Professional Documents
Culture Documents
Contents
I. Proof of Empire
II. Proof of Collapse
III. Rise of a New Economy
I. Proof of Empire
Military Empire
“War and imperialism are Siamese twins joined at the hip. Each thrives off the other.
They cannot be separated. Imperialism is the single-greatest cause of war, and war
is the midwife of new imperialist acquisitions.” Chalmers Johnson
While other nations realize it full well, Americans do not want to accept that the
United States dominates the world through military power. Due to the extreme
secrecy of the present administration, the American people are completely ignorant
of the fact that the United States “garrisons the globe.” There is a huge network of
military bases in more than 150 countries. It is called the new empire. It is the
American Empire. Our government employs more than half a million soldiers, spies,
technicians, teachers, dependents and civilians as well as civilian contractors all over
the world. In addition to officially listed bases, the US has numerous secret bases not
to be found on any government listing. Some of these bases are engaged in listening
to people all over the world, including American citizens – keeping track of what they
are saying, faxing and emailing.
This Empire began back in the 19th century, when the US declared Latin America as
being under its “sphere of influence,” and proceeded to enlarge its territory while
ignoring or slaughtering those who stood in the way; i.e., the indigenous peoples of
North, Central and South America. Today we have a similar group of imperialists in
power who, under the guise of the “war on terrorism” are expanding American bases
all over the world, particularly in Middle Eastern countries.
It was after World War II that America emerged as the richest nation and became a
natural successor of the British Empire, which floundered economically due to the
heavy costs of the war. The Cold War of the 1970s justified the US government
creating scores more bases, all to fight the communist threat. Government officials
of course denied that the bases indicated global imperialism.
In 1991 the Soviet Union collapsed and there was no need for the US to continue
maintaining bases in numerous countries. But, the US was too accustomed to
controlling other countries and had no intention of giving up their authority. Thus we
saw the continuation of various wars and so-called “humanitarian interventions” in
the Panama, the Persian Gulf, Somalia, Haiti, Bosnia, Colombia and Serbia. It was an
informal empire but quickly becoming formalized.(1) The attack on 9/11 caused
dangerous changes in the mindset of our political leaders, who decided that the US is
now equivalent to the Roman Empire, that it is no longer bound by international law
or the opinions of allied and other non-allied countries. While during the Clinton
years the nation had at least a semblance of multilateralism, now its actions became
completely unilateral, and completely arrogant. Thanks to the American mainstream
media, the common people knew nothing of its government and what it was doing in
foreign countries. The Patriot Act came and only a handful of politically conscious
people protested and continue to protest. The Patriot Act stripped Americans almost
entirely of the political liberties granted to them in the U.S. Constitution two
centuries ago. Earlier we were referred to as the lone superpower. But today, we are
called the American Empire. To question this, to voice dissent, is to question Bush’s
war on terrorism, which remains akin to treason. The media is completely complicit
in the building and maintaining of American Empire, using politically appropriate
vocabulary such as “collateral damage” (instead of “slaughtered innocent human
beings”), regime change (instead of “imperialist invasion and occupation”), “illegal
combatants” (meaning any civilian who does not tow the line of US occupation of
Iraq and any other country it chooses to attack) and “preventive war” (There is no
such thing as preventive war. Wars involve aggressive invasion by one country of
another country.) With these cosmeticized terms in hand, the American public
remains clueless about the crimes of our present government both outside and inside
its borders.
There are presently more than 725 American military bases located all over the
world. Generally these bases are established near oil pipelines, and its inhabitants
are there to protect those pipelines above all else. While the US has had bases in
places like Saudi Arabia, United Emirates and Qatar for several years, new ones have
been built in Kosovo, Kyrgyzstan and Uzbekistan. As Chalmers Johnson writes:
“Our militarized empire is a physical reality with a distinct way of life but it is also a
network of economic and political interests tied in a thousand different ways to
American corporations, universities, and communities but kept separate from what
passes for everyday life back in what has only recently come to be known as “the
homeland.” (2)
Our present administration has let it be known to other countries that it prefers to
deal with them through the use of threats, bullying or force instead of negotiations,
commerce or cultural interactions. Now the US deals with countries through military-
to-military confrontations instead of civilian relations. As Bush has mentioned in
several speeches, we need to be ready for preemptive action whenever necessary to
defend our liberty and defend our lives. Historian Arthur Schlesinger wrote after
9/11:
Roman democracy was also replaced by a dictatorship. The Romans eventually were
overwhelmed by the number of enemies they had created. Until the end, they
continued to claim that they represent the people of Rome. Yet then, as now,
empires do not give up their empires voluntarily. The US government justifies its
Empire in many ways: by claiming to spread American ‘market democracy’ via
globalization; by open warfare against Latin American drug cartels and indigenous
political reform movements; by isolation of ‘rogue states;’ and most of all today by
an endless ‘war on terrorism’ which gives it the ‘freedom’ to do anything, including
‘preventive intervention’ against anyone.
Hitherto there had always been some constitutional restraints on the US armed
forces. However, by 2002 these restraints vanished. The US no longer had a foreign
policy; it had a military empire. This empire comprises the vast number of
permanent naval bases, military airfields, army garrisons, espionage listening posts,
and strategic enclaves on every continent of the earth. (3) So America has, not an
empire of colonies (as in the British Empire) but an empire of military bases closely
interwoven with and supervised by the US military-industrial complex. The bases are
not there to fight wars. They are there as ‘pure manifestations of militarism and
imperialism.” (4)
The US military enters countries on the pretext of liberating Afghan women from
Islamic fundamentalists, or a natural disaster in the Philippines, or more recently
Aceh, Indonesia, or claiming to protect Bosnians, Kosavars or Iraqi Kurds from
campaigns of “ethnic cleansing.” But invariably what happens is that after the crisis is
over, the Americans do not leave. They remain in their new bases to strut around in
arrogance in their newly acquired territory. It is a short mental hop from imperialism
to racism as a way of life. As David Abernathy writes, people who have superior
power will quickly decide that their superiority extends also to intellect, morality and
civilization.
From war come armies. From armies come debts and taxes. Armies, debts and taxes
are the instruments for keeping many under the domination of a few. It was
Woodrow Wilson who developed the rhetoric of ‘exporting democracy’ to the rest of
the world, which is now used by today’s imperialists to justify their colonialist,
capitalist invasions.
“From the time of the Romans and the Han dynasty Chinese to the present, all
empires have had permanent military encampments, forts, or bases of some sort.
These were meant to garrison conquered territory, keeping restless populations
under control, and to serve as launching points for further imperial conquests. What
is most fascinating and curious about the developing American form of empire,
however, is that, in its modern phase, it is solely an empire of bases, not of
territories, and these bases now encircle the earth in a way that, despite centuries-
old dreams of global domination, would previously have been inconceivable.
“Yet, although our own nation is filled with military installations – there are 969
separate bases in the fifty states – ours has, oddly enough, never been a warrior
culture. Our people are largely not in uniform, nor (until the recent “war on
terrorism”) were military uniforms common in our cities and airports; our streets
seldom see a military parade; our concerts are rarely filled with martial music; and
yet ours is also a thoroughly militarized empire – though our model of a warrior
seems most likely to be a military bureaucrat. The modern American empire can only
be perceived, and understood, by a close look at our basing policies, the specific way
we garrison the earth. To trace the historical patterns of base acquisition and to
explore our basing systems worldwide is to reveal the sinews of what has until very
recently, for most Americans, been a largely hidden empire.”
“Two and a half years into the Bush administration, most of our allies had left us, our
military was overstretched, and no nation on earth doubted our willingness to employ
military power to solve any and all problems.”
Chalmers Johnson
Today the federal government can tap into our phone calls, faxes and email
transmissions if it wants. The federal government has also begun arresting and
imprisoning not only naturalized but also native-born citizens along with immigrants
without bringing charges against them. Essentially the government does what it
likes, and the president alone decides who is an “illegal belligerent” – another new
term of this administration which can mean anything Bush wants it to mean. All of
these actions are signs of a national security state – militarism.
Today the Department of Defense has given a new interpretation to federal law and
says that if any part of a university denies access to military recruiters, the entire
university will lose all federal funds forthwith.
In 1878 the Posse Comitatus Act was passed, in order to prevent the military from
ever again engaging in police activities without the consent of Congress or the
president. It means the standing army will not have any role in policing American
citizens in their own country. This distinction is nowhere today. Today the Pentagon is
in the domestic policy business. Thanks to the very nebulous, flexible term of
“terrorism,” the Pentagon today can do whatever it wants to American citizens. In
the summer of 2002, the Bush administration directed its lawyers to review the
Posse Comitatus Act and any other laws that could potentially restrict the Pentagon’s
ability to engage in domestic law enforcement. In 2003 the Bush administration
proceeded to tuck in an interesting proposal (within a broader intelligence
authorization bill) which gives the military as well as the CIA authority to require
Internet providers, credit card companies, libraries and many other organizations to
hand over all kinds of records on US citizens – including phone records, bank
transactions and email logs. Hitherto only the FBI could seek this information and
that too only with a judicial warrant. Hence in just four years we have witnessed the
transformation of the United States government from one following some semblance
of democracy to one in which the executive branch in collusion with the Pentagon are
operating more and more as a totalitarian democracy, including over its own citizens.
Enemies are portrayed as “both white and black-skinned but have one trait in
common – nearly all of them are unshaven.”
Another habit traditional for empires is to recruit foreigners to do the dirty work.
Replacing homeland soldiers with local cannon fodder is at the top of the list for
imperialist rulers. Setting one indigenous group against another indigenous group is
also traditional for maintaining empire, as if the two groups are fighting (witness
Sunnis and Shiites) it makes it easier for Empire to control them all and keep them
down where they belong. It is not American soldiers who guard military checkpoints
in Baghdad, but Nepalese gurkhas. Furthermore we have in Iraq today not
necessarily the US military in charge but rather numerous private military companies
who work hand in hand with the CIA and other intelligence agencies. It is the
privatization of the US armed forces. It is these private military companies that have
become indispensable to the military and who in fact keep the Empire running.
The total value of 725 recognized American military bases around the world is $118
billion. Of these, $38 billion are in Germany (with more than 47 bases) and $40
billion are in Japan – remnants from World War II, in the form of a secret enclave of
military airfields, submarine pens, intelligence facilities and CIA safe houses in
Okinawa). (9) Bases in South Korea account for $11.5 billion. The Pentagon did not
yet include in its financial calculations the new military bases springing up like
mushrooms all over the Middle East!
The high tech war and the fanatic attention to controlling mainstream media
coverage of the war are the latest signs of American-style militarism and imperialism
– or can we say, totalitarianism?
Economic Empire
“At the August 2002 world summit on sustainable development in Johannesburg, the
delegates wore badges asking, “What do we do about the United States?” Chalmers
Johnson
The new American Empire of bases is militarized and unilateral. Since the last three-
four years it has subverted commerce and globalization because militarism weakens
international law and reciprocal norms on which trade is based. In the age of
American militarism, globalization takes on a simple new definition, which is to force
(if necessary) all countries to open themselves up to American exploitation and
American-style capitalism. Libyan leader Muammad al Qaddhafi’s recent capitulation
right after the capture of Saddam Hussein is a stunning example.
WTO was created in 1995 and thereafter world trade expanded from $124 billion to
$10,772 billion. It worked well, so long as the trade balance favored the US, and so
long as the US could dictate the terms for trade so as to derive maximum benefit for
US corporations.
In the mid-1980s Japan had replaced the US as the world’s leading creditor nation
while America’s fiscal deficits and inability to cover the costs of imported goods
quickly turned it into the world’s largest debtor nation. For this reason, the
conservatives took action by reviving 19th-century capitalist fundamentalist theory,
which they dubbed ‘neoliberalism.’ It meant, withdrawing the state as far as possible
from economic participation; opening domestic markets to international trade and
foreign investment; privatizing investment in public utilities and natural resources;
ending protective labor laws; creating powerful domestic and international
safeguards for private property rights, including the famous “intellectual property
rights;” and carrying out conservative fiscal policies regardless of the impact on the
welfare of the common people. In academic circles the term ‘neoliberalism’ became
known as ‘neoclassical economics.’ In the public domain it was referred to as
‘globalization.’ It was a ‘gigantic repackaging’ of classical liberalism. Clinton actively
propagated globalization. George Bush promoted ‘Free Trade Area of the Americas” –
FTAA. The effect of these policies and regulations on third world countries was
devastating. As Peruvian ambassador to the WTO, Oswaldo de Rivero, said, “the cost
of the Soviet version of development was shortages and lack of freedom; today, that
of the neoliberal, capitalist variant is unemployment and social exclusion.” (10)
In countries where the leaders had no option but to obey the US and its imperialist
affiliates- the WTO, WB and IMF, where they began allowing ‘free’ trade, sell-offs of
public utilities, no controls over capital movements – the results in those countries
were a catastrophe.
The American people need to know that the World Bank and the International
Monetary Fund (IMF) are simply surrogates for the US Treasury. Both organizations
are located at 19th and H Streets, Northwest, in Washington, D.C. The voting rules of
both organizations guarantee that they can do nothing without the approval of the
secretary of the US Treasury.
The other cunning capitalist innovation carried out by the US was the system of fixed
exchange rates among the currencies of all capitalist nations. Every other financial
system was tied to the US dollar with an American guarantee that the dollars would
be exchanged for gold if requested. Of course, the gold has long since gone out the
window. Both Britain and the US were dedicated to the idea of a world economic
order maintained by “enlightened governments” – aka the US and Britain, of course.
It was Nixon who ended the gold standard and also the system of fixed exchange
rates. From then on, currencies of different countries could float their currencies,
whose values were set by demand in the international markets.
Since profits were huge and costs were low, American banks like Citicorp and Banker
Trust began to make huge, risky loans to Third World countries. In economics this is
called “moral hazard” – where bankers make outrageously irresponsible loans
without any risk of having to absorb the loss or make good the money they might
lose in the transaction. This was in the 1970s. By the end of the 1970s every country
in Africa was in debt up to its eyeballs. In 1982 the US government put the IMF and
the World Bank in charge of making loans to Third World countries, with the following
instructions: (1) Keep those poor debtor countries paying something so as to avoid
official defaults, and (2) squeeze as much money out of them as possible. (Sort of
like our credit card companies do to the ordinary citizens here in America!)
So what exactly does the World Bank do to Third World countries? It gives loans. But
there are conditions on the loans. To get the loan, the poor country must agree to
the imposition of drastic socioeconomic conditions which feed the neoliberal agenda
of transnational corporations. If the poor country does not agree to the terms of the
World Bank, the Bank refuses all loans, thus helping to destabilize its economy. If the
country still does not agree, then the World Bank will aid in setting up the country for
a coup d’etat, organized by the CIA. The case of Chile comes to mind, along with the
CIA-sponsored overthrow of democratically elected Salvador Allende and the CIA-
installation of Augusto Pinochet who proceeded to torture, ‘disappear’ and slaughter
thousands of his own citizens. In this manner, and under these threats by the World
Bank and IMF, impoverished Third World countries quickly came into line and thus,
by the late 1990s about 90 third world countries were getting “structurally adjusted”
by the World Bank and IMF.
What are these “structural adjustment” programs of the so-called benevolent World
Bank and IMF? In such a program, the IMF and WB require that the poor country in
question give foreigners (which translates to American multinational corporations)
free access to its economy. Further, the country is forced to reduce spending on
social programs such as health care and education, in order to divert that money to
repay their debt to the IMF/WB as well as foreign corporations. All subsidies to local
agriculture must be eliminated – making local agriculture economically nonviable.
Instead subsidies to agro-businesses growing crops for export are increased. The IMF
further demands that countries allow foreign investors to buy up any state-owned
enterprises they please – such as electric companies, power companies, telephone
and transportation companies, natural resources and energy companies – yes, that
would be the local oil companies.
And last but not least, the country must agree to maintain the convertibility of its
currency. In other words, it must not prohibit the exchange of its own money for the
money of another country. Maintaining free convertibility, regardless of the exchange
rate, makes speculation about the currency’s future value possible. So how does any
country benefit from such loans, with such draconian strings attached? It benefits in
no way at all. It never achieves any kind of economic recovery from the loans.
Instead it moves towards total economic collapse. It leaves governments of those
countries so weakened that they often decline into kleptocracies – governments
characterized by rampant greed and corruption! Cases in point would be the
bankruptcy of Mexico in 1995, followed by Thailand, South Korea and Indonesia in
1997; Brazil and Russia in 1998; the horrendous collapse of the Argentinian economy
in 2000, and Venezuela in 2002. These countries, in a state of near anarchy, continue
to be compelled to depend on blood-sucking American corporations for virtually all
their consumer needs. In the words of the great Filipino activist Walden Bello, IMF
and WB loans result in nothing but “failure, spectacular failure.” (13) In signing
papers with these two institutions, Bello said, they “signed away their right to
development.” (Again, it reminds one of the credit card companies in the US –
sucking the life force out of debtors with their 29 percent interest rates, and driving
millions of simple citizens, unable to calculate the extreme capitalist exploitation of
these banks, into bankruptcy!)
With clear proof of the unbounded destruction of the IMF and World Bank, the
catastrophic consequences on the little people struggling to climb out of abject
poverty, the question arises: Why do we need the World Bank, the World Trade
Organization (WTO), or the IMF? The WTO was created because the US found it
could be created, to use as a tool to make more money. The WTO’s two objectives
(on behalf of US corporations) was (1) to manage the growing trade rivalry between
western industrialized countries like the US, the EU and Japan; and (2) to make sure
that Third World countries could not use trade as a means to their own
industrialization – which would negatively affect the neoliberal global economic
structure, i.e., the cessation of incoming profits to US. Before the creation of the
WTO, agriculture was an independent entity in Third World countries. But with the
advent of WTO, both the EU and the US could force the Third World to open up new
markets (cash crops) for export. To succeed in this endeavor, the WTO had to first
put local farmers out of business – drive them into bankruptcy. Second, those local
farmers were to be replaced by giant agro-businesses.
As if this were not enough, the WTO introduced Trade-Related Intellectual Property
Rights – also known as TRIPS, which allowed American and other transnational
corporations to claim patents on indigenous products already used in Third World
countries for centuries. The neem tree in India is an example. The common people
have utilized the healing properties of its leaves and bark through the ages.
Suddenly, Indians were faced with demands that it could no longer be used locally,
as an American corporation now held the patent on this indigenous plant. Another
example is the case of RiceTec, Inc. of Alvin, Texas, who in 1997 patented a hybrid of
Indian basmati rice, which in fact has been grown in India for more than two
centuries. These are just two examples of medical and agricultural exploitation of
Third World countries by American corporations on the basis of laws incorporated into
the WTO – an entity serving capitalism and capitalists alone! The WTO is nothing but
a tool of American economic imperialism, controlled by rich nations who exploit and
oppress poor nations.
Globalization and the WTO started sinking into trouble with the Asian Tiger collapse
of 1997. This collapse, a direct result of neoliberalist policies of the US, caused the
overthrow of the Indonesian government when the IMF tried to impose draconian
reforms as a precondition for desperately needed loans. IMF policies began to
generate a deep-seated hatred of US, which spread across the East Asian continent.
Western powers tried to deflect this hatred, falsely claiming that the Asian countries
collapsed due to internal corruption. According to New York Times columnist Thomas
Friedman, globalization is the inescapable reality – and globalization has no name.
But in Seattle, Washington in 1999, outraged NGOs fighting for justice found some
names to match the crimes – the names of IMF and World Bank officials responsible
for creating the policies that wreaked economic havoc on Third World countries!
These good people unmasked the imperialist, expansionist motives of the IMF, the
World Bank and the WTO. They exposed how IMF voting rules are rigged to favor the
rich countries. Only the US has the power to elect the president of the World Bank.
By 2002 anti-globalization movements had spread around the world, doing their
utmost to expose the exploitation of these capitalist institutions. As a result of the
protests, the IMF changed the name of its program from “structural adjustment
policies” to the new name of “poverty reduction and growth facility.” They are
meaningless, hypocritical words invented to hoodwink the simple masses who have
unbounded suffering and who do not understand the cause of their suffering or who
creates all their torture.
When Argentina went belly under in 2000, the IMF agreed to help it with the same
draconian stipulations: fire large numbers of government workers, cut pensions,
reduce wages, and eliminate fringe benefits. The IMF gave loans telling the
government to keep squeezing the poorest sections of the society so as to be able to
repay the loans. No government could realistically meet the demands of the IMF.
Those demands were the embodiment of cruelty, of torture, to the little people in the
country. Finally the IMF refused to give more loans and Argentina collapsed through
the floor – all thanks to neoliberalism, globalization and the IMF.
How has globalization changed since the year 2000? After 9/11, globalization was
gradually replaced by munitions and war profiteering. There is no way for capitalists
to make more money than to take a country to war and to get into the munitions
business. The military-industrial complex and the Pentagon play a huge role in this
kind of economy. However, arms manufacturing does not follow the rules of
globalization. Normally there is one customer (the government) and it is not subject
to market discipline. Risks of profit and loss are not taken into consideration. Hence,
making and selling munitions is not an example of “free enterprise.” Rather it is state
socialism. (14) While “industrial policy” is outlawed by the WTO, there is one glaring
exception – that is the production and sale of weapons. So even while IMF imposes
severe restrictions on a country in spending on health care or pensions for its
common citizens, it will allow the same country to purchase unlimited number of
weapons from – you guessed it – American munitions corporations. An example is
when in October 2002 Columbia was about to purchase 40 Super Tucano light attack
aircraft from Embraer of Sao Paulo, Brazil’s biggest exporter, for $234 million.
Instead, General James T. Hill, head of the US Southern Command, wrote to Bogota
saying that purchasing from Brazil would have a negative effect on support for future
military aid to Columbia. General Hill instead suggested that Columbia buy C-130
airplanes from Lockheed Martin in Georgia. (15) Columbia dropped the deal with
Brazil and coalesced with the US. Did it have any choice? However, with the election
of Luis Lula da Silva, also in October 2002, the days of bending to US exploitation
and arm-twisting may be over.
As Andre Gunder Frank says, the Pentagon is the world’s largest planned economy,
with their goal being to redistribute income from poor to rich at home and abroad to
blackmail friend and foe to do the same. Rumsfeld has completely privatized the war
in Iraq. Hence the military-industrial complex is alive and kicking under the joint
stewardship of Rumsfeld and Cheney. Between 1994 and mid-2003 the Pentagon
made over 3,000 contracts valued at more than $300 billion. More than 2,700 of
those contracts were given to just two companies: Kellogg Brown and Root (KBR),
subsidiary of Cheney’s Halliburton, and to Booz Allen Hamilton. The result is called
private military companies – PMCs. The number of mercenaries employed by PMCs is
greater than that employed by the US and British military combined. (16)
Environmental Degradation
According to Kirkpatrick Sale, it is in the nature of all empires to one day collapse.
He provides four indicators. The first is environmental degradation. Empires
invariably die because they have completely destroyed their environment – the land,
the waters, the very air they breathe. In their ruthless desire to conquer and control,
to make money, they ravage the land and poison the waters. We have all the
indicators today of mounting ecological devastation. More than 15,000 species are
threatened with extinction. Global warming is occurring far faster than atmospheric
scientists ever imagined, due directly to carbon dioxide emissions of factories owned
by greedy capitalists who do not care what happens to the environment or whether
there is global climate change later on. They care about today, and about today’s
profits. So in the name of exploitation for capitalist profit, we have widespread
slaughter of forests around the world. We have pollution of freshwater resources -
which comprise just two percent of the earth’s total water – it is a very small amount
to nourish 6 billion people.
In America’s new wars (Kosovo, Afghanistan and Iraq) we have depleted uranium
dust being used in a reckless, devil-may-care manner in such large amounts that it is
already killing not just the so-called ‘enemy combatants’ but also American soldiers
by the thousands. The dust is being picked up and carried by winds around the
world, and will gradually cause thousands more deaths of civilians who will never
know what hit them. This is again in the name of capitalist profit – the horrific drive
on the part of American corporations to take over Iraq – to get their oil, to patent
their indigenous seeds, to steal their gold, silver and other minerals. In other words,
due to the insatiable greed of capitalists, of corporate owners, the earth is being
destroyed. We are losing our ecological equipoise. Without ecological equipoise,
human beings will not be able to sustain themselves. A Department of Defense
report in 2004 predicts abrupt climate changes within the next ten years leading to
‘catastrophic’ water shortages, wars over fast dwindling water and energy resources.
In addition there is vast erosion of top soils and beaches, overfishing, global
deforestation, freshwater and aquifer depletion, soil salinization, depletion of oil and
minerals, melting ice caps and glaciers and rising sea levels, which threaten to
inundate New York, Boston, New Orleans and many other coastal cities around the
globe..
Economic Meltdown
Today the US is devoting more and more of its manufacturing assets to arms and
munitions. Simultaneously it is becoming increasingly dependent on foreign imports
for the basic necessities required by its citizens. In 2002 the US had a record trade
deficit of $435.2 billion, and a near zero savings rate. As William Greider says, the
US government, instead of facing its debts in a rational manner, continues to lecture
its debtors with full arrogance and pomposity. He says that “… American leadership
has … become increasingly delusional … I mean that literally – and blind to the
adverse balance of power accumulating against it.” (17) What Mr. Bush and cohorts
fail to realize is that if they only want to engage in military unilateralism, they fail to
see the collateral damage it is causing to international trade. International trade
depends upon mutually beneficial relationships between people in order to function
nicely. By adopting a stance of unilateral military imperialism, other countries are not
happy, and they are showing this displeasure by deciding not to invest in American
goods and services. They are taking their business elsewhere – to China, for
example. So while globalization has been devastating for the poor and neglected
humanity, the new American militarism and imperialism will conceivably usher in a
far worse scenario, affecting first and third world countries alike.
The US economy is built on a very fragile system wherein the world produces and the
US consumes. US manufacturing at the end of 2004 was a mere 13 percent of GDP.
Presently US has a $630 billion trade deficit with the rest of the world. In order to
pay for that deficit, an inflow of cash is required to the tune of $1 billion every day.
This is not happening. And this kind of excess is simply not sustainable over the long
run. In addition the US has a $500 billion Federal budget deficit as part of a total
national debt of $7.4 trillion as of Fall 2004. Then there is the military cost of one
war after the other – first Afghanistan, then Iraq and soon Iran. It is costing more
than $530 billion annually, without counting billions spent in covert operations never
recorded by the Department of Defense. These figures are also not sustainable. The
dollar has lost value everywhere. Since 2000 it has lost nearly 40 percent value
against the Euro, and countries are beginning to raise their eyebrows. If the dollar
value declines much further, it will be more than raised eyebrows, as one by one
countries shift their financial operations to the Euro. According to Kirkpatrick Sale,
China may well let the yuan float against the dollar, which will render the US
bankrupt and powerless to control its own economic life, let alone foreign economies.
China’s growth rate is welcomed. However, the US and Japan fear the now obvious
shifting of power from west to east, and specifically from the US to China. Because of
this fear, the US as well as Japan take every opportunity to insult and upset China,
particularly with regard to the status of Taiwan. As William Greider noted: “Any
profligate debtor who insults his banker is unwise, to put it mildly…” (19) For
example, if China gets tired of Bush-bullying and decides to shift some or all of its
foreign exchange from the dollar to the euro, this would produce “the mother of all
financial crises,” and the US would crash overnight, practically. Meanwhile, it is
exciting to note the new bonds of trade taking place between China and Latin
American countries, as well as Iran. China is beginning to replace the US as the
major trading partner for these countries, leading to a situation of multipolarity – the
preference for different, competing power centers rather than the ‘unipolarity’ of the
US as a single superpower. Multipolarity is no longer a goal for the Third World. It is
the reality! China is now close to the European Union, Latin American countries, Iran,
and the Association of Southeast Asian Nations (ASEAN), which comprise the ten
countries of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines,
Singapore, Thailand and Vietnam. The US was not invited to their recent joint
meeting in Vientiane to discuss the forthcoming East Asian Summit in November,
2005. China has signed important trade agreements with Argentina, Bolivia, Chile
and Cuba, while Hugo Chavez of Venezuela paid a recent visit to China and offered
China wide-ranging access to his country’s oil reserves. China will be investing $350
million to extract oil and another $60 million in natural gas reserves, in Venezuela.
(20)
In his recent article, “Is America Going Broke?” Steve Maich talks to David Walker.
Walker is the comptroller general of the United States. He is an accountant, and he is
the head auditor for the most powerful government in the world. According to Maich,
Walker is trying hard to get a message out to anyone who will listen. He says that
the US public finances are in a shambles, and getting worse. If something is not
done soon, the world is going to face an “economic shakeup unlike anything ever
seen before.” (21) Walker mentions the $43-trillion hole in America’s public finances
that’s increasing daily. He says that Americans have no idea what they’re in for
economically because they were born into relative affluence and have never known
hard times. This is why the people are not believing him and not listening to him.
Walker says that the present American lifestyles have been bought on credit, and
very soon people will have to pay up, and there will be drastic consequences if they
do not. Those consequences will spill beyond American borders over to Canada,
which is so tightly interwoven with the US in terms of trade. No region or industry
would be untouched by the financial shock Walker expects to occur in America.
As of February, 2005, the US national debt was $7.7 trillion. By the end of this year
another record deficit of $427 billion is expected. These numbers still do not capture
the real financial hole that the country is in. The Middle East wars will require
another $80 billion. Social Security revamping will cost $2 trillion if implemented.
Our government has reneged and defaulted on nearly 40 percent of its trillion-dollar
foreign debt, and nobody in America seems to mind! The value of the dollar is down
now nearly 40 percent – from 80 cents to the euro to 133 cents today. It is quite
likely that the dollar will hit rock bottom - zip in value. The same scenario happened
in the 1930s. Because China and other East Asian countries have their money
pegged to the dollar, so as the dollar slides in value, those countries are also losing a
lot of money. The question is, when will they get fed up and pull out of the dollar -
begin dumping the dollars they have? China is giving away hundreds of billions of
dollars worth of real goods produced in China and consumed by the US, and receives
paper dollar bills, then turns around and buys American Treasury bills – more
worthless money! The US government has a domestic debt that is nearly 100% of
GDP and consumption. (22) The federal debt is right now $7.5 trillion. The US has
also arranged to earn 9 percent interest on all economic and financial holdings in
other countries, while foreigners earn only 3 percent on their holdings. This
arrangement brings in a lot of extra money for Uncle Sam. According to Andre Frank,
the problem is that the US government saves no more than 2 percent of its income.
The wealthiest 20 percent of Americans save no more than 2 percent. This is
counterbalanced by deficit spending of 6 percent. Hence, the government maintains
a $600 billion dollar plus deficit while itself living off the fat of the rest of the world –
of countries generally called poor countries! US is getting annually more than $100
billion from European central banks, more than $100 billion from China, $140 billion
from super-saver Japan, and tens of billions from many other countries around the
world. For how many years now has the IMF been lending money to third world
countries - more than they could possibly afford to repay – and then simply taken
over their economies? As John Perkins writes in his latest book Confessions of an
Economic Hit Man:
“our job is to build up the American empire… to create situations where as many
resources as possible flow into this country, to our corporations, and our government
and in fact we’ve been very successful. We’ve built the largest empire in the history
of the world… primarily through economic manipulation, through cheating, through
fraud, through seducing people into our way of life… my real job was deal-making. It
was giving loans to other countries, huge loans, much bigger than they cold possibly
repay…. Let’s say [to] Indonesia or Ecuador – and this country would then have to
give 90% of that loan back to a US company, or US companies… a Halliburton or a
Bechtel … a country today like Ecuador owes over 50% of tis national budget just to
pay down its debt. And it really can’t do it. So we literally have them over a barrel.
So when we want more oil, we go to Ecuador and say, ‘Look, you’re not able to repay
your debts, therefore give your oil companies your Amazon rain [forests], which are
filled with oil.’ And today we’re going in and destroying Amazonian rain forests,
forcing Ecuador to give them to us because they’ve accumulated all this debt … [We
work] very closely with the World Bank. The World Bank provides most of the money
that’s used by economic hit men, it and the IMF.”
Whenever any country does not fall in line with the World Bank, and IMF and their
representatives – the economic hit men – then it is time for what Perkins calls “the
jackals.”
“Jackals are CIA-sanctioned people that come in and try to foment a coup or
revolution. If that doesn’t work, they perform assassinations. Or try to. In the case
of Iraq, they weren’t able to get through to Saddam Hussein. He had – his
bodyguards were too good. He had doubles…. So the third line of defense is our
young men and women, who are sent in to die and kill, which is what we’ve
obviously done in Iraq.” (23)
Military Overstretch
Earlier we talked about how the American empire is represented by bases all over
the globe. However, they are only bases. They are not occupying armies that can
conquer the country in question. The reality is that the US army is not able to
conquer even one nation – Iraq – despite all its high-tech military equipment and
long-distance weapons systems. The US government, in its arrogance, had no idea of
the mindset of the Arab people. The Arabs will never lie down and say, please stomp
on us, please occupy our country, and please help yourselves to our oil. No, even if
they have to fight with their sandals and their bare fists, the Arabs will never allow
themselves to be occupied by a foreign invader. The history of British occupation of
Iraq is proof of the mindset of Iraqis as regards occupation. If not today, then
tomorrow the people of Iraq will drive out the US invaders and send them packing. It
is a question of time. The US military has bases in more than 150 countries, but it
cannot control or contain those countries if there is rebellion by the local citizens.
It was not US military power but US arrogance that caused people in Washington to
create so many bases. The US is not going to win any war now or in future because
it does not have the military capacity to do so. Countries like Iran, China, Venezuela
and other South American countries are purchasing state-of-the-art weapons and
planes from Russia and other countries, and are making themselves strong. They are
prepared to fight and conquer the sagging American empire! As more and more
countries refuse to coalesce to the “structural adjustment” policies meted out by the
IMF on behalf of its blood-sucking, capitalist controllers, they will resist not only US
economic hegemony but US military hegemony. With China growing exponentially in
power both economically and militarily, and engaging in trade negotiations around
the world – including South America and the Middle East – it is reaching the point
where the world simply does not need America any longer. Soon we may see an East
Asian currency – perhaps a mix of ASEAN countries plus China, Japan, South Korea
and even India. The US is becoming more and more dispensable in the eyes of the
world. On December 11-17, 2004 The Economist reported on the previous week’s
summit of ASEAN plus three in Malaysia, where the Malaysian prime minister
declared that this ASEAN summit will now lay the groundwork for an East Asian
Community (EAC), which will “build a free-trade area, cooperate on finance, and sign
a security pact… that would transform East Asia into a cohesive economic block … In
fact, some of these schemes are already in motion… China, as the region’s pre-
eminent economic and military power, will doubtless dominate … and host the second
East Asia Summit.” The article mentions how in 1990 the US sabotaged a similar
initiative so they would not lose their influence in the region. But today, the word is,
“Yankee stay home!” Empire is now dispensable, and hence it is no longer an Empire!
Another very likely scenario is that Asian countries will simply decide to stop buying
oil in dollars and will switch over to the mix of Asian currencies or the euro. In one
stroke this would wipe out demand for the US dollar and send US economy crashing
into netherland. It would start a chain reaction, with domestic holders of dollars
selling them off lickety split, along with the central banks of countries around the
world doing the same. As Frank writes, “Since selling oil for falling dollars instead of
rising euros is evidently bad business, the world’s largest exporters in Russia and
OPEC have been considering doing just that.” (24) The bottom line is, the US is a
dispensable item in our world today.
Domestic Dissent
According to Sale, empires make their final collapse when dissent from within goes
out of control, when public outrage at home becomes unmanageable. Presently the
level of dissent in the US has not reached that stage. Life is still too easy, with too
many Americans having homes, food, cars, and jobs. However, these statistics are
changing rapidly – despite all mainstream media claims to the contrary. In addition,
even with relatively small dissent, the Bush administration is becoming more and
more repressive, and publicly linking any kind of dissent to ‘terrorism’ and ‘terrorists.’
Along with repression of those who dare to speak out is the calculated program to
dumb down the American masses via crude, low-grade entertainment, glamorized
sports, television programs aimed at 13-year-olds with careful avoidance of all the
real issues plaguing Americans such as no health care, no jobs, no pensions. In place
of talking about real issues which are worrying Americans every day – such as their
credit card debt and inability to make ends meet without incurring that debt – the
Bush administration pays hundreds of thousands of dollars to TV commentators to
push its agenda – be it social security elimination as we know it or Medicare and
Medicaid elimination. Presently Bush propaganda is cloaked in a veil of religious
fundamentalism. And while it is fooling the people today, there is only so long that
the people can be fooled by religious rhetoric if they cannot pay their heating bill that
month! Perhaps things need to get worse before Americans begin to organize and
demand their fundamental, constitutional rights.
This author says, things are going to get much worse fast – maybe in just two or
three years. In his new book, Collapse, Jared Diamond says that the traditional
values which sustained America for the past 200 years are simply not going to work
anymore, and Americans will have to change their mindset and adopt new, more
selfless values. Americans celebrated capitalism, but capitalism is not working
anymore, and it is time to develop a new economic model. Americans celebrated
individualism, but there is too much individual suffering. Individualism needs to be
replaced by thinking for the collective welfare. We need to feel the pain of our
brothers and sisters without health care, without pension, without job, and without a
home due to bankruptcy. The value of nationalism is outdated and completely racist
and isolationist. It is time to replace nationalism with the concept of universalism –
the idea that all people are brothers and sisters, free to move and settle anywhere
on this earth without restrictions. Universalism means, we are one human family and
one human culture. We are not to make racist distinctions based on external
appearances and differences in language or dress. If Americans begin to make
fundamental changes in their thinking and thereafter in their lifestyles, the economic
collapse can conceivably be avoided. But Sale says that they won’t make these
changes in time. It means that collapse of Empire is inevitable.
Economic planning should take place at the central, regional, and district levels. But,
for the most part, planning authority should reside at the local level. The most basic
unit of planning is the district. District boundaries should not be determined on the
basis of political considerations, but on the basis of geographic factors, socio-
economic requirements, common economic problems, and common aspirations of the
people.
If planning is undertaken at the district level, it means that planners will better
understand the major and minor problems of the area; local leaders can solve
problems according to their own priorities; planning will be more practical and more
readily implemented; local organizations can play an active role in mobilizing human
and material resources; and most important, unemployment can be more easily
prevented.
When planning at the district level, the following guidelines can be observed. The
unit costs of production (including spillover/environmental costs) should be carefully
determined, and the cost of producing a particular commodity should not exceed its
market value. Every economic enterprise must be economically viable, and without
need of state subsidy. A major objective of planning must be to increase people’s
purchasing capacity. Hence there must be: (1) availability of commodities according
to local demand, (2) stable prices, (3) periodic increases in wages, and (4) steady
increase in collective assets (such as roads, energy generation systems, and
communications infrastructure).
The economy should be organized such that it has the capacity to continuously
increase its productivity. There should be maximum production according to the
collective need, and full utilization of the productive units. Money should be properly
invested, and not hoarded or squandered in unproductive ways. No economic
development project should be undertaken which decreases the productive capacity
of the environment or the vitality of local ecosystems.
To avoid trade deficits and the loss of currency, interregional and international
commerce should be conducted on a barter basis where possible. Locally produced
basic commodities should be protected from competition with cheaper goods
produced in other countries. To protect local employment opportunities, international
and interregional trade in raw materials should be avoided, and only finished
products should be sold outside a region. Regional economies should be largely self-
sufficient in the production of basic commodities. Except for commodities protected
from foreign competition, there should be free trade.
Workers must have the right to organize independent trade unions, and control of
the unions must remain with workers, not with political party interests. Unions
should give as much importance to making workers conscious of their responsibilities
as they do to protecting their interests. In small and medium-sized cooperatives,
there will be less need for worker representation by organized trade unions, as these
are worker-managed businesses. But in large cooperatives, key industries, public
service institutions, and government administration, unionization should be
encouraged. In large cooperatives, unions will serve the interests of workers as
workers, rather than their interests as worker-owners.
We need to climb out of these two economic boxes – one called capitalism and the
other called communism – and step outside into the fresh open air of new visions of
economic and social understandings that will bring real benefit to the people. We
need to spread these visions across continents and oceans and create huge
international networks so that the global population moves together to implement
these visions! As one global population fighting for moral economic justice, we can
fight the WTO, the World Bank and the IMF, defy their so-called laws, and if
necessary be ready to go to prison during that fight! We must speak out in protest in
order to end the economic domination of these capitalist institutions. The Battle of
Seattle was the first step, when more than 1600 organizations from 90 countries on
every continent came to protest trade liberalization. They understood the suffering
that WTO leaves in its wake! We need to create a massive global second step –
leaving a footprint so deep that it cannot be removed. We need to bring the WB and
IMF to their knees! This protest movement will have to be both an economic protest
as well as a political protest against trade liberalization and those political leaders
who greedily push neoliberalism onto third world countries knowing full well that they
alone and not those countries will benefit monetarily. Using only the Internet, in
1998 a gigantic coalition of protestors brought enough pressure to bear so as to kill
the OECD’s MAI. We need to do this again and again, this time specifically targeting
the World Bank and IMF. We need to declare the complete illegality of all laws passed
by these institutions, saying their laws do not represent the people of the world, and
are hence invalid! We need to demand that the only laws acceptable to the global
population are laws created and approved by that population. Those laws will have to
do with an alternative, humane and sustainable international system of trade and
investment relations. To be rid of unemployment and to rebuild healthy, sustainable
societies, we need to take back our local economies. We need to support all-round
localization! (28) If we can control our own regional economies, orient them towards
serving the basic needs of the people, then the local people will have jobs and will be
protected from any future unemployment. We will go back to small, locally-owned
enterprises (maximum 5-8 employees) and cooperatives. No more mammoth
corporations wherein the benefits of productive assets go to a handful of rich alone
with nothing for the masses! Capitalism devours everything in its wake – people,
communities, ecology – it becomes a cancer in the society. Margaret Thatcher said,
“TINA – There is No Alternative.” Colin Hines along with this author declare today:
“TIAA! There is an Alternative!” The great Ralph Nader says, it is now time to fight
the good fight - to engage in civil disobedience and mass resistance at every rung of
the ladder because, in the words of esteemed economist and lover of humanity,
Prabhat Ranjan Sarkar,
“There is only one way to stop economic exploitation and alleviate the plight of the
common people, and that is to implement a policy of decentralized economy in all
the sectors of the economy. Successful planning can never be done by sitting in an
air-conditioned office thousands of miles away from the place where planning is to be
undertaken. Centralized economy can never solve the economic problems of remote
villages. Economic planning must start from the lowest level, where the experience,
expertise and knowledge of the local people can be harnessed for the benefit of the
members of a socio-economic unit. All types of economic problems can be solved
only when economic structures are built on the basis of decentralized economy.”
“Prout is the panacea for the integrated process of human society. It aims to bring
about equilibrium and equipoise in all aspects of socio-economic life through totally
restructuring economics. Without PROUT, socio-economic emancipation will remain a
utopian dream. Only PROUT can save the world from [economic] depression …. We
are near the last stage of the capitalist era. If an impact is created, it will help the
suffering humanity. It is the most opportune moment for creating an all-round
revolution!” (29)
Notes
1 Chalmers Johnson, Sorrows of Empire,New York, Metropolitan Books / Henry Holt
and Company, 2004.
2 Ibid, p. 5
3 Ibid, p. 23.
4 Ibid.
5 Ibid, p. 58
6 Ibid, p. 60.
7 Ibid, p. 74.
8 Ibid, p. 81.
9 Ibid, p. 199
10 Ibid, p. 261.
11 Ibid, p. 262.
12 Ibid, p. 262
13 Ibid, p. 268
14 Ibid, p. 277
15 Ibid, p. 280
16 Andre Gunder Frank, “Geopolitical Catch 22: Uncle Sam’s Paper Tiger Dollar,” at
Center for Research on Globalization, www.globalresearch.ca, 18 January 2005.
17 Chalmers Johnson, Sorrows of Empire, p. 281
18 Chalmers Johnson, “No Longer the ‘Lone’ Superpower: Coming to Terms with
China,” in JPRI: Japan Policy Research Institute, Working Paper No. 105 (March
2005).
19 Ibid.
20 Ibid.
21 Steve Maich, “Is America Going Broke?” in Macleans-Canada.
http://www.macleans.ca/topstories/world/article.jsp?content-
20050307_101541_101541
22 Andre Gunder Frank, “America’s Spiraling External Debt and the Decline of the US
Dollar,” at Center for Research on Globalizatoin, www.globalresearch.ca, January 12,
2005.
23 Ibid.
24 Ibid.
25 Trond Overland, “Beyond Collectivism and Individualism: Structural Features of
the Prout Economy,” at Prout World:
http://proutworld.org/ideology/statepriv/structfeat.htm.
26 Garda Ghista, “Economic Consequences of Iraq Occupation,” at World Prout
Assembly: http://www.worldproutassembly.org/archives/
2005/05/economic_conseq_1.html
27 Ibid.
28 Colin Hines, Localization: A Global Manifesto, London: Earthscan Publications Ltd.
2000, p. 239.
29 Shrii Prabhat Ranjan Sarkar, Proutist Economics, Kolkata: Ananda Marga
Publications, 1992, p. 98-99.