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Jo Makepeace | 29.09.2006 21:32 | Anti-militarism

SchNEWS looks again at the death-to-dividends arms business.

Perpetual War Means British Jobs
Perpetual War Means British Jobs

“We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” — Dwight D. Eisenhower, US President 1953-1961

Corporations and governments use war to gain power, access to resources and markets, and for domestic propaganda – ultimately it’s just a means to an end. For Western governments it’s a dangerous game. On the one hand, the exploitation and promotion of global insecurity helps to prop up capitalism, whilst allowing increased authoritarian control over their subjects, but on the other it threatens the security of the core Western capitalist regions, by encouraging terrorism and pushing alternative military power blocs to form (see SchNEWS 551).

It is only the arms industry, looking myopically to the next quarter’s share price, that has a direct interest in war above all else. Terrorist attacks in the US or Europe? Ker-ching! Shares in British Aerospace rocketed before the dust of the twin towers had settled, and protesters outside the DSEi arms fair in London on September 11th, 2001 (possibly unreliably) reported the sound of champagne corks popping from inside the building as the news came through. US wars of conquest dragging on for years? Ker-ching! All those brave soldiers will need feeding, arming and equipping for as long as they’re out there.

In the US, whose state and corporations still lead the Western capitalist bloc despite their collapsing society and disastrously aggressive policies, spending on weapons (sorry, “defence”) has gone ballistic. Government arms contracts in 2005 totalled $269 billion, up from a pocket-money sized $154 billion in 2001. The War Resisters League quotes budgeted military spending for 2007 at $563 billion, estimating another $100 billion unbudgeted spending in Iraq and Afghanistan, totalling 30% of the national budget. And that’s just at home – US arms exports in 2004 were $18.5 billion, up from $5.4 billion in 1990.

The arms trade’s growth has far outstripped the rest of the economy - between 2001 and 2005, average profits for the 34 top publicly-traded US arms companies increased by 189%, compared to a ‘meagre’ 76% average. And arms industry bosses seem to be particularly greedy, even among the feeding frenzy of executive excess. Average pay for CEOs at those companies doubled from $3.6 million in the three years before 9/11 to $7.2 million in 2002-2005, while the overall average pay for corporate execs rose by 6%. Maybe, since they’re bringing about the end of human existence as we know it, war profiteers want to spend as much money as possible now while they’ve still got the chance. Better not to imagine what could be done with that $563 billion a year towards creating a sustainable world economy that would protect the environment and reduce conflict by using resources more efficiently and fairly, an arrangement that would be in everyone’s interests... oh, except for the arms trade and oil barons.


While soldiers risk death and physical and psychological damage, and those civilians left alive or uninjured suffer displacement, trauma and the destruction of material and social structure, arms dealer bosses sit at home counting the cash. In 2005, an average US arms company CEO coined in $7.4 million – that’s 44 times more than an experienced military general, and 308 times more than an army private actually taking the combat risks - earning $25k a year for killing and possibly dying on the front line. As of 2005, the top-paid bloodsucking fat cat arms dealer boss was George David of United Technologies Corporation, who did pass Go and banked $200 million between 2002 and 2005, including $88.3 million in 2004 alone. You don’t get to the top by playing fair – UTC are currently suing the Pentagon to stop the public learning about them supplying defective helicopter parts in Iraq.

Other top fat cats include Health Net CEO Jay Gellert, who sells military “mental health services” to patch up the shattered minds of those who have witnessed the full horrors of war - and get them back on the front line. His income between 2002 and 2005 increased by a high-explosive 1,134% compared to the previous four years, to a total of $28 million. Of special interest to SchNEWS is number 9 in the list of top earning US war profiteers, James M. Smith of EDO Corp, the parent company of notorious Brighton arms firm EDO MBM. His personal profit has risen from $883,200 a year to $1,783,700 in 2005.

Back in the UK, arms exports totalled $1.9 billion in 2004, leaving old Blighty 4th in the world arms dealing league. British Aerospace, now called BAe Systems Plc, the world’s fourth largest arms firm, earned $20,344 million in military revenue in 2004. From 1996, BAe notoriously supplied Hawk aircraft to Indonesia, which were used in attacks on East Timor. BAe subsidiary Royal Ordnance has been accused by Amnesty of supplying torture equipment. Other top UK arms companies include Rolls Royce (military sales $3,069 million in 2004) and QinetiQ, the privatized Defence Research Agency ($1,399 million). BAe chief exec Mike Turner will earn up to £4.1 million this year – good work old boy, you’re well up with those nice Amercian chaps now!

Arms business’ influence over governments operates through corporate lobby groups and the ‘revolving door’ system, where politicians who have done favours for arms companies later get lucrative jobs with the self-same companies. In the UK, one such public servent is Lord Levene, former government Chief of Defence Procurement, and now Chairman of General Dynamics UK and President of the Defence Manufacturers Association.

Another is lard-arse fox-hunting Tory Nicholas Soames, who was Conservative Armed Forces Minister and is now a non-executive Director of Aegis Defence Services. DESO (Defence Export Services Organisation) employs 500 civil servants in Whitehall to find opportunities for arms sales around the world and promote the arms industry’s interests across government.*

US authors of the report ‘Executive Excess 2006: Defense and Oil Executives Cash in on Conflict’ conclude, rather mildly: “Excessive CEO pay in wartime raises the risk of a profit motive for continuing the conflict or getting into new ones in other parts of the world. The vast potential for war profiteering should be of even greater concern during this war [Iraq] than in past ones because of the extent to which the war and the reconstruction effort have been privatized.” Ker-ching!

* Campaign Against Arms Trade (CAAT) are having a peaceful protest campaigning to close down DESO. 12.30pm, 2-12 Bloomsbury Way, London WC1A 2SH. See

For the rest of this weeks issue see

Jo Makepeace
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