The Global Empire

from the book

Triumph of the Market

by Edward S. Herman

published by South End Press, 1995

Freedom as the Recognition of Necessity

During the years of disintegration of the Soviet bloc, numerous articles in the mainstream media referred to the ongoing collapse of the Soviet "empire." The same media have never applied the word empire to the world of U.S. (or other Western dominated) client states. By ideological premise these are Free, and at most temporarily advised, aided, threatened, and occupied until the natives are ready for self-rule and responsible leaders are in place.

But this self-serving usage is deceptive. The New World Order (NWO) gives daily manifestations that a more sophisticated phase of imperialism has evolved in which trade, aid, loans, debt management, proxy armies, techno-wars, and international "law" are deployed to keep Third World countries in a dependent status. Free World imperialism has been extended to a virtually global regime with the collapse of the former Soviet Union, opening up a vast new area for exploitation, removing a major obstacle to the First World's use of force against the Third World, and making the UN system once again serviceable in the cause of Freedom. In short, a higher stage of "the highest stage" of capitalism has been reached.

The new system is now working very well to quash or prevent the emergence of Third World leaders and movements that might embark on an independent course of development. Michael Manley, recently retired from office in Jamaica, has pointed out that social reform has become impractical, with Jamaica desperate for foreign exchange and "strapped up to its eyeballs, totally dependent on an IMF that's more powerful than ever." His own earlier experiment in reform was undermined by Reagan policies as well as normal market forces, and the more mature Manley, returning to office in 1989, opted to accept the constraints of the NWO and eschew any attempt at progressive politics. He now not only regards these constraints as inescapable, he has surrendered spiritually as well as in practice to the new realism. The new Manley contends that "the market is the guarantee that you will attain the necessary level of competitive efficiency to be able to survive in a world market. "

Freedom in the NWO thus has two aspects: economic freedom to invest, sell, and repatriate profits, which is fundamental; and the derivative freedom of leaders of weaker countries to carry out policies within the constraints of imperial reality. The latter freedom harks back to the Spinozan concept of freedom as the recognition of necessity.

Let us review briefly the main elements and bases of the New Freedom of the Manleys, Ortegas, and their ilk.

The Imperialism of Free Trade

A notable article by John Gallagher and Ronald Robinson entitled "The Imperialism of Free Trade" (Economic History Review, 1953) stressed the importance of "economic dependence and mutual good-feeling" as the basis for domination of less developed countries (LDCs) by imperial powers. Trade, loans, dependence on ports and markets, and investment in and control over railroads and other forms of communication produced an "informal paramountcy" over LDCs. This was frequently confirmed by a "treaty of free trade and friendship made or imposed upon a weaker state," which was perhaps "the most common political technique of British empire." Technical, marketing, and financial dependency were supplemented by the political influence of local comprador elements. Once the LDC's economy became dependent on foreign trade, the classes whose prosperity was drawn from the trade normally worked themselves in local politics to preserve the local political conditions needed for it. Gallagher and Robinson emphasized that intervention was only a supplement to a dominant influence that normally flowed from free-market forces. The imperial power would have to use military force only when local polities "fail to provide satisfactory conditions for commercial or strategic integration."

Subsequent analyses have added the consideration that economic penetration and marketing connections have brought LDC elites into a new social nexus, including acculturation to the advanced consumerism of the First World. "Denationalization" of elites in Latin America thus took the twofold form of working for foreigners, and representing their interests, and absorbing their culture and repudiating one's own. The so-called "international demonstration effect" followed from the latter, and was characterized by a gradual shift of elite purchases from local goods to high-style foreign imports. This weakened domestic industry and, via the increasing imports, made for balance-of-payments difficulties, enlarged debt, and greater dependency. Some analysts have pointed to the contrast between the Latin American and Japanese elites in this respect: for many decades the latter rejected denationalization in both its aspects. This helped preserve Japanese economic and cultural autonomy and contributed to their ability to take off into sustained economic growth.

"Managed" Trade

The United States and other great powers also "manage" trade, via tariffs, quotas, subsidies, harassment and seizures of imports, threats of retaliation, and boycotts. Much of this management is done under the guise of combating somebody else's "unfair trade." Thus, beyond the power stemming from the dependency relations of normal trade flows, the great powers manipulate the trade environment with "bilateral initiatives based on bullying smaller trading partners."

The Aid System

Government aid has long been deployed to supplement private trade and financing. In the post-World War II era this was improved and given international sanction by the creation of major international lending institutions, including the IMF, World Bank, and InterAmerican Development Bank, all dominated by the United States. Given U.S. power, U.S. hostility to a small country has traditionally resulted not only in the cutoff of direct U.S. aid, but defunding on the part of the "international" institutions, and then by private finance. When added to "managed trade" attacks, the pressures on small countries through these economic channels can be very severe.

On the other hand, states meeting U.S.-IMF-World Bank standards are treated generously. The criteria of acceptability are a suitable degree of political subservience, and policy choices that, as Gallagher and Robinson described in connection with imperial policy in general, "provide satisfactory conditions for commercial or strategic integration." Such policies-namely, establishment of an open economy, privatization, a stress on raw materials exports, protection of the rights of foreign investors, cutbacks in social budgets, and devotion to inflation control-are the elements of Structural Adjustment Programs (SAPs) implemented by the IMF enforcers and missionaries. Games Morgan, an economics correspondent for BBC World Services compares SAP to the "word of God" dispensed by missionaries going out from Western Europe to visit the barbarians in the Middle Ages.)

SAPs have often been implemented by terror states that were the ultimate in non-democracy. But aid and bank funding flowed their way. Nicaragua, pursuing the logic of the majority" in the early 1980s, was quickly defunded and even put on a Free World hit list; Argentina under military rule from 1976 to 1983 murdered thousands, but received lots of Free World money. Marcos, Mobutu, Suharto, Pinochet, end the Brazilian generals after the 1964 coup met the twofold criteria of freedom noted above: economic freedom and adherence to the proper rules of behavior in Third World countries. The needs and demands of the local majority have been irrelevant in this system, and in fact a "courageous" willingness to resist demands for relief in the face of mass suffering is a key characteristic of qualified leaders.

In this framework, we can see that Yeltsin is now the IMF's and the West's "hit man" who inflicts pain on the general population as required by the imposed model-as Pinochet and Marcos did before him-with much of his power now resulting from the fact that the aid is contingent on Yeltsin's retaining authority and thus preserving the West's "confidence" in Russia's pursuit of a SAP. Structural "reform" funded by "aid" can move only in one direction; if any reforms designed to advance social democracy were attempted, confidence would sag, funding would dry up, and the leaders pursuing such outlandish ends would become demagogues and perhaps even qualify for destabilization.

The Subversion System

Subversion is an invidious word that the mainstream media and intelligentsia rarely if ever apply to their own government's actions, and acts by the United States that would be gross subversion if done by others are normalized in the U.S. media. Most notable was the arming, training, and brainwashing of Latin American police and military establishments from the 1950s onward, to reorient them to U.S. needs and provide a counterweight to populist and radical movements at home. This was followed by the rapid proliferation of military dictatorships, death squads, torture, and disappearances on a continent-wide basis in our most closely watched sphere of influence.

Brazil in the early 1960s is a classic case (and the classic exposition is in Jan Black's United States Penetration of Brazil), where the United States operated as a quasi-occupying power in this supposedly sovereign country, the largest in Latin America. The U.S. Embassy expected to be consulted on major decisions. The United States subsidized hundreds of politicians, intellectuals and journalists, organized think-tanks, bought space in newspapers, penetrated and tried to disrupt labor and peasant organizations, and established close relations with a significant segment of the military establishment and other security forces. It was a virtual partner in the 1964 coup, wrote the justifying White Paper (unattributed), and the ruling generals expressed their deep appreciation and loyalty to the Godfather in the years that followed.

In lesser client states, U.S. intervention in policymaking and manipulation of the political environment is equally or more blatant, but it is treated with brevity and understanding in the mainstream media. For example, while U.S. law prohibits foreigners from funding and organizing our elections, major U.S. intrusions in the Nicaraguan elections of 1984 and 1990 were taken as perfectly legitimate in the U.S. mainstream media. An imperial double standard was completely internalized. This is plausible-the normalization of our own subversion is obviously necessary to maintain subversion as a viable instrument of imperial policy.

The Proxy Army System

In addition to subversion by the provision of "military aid and training, " proxy forces may be organized and funded to attack a target country whose military forces are not easily won over to counterrevolution. This was the case in Nicaragua after July 19,1979, where the United States had to make do with Somoza National Guard remnants in Honduras, supplemented by mercenary recruitment, just as it used the Chinese Nationalist Army remnants in Burma after 1949 to harass China, and the Khmer Rouge and its allies in Thailand to attack Cambodia (and by this route, Vietnam) after 1979. As is well known, U.S. support automatically makes these proxies "freedom fighters," as opposed to terrorists. It is also clear that any ruling by the World Court declaring the proxy army system illegal in a particular case (now unlikely in the NWO) would render the Court momentarily a "hostile forum" that can be reasonably and safely ignored.

The Techno-War Option

Panama in 1989 and Iraq in 1991 demonstrated the efficacy of a short, capital-intensive assault as a useful imperial option for displacing a disobedient leader (Panama) or returning to the stone age the society of a disobedient and threatening one (Iraq). The option was made more viable by the disappearance of the Soviet Threat (i.e., Soviet constraint), the associated return of the UN system from demagoguery to reasonableness and utility, and mastery of the art of the short war that minimizes U.S. casualties while providing the media and public with a modern version of the Roman circus (with bombs dropped on "mere gooks," Arabs, etc., instead of barbarians or Christians being fed to lions).

The New Legality

A crowning touch to the new imperial system has been its refurbished base and legitimation in imperial law. First, there was the reconquest of the Security Council, with the demise of the Soviet Union eliminating the threat of a veto, and the virtual dependency status of the members assuring a majority vote in favor of proposals by the United States and its eager British Tory ally. Iraq can be devastated and starved by the United States under UN auspices. At the same time the United States can protect its Israeli client from enforcement of a long-standing Security Council resolution (242) condemning Israel's illegal occupation of territory, and can veto or simply ignore a Security Council vote condemning its own invasion and occupation of Panama.

In a further development of imperialist legality, the World Court, which challenged U.S. direct and sponsored terrorism against Nicaragua in 1986 (albeit without effect), dismissed Libya's appeal to international law which, according to the Montreal Convention of 1971, appeared to give Libya certain options in handling the case of its two citizens accused of involvement in the Pan Am 103 bombing. The World Court now declares that a Security Council resolution supersedes international law! This rounds out the legal system of the NWO nicely. The law is what the Godfather decides.

The Imperial Hierarchy

In sum, the global imperial order has been strengthened by the Soviet collapse and Chinese counter-revolution. It has been weakened somewhat by the economic disabilities of the United States and the rise in economic strength of Japan and Germany. But the United States is still far and away the largest and most diversified economy, has the largest aid budget, dominates the international lending institutions, and its huge investment in military power, and the relatively small Japanese and German military establishments continue to give the United States preeminent power and considerable discretion in dealing with Third World countries. The Gulf War displayed the structure of power: Germany and Japan were compelled to support and even help fund U.S. actions damaging to their own interests.

But while the imperial hierarchy has been strengthened vis-a-vis Second and Third World countries, the increased size and mobility of the transnational corporations (TNCs) (including the global private financial institutions) has weakened the power of individual states, including those at the peak of the hierarchy. Their capacity to run independent monetary and fiscal policies has been reduced and their freedom of action in general is to a great extent contingent on their serving the TNC and banker interest. In the age of the triumph of the market the dominant colossi that stand astride the world are the major TNCs and banks; nations are free to serve these rulers of the world.

Z magazine, July/August 1992

Triumph of the Market