically states that are "satellites" of the conflicting nations, i.e., nations allied to them or under their political influence. Opponents in a cold war will often provide economic or military aid, such as weapons, tactical support or military advisors, to lesser nations involved in conflicts with the opposing country.

Colonial War

Colonial war (in some contexts referred to as small war) is a blanket term relating to the various conflicts that arose as the result of overseas territories being settled by foreign powers creating a colony. The term especially refers to wars fought during the nineteenth century between European armies in Africa and Asia.

Insurgency

An insurgency is a rebellion against authority (for example, an authority recognized as such by the United Nations) when those taking part in the rebellion are not recognized as belligerents (lawful combatants). An insurgency can be fought via counter-insurgency warfare, and may also be opposed by measures to protect the population, and by political and economic actions of various kinds and propaganda aimed at undermining the insurgents' claims against the incumbent regime. As a concept, insurgency's nature is ambiguous.

War of Independence

A war of independence or independence war is a conflict occurring over a territory that has declared independence. Once the state that previously held the territory sends in military forces to assert its sovereignty or the native population clashes with the former occupier, a separatist rebellion has begun. If a new state is successfully established, the conflict is usually known as a 'War of Independence'.

War of Liberation

Wars of national liberation or national liberation revolutions are conflicts fought by nations to gain independence. The term is used in conjunction with wars against foreign powers (or at least those perceived as foreign) to establish separate sovereign states for the rebelling nationality. From a different point of view, these wars are called insurgencies, rebellions, or wars of independence. Guerrilla warfare or asymmetric warfare is often utilized by groups labeled as national liberation movements, often with support from other states.

Civil War

A civil war, also known as an intrastate war in polemology, is a war between organized groups within the same state or country. The aim of one side may be to take control of the country or a region, to achieve independence for a region or to change government policies. The term is a calque of the Latin bellum civile which was used to refer to the various civil wars of the Roman Republic in the 1st century BC.

Boarder War

Territorial disputes are often related to the possession of natural resources such as rivers, fertile farmland, mineral or oil resources although the disputes can also be driven by culture, religion and ethnic nationalism. Territorial disputes result often from vague and unclear language in a treaty that set up the original boundary.

Fault line War

A fault line war is one that takes place between two or more identity groups (usually religious or ethnic) from different civilizations. It is a communal conflict between states or groups from different civilizations that has become violent. These wars may take place between states, between nongovernmental groups, or between states and nongovernmental groups. Most often, the issue in a fault line war is often over territory, but it could also be over the control of people. Such wars within states may involve groups that are predominantly located in different territories or groups that are intermixed. In the latter, violence often erupts periodically.

Invasion

An invasion is a military offensive in which large numbers of combatants of one geopolitical entity aggressively enter territory owned by another such entity, generally with the objective of either conquering; liberating or re-establishing control or authority over a territory; forcing the partition of a country; altering the established government or gaining concessions from said government; or a combination thereof. An invasion can be the cause of a war, be a part of a larger strategy to end a war, or it can constitute an entire war in itself. Due to the large scale of the operations associated with invasions, they are usually strategic in planning and execution.

Proxy War

A proxy war is an armed conflict between two states or non-state actors which act on the instigation or on behalf of other parties that are not directly involved in the hostilities. In order for a conflict to be considered a proxy war, there must be a direct, long-term relationship between external actors and the belligerents involved. The aforementioned relationship usually takes the form of funding, military training, arms, or other forms of material assistance which assist a belligerent party in sustaining its war effort

Range War

A range war is a type of usually violent conflict, most commonly in the 19th and early 20th centuries in the American West. The subject of these conflicts was control of "open range", or range land freely used for cattle grazing, which gave the conflict its name. Typically they were disputes over water rights or grazing rights and cattle ownership.

Religious War

A religious war or holy war is a war primarily caused or justified by differences in religion. In the modern period, debates are common over the extent to which religious, economic, or ethnic aspects of a conflict predominate in a given war.

Undeclared War

An undeclared war is a military conflict between two or more nations without either side issuing a formal declaration of war. The term is sometimes used to include any disagreement or conflict fought about without an official declaration. Since the United Nations' police action in Korea followed the example set by the United Kingdom during the so-called Malayan Emergency, a number of democratic governments have pursued disciplinary actions and limited warfare by characterizing them as something else such as a military action or armed response.

Police Action

Police action is a euphemism for a military action undertaken without a formal declaration of war.

Since World War II, formal declarations of war have been rare, especially actions conducted by developed nations in connection with the Cold War. Rather, nations involved in military conflict (especially the major-power nations) sometimes describe the conflict by fighting the war under the auspices of a "police action" to show that it is a limited military operation different from total war.

Total War

Total war is warfare that includes any and all civilian-associated resources and infrastructure as legitimate military targets, mobilizes all of the resources of society to fight the war, and gives priority to warfare over non-combatant needs. The Oxford Living Dictionaries defines "total war" as a war that is unrestricted in terms of the weapons used, the territory or combatants involved, or the objectives pursued, especially one in which the laws of war are disregarded.

World War

A world war is a large-scale war which affects the whole world directly or indirectly. World wars span multiple countries on multiple continents or just two countries, with battles fought in many theaters. While a variety of global conflicts have been subjectively deemed "world wars", such as the Cold War and the War on Terror, the term is widely and usually accepted only as it is retrospectively applied to two major international conflicts that occurred during the 20th century: World War I (1914–18) and World War II.

Nuclear War

Nuclear warfare (sometimes atomic warfare or thermonuclear warfare) is a military conflict or political strategy in which nuclear weaponry is used to inflict damage on the enemy. Nuclear weapons are weapons of mass destruction; in contrast to conventional warfare, nuclear warfare can produce destruction in a much shorter time and can have a long-lasting radio-logical warfare result.

Principles of War

The principles of war serve as a guide for our forces. The principles have withstood the tests of time, analysis, and practice. The principles of war includes the following:

· Objective

· Offensive.

· Mass.

· Economy of force.

· Maneuver.

· Unity of command.

· Security.

· Surprise.

· Simplicity

Categories of War

Those categories include but are not limited to (in alphabetical order): Absolute War, Ideal War, Limited War, Real War, Total War, and War to Disarm the Enemy, War of Limited Objectives, and War to Overthrow the Enemy. This may sound like a simple proposition- a matter of merely cataloging definitions.

Advantages of War

· War brings about innovation which a period of peace cannot replicate.

· War is also a good economic stimulant.

· War is also profitable for big business as wartime consumption increases.

· War can also be a fight for the greater good.

Disadvantages of War

· Effect on Human life.

· Economic effect.

· Infrastructural effect.

Conclusion

More soldiers and manufacturing leads to lower unemployment and therefore cash to stimulate an economy.

There is a multiplier calculation used (you'll have to Google it) so every $ spent is worth more to an economy. So 1.00 is injected into an economy that means when that spent .20c goes to taxes, and a local business gets .80c that it can afford to spend on other services/goods and so on. At the same time that .20c is used by the government to provide services and improvements such as security or infrastructure. Thus paying somebody else and the process repeats.

Whenever money is spent a country profits, war creates demand (both for weapons and food/transport/etc.) and lowers unemployment, thus stimulating the economy and reducing the amount of dependents on the state. Loss of life leave job openings and fewer people to take pension. Banks loan theoretical money and the list goes on.

No country in a war profits. They might have in days past when wars were less expensive and there was a less powerful world order, but now the expense is greater than any such possible events. And even if you were able to seize something valuable, the world community would not let you keep it.

Thank you.

Do Governments Profit from War?

September 12, 2019

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