The Incorporated Military States of America

Farewell Warnings

On September 19, 1796, President George Washington published his Farewell Address to the nation, warning his countrymen of the external dangers of “foreign entanglements”. One-hundred and sixty-five years later, on January 17, 1961, President Eisenhower delivered his own Farewell Address, alerting the American people of a relatively new internal threat – America’s own “military-industrial complex” – acquiring “unwarranted influence” and “endangering our liberty or democratic processes”.[1]

It is interesting to examine what happened next in both cases. Washington’s successor – President John Adams – took to heart Washington’s message, refusing to cave to political pressure and involve his fledgling young nation in the French “Revolution”. This, despite extreme political pressure to aid an ally in distress – one that had aided the American colonies in their moment of distress during their struggle for independence against England. Even after the XYZ Affair during which France’s misbehavior toward America might have enticed lesser men into taking sides in France’s civil war, Adams nevertheless kept America out of a foreign entanglement – a decision viewed with the benefit of hindsight, probably saved our nation. What was his reward for this kind of statesmanship? In the short term, he lost the next election and became America’s first one-term President – a badge of political mediocrity at best. Taking a longer view, historians now credit Adams with the kind of political courage one might expect in a leader, just not a political one.

Eisenhower’s successor – President John F. Kennedy – also took his predecessor’s words to heart, ending US-backed military interference in Laos, refusing twice to go to war in Cuba (the first time during the Bay of Pigs invasion and the second time during the Cuban Missile Crisis), negotiating the Nuclear Limited Test Ban Treaty with Soviet Premier Nikita Khrushchev, opening secret back-channels with Khrushchev and Cuban dictator Fidel Castro, and signing the Executive Order (263) that would have pulled all US advisors (more commonly referred to as troops) out of Vietnam by the end of 1965 – foreclosing on a war in Southeast Asia. In case after case, with the Joint Chiefs and the CIA predictably advising him to increase tensions and go to war, our nation’s youngest President instead chose rapprochement and peace. Unfortunately, it turns out peace is less lucrative than war. What was Kennedy’s reward for his Beatitude-like peacemaking? The domestic industry that needed foreign wars couldn’t risk an election…so it murdered him. Tellingly, President Kennedy’s peace policies were almost immediately reversed by his successor, cementing in place a pattern that continues to this day (war, war, and evermore war) – even Presidents must kiss the ring of the shadow government if they expect to win a second term, or as in Kennedy’s case, remain alive.[2] This shadow government is often referred to as the Deep State – an oligarchy of social Darwinists whose ruling mindset is characterized by the obnoxious snubbing of popular sovereignty and the arrogant dismissing of the public interest, obsessing instead over the maximization of bloody profits and the acquisition of unaccountable power.

Though both had committed the same “crime” of resisting war, each was disposed of differently. Adams was summarily dismissed from his position of power via the democratic process of a legitimate election. He was certainly no shoo-in with the voters to begin with considering his low favorability (Adams was not a likable fellow) and his support of the terribly unpopular Alien and Sedition Acts. But his anti-war stance put him at odds with the establishment – the Deep Staters who like to think they run things – so he lost his re-election bid. Kennedy was not so fortunate. Popular with the voters and growing more popular, Kennedy’s fate could not be left to the masses. He was on a glide-path to re-election and the Deep State knew it. Something had changed in American politics from the days of a Founding Father like Adams to the 100 days of the Kennedy administration. While Adams had committed a sin that could be forgiven – there was no military-industrial leviathan needing to be fed in the late 18th century – Kennedy had committed the unpardonable sin by attempting to starve the beast. In the context of the Cold War sixties, there was more at stake – more money and more power – to leave the future to chance. Traditional moral and ethical boundaries had long been vacated, replaced with a “just business” mindset not unlike the gangsters who operate the organized crime syndicate. And so, just as mafiosos handle their family business with violence, the Deep State likewise handled its business on November 22, 1963 – forever changing the way America does business.

Ultra Vires Act

What changed and when did it happen? First, the balance of power in the United States shifted regionally during the Civil War era, leaning heavily in the direction of the urban, industrialized North and away from the rural, agricultural South. Simply put, most of the money and people resided north of the Mason Dixon Line, and in the US system, money and people equals power. Secondly, the balance of power was altered politically by the passage of the 14th amendment, subjugating state laws to federal standards. Together, these new supremacies – northern finances and federal laws – set the table for what came next.

After the Civil War, a new business enterprise called the “corporation” was created. The corporation immunized the owners (the stockholders), the board of directors, and the management (CEO) against any personal legal liability relating to the conduct of the corporation while simultaneously entitling those same stockholders to divide up among themselves all the profits. In addition to immunizing all the players, the Ultra Vires Act also charged the board of directors with the legal responsibility of placing absolute exclusive value upon the maximization of profits for the company. In fact, as it was written, the Act allowed for termination with cause of a member of the board of directors who considered any aspect of the public interest while making decisions which came at the expense of the corporation’s policy of maximizing profits for the stockholders.[3]

The only entity in this new business arrangement that remained personally legally liable for any conduct taken on behalf of the corporation was the corporation itself (its assets). No problem. To minimize this risk, corporations simply established subsidiary companies, assigning to these subsidiaries only the assets the mother corporation was willing to risk, hiding the bulk of the REAL assets of the corporation behind a “corporate veil” of subsidiaries. Similarly, corporations established shell or “holding” companies in which to disperse their profits, effectively hiding the bulk of their corporate profits from the tax man.[4]

Conveniently, the corporation maintained that all these subsidiaries and shell companies were totally separate and distinct from the mother corporation even though the same board of directors ran all of them. That is how 50-60 men could run all the corporations of the country. Which is how the same 50-60 men could run the entire US economy. Which, after paying for the campaigns of everyone running for political office from the local and state level to the federal level, is how the same 50-60 men could run the entire US government. Regarding this scenario, FDR wrote in Looking Forward, “If the concentration of wealth and power goes on at its present rate, by the end of the 20th century, we shall have all of America’s industry and finance controlled by less than a dozen major corporations. They are owned and run by less than 100 men today. Putting it plainly, we are on and are still steering a steady course toward economic and political oligarchy”. And later, at the 1936 Democratic Convention, FDR said this: “It was entirely natural to expect that the privileged princes of the new corporate economic dynasties thirsting for power and profit as they are, would reach out and seek control over the government itself. They have created a new despotism and have wrapped it in the robes of legal sanctions”. Oligarchy and despotism indeed.[5]

The results were predictable. First, corporations naturally began pursuing raw self-interest in the interest of maximizing profits for the owners (their mandate). Of course, this effort was aided tremendously by its exemption from any legal liability. In that vein, corporate conduct after 1868 became more and more harsh, crushing anyone or anything that stood in the way of its organizing principle – maximizing profits. Workers who were injured on the job or had the nerve to ask for a raise were simply fired. Competitors were driven out of business by the monopolists. Would-be government regulators were corrupted. Child, female and immigrant labor proliferated, exploiting the politically disenfranchised. Company stores created a form of legally sanctioned wage slavery in the US. Corporate cost-cutting meant hazardous working conditions for workers and polluted water supplies for local communities. And in the event workers ever tried to organize, Pinkerton gun thugs were called upon to use force to dissuade them of the notion.[6]

Some spoke out against such behavior, altruistically arguing it was not in the public interest, only to learn that the public interest argument had zero standing in the corporate ethos – corporations simply didn’t “do” public interest. They only maximized profits. Period, full stop. Social Darwinism gave these “Robber Barons” cover, maintaining that if a certain person or group of persons was unable to survive in competition with another person or group of persons who are smarter, richer and/or more “fit”, that person or group of persons SHOULD perish. The species would be better off if they simply fell out of the gene pool. Toward that end (of improving the gene pool), intermarriage among the “royal” families was a common practice, merging one corporate family (and its corporate stockholdings) with another, resulting in corporate dynasties. In his work, White Man’s Burden, Rudyard Kipling juxtaposed the fit vs. the unfit this way: Those who can and do what is necessary despite public criticism to control resources over the “half-devils and half-children”. The notorious Jay Gould was even less sympathetic, famously claiming “I can hire half of the working class to kill the other half”. Cornelius Vanderbilt summed up his and his kind’s control of the system – including the legislative, judicial, and executive branches of government – this way, saying “What do I care about the law? I’ve got the power”. In short, between 1868 and 1918, the robber barons created a business vehicle by which they maximized profits, were immunized from all legal liability, and functioned completely divorced from any moral value whatsoever.[7]

Corporatization of Government

Corporations clearly altered the ethical lay of the land between the years 1886 and 1918, prioritizing profits over public interest and immunizing virtually all manners of behavior – thereby sanctioning the substitution of greed for morality in the business arena. So long as a line of demarcation existed between big business and government, the United States still maintained some semblance of an ethical veneer – a gilded finish covering an increasingly rotting core.

It was bound to happen. Three 20th-century world crises forced a convergence of big business and government, altering the purposes of government from serving the greater good to attending to the bottom line. From being public servants of the people to being political slaves to the princes. From caring about moral principles to obsessing over profits. The Great Depression sandwiched between two World Wars necessitated that scores of industry and finance leaders move into government. As a result, Washington D.C. was quickly taken over by business executives, Wall Street lawyers, and investment bankers, bringing with them their ultra vires doctrine.

During World War II, the United States became the world’s “Arsenal of Democracy”, building more military hardware by itself than the Axis Powers combined. For the first time in the history of warfare, the nations that killed the most people lost to the nations that built the most stuff. While the Axis Powers were killing over 80% of all those killed in the war, the Allied Powers were building over 80% of the munitions in the war, proving that in modern warfare, munitions are more important than lives. When America gave its ally Russia 2,000 locomotives & 375 Dodge trucks, the Germans, who called the American hardware “automatons” or automatic robots, complained that these “Damn Americans have motorized their (Russian) divisions while 70% of our divisions are still driven by horses. They have an oil war, and we have a grass war”.[8]

America’s production miracle could not have been achieved without its corporations. The effort to defeat fascism temporarily merged industry and government, resulting in a militarized government that everyone hoped would demobilize afterward. It didn’t happen. In the post-WW II era, the ongoing effort to contain communism merged industry, government, and the military, resulting in an ever-expanding military-industrial complex – a DEEP STATE. This new unholy trinity brought corporate CEO’s, Wall Street lawyers, and investment bankers into business with politicians, government agencies, cabinet members, the Joint Chiefs, the under-Secretaries, the generals, and the intelligence apparatus. It wasn’t long before distinguishing between the three entities was like trying to find a distinction without a difference. Like an incestual family, the children of these dynastic Royals attended the same elite prep schools after which they matriculated at the same Ivy League colleges after which they married into each other’s families. They swapped seats with each other on the Ford and Rockefeller Foundations, served together on the Princeton Board, and accepted membership invites to the Council of Foreign Relations. It was this beastly leviathan that inspired President Eisenhower to issue his warning in 1960.[9]

In the Cold War era, defending the world against communism became the pretext for this militarized government to impose an American reign on the world enforced by this ever-growing military-industrial complex, the specter of nuclear weapons and too-many-to-count CIA clandestine operations – many of which were launched under the cover of anti-communism when in fact, they were just thinly-veiled resource grabs by an imperialist United States government acting on behalf of its corporate overlords. These overseas clandestine operations included government overthrows, coup d’ etats, assassinations, sabotage, kidnappings, death squads, torture, and psyops[10]– in most cases to cushion the seat of the most profitable multinational companies such as General Motors, Chase Manhattan, General Electric, Coca Cola, Reynolds Tobacco, Standard Oil, The Ford Motor Co., Scripps Howard Newspapers, United Fruit Co., Dole Foods Co., American Metal Co., Time-Life, Gulf Oil, Texaco Oil and Mobil Oil. These corporations were always on the hunt for more capital, more tobacco and sugar plantations, more oil fields and mineral deposits, more access to new customers, etc. in their never-ending quest to minimize costs and maximize profits. Inevitably, the personal business interests of these political leaders became conflated with the national interest under the permanent guise of national security.[11]

Double Dealing

In keeping with their ultra vires doctrine, corporate benefactors paid little attention to the ideologies of their beneficiaries, caring only about the profits of their partnerships. Brown Brothers Harriman –the world’s largest private investment bank in the late 1930’s – was a United States banking firm that acted as a New York base for the German industrialist Fritz Thyssen, enabling Adolf Hitler to finance his rise to power in the interwar period. The Brown Brothers Harriman-Thyssen-Hitler triangle had another significant partner. The New York-based Union Banking Corporation (UBC) also represented Thyssen’s United States interests, financing much of Hitler’s re-armament. The Director of UBC was Prescott Bush – founder of the Bush political dynasty (Presidents George H.W. Bush was his son and George W. Bush was his grandson). Thyssen owned the largest steel and coal company in Germany. His partnership with the Fuhrer enriched him and re-armed Germany…with the help of US banks.[12]

Brown Brothers Harriman had many other vested interests. Upon his retirement Comandante of the United States Marine Corps, Major General Smedley Butler said, “I spent 33 years in active military service and during that time, I spent most of my time as a high-class muscleman for American big business, for Wall Street, and for their bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico safe for American oil interests in 1914. I helped make Haiti and Cuba a safe place for the National Bank boys to collect revenues in. I helped in the raping of over half-a-dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers Harriman in 1902 all the way to 1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit company – United Fruit – in 1903. And in China in 1927, I helped see to it that Standard Oil was unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was operate his racket in 3 districts. I operated on 3 continents. I was just a paid gun-thug for Brown Brothers Harriman.”[13]

New York City-based Sullivan & Cromwell – the most powerful law firm in the WW I-WW II era – operated under a mandate to protect its clients from wartime harm and/or postwar liability (including its clients in belligerent countries). Who were some of its clients in belligerent countries? One was IG Farben – the German chemical company that later produced Zyklon B. In large part, the Final Solution would become an experiment in efficiency – German engineering applied to the killing and disposing of millions of Jews. With the help of Sullivan & Cromwell, IG Farben would eventually make gas, and thereby genocide, its business. Like Thyssen Steel, German company Krupp Steel helped Hitler re-arm, violating the terms of the Treaty of Versailles. Italy’s largest hydroelectric power company – Italian Superpower Corporation – helped Mussolini do the same in Italy. And like IG Farben, Krupp Steel and Italian Superpower Corporation were both Sullivan & Cromwell clients.[14]

The Dulles brothers – John Foster and Allen – were Sullivan & Cromwell’s primary power brokers during the interwar period, funneling massive US investments to these companies in Fascist countries. The profits were used to pay WW I reparations to England & France from which war debts could then be repaid to the US (an arrangement codified into US law by the 1924 Dawes Plan). Like their corporate brethren, both Dulles brothers transitioned from the private into the public sector after WW II with John Foster serving as Secretary of State under Eisenhower and Allen serving as Director of the OSS during the war and Director of the CIA after the war. Regarding their complicity in the rise of Fascism, Allen Dulles was not unaware. Quite the contrary. When he interviewed James Angleton to be chief of the CIA’s counter-intelligence office, he explained to Angleton that “the single condition to me hiring you would be your agreeing NOT to polygraph either myself or any of the sixty men I worked with to help fund Germany between WW I and WW II.”[15]

Allen Dulles didn’t only limit himself to pre-WW II double-dealing. At the end of their 1943 Casablanca Conference, FDR and Churchill announced their “Unconditional Surrender” doctrine. Included in the agreement were two promises: First, that the Americans and British would not sell out the Soviets by making separate peace deals with the Nazis, and second, that Nazi war criminals would be brought to justice after war. In an operation (“Sunrise”) that at best can be described as self-serving and at worst be labeled treasonous, Dulles promptly went behind his President’s back. In the Power elite’s view, the Soviets were going to be the REAL post-war enemy, not the Nazis. Needing a bulwark against communism in Europe after the war, they wanted to use Nazis as future intelligence assets against the Soviets – war criminals or not. Acting as Swiss Director of the OSS, Dulles served these interests by securing a secret peace with Nazis in Italy and protecting Nazis with strategic value from post-war justice. Furthermore, to protect his client companies’ assets from being seized or destroyed after the war, Dulles conflated his roles as Sullivan & Cromwell lawyer with US Intelligence Director.[16]

A who’s-who list of Dulles’s “Sunrise Nazis” included Karl Wolf – the SS General who kept the trains running to the death camps and played a key role in the medical experiments at Dachau – who was rescued by Dulles from certain Nuremberg prosecution for future intelligence purposes. Eugen Dollman – the SS Colonel who had extensive espionage contacts in Italy and Germany – served as Wolf’s liaison to Dulles and was himself rescued by James Angleton (Dulles’ protégé) from certain Nuremberg prosecution – also for future intelligence purposes. It gets better. Reinhard Gehlen – Hitler’s intelligence chief in Russia – and his staff were recruited by Dulles to head intelligence in West Germany after the war. In 1968, after serving 23 years in this capacity, the former Nazi retired with honors from the CIA to a lakeside estate where he sailed his sailboat – all paid for by the CIA. These are but a few examples of Dulles’s double-dealing. Thus, while the Allies were supposed to be sending Nazi war criminals to Nuremberg, Allen Dulles and James Angleton were helping Nazi war criminals escape through a series of secret passageways (“ratlines”) and safe houses – an “underground railroad for Nazis”.[17]

Regarding their Nazi clientele, Dulles and Co. could not claim ignorance. Eduard Schulte – Chief Executive of German Mining Co. – hand-delivered Auschwitz evidence in a face-to-face meeting with Allen Dulles in 1943. In response to Schulte, concerned more about Hitler’s people, not his victims, Dulles asked Schulte to write a memo on the state of the German nation. Fritz Kolbe – a German Foreign Service official who refused to join the Nazi Party – smuggled Final Solution documents to Allen Dulles over 8-month period in 1944. In response to Kolbe, instead of reporting on the fate of the Jews or recommending the bombing of the rail lines, Dulles reported to FDR that communists were gaining strength in Germany. Lastly, Rudolf Vrba and Alfred Wetzler – Jewish escapees from Auschwitz who wrote down everything they’d seen at the camp – filed their first-person report with Allen Dulles in 1944. In response to Vrba and Wetzler, Dulles sent a routine cable to Cordell Hull (Secretary of State) recommending that Hull advise FDR to reject the Jewish passengers on the St. Louis, dooming them to an almost certain death upon the ship’s return to Germany.[18]

Militarization of Government

Unlike previous wars after which the US demobilized, the transition from WW II to a Cold War with the USSR necessitated an arms build-up instead. John Foster Dulles – Eisenhower’s Secretary of State – convinced the President that nuclear weapons should be the first rather than the last resort because “the next war will be nuclear anyway”. The resulting Eisenhower Doctrine became one of massive retaliation. In the 1950’s, the US established a nuclear advantage over the Soviets. Eisenhower saw political advantages in prioritizing nuclear arms over conventional weapons in his military build-up. Because nuclear warheads were cheaper than conventional weapons, he could simultaneously reduce military spending while still maintaining the strategic advantage over the United States’ Cold War nemesis. And so, Ike’s doctrine of massive retaliation was in part a bluff: Keep the world at peace by threatening to go to war.[19]

Meanwhile, the Soviets were doing likewise, building up their conventional military, researching and developing new weapon systems, and forging ahead with plans to weaponize outer space. Together, the two superpowers were creating an environment of mutual assured destruction should one trigger-happy general on either side lose his bearings during one of the many provocations that would occur during forty-plus years of Cold War tensions. Ironically, both sides were building weapons that if ever used against each other, would ensure their own destruction, resulting in a perverse form of deterrence. In this new bipolar world of east vs. west, Warsaw Pact vs. NATO, and communism vs. democracy, head-to-head confrontations between the two superpowers were circumvented in places like Korea, and later in Vietnam, and later still in Afghanistan, in favor of proxy wars – all to prevent the destruction of the planet.

Returning to President Eisenhower’s Farewell Address, the point of his speech was clear: The apparatus of national security was rapidly becoming big business. The Cold War nexus of military and intelligence operations (many of which were covert or “off-the-books”), weapons hardware, money and power was threatening to convert the United States into a security state. The corporate ultra vires doctrine was beginning to dominate government policy-making decisions. A seemingly permanent state of war was providing cover for Cold War policies that were less about the interests of the American people and more about the profits of the “military-industrial complex” as Eisenhower defined it. Five months after Eisenhower’s warning, Senator J. William Fulbright – on his way to becoming the longest-serving chairman of the Foreign Relations Committee in the United States Senate’s history – doubled down, issuing the Fulbright Memorandum in which he warned of a politicized military and the possibility of a military coup in America much like the 1961 coup attempt by French Generals vs. Charles de Gaulle (In a disagreement over self-determination in Algeria, the French Generals – with the now-discovered help of the CIA – had attempted to overthrow a French government that was interested in peace and replace it with a military dictatorship interested in war). Other similar warnings were issued. Columnist Marquis Childs wrote, “In one country after another in recent years, the intervention of the military in politics has had disastrous consequences.” Columnist Drew Pearson wrote, “Certain Pentagon brass hats are lining up with industrial right-wingers to foment a sort of neo-fascism despite the fact that they are wearing Uncle Sam’s uniform.”[20]

The warnings proved futile. After the assassination of President Kennedy, the war in Vietnam started for real. Bell Helicopter, on the verge of bankruptcy before the war, sold 12,000 helicopters to the Pentagon during the war. At $4.7 million each, Bell Helicopter made a cool $56,400,000,000 off the Vietnam War. General Dynamics – a company out of Texas with ties to President Lyndon Baines Johnson – made a $300 million PROFIT off the sale of its F 111 Fighter Jet during the war. Vietnam – the most expensive war in Cold War history – ended up costing over $1 trillion in today’s money over the span of four US Presidents. The Cold War was worth over $10 trillion in today’s money over a forty-year span. Going forward, in 2011, the United States invested $711 billion on military spending. Compare that figure to China, Russia, Britain, France, Japan, India, Saudi Arabia, Germany, Brazil, Italy, South Korea, Australia, and Canada – all combining to spend $695 billion on their militaries. In 2016, the US commissioned its newest nuclear-powered aircraft carrier – the Gerald R. Ford – at the stupendous cost of $13.2 billion. The Pentagon proposed $13 billion of spending in its 1950 budget, $47 billion in 1961, $100 billion in 1975, $170 billion in 1986, $664 billion in 2010, and $686 billion in 2018. Since WW II, US involvement in wars and/or proxy wars has become a permanent fixture in America’s foreign policy. The Cold War began in 1945 and ended in 1991 – a 46-year period during which the US fought proxy wars in Korea, Vietnam, Afghanistan, and most currently, in a renaissance of Cold War tensions between the US and Russia, the Ukraine. But that’s not all. American forces have also been deployed in Grenada, Beirut, Libya, Panama, the Persian Gulf, Somalia, Haiti, and Yugoslavia. After 9-11, the War on Terror replaced the Cold War, drawing the US into conflicts in Afghanistan (again), Libya (again), and Iraq (again) and Syria. If wars are the most profitable enterprise ever invented, permanent war offers limitless profits and infinite powers over its people. All it requires are permanent bogeymen. As such, Russia and terrorism have become virtual ATM machines for the military-industrial complex. As Eisenhower, Fulbright, and numerous others warned would happen, the tail is clearly now wagging the dog.[21]

Questions to Consider

As noted earlier, the Ultra Vires Act established generating profits as the sole purpose of the corporation. In fact, even considering the public interest was cause for dismissal for a board member and/or the CEO. Immunity from legal liability exempted elites from any consequences for their behavior…if it was in the pursuit of profits. Any pushback to this doctrine from workers and communities or by reform efforts, etc. was always met with force. During the interwar period, corporate elites began transitioning into government to help steer the ship of state out of the Depression. As they did, they brought these business practices with them, injecting ultra vires into the public sector. During the post-WW II era, shielding corporate assets and/or gaining access to resources – all in the pursuit of bigger profits – increasingly became the business of the military, seeding ultra vires into America’s foreign policy. This unholy trinity of corporations, military, and government resulted in “captured” government agencies, policies, and politicians – each serving the interests of their business overlords, using the military to accomplish much of their profiteering…all under the guise of national security.[22]

Which leads to several obvious questions: First, what if pushback to this enterprise came from the White House? Would it be met with the same force that workers, communities, and reformers encountered?

And second, how far would this new corporatized/militarized government be willing to go to maximize profits at the expense of the public interest…all in the name of national security? Would it be willing to sacrifice a U-2 plane, instigating an international incident to sabotage a peace summit?[23] Would it be willing to kill a US President to secure a war?[24] Would it be willing to entrap a US President, setting him up to be impeached to short-circuit his efforts at détente?[25]