In the 1930’s, Smedley D. Butler, a retired United States Marine Corps Major General and two-time Medal of Honor recipient, made a nationwide tour giving his speech War is a Racket. In 1935 he published the book War is a Racket. Butler points out how industrialists, subsidized by public funding, can generate substantial profits, making money from mass human suffering.
In a September 13, 2021 paper entitled, Profits of War: Corporate Beneficiaries of the Post-9/11 Pentagon Spending Surge, William D. Hartung examines Pentagon spending that has benefited weapon makers, logistics firms, private security contractors, and other corporate interests. His paper echos the same conclusion that Smedley Butler made almost 100 years ago.
Hartung points out that the financial benefits from a war economy include much more than just the weapons industry. Although one-quarter to one-third of all Pentagon contracts in recent years have gone to just five weapons contractors: Lockheed Martin, Boeing, General Dynamics, Raytheon, and Northrop Grumman, there has been an abundance of booty to be had.
Heidi Peltier reported that roughly half of the Pentagon 2019 budget went to military contractors. These funds were both for war-related and ongoing peacetime activities. The FY2020 indicates, the spending for these contractors grew to $420 billion. It includes logistics and reconstruction firms like Halliburton subsidiary Kellogg, Brown and Root (KBR), Bechtel, and armed private security contractors like Blackwater and Dyncorp.
The Commission on Wartime Contracting in Iraq and Afghanistan estimated that waste, fraud, and abuse in the two war zones as of 2011 had totaled $31 billion to $60 billion. Taking advantage of the less rigorous oversight under wartime conditions is what is called war profiteering. The war industries are guilty of overcharging, shoddy construction, and outright theft by contractors.
Overcharging violations in 2004, KBR refunded the U.S. $27.4 million for potential over-billings at dining facilities in Iraq and Kuwait. Shoddy work has had tragic human consequences, like the electrocution of at least eighteen military personnel in several bases in Iraq due to faulty electrical installations and lack of grounding.
The list goes on; $43 million on a never used gas station, another $150 million on lavish living quarters for U.S. economic advisors, and $3 million for patrol boats for the Afghan police that were also never used.
A Congressional investigation found that a significant portion of $2 billion worth of transportation contracts to U.S. and Afghan firms ended with kickbacks to warlords, police officials, or payments to the Taliban. Former Secretary of State Hillary Clinton has stated that a source of funding for the Taliban was the protection money paid from U.S. transportation contracts.
The use of private contractors reduces transparency and accountability in war zones, accompanied by disastrous results. In 2011 contractors represented more than half of the U.S. presence in the contingency operations in Iraq and Afghanistan, at times employing more than a quarter-million people.
A 2017 analysis by Brown University’s Costs of War project documented abysmal labor conditions and human rights abuses inflicted on foreign nationals working on U.S.-funded projects in Afghanistan. Including false imprisonment, theft of wages, and deaths and injuries in areas of conflict.
Activities of private contractors like Blackwater and its 2007 massacre of 17 people in Baghdad’s Nisour Square have occurred. Contractors like Titan and CACI International firms involved in the interrogation of Iraqi prisoners. Their activities included interrogators and translators on the ground at Abu Ghraib, the Iraqi prison where inmates were tortured.
Failures like DynCorp, a primary contractor to train and develop the Afghan police force between 2002 and 2017, are rewarded instead of terminated. By 2009, over half of DynCorp’s revenues were coming from the Iraq and Afghan wars. The same company paid $1.5 million to settle fraud allegations for a scheme in that DynCorp officials received kickbacks from subcontractors. The same company agreed to pay the U.S. $7 million to settle a lawsuit for submitting inflated charges.
Smedley Butler wrote: ”War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war, a few people make huge fortunes.”
The ultimate solution for stopping war profiteering is stopping war. Until then, slash the Department of Defense budget and change the U.S. foreign policy. Prioritizes real diplomacy, not gunboat diplomacy.