Somebody once said to the communist revolutionary Lenin that war is terrible. Lenin replied, “Yes, terribly profitable.”
World War I was particularly profitable for American business. Before entering the war, America played the role of chief money-lender and supplier of raw and finished goods to the warring parties in Europe. For most of the Great War, the U.S. stood profitably neutral, and even when it did enter the war in 1917, its expenditures were minuscule compared to its overall financial gain. The only significant competitors in finance and commerce at the time — England, France, and Germany — were already involved in the war, and thus limited in their abilities to compete.
The war presented a huge market for American goods. U.S. exports soared to two and a half times greater than the highest pre-war level. What’s more, these exports were now manufactured instead of agricultural, which produced even greater profit margins. American companies that were on the brink of failure prior to the war now found themselves struggling to keep up with demand. Between 1914 and 1917, American industrial production increased 32% and Gross National Product increased by almost 20%.
The United States steel industry, which had struggled prior to World War I, was now making record profits supplying the raw goods to produce the tanks, guns, and munitions for the war. Even after President Woodrow Wilson stepped in and imposed price limits, profits were still handsome. American exports to the warring nations increased from $825 million in 1913 to $2.25 billion in 1917.
The American financial industry was an even greater beneficiary of the profits of war. Loans to European nations from U.S. lenders increased greatly during the war. The House of Morgan, part of J.P. Morgan’s vast financial empire, provided most of the financing for the English and French war machines. As the war raged on, and the prospects of repayment from the French government became increasingly questionable, Morgan began to back off on its commitment to lending for the war. The company’s profitability was apparently more important that the preservation of European democracy.
Reaping tremendous profits from war continues to this day. During the Iraq War, many American companies have received financial windfalls. As of 2013, public and private U.S. companies had received at least $138 billion of U.S. taxpayer money through government contracts for services including infrastructure construction, security services, and food supply.
And just in case you were laboring under any lingering delusions that the Iraq War was fought to protect the U.S. from “weapons of mass destruction” or over Iraq’s supposed ties with Al Qaeda, you might recall that our vice president under George W. Bush was one Dick Cheney. Before joining politics, Cheney served as CEO of the publicly-traded company Halliburton, from 1995 to 2000. From the beginning of the Iraq war to 2013, Halliburton received more than $40 billion in no-bid contracts for the Iraq War.
In other words, Halliburton got the contracts automatically, without having to go through the typical bidding process the government usually performs to help keep costs down. This included a $568-million contract in 2010 to provide housing, meals, water and latrine services to soldiers.
Dick Cheney reportedly received a $34 million payout when he stepped down as Halliburton CEO to join the George W. Bush presidential campaign. He also reportedly still owned stock in Halliburton even while he was helping to make decisions that added all of those billions to Halliburton’s revenue stream.
So, you do the math.
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