Monday, April 30, 2007

SUPER-IMPERIALISM: The Shameful Legacy Of Liberal Democrats

April 29, 2007

By Carolyn Baker

It is a war against the globalization of the market, against the destruction of nature adn the confiscation of resources, against the termination of indigenous peoples and their lands, against the growing maldistribution of wealth and the consequent decline in standards of living for all but the rich.

Andrew Kopkind

Professor Michael Hudson, an independent Wall St. financial economist, has written an extraordinary book entitled Super Imperialism: The Origins and Fundamentals Of U.S. World Dominance. I first heard of Michael Hudson when browsing Bonnie Faulkner’s “Guns And Butter” website, and as I listened to him, I knew that I needed to read Super Imperialism for many reasons, not the least of which is that I am not an economist and am only beginning to educate myself on how the money works in the domestic and world economies. For this reason, I have been reluctant to write a review of Hudson’s book; I am still learning, as are many of my readers, about dysfunctional and oppressive economic systems and how they work, as well as learning about how a healthy economy might function to meet the needs of its citizenry without harming them or the ecosystem. That said, as an historian, I believe that in order to fully appreciate the current tyranny of centralized financial systems, it is necessary to understand how they evolved within the past six decades.

While reading Hudson’s book I quickly realized that it is a crucial companion to Chalmers Johnson’s trilogy of books on U.S. imperialism, namely, Blowback, The Sorrows Of Empire, and Nemesis. Johnson’s emphasis is primarily on the military aspects of U.S. imperialism since the end of World War II, with much less focus on American economic imperialism during that era.

In the current milieu of blatant neo-conservative world domination rhetoric and behavior, it is oh so tempting to believe that the Republican Party and political conservatism have been historically at the forefront of an imperialist foreign policy. What is crucial to understand is that from an historical perspective, the economic imperialism engineered by the United States was overwhelmingly the brain child of the liberal wing of the Democratic Party.

Bretton Woods

Hudson takes us back to 1945 when the United States was the most powerful creditor nation on earth, having lent billions to other nations during and after World War II. Today, the U.S. is the most powerful debtor nation on earth, and Super Imperialism describes and documents superbly how such a stunning reversal of economic positioning occurred.

Although corporations and centralized financial systems were the means by which economic imperialism was implemented, …it is not to the corporate sector that one must look to find the roots of modern international economic relations as much as to U.S. Government pressure on central banks and on multilateral organizations such as the IMF, World Bank, and World Trade Organization….At the root of this new form of imperialism is the exploitation of governments by a single government, that of the United States, via the central banks and multilateral control institutions of intergovernmental capital rather than via the activities of private corporations seeking profit. What has turned the older forms of imperialism into a super imperialism is that whereas prior to the 1960s the U.S. Government dominated international organizations by virtue of its preeminent creditor status, since that time it has done so by virtue of its debtor status. (23-24)

The genesis of this re-positioning was the International Monetary and Financial Conference of 1944 held in Bretton Woods, New Hampshire out of which was born the Bretton Woods System of “international monetary management for commercial and financial relations among the world’s industrial states.” It was there that the World Bank and International Monetary Fund were established, and as Hudson notes, “The U.S. economy was enabled to draw the finances of other governments into an international cartel directed by its own policy-makers, dominated by U.S. officials and their appointees.” (139)

As I have noted in my recent book U.S.HISTORY UNCENSORED: What Your High School Textbook Didn’t Tell You, the ultimate “cure” for the Great Depression was not the New Deal and its economic programs, but World War II, out of which the U.S. emerged not only as the most powerful nation militarily, but economically as well. A number of modern historians have speculated that one reason Franklin Roosevelt’s administration failed to intervene economically to undercut Hitler’s rise to power was Roosevelt’s ultimate dream: that the U.S. would emerge from war as the most powerful nation on earth economically and militarily, forever precluding, in Roosevelt’s mind, the possibility of another Great Depression. FDR’s dream was realized, making possible the economic supremacy of the United States during and subsequent to the Bretton Woods conference, without which the U.S. could never have achieved the commanding position it assumed at the momentous gathering of nations.

Hudson seems unable to overemphasize the auspiciousness of America’s post-war preeminence:

What occurred after World War II was nothing less than an inversion of the law of nations as it had been evolving for centuries, at least on the part of Europe if not that of the United States. The most basic principle of international law is that nations are equals with regard to their rights and policy-making autonomy. In addition to this legal principle is a basic behavioral law of diplomacy: in a world of nation-states it is unnatural for any nation to abrogate its international position voluntarily….Europe demurred from pressing its self-interest at any point where this conflicted with that of the United States. Exhausted by war, it voluntarily abrogated what had been more than four centuries of imperial ambitions. (265)

To American diplomats the United States simply was living up to its historic destiny as world leader when they formulated their plans for the postwar world at Bretton Woods. In their idealism they anticipated that the breakup of nationhood—at least on the part of foreign countries—would inaugurate a world economy of peaceful interdependence and perhaps even altruism. They did not ponder how alien this concept was to the basic principle of nationhood, that no nation can be expected to relinquish its independence with regard to economic policy-making. Nonetheless, American now asked, and received, European capitulation on every major point of postwar relations. (265)

Pegging international currency to the dollar, backed by the gold standard, the U.S. continued to exert economic supremacy throughout the Cold War era. Although the Bretton Woods system “officially” collapsed in 1971 when the U.S. suspended convertibility from dollars to gold, America’s economic dominance did not subside with abandonment of the gold standard.

In fact says Hudson, “The key to understanding today’s dollar standard is to see that it has the form of gold bullion. While applying creditor-oriented rules against Third World countries and other debtors, the IMF pursues a double standard with regard to the United States. It has established rules to monetize the deficits the United States runs up as the world’s leading debtor, above all by the U.S. government to foreign governments and their central banks.” (35)

Everyone got something as a result of Bretton Woods, but ultimately the cost was untenable. Europe received resources it could have never acquired otherwise and assistance in rebuilding after the World War II, but its war debts remained on the books. Developing nations, particularly the agriculturally backward ones, received resources as well, but the price they have paid has been nothing less than brutal. Hudson states that the United States “simply anticipated that these countries would increase their purchases of American farm products, which they could have produced for themselves if only they had set out to restructure their agricultural sectors.” (186) The World Bank and IMF were “protectionist” in the sense that they protected U.S. investors against foreign commercial nationalism. Any movement by developing countries toward industrial and agricultural self-sufficiency was halted and reversed, leading to increased impoverishment of developing countries since World War II. (187)

Throughout the book, Hudson is perhaps kinder than he should be. Although he does not use the term, what he is superbly describing and documenting in his book is economic warfare far more brutal and merciless than the limited-hangout offered by John Perkins’ Confessions Of An Economic Hit Man on which Catherine Austin Fitts comments:

In the process of providing a colorful account of a 1970s whodunit (complete with low tech strategies devoid of the dazzling technology toolkit that is now an essential part of the economic hit man's weaponry of economic warfare), Perkins delivers to readers the "big lie": he reveals the secret that there is no greater conspiracy. This is simply globalization run amok, he would have us believe. Somehow, this particular conspiracy theory seems charmingly credible as part of a "confession." Perkins admits to what is known and then uses the credibility created by his "limited hangout" to further obscure the reality of who's who in the real governance of global investment and risk management. We are to presume that the investment networks in and around the Harvard Corporation, the City of London, the Vatican and investment managers and bankers for the proceeds of transnational organized crime are simply good-hearted fellows who let things get out of hand.

What the United States never addressed in developing countries, and still is not addressing, are the oppressive and corrupt institutions of those nations that manage inequity in land distribution, tax structures, and the allocation of natural resources. One consequence of refusing to do so was “to draw population from the countryside to the cities in search of employment. But the growth of industrial hiring was insufficient to absorb this rural exodus.” (207)

In recent years, living as I do near the U.S./Mexican border, I have observed firsthand the myriad ways in which this destructive pattern plays out. Hundreds of thousands of dispossessed people from rural Mexico, particularly its southern regions, migrate to Mexican border towns where if they are fortunate, they find jobs in maquiladoras which are overwhelmingly owned and managed by U.S. corporations. Currently, many of these corporations are leaving Mexico and moving their operations to China or Southeast Asia where labor is even cheaper and tax loopholes even sweeter than they are in Mexico. As they do so, they leave behind environmental devastation and a large number of unemployed, dispossessed people who end up on the streets or make desperate attempts to enter the U.S. illegally. Saul Landau’s excellent documentary on these issues, “Maquila, A Tale Of Two Mexicos”, may be watched online.

When super-imperialism is fully understood, the “mystery” of illegal immigration will immediately be resolved. It is as if the international corporatocracy of world dominance functions like a giant broom sweeping the dispossessed into the United States where they are greeted by the domestic corporatocracy and further exploited as wage-slave laborers with all the accoutrements of “the good life, huaraches exchanged for vinyl sandals made in China and corn tortillas supplanted by “happy meals.” One can only wonder what this government’s policy will be when the dire consequences of Peak Oil and climate-chaos drought hit the fan. What then will be America’s border policy? Today, gorging itself on cheap labor, the corporatocracy sucks up taxpayer money to build meaningless border fences that it knows will not deter the illegal workers it needs, but when Walmarts have weeds growing in their parking lots and thousands of meat packing plants have shut down because only the very wealthy can afford to remain carnivorous, we will see how many new immigrants will be allowed to inhabit the U.S. and consume the last drops of its water and oil.

As a result of the mass exodus to cities, food prices have soared in numerous developing countries so that people who have relocated in cities are working primarily to get the money to buy the food they eat. Thus, says Hudson, the World Bank has been “pauperizing the countries it had been designed, in theory, to assist.” (208)

According to Hudson, “Freeing debtor, food-deficit countries from their yoke of obsolete political and social systems therefore must entail not only a re-education of U.S. strategists, but at some point direct political action by the developing countries to thwart their strategies. The ultimate action would be for these countries to withdraw from the World Bank, GATT, and the IMF altogether and to form a new set of development institutions run by themselves and in their own interests.” (209)

Increasingly, Latin American countries, whom Hudson asserts have been intentionally managed and contained by the World Bank and IMF in order to prevent their autonomous departure from the economic control and management of the U.S., are doing exactly what he prescribes. Venezuela has taken the lead in rejecting World Bank and IMF carrot and stick economics, and more recently, Ecuador and Bolivia have joined Hugo Chavez in working to create Latin American self-sufficiency apart from the control of the U.S. Just this week, Ecuadorian President, Rafael Correa banned a World Bank official from the nation. Currently, Ecuador, Argentina, and Brazil are discussing the creation of a Southern Bank, operated by and for Latin Americans, as an alternative to the World Bank.

The Power of Debt

Today, the United States, through the issuing of treasury bills and various forms of borrowing from other nations, has risen to the status of Planetary Debtor In Chief, and in stark contrast to its position of planetary creditor sixty years ago, it now rules the world economically. Hudson comments:

In sum, the United States is able to rule not through its position as world creditor, but as world debtor. Rather than being the world banker, it makes all other countries the lenders to itself. Thus rather than its debtor position being an element of weakness, America’s seeming weakness has become the foundation of the world’s monetary and financial system. To change this system in a way adverse to the United States would bring down the system’s creditors to America. (386)

But changing that system is indeed what America’s myriad creditors intend to do, and many are strategically working toward economic self-sufficiency in order to walk away from the stranglehold that the World Bank and the IMF have held on them for six decades.

Neoliberalism: The Offspring Of Liberalism

Overwhelmingly, Latin American nations and their leaders are rejecting neoliberalism and speak freely of doing so. One of the most informative and succinct primers on neoliberalism can be found at Corpwatch where Elizabeth Martinez and Arnoldo Garcia explain that:

"Liberalism" can refer to political, economic, or even religious ideas. In the U.S. political liberalism has been a strategy to prevent social conflict. It is presented to poor and working people as progressive compared to conservative or Rightwing. Economic liberalism is different. Conservative politicians who say they hate "liberals" -- meaning the political type -- have no real problem with economic liberalism, including neoliberalism.

"Neo" means we are talking about a new kind of liberalism. So what was the old kind? The liberal school of economics became famous in Europe when Adam Smith, an English economist, published a book in 1776 called THE WEALTH OF NATIONS. He and others advocated the abolition of government intervention in economic matters. No restrictions on manufacturing, no barriers to commerce, no tariffs, he said; free trade was the best way for a nation's economy to develop. Such ideas were "liberal" in the sense of no controls. This application of individualism encouraged "free" enterprise," "free" competition -- which came to mean, free for the capitalists to make huge profits as they wished.

It is extremely important to understand that the New Deal policies of Franklin Roosevelt which gave birth to the Bretton Woods system were engineered by Democrats, Cordell Hull and Harry Dexter White, the two principal architects of the system and two of the most powerful bureaucrats close to Roosevelt. Further left of center than Hull, White was an avid internationalist and was later accused during the McCarthy Era of being a member of the Communist Party.

During the Great Depression the New Deal unarguably brought economic relief to millions of Americans and their families who otherwise might have starved. It is also true that just as the so-called “reforms” of the Progressive Era under another President Roosevelt (Teddy), were legislated from a fundamental underpinning of social control, the essential intention of the New Deal’s framers was to ward off a revolution in the United States that, left unchecked, could easily have spiraled out of control, driving an increasingly desperate populace into the arms of Soviet-style Marxism.

Since the United States Civil War, reform in America has always been wedded to the principal assumptions of the capitalist economic system, namely, that corporate capitalism, the maintenance of order, and the passage of laws that enforce the predominance of the business class and contain the unruly have-nots, is preferable to any possible alternatives. To succinctly describe this, historian Gabriel Kolko in The Triumph Of Conservatism uses the term political capitalism to define a political system engineered to meet the needs and serve the interests of business. Of the Progressive movement he states that: “Progressivism was initially a movement for the political rationalization of business and industrial conditions, a movement that operated on the assumption that the general welfare of the community could be best served by satisfying the concrete needs of business. But the regulation itself was invariably controlled by leaders of the regulated industry, and directed toward ends they deemed acceptable or desirable.” (3)

The Bretton Woods system was yet another milestone of political capitalism in which, in the name of world peace and “stability”, the United States would dominate the world economically. As with domestic political capitalism, it was motivated by the necessity of restraining the influence of the Communist bloc and managing impoverished nations that were likely to align with it as a result of their fundamental survival needs. The engineers of that system were not ideological conservatives but liberal members of the Democratic Party.

Whereas the Bretton Woods system was constructed largely by New Deal liberals, the resultant policies of the IMF and World Bank have transmuted into the current neoliberal paradigm, bolstered by the Council on Foreign Relations (CFR) of which Harry Dexter White was a member, embracing an internationalist, globalist perspective which shares more than less in common with the neoconservative ideology of blatant geostrategic hegemony as typified by the Project For The New American Century (PNAC). Differences in rhetoric between the two organizations imply a divergence in policy, yet historical functioning reveals otherwise. The endgame of both is geopolitical dominance politically, economically, and militarily by the United States. Whereas the neoconservative agenda envisions an ever-expanding military to accomplish blatant conquest and subjugation of nations, the neoliberal vision would be realized by the dissolution of nation-states altogether under the economic administration of transnational corporations.

Thus, we should not be surprised by the close ties developed in recent years between the Bush family and the Clintons. The Bush crime family has multigenerational experience in waging super-imperialist economic warfare on the world and on American citizens, and it appears that the Clintons have become two of their most prodigious pupils—their “entrance examinations” being the creation of NAFTA and throwing masses of welfare-dependent individuals into “welfare to work” jobs on which no one in America could survive.

In the current political milieu, no candidate who is not committed to a policy of super-imperialism has the slightest chance of ascendancy to the Presidency of the United States. Echoing her CFR colleagues, Hillary Clinton states, “First, and most obviously, we must by word and deed renew internationalism for a new century.” And Barack Obama chimes in with, “Whether it’s global terrorism or pandemic disease, dramatic climate change or the proliferation of weapons of mass annihilation, the threats we face at the dawn of the 21st century can no longer be contained by borders and boundaries.”

I am not suggesting that the United States become an isolationist country in the sense that we have nothing to do with all of the other nations with whom we reside on planet earth. What I am declaring is that I support no leader who is unwilling to radically alter the super-imperialist trajectory on which the United States has traveled since World War II. Having said that, I am well aware that no one who would do so could ever be nominated, let alone elected President of the United States.

Inextricably tied to the super-imperialism project is the $4 trillion dollars stolen from the U.S. Treasury in the past decade, the unanswered questions regarding September 11, 2001, the USA Patriot Act, Peak Oil, the privatization of water and other resources, the cesspool of corruption surrounding government contracts in Iraq and Afghanistan, and the domination of U.S. money supply and fiscal policy by the Federal Reserve and other centralized financial systems.

Each of these issues is beyond the scope of any president or party to thoroughly remediate. Only one thing is absolutely certain regarding super-imperialism—its collapse. Whether collapse occurs suddenly or gradually, before, during, and after, there will be many opportunities for those of us residing in the belly of the beast to create new economic and social structures. The pivotal question is: Will we be prepared to do so?

Did I watch the Democratic candidates’ debate, April 26? No, I was sitting in a local movie theater watching the film “Shooter” which, in my opinion, rips the mask off the current political landscape and ventures into territory where no candidate anointed by the corporatocracy is willing to travel. “Shooter” is the real deal; presidential debates, yet another distracting soap opera. A line from that film now comes to mind, depicting the essence of super-imperialism: “There is no Sunni or Shia, no Democrat or Republican—only the have’s and have-not’s.”

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