War, Politics, and Money: Some Economic Aspects of America’s Crusades Since 1900

0:00War politics and money, some aspects of America's crusade since 1900. War economics, war parties and state elites are at the heart of the revisionist historical tradition that's very much intertwined with the Austrian School of Economics. And today I will first make some brief comments on the nature of war parties and war making elites in the United States over the last century or so. Then I will introduce a kind of group portrait of the United States Secretaries of War and Defense since McKinley as a way of making a concrete related point. We can, probably all of us in this room, list any number of home front processes that occur in modern wars.

0:50Even a short and incomplete list will suffice for my argument today since I just want to make some connections, but you could do this at home. Don't worry kids. is a safe thing to do. So play with your list of what happens in modern wars. I'm saying, number one, accelerated government intervention in society and the economy, accelerated expropriation and legal plunder, of course, confiscation, inflation, etc. My third point would be destruction Reconstruction and Reconstruction, and I'm borrowing that phrase from Richard Taylor's great memoir of the Civil War and after, but by this I mean the process whereby war is waged in ways which seem to necessitate certain kinds of specific reconstruction by specific companies after the war. Fourth, the simultaneous centralization of power and the minimization of Individual Liberties and Individual Lives. Finally, the special prominence of a group of welfare, warfare decision-makers and collectivist managers of a certain type. Some Austrian commentators have called them the state elite. Paul Gottfried has referred to them as denizens of the managerial

2:11state. Rothbard referred to this elite as the coercive elite. And this includes the intellectual in Business Elites and the Military Elites who push for war and warlike situations and war preparation. Though we could, as I say, each of us go on and on, we'll stop there. But it's important to add to this idea of what happens in a war, that since McKinley, American military aggression has gone forth in the name of democracy, as we've seen in so many ways here today. The clearest-cut case was Wilson's call to make the world safe for democracy, but in one way or another, this vision of American democracy leading us to righteous wars has come to seem almost a call and response trope. And the answer to the call of making the world safe is, of course, they hate us because of our freedom.

3:05Now this reflex is not natural. In other words, it's not natural for the public to say what What we all hear them say on a daily basis. It has to be learned, and as they say, this lesson has to be relearned every generation. Academia and the news media help spread the message that they hate us for our freedom, etc., etc. But so do the political parties as extensions of this state elite. Indeed, it's important here to think about the role of war parties in a democratic order. In modern times, of course, war and war preparation and results not from the desires of king and cabinet, but from a huge array of interests. The state elite is a whole machinery of individuals. Now we're tempted to call this machinery faceless, but they do indeed have faces. The purveyors of war do indeed engage in human action. Likewise, it's clear that this coercive elite is made up of a range of constituent elites and branches.

4:11Rothbard's famous essay, War as Fulfillment, is instructive not just as a lesson in the history of World War I, but also as a historical paradigm. The two great American parties play a vital role in this whole indoctrination process. Aggression has been largely bipartisan since McKinley. George W. Bush revels in being called a war president, but since McKinley, we've scarcely had a president who was not a war president. The fable told on the evening news is that the Republicans are hawks and the Democrats doves. Certainly, leading Republicans self-identify as hawks and often try to outstrip each other in bellicose statements.

4:56Even some libertarians and paleocons continue to think of the GOP, perhaps because of Coolidge or Robert Taft. They think of it as not a party of aggression, that somehow this is the extraordinary case that it's the aggressive party. Yet the Robert Tafts and the Ron Pauls are the aberrations, not the other way around. Again, I'm talking about bipartisan bellicosity here. George McGovern was just as much an and Oddball for the Democrats as Ron Paul was for the Machine Republicans. Now in working on this whole set of themes, I began thinking about Secretaries of Defense and their role in this warfare, welfare elite.

5:41And I decided to turn to the historian's tool of group biographical study. We call that prosopography. And so I will now turn to a short survey, which I made, of the Secretaries of War and and Defense since McKinley. It is an informal and fairly superficial prosopography or group biography of these Secretaries of War and Defense. As an aside, the title of the office changed from Secretary of War to Secretary of Defense in 1947 with a big reorganization of the establishment, and so they're both pre-1947 Secretary of War. I chose to begin with McKinley's Secretary of War since McKinley, in essence, formalized the imperial pattern explored only intermittently by earlier presidents.

6:31From the time of McKinley, though, we get all things in place, all the pieces come into place for modernity. Collectivism, the inflationary regime, this destruction-reconstruction pattern, the warfare, welfare state, and all of it. My survey does not go as far as archival research, but even on the surface, the secretarial biographies are informative. Of 41 secretary ships of war or defense since McKinley, we're looking at 39 individuals since two served twice under two separate presidents. These 39 secretaries came from 19 states only. The overwhelming majority were from the Atlantic seaboard, and indeed, and I think strangely, 41% of these secretaries of defense and war came from just three states, New York, Pennsylvania, and Ohio, with Pennsylvania having the most.

7:30Casting our net just a very little bit wider geographically, we get two-thirds of all the secretaries in a kind of triangle reaching, if you imagine it, stretching from New York to Lake Erie, down to about Baltimore and back up. You really have two-thirds of all the Secretaries of War and Defense since 1900, which I think is quite remarkable. Of the group, 52% attended Ivy League institutions, some of them only the professional schools. Of the Ivy Leaguers, 11 were Republicans, 10 Democrats. Significantly, I think, in spite of the Ivy League connections, most of the secretaries came from middle class and even lower middle class backgrounds. Of course, not all. Robert Lovett, for example, a Truman secretary of war was a scion of Pacific Union money and hence he was related to a couple of banking empires. Elliot Richardson, Nixon's secretary of Defense was from a blue-blooded family of Boston Brahmins, and there were others, but on the whole, the war and defense secretaries have been the same kind of men, and on the

8:43whole, the type is common to both parties. Well for the talk today, then I created an ideal type war defense secretary since McKinley. So I'll give you this model secretary. It's a fiction, but even the most extreme outliers among the 39 really do not stray too far from the following portrait. Our secretary of defense, our ideal secretary, is an individual from, let's say, Altoona, Pennsylvania. Many small towns in here, actually, and small cities. He does not come from wealth or old money, but from a sturdy middle-class background, one which would enable a bright boy to make and make it by dent of hard work and brains to an Ivy League education, most likely Yale.

9:34He writes or edits one of the college publications. Since our man is at Yale and he's clever and articulate, he is sought out by a secret society and he gets into Skull and Bones, rubbing shoulders there with representatives of the elite families and fortunes. The most frequent club of our guys is Skull and Bones. This is all reflected in these numbers. If there is a war after college, our men will serve a short stint in the military. Our future secretary will then study law at Harvard, work for a law firm or an investment bank, and then make his way into state or national politics. He'll serve in a number of legislative and executive positions.

10:19Our prosopographical man would most definitely be in the Council on Foreign Relations if it's after 1919. After serving for three or four years as Secretary of War or Defense, our man will go back to business, which in this context almost certainly means banking. He would also maintain extensive board memberships, consultative positions and other connections to various industries, especially and almost certainly the arms industry. And he would sit on various task force committees within the worlds of government and the great tax-free foundations and think tanks, such as the Ford Foundation or the Wren Corporation.

11:04And of course, whether actually in business or not, our average ideal secretary would have ties to, certainly have ties to one of the investment banking firms, Lehman Brothers, Morgan, Jacob Schiff, Goldman Sachs, et cetera, et cetera. Finally, our prosopographically, that's the longest word in my presentation, at least it's got the most syllables, prosopographically perfect man would be personally acquainted with the several contemporary secretaries of defense or war before or after his service. In other words, he would know his predecessors and successors personally from a long time back. Now let me say there's plenty of incidental variation in the pool.

11:49But the variations are actually superficially quite interesting. One secretary of war, for example, had two descendants, a grandson and granddaughter who were nominated for the Academy Awards. That was George Dern, one of FDR secretaries. One secretary of defense who served twice in between his service joined Big Pharma and and successfully gained the FDA approval of Aspartame, that was Rumsfeld. One secretary of war was the man who had previously established the Davis Cup in tennis, that was Davis, Coolidge under Coolidge, Dwight Davis. Two secretaries had previously been college roommates, that was Rumsfeld and Carlucci.

12:41And one of Roosevelt's war secretaries was a strict non-interventionist. How about that? This was Harry Woodring. Now, not all these guys were college roommates, but they did belong to a pretty small class, a small Mandarin class where everybody knew each other, everybody came up the same way, and everybody had the same background. Either before or after their Under cabinet service, most of these secretaries were connected with banking or law or both. Any secretary of war in modern times spends most of his time in supply and procurement and as a result of course business experience in particular makes sense and so several secretaries had previously been corporate CEOs like McNamara and coming from Ford and so forth.

13:31A few of the secretaries came from old money and privilege. They were the patricians, but only a few. They tended to be on the whole solidly middle class, not upper middle class at all. These were not the shadowy puppet masters of imagination, but rather the sons of insurance salesmen and school teachers whose ambition took them to positions of influence. Indeed, some exercised enormous influence on policy. think Stimson, McNamara, Rumsfeld, for example. Some much less, some disagreed with their president on fundamental policies, but all were there to do the bidding of the political class, to procure the materials for war, to procure them from the preferred sources, to shape American defense organizations so as to carry out the military plans of the president and his advisors, maybe even to ensure that the destruction inflicted These secretaries certainly provided one of the secured connections between politics and the upper-level decision-making layers of wise men, as the long-range planners have called themselves, the patricians and the planners and the elites.

14:54Hence, the secretaries have been high-level civil servants, but not really metternichs or richelues. There were no coachmen of Europe among them, so to speak, yet their function is really crucial to the warfare welfare state. Since we are looking specifically at the nature of the political parties as war parties, I must note a difference in style among our The Democratic Party has tended to choose a few more out-of-sync secretaries than the Republican Party. So for example, Roosevelt did have the misfortune of having chosen a strict non-interventionist for the position of war secretary, that was Harry Woodring, 1936. Loathed to fire the secretary for some reason, Roosevelt installed an interventionist as Assistant Secretary, and waited until nearly the eve of the war in 1940 when he replaced Woodring with the thoroughgoing finance bank insider Henry Stimson. Also, a few more democratic secretaries came from outside this Bermuda Triangle of war secretaries than the Republicans, but only a few. On the other hand, it's likewise true that the defense, that defense is the

16:12and the Cabinet Position, interestingly, that probably most frequently crosses party lines, as with our current Defense Secretary. Clearly at times these guardians are simply interchangeable from party to party. Well, to conclude, this paper is part of an attempt to see the warfare-welfare oligarchy at work. Like the news media, both political parties have acted as fronts for For this state elite, the appearance of tension between the two parties in matters of war-making has been theater in many ways, though many participants are no doubt true believers. Yet these ideas have to be conveyed against the backdrop of actual aggressive war-like activity by both parties when in power.

16:59The collected biographies of the Secretaries of War and Defense give us some accidental Insights into the War Party's Relationships. Though these secretaries are not the only gatekeepers of the welfare state, and maybe not even the most important ones, they do perform a crucial function in coordinating the collectivist, rent-seeking corporate entities with the political parties and their domestic agendas. They make the world safe for democracy, so to speak. Hence, this important interface is guarded by a special class of loyalists, usually extremely bright individuals of modest family and social status, chosen by the coercive elite to do this work, and later rewarded accordingly.

17:49Finally, over a century, there has been no substantial difference in the profile of the individuals chosen to manage the crucial coordination of business war politics, regardless of party. It's been pretty much the same since 1900. I think this macrocosm can be summarized in the microcosm of the two defense secretaries, Frank Carlucci and Donald Rumsfeld, the old college roommates. They had different styles, but they remained roommates. Applause.