Book summary “War is a racket”: summary

Introduction

You live in a world where war is routinely presented as a noble defense of liberty and democracy. Yet you might suspect that immense financial interests drive nations into bloody conflicts from which ordinary citizens gain nothing. When the drums of war beat, politicians and patriots urge you to sacrifice for the flag.

Smedley D. Butler exposes armed conflict not as a matter of national honor, but as a colossal enterprise run for vast financial profit. He reveals how a tiny group of insiders uses the machinery of government to manufacture foreign crises, protect foreign investments, and send your children to die. You will learn how corporations reap billions from bloodshed while you carry the economic and human burden.

This book answers several critical questions about the hidden machinery of militarism:

• Who actually collects the staggering financial dividends when a nation goes to war?
• How do bankers and industrialists manipulate foreign policy to protect their private investments?
• What happens to the soldier who returns home broken after fighting corporate battles abroad?
• How can you dismantle the war racket before it destroys another generation?

1. Who Makes the Profits

War operates as a profitable international racket conducted for the benefit of a very few at the enormous expense of the masses. Losses are measured in lives, mangled bodies, broken homes, and generational taxation while an inside group of war profiteers stays safely at home. During World War I in the United States, at least 21000 new millionaires and billionaires admitted their huge blood gains in income tax returns.

Wartime corporate profits skyrocket far beyond normal business returns, transforming blood into gold for industrialists and speculators while the public pays the financial and human costs.

Normal business concerns earn six to twelve percent. Wartime profits reach astronomical levels, ranging from twenty to eighteen hundred percent. Powder manufacturers, steel companies, copper producers, leather companies, and meat packers reap massive financial windfalls from government contracts.

The du Pont company saw average yearly profits jump from $6,000,000 in pre-war years to $58,000,000 a year during the war, an increase of over 950 percent. The International Nickel Company recorded a 1,700 percent increase in profits. During the actual war period, the total cost of the World War to the United States reached $52,000,000,000, and this conflict yielded $16,000,000,000 in profits.

Wartime procurement generates immense waste and massive profits on supplies that were completely useless or never reached the battlefield. Enterprising manufacturers sold Uncle Sam millions of items that were unnecessary, defective, or never shipped overseas, ensuring profits were collected and pocketed regardless of military utility.

The government bought 20,000,000 mosquito nets and 40,000,000 additional yards of netting for soldiers in France, even though there were no mosquitoes in the trenches. Patriotic industrialists also collected payments for:

• 35,000,000 pairs of hobnailed service shoes bought for 4,000,000 soldiers;
• $1,000,000,000 spent on airplanes and engines that never left the ground;
• $635,000,000 worth of wooden ships built that wouldn't float and sank.

2. Who Pays the Bills

The soldier pays the heaviest part of the war bill through physical destruction, mental trauma, financial exploitation, and abandonment after discharge.

The military took four million lovable, easy-going American youths and placed them in assembly plants called cantonments. Professional instructors used severe discipline and psychological coaching to teach them how to use bayonets with lethal efficiency, instilling a loathing for the enemy that destroyed their youth and psychological stability overnight. You watched ordinary boys get transformed into killers through mass psychology that regarded murder as the order of the day.

Hard-boiled sergeants instructed young recruits on how to withdraw a bayonet from a slain enemy by placing a hob-nailed boot on the chest of a prostrate body and giving a sharp, upward twist.

Young men returned home dazed and suffering from shrapnel wounds, gas inhalation, and shattered nerves without any psychological help. You faced difficult readjustments without support, leading to rampant mental destruction and high mortality rates in veterans' hospitals.

At the government hospital in Milwaukee, there are 3,800 living dead, and the chief surgeon reported that mortality among veterans is three times as great as among those who stayed at home.

There are 50,000 destroyed men in eighteen government veterans hospitals. The federal government threw 500,000 physically disabled veterans into the streets and took away their monthly compensation, while simultaneously creating the Civilian Conservation Corps to pay young, able-bodied men a flat wage.

Although the 1930 Disability Compensation Act humanely assisted veterans who lacked formal bureaucratic proof of service-connected injuries, the subsequent 1933 Economy Act repealed it, stripping half a million disabled veterans of meager monthly compensation.

You also faced financial exploitation while serving for a meager soldier salary of $30 a month. The government forced you to buy Liberty Bonds that bankers later depressed and bought back cheaply at $84 or $86.

You and the public suffer from dangerous economic delusions, persistently trying to spend more than you earn while accumulating massive public debt and crushing tax burdens. Butler compares Uncle Sam to the head of a household, arguing that neither governments nor individuals can practice the magic of spending beyond their income without financial ruin. The public debt rose from 3 billion dollars in 1917, or $28.57 per capita, to 20 billion dollars by 1932, or $155.85 per capita, with an approximate public debt of 30 billion dollars expected at the close of the fiscal year.

National income stood at 90 billion dollars before 1929, with a tax bill of 10 billion dollars, which later reached 15 billion dollars. The per capita public debt in the United States reached $64.09 compared to $37.65 in Germany. The immense tax bill required to service federal deficits stifles recovery, and politicians merely vote for appropriations because organized groups of citizens demand them.

To reverse these economic delusions and relieve the population, you must apply practical solutions:

• Reduce taxes in proportion to the national income to release the brakes on national recovery.
• Stop demands for appropriations from public funds until surpluses pay the costs.
• Apply a graduated income tax, inheritance taxes, gift taxes, and adequate levies on public utilities and large corporations.

3. Economic Roots of Militarism

Competition for world trade, international loans, and foreign bonds drives nations into foreign wars to protect the investments of a privileged few.

Financial entanglements and massive loans to foreign allies are the true underlying causes driving nations into foreign wars. Governments enter foreign conflicts not to protect democracy, but to secure massive debts owed by allies to domestic bankers, munitions makers, and speculators. If allied nations lose and cannot pay back billions in loans, the financial elite push the nation into war to protect their wealth.

An allied commission secretly told Woodrow Wilson and his advisers before the U.S. entered World War I that allied forces were losing and could not repay the five or six billion dollars owed to American bankers and manufacturers unless the U.S. intervened.

Militarism in America is driven by three distinct groups:

• active military brass seeking promotions;
• business elites protecting foreign investments and profits;
• sincere citizens misled by clever propaganda.

The first class consists of career military officers where expansion means automatic promotions and bigger pay envelopes up the ladder. The second class comprises bankers, shipowners, exporters, and munitions makers who want a massive army and navy exclusively to preserve their foreign profits and commodity markets. The third group is made up of honest, patriotic citizens who are terrified by clever propaganda claiming a lack of defense invites an immediate foreign invasion of their homes.

Competition for world trade, including international loans, foreign bonds, and merchandise exchange, is the underlying cause of nearly every major war in U.S. and world history. Tracing roots back to the American Colonies and 1775 friction with England over free trade and selling to outside markets, prominent citizens amassed great fortunes through foreign business. This created the enduring freedom of the seas policy, which drags the country into foreign wars.

The United States sacrificed tens of billions of dollars and countless lives in World War I to protect a relatively small foreign trade balance and overseas investments. Butler evaluates trade statistics showing that in 1917, approximately three billion dollars of world trade and European securities were at stake. To save this, the country entered a war that ultimately cost at least fifty billion dollars initially, and will reach an estimated one hundred billion dollars, while the normal favorable trade balance was no more than half a billion dollars annually.

In 1910, the favorable trade balance was worth about 279 million dollars. In 1917, the export business was worth approximately six billion dollars and imports nearly three billion dollars. By 1929, merchandise exports amounted to more than five billion dollars, and the value of imports was approximately four and one-half billion dollars. In 1934, merchandise exports dropped in value to hardly more than two billion dollars, and by 1937 the country was exporting less than 10 percent of all domestic production.

4. How to Smash This Racket

You can eliminate war by conscripting capital and industry before youth, limiting military forces to home defense, and organizing citizens to change national policy.

To eliminate war, you must remove the financial incentives that drive nations into foreign conflicts. The war racket can only be smashed by conscripting capital, industry, and labor before any young men are conscripted.

• Conscript capital, industry, and labor one month before the government can conscript the nation's youth.
• Restrict all officers, directors, executives, bankers, speculators, workers, politicians, and generals to a total monthly income not to exceed the $30 paid to the soldier in the trenches.
• Require high earners to pay half of their monthly $30 wage to their families, pay war risk insurance, and buy Liberty Bonds.

Giving capital and industry thirty days to consider this restriction will effectively prevent any war from starting.

Old executives, bankers, and politicians who see visions of tremendous profits and will never be called upon to shoulder arms should have no voice in declaring war. Only those who must risk their lives should have the privilege of a limited plebiscite to determine war declarations.

• Have men coming of military age register in their communities and undergo physical examinations annually.
• Grant voting eligibility in a limited plebiscite only to those who pass the physical examination and would bear arms in the event of war.

Military forces must be strictly limited by law to home defense purposes to prevent the nation from launching offensive wars. Naval forces and offensive capabilities must be legally restricted close to the coastline to eliminate aggressive maneuvers in distant oceans like the Pacific.

• Limit naval ships by law to a maximum distance of 200 miles from the US coastline.
• Permit reconnaissance planes to travel up to 500 miles from the coast.
• Forbid the army from ever leaving the territorial limits of the nation.

The American Legion and the Veterans of Foreign Wars advanced resolutions at their conventions in Miami and Louisville urging federal legislation to draft property and equalize wages during wartime. Veterans pushed for legislation ensuring that in times of war, factory workers, foremen, and superintendents are paid proportionately the same wages as doughboys, corporals, and lieutenants.

• Pay workers in every factory proportionately the same wages as the doughboy in uniform receives.
• Give every foreman a salary equivalent to the salary of a corporal.
• Give every superintendent the pay of a lieutenant.
• Grant the government the same right to take over a building or manufacturing plant as it has to draft a human being.

The United States can completely avoid foreign wars by adopting a clear policy of attending to its own domestic business and conduct. Avoiding foreign conflicts requires simple political action driven by the majority who fight and pay for wars.

• Adopt the peace slogan and policy: Attend to our own business.
• Put all foreign nations on an immigration quota footing and keep foreign relations in order.
• Publish clearly to the world what the nation intends to defend with armed forces, ensuring forces are strictly designed so they cannot invade other lands.
• Keep the arms embargo tight to prevent the sale of blood-stained weapons and ammunition.

Citizens can force lawmakers to keep the country out of war by organizing locally in every congressional district to pass a constitutional amendment abolishing the freedom of the seas policy. Peace advocates must mobilize voters in every community and congressional district to pressure state legislators and federal representatives.

• Mobilize forces and organize adherents in every community and Congressional District.
• Confine activities to the single objective of passing a constitutional amendment untainted by partisan politics.
• Pressure state legislators and members of the House and Senate to approve the amendment.

Conclusion

Financial greed, militarism, and veteran abandonment connect directly into a single systemic racket that enriches a tiny corporate elite at the expense of millions. You watch profits soar while soldiers die, debts accumulate, and foreign adventures serve only bondholders and industrialists. To smash this racket, you must dismantle the machinery of war before it starts and strip the profit from bloodshed.

You can prevent future conflicts by following these practical rules:

1. Conscript capital, industry, and labor before you conscript a single soldier.
2. Limit the military to pure home defense within your own territorial borders.
3. Submit every declaration of war to a direct national referendum of the people who will actually fight and die.

10 Key Ideas

1. Smedley D. Butler exposes armed conflict not as a matter of national honor, but as a colossal enterprise run for vast financial profit at the expense of ordinary citizens.
2. Wartime corporate profits skyrocket far beyond normal business returns, transforming blood into gold for industrialists, speculators, and munitions makers while the public pays the financial and human costs.
3. The soldier pays the heaviest part of the war bill through physical destruction, mental trauma, financial exploitation, and abandonment after discharge.
4. The federal government threw hundreds of thousands of disabled veterans into the streets and took away their monthly compensation through legislative acts like the 1933 Economy Act.
5. The public and government suffer from dangerous economic delusions, attempting to spend far beyond national income and accumulating massive public debt and tax burdens.
6. Competition for world trade, international loans, foreign bonds, and merchandise exchange drives nations into foreign wars to protect the investments of a privileged few.
7. Militarism in America is driven by career military brass seeking promotions, business elites protecting foreign investments, and sincere citizens misled by clever propaganda.
8. You can eliminate war by conscripting capital, industry, and labor before youth, limiting military forces to home defense, and organizing citizens to change national policy.
9. Giving capital and industry thirty days to consider strict wage and profit limitations will effectively prevent any war from starting by removing the financial incentive.
10. Citizens can force lawmakers to keep the country out of war by organizing locally in every congressional district to pass a constitutional amendment abolishing the freedom of the seas policy.