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History Of Us Imperialism: Pre-world War I

Discussion in 'Picard's Corner' started by Picard, Nov 10, 2016.

  1. Picard

    Picard Lt. Colonel RESEARCHER

    Feb 4, 2012
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    Pre-World War I

    US tradition of using force to solve the problems where diplomacy would suffice actually goes to very beginning of United States themselves, with any native populace in the way of US expansion being dislocated, exterminated or isolated in reservates. United States kept expanding over North American continent through conquest and purchase (Louisiana 1803), however expansion towards the North was stopped by their defeat in English-American War of 1812.

    Since very beginning, Americans have perceived themselves as people chosen by God to propagate their values and beliefs to rest of the world. Thus, extending US-style demo(n)cracy to rest of the world is seen as a something of an imperative beyond simple interest in profit. In that they can be compared to Roman Empire – much like Rome, United States don’t see themselves as opressors, but as civilizators; slaughter and genocide are both acceptable if they serve interests of political and social elite.

    In 1823, Jason Monroe declared both Americas to be US-exclusive interest zone and thus exempt from any colonization attempts or interference by European powers. However, until end of the 19-th century, it was British Navy which actually enforced that exemption, due to UK’s own interests – only by end of the century did United States have navy capable of enforcing the declaration on its own.

    Still, Monroe Doctrine did not exemp United States from such interference, setting up American continent as US interest zone. Theodore Roosevelt has confirmed in 1904 that United States have a special right to intervene in any country in both Americas, militarily if need be. That right was, over time, extended to rest of the world.

    In 1898, after Spanish-US war, United States have gained control over the entire Spanish empire in Pacific and Carribeans (Cuba, Puerto Rico, Phillipines, Guam). In same year, Hawaii were also annexed.

    Theodore Roosevelt, arguing for annexation of Phillipines, claimed that it is “not imperialism, but expansion”. Such euphemisms will later become typical of US politicians. After Phillipines were annexed, 200 000 Filipinos were killed out of population of eight million in an attempt to crush the rebellion, which happened in 1903.

    United States controlled the Phillipines from 1898 to 1946; Cuba was protectorate from 1901 to 1934, and in that time, two naval bases were built on Cuban territory – Guam and Puerto Rico; both bases are still under US control. United States also controlled island’s sugar economy and political life, intervening in force when necessary to quell uprisings. Cuban government had to obtain blessing from US minister in Havana in order to undertake any major departure.

    In 1903, United States sponsored a coup against Columbia in which Republic of Panama was created; new country immediately gave right for building a canal over Panama isthmus. Upened in 1914, canal remained under direct US control until 1979, to be again invaded in 1989-1990.

    Woodrow Wilson interventioned militarily in Haiti in 1914, Dominican Republic in 1916 and twice in Mexico (1914, 1916) to crush revolutions that threatened to nationalize US land, as well as mining and oil companies. However, as none of these interventions had a result of United States annexing any land, but rather installing US-friendly regimes and using them to control politics and economies of invaded countries, many believe that these interventions cannot be described as actions of an empire. They are, obviously, wrong.

    In 1899, United States entered China and claimed equal treatments as that of European powers (in other words, preferential relative to indigenous Chinese commerce). However, while United States took liberty in rest of the world, US involvement with Europe was purely economical, not military, in nature – excepting when it comes to matters directly pertaining to American continent – due to the fact that Europe could, if unified, easily counter any US attempt at involvement. Moreover, there was fear that a politically unified Europe could threaten the security and very identity of United States; that fear still remains.

    In 1914, United States have displaced Great Britain as world’s leading industrial power, accounting for 33% of world’s GNP. Same year, US Navy ranked third in the world, just behind UK and German fleets, after a massive buildup. Despite all that, and criticism from Theodore Roosevelt, Woodrow Wilson kept United States from entering World War I. In 1917, however, he entered war, declaring that “German agression is a threat to humanity itself”.

    After US entry won the war for the Allies, Wilson created Fourteen Points and League of Nations; however, US Senate refused to allow United States entry into League. United States have greatly benefoted from the World War I, becoming greatest creditor and financial country in the world, and producing 43% of world’s industrial output.

    US entry in World War II also won the war for the Allies (despite USSR carrying the brunt of fighting) but this time, United States emerged from the war, which saw dissolusion of old European empires, as unmatched world empire, producing half the world economic output, and holding 80% of world’s gold reserves, along with gigantic armed forces. At the end of the World War II, United States opted for a show of force, unnecessarily dropping atomic bombs on Hiroshima and Nagasaki (as matter of fact, Japan was trying to surrender since Battle of Midway).

    While Roosevelt was preaching about evils of British and French Empires and their imperial ambitions, his advisors were compiling lists of bases to be included in US empire around the globe. However, rise of Soviet Union left United States competing for dominance over the globe; thus NATO was created, which, coupled by interests of US military industry, was actually a superior option to destruction of USSR – existence of strong empire in vicinity left Western European countries to seek protection of another power – United States. Thus era of increased militarization of United States started, as did the era of US interventions in oil-rich Middle East.

    In 1933, SoCal – today Chevron – obtained 60-year concession to drill and export Saudi oil. In 1945, SoCal created Arabian-American oil company (Aramco). United States, in order to secure flow of oil, did their best to keep Saudi ruling elite satisfied. With time, Saudi oil fields de facto became part of US oil industry. Iran was also area of US interest until 1979 and islamic revolution in the country. In 1979, Soviet Union invaded Afghanistan, after which United States started preparing Middle East for possibility of US military intervention. During Iraq-Iran war, United States supported Iraq, including access to high technology.

    When Cold War ended, United States had powerful Military Industrial Complex. However, now it faced emerging economic powers – Japan and Germany – both of whom dedicated far greater percentage of resources to civilian research. Ronal Reagan’s expenditures near the end of the Cold War created large fiscal deficits, and United States are now in position of many empires through ages, where imperial commitments outweighted empire’s ability to undertake them. Due to that, and aforementioned rise of new economic powers, United States had to produce a new excuse for continuing military and political primacy, and found it in War on Terror. NATO, an unnecessary dinosaur of the Cold War, has thus been maintained, with one of goals being to prevent – or at least limit – the rise of Germany. United States have also appointed themselves a world policeman, helping MIC and maintaining world primacy, in one stroke.

    World War I

    In 1915, United States have sent troops to Haiti, and occupied Dominican Republic. In 1914 and 1916, armed intrusions were sent into Mexico so as to teach the Mexicans to “elect good men.”

    Inter-War period and World War II

    US military industry and finances during this period also had fingers in Europe. In 1920s to 1940s, Wall Street has financed preparation of Germany for war – one which began even before Hitler came to power, and continued until 1945. In 1934, Germany produced 300 000 tons of natural petroleum products, and 800 000 tons of synthetic gasoline. In 1944, production was 6 500 000 tons of oil – 5 500 000 of which was made synthetically, via usage of Standard Oil hydrogenation patents. US corporations aided German rearmament, despite knowing that probable outcome is another war in Europe.

    Treaty of Versailles imposed heavy reparations burden on Germany – one which made Hitler so popular. Annual fee was 132 billion gold marks – a quarter of 1921 German exports. As Germany was unable to pay it, France and Belgium occupied Ruhr. Meanwhile, US loans were used to establish large chemical and steel cartels in Germany, ones which later helped Hitler to power, and produced bulk of German war materials. Between 1924 and 1931, Germany paid 86 billion marks in reparations, and was given 138 billion marks in loans. It was actually 1928 Young plan (formulated by Morgan agent Owen D Young) which helped Hitler to power, by convincing many people that they had to join Hitler if Young plan was to be prevented from collapsing Germany. Young Plan was actually nothing more than a plan to occupy Germany with US capital, similar to Friedman’s neoliberal policies that will be discussed later.

    In 1920s, three major loans were made by US to three German cartels – same ones which put Hitler in power few years later. On boards of two of these cartels, US financiers were directly represented. Two cartels, IG Farben and Vereinigte Stahlworke, produced 95% of German explosives in 1937-8, using caapcity built by US loans and partly US technology. IG Farben had also cooperated with Standard Oil, which gave it monopoly on German gasoline production. Two largest tank producers in Germany were also Opel, a subsidiary of General Motors (which had 100% of ownership in it), and Ford A G, subsidiary of Ford company in Detroit (Ford himself was decorated by Hitler for his services to Third Reich). Bendix Aviation helped create German aircraft industry – in 1940, it supplied complete technical data for diesel engine starters to Robert Bosch, and before it it supplied data on automatic pilots to German Siemens&Halske A G.

    On beginning of World War II, IG Farben was largest chemical manufacturing enterprise in the world, with vast influence – a state within the state. Without capital from Wall Street, however, it wouldn’t exist – and Hitler would have been remembered os yet another political failure, or wouldn’t be remembered at all. Furthermore, without IG Farben’s capital, Germany would have been unable to go to war. IG Farben was also tasked by Hitler to make Germany independent from imported resources – rubber, gasoline, lubricating oils, magnesium, fibers, fats and explosives – by utilizing vast German coal reserves. Processes were developed or acquired abroad – such as iso-octane process, acquired from United States.

    Farben made numerous arangements with US firms – including technology exchanges. It also served as espionage agency during the war, with Chemnyco Inc serving as its US arm. Moreover, it helped German military on its own initiative – Wehrmacht only rarely had to approach it for projects. Moreover, most of Nazi propaganda in United States was funded by firms inside United States themselves. Many directors of US branch of Farben came directly from Wall Street; yet, only directors found guilty at Nuremburg trials were Germans.

    By 1930, General Electric also gained effective monopoly on Soviet electrical industry, and soon thereafter penetrated last bastions in Germany, specifically Siemens. While it was able to acquire shares in Siemens, it was unable to get directors on Siemens board, which consequently remained fairly independent of GE. Siemens also never participated in financing of Hitler, directly or indirectly, unlike US-dominated A.E.G. and Osram.

    Thus, by time of Hitler’s preparations for takeover, US firms dominated Germany. Both A.E.G. and Osram, as noted, financed Hitler. IG Farben supplied 30% of the 1933 Hitler National Trusteeship (or takeover) fund, as did all other firms GE was associated with.

    General Electric also cooperated with Krupp, which went on to develop 8,8 cm Flak 18/36/37/41, which found use as anti-tank gun – actually, Tiger I tanks used modified version of Flak 36 as KwK 36. General Electric, with Krupp’s help, obtained monopoly on tungsten carbide in US. German electrical industry was also mostly owned by US firms, and only companies not owned by US ones – such as Brown Boveri and Siemenstadt – were bombed by US Air Force. Meanwhile, originally civilian AEG plant was converted for civilian production; it was not bombed until after protection has been developed.

    Standard Oil, meanwhile, helped prepare German economy for war, as German crude petroleum supplies were insufficient for prolonged war. Standard Oil-developed process for getting petroleum from coal was what enabled Germany to go to war. It also undermined US preparations for war. As late as 1944, Standard Oil contributed to Hennrich Himmler’s personal fund.

    Standard Oil/General Motors owned Ethyl Gasoline Corporation supplied Ethyl lead and ethyl fluid – used to improve engine efficiency; without it, mobile warfare would be impractical. Until 1935, such compounds were manufactured exclusively in United States; in 1935, know-how was transferred to Germany by Ethyl Gasoline Corporation, despite protests of US Government.

    In 1939 I.T.T. in the United States controlled Standard Elektrizitats in Germany, which in turn controlled 94 percent of Mix & Genest. Lorenz Company owned 25 % of Focke-Wolfe AG in Bremen, which was making airplanes for Luftwaffe (such as fighter FW-190).

    In 1930s, Henry Ford built Gorki automobile plant in USSR; moreover, he was one of foremost Nazi backers. In 1922, he was backing Adolph Hitler’s movement in Munich. Hitler used Ford’s funds to fund Bavarian rebellion. However, Hitler’s backing in late 1920s and early 1930s came from chemical, steel, weapons and electrical industry cartels, not individual industrialists. In 1928, 40% of Ford Germany was transferred to IG Farben during latter’s merge with Ford, and Carl Bosch of IG Farben came to head Ford Germany.

    Through German Ford, Germany imported various war materials. In late 1930s, Ford-Werke AG was transformed into German company, which exported automobiles to rest of Europe and US; any required foreign supplies were procured through American Ford Company. During war, Ford transferred modern US production and sales methods to Germany; information about that was promptly buried by Washington. French Ford produced 20 trucks a day for Wehrmacht.

    While US Bombing Command did not bomb European plants owned by Wall Street interests, UK Bombing Command apparently did not receive note. When RAF bombed Ford plant in Poissy in France in 1942, Vichy Government paid Ford 38 million francs as compensation for damage. Its primary function was manufacture of light trucks and spares for trucks.

    Nuremburg industrials gave large sums of money to Hitler. Majority of those that did, however, had connections to United States. Except for Thysenn and Kirdoff, all firms that backed Hitler were multinationals built up with US loans in 1920s. However, even Thysenn had connections in United States, and his US partners were prominent members of Wall Street financial establishment, such as Harrimans. Harriman and Thysenn interests did business between them, and although there is no proof that Harrimans supported Hitler directly, they knew of Thyssen’s support for Hitler.

    On Kaiserhof Meeting in May 1932, IG Farbe, Hamburg-America Line, and Diem of the German Potash Trust raised more than 500 000 Reichmarks and given to Rudolf Hess; IG Farben alone contributed 100 000 RM. A total of 3 000 000 was contributed by prominent firms and businessmen; 700 000 of that came from IG Farben.

    Hitler also had Keppler Circle, a group of businessmen who supported his rise to power before and during 1933 and put them under protection of SS. Its founder, Wilhelm Keppler, was close to Hitler even before 1933. Few years after being posted to Austria in 1938, he achieved string of directorships in German firms, including being chairman of two IG Farben subsidiaries – Braunkohle Benzin AG and Kontinental Oil AG; former firm was one that acquired US technology for creation of synthetic gasoline from coal. Meanwhile, at least 8 members of Keppler Corcle were high-ranking members of IG Farben or Farben subsidiary.

    Major US multinationals also were represented in Circle, and made major cash contributions to the Reich regime until 1944.

    American IG was renamed in 1941 to General Aniline & Film, but remained important producer of major war materials. IG Farben plants in Germany, similar to Ford and United Rayon plants, were never bombed by USAAF.

    Developing computer industry was not free of guilt either; beginning in 1933, with Hitler’s rise to power, IBM made a series of contracts with the Third Reich; countracts included running railroads, organizing concentration camp slave labor, as well as identifying and categorizing all European Jews and other prosecuted minorities. While there were no electronic computers back then, IBM provided punch card machines.

    US-based automotive firm General Motors manufactured many of vehicles used by Third Reich military apparatus, most of the through their subsidiary in Germany, Opel.

    Prescott Bush, grandfather of George Bush Jr., had one of his business ventures – the Silesian-American Corporation – siezed when it was discovered that it was profiting from slave labour at Auschwitz concentration camp.

    US industrialists and politicians, such as Henry and Edsel Ford, never were implicated at Nuremberg trials, despite guidiles calling for arrest of „Nazis and Nazi sympathisers“ – which Fords clearly were.

    In short, Wall Street financed not only Hitler’s rise to power, but also Third Reich’s rearmament programmes, and war itself. International firms, especially banks, were extremely important in all this, and without them, Hitler would never be able to come to power in the first place, let alone initiate a war.

    In everything it did – massive armaments industry, imperialism, armed invasions, corporations’ influence in Government – Nazi Germany was a corporatistic empire, much like present-day United States, but far more direct. Entire World War II was result of massive armaments industry Germany built up – a Military Industrial Complex, much like modern-day US „peacekeeping interventions“ over the world are result of US’ own MIC. But more about that later.

    In 1938-1941, United States used embargoes to push Japan to attack them – Japan was left with no other option. Moreover, US politicians knew precisely when and where will Japanese Navy launch its attack. Similarly, in 1915, Lusitania was sunk to push US into war –although that didn’t work (namely, US ignored German warnings about waters around UK being no-sail zone, and did not follow any of established protocols for civilian ships in danger of submarine attacks – protocols which would have allowed it to evade any submarine of that era. Moreover, Lusitania was carrying war materials to Britain and actually sank due to ammunitions explosion).

    Cold War

    Democratic governments have been overthrown in Iran in 1953, Guatemala in 1954, and Chile in 1973, courtesy of CIA.

    During Cold War, United States exported strategic materials and knowledge to USSR. In 1961, 35 ball bearing machines were exported to Soviet Union – United States themselves had 72 such machines left. All of that was done without knowledge of public, or in Congress. In 1968, Gleason Company of Rochester in New York exported equipent to Gorki automobile plant in Russia (built previously by Ford) – plant which produced military vehicles. Despite the fact that post-WW2 assessment showed that any automobile industry is a major war industry, United States exported automobile-manufacturing plants to the Soviet Union.

    Gorki plant produced two models of Ford trucks; both were adopted for military use. US equipment was shipped to Gorski during both WW2 and Vietnam War. During WW2 and Cold War, it had continuous history of producing vehicles for military use. Similar situation was with ZIL plant.

    In 1960s and 1970s even rager aid for construction of military truck plants was approved. One was Volgograd plant, and had capacity to produce 600 000 vehicles per year. Three quarters of equipment came from United States.

    In late 1960s and early 1970s, US financed building of large Kama plant, with annual output of 100 000 vehicles.

    Similar assistance was provided with computer technology. In August 1971, US DoD paid 2 million USD to Hamilton Watch Company for watchmaking equipent (used to manufacture bomb and artillery shell fuses, aircraft timing gear and similar).

    United States also exported computers – Soviet models of Cold War still used electronic tubes and could, as of 1960, perform 100 operations per second, compared to 15 000 operations per second of 1950s US computers. Soviet military use of imported equipemnt was well known to US Government. US also exported accelerometers and ball bearings for Soviet ballistic missiles, as well as equipment for their production, which allowed USSR to create highly precise ICBMs, as well as nerve gas technology.

    Despite Eisenhower himself providing resistance to MIC at home, his administration was more than happy to protect corporate interests abroad. In Latin America of 1950s, nationalist economies, based around ideas similar to these of US New Deal, were proving to be extraordinarily successfull in economic terms. In 1953 and 1954, Keynesian governments in Iran and Guatemala were overthrown, former being replaced by exceedingly brutal shah. Coup in Guatemala was done on behest of United Fruit Company.

    “Problem” was that President Jacobo Arbenz has expropriated (providing full compensation) some of UFCs land, with goal fo transforming Guatemala “from feudal to modern capitalist state”. He was soon out of office, and UFC was running the country again. Iran, on the other hand, wanted to nationalize oil industry.

    University of Chicago was chosen to “educate” Chilean economy students, actually to brainwash them into following lassiez-faire philosophy, including “if it doesn’t work, you’re not doing it hard enough” logical fallacy. Project was done at Chilean Catholic University, with all expenses paid by the United States. In 1965, program was expanded to include students from across Latin America. But despite it, Latin America continued to move towards the left – discussion was between extensive nationalization, and formation of trade bloc to rival Europe and North America. By 1970, in Chile itself all three major political parties were in favor of nationalizing copper mines, nation’s largest source of revenue that was at the time controlled by US corporations.

    In 1970, Salvador Allende won elections, promising to nationalize large parts of economy that were still in hands of foreign and local corporations. While he also promised to negotiate fair compensations to US companies that were losing property and investments, these were unwilling to part with extremely profitable arrangements: by 1968, US companies have invested 1 billion USD in Chile’s copper mining industry, sending 7,2 billion USD home.

    Immediately after that, ad-hoc Comittee on Chile was created in the United States, with purpose to force Allende to cease plans for nationalizations. Corporations included in the comittee decided to block US loans to Chile. In March 1971, it was discovered that US telephone company ITT had plotted with CIA and US State Department with goal of preventing Allende from being inaugurated. After that failed, ITT turned to shaping US policy towards Chile, a task it was successfull in, including a preparation of military coup against Allende. Yet in 1973, after years of tricks similar to one described, Allende was still in power, gaining even larger support than he had at first elections, all despite US lobbying.

    In Brazil, US-backed military junta seized control of the government in 1964, immediately establishing neoliberal economic programme, and opening Brazil to foreign investment. But when these measures proved unpopular to the point of junta’s regime being in jeopardy, junta turned to repression.

    Indonesia was not better off. Since Second World War, Indonesia was ruled by President Sucarno, a nationalist, who followed protectionist economic policies, redistributed wealth and threw out both IMF and the World Bank. In October 1965, CIA-backed General Suharto started killing country’s leading leftists (term used in economic sense), with CIA providing the list. Soon, more indiscriminate killings were started by Suharto’s followers, with between 500 000 and 1 million people being killed as a result. His economic program was prepared by students of University of Berkeley, so-called Berkeley Mafia, who were ideological duplicates of “Chicago Boys”, economy students from University of Chicago. Berkeley Mafia was also funded by Henry Ford.

    After the coup, Suharto not only followed economic programme, but packed his government with Berkeley Mafia members, in effect creating a technocratic government. Role of brutality in establishing and maintaining his regime was closely studied in Washington. Soon afterwards, laws were passed that allowed foreign companies to hold hundred per cent of Indonesia’s resources, handed out tax holidays, and within two years all Indonesia’s natural resources were divided between world’s corporate giants.

    Lessons from Indonesia coup were then used in Chile. In September 1971, top business leaders held a meeting to develop a regime-change strategy, while Chicago Boys, along with collegaues from Catholic University, developed economic strategies to be implemented after the coup – later called “The Brick”. Over 75% of their funding came from CIA, eight of ten authors of “The Brick” came from University of Chicago. Military, as mentioned, planned its own coup, and soon two groups opened a dialogue.

    Shock of the coup was to be followed by economic “shock therapy”, a lightning-fast ad-hoc implementation of neoliberal policies, as well as by general opression, which included torture techniques from CIAs Kubark manual.

    On September 11, 1973, General Augusto Pinochet launched a coup against President Sallende, who had refused to organize his supporters into militias, while Pinochet had complete control of the military. After 41 years of uninterrupted democracy, Chile was to find itself under military dictatorship, which came with fireworks, tanks firing on opposition there was none of, except for Allende and his inner circle who attempted to defend Presidential Palace. Military launched 24 rockets on Allende and his 36 supporters. After surrender, Allende was found with head blown apart; likely a suicide to prevent capture. Reason was that CIA brainwashed military into believing that any kind of socialism could be equated with Soviet-style Communism, and therefore had to be extinguished. In following days, 13 500 civillians were arrested and imprisoned, with hundreds being executed. End result of coup was 3 200 people dead or disappeared, 80 000 imprisoned and 200 000 fled the country for political reasons.

    By noon of September 12, Chicago Boys had finished their economic programme, taken straight out of Milton Friedman’s “Capitalism and Freedom”: privatization, deregulation and cuts to social spending. Without push and pull mechanism of democracy, they were free to implement it completely.

    Pinochet knew nothing of economy, yet coup and caimpaign of corporate sabotage spearheaded by ITT had sent economy into chaos. He named several Chicago Boys as advisors, and they spke things he did understand and like: that economics were like force of nature, that need to be respected and obeyed because “acting against nature is counter-productive”. This argument, of course, ignored two main points that actually destroy it completely: a) economy is not force of nature, it is part of human society and its creation, and b) human civilization is built on human ability to shape nature, act against it where required and adapt it to humanity’s own needs, as opposed to animals’ response of adapting themselves to the nature.

    For first year and a half, Pinochet mostly followed Chicago rules: partial privatization of state-owned banks and corporations, allowance of speculative finance, and cutting of governmental spending, except for the military – whose spending was massively increased. Price control was also abolished. Results were, expectedly, catastrophic: in 1974, inflation reached 375%, highest rate in the world and twice the top level under Allende. Costs of basics, like bread, suffered a massive increase. Country was hit with massive imports, which lead to equally massive loss of jobs and widespread starvation. With agenda in danger, Chicago Boys had to call in Milton Friedman and Arnold Hamberger. Friedman said that “shock treatment” was the only solution. He further advised complete free trade and cutting government spending by 25% across the board, and predicted that recovery will follow in matter of months. After it, Pincochet filled government with even more Chicago Boys, and in 1975, cut the government spending by 27%. In 1980, government spending was half of what it was under Allende. 500 of state-owned companies and banks were privatized at bagatel price. Result was that manufacturing as a percentage of economy was, by mid-1980s, at lowest levels since World War II. In the first year, economy contracted by 15%, and unemployed went from 3% under Allende to 20%. Crisis, contrary to Friedman’s predictions, lasted for years. 74% of average family’s income went to buying bread, while under Allende, bread, milk and bus fare took up 17% of average public employee’s salary. School milk program was eliminated, and many students were so badly fed that they were incapable of going to the school. Not that it mattered, since public school system was soon replaced by private schools, health care became pay-as-you-go, kindergartens and cementeries were privatized.

    Chile is now held up as a “proof” that free market works. But its period of steady growth that statement in question is actually referring to did not begin until mid-1980s. In 1982, despite (or, rather, because of) its strict adherence to Chicago doctrine, Chile’s economy crashed: debt exploded, and unemployment reached 30%. These problems were mainly caused by “piranhas”, financial houses that were now free from all regulation, buying country’s assets on borrowed money and racking up debt of 14 billion USD. In the end, Pinochet was forced to nationalize most of “piranhas”, and fired Chicago Boys – with many of them ending up under investigation for fraud. Collapse was prevented though, entirely thanks to the fact that Codelco, copper mine company that was nationalized by Allende and accounted for 85% of Chile’s export revenues, was never privatized. Chile was, in effect, what United States are today: a corporatist country, an alliance between state and big business. Thanks to Pinochet’s last measures, in 1988 economy stabilized and entered a phase of rapid growth. But by then, 45% of Chileans ended up below poverty line, and richest 10% had seen their wealth increase by 83%. Even in 2007, Chile remained among top ten most unequal countries in the world, a fact that does not help economy at all. It exposes Chicago school as pushing agenda of big business: exterminating middle class, making wealthy extraordinarily wealthy and the poor extraordinarily poor.

    In 1973, Uruguay military staged a coup and decided to go Chile’s route. Real wages dropped by 28%. In 1976, Argentina also fell under military junta, which also followed Chicago course. Argentina’s junta did not privatize oil reserves or social security. Still, strikes were banned, and employers given ability to fire workers at will. Price control was abolished, as were limitations on foreign ownership of Argentina’s companies. Within year, wages lost 40% of their value, and poverty spiralled. Argentina did want to avoid international pressure that was levelled against Chile due to obvious terror; as Chile eventually did, so Argentina settled on disappearances. By the end of the generals’ regin, 30 000 people have disappeared. Like after US invasion of Iraq in 2003, bodies would often show up in garbage bins, missing fingers and teeth.

    Governments of juntas collaborated with each other in cracking down on populace, in what was called Operation Condor. Operation Condor included information exchange and safe passages for each others’ agents so as to snatch subversives that had taken refuge in neighbouring countries. Information on torture was also exhchanged, with military officers attending “torture classes” – these included live demonstrations, and as many as 100 officers could be present at any given torture. Torture techniques were taken from “Kubark” manual, and included sensory deprivation and electroshocks among the others. Between 100 000 and 150 000 people were tortured in the Southern Cone, and tens of thousands were killed. CIA also directly trained Argentine police. Admiral Massera called junta’s terror campaign a “war for freedom and against tyranny”. Orladno Letelier, who worked on exposing Pinochet’s crimes, was killed on September 21, 1976. by assassins who have been smuggled into US with CIAs consent. Ideologically inappropriate books were burned, and some of students on University of Chile were shot for holding views that contradicted official ones.

    Raids targeting worker unions begun at the day of the coup itself. In Chile, arrests started while everyone was focused on the siege of Presidential Palace.

    Foregin corporations did everything they could to help regimes. In Brazil, several multinational corporations, including Ford Motor Company, financed their own private torture squads. In Argentina, company supplied cars to the military, and green Ford Falcon sedan was vehicle of choice for kidnappings. Juntas responded by ridding corporation’s production lines of trade unions – prominent members of unions were detained and tortured by techniques straight from Kubark manual. Mercedes Benz provided names of union leaders in their own factories to junta’s squads – sixteen people on the list disappeared, and only two of them were seen again. In fact, everyone who had vision of society built on anything except pure profit was in danger. Farmers were tortured by electricized picanas, while at the same time powerful ranchers rised price of meat by 700 per cent. In slums, anyone who helped poor was a target, including members of the Catholic Church. In September 1976, six high school students were tortured to death after student protests for lower bus fare. People were tortured to provide information – information that in many cases interrogators already knew, but divulgion of which would create a sense of betrayal and shame in interrogated.

    Torture was also used to make prisoners as individualistic as possible – choice was often between more torture for oneself or more torture for a fellow prisoner, so as to make them succumb to Western neoliberalistic, individualistic cutthroat ethos. Babies were taken from parents, who were then usually tortured to death, and given to members of junta, to be raised as “model citizens”.

    Human rights organizations, to most extent, ignored underlying political goals and focused on acts of torture without even trying to understand them. One of reasons for that was the fact that many of these groups received funding from Ford Foundation, same organization that funded many South American universities. While some of these were left-leaning, most of funding went to two institutions: University of Chicago’s Program for Latin American Economic Research and Training and Chile’s Catholic University, both of whom were examples of institutionalized neoliberal fundamentalism. Foundation also trained Suharto’s economists, who proceeded to basically sell entire country to foreign corporations. Despite it, Ford’s work did produce some results: corporation was often the only possibility of putting an end to worst of abuses, and it helped persuade US Congress to cut military funding for juntas, forcing them to scale back repression to an extent. But it would be wrong to think that Ford did this for filanthropy; it was closely associated to neoliberal dogma, and it did not want its image tainted. For this reason, only one – and completely independent – report ever asked the most basic of all questions: why.

    Milton Friedman, often hailed as a “great economist”, was directly responsible for campaign of terror that ravaged Chile, since his economic reforms could not be established peacefully. But that campaign was more than just terror; it was campaign of extermination targeted against whole sections of society. Result of neoliberal transformation of South America was that Chile, Brazil and Argentina were reduced from developed first-world nations to third-world hell holes. He would later go on to say that “Pinochet spent first two years trying to run economy on his own”, a very obvious lie made to excuse his economic programme which managed to completely ruin Chilean economy in first year-and-a-half after the coup in which it was implemented. He also claimed that Pinochet’s regime was example of “free society” brought by free markets.

    In 1979, US-backed Shah of Iran was overthrown, and new government nationalized the banking sector and brought in a land redistribution program, as well as imposed restrictions on imports and exports. Five months later in Nicuaragua, US-backed dictatorship of Anastazio Somoza Dabayle was replaced by left-wing Sandinista government in a popular revolt, which also restricted imports and nationalized banks.

    In 1985, Bolivian Presidential candidate Hugo Banzer enlisted help of neoliberal Friedmanite economist, Jeffrey Sachs. Unlike other neoliberal economists, however, Sachs believed that free market policies have to be supported by debt relief and foreign aid. His approach in other avenues was neoliberal, however – contrary to Keynesians, he believed that government austerity and price increases are best solution for the crisis, an utter illogicality considering that economics are all about flow of money and not its accumulation. While Paz Esstensoro was inaugurated President, Sahch’s policies were implemented thanks to back-room dealings. His “solution” to Bolivia’s crisis was price deregulation and tenfold increase in price of oil. This was supported by a promise of US aid if Bolivia went neoliberal route, and soon Bolivian borders were openet to unregulated import, wages were frozen, food subsidies were cancelled, as were price controls. State companies were also downsized, and all measures were done at one time so as to overload public’s perception of events, breaking their OODA loop.

    While price increases did end hyperinflation, they shifted all costs of that process on the poor. Unemployment rate increased from 20% in 1985 to more than 25% in 1987. By the same time, real wages were down 40%, and per-capita income fell from $845 to $789. Worse, most of total income was received by the rich; average income of average person was just $140. Sachs, who has returned to Bolivia, opposed increase in pays to deal with price increases. One of immediate results was that many farmers turned to growing coca, and by 1989 as much as 10% of all workers was connected to cocaine industry in some way. In 1987, illegal cocaine exports had generated more revenue for Bolivia than all legal exports combined, and had resurrected economy and beaten inflation. Bolivian economy itself had become addicted to cocaine. All of it was done through Vodoo politics – better known as “lying”.

    In response, a country-wide strike was organized. Paz responded to a response by placing country under effective military dictatorship, rounding up two hundred union leaders. This state lasted until economic plan was fully implemented.

    United States prevented formation of free democracies by forcing them to pay debts accumulated by previous juntas. In Argentina, junta collapsed after 1983, and Raul Alfonsin was elected president. But junta had managed to increase debt from 7,9 to 45 billion USD. In Uruguay, junta increased debt from 0,5 to 5 billion USD. In Brazil, junta increased debt from 3 billion USD in 1964 to 103 billion in 1985. Most of that money was spent on military and on torture camps, and much of remaining money simply vanished, transferred to accounts in foreign banks – Pinochet had 125 different bank accounts. In Argentina, of 35 billion USD borrowed by junta, 19 billion USD was moved to such accounts. Of the remaining money, most was spent on interest payments and on bailouts of private firms, as juntas absorbed their debts.

    In later half of 1970s, United States let the interest rates on debt soar. This meant that interest on debt could only be met by further indebtment. In Argentina, 45 billion USD debt left over by junta reached 65 billion USD in 1989. Brazil’s debt doubled in 6 years, to 100 billion USD. In 1986, Bolivia was hit by a price shock, and all exports except for coca dropped by 55%, literally hooking its economy on cocaine.

    In Europe, Solidarity organized a strike in Poland in 1980; Catholicism played an important role. Within a year, it had 10 million members, a half of Poland’s working population. It wanted five-day work week, social democracy, reduced bureocracy, ability of workers to decide how their factories are run. It demanded self-governing and democracy at every social level, and economic system combining the plan, self-governing and market. State-run companies were to become democratic workers’ cooperatives. But these goals were in opposition to Communist Party’s wishes, and it cracked down on Solidarity. In 1983, Walesa was awarded Nobel Peace Prize; yet everyone saw in Solidarity what he wanted to see, and not what Solidarity was. The left saw a socialism untained by genocides of Stalin and Mao; the right saw evidence of Communist brutality against even smallest dissent; Catholic Church saw ally against Communist atheism; while Margaret Tatcher and Ronald Reagan saw an opening in Soviet armor, despite themselves fighting in their own countries against everything that Solidarity represented.

    But by then, economy, ruined by political bickering and mismanagement of Communist era, was in free-fall. Solidarity was unable to reform it, having to fight simply to avoid complete meltdown and mass starvation. Inside Solidarity, some wanted to give over factories to workers, whereas others wanted Scandinavian social democracy. Both approaches would have worked, if it were not for the fact that Poland desperately needed loans and debt relief to get out of its immediate crisis. But despite such help being a central mandate of IMF, now-neoliberal IMF refused any help at all, eyeing a chance to implement neoliberal reforms.

    United States made it clear that they expected Solidarity to pay debts accumulated by ousted dictatorship, and IMF let the country fall deeper and deeper into debt and inflation. At the same time, hyped-up Jeffrey Sachs started working as advisor to Solidarity. Sachs offered help with paying off debt, but it came at price: neoliberal economy had to be put in place. Plan included slashing off subsidies, eliminating price control, and selling off entire industrial sector into private hands. These moves were in utter contradiction with what Solidarity wanted, but Poland’s leaders wanted a quick fix. In 1989, Sachs’ plan was adopted; in return, he secured 1 billion USD of IMFs help. Francis Fukuyama soon declared the “end of history”, a victory of liberty and economical libertarianism. Democracy and radical capitalism were to be fused together, despite statements that people wanted neoliberalism being nothing more than bold lies. In the same year, IMF and World Bank unveiled Washington Concensus, an attempt to crush new democracies under neoliberalism’s heel.

    First place where Fukuyama’s dream was to be tested was China. Two months after his February speech, protests started at Tainanmen Square, to oppose dictatorship’s newly-introduced neoliberal policies – deregulation of wages and prices was not followed by democracy, as Fukuyama claimed, but in repeat of Latin America, neoliberal policies were introduced through bloodshed. Like in Croatia in 1990s, old Communists used privatization to enrich themselves. Price controls were lifted and job security eliminated, but by 1988 Party was forced to reverse some of reforms due to popular backlash. Friedman visited China in 1988, and soon thereafter Chinese experiment took overtones of Chile. All of this resulted in protests on Tainanmen Square, protests as much against authoritarianism itself as against economic policies of dictatorial government, in which people had no vote. On May 20, 1989, Party decided to protect economic programme at all costs, and declared martial law – between 2 000 and 7 000 people were killed, measures that Henry Kissinger supported as “necessary”. Afterwards, 40 000 people were arrested in a witch hunt on opponents of the regime, and hundreds were executed. Workers bore brunt of the reprisals, and all neoliberal reforms that had to be reversed in 1988 were reintroduced. These events turned China into sweatshop of the world, basically wrecking Western economies: in face of low taxes, corrupt officials and spineless workforce cowed by massacres, capitalists were free to do as they pleased.

    This was a win-win for Party and for capitalists. In 2006, 90% of Chinese billionaires (calculated in yuans) were children of Party officials. Foreign multinational companies are still helpin China censor the knowledge about massacres – whenever “Chianmein Square massacres” or similar key words are typed in by Chinese, no results turn up.

    Post-Cold War

    Orthodox narratives tend to think of post-Cold War US policies as not being continuous with Cold War policies. However, there are no major differences; US policy continues to be malign and anti-democratic whenever its interests are opposed; and even when it is seemingly pro-democratic, it usually supports only phony representative democracies, easily manipulated for benefit of United States themselves. Massive military industry is also present, and United States have often criticized its allies in Europe for not spending enough on defense – despite the fact that EU is second-largest defense spender. It is still concerned with controlling world’s resources, especially oil – and is also curbing development of alternative energy sources. United States control IMF and World Bank, using them to push neoliberal policies to rest of the world; there is a literal conveyor belt delivering neoliberal economists – predominantly from University of Chicago – to headquarters of two institutions. This is in direct contradiction to reasons for IMF’s and WB’s founding – namely, to regulate markets, help countries in financial trouble, and prevent opportunities for rise of dictators like Hitler. But IMF was always regulated on basis of country’s effective economic size, which led to de facto complete US control over IMF, and latter’s complete embracement of neoliberal ideals after those took over in US.

    In fact, everything United States are doing in a new post-Cold War world is aimed at establishing US dominance – political and economic – and providing justification for continuing existence of Military-Industrial Complex. United States are, with exceptions such as Russia and China, to decide who has right to posses nuclear weapons and label everyone else as a “rogue state”. Continued US military presence in Japan and Germany is aimed more at preventing these economic superpowers from seeking policies independent of US ones than assuring their security (security from who?). External threats – real, and more often imagined, or even created – are used to justify large defense spending and militarization. “Two-war” doctrine was also adapted to justify large spending, but it was never anything more than a marketing, assuming far better equipped opponents than US likely enemies were (or are).

    United States are also promoting “free, unregulated market”, not only because of ideological concerns, but because it opens them access to previously protected world markets, and resources these markets had access to. At the same time, US companies’ investments are protected from confiscation by local governments – and large military plays role in securing these investments. Since 1983, IMF, as US-controlled body, forced countries that required its help to embrace neoliberal ideals.

    As for relationship with Europe, United States have prevented creation of European alternative to US-dominated NATO, which has quickly become far more than a military alliance. US military bases are still in Europe, limiting EUs ability to counter US.

    US position between two oceans allows United States to wage wars that have almost no impact at everyday life of citizens – except for cuts in public sector. That, combined with “always just” rhetoric, allows US elite to ramp up popular support for wars abroad. Any challenge to US primacy is met with military intervention or threat thereof. That threat is supported by world-wide network of military bases. Once United States go somewhere, they remain there – after First Gulf War, US military bases have been established in Saudi Arabia, Kuwait and other Gulf states. After bombing of Yugoslavia in 1999, military bases have been established in Kosovo, Albania, Macedonia, Hungary, Bosnia and Croatia. After Operation Enduring Freedom, US bases have been established in Afghanistan, Pakistan, Uzbekistan and Tajikistan.

    Only really important difference is the lack of the Soviet Union, which used to confine US military interventions abroad; though, it is possible that resurgent Russia may be able to fulfill that role. However, fall of the Soviet Union meant that United States have found themselves without a rival requiring enormous military expenditures; thus, War on Terror was used as a substitute. Today, rise of China and its threat to the West are constantly ramped up in order to justify huge levels of defense spending on irrelevant weapons (F-35 being the prime example).

    In many cases, United States had a choice between diplomacy and force for solving the problems; yet, they have usually (if not exclusively) opted for the use of force, causing wars required for MIC to prosper. At the same time, US-controlled IMF, World Bank and UN have continued to push neoliberal agencies, this time not only exploiting crises but also creating them. More than once did IMF falsify the data in order to wreck economy of country not conforming to neoliberal ideals, such as doubling cost of work force or inventing huge unpaid debts. Trinidad and Tobago’s economy was wrecked that way, and IMF’s “help” came with requirement of neoliberal reforms.


    When President Carlos Menem declared that he will revive Juan Peron’s nationalistic economic policies, he was pressued by IMF to continue junta’s corporatistic experiment. Soon, all country’s top economic posts were filled by University of Chicago’s neoliberal economists. These formed a mafia-like partnership with collegaues that remained on University itself. Soon, Cavallo Plan was enacted, selling off massive privatization coupled with equally massive cuts to public spending as a solution for hyperinflation crisis. Parts of Argentina’s economy – such as airline and oil reserves – that were still in public hands, were privatized. By 1994, 90% of all state enterprises have been privatized, and 700 000 workers fired in preparation for a sell-out.

    But Cavallo Plan was actually written not by Cavallo or IMF, but by JP Morgan and Citibank, two of Argentina’s largest creditors. Measures taken – such as tying peso to USD – meant that it became too expensive to produce goods in Argentina, so its economy was destroyed by cheap imports, and more than half of populace was pushed below poverty line. In 2001, President de la Rua was finally forced to flee in helicopter.


    In that vein, United States have continued giving aid to Colombia – while Cold War excuse was to combat communism, modern excuse is that aid is intended to combat narco-trafficking. However, money actually goes – and was going since the start – on combating left-wing guerilla groups, such as FARC (Revolutionary Armed Forces for Columbia) – despite US allegations of FARC being involved in narco-trafficking, FARC is actually actively cooperating with UN in facilitating a shift from coca crops to alternative legal crops, although some of its profits do come from taxing coca production. Meanwhile, right-wing groups such as AUC are left alone, despite supporting drug trafficking.

    After beginning of War on Terror, US have continued supporting Colombian military, despite the fact that paramilitaries, which have ties to military, are consistently responsible for more than 80% of human rights abuses as well as almost entire cocaine traffic. While coca plantations are targeted, all of targeted plantations were within FARC-controlled territory, in a campaign obviously aimed at cutting off one of FARC’s sources of revenue. US counter-insurgency manual also deemed terrorist attacks against civilians acceptable as a part of counter-insurgent strategy, and advised monitoring of labor organizations, legal political organizations that may serve as a front for insurgents, public education system, religious organizations; it also explained that counter-insurgents must watch for any refusal of peasants to pay taxes.

    In last 15 years prior to 2003, entire democratic left party was eliminated by right-wing paramilitaries. In 2002 alone, 8 000 political assasinations were carried out – 80% of them by paramilitary groups. Teachers, human right activists, indigenous leaders and community activists were regular targets.

    US interest in Colombia are obvious – Colombia is US’ seventh largest oil supplier, and has vast oil reserves within its territory. In fact, it now supplies more oil to US than Kuwait did in 1991. Second, repression has enabled Columbian transition to neoliberal dictatorship, where over half of population lives in poverty.


    In 1989, United States have decided to overthrow president Noreiga, a one-time ally. War, which lasted basically hours, claimed 24 US combat causalties, 450 Panamian military casualties and 2 000 – 4 000 civilians. Operation was labelled “Operation Just Cause”, a very hypocritical designation, as US concerns were strategic (control of Panama Canal, for one) rather than humanitarian. War was largest US military deployment since Vietnam, and unilateral “screw-the-UN” action caught President Noreiga by surprise. Invasion lasted hours, and UN resolution condemning it was vetoed by US, UK and France.

    As it turned out, quickness and cleanness of operation were its main dangers, as operation convinced US politicians and public that military solution can be quick, clean and successful – something which increased willingness to use force abroad. Moreover, with no USSR to watch over its shoulder, US freedom of using Rambo-style actions increased.

    Post-invasion democratic performance of Panama was poor, as with all other countries where US have changed the government. Timing of invasion has shown that USSR, dictatorial as it was, was in fact only thing restraining United States.

    Gulf War

    Gulf War had two purposes; on external plan, it was to protect oil-rich Kuwait from Saddam. On internal plan, it served as an excellent counter to those who were calling for cuts in defense spending. Another US concern was that Saddam may invade Saudi Arabia – very anti-democratic and opressive country, which supports Muslim terrorists in Bosnia, but which is also US ally, and one with large oil reserves to boot; the war was useful for consolidating US control over the region, especially over Saudi Arabia.

    When Iraq invaded Kuwait, it was far more than invasion of one sovereign state by another – it was a threat to US domination over the world. Had Iraq been allowed to keep Kuwait, it would have controlled 20% of world’s proven oil reserves. But with USSR having fallen apart, there was no state capable of preventing United States from invading Iraq. On internal political plan, US public was falsely convinced that Iraq possessed weapons of mass destruction, and thus there was no real opposition to the war. It is important to note that, had Iraq produced WMDs, United States hegemony over Iraq, and entire Gulf region, would have been politically challenged.

    All requests set by US were made specifically so Saddam could not accept them. War, thus, was inevitable; but it achieved its purposes of: defending Kuwait oil reserves; securing them to West; justifying extremely expensive military buildup of preceeding decade; demonstrating apparent need for military might as well as demonstrating US capability to provide global leadership. Financial cost of campaign was mainly paid for by Kuwait and Saudi Arabia. However, hundreds of thousands of Iraqi died due to direct effects of war, and many more due to economic sanctions. After the war, two rebellions rose in Iraq, by Kurds and Shiites, both previously encouraged by US during the intervention. US did nothing while Saddam crushed rebellions; two million Kurds escaped to Iran and Turkey, and hundreds of thousands of Shiites had to flee to southern marshlands of Iraq. UN, meanwhile, was involved simply so as to give invasion appearance of legitimacy.

    Interesting is the fact that, when asked by Iraqi President, United States ambassador said that United States will not intervene militarily if Iraq was to attack Kuwait. That was basically giving a green light to Saddam for the invasion.

    Quick victory in war was used to make people forget lessons of Vietnam, and keep military spending at or above Cold War level. The war has also proven that even “smart” weapons always result in tremendous number of civilian casualties. Further, DU weapons used – 1 000 tons – have poisoned the country. These would later be used in Yugoslavia and Gulf War II, resulting in numerous health problems for both veterans and inhabitants of affected areas.

    Maybe most important of all, Persian Gulf has remained American gulf. After Desert Storm, US military presence within the Gulf has increased, especially regarding naval assets.

    Eastern Europe

    In 1999, NATO attack on Belgrade has created conditions for massive privatization wave in former Yugoslavia. In fact, Strobe Talbott, the Deputy Secretary of State under Clinton and the leading U.S. negotiator during the war, later denied that “the plight of the Kosovar Albanians” was cause of the campaign, stating that the real reason was “Yugoslavia’s resistance to… political and economic reform” that had been driving forward the liberalisation and deregulation of markets throughout the region. In fact, Croatian Government had been forced to push through neoliberal reforms in exchange for US diplomatic support, and first waves of privatization were done during the 1991-1995 war. Most of state-owned business was not immediately sold to foreigners, however, but was taken by old Communist politicians, to be then re-sold to West.

    In Poland, neoliberal reforms mentioned in “Cold War” section have, by 1990s, caused a full-blown depression: 30% reduction in industrial output and 25% unemployment by 1993 (during Communism, rate of unemployment was basically 0%). In 2006, 20% workers were still unemployed, and for workers under 24, rate of unemployment was 40%. Number of people living in poverty jumped from 15% in 1989 to 59% in 2003. This contrasted strongly with normal European countries, with their strong labor laws and social benefits, even though these started to be relaxed after end of Cold War. Economy was in worse shape than at any time during Communism. Number of strikes increased from 250 in 1990 to 6 000 in 1992 and 7500 in 1993. This forced a slowdown in privatization – by end of 1993, 62% of Poland’s industry was still public. Polish economy started to grow rapidly during same period, especially after it became obvious that wholesale privatization has been prevented. In 1993, coalition of left parties won 66% of seats in the Parliament.


    By the beginning of 1990s, Gorbachov had managed to democratize the Soviet Union, and was moving towards the combination of free market and strong safety net, with key industries under public control. Goal was to build a Scandinavian-style social democracy. And while at first it seemed that West did support his moves, at G7 meeting in 1991 he was forced to accept neoliberal shock therapy. After the meeting, US-controlled IMF, World Bank and other financial institutions also pushed for neoliberalization, and when Gorbachev asked for debt forgiveness some time later, it was denied. But only way to implement economically-suicidal neoliberal policies was through force – and The Economist magazine asked for “a strong hand” to smash through with reforms, asking Gorbachov to follow Pinochet’s model. The Washington Post did something similar, but asking for Gorbachov’s replacement with someone more like Pinochet.

    And that someone did exist. Boris Yeltsin, president of Russia, though holding post lower than Gorbachov’s, was far less scrupulous and responsible. A notorious alcoholic, after “saving” democracy (in what, to me at least, looked like a staged incident), he formed alliance with two other Soviet republics, ending the USSR and forcing Gorbachov’s resignation. Then Yeltsin invited Jeffrey Sachs for help with economics, and for monetary help. Sachs promised him 15 billion USD.

    After that, Yeltsin asked Duma for dictatorial powers, which were granted, for one year. Immediately, a team of neoliberal economists was created, and notorious strongman Yury Skokov was put in charge of defense and internal security. US Government funded its own experts which were to assist Yeltsin’s group, and in May 1995 Sachs was named director of Harvard Institute for International Development.

    On October 28, 1991, price controls were lifted, and 7 days later, free trade policies were introduced – including a first of several waves of massive privatization, which were designed to gut Russia’s 255 000 state-owned companies. This quick approach was needed in order to prevent slow democracy from stopping neoliberal conqest dead in its tracks. Results were, as always, socially and economically devastating – after only one year, millions of Russians lost their life savings as money lost its value, and millions more did not receive pay for months. Average Russian consumed 40% less in 1992 than in 1991, and 1/3 of population fell below the poverty line.

    Soon after, Duma, under pressure from voters, decided that it was time to rein in the president and his neoliberal bloodsucking think-tank. In December 1992 they unseated Yegor Gaidar, and in March 1993, Duma voted to repeal special powers given to Yeltsin. But Yeltsin, by now in rather monarchic mood – even calling himself Boris I. – declared state of emergency, restoring his powers, and even after independent Constitutional Court voted 9-3 that he had violated constitution on eight different counts. But Washington still threw its weight behind Yeltsin, and The Washington Post called parliamentars a “hardline Communists”, despite all members of Duma having stood in 1991 against coup by hardliners.

    In spring 1993, Parliament decided to ignore IMFs requests for strict (and suicidal) austerity. Yeltsin responded by trying to eliminate the Parliament, throwing together a referendum – with total support from press – asking for dissolution of Parliament. Not enough voters actually voted for him to get the mandate, and those that did only supported him by very slight majority, yet he claimed victory. IMF decided to threaten withdrawing the load because of Russia “backtracking on reforms”. Day after, Yeltsin dissolved the Parliament, and two days later Parliament voted 636-2 to impeach Yeltsin for his act, which was nothing short of mutiny against democratic government. Vice President Aleksandr Rutskoi stated that Russia had already paid dearly for Yeltsin’s adventurism.

    Russian Constitutional Court once again voted Yeltsin’s actions to be unconstitutional, yet US Congress voted to give him 2,5 billion USD in aid. Immediately afterwards, Yeltsin sent troops to blockade Parliament, and power, heat and phone lines to Parliamentary building were cut. Peaceful demonstrations managed to achieve partial unblocking of Parliament, but despite many calling for early elections, so voters could state their opinion of Yeltsin’s work, defeat of Solidarity after their own neoliberal measures devastated Poland convinced Yeltsin and his Western neoliberal superiors that he was not going to win on polls. He doubled military salaries, and surrounded Parliament. On October 3, military slaughtered 100 protesters at Ostankino TV center.

    Both Washington and EU continued to support Yeltsin, and on October 4 1993, he ordered reluctant military to storm the Parliament White House and burn it; result was 500 people dead and 1 000 wounded. In the end, 5 000 troops and 30 armored vehicles were required to defend neoliberalism from the threat of democracy. Following the coup, all elected bodies as well as Constitutional Court were dissolved, and press was put under censorship.

    At the same time, neoliberal practices were hurriedly introduced. With Parliament out of the way, it was excellent opportunity for huge budget cuts, removal of any and all price controls, and ever-faster privatization. Only people who benefited from that were old Communists, and clique of billionaires – later to beome known as “oligarchs” – was created. While before 1990s Russia had no millionaires, by 2003 there were 17 billionaires, as Yeltsin and his clique did not allow state property to be sold but rather divided it up among themselves, and then sold them for far higher price.

    In December 1994, in order to hold on power, Yeltsin did what many leaders, since the time of the Roman Emperors, did when their popularity started to worsen – he started a war. To that end, Chechenya was invaded. In 1996, Yeltsin won at elections – thanks in part to that, but far more to generous financing by oligarchs, who donated 100 million USD, as well as secured him 800 times more coverage in oligarch-controlled media (that is to say, all media) than his rivals. (This is also how corporations have walked away with democracy in the West).

    After that, sales followed – 40% of the company comparable in size to France’s Total (193 billion USD of sales in 2006) was sold for 88 million USD. Norilsk Nickel, which sold 1,5 billion USD worth of nickel annualy – a 1/5 of world’s production, was sold for 170 million USD. Oil company Yukos, which controlled more oil than Kuwait, was sold for 309 million USD; by 2006, it was earning over 3 billion USD a year. Many of Russia’s public riches met the same fate, and all were purchased by public money. Oligarchs became politicians, and politicians became oligarchs; and after securing themselves, they opened up their companies to multinationals, with Royal Dutch Shell and BP entering partnership with Gazprom and Sidanko. Many of foreign “advisors”, also profited on this wave of privatization, showing perhaps obvious: that ideology of neoliberalism and free markets is nothing more than self-serving attempt to justify unfettered greed by capitalists and think-tanks who promote it. Soros also did profit on it, though by the late 1990s he apparently – alone of all – had change of heart, funding NGOs that focused on putting anticorruption measures in place, and criticizing shock therapy.

    In 1998, Russian economy – left open and vulnerable by short-term speculative investments and currency trading brought in by neoliberalization – collapsed entirely when Asian financial crisis started spreading. It looked like Yeltsin and oligarchs were going to be hit hard, with Yeltsin’s approval rating dropping to 6%, when in September 1999 a number of terrorist attacks hit, killing 300 people and redirecting eyes of public from economic issues. Immediately afterwards, 17-year veteral of KGB Vladimir Putin was put in charge of bringing terrorists to justice, and he launched a series of air strakes against Chechenya. On December 31, power was quietly transferred from Yeltsin to Putin, no elections necessary, and Putin signed a law protecting Yeltsin from prosecution.

    Wars in Chechenya killed 100 000 people. By 1998, 80% of Russia’s farms have gone bankrupt, 70 000 of state factories had closed, and between 1989 and 1997 number of people living below poverty line increased from 2 million to 74 million. In 2006, 3,5 million children were homeless, Russians started to drink twice as much alcohol as during Communism, and number of drug users went up 900% between 1994 and 2004, reaching 4 million. Between 1995 and 1997, number of HIV positive Russians doubled from 50 000 to 100 000, and by 2005 it reached 1 000 000. By 1994, suicide rates were double of these in 1986, and violent crime increased more than fourfold. By 2006, criminal capitalism has killed off 10% of Russia’s populace. Yet Western media only began writing badly about Russia again once Putin started to crack down on illegal activities of some oligarchs, and were careful to blame Russia’s problems on “mafia capitalsm”, supposedly a genuinely Russian phenomenon – nevermind that it is alive and well in both United States and European Union as I write this, where state is nothing more than rescue fund provider for corporations. Part of problem was that Sachs was unable to secure promised help, as many believed that “it should all be left to markets”. Social capitalsm – which, in West, produced high standard of living and powerful economies, and is continuing to do so in Scandinavia – was nothing more than pragmatic need for something to counter communism, as was Marshall’s plan. By 1949, US Government tolerated from West German Government all kinds of protectionist and interventionist economic policies, even going so far to help with them by forbidding US companies to compete in West Germany until German ones have recovered. But when Soviet Union collapsed, capitalists saw a perfect opportunity to end it; Heritage Foundation, ground-zero of rabid neoliberalism, refused Sach’s request to help Russia.

    Following Russian lessons, Mexico was quickly privatized during “tequilla crisis”.


    In South Africa, where white elite had amassed huge wealth, ANC had finally won in 1990. Mandela wanted to nationalize the mines, something that would have been very dangerous to neoliberalists; but he was in position to do so despite certain outrage from neoliberal empires and their enforcers: the United States, European Union, and International Monetary Fund. But being viewed as a living saint, he was in position to withstand the pressure. But when ANC – trying to avoid the civil war – negotiated with National Party about power transfer. It turned out peaceful, but National Party managed to take over country’s economy, nullifying – with help from IMF, World Bank and GAAT – political power ANC gained. Central Bank ended up being run as autonomous entity, and ANC was – despite rulling the country – powerless to do anything about any important issue. In fact, any measures that had any impact at all on economy were effectively outlawed, unless carried out with IMF’s consent.

    ANC did try to make good on its promises, giving millions water, electricity and homes – but debt, combined with international pressure to privatize services, meant that changes had to be undone. No firms were nationalized either, and in 2005 only 4% of all South African companies and 30% of the land were controlled by blacks, who make up 90% of the population. Reason was that ANC did not try to undo economic changes, instead searching for foreign investors. And as money was no longer gold standard, and trade barriers were down, corporations speculating and switching nationalities on a whim was commonplace. Markets responded with panic at any statements that hinted at nationalization; only alternative would have been country’s complete self-dependance and withdrawal from international markets – still a far better choice than what happened.

    ANC was forced to forget any talk of nationalization, redistribution of wealth and similar socialist policies. New neoliberal programme was made, which as usual called for privatization, cuts to government spending, labor “flexibility” (actually free hands to capitalists to fire workers as they please), free trade and almost no control on money flows. But it didn’t work: it only attracted short-term speculative betting. And despite country being forced to pay apartheid debts (much of which goes on pensions of appartheid officials), ANC did not ask for corporations to pay reparations for their policies, and refused to default on debts, all in attempt not to look radical.

    Between 1997 and 2004, 18 state-owned firms had to be sold to service the debt. Between 1994 and 2004, a decade of neoliberalism, number of people living on less than 1 USD per day doubled, as did unemployment rate for black South Africans; out of 35 million black citizens, only 5 000 earn more than 6 000 USD per year, compared to 100 000 white citizens; government has built 1,8 million homes, but 2 million people have lost their homes; 1 million of people have been evicted from land; number of shack dwellers has doubled. ANC staffers had meanwhile been brainwashed by neoliberal propaganda, which promised that more of the same will fix what it caused. Lies about globalization and economic interdependence prevented Marshall plan from being carried out.


    In February 1993, artificially constructed but unjustified fear of financial catastrophe, and justified fear of Standard and Poor’s and Moody’s downgrading Canada’s credit rating from AAA to something way lower, forced Liberal Party to drastically cut public spending. While Canada did indeed have deficit problem, it wasn’t caused by social spending but by high interest rates. Credit rating was also heavily influenced by Canadian corporate executives and bankers. Reason was political battle waged in Canada, where bankers and capitalists wanted spending on social programs to be cut. But in the time it took Moody’s issued statement that there was no problem with Canadian economics, and that reports by right-wing think tanks were exaggarated, Canadian government had already made deep cuts to social spending.


    In 1997, Asia fell into economic crisis. Cause was human stupidity and pure panic which spread through globalized markets. Because of unsubstantiated, and ultimately false, rumor that Thailand did not have enough dollars to back up its currency, banks called in their loans and fast-growing bubble of real estate market promptly popped. Panic spread and money fled from Indonesia, Malaysia, Phillipines and the South Korea. Asian countries, in an example of self-fulfilling prophecy, were forced to drain their central banks, to which markets responded with even more panic. In South Korea, people donated 200 tons of gold; yet currency continued to plummet.

    Only thing that could have stopped the crisis was a quick, decisive loan, such as one that saved Mexico’s currency during so-called Tequilla Crisis of 1994. None were coming, with so-called “experts” such as Milton Friedman advising that markets should be “left to correct themselves” (yet markets, being an artificial construction, are inherently unstable and require external input to recover properly, and to avoid destabilization in the first place; apparently Friedman ignored that fact for ideological reasons). IMF, US-controlled world body designed to prevent such crises, would eventually respond: but only with a list of demands based on neoliberal dogmas.

    During 1990s, Asian Tigers were held as proof of benefits of free trade for economies. But truth was opposite: Malaysia, South Korea and Thailand had highly protectionist economies that prevented foreigners from owning land or buying national firms. Energy and transportation sectors, as well as many other sectors, or firms in sectors that did have significant private ownership, were state-owned. Many foreign imports from Japan, Europe and North America were blocked from entering their markets. They proved that Keynesian, mixed and managed, economies grew far faster and more equally than free-market ones. Western and Japanese firms wanted their peace of the cake, to sell their products and buy Tigers’ corporations.

    As a result, IMF and WTO forced Tigers to lift barriers to financial sectors, barriers which were preventing currency trading. This speculative investment, once allowed in, devastated their economies in 1997; it is not a stretch to imagine that rumor which brought down their economies originated at IMF, WTO, US Federal Reserve or the Wall Street. In any case, crisis allowed these organizations to bypass remaining barriers. IMF, after months of doing nothing, entered negotiations with Tigers. Only Malaysia, with relatively small debt at the time, resisted. Remark made by its prime minister, Mahathir Mohamad, who said that he “did not think he should have to “destroy the economy in order that it should become better” was enough for him to be branded a raving radical. China was only country which did not lift barriers to currency trading, and as result its economy remained healthy, whereas Malaysia started to recover immediately after putting barriers back up.

    But other Tigers were not so lucky. They were forced to adopt austerity measures and neoliberal economic policies, leading to massive worker layoffs and letting foreign bloodsucking firms and capitalists to enter their economies. In Korea, IMF dictated that it was to shed 50% (later lowered to 30%) of its workforce in order to meet its targets. It also refused to lend any money until all four presidential candidates, of which two were running on anti-IMF platforms, agreed to adopt anything IMF demanded if they won.

    In Indonesia, Suharto was still in power, but instead of enriching foreign corporations, his attention was now turned to enriching himself and his children, such as giving heavy subsidies to automobile corporation owned by his son Tommy. He resisted IMF for few months, until IMF deliberately gave a public statement that it would withhold billions of promised loans unless he complied; after that, Indonesia’s currency lost 25% of its value in a single day. Suharto brought back IMFs lapdogs, the Berkeley Mafia, which immediately agreed to 140 “adjustements” IMF wanted without any discussion at all.

    Despite IMF’s promises that money will return after neoliberal reforms, these same reforms caused market to panic, and money started fleeing Asia at even higher rate. 24 million people lost their jobs; Indonesia’s unemployment rate increased from 4 to 12 per cent, and Thailand was losing 2.000 jobs per day at height of the reforms. In South Korea, IMF’s pressure to slash government budgets and hike interest rates caused 300.000 workers to be fired every month. Large and growing middle class disappeared: in 1996, 63,6% South Koreans identified themselves as middle class, compared to 38,4% in 1999. 20 million Asians were thrown into poverty. In the year after IMF reforms, there was 20% increase in child prostitution in Thailand. But Wall Street rejoiced: everything in Asia was now up for sale. As few examples, Merryl Linch bought Yamaichi Securities, AIG bought Bangkok Investment for fraction of its worth. Both Donald Rumsfeld and Dick Cheney were on Salomon Smith Barney’s International Advisory Board, which was providing advice on company mergers and acquisitions; Rumsfeld was actually board’s chairman. Carlyle Group, often a soft landing for ex-presidents and ministers, bought Daewoo’s telecom division. Korean titan Samsung was sold in parts: Volvo bough its heavy industry division, SC Johnson & Son its pharmaceutical arm, General Electric its lightning division. Daewoo’s car division, worth 6 billion USD, was sold to General Motors for 400 million USD. General Electrics also acquired stake in Korea’s refrigerator manufacturer LG; UK’s Powergen grabbed LG Energy; Nissan bought one of Indonesia’s largest car companies. Saudi Prince Alwaleed bin Talal bought a stake in Daewoo, among other things. Morgan Stanley advised Daewoo on sale of its car division.

    Massive privatization of state firms was also agreed upon. Bechtel privatized water and sewage system in eastern Manilla; New York-based energy giant Sithe purchased large stake in Thailand’s public gas company. Indonesia’s water systems were split between Britain’s Thames Water and France’s Lyonnaise des Eaux. Other foreign companies also made purchases. Due to that, massive layoffs continued even after crisis was declared over.

    People, as slow-learning they may be, obviously learned something. In 1999, World Trade Organization talks in Seattle collapsed when developing countries refused to give deeper trade concessions as long as US and Europe continued to subsidize domestic industries. Within few years, free trade zones planned by US, which would encompass entire Pacific and Americas, were abandoned.

    9/11 attacks and aftermath

    War on terror

    In keeping with Neoconservative ideology that that lying is necessary for the state to survive, and that the state, and society itself, should be run by an intellectual elite, entire War on Terror is based on lies. Furthermore, they believe that attack on civil liberties is not only allowed, but necessary. In contrast to this, and to healthy logic, goes neoliberal argument that war can be used to bring democracy. Hogwash. You can’t “bring” democracy to someone, it is, by nature, a free choice people make. Imposing democracy on someone automatically means that what he gets is no longer a democracy – if it was ever intended to be in the first place. It is nothing new, in either US history or history of country that has taught US everything they know – Great Britain.

    War on Terror is basically an unconstrained, costly and permanent state of war with large number of far smaller groups. It has most paralels to Rome’s wars with barbarian tribes, and it is almost as ruthless – mass murders are an option if they further US goals. However, paralels can be also drawn with crusades: both WoT and Crusades were wars between different civilizations, using excuses (then religion, now democracy and security) to further their own, far more pragmatic goals (such as control of trade routes).

    US “anti-terrorism” wars in Afghanistan and Iraq are first ones in history to depend on mercenaries, so-called “private military contractors”, who undertook tasks up to and including combat support – previously exclusive task of state military. In 2011, there were between 200 000 and 260 000 PMC mercenaries – between one and two contractors for every uniformed soldier; compare that to ratio of one contractor for every 50 uniformed soldiers in Gulf War One. From 2001 to 2011, 177 billion USD had been obligated to private contractors; 12 billion USD may have been lost in fraud and inefficiency due to lack of governmental oversight of private contractors. And even though it is called “defense budget”, and touted as necessary for “War on Terror”, the FY 2012 budget allocated 87 % of budget for conventional military forces, 7% for homeland security, and 6 % for prevention (diplomacy, etc.), exactly opposite of what it should have been.

    In 2011, US were paying 20 billion USD a month just for air-conditioning US bases in Iraq and Afghanistan. Once costs of transport are counted in, one gallon of gas used in these two countries costs between 18 and 30 USD. And withdrawal of governmental troops does not reduce the costs, since troops withdrawn are always replaced by mercenaries.

    In 2001, Bush tried to “root out inefficiencies” by reforming government based on free market principles. US Government embarked on a program of outsourcing and privatization, and on September 10, 2001, Donald Rumsfeld attacked Pentagon bureocracy – actually, generals that were opposed to privatization – as “bastion of central planning” and a “dangerous threat to the state”.

    Shortly after, QDR (Quadrennial Defense Review) stated that “DoD will turn to private enterprise” and “blend government and private research where appropriate”. It also stated that “only functions that must be performed by DoD should be kept by DoD”.

    In 2009, contractors were forbidden from certain activities, such as prisoner interrogation. However, in all other areas, they have continued to operate with virtual legal immunity. From 2003 to 2008, only two contractor personnell have been convicted for crimes in Iraq and Afghanistan.

    Private contractors have also often caused confusion due to their unclear status (are they civilian or military personnell?).

    From 2004 through 2010, 215 billion USD worth of new weapons have been procured. Many of these were unnecessary in context of War on Terror, used to justify such procurements. Some procurements were inserted despite Air Force not stating need for them, such as lease of 100 air refueling tankers from Boeing – which was, at 26 billion USD, more expensive than simply buying new aircraft. Tankers were also unnecessary, as even oldest tankers in fleet could have lasted until 2040.

    War on Terrorism has seen heavy usage of “Shock and Awe” tactics coupled with various forms of strategic bombing, in an obvious attempt to intimidate civilian population – aka “terrorism”. At the same time, political rhetoric has avoided saying the truth, that US citizens have become target because of what United States have been doing; labelling instead those opposing United States – terrorists and non-terrorists alike – criminals. War on Terrorism itself has been declared a “war on behalf of freedom”, in keeping with US centuries-old tradition of fact-spinning. Yet terrorists were nothing more than a replacement for USSR as a justification for extreme defense spending and military interventions over the world, and labelling terrorists (those not on US payroll) a source of opposition to US policies ignores the fact – intentionally, it seems – that anti-US terrorism, at least part not directly caused by CIA, is but a symptom of popular dissatifaction with US international policies.

    UN has become no more than a tool in US hands.


    During hunt for Osama bin Laden, US cruise missiles have destroyed Sudan’s pharmaceutical factory; it has been claimed to be a provider of chemical weapons for Osama bin Laden. As a result of factory’s destruction, Sudan faced medical supply shortages which left tens of thousands of people dead.


    In Operation Enduring Freedom, United States have attacked Afghanistan. Official purpose of operation was to remove Al-Quaeda and punish Taliban providing Al-Quaeda with support. Invasion started on October 7, and on October 14 Taliban have offered to surrender Osama bin Laden to a thrid country for a trial if United States offered proof of his involvement in 9/11 attacks. Offer was not accepted.

    Invasion was long planned since before 9/11 attacks: in July 2001, Taliban were described as a “threat to international peace and security in the region”, and as such, goal of war was to install a US-friendly government, establish military bases (including ones for electronic surveillance) and provide passage for oil and gas pipelines. War consisted mostly of “using $2 million missiles to hit $10 empty tents” in words of President Bush jr. Air superiority followed, and soon United States started searching for locals willing to fight ground war for them. They found Northern Alliance, which had been removed from power by Taliban in 1996.

    Afghan warlords and drug dealers dutifuly complied, stepping into role of freedom fighters spreading civilization. Civilization was spread in around 8 weeks of fighting between Taliban and Northern Alliance, coupled with mandatory massacres of civilians by US strategic bombing campaign, which killed at least as many people as were killed in 9/11 attacks.

    In Afghanistan, US security firms hire local mercenaries, many of whom have ties to local war lords, criminals and insurgents. During the war, Pakistan has turned from a rogue state to an ally, and Uzbekistan got promises of military help in case it was ever attacked.

    Consequence of occupation of Afghanistan was that United States have, after securing Americas and Europe, secured a foothold in Central Asia, from which they could spread military involvement in region, and protect Middle East from China. It has also convinced Muslim world that “War on Terror” is euphemism for “Crusade”, and that Islam itself is an actual target, bringing an increase in resistence to US goals, and with it, increase in terrorist attacks both there and in the West – not that United States are concerned about it. As for Afghanistan itself, it fell into chaos, with US trying to secure peace with B-52s (refer to my Strategic Bombing analysis on how successfull that is).


    Iraq was attacked despite the fact that UN inspections have found no proof at all of active nuclear programme. It was also asserted that bringing the democracy to Iraq (or, as it turned out, “democracy”) will cause its neighbours to change and prosper, thus cutting off terrorists’ sources of manpower. Occupation of Iraq was indeed important for US, but for Iraq’s oil and mineral wealth, as well as for establishment of military bases, allowing US military to leave Saudi Arabia, where they were not welcome by the populace. No green light from UNSC has been received, and invasion was definetly not a case of self-defense – as such, it was illegal; but as might makes the right – or so Bush administration assumed – noone cared. Nor did it adress question of some other, US-protected, tyrants, such as Saudi royal family.

    In fact, invasion itself has been set long before 2001 attacks have happened. One of reasons was that Iraq had defied United States by starting to trade oil in Euros instead of US Dollars in November 2000. Second reason was that Saddam had signed contracts with a Russian oil giant and was negotiating with France’s Total, leaving US and British companies with nothing. After Saddam’s removal from power, opportunities opened for ExxonMobil, Chevron, Shell, BP and many other firms.

    No evidence of Saddam’s link to the Al’Quaeda has been brought forward. Only – and very uncertain – act of terrorism he performed against United States was his alleged attempt to assasinate George Bush sr. Two and half months after that event, Clinton ordered cruise missile strikes at Baghdad, killing several innocent bystanderds.

    As United States were unable to get support of UN Security Council members other than Great Britain, Spain and Bulgaria, they immediately launched an unilateral operation rather than waiting for vote and a certain veto. Result were worldwide demonstrations and polls that showed people marking George Bush as a greater danger to world peace than Saddam Hussein was.

    Campaign, guided by “Shock and Awe” theorem, lasted 10 days. After the campaign, no traces of WMDs have been found. Yet United States did not face any sanctions they should have, showing again amount of control they exert over the United Nations.

    In March 2011, there were 155 000 private military contractors in Iraq and Afghanistan , and 145 000 uniformed military personnell. In Iraq, 10 500 PMC personnell (16%) were armed (private security contractors) and rest were tasked with support activities. Companies providing these services, such as Halliburton, have often hired employees from third-world countries (57%) and Iraq (16%), with US citizens accounting for less than one-third of all personnell. Personnell from third-world countries were paid far less than Iraqi, and both were paid far less than US citizens – American workers were paid 60 000 USD per year on average, and foreign workers 3 000 USD per year, with security personnell with background in Marines or Army Special Forces were paid over 200 000 USD per year. In Afghanistan, however, majority of 9-20 thousand mercenaries that were there in 2011 were Afghan nationals.

    From FY 2002 to 2006, Halliburton’s contracts grew more than tenfold due to contracts awarded for rebuilding Iraq’s oil infrastructure and support US troops. First rebuilding contract – mainly connected to Iraq’s oil infrastructure (putting out oil fires, rebuilding Iraq’s oil infrastructure in wake of US invasion) – was awarded before war began, without any bid at all. It also included seven-year contract for running oil facilities, although later two other firms got smaller parts of contract; majority of it remained to Halliburton.

    Thanks to logistics contracts, Halliburton’s contracts jumped from 483 million USD in 2002 to 6 billion USD in 2006, much of which went unaccounted for.

    Despite enormous profits, work done by US companies on rebuilding Iraq was shaggy and incomplete. Multi-national firms did not perform any better. Many firms were contracted to do tasks they never did or even prepared for. Custer Battles had contracts to guard the Baghdad air port, and to collect the old Iraqi currency – they hired security guards with no prior training, had no translators who spoke Arabic, no dogs, and no knowledge of Iraqi laws and legal standards. Yet they used governmental money to build luxury apartments with controlled climate, pools and wireless internet for themselves while US soldiers were still living in tents. They built substandard quarters for workers replacing the money, and trucks so unreliable that general in charge of operation had to ask for military trucks. It also grossly overcharged projects it was supposed to do – many were never done – with estimated earnings from such dealings exceeding 10 million USD a year. In the end, company had to pay 10 million USD in fines and was barred from receiveing government contracts. On March 8, 2004, Blackwater security firm signed contract under which it was to supply two armored SUVs with three guards per vehicle to provide security for ESS trucks transporting food. On March 12, Blackwater changed contract to exclude “‘armored’ vehicle” requirement, without informing guards that they will be using unarmored vehicles as result. Two vehicles departed with just two guards per vehicle, each short a rear gunner, and no member of team ever worked with another member before. When it came out, Blackwater successfully employed lobbysts to stop any investigation, and contributed 2 million USD for campaigns of certain government officials. These officials in turn helped Blackwater obtain new contracts, many of them receiveing high-paying jobs in Blackwater after leaving the office.

    What was built very quickly were military bases – work on four has started in 2003 alone, bringing large profits to private contractors, and ensuring United States yet another jump-off point for further invasions. And even now, 10 years after the invasion, PMCs remain in Iraq. Prisons were established too, and in these prisons prisoners were tortured and insulted.

    Important goal of US invasion was also restructuring Iraq according to the neoliberal dogma. Paul Bremer’s first step as US governor of Iraq was privatization of energy sector, media and the heavy industry. Argument was that privatization, despite all evidence to the contrary visible in United States and the Europe, is the prerequisite for establishment of democracy.

    In fact, United States are using system of indirect rule, tried and tested by both United States themselves and the now-extinct British Empire. Native rulers are installed, but superpower controlls country’s financial matters, taking control of country without most people realizing it.

    Countering the China

    Since China has started to challenge US dominance on Pacific, US have started transferring military assets to the area. In 2011, announcement was made that US Marines will be stationed at US base in Darwin. Aside from that, new deal included greater US access to Australian bases, more joint military exercises as well as increased interoperability in equipment – basically, it was turning Australian military into branch of US military. In 2012, Australian military assets have been moved to the north and west of the continent.

    By increasing military threat, United States are trying to start arms race with China, so as to compensate for US economic weakness and prevent or slow China’s economic and military rise. Considering developments of new, very expensive but rather useless, weapons in Chinese arsenal – example being J-20 “stealth” fighter – “arms race” part is succeeding. Main goal is control of markets, natural resources and cheap labour, as well as forcing countries of Pacific Basin to switch to the “free market” corporate capitalism – if they didn’t already, as well as to prevent China from doing the same. Furthermore, China is providing a threat that US Military-Industrial Complex needs to survive.

    Through combination of playing up threat of China, promoting stealth aircraft, and exherting political pressure, United States have managed to sell F-35 strike aircraft to Japan – under false presumption that it can carry out air superiority missions. Some countries, like South Korea, have been effectively occupied – in case of war, US general would be in charge of South Korean military. Vietnam has allowed US bases on its territory.

    United States have also positioned military assets at key choke points, such as Malacca Straits. Yet through all this, China’s response was – aside from answering US invitation to an arms race – restrained.
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