War, Inc.

The profits of mass destruction

by John Glansbeek & Andrea Bauer

During the Vietnam War years, one of the writers of this article worked at a small print shop in Ohio, producing display boxes for retail sales. When there were no commercial orders to run, a defense contract took up the slack: the shop made cardboard dry-cell battery cases for the Army.

Today, some 35 years later, corporate America is hoping that military production will take up the slack in a depressed economy, capsized by an irrational ten-year fascination with speculation in the stock market and the underlying problem of chronically glutted markets.

War production: an economic imperative

Even in what passes for peacetime, US defense spending is the highest in the world, by far. In 1995, military spending was $264 billion--40 percent of the world's total. By way of contrast, five nations against which the US is supposedly defending itself--Iraq, Iran, North Korea, Libya, and Cuba--together spent $9 billion.

The Department of Defense and the top corporations who produce for it--the military-industrial complex--make up the most massive economic bloc in the country. More than one third of all US engineers and scientists work in jobs tied to the military.

That is the snapshot of normal times. In periods of economic downturn, however, when profits are weakening and titans of industry are going bankrupt, the military cash cow is the god to which troubled corporations pray.

Boeing: a case study

"The purse is now open." That's what Boeing Co. Vice Chairman Harry Stonecipher told the Wall Street Journal after 9/11. And nobody is in a better position to appreciate a fresh infusion of corporate welfare through warfare than beleaguered Boeing.

The company is the world's largest aerospace giant and the biggest US exporter, but its commercial operations are in a tailspin, already slumping before the 9/11 attacks crashed air travel. Commercial orders for its planes hit a ten-year low last year, and it laid off 30,000 employees.

But as its commercial revenues sink, its position as a major defense player climbs. In fact, it is expected to surpass Lockheed Martin this year as the globe's top defense contractor.

Boeing owes its heightened standing as a war profiteer in large part to Phil Condit, chief executive since 1996. Under Condit, Boeing has bought up a number of significant defense contractors, including Rockwell International's space and defense business; McDonnell Douglas; and Hughes Space and Communications. Coming late to the high-tech party that is seen as the future of the defense industry, Boeing paid an overblown $3.7 billion in cash to acquire Hughes at the height of the stock market bubble.

The list of weapons of mass destruction that Boeing creates is staggering. Its JDAMs (Joint Direct Attack Munitions) are the "smart bombs" that killed several people when dropped on the Chinese embassy in Belgrade during the Kosovo war. (Military experts blame human error.) And like other defense contractors, Boeing is feeding at the deepening "homeland security" trough. Total spending in this category jumped to $37.7 billion in 2003.

Boeing built many of the aircraft used in the most recent Iraq war, among them the KC-135 air-to-air refueling tanker plane. After protracted negotiations and much controversy, the Pentagon announced in May that it had sealed a deal with Boeing to replace these planes with a new line of modified 767 passenger jets. The Air Force will lease 100 planes for six years for about $16 billion, a hugely more expensive move than buying them outright.

On top of that, critics, even within government, say the whole project is unnecessary, and that actual costs to the taxpayers will be more like $20 to $30 billion.

But Boeing, like the rest of the industry, has friends in high places.

The Democrats who are the top politicians in Washington state, where the planes will be built, of course put on a full-court press for Boeing.

These days, however, it's hard to even tell the politicians, CEOs, and military chiefs apart. A former deputy secretary of defense, Rudy de Leon, is the top man at Boeing's office in Washington, D.C. Former senator Bennett Johnson and past representative Bill Paxon are on the Boeing payroll. And high-ranking ambassador Thomas R. Pickering is now Boeing's senior vice president for international relations, pitching Boeing to foreign governments and corporations.

This is something US ambassadors do for defense corporations as a matter of routine, but now Boeing is writing Pickering's checks instead of the government. In either case, US working people are paying the bill.

DynCorp and the privatization of military "services"

If Boeing represents old-style production of military hardware, then DynCorp, No. 13 among defense contractors in 2002, represents the growing military "service sector."

The initiative for contracting out nearly every aspect of military service except firing the guns at the enemy, with little accountability and often in secret, began during the first Bush administration, spearheaded by then-Defense Secretary Dick Cheney. It gathered steam under President Clinton, particularly in relationship to his Plan Colombia, and in recent years has been pushed further by Secretary of the Army Thomas White, a former vice chairman of Enron.

More than 96 percent of DynCorp's yearly revenue comes from Uncle Sam. In return, DynCorp provides the main police force in Bosnia and bodyguards for the president of Afghanistan. It manages border posts between the US and Mexico and the entire Air Force One fleet. During the first Persian Gulf War, DynCorp serviced and rearmed combat choppers. Last year, it moved equipment and ammunition into position for George W. Bush's war. It produces smallpox and anthrax vaccines for the government.

In Colombia, DynCorp flies defoliation missions, regularly dousing both fields and peasants with Monsanto herbicides. A group of Ecuadorian peasants is suing the corporation, asserting that the chemicals are drifting across the border, destroying crops, and causing illness and death. Observers also charge that DynCorp is taking part in actual combat in Colombia.

In Bosnia, DynCorp employees bought, sold, and used local girls, some as young as 13, for prostitution. The men never faced charges, and the two DynCorp workers who blew the whistle were fired.

DynCorp has won a multi-million-dollar contract for policing occupied Iraq.

Costs too heavy to bear

While the CEOs of Boeing and DynCorp count their blood money, the State of Oregon is shortening the school year. The social repercussions of the flow of public wealth to the mercenary monopolists are becoming ever more extreme.

During the antiwar demonstrations in the first months of the year, several protests--in New York, Chicago, the San Francisco Bay Area, and St. Charles, Missouri--focused on death dealers like Boeing and the Carlyle Group.

Antiwar and anti-corporate globalization activists have to keep the heat on, and turn it up. Exposing and protesting war profiteering is the first step; shutting it down is the goal.

Reprinted from the Freedom Socialist Volume 24 No. 2, July-September 2003. For a one-year subscription to the quarterly FS, send $5.00 to FS, 5018 Rainier Ave. South, Seattle, WA 98118.