A war profiteer is a person who makes unreasonable financial gain through war
by providing arms, ammunition and sometimes a whole private army to fight side
by side with the national troops. To give you a better idea about what a war
profiteer is and what he does, I'd like to quote a line from the 2005 Hollywood
movie, "Lord of war". The opening lines of the movie said by Yuri, an arms
dealer, "There are over 550 million firearms in worldwide circulation. That's
one firearm for every twelve people on the planet. The only question is: How do
we arm the other 11?"
War profiteering is an even bigger business than war itself. It is a means by
which companies can make money by taking advantage of conflict and chaos. Armed
conflict is a breeding ground for risk, which is why investors often flock to
the industries that fuel it. It is also a market with a huge demand for a
specific type of product: weapons.
War profiteering is a global industry, and the same companies that profit from
conflict in one part of the world will often find success in others. The global
arms trade is a prime example of this phenomenon. The United States is the
largest arms dealer in the world, and sells billions of dollars' worth of
weapons every year. Most of this arms' trafficking occurs abroad, with the
United States delivering weapons to allies and selling weapons to unstable
regions around the world.
War profiteering is not a new concept even in 2006 when the Iraq war was its
height an analysis of the pay of the CEOs of the 34 corporations that were at
the time the top military contractors showed a considerable jump in their pay
after 9/11 attacks. Pentagon funding and revenues of weapons contractors
increased dramatically after the 9/11 attack. Between the years 2001 and 2005 on
average the pay of the CEOs of military contractors jumped by 108 percent in
comparison to the 6 percent increase witnessed by their counterparts at other
large U.S. companies.
In 2004, a year into the Iraq war scores of examples of shoddy construction,
overcharges, and outright theft by contractors engaged in the rebuilding of Iraq
were exposed by the Special Inspector General for Iraq Reconstruction (SIGIR)
but relatively few companies suffered significant financial or criminal
There are two kinds of war profiteers, the passive ones and the active ones.
While passive war profiteers, on one hand, make profits from war, they do not
influence the duration or the outcome of a war in any manner. Active war
profiteers, on the other hand, influence duration of the in order to increase
their own profits.
The thought that private inspiration assumes a significant part in dragging out
struggle is upheld by the instances of Sudan, Sierra Leone, and Liberia. Many
accept that strong private interests are likewise behind the conflict in Iraq
started in 2003. Significant opportunists in the present conflicts incorporate
organizations engaged with weapons making, security, military insight, mineral
extraction, and recreation drives.
Most of this profiteering happens through selling weapons to both the countries
in war, providing inferior products to what was agreed upon, escalating the war
by using illegal methods.
To understand it in much more detail, we would need to look at the United
States, the world's largest defense spender. Most of the wars fought by US
aren't even for defensive reasons but for taking over oil reserves in turbulent
countries. Pentagon has reportedly spent 14 trillion dollars since the beginning
of Afghanistan war.
Post 9/11, the political climate had started a new era of warfare, the global
war on terror. Pentagon had its largest share of funding in years which was used
to hire private contractors to fight in the ongoing conflicts in Afghanistan and
Iraq. Out of the 14 trillion allotted to pentagon, 2 trillion was just spend on
Pentagon's Overseas Contingency Operations (OCO) account. With about 800
overseas military bases and massive expenditure on weapons of mass destruction,
it can be safe to say, that war is a profitable venture.
Providing further evidences are the statistics, the increase in U.S. military
spending between Fiscal Year 2002 and Fiscal Year 2003 was more than the entire
military budget of any other country, including major powers like China, Russia,
the United Kingdom, Germany, and France. Even with the new Biden administration
the numbers have gone down but still a whopping $753 billion is spent on
Department of energy for nuclear warhead development.
The most benefited private companies through this sudden surge in war and
military expenditure are : Lockheed Martin, Boeing, General Dynamics, Raytheon,
and Northrop Grumman and armed private security contractors like Blackwater and
DynCorp these seven companies acquire at least 1/3rd of all pentagon contracts.
CEOs of major military contractors benefit from the escalation of conflict. This
became evident immediately after the assassination of Soleimani as the share
prices of these companies began to hike. Wall Street traders are well aware that
more lucrative contracts would be possible for U.S. weapons makers if there was
a war between U.S.
Politicians benefit by way of lobbying which was apparent in the case of
Lockheed Martin which donated $75,000 to House Armed Services Committee chair
Representative Mac Thornberry who later passed a bill in favor of the company,
whereas others like the modern defense conglomerates which manufacture defense
equipment like Lockheed Martin, Boeing, BAE Systems, General Dynamics, and
Raytheon have outperformed the stock market overall by 58 percent during the
The CEOs of the top five contractors of Pentagon i.e. General dynamics, Northrop
Grumman, Boeing, Lockheed Martin and Raytheon it can be seen that they held
company stock approximately worth $319 million before the assassination of the
Iranian leader Qasem Soleimani. The value of their combined shared had increased
to $326 million by the time the market closed the following day.
Another aspect of war profiteering is the scientific research. With an
increasing demand for military technology modernization, more and more research
organizations have come up in last few decades which not only provide wartime
logistics and other technologies to states and corporations alike. One such
example is 'Siri', an artificially intelligent "personal assistant" programmed
into Apple devices which was a spin-off of a cognitive assistant program. It was
a project funded by the government military development group.
War profiteering has many faces, and it is often difficult to detect the hand of
the profiteer when it is present. However, the global nature of the industry
means that even if a war does not take place in your backyard, it is likely to
have an impact on the profits of a multinational company. This is especially
true of the largest and most powerful corporations. These companies profit from
three ways: logistics and reconstruction, private security contracting, and
supplying weapons. These are also where these companies take most advantages of
during wartime conditions through overcharging or straight up fraud.
It also includes a complex network of financial institutions, companies and
individuals whose money makes war possible or who profit financially from
militarization or war. As long as violence continues to be profitable war will
continue to persist because peace and liberation will be put below the economic
interests of the powerful. When talking about war profiteering the first thing
that comes to our mind is weapons manufacturing but it goes deeper than that.
Examples of war profiteering and war economy are: financial institutions or
Banks that invest in arms scompanies loan them money or provide them with
insurance and extractive industries like mining companies that use military
support to exploit natural resources.
Critics have also pointed out how these large government contracts are always
given to the same handful large firms with unreasonable pricing, fraudulent
contracts and poor pay for employees working for the said companies.
These are just not limited to military contracts but also intelligence agencies
like Central Investigation Agency (CIA), National security agency (NSA) and
Homeland security where there are more private employees than government
servants. A lot of this can be blamed on unchecked corruption, as per reports
weapon manufactures spent almost 2 billion dollars to employ more than 700
lobbyist per year over the past year.
Why War Happens?
History shows that the leading cause for war has been territorial disputes. Some
of such examples would be Kashmir, the Golan Heights, Alsace-Lorraine ad the
Beagle Channel. In comparison to other types of diplomatic disputes territorial
disputes lead to militarized conflict more often. Such territorial disputes can
be resolved peacefully with the help of conflict management tools such as
arbitration and adjudication through international courts.
Article 33 of the UN Charter states that "the parties to any dispute, the
continuance of which is likely to endanger the maintenance of international
peace and security, shall, first of all, seek a solution by negotiation,
enquiry, mediation, conciliation, arbitration, judicial settlement, resort to
regional agencies or arrangements, or other peaceful means of their own choice."
(The United Nations, 2017).
During the conflict between India and China which started back in May 5, 2020
the then President of the United States had sought to mediate in the border
dispute. On May 27 President Trump had offered to mediate or arbitrate the
dispute between both the countries India and China but was rejected by China
claiming that they do not want a third-party intervention to resolve the
The offer was also diplomatically turned down by India saying that they were
engaged with China to peacefully resolve the border dispute. Mediation plays an
important role in border diplomacy and helping in securing international peace
and security. Mediation has served as a process of settling disputes peacefully.
War is bad for nearly everyone and therefore alternative methods like mediation
and arbitration should be considered when resolving disputes. But as long as the
powerful people like CEOs of war profiteering companies continue to reap rewards
their profit motive for war will continue to persist.
War profiteering is a particularly interesting phenomenon when it comes to
cross-border disputes. In many cases, these disputes are the result of
individual companies taking advantage of a conflict that has already started.
For example, the Iraq War is often cited as a major contributor to the current
instability in the Middle East, but it was the decision of one company,
Halliburton, to bid for a piece of the Iraqi reconstruction pie that
kick-started the war in the first place. Similarly, the ongoing crisis in
Ukraine is the result of a series of decisions by junior politicians to take
advantage of the uncertainty created by the conflict in the Donbass region.
- Sayantan Chowdhury &
- Vidhan Singh