NATO triumphant, but the real victors are US war merchants

With the Ukraine war thrusting NATO to centrestage, T Rajamoorthy sheds light on the big US military contractors that stand to make a killing from the alliance’s resurgence.

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WHEN the North Atlantic Treaty Organization (NATO) celebrated its 73rd anniversary earlier this year, there was inevitably an air of triumphalism. Likewise, the mood of confidence that pervaded the NATO summit in Madrid in June has been variously described as ‘historic’, ‘transformative’ and ‘game-changing’. There is nothing surprising about all this euphoria given the fact that until quite recently the inevitable question that any discussion of NATO would engender was: Has NATO a future? 

The answer its proponents would now give to that question is probably a resounding ‘Yes!’. They would argue that NATO has not only survived but grown. When it was established in 1949, it had only 12 members. Now it has 30. When the membership applications of both Sweden and Finland are approved (a mere formality), the final tally should be 32.

However, NATO’s current triumphal state is no reason for ignoring its dubious past. For example, the fact that NATO was founded on a lie. The lie that Russia in 1948 was poised to invade and take over Europe.

This was a palpable falsehood as it was plainly evident that Russia was in no position to execute such a blitzkrieg. The country had just emerged from the Second World War still bleeding, having lost some 27 million lives in the conflict. Much of its industry was in ruins while its housing and other urban structures were devastated. Given its ruinous state, Russia was in no position to launch a full-scale war against the West.

Moreover, Western intelligence reports did not lend any support to this claim.

George Kennan, who as Director of the Policy Planning Staff of the United States State Department had been tasked with the goal of countering the alleged Russian offensive, admitted some two decades later that there was no basis for the claim of Soviet military expansionism.

In May 1965, in a lecture delivered at the Graduate Institute of International Studies in Geneva, Kennan pointed out that ‘It was perfectly clear to anyone with even a rudimentary knowledge of the Russia of that day that the Soviet leaders had no intention of attempting to advance their cause by launching military attacks with their own armed forces across frontiers.’ He criticised NATO as a military defence against ‘an attack no one was planning’.¹

Despite all this, the US administration of President Harry Truman and other Western governments managed to hoodwink their people into believing that the Russians and the Communist bloc were about to launch a war against them.

What was the objective of this ‘war scare’? What did the US under Truman hope to achieve by propagating this myth?

The late Frank Kofsky, in his illuminating and thoroughly researched Harry S. Truman and the War Scare of 1948,²  provides the answer.

When the US entered the Second World War, its economy had still not fully recovered from the Great Depression. However, the war expenditure served to bolster the economy. The principal beneficiaries of such military expenditure were a handful of US defence contractors.

Many of these were contractors which were wholly dependent on government contracts for their sustenance. So long as the war continued, they wallowed in the fat profits which came from this source. However, as the war began to wind down, there was general alarm at the fall in profits, with some pleading that they were on the verge of bankruptcy.

President Truman decided to respond positively to these pleas, but to persuade the US Congress to loosen its purse strings, it was deemed necessary to create a ‘war scare’ along the lines that ‘Communist Russia is about to invade your country’.

Kofsky demonstrates that Truman and his chief officials – notably Secretary of State George C Marshall and Secretary of Defense James V Forrestal – contrived this scare to terrify Congress and the electorate into acquiescing in the administration’s expensive and unpopular military buildup programmes unprecedented in peacetime.

The ‘war scare’ evidently did the trick. Congress approved the programmes and the supporting budget outlays.   

The military buildup was precisely what the defence contractors needed to revive their fortunes. As the orders for more aircraft and arms came in, their business picked up, as did the economy as a whole.

The lesson was not lost on policymakers as it became clear that defence spending played a critical role in peacetime as in wartime, in reducing unemployment. The millions in defence expenditure accrued mainly to the defence contractors but also indirectly to a host of other actors who interacted with the implementation of these programmes. The moral of this story was that the US had to maintain something of a permanent war economy if only to keep its economy humming.

Kofsky argues that there was a European component to the scare as well. The Truman administration sought to use it to panic otherwise reluctant European countries, especially in Scandinavia, into joining NATO. On this score, Truman succeeded only partially. While Denmark and Norway entered NATO, Sweden and Finland did not.

Ironically, it is Russian President Vladimir Putin’s launching of war against Ukraine that, according to these countries, has now finally persuaded both Sweden and Finland to join NATO. Herein lies the folly of Putin’s action: it is not only illegal but it has lent credence to the continued existence of NATO.

In fact, until the Ukraine war, NATO had no raison d’etre. The basis on which it was founded in 1949, as we have shown above, was a lie. There was no threat of a Russian invasion. In any case, with the collapse of the Soviet bloc in the 1990s, there was not a shred of justification for NATO to remain.

NATO however has sought to justify its continued existence by adopting new causes, intervening in the civil wars in Yugoslavia, Libya and Afghanistan, avowedly to bring peace to these countries. However, none of these interventions brought real peace. All that NATO succeeded in doing was to sow death and destruction on an epic scale. Hundreds of thousands of innocent men, women and children were slaughtered. In the case of Libya and Afghanistan, the people were worse off, with neither bread nor peace after NATO’s intervention.

At its recent Madrid summit, NATO reiterated its oft-repeated claim that it is a defensive alliance and poses no threat to any country. It has also made the claim that it is essential to world peace. The truth is that NATO is a threat to world peace.

The problem really lies in the US military establishment and its relationship with the defence corporations that supply it. This is the infamous ‘military-industrial complex’ which President Dwight Eisenhower in his farewell speech in 1961 had warned his countrymen about. He specifically warned about ‘the unwarranted influence’ which this complex could acquire in the absence of an alert and informed citizenry.

What is particularly worrying today is the phenomenal growth in the power and influence of the US defence contractors. At present, these contractors are not merely producing and supplying weapons and armaments for the US Defense Department. They are also shaping and decisively influencing US foreign policy.

The most notable of the contractors are Lockheed Martin Corp, Raytheon Technologies Corp, General Dynamics Corp, Boeing Co and Northrop Grumman Corp.

The case of Lockheed Martin, the world’s biggest defence contractor, provides a good illustration of such ‘unwarranted influence’. William D Hartung, in his Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex,³  has documented the enormous power and sway this behemoth has on American foreign policy.

Like all defence contractors, Lockheed Martin thrives on conflict. Its motto could very well be ‘War is good business’. And there is enough evidence to show that it has played an important role in fomenting US involvement in two major conflicts.

The first is the Iraq War. Here Bruce Jackson, who served as Lockheed Martin’s Vice President for Strategy and Planning from 1993 to 2002, was a key figure. To say that he was a strong advocate of US intervention in Iraq would probably be an understatement. ‘Bruce Jackson was championing the invasion of Iraq long before it was fashionable,’ says Hartung. Jackson headed a think-tank called the Committee for the Liberation of Iraq which described itself as a ‘distinguished group of Americans’ who wanted to ‘free Iraq from Saddam Hussein’.⁴  

But the think-tank which was more consequential in mobilising American public opinion on Iraq was the Project for the New American Century (PNAC), a neoconservative outfit based in Washington that focused on US foreign policy. It was established as a non-profit educational organisation in 1997 ‘to promote American global leadership’.  Of the 25 people who signed PNAC's founding statement of principles, 10 went on to serve in the administration of President George W Bush – the administration that launched the war against Iraq.⁵

The other conflict which Lockheed Martin exacerbated to its very limit was the West’s conflict with Russia. The flashpoint was NATO’s eastward expansion. The 1991 collapse of the Soviet Union had opened up the opportunity for former Soviet bloc countries to join NATO. But it was clear that such a move would antagonise Russia as it would pose a security threat. And Russia had made clear its objection. Above all, the Russians argued that when they allowed the reunification of Germany (and for the united Germany to remain in NATO), German Chancellor Helmut Kohl and other Western leaders had promised not to expand NATO eastwards.

Despite this pledge, the West ignored Russian concerns and objections and proceeded to admit Poland, Hungary and the Czech Republic in 1999; Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia in 2004; Albania and Croatia in 2009; Montenegro in 2017; and North Macedonia in 2020. Ukraine was obviously the last straw.

There cannot be any doubt that the West’s decision to ride roughshod over Russian objections received the full support of US military contractors, especially Lockheed Martin. The contractors were gung-ho about NATO expansion eastwards, and already in the 1990s, Bruce Jackson had set up the US Committee to Expand NATO to mobilise political opinion in Washington in favour of such expansion, ignoring Russian objections. Jackson lobbied the US Congress furiously and made frequent trips to Eastern Europe, making contacts (and deals) with the region’s starry-eyed leaders. He exploited to the full the opportunities afforded to him by the fact that he headed both an organisation which agitated for the expansion of US power in the Middle East and another which pushed for extension of US influence in Eastern Europe.

Hence when there was strong resistance by Western European countries (led by France and Germany) to the US-led campaign against Saddam Hussein, Jackson persuaded some 10 Eastern European countries to sign a letter pledging their support for US intervention in Iraq (the infamous ‘Vilnius letter’ organised at a meeting in the Lithuanian capital). Likewise, when Western European countries refused to send troops to Iraq to back the US war effort, he persuaded the Eastern European countries to do so, claiming it would strengthen their case for NATO membership.

According to him, when he began his campaign in 1995 to secure NATO accessions for Eastern European countries, ‘around 70% of editorial boards and 80% of think tanks were on record as being opposed to NATO expansion’. More critically, within NATO itself, there was considerable opposition from countries like France and Germany, which feared Russian antagonism.

Undaunted, Jackson claimed that he and his supporters organised well over 1,000 meetings with US Senators and Congressmen. The hard work paid off and by 1999, the tide had turned, with some 89% Congressional support for the Eastern European countries’ claim for NATO accession. Such was the zeal and commitment which Johnson displayed in his drive to secure NATO membership for these countries that Jules Evans profiled him in an article on the Global Dashboard international affairs website as ‘the man who took NATO east’.

But the single-mindedness with which Jackson pursued his cause cannot be explained merely by altruism. The hard truth is that he viewed NATO expansion as opening up opportunities for the profitable sale of arms and armaments. He was obviously confident that Lockheed Martin, as the world’s largest military contractor, would be able to secure a large portion of the contracts.

His confidence was not misplaced. In an article entitled ‘Lockheed Martin and General Dynamics Poised for NATO Expansion’, one market analyst writes: ‘Looking forward, I see the ongoing Ukraine war and the recent development in NATO countries to provide tailwinds for these two defence leaders [Lockheed Martin, LMT, and General Dynamics, GD] for years to come. The [US Defense Department] now recognises Russia as one of its “principal priorities in the context of renewed great power competition”. And recent requests from Finland and Sweden to join NATO have the potential to trigger another round of defence spending in Europe too. Leading defence contractors like LMT and GD are already deeply embedded in NATO. For example, GD was awarded a contract back in 2020 to deliver 624 of its Land Systems Multi-Utility Tactical Transport (“MUTT”) systems by 2025 to NATO, the large NATO unmanned ground vehicle fielding. Going a bit further back to 2017, NATO gave GD a five-year $140M contract to provide cloud and IT services, which will “fundamentally reshape NATO’s nervous system”.

‘And I anticipate them to play an even larger role with NATO’s heightened awareness of security after the Russian/Ukraine war. An immediate example includes Germany’s announcement to sharply increase defence spending shortly after the war broke out and the plan to order more F35s (made by LMT), and also Ukraine's recent request for M270 and M142 Launch Rocket Systems (both made by LMT).’⁶

Another senior analyst, Jon Markman, writing on the Forbes website, broadly concurs with the view that big US defence contractors stand to gain most from recent NATO expansion. He argues: ‘Treaty obligations will mean a significant increase in defence spending … More importantly, aligning with NATO is a commitment to interoperability with the American defence ecosystem. This directly benefits the big US contractors. The market for their goods is expanding and they will face no competition for the foreseeable future.’⁷              

T Rajamoorthy is Editor of Third World Resurgence.

Endnotes

1    Cited in Isaac Deutscher (1967), ‘Myths of the Cold War’, in David Horowitz (ed.), Containment and Revolution: Western Policy Towards Social Revolution: 1917 to Vietnam, London: Anthony Blond.

2    Frank Kofsky (1995), Harry S. Truman and the War Scare of 1948, New York: St Martin’s Press.

3    William D Hartung (2011), Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex, New York: Nation Books.

4    Wikipedia entry, ‘Committee for the Liberation of Iraq’

5    Wikipedia entry, ‘Project for the New American Century

6    Envision Research (2022), ‘Lockheed Martin and General Dynamics Poised for NATO Expansion’, Seeking Alpha, 2 June

7    Jon Markman (2022), ‘Expanded NATO Will Shoot Billions to US Defense Contractors’, Forbes, 23 May

*Third World Resurgence No. 351, 2022, pp 54-57