War profiteering takes many forms. If anything, the war in Iraq should serve to remind us of both the variety of profitable opportunities available to businesses during time of war and the ethical questions raised by the intersection of private enterprise and public policy making. Perhaps the extent to which the current American administration has sought to “privatize” war making is unique, but it is certainly nothing new. Basil Zaharoff, for example, the Vickers arms dealer, became notorious in the interwar period as one of many so-called merchants of death whose firms lay at the intersection of profit and terror. Andrew Undershaft, the arms merchant in George Bernard Shaw's Major Barbara, summarized one popular perception of the relationship between arms manufacturers and public policy makers with the bald statement: “I am the government of your country. … When I want anything to keep my dividends up, you will discover that my want is a national need. When other people want something to keep my dividends down, you will call out the police and military. And in return you shall have the support and applause of my newspapers, and the delight of imagining that you are a great statesman” (act 3).
Of course, not all merchants of death are arms manufacturers. Enormous profits can be made in the production and sale of uniforms, boots, helmets, food supplies, as well as from a variety of postwar circumstances, including those associated with occupation and reconstruction. Equally significant are the profits to be made by the financing of loans to the state, loans that are crucial to the prosecution of a war. In fact, according to John Brewer, the rise of the fiscal-military state in the late seventeenth and early eighteenth centuries entailed not only the concomitant birth of “the City” to fund war making, but also its manifestation in the form of unscrupulous “monied men” or “the financial interest” whose special access to money and power created new opportunities for corruption.
Unfortunately, Brewer's work ends with the American War because the insights he provides for the century before the defeat at Yorktown are equally important and apt for the period that concludes with the victory at Waterloo. Certainly, the most famous profiteer to emerge from the wars with Napoleon was Nathan Mayer Rothschild. The near-mythic story of Nathan's apotheosis from ne’er-do-well son of a wealthy German merchant to, in Niall Ferguson's words, “the Napoleon of finance” (The House of Rothschild [New York, 1998–99), 1:85) is by now a rather well-known tale. Born in 1777 in the Jewish ghetto of Frankfurt, Nathan Rothschild was sent to Manchester in 1798–99. Herbert Kaplan's portrayal of his endeavors during this period appears to belie Rothschild's later successes. During the Manchester years, he developed a healthy reputation for being unethical, brusque, irresponsible, arrogant, and slipshod. However, any good apotheosis story requires a transfigurative moment. For Rothschild, this moment arose through the fortuitous connection established with the Duke of Wellington via the intercession of John Charles Herries.
Herries, as Commissary-in-Chief, was responsible for securing and supplying coin and bullion to pay Wellington's armies and purchase supplies. As Kaplan shows, by late 1813 and early 1814 Wellington's requests for funds had taken on an increasingly desperate tone. “Without pay and food, they must plunder; and if they plunder, they will ruin us all” (80), Wellington warned Earl Bathurst, the Secretary for War and the Colonies. In January 1814, Herries therefore undertook a number of meetings with Rothschild that resulted in the unusual arrangement empowering Rothschild to collect gold and silver in Europe and deliver it to Wellington. In return, Rothschild was allowed a hefty commission of between 2 and 6 percent.
There is no extant evidence that might help to definitively establish why Herries chose Rothschild and not another merchant-banker for this mission. However, one reason may have been Rothschild's expertise as a smuggler. For years, Rothschild had been smuggling bullion and coins into and out of Europe despite the strictures of both Napoleon's Continental System and Britain's Orders in Council. Kaplan ably demonstrates that by 1814 Rothschild had developed an impressive network of illegal contacts through which gold and silver could be both collected and disbursed. Thus when Rothschild was approached in January it is unlikely that either labored under any misconception as to why the latter had been chosen for this “important & delicate operation of collecting secretly … [F]rench Coin in Holland & Germany for the use of Lord Wellington” (81), as Herries later noted.
Rothschild's successful covert activities laid the foundation for his own and his family's vast fortune. Substantial additions to these winnings were also made in the immediate postwar years when Rothschild was used as a conduit through which British subsidies to the Austrians, Prussians, and Russians were collected and distributed. In the end, Kaplan estimates that Rothschild earned at least a quarter of a million pounds in commissions between 1814 and 1816.
Rothschild's efforts not only earned him enormous profits, but they also earned him the obeisance that invariably accompanies great wealth, an obeisance to which historians have not been immune. Unfortunately, Kaplan is not unique in his uncritical assessment of the “new” Rothschild. Behavior that earlier in his career had been condemned as unethical is later considered “financial acumen” (103); a notable lack of character miraculously is transformed into a newfound respectability; and private accumulation becomes “extraordinary public service” (156).
Such an apotheosis is a standard narrative technique and characterizes most biographies of Rothschild. But perhaps it would be more accurate to reach further back into Britain's history to find a suitable model for Rothschild's success. A more critical reading of the events might reveal that Nathan Rothschild was no more and no less than a privateer. However, rather than holding letters of marque, he had been commissioned by the British state to covertly undermine the new “sinews of power,” that is, those international financial institutions that supported war making in Europe. By redirecting bullion transfers from European markets to Britain, Rothschild simultaneously weakened Napoleon and strengthened Wellington. Heralded as a hero in victory, Rothschild could equally have been seen as a pirate in defeat.
It was certainly Rothschild's great fortune to be on the winning side of this conflict. Not only was he able to reap fantastic pecuniary rewards, but he was also able to construct a new historical identity for himself. Still, behind the mask of the new respectable patriot lay the smuggler, privateer, and merchant of death. It is this story that historians and biographers have yet to tell.
