Should businesses profit from war?
In one facet of my life, I am involved with economist, this question came up recently...should businesses profit from war?
I don't post very often, but I read ALOT...you ladies and gentlemen always have some pretty interesting thoughts. Let me know how you feel about the topic.
I don't post very often, but I read ALOT...you ladies and gentlemen always have some pretty interesting thoughts. Let me know how you feel about the topic.
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no, only charities should make arms. this will create a reliable supply of cutting edge equipment for our military.[:o)] 0 -
Oh yeah and soldiers need to be unpaid too.
what a stupid question0 -
Turn the question around once and ask it again.
Should a company have to invest tens of millions, hundreds of millions, possibly billions of dollars of capital, and expect to get zero return on the investment? Who do you think is going to provide that capital if they can't even get as much of a return as they could get in the bank in a CD.?0 -
why should I give my goods to the army whrn they are worth cash on the market?
Will I invest billions into devolping what the military needs to give it away?
Maybe you want us all to work in a govt factory for free on the weekends.
everything cost $, whether you directly see the price or not0 -
tsavo:
I appreciate the fact that you think it is a stupid question...but a riduculus amount of people can not answer this question with any validity.
Majority of people wouldn't even understand both of your smart a$$ answers. 1)Defense contractors are not on eveyones radar, nor are the weapons they produce.
2)Not everyone in the world immediately appreciates our military like some (such as you and I-not to speak for you)
Half of the battle for people to understand a concept is educating them. I posted this question HERE, hoping to have intelligent conservative answers vs. the far left answers that are usually given for a question like this.
Thanks for your thoughts.0 -
While they should be allowed to profit, they should not be allowed to gouge. Design oversights/defects should be corrected for free (under warrenty if you will) and not have to be paid for at a outragious upcharge.
Now I realize that the Govt. put's a lot of stupid requirments into the contracts (they have entire dept's that do nothing but write test specifications for hammer handles), and there needs to be a lot of "trimming" done there also.0 -
Just playing SAW[:o)], I am amazed how little faith people have in the free market system! I am easy to get going on Econ stuff
I didnt mean to ruin your experiment or lesson[:I]0 -
There is no such thing as fixing a mistake for "free", it still costs money and resources and those have to be paid for from some source. If a company has to pay more for fixing a "mistake" than they were allowed to make in profits, they will soon be out of business and the supply of your war material is done. The anticipated cost of correcting errors will be figured into the original price, just like it is in every other business on earth.
You also have to understand that a defense related industry is going to have to be allowed to charge enough to cover the cost of surplus capacity during peacetime in many cases. It is relatively easy to supply materials needs when you have the luxury of waiting for a new item to come through the pipeline, but when wartime extremes require greater production, you just don't have the time to build all of your manufacturing facilities from scratch. You just plain have to have a reserve of some production capabilities ready to go when needed, and that's going to be surplus, and thus idle, capacity during peacetime.0 -
The primary purpose of war is to promote profits, so why the heck not? 0 -
companies shouldnt profit from war. that way we could ensure that the technology we use would be state of the art 1751 muskets. stealth bombers ? those would be nice but only if the engineers would develope it out of the goodness of their heart and spend their own $150 billion and not get any of it back. 0 -
There should be no profit restrictions whatsoever in the supply of any product.
Free enterprise.
Darwin.
Doug0 -
It works both ways. How about a company who puts all their capital into R & D and gambles their future on a product for the armed forces and the government doesn't buy it. 0 -
Let's put it another way; Should individuals profit from war?
Apparently, that's the whole idea behind war.
The latest example would be Speaker Pelosi and her connections to a Co. that does Defense Contracts while she sits on the Appropriations and Defense Committees. Another, more well-known example would be Ol' Joe Kennedy; who partied with the Krauts during WWII, smuggled booze during Prohibition, and left a sizeable legacy to a group of morons who see "Public Office" as their birthright.
If a product is desired, and someone takes the time to produce that widget; should they not be paid just because there's a war on?
Depends.0 -
quote:Originally posted by gunnut505
Let's put it another way; Should individuals profit from war?
Apparently, that's the whole idea behind war.
The latest example would be Speaker Pelosi and her connections to a Co. that does Defense Contracts while she sits on the Appropriations and Defense Committees. Another, more well-known example would be Ol' Joe Kennedy; who partied with the Krauts during WWII, smuggled booze during Prohibition, and left a sizeable legacy to a group of morons who see "Public Office" as their birthright.
If a product is desired, and someone takes the time to produce that widget; should they not be paid just because there's a war on?
Depends.
Try not paying them and see how long the widget is produced.
Where do you think the money to pay employees and buy materials is going to come from?
Shipping and packaging will be free, of course, won't it?0 -
Feinstein did and she was on the approbations committe that awarded the contract to her husband while she screamed about the war.Yell about it and in the other hand making money from it. How typical of her 0 -
They should absolutely make a profit. Without profit there would be nothing new, nothing new leaves us in the dust. -dave- 0 -
Remember that many products produced for the Military have no civilian use. The Research and Development dollars cannot be spread over years of production for items produced for a specific purpose or for war time only. Pricing may be different for a military spec item and may never be profitable, or may be extremely profitable.
I think that the contractors that recently were bidding on the replacement handgun for the military are a good example. The bids were very low in anticipation of selling almost 600K to the armed forces. But Taurus for example made the 24/7 oss designed specifically for the military contract. Since they were not awarded the contract they are trying hard to sell this item to the civilian population to recover some of their development costs. They may never recover the cost of producing this firearm.
Many aircraft companies push themeslves to the brink of bankruptcy to be able to bid on contracts. If they don't sell any of the new fighters that they develope they may be gobbled up quickly. Its a risky business, dealing with the military.0 -
Thanks to everyone for their thoughts!!
Many people are wrapped up in emotional thought vs. rational when it comes to things like war.
While most only consider war machines, many of our "modern" conviences have been developed for the military and modified for general population use. GPS, durable laptops, cell phones, protective wear for our police, Hummers[:0].
Yes, R&D is a risky area for most companies and I hate for any company to loose trying to develop better resources for our military.
I also have the challenge of explaning this concept in very real perspective for some...clothing distributors profit from the uniforms the military buys, electronic companies profit from the resources needed during a time of war, paper/packaging companies, MEDIA outlets: newspapers-magazines-books-photojournalists, tourism, food distributors, the list can go on forever. Some of these are effected immediatetely, some are risidual, and some are long term.
We live in a global marketplace and we (USA) do get to benefit from our free enterprise.
While some examples are menial at best, explaining all the "little" pleasures we take for granted is sometimes the best way to help people understand, no matter how unfortunate a war is, businesses making a profit from war is necessary for us to maintain the ideal state we are in right now.
It also helps for the artsy misunderstood creative sorts of the world to see that, those of us who actually understand how fortunate we are need to be able explain this to the other opinion.
Simply stating business must profit from war or else we wouldn't be able to defend our country can fall on deaf ears. Tell them in words they relate to and maybe in will open eyes.
Alright, I am off the soap box!!
I'll see if I can find another interesting topic to quote you guys on later.
Thanks again!0 -
I don't think they should make AS MUCH profit off of war as they do these days. Profit, yes, but reasonable profit. 0 -
...of course co.'s should be able to turn a profit...how else could any co. exspect to stay in business; and that is what war is, a business...everyone has to be paid.
...Zu, "who" determines a "fair" profit? I'd much rather the free market deterime what a product sells for than "who"...[;)]
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profit, yes.
gouge, no.
too many choices leads to non-uniformity. thats not a good thing in combat.0 -
Defense contractors have been profiting ever since the first blacksmith made the first edged weapon.
Its worked for eons. No need to change things now.
+1 though on bobski's "no gouge" comment.0 -
Profits are needed to expand R&D, just because you make a great gun does not mean that it is going to be bought, so then your R&D budget goes down the toilet. Just take a look at what happened to HK with the G11. HK spent millions to develop not only a completely new technology in the rifle but also a completely new technology in the caseless ammo. Then the German Army set about to adopt the rifle so HK spent millions more to tool up for production. The German economy fell apart in 1988 so the army had to cancel the contract after only 1000 rifles were delivered, that put an end to the G11. That also almost put a end to HK as they were out millions that they had spent, but they were bailed out by British Aerospace.
Again you see this happen during the early 90's with the Advanced Combat Rifle Program and more recently with the Objective Individual Combat Weapon Program (OICW). Company's spend millions to develop these weapons as they were requested to do by the armed forces, yet they have no guarantee that any of the money the spend will ever be returned to them, or are the guaranteed that the military will even choose ONE of the weapon systems for a manufacturing contract. Plus, just because you receive a contract for manufacturing does not mean that the military will not cancel the contract after you have spent millions to tool up for production. So is it ok to make a profit from war? Yes, I would say it is.0 -
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Age old question rather simple answer; business and profit go hand in hand, no profit no business.
The Government buys from a WINNING BIDDER supplying the product to meet the RFQ at the best price. Profit is not a determining factor for granting the contract by the Government unless spelled out in the RFQ.
So; a solider is fighting with equipment that is supplied by the QUALIFIED bidder selling the item for the LOWEST COST.
Another fancy rule in the FAR's is that you agree to sell that product to the Government at the "best price". You can't sell it to anybody else for less.
A company can sell at a loss to the Government and be forced to supply the product at the bid price if they won the bid, profit is of no concern to the Government.
Some equipment meeting an RFQ will be supplied by a sole source. The RFQ process takes cost into consideration and has a list of factors that will be used to determine the winner of the bidding. That is how a sole source contract gets issued.
Set-Asides for Minority owned, small veteran owned or disadvantaged companies meeting the requirements will be issued contracts for more than other companies are allowed to bid. This is reverse discrimination at its best.
So; to answer your question. Profit is irrelevant to the Government when buying war materials. If the company making it makes money on it fine and dandy; if they lose money fulfilling the contract T.S.
Without profit the company will go under and the next guy gets the work.0 -
Here's a thought. Do you think the military could develop and make its own things? Own factorys and development centers?
Enlist and your MOS be a plant worker, or a development engineer? Wouldn't it be cheaper that way? After all these contracted companys make a profit somehow. [:)]
Never heard anyone argue that point before. How would the military lose?0 -
quote:Originally posted by bpost1958
The Government buys from a WINNING BIDDER supplying the product to meet the RFQ at the best price. Profit is not a determining factor for granting the contract by the Government unless spelled out in the RFQ.
Really? Winning bidder huh? I never saw where halliburton submitted bids.
Ben0 -
No, just countries like Sweden and Switzerland, who profited from dealing with both sides, during WW2 should continue to do so.
That's really a niave question. To ask it is to display total ignorance about how doing business with the Government works.0 -
SAW2B,
quote:In one facet of my life, I am involved with economist, this question came up recently...should businesses profit from war?
It always comes back to what Chalmers Johnson said: "When war becomes this profitable, you're going to see a lot more of it."
It is no longer a question of whether or not companies should be allowed to profit from war, but rather how many companies will profit from war.
It has become an excuse and prime motivator for profit. You will note that even as real wages continue to drop, foreclosures continue to rise, and the U.S. dollar continues to sag, not one CEO of a military arms corporation has gone without his bonus. You will note that as maimed veterans were dealing with hideous conditions at Walter Reed, not one politician or board member of a PMC was forced to live in anything other than absolute luxury.
When you ask whether or not businesses should profit from war, it deflects attention from the real question.
The real question should be should we let them get away with it? Warmaking in the United States today is decided by people with a vested interest in seeing a war happen. It makes sense to the socio-political elite because war is good for business. Everything from tanks and missiles to sunscreen, bottled water, and Silly String are "needed." That's a lot of money and a lot profit to be had under the aegis of an excuse very few Americans are willing to question or challenge.
But unlike Vietnam or World War II, there is no shared burden. Have the sons or daughters of the CEOs from DynCorp, Blackwater, or General Dynamics signed up? I notice the Bush twins are still safe at home.
Profit has become our perpetual cassus belli. In terms of profit and loss, it matters not that over 3000 families have lost a son or daughter because, by God, these latest quarterly profit reports look damned good![xx(]0 -
DeadMonkey
You clearly have an understanding of what I am asking however, you have replied with a liberal emotional response vs. a rational capitalist response.
As far as the 3000+ soldiers killed in Iraq, what would be an acceptable number of civilians killed in the U.S.0
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