Corporate Profit and Modern War

National militaries are now merely the paymasters for private corporations

By David Evans | 2005-07-01 12:00:00

Mercenary armies are as ancient as written history. Killing to gain money is neither original nor new. What is new is that from the mid-1980s on, government militaries all over the world have divested themselves of many activities, taking on instead the role of paymaster or conduit for government funds. For the first time in history, countries are divesting their militaries to private transnational corporations.

The line between business and the military has become obscure, as military armies spawn giant successful corporations (such as China's COSCO) and resource corporations are accused by the UN of promoting and fueling civil war for profit. Securing resources by means of military support is now common, if not standard practice by mining or oil corporations. All over the world, the distinction between corporate activity and hostile military action is ceasing to be meaningful.

In the past decade, conflicts in the DR Congo, Eritrea, Ethiopia, and elsewhere in Africa have seen competing transnational corporations offering a whole range of mlitary services to all sides in those countries' conflicts. The four million dead in DR Congo, and the terrible atrocities committed against children in Sierra Leone, are conveniently left out of the balance sheets of those corporations which have directly benefitted from the continuation of these wars.

In a recent book, Corporate Warriors,1 Peter Singer suggests that determining where the military ends and corporate organization begins is a futile enterprise. Virtually all areas that were considered the exclusive domain of the military have now become part of corporate activity. Hiring, provisioning, training, planning, propaganda, and combat are all now part of services used by major Western governments and supplied by transnational corporations.

For example, L3 Corporation owns MPRI Corporation, which provides military services in training and planning to the militaries of the US and governments allied to US foreign policy. L3 is owned in turn by Lockheed Martin, a corporation that has received investments from Canada Pension Plan (CPP) funds. CPP funds have been invested in 15 of the top 20 military supply corporations in the world. Canadian integration into the world of privatized military services does not stop here.

The Military Business

Crown Corp Technology Partnerships Canada funds the invention of war technology. With hundreds of millions of dollars in its annual budget, it has given government handouts to corporations developing instruments of destruction in the name of science. Defence Industry Productivity Program has further given corporations billions to develop their military production efficiency. These represent a federal investment in an industry that Canadians consistently choose to oppose.2

This integration is an international phenomenon that has been developing since the end of World War II. Even President Dwight Eisenhower speculated that profit, instead of military necessity, was driving the military buildup.

Corporations that serve the military may be the most powerful obstacle to achieving peace. The largest single buyer of oil in the world is the US Department of Defense.3 So central to North America's economy is the defense industry that to separate ourselves from its influence might risk economic collapse.

The military buildup bankrupted enemies of the West. As no country can afford to match the US in defence spending, the very spending itself is a deterrent. The development of a military capable of destroying enemies of the state is a secondary objective. The global military industrial complex may have outgrown the states that nurtured it.

Are Armies Still 'Effective'?

The present military débacle in Iraq and makes us question the overall effectiveness of government military forces. In the world of increased terrorism and state destabilization, can any government military be effective?

Because of this perceived inability to be effective, members of the present British government have suggested the use of "private military corporations." They argue that privatizing the military as transnational corporations will make the use of force more cost-effective and capable of meeting its objectives.

Canada is not far behind in this process. The Canadian government has divested part of its services to the Calgary-based Corporation ATCO Frontec, which provides services in supply, logistics, and even the security of armaments and munitions. As well, the corporation provides support for Canada's early warning system in case of nuclear attack. As stated in its annual report, this company plans to offer its mercenary services to other countries as well as Canada.4

ATCO Frontec has had difficulty in providing staff that are willing to endure the risks of battlefield operations. However, unlike Canadian soldiers, these staff are not liable for treason or similar charges if they fail to follow orders on the battlefield.


A sign of what may come from further outsourcing the Canadian military can be seen in the farcical events of the winter of 2000. Because of a contractual dispute between a transport supplier and the Canadian government, a large part of the Canadian navy spent weeks sailing in circles.

The military everywhere has increasingly ceased to be an organization of patriotic defence. Rather it has become an instrument of resource transfer from one section of society to the other. Funds raised from taxes and pensions are transferred to transnational corporations that US and Canadian citizens do not necessarily own. They are founded less on allegiance to the foreign policy of any particular country than dedicated to the accumulation of profit.

Halliburton's Root and Brown Corporation has pushed the boundaries of what a corporation can do in military operations.5 Primarily this is because they were employed to write the official rulebook for the US government on the use of the private military services. 6 Lockheed-Martin's MPRI has done the same in writing the official government rulebook for military services it offers. Both corporations have intimate and extensive links with military leaders and US government officials.

The world's top two engineering firms, Bechtel7 and the Canadian based SNC-Lavalin Group are also involved in military contracts for supplies and services that range from construction of military and civilian facilities, to armaments and mercenary services such as security and logistics. Canadian activist groups have been spotlighting SNC-Lavalin Group's contract for supplying bullets to the US military.8

Increasingly, groups dedicated to the peace movement have sought means to hold corporations accountable and thereby prevent corporations from fueling conflicts. The campaigns against Talisman and Shell are two cases where some success has been achieved. The need to unite with others around the world against this global threat has never been greater.

David Evans is a librarian who lives and works in Toronto.


1 Peter Singer, Corporate Warriors: The Rise of the Privatized Military Industry (Cornell University Press, 2003).
2 Hector Mackenzie, "Defining and Defending a Place in the World: Canada's Vital Interests in International Affairs. Canadian Issues, Sept 1, 2002; Miro Cernetic, "Tackle Hunger Before War on Terror Poll," Toronto Star Feb. 17, 2005.

3 "Battling Fuel Waste in the Military,"
5 Singer, p. 142.
6 Singer, p. 124.
7 Bechtel gets new $1.8 bn. Iraq deal., 7 Jan. 2004.
8 Campaign against SNC-Lavalin,, Autonomy & Solidarity, March 17, 2005.

Peace Magazine Jul-Sep 2005

Peace Magazine Jul-Sep 2005, page 13. Some rights reserved.

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