Missiles are flying over Ukraine, and the shares of the arms companies are also taking off. There is no shortage of opportunities to make money in the kingdom of imperialism. Ukrainian military needs and the economic strangulation of Russia could also benefit Canadian capitalists. As Lenin said: “War is a ‘terrible’ thing? Yes. But it is a terribly profitable thing.” This is the stark reality of capitalism, where the death and suffering of some is matched by the profits for others.
Investing in war
Dear investors, here is your chance to do business! Lockheed Martin, Northrop Grumman, or why not Raytheon Technologies—several interesting options could make you more money in 2022. This is the type of advice that has been on the front pages of financial analysis and investment sites for the past few days. While the conflict is creating a lot of uncertainty in the stock markets and the global economy, it is also rapidly increasing confidence in the arms industry.
Shares of major military equipment and weapons companies have risen in value as NATO powers make promises to send military equipment to Ukraine. The frenzy surrounding the threat of Russian cyberattacks has also driven up the stocks of cybersecurity companies. While Ukrainians sleep in fear or to the sound of bombing, there are others who can peacefully dream about the next yacht they will buy.
After having already announced that they will send $8 million in lethal weapons to Ukraine, the Canadian government announced on Feb. 27 another $25 million in military equipment to be sent to the country. The next day, 100 anti-tank weapon systems and 2,000 rockets were also promised to Ukraine. A few days later, the delivery of 4,500 rocket launchers and more than 7,000 grenades were added. The government claims that some of this equipment came from the Canadian Armed Forces’ inventory, and some was purchased from various companies. These huge sums of public money will ultimately end up in the coffers of military companies, at taxpayers’ expense.
But that is not the end of potential to profit from this war. In addition to what is currently being channeled directly to Ukraine, the defense investments of the various powers are expected to increase. Already in early February, the U.S. took advantage of rising tensions in Eastern Europe to sign a $6 billion U.S. military equipment sales contract with Poland to expand its military arsenal.
Now that the invasion is underway, Germany has announced that its military budget will increase from 1.5 per cent of its GDP to more than 2 per cent by 2022, an increase of US$113 billion. It is this particular announcement that has helped to significantly boost the stocks of arms companies, as it is very significant for what is to come. As the leading financial advisory firm InvestorPlace underlined, “If Germany is feeling pressure to bolster its military and defense systems in this way, other countries are likely to follow suit. This means that companies that produce military technology and weapons are likely to see a significant spike in demand throughout the coming months.” The article concludes: “Investors should be watching defense stocks very closely as the conflict proceeds. Even if we see a ceasefire soon, the recent events in the Ukraine have alerted countries to the importance of a well-funded military. This is all around good news for the defense sector.” Arms dealers are rubbing their hands together.
After two years of a pandemic that exposed the chronic underfunding of health-care systems, this is what working people needed: even more public money spent to line the pockets of a parasitic capitalist minority! The pandemic did not curb investment in armaments. While the death toll has risen, essential workers have risked their lives on a daily basis, and millions of workers have fallen into poverty, global military spending has continued to increase. “We can say with some certainty that the pandemic did not have a significant impact on global military spending in 2020,” said one of the researchers at the Stockholm International Peace Research Institute, which released a report last year on global military spending in 2020.
The report estimates that global military spending in the first year of the pandemic was $1.981 trillion, the highest level since 1988. It also states that Canada increased its military spending by 2.9 per cent over 2019. From 2011 to 2020, the Canadian defense budget would have increased by 26 per cent, exactly the same proportion as Russia’s. But don’t worry: Canada is completely different from evil Russia! The Orwellian-speaking Liberals will explain that the difference with Russia is that Canada invests in war to spread peace!
Canada defends Canadian capitalism
For Canadian capitalism, the tensions in the region have already proved profitable. In late January, as the conflict escalated, the Canadian government took advantage of the opportunity to increase its influence on Ukraine by providing a $500 million loan, followed by another $120 million loan in mid-February.
Canada has been profiting from arms sales to Ukraine for a number of years now, particularly since the Liberal government increased the scope of permitted exports to the country for Canadian arms manufacturers. In 2014, when Russia annexed Crimea, the NATO Association of Canada underlined the business opportunities that supporting Ukraine could bring: “Canadian manufacturers like CAE, Irving shipbuilding, Bombardier, and General Dynamics Land Systems could all participate in the completion of major defence projects. Not only would these companies profit financially, but they would also gain valuable experience and bolster Canada’s international prestige.” This is what “helping Ukraine” really means to Canadian imperialism.
If war is profitable for arms dealers, it also opens up good business opportunities for all kinds of parasites. With the sanctions imposed on Russia, oil and gas have become a central issue for the imperialists. Russia supplies 40 per cent of the European Union’s gas, and sells 60 per cent of its oil to Europe, which constitutes almost one-third of European oil. This is why the European imperialists are reluctant to impose sanctions in this respect. But Putin should beware, because Canada is not afraid to show Russia its teeth! Justin Trudeau has just announced that Canada will block imports of Russian oil to send a “strong message” to Russia. In reality, imposing sanctions is of little importance to Canada, as the country has not imported crude oil from Russia since 2019.
But here’s an opportunity: what if the Canadian oil industry could benefit from sanctions on Russia? Already some have taken advantage of the opportunity to promote Canadian oil. Jason Kenney, Alberta’s premier, made a plea on Twitter: “Now if Canada really wants to help defang Putin, then let’s get some pipelines built! Alberta stands ready, willing and able to supply the energy needed to displace Russia from global markets. Message to Ottawa and Washington: stop helping Putin and OPEC by killing pipelines.” Conservative Party leadership candidate Pierre Poilievre echoed this message, calling for approval of the Newfoundland and Labrador LNG project. If elected, Poilievre says he would “remove the bureaucratic gatekeepers, so our workers can earn paychecks and our energy can power our allies against tyranny. Canada will take back control of its energy future and our workers will take back control of their lives. And the world will be a safer and greener place.” What altruism! To save the Ukrainians, let’s fatten the profits of the oil barons! It’s hard to find a more cynical and hypocritical position.
The reality is that the rhetoric of peace and humanitarian aid that we hear from the country’s politicians and media serves to mask the real issues that motivate Canadian imperialism in this conflict. Canada and other NATO countries have done everything possible to encircle Russia since the collapse of the Soviet bloc, and to remove the former Warsaw Pact countries from the Russian fold. In the case of Ukraine in particular, Canadian imperialism has been trying to profit for years from the privatization of Ukrainian state-owned enterprises. The country signed a free trade agreement with Ukraine in 2017, expanded in 2020, and provided access to an important market for Canadian capitalists. For example, the agreement helped Ukraine become the fourth-largest importer of Canadian fish and seafood in 2020. But there is still great potential for capitalists to exploit. As of last year, there were still 3,644 state-owned enterprises awaiting privatization, coveted by many foreign investors.
This explains why Canada has been particularly bellicose towards Russia since the beginning of the conflict. When the government says it wants to “defend Ukraine”, what it really means is that it wants to defend Canada’s share of the spoils from the plunder of Ukraine.
Who pays for the war?
While a capitalist minority enriches itself from the war, the vast majority suffers the brutal consequences. Already the destruction of the Ukrainian infrastructure and the economic strangulation of Russia threaten global food security. The two countries combined account for 29 per cent of world wheat exports, 19 per cent of corn exports and 80 per cent of sunflower oil exports. Against this backdrop, the price of wheat has already been rising for a week, reaching the highest level in 12 years. This adds to the already growing global inflation, especially in the food sector. While the UN World Food Programme already declared in November that this was a “hunger catastrophe” for millions of people around the world, the worst is definitely yet to come. This is just one example of how this war will affect workers around the world.
Even when they are not the direct victims of the violence of war, working people suffer the political and economic impact of shifts in the balance of power. The global working class always loses out terribly. While there is no money under capitalism for hospitals, for clean water on Indigenous reserves, or to raise wages, there is always money for war, and war always makes money. This is the logic of a terribly rotten system.
As Lenin said, capitalism is horror without end. We must get rid of it.