Halliburton and the raw drive for profits

Karl Marx once wrote that the United States had a relatively “pure” form of capitalism where the capitalists faced the workers directly, with no aristocracies, pre-capitalist classes, or non-capitalist ideological survivals to get in the way – just the raw drive for profits.

Wars and war-profiteering are great illustrations of Marx’s point.

War profiteering has a long history in the U.S., with some famous names attached. In the Civil War, which really was on one level a war for freedom against slavery, industrial capitalists like Jay Gould profited from war spending and war contracts and, if they had to, bought $300 exemptions from the draft.

Cornelius Vanderbilt took his black-sheep son William into the family business when William, who had a farm on Staten Island, proved his worth by selling hay to Union Army cavalry troops at inflated prices. In the Civil War, tainted meat and other products sold by contractors in an unregulated economy spread disease and death. In the Spanish-American War in Cuba in 1898, where U.S. battle casualties were minimal, historians estimate that more soldiers died as a result of contaminated foodstuffs than in combat.

Companies like DuPont in World War I and General Motors and Ford in World War II (when the modern military-industrial complex was born) greatly increased their wealth through government contracts, and had their executives serve on wartime planning boards as “dollar-a-year men.”

But, unlike today, they did not have one of their former chief executives as vice president of the United States. Also, they had to face a large tax increase and government protection for unionized workers in both world wars as a tradeoff for their increased profits.

Earlier, even Andrew Mellon, treasury secretary under Harding, Coolidge and Hoover in the 1920s and a minor big-business folk hero, had to resign his post during the early Depression so that his Pittsburgh banking empire could receive loans from the government’s Reconstruction Finance Corporation.

Mellon is no role model for Vice President Dick Cheney, former Halliburton CEO, who shamelessly rolls on with and for the company, channeling multibillion-dollar super-profitable federal contracts its way without competitive bidding, even as the press reports corruption in Halliburton-supervised food sales to the U.S. military. In a way, Cheney is closer to former General Motors President Charles E. Wilson, who proclaimed, “What’s good for General Motors is good for the country.” But even Wilson had to break his direct GM connections when he became secretary of defense, and a number of minor Defense Department officials with connections to firms selling clothing and other supplies were later forced to resign their positions under a cloud of suspicion.

Another point made by Karl Marx was that as a system goes into crisis, its contradictions become more and more apparent to the masses of people. Today Americans are both seeing and feeling those contradictions. This administration is fighting a 19th century imperial war with 21st century weapons in Iraq. It has turned loose a legion of “private contractors” to get rich there even if many of their employees get killed in the process. It has permitted these companies in many instances to bring in their own private security forces, even though that may conflict with U.S. military strategy and tactics.

Since the Bush administration’s interest is in making sure that the hundreds of billions in profits go to the industrial side of the military-industrial complex, to Halliburton especially, it is treating U.S. soldiers the way big employers do nonunion workers. It is taking National Guard forces and reserves out of their domestic jobs where they are needed and sending them with virtually no training to occupy a foreign country. As the disaster in Iraq deepens, the attitude of Halliburton and Bush’s other big-business supporters towards this administration reminds me of gangster Hyman Roth’s comment about the Batista regime in Cuba in the film “The Godfather Part II” – “We have here what we have been always looking for: a government that we can really work with.”

Today, more than 150 years after Karl Marx saw the U.S. as representing a “pure form” of capitalism, the Bush administration is providing the world with a textbook example of “state monopoly capitalism,” with no apologies for the open connections between high government officials and a firm like Halliburton, with its multibillion-dollar Pentagon contracts.

Fortunately we have the power in the coming election to defeat the Bush administration and war profiteers like Halliburton.

Norman Markowitz is a history professor at Rutgers University. He can be reached at pww@pww.org.