War and Venture Capitalism
War and Venture Capitalism
During the Vietnam War, one of the peace movementâ€™s more sardonic slogans was: â€œWar is good business. Invest your son.â€
In recent years, some eminent pundits and top government officials have become brazen about praising war as a good investment.
Thomas Friedmanâ€™s 1999 book â€œThe Lexus and the Olive Treeâ€ summed up a key function of the USAâ€™s high-tech arsenal. â€œThe hidden hand of the market will never work without a hidden fist,â€ he wrote.
â€œMcDonaldâ€™s cannot flourish without McDonnell Douglas, the designer of the U.S. Air Force F-15. And the hidden fist that keeps the world safe for Silicon Valleyâ€™s technologies to flourish is called the U.S.
Army, Air Force, Navy and Marine Corps.â€
On Sept. 12, 2003, Secretary of State Colin Powell spoke this way as he defended the U.S. military occupation of Iraq: â€œSince the United States and its coalition partners have invested a great deal of political capital, as well as financial resources, as well as the lives of our young men and women -- and we have a large force there now -- we canâ€™t be expected to suddenly just step aside.â€ He was voicing the terminology and logic of a major capitalist investor.
And so, it was fitting when the New York Times reported days ago that Powell will soon be (in the words of the headline) â€œTaking a Role in Venture Capitalism.â€ The article explained that Powell is becoming a partner in Kleiner Perkins Caufield & Byers, a renowned Silicon Valley venture firm: â€œMr. Powell acknowledged in an interview Tuesday that he has had any number of tempting job offers since leaving the State Department in January, but that the chance to work as a venture capitalist at Kleiner Perkins seemed too enticing to turn down.â€
Writ large, the balance-sheet outlook of venture capitalism is being widely applied to the current war in Iraq -- even while defenders of the war are apt to indignantly reject any claim that itâ€™s driven by zeal for massive profits. But letâ€™s take the corporate firms at their own words.
Last year, I went through the latest annual reports from some American firms with Pentagon contracts. Those reports acknowledged, as a matter of fact, the basic corporate reliance on the warfare state.
Orbit International Corp., a small business making high-tech products for use by the U.S. Navy, Air Force, Army, and Marines, had increased its net sales by nearly $2.4 million during the previous two years, to about $17.1 million -- and the war future was bright. â€œLooking ahead,â€ CEO Dennis Sunshine reported, â€œOrbitâ€™s Electronics and Power Unit Segments expect to continue to benefit from the expanding military/defense and homeland security marketplace.â€ In its yearly report to federal regulators, Orbit International acknowledged: â€œWe are heavily dependent upon military spending as a source of revenues and income. Accordingly, any substantial future reductions in overall military spending by the U.S. government could have a material adverse effect on our sales and earnings.â€
A much larger corporation, Engineered Support Systems, Inc., had quadrupled its net revenues between 1999 and 2003, when they reached $572.7 million. For the report covering 2003, the firmâ€™s top officers signed a statement that declared: â€œAs we have always said, rapid deployment of our armed forces drives our business.â€ The companyâ€™s president, Jerry Potthoff, assured investors: â€œOur nationâ€™s military is deployed in over 130 countries, so our products and personnel are deployed, as well. As long as America remains the worldâ€™s policeman, our products and services will help them complete their missions.â€
The gigantic Northrop Grumman firm, while noting that its revenues totaled $26.2 billion in 2003, boasted: â€œIn terms of the portfolio, Northrop Grumman is situated in the â€˜sweet spotâ€™ of U.S. defense and national security spending.â€
War. How sweet it can be.
This article is adapted from Norman Solomonâ€™s new book â€œWar Made Easy: How Presidents and Pundits Keep Spinning Us to Death.â€ For information, go to: