An Excerpt from
A Game As Old As Empire
A Game As Old As Empire
By Steven Hiatt
A never-ending accumulation of property must be based on a never ending accumulation of power. —Hannah Arendt
In June 2003, after declaring “Mission accomplished!” in the wake of Operation Iraqi Freedom, George W. Bush told cheering West Point cadets that America has “no territorial ambitions. We don’t seek an empire.” Meanwhile, neoconservative pundits like Niall Ferguson and Charles Krauthammer were encouraging him to do precisely that: to “make the transition from informal
to formal empire,” by acknowledging America’s actual role in the world and accepting the reality that “political globalization is a fancy word for imperialism.” Had the post-postwar world—the new order emerging since the Berlin Wall came down in 1989—come full circle to a new Age of Empire? The victory of the Allies in 1945, confirming the right of peoples to self-determination
in their Atlantic Charter declaration, seemed to signal the end for the world’s colonial empires. Colonial peoples in Asia, Africa, and the Middle East had seen the armies of Britain, France, and the Netherlands defeated in 1940–41, and knew that the former imperial powers now had neither the military nor the financial resources to enforce their rule for long. Moreover, the two strongest powers, the U.S. and the Soviet Union, were formally on the anti-imperialist side. The U.S. had long pursued an “open door” policy advocating formal independence for developing countries. The Soviet Union had denounced imperialism since its birth in 1917, and the communist movement it led had wide appeal in parts of the colonial world as a result. Nevertheless, the European colonial powers tried to hang on to their possessions as long as they could. Britain did finally “quit India” in 1947, but fought insurgents in Kenya, Cypress, and Malaya before granting those countries independence.
France fought losing, divisive wars in Indochina and Algeria to retain its bit of imperial gloire. Still, the tide of history was clearly running in favor of self-determination around the world. The quandary for Western elites was how to manage this process. Would new Third World leaders attempt to strike out on their own, taking control of their countries’ resources in order to build their own national industries? Or—worse—would they ally with the Soviet bloc or would nationalist campaigns prepare the way for takeovers by communist parties?
For Western Europeans, loss of access to colonial resources and markets would be an enormous blow: their weakened economies were only slowly recovering from World War II and they planned to force the colonies to help pay for reconstruction. For its part, the U.S. feared that colonial independence would weaken its European allies and might well lead to the expansion of Soviet influence in Europe. And U.S. business leaders were concerned about a postwar return to the depression that had marked the 1930s, so they were eager to preserve access to resources and possible new markets.
Events in Iran, Guatemala, and Egypt in the 1950s marked a new turn in Western policies in what was becoming known as the Third World. In 1951, Iranian Prime Minister Mohammad Mossadegh nationalized the country’s oil industry, which had been run by the Anglo-Iranian Oil Company (since renamed British Petroleum). A democratically elected nationalist, Mossadegh (Time’s Man of the Year for 1951) not surprisingly resented the fact that 92 percent of the profits from Iranian oil went to AIOC, a longstanding arrangement reflecting British domination of Persia early in the century. Winston Churchill had recently returned for a second term as prime minister, and he was determined to restore the UK’s finances and prestige in the face of this challenge from a newly assertive client state. Churchill ordered a blockade of the Persian Gulf to prevent Iran from exporting oil to other purchasers, and he was joined in a boycott of Iranian trade by the United States. More muscular action was not possible, however: the Korean War absorbed the attention of the U.S. and Britain, and Soviet intervention in support of Iran was a threat. A more subtle approach was needed, and the CIA devised Operation Ajax, directed by Kermit Roosevelt. The first step was to create political turmoil to undermine Mossadegh’s political support: a CIA disinformation campaign worked overtime spreading rumors designed to split secular democrats from Islamic nationalists. Finally, the military made its move in August 1953, and Mossadegh was arrested, a new prime minister was appointed, the Shah was restored to power, and the oil industry was denationalized. The US did demand a price for its help, however: British Petroleum now had to share its access to Iranian oilfields with several U.S. companies. U.S. military and foreign policy leaders were cheered by the success of their plan, recovering Iran at a low cost politically, militarily, and financially. Guatemala was the next test case for this indirect method of policing empire. In May 1952, President Jacobo Arbenz announced a land reform program that would have nationalized unused land belonging to landlords and, especially the holdings of Boston’s United Fruit Company, the Country’s largest landowner. His inspiration was Abraham Lincoln’s Homestead Act of 1862, with Arbenz hoping to enable peasants and rural laborers to become independent small farmers. But apparently Lincoln was too radical for the Eisenhower administration, especially with Secretary of State John Foster Dulles and CIA Director Alan Dulles sitting on United Fruit’s Board of Directors.
Kermit Roosevelt described Alan Dulles’s reaction to plans for the CIA’s Operation PB Success: “He seemed almost alarmingly enthusiastic. His eyes were glistening; he seemed to be purring like a giant cat. Clearly he was not only enjoying what he was hearing, but my instincts told me that he was planning as well.”2 Arbenz was overthrown in a coup in June 1954; some 15,000 of his peasant supporters were killed.
Following the success of covert methods of intervention in Iran and Guatemala, the Suez Crisis of 1956 illustrated the dangers of old-style direct intervention. Egyptian President Gamal Abdel Nasser announced nationalization of the Suez Canal in July 1956; the canal was a key national resource in the hands of European investors, and Nasser hoped to use canal profits to pay for his ambitious Aswan High Dam project. His plans energized several enemies: Britain, the former colonial power, since a British company ran the canal; France, since Nasser supported the Algerian rebels that France had been fighting since 1954; and Israel, which hoped to settle accounts with a pan-Arab nationalist who supported the Palestinians. Israel invaded Egypt on October 29, 1956, and Britain and France quickly occupied the canal region despite Egyptian resistance. This resort to direct military intervention posed a problem for the United States. The Eisenhower administration was dealing with Soviet intervention in Hungary to depose reformer Imre Nagy. The U.S. hoped to use the Hungarian crisis to undermine the appeal of communism, which had already suffered a serious blow to its prestige earlier in the year with Khrushchev’s revelation of Stalin’s crimes at the Soviet Twentieth Party Congress. Western intervention in the Suez therefore undercut the U.S. position. The U.S. response this time was creative: Britain was pressured to withdraw, and the intervention collapsed—underlining the weakness of the old colonial powers, speeding decolonization, and enhancing the prestige of the United States in the Third World. From then on, the U.S. would have to compete with the Soviets for influence, as dozens of newly independent countries flooded the halls of the United Nations.
Decolonization vs. Control during the Cold War
For the most part, the newly independent states in Africa and Asia joined Latin America as producers of primary commodities: sugar, coffee, rubber, tin, copper, bananas, cocoa, tea, jute, rice, cotton. Many were plantation crops grown by First World corporations or local landlords, or minerals extracted by First World companies. In either case, the products were sold in markets dominated by European and U.S. companies, usually on exchanges in New York or London, and processed in plants in Europe or North America. As Third World leaders began to take responsibility for their nations, they emphasized tackling the problem of economic underdevelopment. Their efforts were based on state-led development models, influenced by current thinking in the U.S. and Western Europe. Typically, colonial governments had been heavily involved in economic planning and regulation, and new leaders like Kwame Nkrumah of Ghana, Jawaharlal Nehru of India, and Léopold Senghor of Senegal had been educated in Europe and influenced by socialist and social democratic programs. Moreover, the new states started economic life without their own entrepreneurial class capable of leading economic development. Not surprisingly, then, many countries concentrated on Big Projects—showpiece government development projects that could be the motor for economic transformation, such as Ghana’s Volta River Project, which involved construction of the Akosombo Dam in the early 1960s to form the world’s largest artificial lake and building aluminum smelters to take advantage of the country’s bauxite resources. And most countries followed policies of import substitution—developing local production capacity to replace expensive imports from Europe and North America. However, these and other industrialization projects all required massive loans, from banks, export credit agencies, or international development institutions such as the World Bank. Again Western elites faced a problem: how could they preserve their access to Third World resources and markets? Independence offered the West an opportunity to shed the costs of direct rule—responsibility for administration, policing, and development—while maintaining all the benefits of Empire. But independence also carried dangers: Asian, African, and Latin American nations might indeed become masters of their own economies, directing them to maximize their own development. And there were alternative models: Cuba and Vietnam, to name the most prominent. After all, the point was not simply to import oil or coffee from Latin America, or copper or cocoa from Africa, but to import these goods at prices advantageous to the West—in effect, a built-in subsidy from the former colonies to their former rulers. Empire, whether based on direct rule or indirect influence, is not about control for its own sake: it is about exploitation of foreign lands and peoples for the benefit of the metropolis, or at least its ruling circles. At some point, the alternative that Claudine Martin laid out to John Perkins in 1971, as recounted in Confessions of an Economic Hit Man,3 must have become an obvious element of the West’s strategy. The U.S. and its allies were competing with the Soviet bloc to provide loans for development projects of myriad kinds. Why not embrace this burden—and use the debts to bring these countries into the West’s web of control economically and politically? They could be lured by economic hit men like John Perkins to take on debt to build grandiose projects that promised modernization and prosperity—the debt-led theory of economic development. Moreover, the large sums flooding in could be useful in winning the allegiance of new Third World elites, who were under pressure to deliver prosperity to their political followers, allies, and extended families. The possibilities for corruption were seemingly endless and would provide further opportunities for enmeshing the leaders in relationships with the West while discouraging them from striking out on their own on what could only be a more austere, and much more dangerous, path.
Debt Boom—and Bust: SAPing the Third World
The Yom Kippur War in 1973 and the subsequent Arab oil embargo led to the stagflation crisis of 1974–76 and marked the end of the postwar boom. As one result, leading First World banks were awash in petrodollar deposits stockpiled by OPEC countries. If these billions continued to pile up in bank accounts—some 450 billion from 1973 to 1981—the effect would be to drain the world of liquidity, enhancing the recessionary effects of skyrocketing oil prices. What to do? The international monetary system was facing its worst crisis since the collapse of the 1930s. The solution was to “recycle” the petrodollars as loans to the developing world. Brazil, for example, borrowed $100 billion for a whole catalog of projects—steel mills, giant dams, highways, railroad lines, nuclear power plants.4 The boom in lending to the Third World, chronicled by Sam Gwynne in “Selling Money—and Dependency,” turned into a bust in August 1982, as first Mexico and then other Third World states were unable to meet their debt payments. What followed was a series of disguised defaults, rescheduling, rolled-over loans, new loans, debt plans, and programs, all with he announced goal of helping the debtor countries get back on their feet. The results of these programs were, however, the reverse of their advertised targets: Third World debt increased from $130 billion in 1973 to $612 billion in 1982 to $2.5 trillion in 2006, as James S. Henry explains in “The Mirage of Debt Relief.” Another result of the crisis of the 1970s was to discredit the reigning economic orthodoxy—Keynesian government-led or -guided economic development— in favor of a corporate-inspired movement restoring a measure of laissez-faire (a program usually called neoliberalism outside North America). Its standard-bearers were Ronald Reagan in the United States and Margaret Thatcher in Britain, and international enforcement of the neoliberal model was put into the hands of the International Monetary Fund (IMF) and World Bank. Dozens of countries currently operate under IMF “structural adjustment” programs (SAPs), and despite—or because of—such tutelage few ever complete the IMF/World Bank treatment to regain financial health and independence.
The Web of Control
Payments on Third World debt require more than $375 billion a year, twenty times the amount of foreign aid that Third World countries receive. This system has been called a “Marshall Plan in reverse,” with the countries of the Global South subsidizing he wealthy north, even as half the world’s population lives on less than $2 a day.5 How does such a failed system maintain itself? Simply put, Third World countries are caught in a web of control—financial, political, and military—that is extremely hard for them to escape, a system that has become ever more extensive, complex, and pervasive since John Perkins devised his first forecasts for MAIN. Chart 1 illustrates the flows of money and power that form this web of control. Capital flows to underdeveloped countries via loans and other financing, but—as John Perkins points out—at a price: a stranglehold of debt that gives First World governments, institutions, and corporations control of Third World economies. The rest of this chapter outlines the program of free-trade, debt-led economic development as preached by the IMF and the World Bank, shows how corruption and exploitation are in fact at the heart of these power relationships, and explores the range of enforcement options used when the dominated decide that they have had enough.
The Market: Subsidies for the Rich, Free Trade for the Poor
If the global empire had a slogan, it would surely be Free Trade. As their price for assistance, the IMF and World Bank insist in their structural adjustment programs that indebted developing countries abandon state-led development policies, including tariffs, export subsidies, currency controls, and import substitution programs. Their approved model of development instead focuses
on export-led economic growth, using loans to develop new export industries— for example, to attract light industry to export-processing zones (firms like Nike have been major beneficiaries of these policies). Membership in the World Trade Organization also requires adherence to the IMF’s free trade orthodoxy. Ironically, as Cambridge economist Ha-Joon Chang points out, the First World countries transformed their own economies from a base of traditional agriculture to urban industry by using an arsenal of protectionist tariffs, subsidies, and controls. Britain became a paragon of free trade only in the 1850s; before then it had pursued highly directive industrial policies (in addition to its forcible extraction of tribute from India and the West Indies). The U.S. economy developed behind some of the highest tariff walls in the world, President Grant reportedly remarking in the 1870s that “within 200 years, when America has gotten out of protection all that it can offer, it too will adopt free trade.” U.S. tariff rates were not significantly reduced until after World War II. In the postwar era, the most successful developing countries have been the East Asian “tiger” economies of Japan, China, Korea, and Taiwan, which have indeed concentrated on export-led development, but have historically prohibited import of any goods that would compete with industries whose products they wanted to nourish. For example, one of today’s World Bank teams viewing a Toyota on sale back in 1958 would have advised the company not to bother, since its cars were clearly not competitive on the world market, and West European automakers produced better vehicles at a lower price. Their policy prescription would undoubtedly have been that Japan stick to its relative advantage in the production of toys and clothing. Toyota did not take such advice, and today is the world’s most successful automaker. In sum, the First World has “kicked away the ladder,” prohibiting Third World countries from using the only economic development strategy proven to work.6 The phrase free trade suggests images of Adam Smith’s marketplace, where equals meet to haggle over the goods on sale and finally arrive at a bargain that meets the needs of both, thus enhancing the general welfare. But these are only images, not reality, and they are images that convey exactly the wrong impression. It is not first and Third World equals who are meeting in the marketplace, and the result of their interaction is not a bargain that benefits both. Ghana, for example, was forced by the IMF to abolish tariffs on food imports in 2002. The result was a flood of food imports from European Union countries that destroyed the livelihoods of local farmers. It seems that the IMF’s economic hit men “forgot” to ensure that the EU abolishes its own massive agricultural subsidies. As a result, frozen chicken parts imported from the EU cost a third of those locally produced.7 Zambia was forced by the IMF to abolish tariffs on imported clothing, which had protected a small local industry of some 140 firms. The country was then flooded with imports of cheap secondhand clothing that drove all but 8 firms out of business.8 Even if Zambia’s clothing producers had been large enough to engage in international trade, they would have faced tariffs preventing them from exporting to EU and other developed countries. And while countries like Zambia are supposed to devote themselves to free trade, First World countries subsidize their exporters through export credit agencies— often, as Bruce Rich explains in “Exporting Destruction,” with disastrous results for the environment and economies of the Third World. There are perverse effects as well—the famous “unintended consequences” that conservatives love to cite. The IMF’s structural adjustment program in Peru slashed tariffs on corn in the early 1990s, and corn from the U.S.—whose farmers are subsidized at the rate of $40 billion a year—flooded the country. Many of Peru’s farmers were unable to compete, and so turned to growing coca for cocaine production instead. Meanwhile, the prices Third World countries receive for many of their traditional exports, from coffee and cocoa to rice, sugar and cotton, continue to decline. The relative value of their exports has declined even more—for example, in 1975 a new tractor cost the equivalent of 8 metric tons of African coffee, but by 1990 the same tractor cost 40 metric tons. However, it is difficult for these countries to move to production of more complex goods with higher value because they lack capital, access to markets, and workers with sufficient education. In fact, many IMF programs have required cuts in health and education spending, making it harder to improve the quality and capabilities of work forces with low levels of literacy and few technological skills. In some countries, such as Ghana, the percentage of school-age children who are actually in school is falling because of IMF-imposed budget cuts.
Monopoly: An Unleveled Playing Field
In addition to dominating and manipulating markets, First World elites use extra- market muscle to ensure their control—despite their constant invocation of the magic of free markets. They have insisted on what are called Trade-Related Aspects of Intellectual Property Rights (TRIPS), which they pushed through the Uruguay Round of trade talks in 1994 despite wide opposition. TRIPS allow patents and other intellectual property monopolies to shut Third World producers out of lucrative markets (thus keeping them trapped in commodity production).
As part of this strategy, the U.S. has insisted on defining genetic material, including seeds, human cells, and microorganisms, as patentable “compositions of matter.” First World corporations have used TRIPS clauses to mine the Global South for local plants and other genetic resources that they can then patent, gaining exclusive production and sales rights—a strategy often called biopiracy.12 In one particularly perverse attempt, RiceTec, a Texas company, applied for, and received, a patent on India’s basmati rice—claiming that it had developed “novel” rice lines—genetic lines that had in fact been developed over centuries of plant breeding by Indian and Pakistani farmers.
Debt: Owing Their Souls to the Company Store
Debt keeps Third World countries under control. Dependent on aid, loan rescheduling, and debt rollovers to survive—never mind actually develop— they have been forced to restructure their economies and rewrite their laws to meet conditions laid down in IMF structural adjustment programs and World Bank conditionality. Unlike the U.S., they do not control the world’s reserve currency, and so cannot live beyond their means for long without financial crisis. As Doug Henwood, author of After the New Economy, points out: The United States would right now be a prime candidate for structural adjustment if this were an ordinary country. We are living way beyond our means; we have massive and constantly growing foreign debts, a gigantic currency account deficit, and a government that shows no interest in doing anything about it. . . . If this were an ordinary country, the United States would have the IMF at our doorstep telling us to create a recession, get the foreign accounts back into balance, consume less, invest more, and save more. But since the United States is the United States, we don’t have such a thing happening. If it is not good medicine for us, then why is it such good medicine for everyone else?
Corruption, Debt, and Secrecy
Corruption, always the handmaid of Power, serves as a mechanism of both profit and control—and it diverts attention from the real springs of power. Corrupt Third World leaders like Zaire’s Mobutu Sese Seko, who stole at least half of Zaire’s aid money,14 are happy to take on additional debt for unnecessary, poorly planned, or inflated projects—debt that must be repaid by their countries’ citizens. And the IMF and World Bank were happy to continue lending to Zaire—even though their own investigators warned them that the money was being stolen. Mobutu’s support for Washington’s African policies during the cold war may have had something to do with their enthusiasm, but the round-tripping of loaned-then-stolen money back to First World banks must have played a role as well. Steve Berkman, in “The World Bank and the $100 Billion Question,” gives us an inside investigator’s account of how these schemes diverted development money into the pockets of corrupt elites. More generally, what has been called the “debt/capital flight cycle” has roused the interest of many loan committees: the Sag Harbor Group estimates that “at least half the funds borrowed by the largest debtors fl owed right back out the back door, usually in the same year or even the same month the loans arrived.”15 John Christensen describes in “Dirty Money: Inside the Secret World of Offshore Banking” how secret accounts in out-of-control offshore banking havens like the Cayman Islands enable Third World elites to hide money they have stolen, embezzled, or derived from kickbacks, bribes, or drug trafficking. The same offshore institutions enable First World corporations and elites to hide their profits from taxation, leaving rank-and-fi le citizens to pay the bills. The Bank of Credit and Commerce International, incorporated under Luxembourg’s bank secrecy laws, pushed these offshore banking opportunities to new extremes, with as much as $13 billion being lost or stolen in the biggest bank fraud in the world. In “BCCI’s Double Game: Banking on America, Banking on Jihad,” Lucy Komisar explains why governments and regulatory authorities looked the other way: BCCI accommodated the banking needs of a range of powerful inside players—from the CIA and influential Democrats and Republicans in Congress to the Medellín drug cartel—and, as it turns out, al-Qaeda. The privatization programs pushed by the IMF offer such rich opportunities for graft that they have been called “briberization.” According to Joseph Stiglitz, former chief economist at the World Bank, “national leaders told to sell their countries’ water and electricity companies . . . were keen to get commissions paid into Swiss bank accounts. . . . You could see their eyes widen” when they realized the scale of the opportunity in front of them, and “objections to selling off state industries were silenced.”
The Enforcers: Carrots and Sticks
But what of the leaders who want to pursue a populist agenda, those whose goals include national control and profit from their country’s resources? Suppose they don’t respond to the snares of corruption or the lure of an upscale First World lifestyle? The EHM game plan includes a full menu of options to ensure compliance, whether willing or not. Divide and rule is, of course, the time-honored strategy of both conquerors and threatened elites. Subversion of the political process is one way to rein in a wayward country’s leadership. The U.S. and other powers make it a point to establish relationships with key players in the administration, the military, business, the media, academia, and the trade unions. After some quiet meetings and provision of funds to various groups, an uncooperative country might well find political tensions growing. The government encounters resistance from former supporters, and the political opposition becomes more strident. The media raises a state of alarm. Tension grows, and economists increase their assessment of business risk: money starts leaving the country for Miami or London or Switzerland, investments are delayed, lay offs increase unemployment. If the government gets the message and alters course, the sun comes out: money starts to return, and cooperation suddenly becomes possible.
If the government tries to ride out the storm, other, more muscular strategies are brought to bear—from assassination of individual leaders to military coups to fomenting civil war. Venezuela provides a recent case study. The U.S. government’s National Endowment for Democracy in 2002 provided almost $1 million to several business, media, and labor groups, helping finance their noisy campaign against populist President Hugo Chavez in the months leading up to the (unsuccessful) April 2002 coup against him. For example, the NED gave $55,000 to the “Assembly of Education,” run by one Leonardo Carvajal—who, coincidentally, was scheduled to be named minister of education had the coup leaders succeeded in putting Pedro Carmona, a pro-U.S. businessman, in power.17 Private or semi-official military forces are often useful as well. Andrew Rowell and James Marriott explore the growing interest in Nigeria’s oil on the part of both the West and China. In “Mercenaries on the Front Lines in the New Scramble for Africa,” they uncover another jackal operation: the role of Shell Oil’s security agents in making sure that Niger Delta oil profits are safe from the region’s people. Exploiting ethnic or religious divisions within a country has often been a successful strategy. The U.S. was only too glad in 1979 to help support the Islamic fundamentalist Mujahadeen in their struggle against Afghanistan’s socialist government, which from the muj perspective had clearly crossed the line by instituting a program to educate women; Osama bin Laden was a Saudi Islamist recruited by Pakistan’s intelligence services to help lead the CIA’s campaign.18 Kathleen Kern, in “The Human Cost of Cheap Cell Phones,” describes how ethnic division in eastern Congo and Rwanda has been exploited by Western multinationals to ensure their access to Colton ore and other resources, at the cost of 4 million lives. In Nicaragua, the U.S. used religious and ethnic tensions to turn the Miskitu people on the country’s Atlantic coast against the Sandinista government. And terrorism, though always publicly denounced, is often useful. In December 1981, a Nicaraguan Aeronica jetliner was blown up on the tarmac at Mexico City’s airport. The passengers had not yet boarded, so they were luckier than those on Cubana flight 455, which went down over the Caribbean in October 1976 after an explosion, killing all seventy-three passengers and crew. Cuban exile Luis Posada Carriles, who was convicted in Venezuela of having plotted the bombings, later admitted that he had received $200,000 from the U.S. government–funded Cuban American National Foundation for such attacks. Eliminating uncooperative or ambitious Third World leaders in one way or another is the point, which also serves as an object lesson to any president or prime minister who may be considering resistance. John Perkins provides the back story leading to the removal of Presidents Omar Torrijos of Panama and Jaime Roldós of Ecuador in 1981.22 But a long list of popular leaders have met similar fates: Patrice Lumumba of the Congo in 1960; Eduardo Mondlane of Mozambique in 1969; Amilcar Cabral of Guinea-Bissau in 1973; Oscar Romero, archbishop of San Salvador, in 1980; Benigno Aquino of the Philippines in 1983; Mehdi Ben Barka of Algeria in 1965. The career of Craig Williamson, an agent of the South African security services, is typical of the jackals involved in such targeted killings. He was responsible for the death of Ruth First, an African National Congress party activist and writer, killed by a parcel bomb in 1982, and he has been implicated in attacks on a number of other anti-apartheid activists.
The coup d’état is the classical method of eliminating opposition leaders, sweeping their parties out of power, rounding up activists, and clamping down on an entire society to reverse the results of an inconvenient reform program. Perhaps the best known is the overthrow of Chile’s Popular Unity government in September 1973 by General Augusto Pinochet, resulting in the deaths of President Salvador Allende and thousands of his supporters. A long list of coups is closely associated with U.S. and Western governments, beginning with the CIA’s overthrow of Mohammed Mossadegh in Iran in 1953 and including, notably, the overthrow of Brazil’s President João Goulart in 1964, General Idi Amin’s overthrow of Milton Obote in Uganda in 1971, and General Mohammad Suharto’s seizure of power in Indonesia in 1965. Military intervention is an option if the jackals are unsuccessful and no cooperative military officers can be recruited. Intervention sometimes takes the form of civil war by proxy, using a combination of terrorism and guerrilla warfare to overthrow the government or to wear down the population through a war of attrition that can only be ended by electoral defeat or negotiations. The Contra War against Nicaragua’s Sandinistas was a classic example, but the U.S. also conducted long campaigns against the governments of Mozambique and Angola with the cooperation of the South African military, wrecking the economies of both countries and killing hundreds of thousands of people.
Direct intervention has been reserved for the most difficult situations, but it is always a possible method of regime change. The lessons of the Vietnam War seemed to make this the least attractive option for exercising First World power, but the collapse of the Soviet bloc and the advance of high-tech weaponry have pushed this method to the fore. In the post–cold war era, U.S. military/strategic theorists have used the advantage offered by the so-called revolution in military affairs, including pervasive surveillance technologies, network-centric command and control of military forces, and precision munitions, to undergird a new assertiveness in U.S. foreign policy. As Belloc remarked about the hegemony of Europeans over their colonies in the heyday of the British Empire: “We have the Gatling gun, and they have not.” In 1992, the neoconservative Paul Wolfowitz, undersecretary of defense in the George H. W. Bush administration, formulated what has since become known as the Bush Doctrine in “Defense Planning Guidance 1994–99.” This strategic plan emphasizes three points: the primacy of U.S. power within the New World Order; the right of the U.S. to engage unilaterally in preemptive attacks when necessary to defend its interests; and, in the Middle East, the “overall objective” to remain “the predominant outside power in the region and preserve U.S. and Western access to the region’s oil.”24 The invasion and occupation of Iraq in 2003 followed from these premises. Dick Cheney, now an advocate of the Bush Doctrine, argued against toppling Saddam in the aftermath of the Gulf War in 1991: “I think to have American military forces engaged in a civil war inside Iraq would fit the definition of quagmire, and we have absolutely no desire to get bogged down in that fashion.” Time changes, however. The lure of Iraq’s oil reserves in a world facing future shortages of oil, control of the Middle East as the fulcrum of power in such a world, and prospects of obscenely lucrative contracts and concessions, as Greg Muttitt reports in “The Iraqi Job: Hijacking Iraq’s Oil Reserves,” seem to have led the U.S. on to a long-term intervention from which it may be difficult to disengage. Andrew J. Bacevich, himself a conservative military theorist, sees the problem: “Holding sway in not one but several regions of pivotal geopolitical importance, disdaining the legitimacy of political economic principles other than its own, declaring the existing order to be sacrosanct, asserting unquestioned military supremacy with a globally deployed force configured not for self-defense but for coercion: these are the actions of a nation engaged in the governance of empire.”
Yet, as in 1776, empire is acceptable only as long as its subjects believe they benefit from living under its control and limiting their aspirations to those their rulers deem acceptable. While Third World elites may have ample opportunities to live an opulent First World lifestyle, 2 billion people crowd into urban slums in the cities of the Global South, and mountains of debt continue to shackle economic and social development.26 In this context, the Bush Doctrine calls for war without end to preserve the empire’s web of control. But, as Antonia Juhasz points out in “Global Uprising: The Web of Resistance,” the world’s peoples seem to be deciding that the struggle to create a democratic alternative to globalization is preferable to living perpetually in the shadow of empire.
In June 2003, after declaring “Mission accomplished!” in the wake of Operation Iraqi Freedom, George W. Bush told cheering West Point cadets that America has “no territorial ambitions. We don’t seek an empire.” Meanwhile, neoconservative pundits like Niall Ferguson and Charles Krauthammer were encouraging him to do precisely that: to “make the transition from informal
to formal empire,” by acknowledging America’s actual role in the world and accepting the reality that “political globalization is a fancy word for imperialism.” Had the post-postwar world—the new order emerging since the Berlin Wall came down in 1989—come full circle to a new Age of Empire? The victory of the Allies in 1945, confirming the right of peoples to self-determination
in their Atlantic Charter declaration, seemed to signal the end for the world’s colonial empires. Colonial peoples in Asia, Africa, and the Middle East had seen the armies of Britain, France, and the Netherlands defeated in 1940–41, and knew that the former imperial powers now had neither the military nor the financial resources to enforce their rule for long. Moreover, the two strongest powers, the U.S. and the Soviet Union, were formally on the anti-imperialist side. The U.S. had long pursued an “open door” policy advocating formal independence for developing countries. The Soviet Union had denounced imperialism since its birth in 1917, and the communist movement it led had wide appeal in parts of the colonial world as a result. Nevertheless, the European colonial powers tried to hang on to their possessions as long as they could. Britain did finally “quit India” in 1947, but fought insurgents in Kenya, Cypress, and Malaya before granting those countries independence.
France fought losing, divisive wars in Indochina and Algeria to retain its bit of imperial gloire. Still, the tide of history was clearly running in favor of self-determination around the world. The quandary for Western elites was how to manage this process. Would new Third World leaders attempt to strike out on their own, taking control of their countries’ resources in order to build their own national industries? Or—worse—would they ally with the Soviet bloc or would nationalist campaigns prepare the way for takeovers by communist parties?
For Western Europeans, loss of access to colonial resources and markets would be an enormous blow: their weakened economies were only slowly recovering from World War II and they planned to force the colonies to help pay for reconstruction. For its part, the U.S. feared that colonial independence would weaken its European allies and might well lead to the expansion of Soviet influence in Europe. And U.S. business leaders were concerned about a postwar return to the depression that had marked the 1930s, so they were eager to preserve access to resources and possible new markets.
Events in Iran, Guatemala, and Egypt in the 1950s marked a new turn in Western policies in what was becoming known as the Third World. In 1951, Iranian Prime Minister Mohammad Mossadegh nationalized the country’s oil industry, which had been run by the Anglo-Iranian Oil Company (since renamed British Petroleum). A democratically elected nationalist, Mossadegh (Time’s Man of the Year for 1951) not surprisingly resented the fact that 92 percent of the profits from Iranian oil went to AIOC, a longstanding arrangement reflecting British domination of Persia early in the century. Winston Churchill had recently returned for a second term as prime minister, and he was determined to restore the UK’s finances and prestige in the face of this challenge from a newly assertive client state. Churchill ordered a blockade of the Persian Gulf to prevent Iran from exporting oil to other purchasers, and he was joined in a boycott of Iranian trade by the United States. More muscular action was not possible, however: the Korean War absorbed the attention of the U.S. and Britain, and Soviet intervention in support of Iran was a threat. A more subtle approach was needed, and the CIA devised Operation Ajax, directed by Kermit Roosevelt. The first step was to create political turmoil to undermine Mossadegh’s political support: a CIA disinformation campaign worked overtime spreading rumors designed to split secular democrats from Islamic nationalists. Finally, the military made its move in August 1953, and Mossadegh was arrested, a new prime minister was appointed, the Shah was restored to power, and the oil industry was denationalized. The US did demand a price for its help, however: British Petroleum now had to share its access to Iranian oilfields with several U.S. companies. U.S. military and foreign policy leaders were cheered by the success of their plan, recovering Iran at a low cost politically, militarily, and financially. Guatemala was the next test case for this indirect method of policing empire. In May 1952, President Jacobo Arbenz announced a land reform program that would have nationalized unused land belonging to landlords and, especially the holdings of Boston’s United Fruit Company, the Country’s largest landowner. His inspiration was Abraham Lincoln’s Homestead Act of 1862, with Arbenz hoping to enable peasants and rural laborers to become independent small farmers. But apparently Lincoln was too radical for the Eisenhower administration, especially with Secretary of State John Foster Dulles and CIA Director Alan Dulles sitting on United Fruit’s Board of Directors.
Kermit Roosevelt described Alan Dulles’s reaction to plans for the CIA’s Operation PB Success: “He seemed almost alarmingly enthusiastic. His eyes were glistening; he seemed to be purring like a giant cat. Clearly he was not only enjoying what he was hearing, but my instincts told me that he was planning as well.”2 Arbenz was overthrown in a coup in June 1954; some 15,000 of his peasant supporters were killed.
Following the success of covert methods of intervention in Iran and Guatemala, the Suez Crisis of 1956 illustrated the dangers of old-style direct intervention. Egyptian President Gamal Abdel Nasser announced nationalization of the Suez Canal in July 1956; the canal was a key national resource in the hands of European investors, and Nasser hoped to use canal profits to pay for his ambitious Aswan High Dam project. His plans energized several enemies: Britain, the former colonial power, since a British company ran the canal; France, since Nasser supported the Algerian rebels that France had been fighting since 1954; and Israel, which hoped to settle accounts with a pan-Arab nationalist who supported the Palestinians. Israel invaded Egypt on October 29, 1956, and Britain and France quickly occupied the canal region despite Egyptian resistance. This resort to direct military intervention posed a problem for the United States. The Eisenhower administration was dealing with Soviet intervention in Hungary to depose reformer Imre Nagy. The U.S. hoped to use the Hungarian crisis to undermine the appeal of communism, which had already suffered a serious blow to its prestige earlier in the year with Khrushchev’s revelation of Stalin’s crimes at the Soviet Twentieth Party Congress. Western intervention in the Suez therefore undercut the U.S. position. The U.S. response this time was creative: Britain was pressured to withdraw, and the intervention collapsed—underlining the weakness of the old colonial powers, speeding decolonization, and enhancing the prestige of the United States in the Third World. From then on, the U.S. would have to compete with the Soviets for influence, as dozens of newly independent countries flooded the halls of the United Nations.
Decolonization vs. Control during the Cold War
For the most part, the newly independent states in Africa and Asia joined Latin America as producers of primary commodities: sugar, coffee, rubber, tin, copper, bananas, cocoa, tea, jute, rice, cotton. Many were plantation crops grown by First World corporations or local landlords, or minerals extracted by First World companies. In either case, the products were sold in markets dominated by European and U.S. companies, usually on exchanges in New York or London, and processed in plants in Europe or North America. As Third World leaders began to take responsibility for their nations, they emphasized tackling the problem of economic underdevelopment. Their efforts were based on state-led development models, influenced by current thinking in the U.S. and Western Europe. Typically, colonial governments had been heavily involved in economic planning and regulation, and new leaders like Kwame Nkrumah of Ghana, Jawaharlal Nehru of India, and Léopold Senghor of Senegal had been educated in Europe and influenced by socialist and social democratic programs. Moreover, the new states started economic life without their own entrepreneurial class capable of leading economic development. Not surprisingly, then, many countries concentrated on Big Projects—showpiece government development projects that could be the motor for economic transformation, such as Ghana’s Volta River Project, which involved construction of the Akosombo Dam in the early 1960s to form the world’s largest artificial lake and building aluminum smelters to take advantage of the country’s bauxite resources. And most countries followed policies of import substitution—developing local production capacity to replace expensive imports from Europe and North America. However, these and other industrialization projects all required massive loans, from banks, export credit agencies, or international development institutions such as the World Bank. Again Western elites faced a problem: how could they preserve their access to Third World resources and markets? Independence offered the West an opportunity to shed the costs of direct rule—responsibility for administration, policing, and development—while maintaining all the benefits of Empire. But independence also carried dangers: Asian, African, and Latin American nations might indeed become masters of their own economies, directing them to maximize their own development. And there were alternative models: Cuba and Vietnam, to name the most prominent. After all, the point was not simply to import oil or coffee from Latin America, or copper or cocoa from Africa, but to import these goods at prices advantageous to the West—in effect, a built-in subsidy from the former colonies to their former rulers. Empire, whether based on direct rule or indirect influence, is not about control for its own sake: it is about exploitation of foreign lands and peoples for the benefit of the metropolis, or at least its ruling circles. At some point, the alternative that Claudine Martin laid out to John Perkins in 1971, as recounted in Confessions of an Economic Hit Man,3 must have become an obvious element of the West’s strategy. The U.S. and its allies were competing with the Soviet bloc to provide loans for development projects of myriad kinds. Why not embrace this burden—and use the debts to bring these countries into the West’s web of control economically and politically? They could be lured by economic hit men like John Perkins to take on debt to build grandiose projects that promised modernization and prosperity—the debt-led theory of economic development. Moreover, the large sums flooding in could be useful in winning the allegiance of new Third World elites, who were under pressure to deliver prosperity to their political followers, allies, and extended families. The possibilities for corruption were seemingly endless and would provide further opportunities for enmeshing the leaders in relationships with the West while discouraging them from striking out on their own on what could only be a more austere, and much more dangerous, path.
Debt Boom—and Bust: SAPing the Third World
The Yom Kippur War in 1973 and the subsequent Arab oil embargo led to the stagflation crisis of 1974–76 and marked the end of the postwar boom. As one result, leading First World banks were awash in petrodollar deposits stockpiled by OPEC countries. If these billions continued to pile up in bank accounts—some 450 billion from 1973 to 1981—the effect would be to drain the world of liquidity, enhancing the recessionary effects of skyrocketing oil prices. What to do? The international monetary system was facing its worst crisis since the collapse of the 1930s. The solution was to “recycle” the petrodollars as loans to the developing world. Brazil, for example, borrowed $100 billion for a whole catalog of projects—steel mills, giant dams, highways, railroad lines, nuclear power plants.4 The boom in lending to the Third World, chronicled by Sam Gwynne in “Selling Money—and Dependency,” turned into a bust in August 1982, as first Mexico and then other Third World states were unable to meet their debt payments. What followed was a series of disguised defaults, rescheduling, rolled-over loans, new loans, debt plans, and programs, all with he announced goal of helping the debtor countries get back on their feet. The results of these programs were, however, the reverse of their advertised targets: Third World debt increased from $130 billion in 1973 to $612 billion in 1982 to $2.5 trillion in 2006, as James S. Henry explains in “The Mirage of Debt Relief.” Another result of the crisis of the 1970s was to discredit the reigning economic orthodoxy—Keynesian government-led or -guided economic development— in favor of a corporate-inspired movement restoring a measure of laissez-faire (a program usually called neoliberalism outside North America). Its standard-bearers were Ronald Reagan in the United States and Margaret Thatcher in Britain, and international enforcement of the neoliberal model was put into the hands of the International Monetary Fund (IMF) and World Bank. Dozens of countries currently operate under IMF “structural adjustment” programs (SAPs), and despite—or because of—such tutelage few ever complete the IMF/World Bank treatment to regain financial health and independence.
The Web of Control
Payments on Third World debt require more than $375 billion a year, twenty times the amount of foreign aid that Third World countries receive. This system has been called a “Marshall Plan in reverse,” with the countries of the Global South subsidizing he wealthy north, even as half the world’s population lives on less than $2 a day.5 How does such a failed system maintain itself? Simply put, Third World countries are caught in a web of control—financial, political, and military—that is extremely hard for them to escape, a system that has become ever more extensive, complex, and pervasive since John Perkins devised his first forecasts for MAIN. Chart 1 illustrates the flows of money and power that form this web of control. Capital flows to underdeveloped countries via loans and other financing, but—as John Perkins points out—at a price: a stranglehold of debt that gives First World governments, institutions, and corporations control of Third World economies. The rest of this chapter outlines the program of free-trade, debt-led economic development as preached by the IMF and the World Bank, shows how corruption and exploitation are in fact at the heart of these power relationships, and explores the range of enforcement options used when the dominated decide that they have had enough.
The Market: Subsidies for the Rich, Free Trade for the Poor
If the global empire had a slogan, it would surely be Free Trade. As their price for assistance, the IMF and World Bank insist in their structural adjustment programs that indebted developing countries abandon state-led development policies, including tariffs, export subsidies, currency controls, and import substitution programs. Their approved model of development instead focuses
on export-led economic growth, using loans to develop new export industries— for example, to attract light industry to export-processing zones (firms like Nike have been major beneficiaries of these policies). Membership in the World Trade Organization also requires adherence to the IMF’s free trade orthodoxy. Ironically, as Cambridge economist Ha-Joon Chang points out, the First World countries transformed their own economies from a base of traditional agriculture to urban industry by using an arsenal of protectionist tariffs, subsidies, and controls. Britain became a paragon of free trade only in the 1850s; before then it had pursued highly directive industrial policies (in addition to its forcible extraction of tribute from India and the West Indies). The U.S. economy developed behind some of the highest tariff walls in the world, President Grant reportedly remarking in the 1870s that “within 200 years, when America has gotten out of protection all that it can offer, it too will adopt free trade.” U.S. tariff rates were not significantly reduced until after World War II. In the postwar era, the most successful developing countries have been the East Asian “tiger” economies of Japan, China, Korea, and Taiwan, which have indeed concentrated on export-led development, but have historically prohibited import of any goods that would compete with industries whose products they wanted to nourish. For example, one of today’s World Bank teams viewing a Toyota on sale back in 1958 would have advised the company not to bother, since its cars were clearly not competitive on the world market, and West European automakers produced better vehicles at a lower price. Their policy prescription would undoubtedly have been that Japan stick to its relative advantage in the production of toys and clothing. Toyota did not take such advice, and today is the world’s most successful automaker. In sum, the First World has “kicked away the ladder,” prohibiting Third World countries from using the only economic development strategy proven to work.6 The phrase free trade suggests images of Adam Smith’s marketplace, where equals meet to haggle over the goods on sale and finally arrive at a bargain that meets the needs of both, thus enhancing the general welfare. But these are only images, not reality, and they are images that convey exactly the wrong impression. It is not first and Third World equals who are meeting in the marketplace, and the result of their interaction is not a bargain that benefits both. Ghana, for example, was forced by the IMF to abolish tariffs on food imports in 2002. The result was a flood of food imports from European Union countries that destroyed the livelihoods of local farmers. It seems that the IMF’s economic hit men “forgot” to ensure that the EU abolishes its own massive agricultural subsidies. As a result, frozen chicken parts imported from the EU cost a third of those locally produced.7 Zambia was forced by the IMF to abolish tariffs on imported clothing, which had protected a small local industry of some 140 firms. The country was then flooded with imports of cheap secondhand clothing that drove all but 8 firms out of business.8 Even if Zambia’s clothing producers had been large enough to engage in international trade, they would have faced tariffs preventing them from exporting to EU and other developed countries. And while countries like Zambia are supposed to devote themselves to free trade, First World countries subsidize their exporters through export credit agencies— often, as Bruce Rich explains in “Exporting Destruction,” with disastrous results for the environment and economies of the Third World. There are perverse effects as well—the famous “unintended consequences” that conservatives love to cite. The IMF’s structural adjustment program in Peru slashed tariffs on corn in the early 1990s, and corn from the U.S.—whose farmers are subsidized at the rate of $40 billion a year—flooded the country. Many of Peru’s farmers were unable to compete, and so turned to growing coca for cocaine production instead. Meanwhile, the prices Third World countries receive for many of their traditional exports, from coffee and cocoa to rice, sugar and cotton, continue to decline. The relative value of their exports has declined even more—for example, in 1975 a new tractor cost the equivalent of 8 metric tons of African coffee, but by 1990 the same tractor cost 40 metric tons. However, it is difficult for these countries to move to production of more complex goods with higher value because they lack capital, access to markets, and workers with sufficient education. In fact, many IMF programs have required cuts in health and education spending, making it harder to improve the quality and capabilities of work forces with low levels of literacy and few technological skills. In some countries, such as Ghana, the percentage of school-age children who are actually in school is falling because of IMF-imposed budget cuts.
Monopoly: An Unleveled Playing Field
In addition to dominating and manipulating markets, First World elites use extra- market muscle to ensure their control—despite their constant invocation of the magic of free markets. They have insisted on what are called Trade-Related Aspects of Intellectual Property Rights (TRIPS), which they pushed through the Uruguay Round of trade talks in 1994 despite wide opposition. TRIPS allow patents and other intellectual property monopolies to shut Third World producers out of lucrative markets (thus keeping them trapped in commodity production).
As part of this strategy, the U.S. has insisted on defining genetic material, including seeds, human cells, and microorganisms, as patentable “compositions of matter.” First World corporations have used TRIPS clauses to mine the Global South for local plants and other genetic resources that they can then patent, gaining exclusive production and sales rights—a strategy often called biopiracy.12 In one particularly perverse attempt, RiceTec, a Texas company, applied for, and received, a patent on India’s basmati rice—claiming that it had developed “novel” rice lines—genetic lines that had in fact been developed over centuries of plant breeding by Indian and Pakistani farmers.
Debt: Owing Their Souls to the Company Store
Debt keeps Third World countries under control. Dependent on aid, loan rescheduling, and debt rollovers to survive—never mind actually develop— they have been forced to restructure their economies and rewrite their laws to meet conditions laid down in IMF structural adjustment programs and World Bank conditionality. Unlike the U.S., they do not control the world’s reserve currency, and so cannot live beyond their means for long without financial crisis. As Doug Henwood, author of After the New Economy, points out: The United States would right now be a prime candidate for structural adjustment if this were an ordinary country. We are living way beyond our means; we have massive and constantly growing foreign debts, a gigantic currency account deficit, and a government that shows no interest in doing anything about it. . . . If this were an ordinary country, the United States would have the IMF at our doorstep telling us to create a recession, get the foreign accounts back into balance, consume less, invest more, and save more. But since the United States is the United States, we don’t have such a thing happening. If it is not good medicine for us, then why is it such good medicine for everyone else?
Corruption, Debt, and Secrecy
Corruption, always the handmaid of Power, serves as a mechanism of both profit and control—and it diverts attention from the real springs of power. Corrupt Third World leaders like Zaire’s Mobutu Sese Seko, who stole at least half of Zaire’s aid money,14 are happy to take on additional debt for unnecessary, poorly planned, or inflated projects—debt that must be repaid by their countries’ citizens. And the IMF and World Bank were happy to continue lending to Zaire—even though their own investigators warned them that the money was being stolen. Mobutu’s support for Washington’s African policies during the cold war may have had something to do with their enthusiasm, but the round-tripping of loaned-then-stolen money back to First World banks must have played a role as well. Steve Berkman, in “The World Bank and the $100 Billion Question,” gives us an inside investigator’s account of how these schemes diverted development money into the pockets of corrupt elites. More generally, what has been called the “debt/capital flight cycle” has roused the interest of many loan committees: the Sag Harbor Group estimates that “at least half the funds borrowed by the largest debtors fl owed right back out the back door, usually in the same year or even the same month the loans arrived.”15 John Christensen describes in “Dirty Money: Inside the Secret World of Offshore Banking” how secret accounts in out-of-control offshore banking havens like the Cayman Islands enable Third World elites to hide money they have stolen, embezzled, or derived from kickbacks, bribes, or drug trafficking. The same offshore institutions enable First World corporations and elites to hide their profits from taxation, leaving rank-and-fi le citizens to pay the bills. The Bank of Credit and Commerce International, incorporated under Luxembourg’s bank secrecy laws, pushed these offshore banking opportunities to new extremes, with as much as $13 billion being lost or stolen in the biggest bank fraud in the world. In “BCCI’s Double Game: Banking on America, Banking on Jihad,” Lucy Komisar explains why governments and regulatory authorities looked the other way: BCCI accommodated the banking needs of a range of powerful inside players—from the CIA and influential Democrats and Republicans in Congress to the Medellín drug cartel—and, as it turns out, al-Qaeda. The privatization programs pushed by the IMF offer such rich opportunities for graft that they have been called “briberization.” According to Joseph Stiglitz, former chief economist at the World Bank, “national leaders told to sell their countries’ water and electricity companies . . . were keen to get commissions paid into Swiss bank accounts. . . . You could see their eyes widen” when they realized the scale of the opportunity in front of them, and “objections to selling off state industries were silenced.”
The Enforcers: Carrots and Sticks
But what of the leaders who want to pursue a populist agenda, those whose goals include national control and profit from their country’s resources? Suppose they don’t respond to the snares of corruption or the lure of an upscale First World lifestyle? The EHM game plan includes a full menu of options to ensure compliance, whether willing or not. Divide and rule is, of course, the time-honored strategy of both conquerors and threatened elites. Subversion of the political process is one way to rein in a wayward country’s leadership. The U.S. and other powers make it a point to establish relationships with key players in the administration, the military, business, the media, academia, and the trade unions. After some quiet meetings and provision of funds to various groups, an uncooperative country might well find political tensions growing. The government encounters resistance from former supporters, and the political opposition becomes more strident. The media raises a state of alarm. Tension grows, and economists increase their assessment of business risk: money starts leaving the country for Miami or London or Switzerland, investments are delayed, lay offs increase unemployment. If the government gets the message and alters course, the sun comes out: money starts to return, and cooperation suddenly becomes possible.
If the government tries to ride out the storm, other, more muscular strategies are brought to bear—from assassination of individual leaders to military coups to fomenting civil war. Venezuela provides a recent case study. The U.S. government’s National Endowment for Democracy in 2002 provided almost $1 million to several business, media, and labor groups, helping finance their noisy campaign against populist President Hugo Chavez in the months leading up to the (unsuccessful) April 2002 coup against him. For example, the NED gave $55,000 to the “Assembly of Education,” run by one Leonardo Carvajal—who, coincidentally, was scheduled to be named minister of education had the coup leaders succeeded in putting Pedro Carmona, a pro-U.S. businessman, in power.17 Private or semi-official military forces are often useful as well. Andrew Rowell and James Marriott explore the growing interest in Nigeria’s oil on the part of both the West and China. In “Mercenaries on the Front Lines in the New Scramble for Africa,” they uncover another jackal operation: the role of Shell Oil’s security agents in making sure that Niger Delta oil profits are safe from the region’s people. Exploiting ethnic or religious divisions within a country has often been a successful strategy. The U.S. was only too glad in 1979 to help support the Islamic fundamentalist Mujahadeen in their struggle against Afghanistan’s socialist government, which from the muj perspective had clearly crossed the line by instituting a program to educate women; Osama bin Laden was a Saudi Islamist recruited by Pakistan’s intelligence services to help lead the CIA’s campaign.18 Kathleen Kern, in “The Human Cost of Cheap Cell Phones,” describes how ethnic division in eastern Congo and Rwanda has been exploited by Western multinationals to ensure their access to Colton ore and other resources, at the cost of 4 million lives. In Nicaragua, the U.S. used religious and ethnic tensions to turn the Miskitu people on the country’s Atlantic coast against the Sandinista government. And terrorism, though always publicly denounced, is often useful. In December 1981, a Nicaraguan Aeronica jetliner was blown up on the tarmac at Mexico City’s airport. The passengers had not yet boarded, so they were luckier than those on Cubana flight 455, which went down over the Caribbean in October 1976 after an explosion, killing all seventy-three passengers and crew. Cuban exile Luis Posada Carriles, who was convicted in Venezuela of having plotted the bombings, later admitted that he had received $200,000 from the U.S. government–funded Cuban American National Foundation for such attacks. Eliminating uncooperative or ambitious Third World leaders in one way or another is the point, which also serves as an object lesson to any president or prime minister who may be considering resistance. John Perkins provides the back story leading to the removal of Presidents Omar Torrijos of Panama and Jaime Roldós of Ecuador in 1981.22 But a long list of popular leaders have met similar fates: Patrice Lumumba of the Congo in 1960; Eduardo Mondlane of Mozambique in 1969; Amilcar Cabral of Guinea-Bissau in 1973; Oscar Romero, archbishop of San Salvador, in 1980; Benigno Aquino of the Philippines in 1983; Mehdi Ben Barka of Algeria in 1965. The career of Craig Williamson, an agent of the South African security services, is typical of the jackals involved in such targeted killings. He was responsible for the death of Ruth First, an African National Congress party activist and writer, killed by a parcel bomb in 1982, and he has been implicated in attacks on a number of other anti-apartheid activists.
The coup d’état is the classical method of eliminating opposition leaders, sweeping their parties out of power, rounding up activists, and clamping down on an entire society to reverse the results of an inconvenient reform program. Perhaps the best known is the overthrow of Chile’s Popular Unity government in September 1973 by General Augusto Pinochet, resulting in the deaths of President Salvador Allende and thousands of his supporters. A long list of coups is closely associated with U.S. and Western governments, beginning with the CIA’s overthrow of Mohammed Mossadegh in Iran in 1953 and including, notably, the overthrow of Brazil’s President João Goulart in 1964, General Idi Amin’s overthrow of Milton Obote in Uganda in 1971, and General Mohammad Suharto’s seizure of power in Indonesia in 1965. Military intervention is an option if the jackals are unsuccessful and no cooperative military officers can be recruited. Intervention sometimes takes the form of civil war by proxy, using a combination of terrorism and guerrilla warfare to overthrow the government or to wear down the population through a war of attrition that can only be ended by electoral defeat or negotiations. The Contra War against Nicaragua’s Sandinistas was a classic example, but the U.S. also conducted long campaigns against the governments of Mozambique and Angola with the cooperation of the South African military, wrecking the economies of both countries and killing hundreds of thousands of people.
Direct intervention has been reserved for the most difficult situations, but it is always a possible method of regime change. The lessons of the Vietnam War seemed to make this the least attractive option for exercising First World power, but the collapse of the Soviet bloc and the advance of high-tech weaponry have pushed this method to the fore. In the post–cold war era, U.S. military/strategic theorists have used the advantage offered by the so-called revolution in military affairs, including pervasive surveillance technologies, network-centric command and control of military forces, and precision munitions, to undergird a new assertiveness in U.S. foreign policy. As Belloc remarked about the hegemony of Europeans over their colonies in the heyday of the British Empire: “We have the Gatling gun, and they have not.” In 1992, the neoconservative Paul Wolfowitz, undersecretary of defense in the George H. W. Bush administration, formulated what has since become known as the Bush Doctrine in “Defense Planning Guidance 1994–99.” This strategic plan emphasizes three points: the primacy of U.S. power within the New World Order; the right of the U.S. to engage unilaterally in preemptive attacks when necessary to defend its interests; and, in the Middle East, the “overall objective” to remain “the predominant outside power in the region and preserve U.S. and Western access to the region’s oil.”24 The invasion and occupation of Iraq in 2003 followed from these premises. Dick Cheney, now an advocate of the Bush Doctrine, argued against toppling Saddam in the aftermath of the Gulf War in 1991: “I think to have American military forces engaged in a civil war inside Iraq would fit the definition of quagmire, and we have absolutely no desire to get bogged down in that fashion.” Time changes, however. The lure of Iraq’s oil reserves in a world facing future shortages of oil, control of the Middle East as the fulcrum of power in such a world, and prospects of obscenely lucrative contracts and concessions, as Greg Muttitt reports in “The Iraqi Job: Hijacking Iraq’s Oil Reserves,” seem to have led the U.S. on to a long-term intervention from which it may be difficult to disengage. Andrew J. Bacevich, himself a conservative military theorist, sees the problem: “Holding sway in not one but several regions of pivotal geopolitical importance, disdaining the legitimacy of political economic principles other than its own, declaring the existing order to be sacrosanct, asserting unquestioned military supremacy with a globally deployed force configured not for self-defense but for coercion: these are the actions of a nation engaged in the governance of empire.”
Yet, as in 1776, empire is acceptable only as long as its subjects believe they benefit from living under its control and limiting their aspirations to those their rulers deem acceptable. While Third World elites may have ample opportunities to live an opulent First World lifestyle, 2 billion people crowd into urban slums in the cities of the Global South, and mountains of debt continue to shackle economic and social development.26 In this context, the Bush Doctrine calls for war without end to preserve the empire’s web of control. But, as Antonia Juhasz points out in “Global Uprising: The Web of Resistance,” the world’s peoples seem to be deciding that the struggle to create a democratic alternative to globalization is preferable to living perpetually in the shadow of empire.
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