War and corporations
a brief primer

As the military machine gears up for another war it seems worth taking a closer look at the links between business and conflict. Corporations were born out of the wars of colonisation and today the relationship between military expansion and companies remains.

Corporations - a bloody birth
The first corporate charters were awarded by governments in the 16th century. Essentially corporations were private extensions of states which enabled thte parent country to exploit trading opportunities obtained by conquest and to deal with competition from other colonial powers and indigenous people. For example, from the 17th century onwards the East India Company was Britain’s main tool in the conquest and subsequent exploitation of India; the company hired its own army to gradually conquer India, opening up natural resources for exploitation and obtaining captive markets for British manufactured goods.

More bombs are good for business
The outbreak of the Second World War paradoxically rescued many countries from the great depression of the 1930s. Between 1942 and 1945, the US economy grew by an annual average of 7.7 per cent - more than any other time that century. Growth during war is a product of increased government spending on infrastructure and arms, leading to increases in production and workforce. Though the effect may be short term - wars risk burdening a nation with inflation and debt - military success can bring economic dominance in the long term, as can be seen with the US after WWII.

Arming for war
Political instability and military threat lead to increased military spending by governments, ultimately benefiting their defence companies. The annual ‘defence’ budget for the USA will hit $396bn (£249bn) in 2003; that of the UK will hit £35bn. Instability also leads to increased orders from around the world as governments arm in anticipation of war.
As war becomes increasingly technical, electronics corporations have begun to diversify into defence contracts. The 2000 list of the 100 biggest arms companies included names more familiar from consumer electronics such as Mitsubishi Electric, Sagem, NEC, Toshiba and Motorola.

The McArmy is on its way
Military spending is the direct link between war and corporations but the relationship does not end there. As US Defense Secretary William Cohen put it prior to a speech at Microsoft Corporation in 1999. ‘The prosperity that companies like Microsoft now enjoy could not occur without having the strong military we now have.’
When a hostile government is toppled and one more favourable to US and neoliberal policies installed, it creates a range of money-making opportunites for corporations. Often natural resources are the first target. Increasingly multinationals seek to gain control of resources such as deposits of ores and precious stones, forests for logging and oil reserves during times of instability; for example through bribes to local governments or rebel forces.
A recent report from the World Watch Institute showed how wars over natural resources like coltan - a mineral that keeps mobile phones and other electronic equipment functioning - diamonds, timber and other rare materials have killed or displaced more than 20 million people and are raising at least $12bn (£7.6bn) a year for guerrillas, warlords and repressive governments around the world. As the report’s author Michael Renner comented, ‘People are dying every day because consumer societies import and use materials irrespective of where they originate’.1
But globalisation now means poor countries weakened by war have much more to offer than natural resources. A low wage economy without adequate workers’ rights is the ideal site for multinationals to manufacture goods for export back to the West. A country also offers millions of potential consumers. After the troops have left, the marketeers from Coke and Pepsi move in to claim their share of the spoils.

Neoliberalism - like it or lump it!
Ultimately as JW Smith has pointed out; ‘It is the military power of the more developed countries that permits them to dictate the terms of trade and maintain unequal relationships.’ The US under the guise of the WTO or IMF can back up their trade agreements and rulings with fines and sanctions, but ultimately it is military force which underwrites them. Often the timing of military exercises and the location of the US fleet are used to intimidate certain countries into toeing the line.
Military power is also needed to deal with the inequities of globalisation. As General AM Gray, former commandant of the US Marine Corps, pointed out as long ago as 1990, threats to the US will originate from the, ‘underdeveloped world’s growing dissatisfaction over the gap between rich and poor nations,’ jeopardising ‘our access to vital economic and military sources.’
So events such as the attacks of September 11th fall into a wider pattern. Neoliberal policies, propagated through corporations, backed up through military power, lead to an inevitable backlash and consequent increase in military activity. Meanwhile, as one US foreign exchange analyst commented, ‘The stronger the US retaliation for 11 September, the larger the jump in the value of the dollar will be.’

Blood on everyone’s hands
The implication of these connections is quite shocking – if our economic system relies on and feeds off war and violence, not only the corporations but all Westerners, as material beneficiaries of that system, are complicit in the bloodshed. The Kuwaiti oil we burn, the Angolan diamonds we buy for our fiancées, the Congolese coltan in our mobile phones, bought from a company that also makes military electronics – all implicate us in the violence that underpins corporate capitalism. Only by recognising these connections and attacking indiscriminate consumption as well as the corporations that feed it, can we follow through to attack the roots of war.

Reference
1 Coltan etc http://www.worldwatch.org/pubs/paper/162/press.htm