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Ethics of Weapons Stocks

By Richard J. Maybury

     Weapon Stocks Unethical?

From the Oct 1999 EWR


    In the 1990s we earned huge profits from weapons stocks, and I think there is a lot more coming in the next decade. EWR will offer a full strategy after we see what impact Y2K has.

    Some of you have objected to me recommending stocks in these "merchants of death." You say that, given the US government's aggressive behavior abroad, investing in weapons companies is unethical.

    If Washington's behavior were the only consideration, I would agree 100%, but it isn't.

    The weapons industry sells its products all over the world. In my home I have weapons, and these are used only for self-defense and target shooting. The police and sheriff in your home town have self-defense weapons, and I am sure most readers of this newsletter do, too.

    Some people use weapons for evil, others use them for good. The Afghans could not have beaten the Soviets without Stinger missiles sold by Raytheon.

     By and large, American military equipment is the best, and it is purchased by the Swiss, the New Zealanders and many others who work very hard at avoiding war.

    Innocent people deserve the best protection they can get.

    The ethics, or lack of them, are not in the weapons, they are in the minds of the people who pull the triggers. Weapons are neutral.

    This is not to say the corporations who make weapons are squeaky clean, but in a country with a huge, powerful, horrifically crooked government, a list of companies that have not been corrupted would be short indeed.

    I wish there were totally uncorrupt investments, but I do not know of any. I think the weapons companies do about as much good as they do harm. It would be hard to make this claim for, say, Treasury Bills or even for the fiat paper dollars in your wallet. We do the best we can with the choices we have.


Ethics of Weapons Stocks

From the June 2003 EWR


    I am often asked, is it ethical to invest in General Dynamics or other companies that make war goods?

    No. But it is one of the less unethical investments we can make. The whole financial system is grossly corrupt.

    One of the most evil things I can do is put my money in a bank, mutual fund, pension or insurance. All such organizations buy US Treasury bonds. This means they loan my money to the government. The government pays them interest, which they pass along to me.

    The $6.4 trillion of US Treasury bonds have become international interest-bearing money. Nearly every organization of any type in America, and many abroad, keep their cash in these bonds.

    So, by putting my money into a bank or almost any other financial institution, I am loaning it to the government, giving politicians the means to do whatever it is they do. With no limitations.

    When Clinton fired his so-called Monica missiles into one Muslim country after another to divert attention from his sex scandals, these killings were financed in part by the money I put into banks, mutual funds, etc. In effect, by placing my money in one of these institutions, I helped Clinton buy and fire his missiles, which means I helped him provoke 9-11.

    The killings were also financed by our taxes. Buying into any investment that pays taxes is buying into something that helps and encourages politicians get into wars.

    In contrast, when I buy stock in an arms maker, I buy only three things: the ability to sell the stock, the right to collect whatever dividends the managers declare, and the right to vote in the company's elections.

    How does any of this cause war?

    How could it be as bad as directly loaning Clinton the money he used to buy and fire the missiles?

    In short, if I loan the government $100,000, helping it buy a weapon that kills innocent people, what does it matter if I also own a stock that makes me $10 profit on the sale?

    I am not writing this to try to make anyone feel bad. I am only pointing out that political power corrupts everything it touches, and the leviathan in Washington touches us all in a thousand ways we no longer notice. If you plan to live in this country - or any country with a large government - the only way to escape the corruption is to go into the wilderness and become a self-sufficient hermit.

    We could put all our money into things that are less connected with government - real estate, raw materials and precious metals, for instance. But these are very vulnerable to changes in Federal Reserve policy. To be invested only in these is high risk. Diversification is imperative, and this means keeping a portion of our money in banks, mutual funds, etc.

    Summarizing, if we buy stock in an arms maker, this is not as ethical as dropping out and becoming a hermit, but it is also not as corrupt as putting money in a lot of other places including banks. Buying weapons stocks is a molehill; participating in the global financial system that feeds our taxes and savings to the government is a mountain.

    To me, stocks are just another form of money, and all money now is tainted by politics. As explained in the 3/02 EWR, the very concept of the limited liability corporation which issues stock is suffused with irresponsibility and dishonesty.

    One thing we can do is face the fact that we are living in an inherently corrupt system - a casino where all the dice are loaded - and try to do things that might someday roll back the corruption.

    Lacking the courage to become a hermit, I try to do my part by writing the Uncle Eric books - because, at bottom, nearly all "public affairs" problems are ones of character. If the vast majority of individuals obey the two fundamental laws that make civilization possible, life will grow better. If not, life will grow worse. Whatever else is done will not matter much.

    I am convinced it is that simple. I like Henry David Thoreau's remark, "The fate of the country ... does not depend on what kind of paper you drop into the ballot-box once a year, but on the kind of man you drop from your chamber into the street every morning."

    In other words, living in this sea of corruption, the only reasonable, ethical course is to do something to convince our friends, neighbors and families to obey the two laws, both in their private lives and politics. This is why I write the Uncle Eric books, and I hope you will share yours with others.

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