British Columbia Teachers for Peace and Global Education
A Provincial Specialist Association of the BC Teachers' Federation


The Profits of War

            A couple of years ago, a retired editor from our local newspaper spoke to my media literacy class.  He said that if you are confused by a media story – if it doesn’t make sense – to “follow the money”.  Following the money has led me to the military corporate complex and, disturbingly, to the Teacher’s Pension Plan (TPP) that BCTF members pay into.  After the environmental destruction and millions of lives lost in Vietnam, I thought that we in North America had learned the awful truth of the futility of war.  But, yet again, we are at war – this time in Afghanistan and Iraq.  Why?  Let me share what I’ve learned about the relationship between the military and the monetary.

            In order for the U.S. military to maintain its bloated budget after the U.S.S.R. collapsed, a new enemy had to be found. Saddam Hussein, an autocratic tyrant, served that purpose, and was driven out of Kuwait in 1991.  But then the military budget began to shrink and the military corporate complex began to suffer as sales shrank. Then came 9/11 and the U.S.A. declared war on a noun – “terrorism”.  The shift to ‘terror’ or ‘evil’ as the enemy ensures that there will always be an adversary to fight, and entrenches the Orwellian concept of a permanent war economy.  The U.S.A. no longer needs a single boogey man, or a single ‘rogue’ state.  Terror is any where they wish it to be or determine it to be. First was Afghanistan, now the Iraqi quagmire, and, waiting in thewings, North Korea, Syria, Venezuela, and Iran.  The war on terror is a war without end and the only winner is the military corporate complex that provides the militaries of the world with the armaments to fight. Shamefully, our TPP invests heavily in these corporations.  Why?  In a word – profit.

            Australia’s Sydney Morning Herald recently ran an article, with the cheeky title “Arms Makers Winning War on Terrorism”, outlining record arms profits resulting from the so-called war on terror.  And how big is this business?  Fighting the cold war from 1946 to 1991 cost the U.S.A. (in year 2000 dollars) $15,829,900,000,000 – or 11,154.73 per second for 45 years.  And, according to the Stockhold International Peace Research Institute (SIPRI) World Almanac 2007, world military expenditures in the prior year were estimated to have reached $1204 billion, with the U.S.A. accounting for 46 percent of the world total.  As staggering as this statistic is, it gets worse. According to a December 12, 2007 Associated Press story, the U.S.government authorized “$696 billion in military programs, including $189 billion for the wars in Iraq and Afghanistan”.  That’s over $22,000 U.S. per second!

So many people and so much money, and research and development are now involved in the business of war that the U.S.A. needs war to feed its economy.  In the simple economics of supply and demand, if peace breaks out, the U.S. economy is introuble.  As Dr. Robert H. Trice, Vice President of Lockheed-Martin argued to the Presidential Commission on Offsets to International Trade argued in December, 2000, “It is important to undersand that each $1 billion In foreign defense sales generates an average of about 24,000 person-years of employment for American workers.”

            In a circuitous marketing ploy, Lockheed-Martin has sold so many F-16 fighter jets to foreign buyers that the Pentagon feels compelled to develop the next state-of-the-art fighter jet to maintain its military superiority.  And so on October 28, 2001, Lockheed-Martin was awarded the biggest military contract in history.  Expected to total $200 billion over thenext 20 years, Lockheed will build the F-35 to ensure the Pentagon’s air superiority.  Coincidentally, the plane eventually will be assembled in Fort Worth, Texas – Bush’s home state.

            Nor has Canada, especially since the Harper Conservatives took power, been immune from this trend toward increased military spending.  According to an October 22, 2007 story in the Ottawa Citizen, Canada’s defence budget has hit its highest level since World War II.  NATO figures indicate that our defence budget is now slightly more than $18 billion per year, making us the sixth highest military spender in the organization. 

            So why does our TPP not connect the dots and question the morality of investing in an arms industry that makes money every time there is a war or the threat of war?  Why do we still view weapons manufacturing as an acceptable economic pursuit?  They will tell you that it is their fiduciary duty to maximize profits.  But as lawyer Gil Yaron has pointed out, “There is nothing preventing pension trustees from applying non-financial criteria to invesment decisions per se provided that the investments are prudent and made in the best interests of the beneficiaries.” Is it prudent to invest in industries that contribute to death, suffering, and environmental destruction?  Is this investment in the best long-term interest of BCTF members?  Imagine if the almost $16 trillion in cold war money had been spend fighting disease, famine, pollution, and ignorance.

            As former U.S. President Jimmy Carter said in 1976, “We cannot be both the world’s leading champion of peace and the world’s leading supplier of weapons of war.”  Re-working Carter’s famous quotation, we can ask ourselves how we can call ourselves a social justice union and teach conflict resolution in our classrooms while investing our pension money in weapons manufacturers. In fact, rather than reducing our investments, we are increasing our stake in these merchants of death. Our pension plan is part of a pooled investment – BCIMC, the company that purchases our stocks – that has almost $25 million (twice the 2005 amount) invested in Lockheed-Martin, the world’s biggest arms manufacturer; $41 million (ten times the 2005 figure) in BAE Systems, the world’s fourth largest defence contractor; $16 million (triple the 2005 figure) in cruise-missile developers Raytheon; $28million (double the 2005 investment) in Northrop Grumman; $66 million (a 50%increase over 2005) in SNC-Lavalin, a Canadian company that makes bullets for the U.S. Army; $280 million (up from $104 million in 2005) in General Electric, which specializes in aircraft engines and has reconstruction contracts in Iraq and Afghanistan; as well as $18 million in cluster bomb and anti-personnel minemaker General Dynamics.

            Can pension plans affect the military corporate complex?  In the fall of 2005, the Norwegian Government Pension Fund (NGPF) sold off its shares in the European Defence and Space Company (EADS) for violating the NGPF’s ethical policy. In April 2006, EADS quietly sold its shares in the controversial cluster weapons producer TDA Armaments, then informed the NGPF of the decision.  Money talks.

            In November 2006, our TPP put one percent of its assets into an ethical fund on a trial basis.  This is a start, but does it offset our increased weapons investments?  We need to be leaders for other pension funds and increase our ethical investments until we are no longer involved in weapons manufacturers at all.  Where we put our money and our energy directly affects our world.  If we want peace in the world, we can’t invest incorporations that make money from war. It’s that simple.

            There is a First Nations story about a grandfather talking to his young grandson.  He tells the boy that he has two wolves inside him that are struggling with each other.  One is the wolf of peace, love, and kindness.  The other is the wolf of fear, greed, and hatred.

            “Which wolf will win, grandfather?” asks the young boy.

            “Which everone I feed”, is the reply.

Jim Pine teaches at Victoria High School, and is the father of three children.  He has been working on changing the pension fund for the last four years. 

For more information:
Jim Pine's pension information website:
"Arms Makers Winning War on Terror" from http://tinyurlcom/e0b2w8
Center for Defense Information:
Shareholder Association for Research and Education (SHARE):
National Priorities Project (NPP):
The British Columbia Investment Management Corportation's: