|A cloud over civilisation
Corporate power is the driving force behind US foreign policy - and
the slaughter in Iraq
July 15, 2004
At the end of the second world war, I was the director for overall
effects of the United States strategic bombing survey - Usbus, as it
was known. I led a large professional economic staff in assessment of
the industrial and military effects of the bombing of Germany. The
strategic bombing of German industry, transportation and cities, was
gravely disappointing. Attacks on factories that made such seemingly
crucial components as ball bearings, and even attacks on aircraft
plants, were sadly useless. With plant and machinery relocation and
more determined management, fighter aircraft production actually
increased in early 1944 after major bombing. In the cities, the
random cruelty and death inflicted from the sky had no appreciable
effect on war production or the war.
These findings were vigorously resisted by the Allied armed services
- especially, needless to say, the air command, even though they were
the work of the most capable scholars and were supported by German
industry officials and impeccable German statistics, as well as by
the director of German arms production, Albert Speer. All our
conclusions were cast aside. The air command's public and academic
allies united to arrest my appointment to a Harvard professorship and
succeeded in doing so for a year.
Nor is this all. The greatest military misadventure in American
history until Iraq was the war in Vietnam. When I was sent there on a
fact-finding mission in the early 60s, I had a full view of the
military dominance of foreign policy, a dominance that has now
extended to the replacement of the presumed civilian authority. In
India, where I was ambassador, in Washington, where I had access to
President Kennedy, and in Saigon, I developed a strongly negative
view of the conflict. Later, I encouraged the anti-war campaign of
Eugene McCarthy in 1968. His candidacy was first announced in our
house in Cambridge.
At this time the military establishment in Washington was in support
of the war. Indeed, it was taken for granted that both the armed
services and the weapons industries should accept and endorse
hostilities - Dwight Eisenhower's "military-industrial complex".
In 2003, close to half the total US government discretionary
expenditure was used for military purposes. A large part was for
weapons procurement or development. Nuclear-powered submarines run to
billions of dollars, individual planes to tens of millions each.
Such expenditure is not the result of detached analysis. From the
relevant industrial firms come proposed designs for new weapons, and
to them are awarded production and profit. In an impressive flow of
influence and command, the weapons industry accords valued
employment, management pay and profit in its political constituency,
and indirectly it is a treasured source of political funds. The
gratitude and the promise of political help go to Washington and to
the defence budget. And to foreign policy or, as in Vietnam and Iraq,
to war. That the private sector moves to a dominant public-sector
role is apparent.
None will doubt that the modern corporation is a dominant force in
the present-day economy. Once in the US there were capitalists. Steel
by Carnegie, oil by Rockefeller, tobacco by Duke, railroads variously
and often incompetently controlled by the moneyed few. In its market
position and political influence, modern corporate management, unlike
the capitalist, has public acceptance. A dominant role in the
military establishment, in public finance and the environment is
assumed. Other public authority is also taken for granted. Adverse
social flaws and their effect do, however, require attention.
One, as just observed, is the way the corporate power has shaped the
public purpose to its own needs. It ordains that social success is
more automobiles, more television sets, a greater volume of all other
consumer goods - and more lethal weaponry. Negative social effects -
pollution, destruction of the landscape, the unprotected health of
the citizenry, the threat of military action and death - do not count
The corporate appropriation of public initiative and authority is
unpleasantly visible in its effect on the environment, and dangerous
as regards military and foreign policy. Wars are a major threat to
civilised existence, and a corporate commitment to weapons
procurement and use nurtures this threat. It accords legitimacy, and
even heroic virtue, to devastation and death.
Power in the modern great corporation belongs to the management. The
board of directors is an amiable entity, meeting with self-approval
but fully subordinate to the real power of the managers. The
relationship resembles that of an honorary degree recipient to a
member of a university faculty.
The myths of investor authority, the ritual meetings of directors and
the annual stockholder meeting persist, but no mentally viable
observer of the modern corporation can escape the reality. Corporate
power lies with management - a bureaucracy in control of its task and
its compensation. Rewards can verge on larceny. On frequent recent
occasions, it has been referred to as the corporate scandal.
As the corporate interest moves to power in what was the public
sector, it serves the corporate interest. It is most clearly evident
in the largest such movement, that of nominally private firms into
the defence establishment. From this comes a primary influence on the
military budget, on foreign policy, military commitment and,
ultimately, military action. War. Although this is a normal and
expected use of money and its power, the full effect is disguised by
almost all conventional expression.
Given its authority in the modern corporation it was natural that
management would extend its role to politics and to government. Once
there was the public reach of capitalism; now it is that of corporate
management. In the US, corporate managers are in close alliance with
the president, the vice-president and the secretary of defence. Major
corporate figures are also in senior positions elsewhere in the
federal government; one came from the bankrupt and thieving Enron to
preside over the army.
Defence and weapons development are motivating forces in foreign
policy. For some years, there has also been recognised corporate
control of the Treasury. And of environmental policy.
We cherish the progress in civilisation since biblical times and long
before. But there is a needed and, indeed, accepted qualification.
The US and Britain are in the bitter aftermath of a war in Iraq. We
are accepting programmed death for the young and random slaughter for
men and women of all ages. So it was in the first and second world
wars, and is still so in Iraq. Civilised life, as it is called, is a
great white tower celebrating human achievements, but at the top
there is permanently a large black cloud. Human progress dominated by
unimaginable cruelty and death.
Civilisation has made great strides over the centuries in science,
healthcare, the arts and most, if not all, economic well-being. But
it has also given a privileged position to the development of weapons
and the threat and reality of war. Mass slaughter has become the
ultimate civilised achievement.
The facts of war are inescapable - death and random cruelty,
suspension of civilised values, a disordered aftermath. Thus the
human condition and prospect as now supremely evident. The economic
and social problems here described can, with thought and action, be
addressed. So they have already been. War remains the decisive human
· This is an edited extract from The Economics of Innocent Fraud:
Truth for Our Time, by JK Galbraith, published by Allen Lane.