25th November 2015: 'The Terror Dividend' » 2015 » Mobbsey's Musings » Paul Mobbs/MEI » FRAW

death, like god, plays dice
Does Death, like God, play dice with war, or just chess?

The Terror Dividend – how traders and lobbyists made a killing from the Paris attacks

Paul Mobbs, "Mobbsey's Musings", Wednesday 25th November 2015

Written for The Ecologist, published 25th November 2015

The scenes which emerged from Paris[1] almost two weeks ago ago were horrific, and undoubtedly only scratch the surface of the true devastation upon the families and friends of those involved.

There is still little detail about how the attacks in Paris were planned. Given the close association of those involved in the attack, it seems unlikely that high-tech 'command and control' via encrypted communications from Syria were an essential component of the planning process.

Likewise the source of the weapons for the attack probably has little to do with the Syrian conflict directly. They are most likely the legacy of the NATO-led conflict[2] in the the Balkans two decades ago. The fall-out from the present conflicts in Libya, Syria and Iraq – given the large stockpiles of conventional arms those states had amassed – are also likely to create regional instability for some years to come.

The trade in conflict

For the financial traders in New York and London, however, the Paris attacks have been, quite literally, a bonus.

In the age of 'vulture capitalism'[3] what might be a tragedy for society – both in France and in Syria (where bombings increased after the attack) – has turned out to be highly lucrative for corporate investors. There are a number of people in boardrooms and finance trading rooms who may see a boost to their forthcoming annual bonus as a result.

What these events highlight is a truly ghastly moral issue. One which is rarely described within the panics which ensue after events such as those in Paris.

It's not just the arms trade[4] which makes a killing from its core business. Both within the financial sector, and more widely across the lobby groups and think tanks[5] who make noise about these issues, the "war on terror" has created a powerful group of vested interests[6] whose aggressive rhetoric[7] is fanned by ideological and corporate interests.

For example, in times of crisis the UK media regularly feature[8] "independent" commentators from the Royal United Services Institute[9], or RUSI – who also regularly advise Parliamentarians. Like other defence think-tanks, RUSI is largely funded[10] by the defence and aerospace industry, as well as directly from the Ministry of Defence. This underlying 'conflict' to their impartiality over issues such as terrorism is rarely explored by the media when they feature RUSI.

False profits

Democracy Now: "Shameless" U.S. Officials Exploit Paris Attacks to
Defend Spying & Attack Snowden
, 19th November 2015

In the weeks leading up to the Paris attack global stock markets were declining – worried about the state of the Chinese economy[11] and other related issues. What's really interesting were the stock prices of leading defence and aerospace companies[12].

If we take a 'basket'[13] of defence sector shares in the run-up to the Paris attacks, while the markets had been falling steadily the share prices of defence contractors were falling faster[14] than the market value overall. As terrorism fell off the agenda over the Summer, driven instead by concerns over refugees, the profile of the defence industry was on the wane.

Then came the attacks in Paris on 13th November.

In the USA later that day, and in the following days globally, defence stocks started to climb. By the beginning of the next working week, when the main markets were properly open, defence stocks were rising significantly faster than the average rate of the market overall.

With terror now back at the top of the agenda in Europe and the USA, and the likelihood of stronger military action in Syria, the ephemeral money of short-term investors was flowing back into the defence and aerospace sector.

The Terror Dividend

How much "value" was generated in the stock market is always going to be a vague figure:

share price trend plot
Trend in defence sector share prices around the Paris attack, November 2015

If we take the market capitalization[15] of the basket of defence companies, and measure the uplift in capitalization created following the Paris attacks, the value of the defence sector was boosted by at least £7 billion to £8 billion – more than £55 million to £60 million per fatality (who said the price of human life was cheap?).

Of course there are other factors at play here. One of the reasons why the market rose in the USA were the Federal Reserve's statements on interest rates. Even so, one week after the Paris attack the NASDAQ was still trading below its value of two weeks before – in contrast to defence industry companies who were trading around five percent higher[16] than two weeks before the Paris attack.

It's not just those in defence companies who have benefited from this trend. In London and New York, those who trade bets on the values of stocks, as well as taking income from trading directly, probably made tens of millions of additional income – a proportion of which they will personally receive in their commission and/or annual performance bonus.

Given the influence these corporations have over governments, there's a clear hazard to our ability to resolve global conflict. If terror attacks and their resultant military actions are good for business, how will growth-obsessed[17] politicians ever find the will to make peace?

Enter the hyena lobbyists

If the defence companies are the 'vultures' of capitalism, profiting from death, then that would make the industry's scavenging lobbyists the noisy 'hyenas' of this process – screaming over the bones of the victims.

RUSI, highlighted earlier, is one of the more 'learned' members of the global network of defence lobbyists. Taken as a whole the more shadowy work of those in the background, such as Interel Consulting or the Henry Jackson Society, is probably more significant.

Democracy Now: Glenn Greenwald on "Submissive" Media's Drumbeat
for War and "Despicable" Anti-Muslim Scapegoating
, 19th November 2015

Interel describes itself[18] as "one of the world’s leading Public Affairs defence and security practices", and represents many defence industry contractors in Europe and the USA. In the UK it has close links[19] to the defence industry and government, and has many former political special advisers on its staff.

The Henry Jackson Society[20] has close links to influential figures[21] in the Conservative Party and those on the right of Labour[22]. Over the last few years it has developed a whole project around talking-up the risks[23] of the 'war on terror' and the radicalization of minorities. Its key role in the recent rise of 'British neo-conservatism' was highlighted in a recent report[24] by Spinwatch[25].

The lack of evidence over how these attacks were planned hasn't stopped the advocates of more authoritarian restrictions[26] on our civil rights from wading into the ideological fray. Their diagnosis[27]: recent concerns about civil liberties and digital communications has nullified the ability of state security agencies to counter terrorism.

Some went as far as saying that NSA whistle-blower Edward Snowden has 'blood on his hands'[28] as a result of the Paris attacks – despite the evidence that those carrying out the attacks didn't use the types of communications[29] highlighted in Snowden's disclosures.

For example, relative to other groups, particularly nation states, there is little evidence that ISIS/Daesh have the capacity to launch a systematic cyber-attack, certainly of anything like the lethality of the Paris attacks. And yet one of the responses has been a clamour from 'defence analysts' to demand more powers for state surveillance to prevent Daesh cyber-attacks[30].

Perversely, there is even evidence that corporate lobbyists in the US have used the media-generated fear[31] over the flow of refugees from the Syrian conflict as a political tool to block federal environmental regulations.

The revolving door[32] of defence companies and civil servants (especially senior ex-military[33] figures), probably more publicised in the USA[34] than in the UK[35], is also a significant factor determining why government policy often defaults to the 'spend on conflict' option.

The moral hazard of the 'war on terror'

What recent events highlight, not just in Paris but since the attacks of 2001, is a clear moral hazard[36]. There is a well-funded lobby for spending more conflict, but not for spending on conflict-resolution and peace.

In the world of 'pay-per-view' politics[37], peace doesn't offer a great enough financial return to their major donors; free expression doesn't involve as much 'corporate welfare'[38] as mass surveillance.

Democracy Now: "The Drone Papers" Reveals How Faulty Intel & Secret
"Kill Chain" Mark Suspects, Civilians for Death
, 16th October 2015

The technological-response to terrorism, from bombs and drones to hacking people's mobile phones and Internet services, might make a lot of money for certain interests. Question is, does it solve the problem of modern terror, or exacerbate it?

Or are the vested interests in the political world simply using terror as a proxy[39] for their own ideological battles – drowning-out any alternative solutions which don't increase their financial or political rewards, and kicking off the whole cycle of fear, defence lobbying and spending on violence once again.

The reality is that, since the end of the Cold War, the defence sector and leading terror groups have been inextricably linked into a new 'terror industry'[40] – they are symbiotic organisms feeding-off one another's need to control the public dialogue[41].

The most recent example of this unholy relationship is armed drones[42] – which drive people to extremist causes[43], which in turn creates a greater lobby for more drones[44].

If the response to the Paris attacks is an escalation of military force and domestic surveillance then, on the evidence of the last fifteen years, it will fail.

We need a new response, based upon the resolution of conflict rather than the funding of offensive responses to it. That must begin by highlighting how the whole network of political and financial interests surrounding conflict, not just the industrial manufacture of the physical tools of conflict, benefit from this barbaric cycle of violence – and lock us into this perpetuating cycle through their political lobbying. Whether it be directly via arms manufacturing, or indirectly via share trading or political lobbying, profiting from the human suffering created by terror and militarism are as immoral as the direct use of weapons to inflict that violence.


  1. Wikipedia: 'November 2015 Paris attacks'https://en.wikipedia.org/wiki/November_2015_Paris_attacks
  2. Guardian On-line: 'Paris attacks highlight France's gun control problems', Emma Graham-Harrison, 15th November 2015 – http://www.theguardian.com/world/2015/nov/15/paris-attacks-highlight-frances-gun-control-problems
  3. Wikipedia: 'Vulture capitalism'https://en.wikipedia.org/wiki/Vulture_capitalist
  4. Campaign Against the Arms Tradehttps://www.caat.org.uk/
  5. Powerbase: 'Counter-Terrorism Portal'http://powerbase.info/index.php/Counter-Terrorism_Portal
  6. YouTube: 'James Risen Says War Profiteering Is Out Of Control And Driving The 'War On Terror''https://www.youtube.com/watch?v=F9DT-0RWJac
  7. Al Jazeera: 'Big money behind war: the military-industrial complex', Jonathan Turley, 11th January 2014 – http://www.aljazeera.com/indepth/opinion/2014/01/big-money-behind-war-military-industrial-complex-20141473026736533.html
  8. BBC News: How vulnerable is Europe to Paris-style attacks?, Raffaello Pantucci (Royal United Services Institute), 18th November 2015 – http://www.bbc.co.uk/news/world-europe-34856349
  9. Royal United Services Institutehttps://rusi.org/
  10. RUSI: 'RUSI's funding'https://rusi.org/inside-rusi/rusi-funding
  11. Reuters: 'World stocks fall on China worries; oil extends decline', Caroline Valetkevitch, 9th November 2015 – http://www.reuters.com/article/2015/11/09/us-global-markets-idUSKCN0SY00R20151109
  12. For this analysis the 'basket' of companies used are:
  13. Paul Mobbs/MEI: 'The Terror Dividend, share price data'http://www.fraw.org.uk/mei/musings/2015/20151121-share_price_plots-data.pdf
  14. Paul Mobbs/MEI: 'The Terror Dividend, share price plot'http://www.fraw.org.uk/mei/musings/2015/20151121-share_price_plots.pdf
  15. Paul Mobbs/MEI: 'The Terror Dividend, share capital value'http://www.fraw.org.uk/mei/musings/2015/20151121-share_capital.pdf
  16. Paul Mobbs/MEI: 'The Terror Dividend, share price plot, graphic'http://www.fraw.org.uk/mei/musings/2015/20151125-share_price_plots.jpg
  17. Defence Growth Partnership: 'Securing Prosperity – A strategic vision for the UK Defence Sector', September 2013 – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/237314/bis-13-1154-defence-growth-partnership.pdf
  18. Interel Consulting: 'Defence and Security'http://interelgroup.com/sector/defence-security/
  19. Powerbase: 'Interel Consulting UK'http://powerbase.info/index.php/Interel_Consulting_UK
  20. Henry Jackson Societyhttp://henryjacksonsociety.org/
  21. Powerbase: 'Henry Jackson Society'http://powerbase.info/index.php/Henry_Jackson_Society
  22. Guardian On-line: 'Labour should cut its ties with the illiberal Henry Jackson Society', James Bloodworth, 20th May 2013 – http://www.theguardian.com/commentisfree/2013/may/20/labour-cut-ties-henry-jackson-society
  23. Nafeez Ahmed's blog: 'Who the hell are the Henry Jackson Society?'http://www.nafeezahmed.com/2014/05/who-hell-are-henry-jackson-society.html
  24. Spinwatch: 'The Henry Jackson Society and the Degeneration of British Neoconservatism', June 2015http://www.thecordobafoundation.com/attach/spinwatch%20report_web.pdf
  25. Spinwatchhttp://www.spinwatch.org/
  26. New York Times: 'After Paris Attacks, C.I.A. Director Rekindles Debate Over Surveillance', Scott Shane, 16th November 2015 – http://www.nytimes.com/2015/11/17/us/after-paris-attacks-cia-director-rekindles-debate-over-surveillance.html
  27. The Intercept: 'NYT Editorial Slams 'Disgraceful' CIA Exploitation of Paris Attacks, But Submissive Media Role Is Key', Glenn Greenwald, 18th November 2015 – https://theintercept.com/2015/11/18/nyt-editorial-slams-disgraceful-cia-exploitation-of-paris-attacks-but-submissive-media-role-is-key/
  28. Independent On-line: 'Does Edward Snowden really have blood on his hands over Paris?', Ellen Nakashima and Greg Miller, 19th November 2015 – http://www.independent.co.uk/news/world/europe/does-edward-snowden-really-have-blood-on-his-hands-over-paris-a6740626.html
  29. The Intercept: 'Signs Point to Unencrypted Communications Between Terror Suspects', Dan Froomkin, 18th November 2015 – https://theintercept.com/2015/11/18/signs-point-to-unencrypted-communications-between-terror-suspects/
  30. Channel4 News: 'Is Isis planning murderous cyber attacks?', Geoff White, 18th November 2015 – http://blogs.channel4.com/geoff-white-on-technology/isis-planning-murderous-cyber-attacks/1886
  31. The Intercept: 'Lobbyists, in Strategy Session, Conclude That Refugee Crisis 'Helps Us' Defeat Regulations', Lee Fang, 24th November 2015 – https://theintercept.com/2015/11/24/lobbyists-refugee-crisis/
  32. Wikipedia: 'Revolving door (politics)'https://en.wikipedia.org/wiki/Revolving_door_%28politics%29
  33. Citizens for Responsibility and Ethics in Washington: 'Strategic Manoeuvres: The Revolving Door from the Pentagon to the Private Sector', November 2012 – http://www.citizensforethics.org/page/-/PDFs/Reports/CREW_Strategic_Maneuvers_Pentagon_Generals_Revolving_Door_11_15_12.pdf
  34. Center for Responsive Politics: 'Defense'http://www.opensecrets.org/industries/indus.php?Ind=D
  35. Campaign Against the Arms Trade: 'Political influence'https://www.caat.org.uk/issues/influence
  36. Wikipedia: 'Moral hazard'https://en.wikipedia.org/wiki/Moral_hazard
  37. Guardian On-line: 'Wealthy donors help Tories raise more than twice as much as Labour', 18th November 2015 – http://www.theguardian.com/politics/2015/nov/18/wealthy-donors-tories-funding-raise-twice-much-labour
  38. Wikipedia: 'Corporate welfare'https://en.wikipedia.org/wiki/Corporate_welfare
  39. The Intercept: 'To Stop ISIS, Outside Powers Must End Their Proxy Wars in Syria', 19th November 2015 – https://theintercept.com/2015/11/19/outside-powers-must-end-proxy-wars-in-syria/
  40. Powerbase: 'Terrorism industry'http://powerbase.info/index.php/Category:Terrorism_Industry
  41. Aldous Huxley: 'The Ultimate Revolution'http://sanjindumisic.com/transcript-of-aldous-huxleys-speech-the-ultimate-revolution-at-cal-berkeley-1962/
  42. The Intercept: 'The Drone Papers'https://theintercept.com/drone-papers
  43. The Intercept: 'Former Drone Operators Say They Were 'Horrified' By Cruelty of Assassination Program', Murtaza Hussain, 19 November 2015 – https://theintercept.com/2015/11/19/former-drone-operators-say-they-were-horrified-by-cruelty-of-assassination-program/
  44. Dronewars UK: 'Drones and the 2015 SDSR', Chris Cole, 24th November 2015 – http://dronewars.net/2015/11/24/drones-and-the-2015-sdsr/