Chapter: 26

Insuring and Assuring Defense

“An ounce of prevention is worth a pound of cure.”—Benjamin Franklin

“There never was a war in all history easier to prevent by timely action than [WW II in Europe] . . . It could have been prevented in my belief without the firing of a single shot . . .”—Winston Churchill 1

“Preparation for resistance to aggression is the sole guarantee of peace.”—Winston Churchill 2

INSURANCE AND PRIVATE SECURITY AS DEFENDERS OF A NATION

This chapter offers an explanation and exposition of the way in which the insurance industry, in alliance with the security industry, could provide national defense. The chapter posits that such private enterprise defense would be far more effective and far less costly than the military of a centralized political state. The discussion is based on America, but the principles set forth below would apply to any nation that turns away from the political state and turns to free enterprise for defense against external aggression. 3

INTRODUCTORY NOTE: In the early 21st century the United States of America maintained a monopoly of national defense and a large, expensive military establishment. Consequently, this chapter looks to a future time when the U.S. is unable financially to maintain its military establishment because it has become insolvent. A political state is insolvent when ongoing expenses and financial commitments exceed total revenues from taxation and borrowing. For example, Greece became insolvent in the year 2014. The United States was bankrupt but not yet insolvent in the second decade of the 21st century because the U.S. federal government could borrow enough to bridge the gap between outlays and tax revenues. However, the U.S. has been bankrupt since the 1970s because its liabilities have been more than the federal government could ever pay except by the pretended payment with fiat money, the U.S. dollar, that has lost much of its purchasing power due to incessant and accelerating monetary inflation.  Chapter 11, Political Democracy in America, explains why the U.S. will be unable to fulfill its long-term financial commitments, including promises to its citizens.

Q         How could insurance and security companies provide for national defense?

A         At present they do not. But they could. National defense has been the monopoly of the state.  However, the constant wars in human history demonstrate that the state does a poor job of national defense. Insurance companies exclude war losses from property and casualty insurance because they cannot estimate the amount of such losses or protect against them. However, private security companies could provide defense against external attacks. If they did, then insurance companies could provide insurance against losses from such attacks. In the insurance industry there is no such thing as a risk that is not insurable provided the payment for the insurance is adequate and provided there is no moral hazard. Moral hazard exists when the insured has an incentive to incur a loss in order to collect insurance reimbursement. No moral hazard would exist in the case of war risk insurance, as the insurance would necessarily provide only partial reimbursement for war damages.

Higher risks mean higher insurance costs. Lower risks mean lower insurance costs. The more efficient the protection provided by security companies, the lower the costs of insurance against loss would be. The insurance companies would estimate the risk of loss; they would know the amount of insurance customers decide to buy against such loss, and would price the insurance to allow profitable operation. That is how insurance companies operate. Profitable operation is necessary for an insurance company to honor its commitments, stay in business, improve its service, and compensate its investors.

Q         How could private companies afford to defend an entire country against external aggression?

A         Only private companies and individuals can afford to defend a country. The state has no money to defend its citizens other than the tax money it takes from private citizens and companies.

The U.S. operates military academies to train officers for its army, navy, air force and the Coast Guard. The U.S. maintains a Department of Defense to administer the operations of the military. However, everything used by the U.S. military is produced and supplied by free enterprise; that is everything from aircraft carriers down to the shoelaces on infantry soldiers’ boots.

Free enterprise could supply everything needed by the insurance and security industries for the protection of life and property of Americans.

In World War II, by far the largest foreign war that the U.S. has participated in, although American soldiers, sailors and aviators fought the war, it was private companies that enabled the U.S. to emerge victorious against the large, determined and capable military forces of Germany and Japan. That is documented in the book Freedom’s Forge: How American Business Produced Victory in World War II (2012) by Arthur Herman.

The U.S. was unprepared for WW II even though it should have been obvious five years preceding U.S. entry into the war in December 1941 that Nazi Germany and Imperial Japan were bent on world conquest—Nazi Germany in Europe and beyond, and Japan in East Asia.

When the President of the U.S. decided the country must prepare for war he called upon leaders of American industry to organize and supervise war production by American companies, large and small. At the beginning of 1943 the outcome of the war looked very much in doubt. By the end of 1943 it was clear that America and its wartime allies would emerge victorious.

In the year 1943 America out-produced the combined war production of Japan and Germany by a two to one margin. Some of American production went to England and Russia to help them. At a summit conference of President Roosevelt, British Prime Minister Winston Churchill and Russian dictator Stalin, at Tehran, Persia [Iran], in 1943, Stalin “raised his glass in a toast ‘to American production, without which this war would have been lost.’” 4

Q         How could private companies organize national defense without the central authority of the state?

A         It is possible for private companies to work together to organize operations on a scale suitable to achieve joint goals, provided the state does not prevent such cooperation. For example, in 1965 five oil companies—Texaco, Humble Oil (later part of Exxon Mobil), Union Oil, Mobil Oil and Shell Oil—formed a joint venture to build four artificial islands in San Pedro Bay off the coast of Long Beach, California in order to tap into an offshore oil field.

Insurance companies and security companies could and would cooperate to organize large scale national defense if there were no state claiming and enforcing a monopoly on such activity. The managers of such companies would have an incentive not only to defend their customers, themselves, their families and their country, but also to organize an effective deterrent in advance of anticipated foreign aggression in order to minimize the risk of actually having to finance and engage in defensive military action.

Q         Without the ability to use the coercion of conscription and taxes, how could free enterprise persuade the people of a nation to provide a military defense and to pay for it voluntarily?

A         Most people would pay for war risk insurance continuously through the price of products they purchase voluntarily. Large and successful companies have a lot to gain by paying for national defense insurance in order to protect their companies from external aggression, especially in this era of weapons of mass destruction that can be delivered by intercontinental ballistic missiles or other means.

Large companies already purchase insurance against a variety of risks that are not war related. They would have every incentive to purchase war risk insurance. Large, well established companies have an abundance of assets and regularity of revenues to afford the cost of war risk insurance.

Listing a few American companies alphabetically will illustrate the size of the market for war risk among large companies: Abbott Laboratories, Berkshire Hathaway, Chevron, Du Pont, Exxon Mobil, Ford Motor Company, General Electric, Home Depot, IBM, Johnson & Johnson, Kellogg, Lockheed Martin, Microsoft, Northrup Grumman, Oracle, Pfizer, Quest Diagnostics, Rite Aid, Southwest Airlines, Texas Instruments, Union Pacific, Verizon Communications, Wal-Mart, Xerox, and Yahoo.

The foregoing list does not include any of the large companies that own and rent out commercial and residential real estate, such as Westfield Corporation and Weingarten Realty that own and operate numerous shopping centers, and Avalonbay Communities that owns and operates 164 multi-unit properties that include 45,000 apartments. Such companies would be part of the large company market for war risk insurance.

Large companies domiciled outside America would have the same incentives to purchase war risk insurance. Just a few names of such large companies will illustrate the potential extent of the international market for war risk insurance. They include Astra Zeneca, Bayer, Carrefour, Daimler Benz, Ericsson, Fujitsu, Generali, Hyundai, ING Group, Jardine Matheson, Komatsu, LG Electronics, Michelin, Nestle, Phillips, QANTAS, Royal Dutch Shell, Siemens, Toyota, Unilever, Volkswagen, and Wipro.

There are hundreds more companies that have the assets and the revenues, and a valuable business, to justify purchase of war risk insurance. In aggregate, large companies doing business in America have far more assets and revenues than the United States federal government. Large companies as a group can afford to spend more than the United States on national defense, via war risk insurance.

Most Americans purchase goods or services from many of the companies that would provide the market for war risk insurance. The cost of such insurance would be part of the price individuals and smaller companies pay for the goods and services of large companies. Thus, most Americans would pay for war risk insurance on a continual basis through their purchases of goods and services from large companies.

Q         Why would insurance companies want to offer war risk insurance?

A         Once the state monopoly of national defense has ended, the larger property and casualty insurance companies could have a good business offering war risk insurance. The components of the business of war risk insurance would include actuarial calculation and underwriting.

Actuarial analysis would be employed to determine the probability of loss. Insurance companies would be in a position to employ private military firms to take preventive and preemptive action to stop a potential aggressor from acting on aggressive intent. Actuaries would take into account the capabilities of possible aggressors and the resources available to stop aggression before it occurred. As mentioned in this book, 5 the aggression of Hitler’s Nazi Germany could have been stopped without firing a shot in March, 1936, and that would have been the end of Adolf Hitler and, consequently, the prevention of what became World War II in Europe.

There are risks and dangers from aggression in the early 21st century that are different than the dangers presented by Nazi Germany and Imperial Japan in the 1930s. This chapter examines below the dangers presented by potential aggressors in the early 21st century and means available to prevent such aggression.

Actuarial analysis would focus on the cost of military capability adequate to deter aggression and the cost of taking preemptive measures against aggressors rather than the cost of actual war, because war with weapons of mass destruction of the early 21st century could cause enormous damage in the first hours of war.

The costs of preventing aggression in the era of weapons of mass destruction borne by ICBMs are the costs of establishing and maintaining the military capability to destroy an aggressor’s WMD and ICBMs before they are put to use.

Underwriting by insurance companies would price war risk insurance. That is, it would price the annual or other periodic charges of an insurance company to the insured.

Since the terrorist attacks on America on September 11, 2001, the United States of America has spent around $700 billion per year on its military establishment. America’s major companies, in aggregate, have the wherewithal to afford that much. However, $700 billion a year in U.S. military spending pays for a lot more than is necessary.

That is partly because bureaucratic procurement of military supplies raises the cost inordinately. While the U.S. Congress appropriates money for the U.S. military establishment, Congressional appropriations are greatly influenced and increased significantly, by the lobbying of the U.S. military elite and the major corporations whose primary business is supplying military equipment. 6

Furthermore, maintaining a U.S. military presence in many countries around the world adds greatly to the overall total of $700 billion. Most U.S. military bases on foreign soil were established during the Cold War of the 20th century (1946-1989). They have become unnecessary to defense of America in the 21st century.

During the Cold War it became the policy of the United States that American security required the United States to maintain a permanent, and costly, armed presence around the globe, to prepare the U.S. military for operations in far-flung regions, and to be ready to intervene anywhere at any time. 7 Because of the designs of the Communist Party of the Soviet Union to destabilize other countries so that local communists could seize power, it is understandable that the United States reacted by establishing a global U.S. military presence. Even if that global military presence was appropriate during the Cold War, it is not warranted in the 21st century, except perhaps by the misguided idea that the U.S. could be policeman for the world.

In the discussion below, this chapter will posit that preemptive action against aggressor nations will make it unnecessary for the American nation to maintain military bases in other countries, and certainly unnecessary on a permanent basis. Insurance and security companies domiciled in America may find it desirable to enter into contracts to maintain a military presence in a foreign country if that country desires such a presence. The cost of foreign military bases would surely be much reduced by limiting foreign military operations to only the times and places where needed to protect American lives and property.

The insurance principle of moral hazard would preclude insurance companies from providing war risk insurance to companies that invited attack by attempting to exercise political power over foreign countries, such as the British Empire in India and elsewhere during the nineteenth and 20th centuries.

Q         What could prevent insurance and security companies combining to form a new, coercive political state?

A         Competition for business would prevent this happening. Property and Casualty (P/C) insurers are the companies that would offer war risk insurance. In America in the year 2013 there were over 3,000 P/C insurers that had aggregate total cash and invested assets of $1.5 trillion. 8

If one or more insurance companies tried to operate like a political state by forcing their customers to pay for protection, that would be virtually instant commercial suicide. With over 3,000 American P/C insurers, many of them quite large, other P/C companies would seek and obtain the patronage of customers who rejected such a protection racket.

GUARDING AGAINST TERRORIST ATTACKS

Aircraft and Airline Security

The hijackings of four American airliners on September 11, 2011 could have been prevented by airline security of the kind that has been and is routine for El Al, the national airline of Israel. The United States Federal Aviation Agency (FAA) could have required such security but did not at the time of the terrorist hijacking of four commercial aircraft on September 11, 2001, hijackings that caused nearly 3,000 deaths and $55 billion in property damage.

Companies insuring commercial airlines would require their airline customers to interview every passenger in pre-boarding, and to have individual security agents inspect every bag, as was done in the case described immediately below.

The Anne-Marie Murphy case

On Thursday, April 17, 1986, at the Heathrow International Airport in London, security agents of El Al thwarted an attempt to blow up an El Al plane in mid-air. The plane, a Boeing 747, was preparing to depart for Israel with 395 passengers and crew.

NOTE: Just fifteen days earlier, on April 2, 1986, four Americans were killed when a bomb exploded in a TWA airliner flying from Rome to Athens, Greece.

The plan thwarted on April 17, 1986 was to plant explosives in the belly of the plane; the explosives were to be transported by a duped and innocent passenger entirely unaware of their existence. El Al security agents at the London stop uncovered the explosives and prevented the terror attack.

The passenger, a 32 year old Irish woman named Anne-Marie Murphy was questioned by El Al security officer as part of routine passenger security checks. No suspicious signs were revealed during her questioning. In the check of her baggage, a scientific calculator with an electric cable was found; the bag raised suspicion due to its unexpectedly heavy weight. The security officer’s examination of the bag revealed explosives concealed in the bottom of the bag, under a double panel and an electronic timing device set to activate the explosives. The bomb was set to explode about two hours after the aircraft’s departure for Israel, at a height of 39,000 feet, when it would have been airborne between Italy and Greece.

Anne-Marie Murphy’s interrogation by British police revealed that she was six months pregnant as the result of a relationship with a Jordanian man, Nizar Hindawi. He suggested that they marry, and spend their honeymoon in Israel. He gave her money to buy clothes, acquire a passport, and purchase a plane ticket to Israel. He told her that as a Jordanian, he was unable to travel together with her, but would travel to Jordan and from there he would travel by land to Israel in order to meet her at Ben-Gurion International Airport.

On the night before her flight, Hindawi arrived at her house with a large bag and helped her to pack her belongings, that unbeknownst to her included the explosives.

British police investigation revealed that agents of the government of Syria were behind the plan. The British court that tried Hindawi sentenced him to 45 years imprisonment, the maximum under British law. Anne-Marie Murphy was an innocent dupe. She was not charged with any offense. 9

Airport Security

The Millennium bomber case

On December 14, 1999, a thirty-two year old Algerian man, Ahmed Ressam, was arrested by U.S. Customs agents at Port Angeles, Washington while trying to enter the U.S. there. 10 Ressam was driving a car loaded with explosives 40 times as powerful as a typical car bomb.

Ressam had previously spent time at a terrorist training base in Afghanistan operated by Al Qaeda, the organization that recruited and trained the men who perpetrated the attacks of September 11, 2001 on New York City and Washington, DC. 11

Investigators discovered that Ressam was born in Algeria, traveled to France, and from France traveled to Canada. From Canada he traveled to Afghanistan, then back to Canada, via a stopover at Los Angeles. At the Los Angeles International Airport (LAX) Ressam conceived a plan to detonate explosives at LAX on December 31, 1999. He was indicted on charges of violating U.S. law in the planning of and preparation for the bomb attack. A federal jury found Ressam guilty. He was sentenced to a 37-year prison term. Concurrently, he was convicted in absentia in France for conspiring to commit terrorist acts there and was sentenced to a five year prison term in France. 12

The cost and feasibility of worldwide airline security

Some readers may observe that commercial air transport flights to the United States originate in many countries around the world each day; therefore, it would be costly and unfeasible to provide for pre-boarding screening of passengers attempting to board commercial aircraft flights leaving from every foreign country bound for America. However, there is an enormous potential cost of failing to require such screening. One hundred billion dollars is the estimated cost of the terrorist attacks against American aircraft and ground targets on September 11, 2001. 13 It is certainly feasible for the United States of America and the American aviation and insurance industries to require such external airport pre-boarding screening for international flights to America.

Terrorism and national defense

The United States and individual Americans have been the target of attacks by Islamic terrorists ever since 1979, when an organized group of young Iranian men seized the U.S. Embassy in Iran’s capital, Tehran, taking 66 hostages. Fifty-two of the hostages were held as prisoners for nearly fifteen months.

Since then there have been numerous terrorist attacks against Americans and the U.S. by members of Islamic terrorist organizations—attacks that have been attributed to Al Qaeda, Hezbollah, and other Islamic terrorist organizations. The most deadly was the Al Qaeda attack of September 11, 2001 which killed 2,977 people (2605 American and 372 nationals of other countries) in New York City, Arlington, Virginia, and in rural Pennsylvania.

In addition to the 9/11 attacks, between 1982 and 2005 there were fourteen other Islamic terrorist attacks that killed more than 500 Americans. 14

In 2009 and 2015, Muslim men, each apparently acting alone and independently of any terrorist organization, killed eighteen members of the U.S. military, thirteen at Fort Hood, Texas in November 2009 and five at Chattanooga, Tennessee in July 2015. The Fort Hood murderer was born in America. 15 The Chattanooga murderer emigrated from Jordan to America with his parents at age five. 16 In 2013, two Muslim Brothers killed three Americans at the Boston Marathon, and also killed a police officer they encountered while fleeing from law enforcement agents. 17

The facts and circumstances in each case indicate that these four individuals were motivated by the idea that it was their religious duty to kill Americans.

All but one of the eighteen terrorist attacks described above were perpetrated by individuals who had immigrated to America, or traveled to America from Muslim countries ranging from North Africa to Central Asia.

The nature and frequency of these terrorist attacks indicates that a relatively small, but still significant number, of Muslim men is dedicated to wage jihad—that is a holy war—against Americans and other non-believers in Islam, referred to as infidels.

Within the Muslim religion there is a fundamentalist branch of the Sunni sect that considers Shia Muslims to be infidels who ought to be killed for their false beliefs. By acting on the premise that Shiites are infidels, those Sunnis have provoked internecine violence between the two sects in Iraq, Syria and elsewhere. Sectarian violence between Shiites and Sunnis has caused hundreds of thousands of deaths since 1980, a number of deaths which is orders of magnitude larger than the numbers of non-Muslims killed by Islamic jihadists. 18

In the year 2013, according to the U.S. Department of State, a total of 9,707 terrorist attacks occurred worldwide, resulting in more than 17,800 deaths and more than 32,500 injuries. In addition, more than 2,990 people were kidnapped or taken hostage. 19

According to Israeli commentator Y. K. Cherson, “. . . [I]n 2011, Muslims were responsible for 94 percent of the [worldwide] fatalities in terrorist attacks.” Japan is a country in which not one single attack of Islamic terrorism occurs. Tight immigration controls exclude most Muslims from Japan, where the Muslim population is less than one in 100,000. Open practice of the religion is prohibited. 20

Readers would say correctly that the Japanese practices described above are forbidden to the United States government by American traditions of freedom and by the First Amendment to the U.S. Constitution that states Congress shall make no law abridging the free exercise of religion.

There are 1.5 billion Muslims in the world, making it the second most prevalent religion, after Christianity. On a percentage basis, very few Muslims are jihadists. But very few in a population of 1.5 billion could be very many in absolute numbers. If only one out of 100,000 Muslims were jihadists, that would still be 15,000.

A search of the internet shows that among Muslims worldwide, a significant majority disapprove of terrorism. But that leaves a significant minority who do not disapprove of it. For example, according to the PBS television program Frontline, of 2.75 million Muslims in America, “81 percent say that suicide bombing and other forms of violence against civilians are never justified in order to defend Islam from its enemies, and only 2 percent say they have a very favorable opinion of Al Qaeda.” 21

That accounting for Muslim opinion, in America, leaves 19%–over 500,000 individuals—who are not willing to say they disapprove violence in the name of Islam, and two percent—over 50,000 individuals—who say they have a favorable opinion of Al Qaeda.

CTLR looks forward in this chapter, as in all chapters, to the evolution of human society to a condition affording far more effective protections of life and property than is afforded by political government in the United States. Until then, one cannot help but compare the situation in the United States to the security afforded to the Japanese people by their government’s immigration policies and restrictions on public conduct of religious observances of a religion some of whose adherents commit most of the terrorist attacks in contemporary society.

In addressing security against terrorism, free enterprise would have a large fund of information about the nature and source of the threat in America. For example, Steven Emerson is a journalist who became interested in the problem of Islamic jihad in America. He has written six books and numerous articles on the subject, as well as a PBS documentary film, “Jihad in America.” In this film and his books Emerson describes the clandestine operation of militant Islamic terrorist groups in America. 22

The insurance and security industries would build a detailed and comprehensive data base about terrorism and terrorists, in order to identify who is a threat, the likely target of terrorist attacks and means of thwarting such attacks not only by protective measures, but also by preemptive and preventive measures. For example, before the 9/11 attacks on the World Trade Center in New York, Emerson observed that terrorists had previously set off explosives in one of the WTC buildings in 1993 and he predicted it was likely that terrorists would try again to bring down the WTC tower buildings.

Also, before terrorists hijacked commercial airlines to attack the WTC buildings on September 11, 2001, it was known that hijacking airliners to blow them up or crash them into buildings was among the tactics terrorists had already used and were planning to use again.

For private security, protection against an attack such as those against the WTC buildings in 1993 and again in 2001 would include, but would not be limited to the following: screening to keep dangerous people from driving into airport passenger drop off and pickup areas, entering airport buildings, or boarding commercial airline flights.

Private property as the best defense of infrastructure

In America in the beginning of the 21st century much of the infrastructure—streets, roads, highways, bridges, seaports, airports, hydroelectric dams, other electric power generation and transmission facilities, water supplies and much more—is owned by government entities. In effect, that means nobody owns those assets. Why? Because what is now called government has no proprietary incentive to act as an owner would, by protecting the assets it controls. No political government entity, and no one working for such an entity, has any responsibility for loss and damage caused by failure adequately to protect those assets.

If every element of a nation’s infrastructure were privately owned, every asset in the infrastructure could be, and probably would be, insured against damage by natural or human causes. Insurers would employ security agents directly or indirectly by contracting with security companies, to protect insured assets from criminal attacks by terrorists or other human agents.

NEUTRALIZING ROGUE STATES

NOTE: As of the early 21st century and in the 20th century as well, political states, including democracies, with the exception of tiny Switzerland, have failed to protect their citizens from military aggression by totalitarian states. The democracies, with the sole exception of the tiny state of Israel, have failed to take preemptive action to prevent aggression from occurring. Historically, democracies have acted only to retaliate after their citizens have suffered aggressive attack. This is a central premise of the preceding chapter, entitled National Defense.

The discussion immediately following describes what free enterprise could do to neutralize rogue states’ aggressive capabilities, provided that political states did not interfere with free enterprise defense. The discussion assumes that political states have become bankrupt and therefore would not interfere with private enterprise actions to prevent rogue states from acquiring and maintaining weapons of mass destruction.

With the fall and dissolution of the former Soviet Union in 1989-1991, there have been only two nation states that presented a threat to use nuclear weapons against other countries. The two are North Korea (NK) and Iran. Those two countries are described as “rogue states,” not only herein, but generally. They are considered rogue states because they reject and will not cooperate with international agreements intended to limit or at least reduce the likelihood of the outbreak of war waged with weapons of mass destruction (WMD).

As of the year 2015 a total of 191 states had become party to the Treaty on the Non-Proliferation of Nuclear Weapons, commonly known as the Non-Proliferation Treaty or NPT. The objective of the NPT was to prevent the spread of nuclear weapons and the technology to build them. Neither North Korea nor Iran is a party to the NPT.

North Korea

In 1945, in the aftermath of the defeat of Japan in WW II and the withdrawal of Japanese armed forces from Korea, the Soviet Union (Russia hereinafter) and the United States occupied, respectively, the northern and southern parts of the Korean peninsula. Russia set up a communist regime in North Korea. In June 1950 the army of North Korea invaded South Korea. The United States, in the name of the United Nations, resisted and repulsed that invasion. After three years of indecisive warfare a truce was declared, with the Korean peninsula again divided between communist North Korea, and the Republic of Korea in the South.

North Korea (NK) maintains a very large army, attempts to build tunnels under the barrier dividing north and south, and commits deadly acts of aggression against South Korea.

NK entered the Non-Proliferation Treaty in 1985, but later threatened to withdraw from it. To prevent this, in 1994 the United States entered into an agreement with NK to provide economic aid to NK in return for that country’s agreement not to make a nuclear bomb.

Nevertheless, all along NK was secretly making enriched uranium, a critical component of a nuclear bomb. In 2003 NK announced its withdrawal from the Non-Proliferation Treaty. North Korea tested its first nuclear weapon in 2006. In tandem with development of nuclear weapon capability, North Korea was developing long-range ballistic missiles that could be used to attack other countries with nuclear bombs.

The NK regime has made threats to use missile-borne nuclear bombs against the United States. By the second decade of the 21st century it appeared that North Korea was aiming to achieve the ability to strike the continental United States with nuclear bombs delivered  by long-range missiles.

Iran

After the political revolution of 1979 in Iran, totalitarian political power was established by Shiite clerical men known as Ayatollahs and Mullahs (collectively “the Mullahs” herein) who rule over an Islamic theocratic dictatorship that they have named the Islamic Republic of Iran.

The Mullahs of Iran have been at war with the U.S. since their minions invaded the U.S. Embassy in Tehran in 1979, taking Embassy staff members prisoner and holding them as hostages for a period of 444 days. That was an act of war.

Note: The referent for the name “Iran” hereinafter is the Mullahs. Iran is a relatively large country comprising 80 million residents as of the early 21st century. Many residents of Iran have favorable views of the U.S. in general and of Americans in particular. They know about America not only from the negative propaganda of the Mullahs, but also from relatives who have emigrated to America, and from friends who have had contact with America and Americans. According to polling organizations a slight majority of Iranians have a positive view of the American people. 23

Through various armed terrorist proxy groups Iran has committed terrorist attacks in, and intervened in the internal affairs of Lebanon, Iraq, Syria, and Yemen. The U.S. State Department has named Iran as a state sponsor of terrorism.

The Iranian Revolutionary Guard Corps established Hezbollah in Lebanon, adjacent to Israel, soon after the 1979 Islamic Revolution. Hezbollah is a proxy of Iran that carries out terrorist attacks at the behest of the Mullahs. 24

The Mullahs were behind the deadly attack by their proxy, Hezbollah, on U.S. and French peacekeeping troops in Lebanon in 1982 (241 Americans and 58 French killed), the attack on the Embassy of the U.S. in Beirut in 1983 (58 Americans killed), the murder in 1983 of Malcolm Kerr, Beirut-born President of the American University in Beirut, and the kidnapping and murder of the Beirut station chief of the United States Central Intelligence Agency in 1984.

Iran has a national holiday, Al-Quds Day, proclaimed in 1979 by Ayatollah Ruhollah Khomeini as a commemoration of the religious duty of all Muslims to rally in solidarity against Israel and for the liberation of Jerusalem. The political elite of Iran organize public protests every year on that day, when masses of people shout “death to Israel” and “death to America.”

Since 2002 it has been known that Iran’s regime has been working to develop nuclear weapons. Once this was known, the International Atomic Energy Agency started efforts to investigate Iran’s nuclear bomb program. Starting in 2006 the United Nations Security Council passed resolutions demanding that Iran suspend its nuclear enrichment activities, imposed sanctions when Iran refused to do so, imposed a complete arms embargo on Iran, and banned Iran from any activities related to ballistic missiles. Nevertheless, Iran continued to work on development of nuclear weapons and ballistic missiles. 25

Failure of diplomacy with rogue states

Through diplomatic negotiations, the U.S. entered into an agreement with the communist regime that rules North Korea—an agreement intended to cause North Korea’s rulers to cease activities designed to produce WMD, including nuclear bombs and long-range missiles. 26 Under this arrangement the U.S. promised to provide food aid to Korea at a time when ten percent (10%) of the people of that country were dying of starvation. The U.S. also offered other significant aid to induce North Korea to remain a party to, and comply with the Nuclear Non-Proliferation Treaty.

The North Korean regime accepted the benefits and violated all its promises. In 2002 it was reported that North Korea was working to build nuclear bombs, which the North Korean regime confirmed. The next year North Korea withdrew from the Non-Proliferation Treaty. In 2006 North Korea tested a nuclear bomb. Concurrently, the North Korean regime pursued acquisition of long-range missile capability.

In July 2015, the U.S., Britain, France, Russia, and China (who are the five permanent members of the United Nations Security Council) together with Germany, and the European Union entered into an agreement with the Mullahs of Iran that was similar to the agreement with North Korea, except that it was more favorable to Iran’s WMD aspirations. The agreement with North Korea had no ending date. In comparison, the agreement with Iran will expire at various times over the ten to sixteen years following the parties’ entry into the agreement.

The Mullahs had been working to acquire WMD capability since at least 2002. This agreement virtually assures that the Mullahs will acquire WMD capability as soon as they are able to develop WMD technology to the point of possessing nuclear bombs and long-range missiles. In ten to sixteen years at the latest, the Mullahs will have explicit consent to build WMD, consent granted to Iran by the permanent members of the United Nations Security Council, the United States, Germany, and the European Union. 27

This agreement shows once again that political democracies will do nothing to avert danger to their people until it is too late. Only when an aggressor attacks will political democracies retaliate, if they are able to. That was a terrible policy before WW II when Hitler and his Nazis were gearing up for new war. It is worse now. Hitler did not have WMD. Iran will have WMD sooner, as a result of this agreement, than if the existing sanctions regime had remained in place.

In the Iran Nuclear Deal, the U.S. and western democracies are doing worse than nothing. They are facilitating Iran getting WMD.

Failure has always been the outcome of attempts to neutralize totalitarian aggressor states by diplomacy. Diplomacy has failed because the rulers of totalitarian aggressor states never intend to abide by diplomatic agreements to limit or prevent their aggression.

PREEMPTIVE ACTION TO PREVENT AGGRESSION

Israel: Survival of a nation under perpetual siege

The Jewish state of Israel has been constantly in danger of attack by neighboring Arab states since 1947 when the United Nations approved establishment of an independent Jewish state and an independent Arab state in Palestine.

The Six-Day War

In late May and early June, 1967, 80,000 soldiers from armies of three Arab states, Egypt, Jordan, and Syria, massed on the border of Israel, under the leadership of Egypt. President Nasser of Egypt declared that “our basic objective will be to destroy Israel.”

Israel was vulnerable. Its largest city, Tel Aviv, then was located in a narrow strip of land only ten miles wide between the Mediterranean Sea and Jordan. 28

Israel struck first, not waiting for the Arab armies to attack. In the early morning of June 5, 1967 the Israeli air force destroyed most of the air forces of Egypt and Syria. Over the next five days Israeli troops routed the Arab armies, driving them back away from Israel’s borders. The war ended on June 10, 1967. A Cease Fire was agreed to on June 11.

Yitzhak Rabin, chief of staff of the Israeli army said later that Israeli troops fought well because they understood “. . . that if victory was not theirs the alternative was annihilation.”

Air raid on Iraqi nuclear reactor

In 1981 a nuclear reactor was under construction at Osirak, Iraq. On June 7, 1981 eight fighter-bombers of the Israel Defense Force (IDF) destroyed the nuclear reactor in a surprise raid. The rulers of Iraq have always been hostile to Israel. The Prime Minister of Israel said later that the reactor was about to go into operation and was a threat to Israel because it could produce nuclear weapons. There was considerable circumstantial evidence that Iraq planned to develop a nuclear weapon.

Air raid on Syrian nuclear reactor

In 2007 North Korean technicians were building a nuclear reactor in Syria. The government of Israel determined that the government of Syria planned to build a nuclear weapon using weapons grade uranium to be processed at the reactor. On September 7, 2007 aircraft and commandos of the Israel Defense Force destroyed the Syrian nuclear reactor.

The United States: The power of superior military technology

U.S. military action in Iraq

In 1990 Iraq had an army of more than one million soldiers. Iraq invaded its tiny neighbor, oil-rich Kuwait. The United Nations Security Council passed a resolution condemning the Iraqi invasion and demanding that Iraq unconditionally withdraw all forces deployed in Kuwait. Iraq refused to do so.

In 1991 the military of the United States and several allied nations expelled the Iraqi army from Kuwait. Much of the Iraqi army was destroyed in a few days. In 2003 the U.S. military invaded Iraq for the purpose of ending Iraq’s development of WMD.

In fighting over a total of five weeks in 1991 and in 2003 the U.S. military defeated and destroyed the Iraqi army. The U.S. military was able to do that in a nation over 6,000 miles distant from the U.S. because of technological and logistical superiority.

Afghanistan 2001

In 1999-2001, members of the Al Qaeda terrorist organization trained in Afghanistan, where they planned the attacks of September 11, 2001 on America. Those attacks killed nearly three thousand people. The U.S. determined that the ruling Taliban regime of Afghanistan had made land available for Al Qaeda training bases. When the Taliban refused a U.S. demand to turn over all Al Qaeda operatives, U.S. special military forces traveled nearly 7,000 miles to Afghanistan where they routed the Taliban in 36 days. The Afghanistan operation was unique in U.S. military history in that no large force of U.S. ground troops fought in Afghanistan. The U.S. military action was prosecuted by Special Operations forces, supported by aircraft of the U.S. Navy and Air Force. 29

Mistake of the United States in Iraq and Afghanistan

The mistake of the United States in Iraq and in Afghanistan was political not military. After the initial military objectives had been achieved, U.S. Presidents and their advisors decided that the U.S. military should stay on in order to provide political stability and peace. That was futile in a social culture that has been plagued by perennial internecine, sectarian religious strife and warfare for nearly 1,400 years.

FREE ENTERPRISE DEFENSE AND THE PROBLEM OF ROGUE STATES

If political democracies fall into bankruptcy and abandon their monopoly of national defense, free enterprise insurance and security could provide defense against rogue states threatening aggression by acquisition of weapons of mass destruction or by military invasion.

As indicated hereinabove, large and well capitalized companies would not be helpless victims of foreign aggressors if the political state is unable to maintain its monopoly of national defense.

The insurance and security industries could provide Private Military Firms (PMFs) that would be capable of deterring and preventing foreign aggression.

Once the political state has abandoned its monopoly of defense, the insurance and security industries could expand their activities to whatever defensive measures are required by the large business concerns that are already their customers. With the freedom to take preemptive action to prevent aggression, the insurance industry would be able to make the actuarial calculation of risk necessary for insurance underwriters to price the cost of war risk insurance.

The goal of the insurance and security industries would be to prevent attacks by a foreign aggressor, and where appropriate to destroy the WMD capability of such an aggressor. The model for such preventive action would be Israel’s preemptive attacks on aggressors. Israel possessed military technology superior to its enemies. The U.S. military achieved its initial objectives by means of relatively quick victories in Iraq in 1991, in the first five weeks of war in Iraq in 2003, and in the first five weeks of military operations in Afghanistan in 2001. By staying on afterwards, a political decision by civilian authorities, the U.S. became embroiled in protracted, costly, and useless conflict. Those political decisions had momentous and monumental adverse consequences for America.

Israel achieved victory in its preemptive strikes through a motivation of national self preservation plus military technology superior to that of its enemies. The U.S. military, thanks to private enterprise production, has military capability orders of magnitude greater than that of Israel.

Private enterprise has always produced all (100%) of the equipment used by the military of the United States. The productive capacity of free enterprise would be at the service of the insurance and security industries. Those industries have the financial and human resources to provide adequately for the defense of life and property in America. As indicated in the preceding chapter, under the heading Private Military Firms, such firms are already in operation.

Notes:

  1. Quoted from About Education, Churchill’s Iron Curtain Speech, March 5, 1946, Westminster College, Fulton, Missouri, http://history1900s.about.com/od/churchillwinston/a/Iron-Curtain.htm
  2. Quoted from “The Defence of Freedom and Peace (The Lights are Going Out),” Broadcast to the United States and to London,” by Winston S. Churchill, October 16, 1938, http://www.winstonchurchill.org/resources/speeches/1930-1938-the-wilderness/524-the-defence-of-freedom-and-peace
  3. Most, but not all of the material in the Questions and Answers immediately following appear also in chapter two, entitled “Frequently Asked Questions–Imagine a World Without the State.”
  4. Quoted at Herman, Freedom’s Forge, page 336.
  5. In chapter 25, National Defense, under heading “Causes of War and Catastrophes of the Combatants in WW II,” and under the sub-heading “Willful blindness of most English political and military leaders; fecklessness of French political and military leadership,” at http://www.capitalismtheliberalrevolution.com/chapter/national-defense/
  6. This phenomenon is documented in Scheer, Robert, The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America (2008)
  7. For a thoughtful criticism of the policy of a U.S. global military presence, see Bacevich, Andrew J. Washington Rules: America’s Path to Permanent War (2011).
  8. Insurance Information Institute, Industry Overview http://www.iii.org/fact-statistic/industry-overview and 2014 Ward’s 50 Top Performing P & C Insurers, http://www.wardinc.com/wards50/WardGroup-W50-14-PC-Article.pdf
  9. Israel Security Agency, Anne-Marie Murphy Case (1986). http://www.shabak.gov.il/English/History/Affairs/Pages/Anne-MarieMurphyCase.aspx
  10. Port Angeles is twenty miles by ferry boat across the Strait of Juan de Fuca from Victoria, British Columbia, Canada
  11. See Wikipedia, Al Qaeda, https://en.wikipedia.org/wiki/Al-Qaeda
  12. https://en.wikipedia.org/wiki/Ahmed_Ressam
  13. Institute for the Analysis for Global Security, How did the September 11 terrorist attack cost America, http://www.iags.org/costof911.html
  14. See Timetoast, http://www.timetoast.com/timelines/2876 The Timetoast timeline does not include the murders of Malcolm Kerr, the Beirut-born President of American University of Beirut, and William F. Buckley, the Beirut Station Chief of the U.S. Central Intelligence Agency
  15. Wikipedia, 2009 Fort Hood Shooting, https://en.wikipedia.org/wiki/2009_Fort_Hood_shooting
  16. Wikipedia, 2015 Chattanooga Shooting, https://en.wikipedia.org/wiki/2015_Chattanooga_shootings#Perpetrator
  17. https://en.wikipedia.org/wiki/Boston_Marathon_bombing
  18. See Wikipedia, Jihad, https://en.wikipedia.org/wiki/Jihad#Warfare_.28Jihad_bil_Saif.29 and Wikipedia, Infidel, https://en.wikipedia.org/wiki/Infidel#Islamic and Nairaland Forum, “Are Shia Muslims Infidel? http://www.nairaland.com/397787/shia-muslims-infidels and Wikipedia, Shia-Sunni Relations, https://en.wikipedia.org/wiki/Shia%E2%80%93Sunni_relations and “The Most Deadly Middle East Conflict is Shia vs. Sunni,” Op-Ed by Mordecai Kedhar, Arutz Sheva (Israel National News) November 21, 2013, http://www.israelnationalnews.com/Articles/Article.aspx/14132#.Va7PGPkvnvE
  19. U.S. Department of State, Bureau of Counterterrorism, Country reports on terrorism in 2013, http://www.state.gov/j/ct/rls/crt/2013/224831.htm
  20. “Islamic Terrorism in Japan: Why There is None,” by Y. K. Cherson, http://chersonandmolschky.com/2015/04/13/islamic-terrorism-japan/
  21. Quoted from PBS Frontline, “America and Muslims: By the Numbers,” September 26, 2011, http://www.pbs.org/wgbh/pages/frontline/religion/man-behind-mosque/america-and-muslims-by-the-numbers/
  22. See, inter alia, Emerson, Steven, Jihad Incorporated: A Guide to Militant Islam in the US (2006); American Jihad: The Terrorists Living Among Us (2003), and Emerson’s website, Steve Emerson, http://www.steveemerson.com/
  23. See World Public Opinion.org, Public Opinion in Iran, http://www.worldpublicopinion.org/pipa/pdf/apr08/Iran_Apr08_rpt.pdf
  24. See “30 years of terror sponsored by Iran,” by Matthew Levitt, New York Daily News, October 23, 2013, quoting Matthew Olsen, Director U.S. National Counterterrorism Center, and James Clapper, U.S. Director of National Intelligence, http://www.nydailynews.com/opinion/30-years-terror-sponsored-iran-article-1.1493410
  25. Wikipedia, Nuclear Program of Iran, https://en.wikipedia.org/wiki/Nuclear_program_of_Iran#Post-revolution.2C_1979.E2.80.931989 and Wikipedia, Iran and Weapons of Mass Destruction, https://en.wikipedia.org/wiki/Iran_and_weapons_of_mass_destruction#Missiles
  26. Wikipedia, “Agreed Framework,” https://en.wikipedia.org/wiki/Agreed_Framework
  27. See Charles Krauthammer Op-Ed, July 16, 2015, “Worse than we could have imagined,” by Charles Krauthammer, Op-Ed the Washington Post, July 16, 2015, https://www.washingtonpost.com/opinions/worse-than-we-could-have-imagined/2015/07/16/aa320b42-2bf0-11e5-bd33-395c05608059_story.html
  28. In consequence of  victory in the Six-Day War the Israel Defense Force occupied the territory known as the West Bank thereby providing greater space to defend Tel Aviv in the event of invasion by armies of Arab states to the east.
  29. Quoted from Wikipedia, Taliban, https://en.wikipedia.org/wiki/Taliban

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