When Peace is Bad for Business

If you want to know what may be the real motivation behind opposition to a negotiated agreement with Iran, at least on the part of the American neo-con wing, this may be the answer. Listen as a banker that works with a major defense contractor worries that a less threatening Iran may reduce arms sales to the Middle East and thus profits as well.

The possibility of an Iran nuclear deal depressing weapons sales was raised by Myles Walton, an analyst from Germany’s Deutsche Bank, during a Lockheed earnings call this past January 27. Walton asked Marillyn Hewson, the chief executive of Lockheed Martin, if an Iran agreement could “impede what you see as progress in foreign military sales.” Financial industry analysts such as Walton use earnings calls as an opportunity to ask publicly-traded corporations like Lockheed about issues that might harm profitability.

Hewson replied that “that really isn’t coming up,” but stressed that “volatility all around the region” should continue to bring in new business. According to Hewson, “A lot of volatility, a lot of instability, a lot of things that are happening” in both the Middle East and the Asia-Pacific region means both are “growth areas” for Lockheed Martin.

The Deutsche Bank-Lockheed exchange “underscores a longstanding truism of the weapons trade: war — or the threat of war — is good for the arms business,” says William Hartung, director of the Arms & Security Project at the Center for International Policy. Hartung observed that Hewson described the normalization of relations with Iran not as a positive development for the future, but as an “impediment.” “And Hewson’s response,” Hartung adds, “which in essence is ‘don’t worry, there’s plenty of instability to go around,’ shows the perverse incentive structure that is at the heart of the international arms market.”

That’s why the defense industry always supports going to war, no matter the target or the reason. If a politician seriously suggested invading Canada, they would no doubt be the beneficiary of a big boost in contributions from that sector. But maximizing the profits of the arms industry is not in the best interests of the country or of humanity as a whole.

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  • lldayo

    Ed, I think you forgot to mention all the jobs that are created because of the deaths of our fellow countrymen. Wins all around!

  • parasiteboy

    Peace Sells…but Who’s Buying?

  • dmcclean

    Reminds me of a song:

    ‘Cause I believe that war is the answer

    I believe that war will find the way

    Violence is spread worldwide and there are families on the street

    And we sell guns to children now oh why can’t they just see

    That all we do is drive up futures with the things we do today

    Money is our incentive now so that makes it okay

  • Pierce R. Butler

    The above focuses on megacorps such as Lockheed-Martin and Deutsche Bank, but overlooks how warmongering can be a good ol’ traditional all-American mom-&-pop shop within the military-industrial complex as well.

    Neoconservative pundit Robert Kagan and his wife, Assistant Secretary of State Victoria Nuland, run a remarkable family business: she has sparked a hot war in Ukraine and helped launch Cold War II with Russia – and he steps in to demand that Congress jack up military spending so America can meet these new security threats.

    A rising tide of blood lifts all warships!

  • karmacat

    I think it was that hippie, President Eisenhower who warned the US about the military-industrial complex

  • equisetum

    I think it was that hippie, President Eisenhower who warned the US about the military-industrial complex

    Yes, but Uncle Ronnie put him in his place: I’ll see your military-industrial complex and raise you one Evil Empire.

  • LightningRose

    Come on Wall Street, don’t be slow,

    Let’s man this war a-go-go.

    There’s plenty good money to be made

    By supplying the army with the tools of the trade.

    Just hope and pray that if they drop the bomb

    They drop it on old Eye-ron.

    And it’s one, two, three, what are we fighting for?

    Don’t ask me I don’t give a damn, next stop is old Eye-ron.

    And it’s five, six, seven, open up the Pearly Gates,

    There ain’t no time to wonder why,

    Whoopee we’re all gonna die…

    -“The Fixin’-to-Die Rag”, CJ & the Fish, c 1967

    Lyrics updated by moi to reflect current events.

  • The Other Lance

    L.J.Booth said it good: The Economy Needs a War

  • dugglebogey

    Blame Canada!

    With all their beady little eyes and floppy heads so full of lies!

    It seems everything’s gone wrong since Canada came along.

    With all that hockey hullabaloo and that bitch Anne Murray too!

    We must blame them and cause a fuss before somebody thinks of blaming us!

  • busterggi

    Hence rules 34 & 35 of the Ferengi Rules of Aquisition.

  • Doug Little

    Dammit parasite boy @2 beat me to it.

  • sugarfrosted

    Combining stories:

    I have an idea for the republican party. Claim that Ted Cruz is ineligible to be president unless the US conquers Canada.

  • lorn

    War can indeed be quite profitable. But so can peace.

    The real difference is that defense spending focuses profits on relative few and predictable contractors and their investors. With weapons systems, particularly large weapons systems, the profits tend to stay with a dozen main contractors. Defense spending is a sure thing for the wealthy and powerful.

    Peaceful prosperity can be every bit as profitable to the society but it is usually much less concentrated and it is far more unpredictable as to which pockets the money will fall into. It is the fickle consumers, or the serendipitous merger of technology and vision that drives non-defense economic development. While the total amount of wealth created may be similar it is more of a free-for-all.

  • Electric Shaman

    I believe a young poet from Minnesota wrote a little diddy about this very subject 50 years or so ago:

    Come you masters of war

    You that build all the guns

    You that build the death planes

    You that build the big bombs

    You that hide behind walls

    You that hide behind desks

    I just want you to know

    I can see through your masks

    You that never done nothin’

    But build to destroy

    You play with my world

    Like it’s your little toy

    You put a gun in my hand

    And you hide from my eyes

    And you turn and run farther

    When the fast bullets fly

    Like Judas of old

    You lie and deceive

    A world war can be won

    You want me to believe

    But I see through your eyes

    And I see through your brain

    Like I see through the water

    That runs down my drain

    You fasten the triggers

    For the others to fire

    Then you set back and watch

    When the death count gets higher

    You hide in your mansion

    As young people’s blood

    Flows out of their bodies

    And is buried in the mud

    You’ve thrown the worst fear

    That can ever be hurled

    Fear to bring children

    Into the world

    For threatening my baby

    Unborn and unnamed

    You ain’t worth the blood

    That runs in your veins

    How much do I know

    To talk out of turn

    You might say that I’m young

    You might say I’m unlearned

    But there’s one thing I know

    Though I’m younger than you

    Even Jesus would never

    Forgive what you do

    Let me ask you one question

    Is your money that good

    Will it buy you forgiveness

    Do you think that it could

    I think you will find

    When your death takes its toll

    All the money you made

    Will never buy back your soul

    And I hope that you die

    And your death’ll come soon

    I will follow your casket

    In the pale afternoon

    And I’ll watch while you’re lowered

    Down to your deathbed

    And I’ll stand o’er your grave

    ’Til I’m sure that you’re dead