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Excerpt from The Culture of Make Believe

War and Our Economy (p. 446)

From chapter "War"

We may as well admit that war is the best possible thing for our economy. Wars bring us out of depressions, and the outbreak of peace often begins them. Speaking of things monetary—the lingua francaof our “money talks” theocracy—war is the best possible thing not only for the economy but for those who run it. It allows them to speak of the creation of jobs while increasing their fortunes. It allows them to speak of patriotism while sacrificing lives less valuable than their own. It brings about an urgency—a frenzy, even—that allows the rationalization of massive public expenditures, inevitably translating to private subsidy without even the illusion of public benefit. It allows them to further centralize political and economic power under the guise of efficiency and national security. It allows them to imprison or execute those who oppose this centralization, with no fear of repercussion. It allows them to praise themselves and others like them for giving voice to an urge to destroy. It allows them to in vent, deploy, and use no end of nightmarish devices. It allows them to kill, or, rather, give orders, so others must kill, with no fear of public censure. It allows them to pull off the mask of public appeasement and more fully concentrate and exercise their power, or, more precisely, their power to destroy.

All of this comes at the expense of those whose lives are less valuable, and, most directly, at the expense of those who die, or kill, in the trenches. As Ferdinand Lundberg stated about World War I, and this holds true for any war, “The question which strikes at the heart of the war situation like a dagger is not, Who caused the war? … The revealing question is, Who profited by the war, pocketed the profit, and defends the profit?”

The answer, of course, is always the wealthy. Between April 6, 1917, when the United States declared war, and October 31, 1919, when the last U.S. troops returned home, the federal government spent on World War I more than $35 billion of the public’s money; between 1914 and the end of the war, the national debt grew from $967 million to $24 billion. Net corporate profits were $38 billion between January 1, 1916, and July 1921, when wartime industrial activity finally ceased. More than two-thirds of these profits went to companies associated with the Morgan-controlled Bankers Trust.

Just as the Crimean War came at a propitious time for Pierpont’s father, so World War I came at a propitious time for his son Jack. In 1914, the House of Morgan was teetering, in great measure because of problems associated with the New York, New Haven and Hartford Railroad (called the New Haven Line). While the New Haven Line resembled many of Morgan’s other operations, with its blatant disregard for community interest, fiscal sanity, the free market, and the semblance of legality, the manipulation of the New Haven differed from others in that here Morgan became too greedy even for his own monetary security. Along with Charles Mellon, Pierpont had planned to take over every form of transportation in New England: every railroad, steamship line, even every electric trolley. Through the creation of hundreds of dummy corporations, “some headed by mystified clerks who were periodically called in and told to sign contracts,” Morgan and Company bilked stockholders and the public of between $60 million and $90 million. The New York Worldnoted, “Thousands of men are in jail for offenses against society which are picayunish in comparison with this stupendous achievement in respectable robbery.” But neither Pierpont nor his son Jack went to jail. Neither was convicted of any crime, or even indicted. Both were deified.