Mon, 9 Nov 1998 21:10:12 GMT
Date: Mon, 9 Nov 1998 21:10:12 GMT
To: wsn@csf.colorado.edu (world-system network)
From: rkmoore@iol.ie (Richard K. Moore)
Subject: (2/3) Chapter 1: Evolution of Western Power

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[Chapter 1, Part 2 of 3]

The inter-war years: 1918-1939 - capitalism in crisis
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
After more than a century of collaboration between the forces of nationalism
and capitalism, the distinction between capitalist interests and government
policies had become increasingly blurred throughout the West. The systems of
finance, government, industry, imperialism, and foreign policy were all
intertwined. Other political forces existed, but certainly by 1918 it could
be said that the leading Western nations were capitalist-dominated
societies. The interwar years brought a host of challenges to Western
capitalism, and the response of Western governments to these crises
reflected primarily the interests of the capitalist system.

Nineteenth century industrialization, under capitalism, had created social
dislocation and unrest in its wake. Previous social and economic
arrangements were disrupted, and working conditions in the new factories and
mines were often dismal, dangerous, and poorly paid. Labor movements arose,
along with socialist ideas and anti-capitalist sentiment. In 1848 Marx and
Engels published The Communist Manifesto which articulated a radical
critique of capitalism and called for an international workers' revolution.
In the chaos of wartime Russia, a marxist-inspired revolution succeeded
(1918) and the world's largest nation, the new Soviet Union, came into the
world with an explicit anti-capitalist and anti-imperialist agenda.

Socialist and anarchist movements gained strength throughout the West in the
years following the end of the war. These movements were encouraged by the
success of the Soviet revolution, by the continuing conditions of labor
unrest, and by a pacifist, internationalist sentiment which arose out the
horrors of the war -- a war which had been frequently referred to as the war
to end all wars.

In 192x an uprising in Bavaria led to a socialist takeover which was
brutally suppressed. In 192x, hundreds of leaders and members of the
Socialist Party in America were arrested in the infamous Palmer Raids. In
1926 a general strike in Britain was quelled by an energetic government
response after it had shut down the nation's mines and transport for twelve
days. In Italy, Spain, and Germany, socialist, anarchist, and communist
movements were gaining a considerable popular following.

In 1929, there was a general collapse of the international capitalist
economy, affecting nearly all parts of the world with the exception of the
Soviet Union. The Great Depression put millions out of work and added fuel
to labor unrest in the West generally. The thirties were depression years,
economies generally remained in the doldrums, and unrest grew.

The war had temporarily stabilized imperialist arrangements, but capitalism
in the West was now faced by threats of a different kind. The Soviet Union
was getting on its feet as a society, offering a long-term threat to
imperial domination of world affairs, while labor and socialist unrest was
threatening capitalist domination of political agendas within the West
itself. Communism in the Soviet Union, and socialist movements on the
domestic front, could only be perceived by capitalist-dominated Western
governments as dire threats to Western stability.

Fascism arose in Italy, Spain, and Germany in the twenties and offered a
nationalist alternative, something besides socialism as a radical solution
to societal problems. This was an alternative which was much more acceptable
to capitalist interests. This was very clear in Italy, where fascism was
openly promoted as an explicit partnership between government and capitalism
-- a way to get the trains running on time. In Germany the link between
Hitler and capitalism was not so explicit, but it was just as real.

     "Certain American industrialists had a great deal to do with
     bringing fascist regimes into being in both Germany and Italy.
     They extended aid to help Fascism occupy the seat of power, and
     they are helping to keep it there."
     - William E. Dodd, U.S. Ambassador to Germany, 1937(2)

As Hitler built the strength of the Nazi party, he became more and more
friendly with German leaders and industrialists. One of Hitler's most
enthusiastic backers was Krupp, the most prominent of German industrialists.
After listening to a campaign speech, tears came to his eyes and he said
"This is the man that can lead Germany."(3) The party gained political
victories, and in 1933 Hitler became Chancellor. Soon after that all other
parties were crushed, and Hitler's reign as Der Fuhrer began. He preached a
doctrine of racist nationalism, of revenge for the humiliation at
Versailles, and of German expansionism. Hitler's hatred of communism was
deep, dating at least from his experiences in Bavaria during the socialist
uprising.

Mein Kampf, which Hitler wrote in 1923 during a brief imprisonment, outlined
in considerable detail Hitler's expansionist ambitions. He said that the
Slavic people were an inferior race, and that Germany's destiny was to
conquer and enslave Russia, providing Germany with needed lebensraum (living
space). This was in fact the agenda that Hitler systematically pursued once
he was in power.

To German capitalists, Hitler's lebensraum agenda offered the imperial
expansion that they had sought in the war, and on a grander scale. Hitler's
repressive policies had also brought an end to labor strife and to socialist
movements. In Hitler, German capital saw the opportunity for a prosperous
future, with a fair share of imperialist spoils.

The Treaty of Versailles clearly required that Germany's armaments were to
remain strictly limited, and Western governments generally continued to pay
lip service to that provision. Without armaments Hitler's expansionist
yearnings could remain only empty words. But the other Western powers did
allow Germany to rearm, and to understand why, we need to review the overall
crisis being faced by capitalism at that time, particularly from the
perspective of the United States.

Reactions to Hitler in Britain and France were mixed. Many were shocked by
his policies and frightened by his racism and militarist ambitions. But
there were also fascist sympathies present in both countries, particularly
in the British royal family. In capitalist circles there was relief that
socialism had been squashed in Germany, and there was support for Hitler's
anti-Soviet agenda. Policy toward Germany vacillated right up to the
outbreak of World War II, when appeasement was finally abandoned.

The United States was remote from the turmoil going on in Europe and had its
own domestic economic troubles to deal with. The US was also concerned with
developments in Asia, where Japan was becoming a formidable power and a
threat to America's imperial outposts and ambitions. Throughout most of the
thirties official US foreign policy remained neutral and isolationist. On
the surface it appeared that the US wasn't greatly concerned with how things
turned out in Europe or Asia. The US didn't enter World War II until
attacked by Japan at Pearl Harbor, years after the war had begun in Europe,
and long after Japan had embarked on an expansionist invasion of Asia.

It seemed that the US was a foolish sleeping giant during the thirties,
living in blissful ignorance while the world was falling apart around it.
The giant stumbled, apparently, into its role in World War II, and only
through good fortune emerged afterwards in a globally dominant position. But
in reviewing the record of US actions during this period, we will find that
sleeping giant is the wrong metaphor. More appropriate would be the tale of
Jack the Giant Killer, with Uncle Sam in the role of clever Jack.

In that tale, we find Jack asleep in a tree. While he sleeps, two giants sit
down beneath his tree. On waking Jack is faced with the problem of saving
himself, but being clever, he soon comes up with a plan. He tosses a stone
down on the first giant, who assumes his fellow giant is the culprit. After
a few more carefully placed stones, the two giants soon begin to battle,
kill each other, and Jack escapes with his life and loot from the giants.

Just as Jack was temporarily safe in his tree, unseen by the giants, so was
Uncle Sam safe in America, separated by wide oceans from trouble and strife.
But like Jack, the US was in fact endangered. In a world where Germany
controlled Russia, and Japan controlled Asia, the established imperial order
would be utterly transformed, and much to the disadvantage of America. Like
Jack, Uncle Sam followed a clever strategy, a strategy that got others to do
most of the work necessary to for him to achieve his own goals.

Instead of opposing the rise of Japan and Germany, which self-interest would
have indicated, the US did just the opposite. The US did not act to stop
German rearmament under Hitler, but instead the US invested heavily in
Germany, and provided it with technologies and materials for use in building
its war machine. It was in a General Motors plant, which operated in Germany
before and during the war, that the bombers were built which raided London
during the blitz.

Similarly, the US invested in Japan and provided it with steel and the other
materials of war. In the short term, the US benefitted economically from the
trade with Germany and Japan, and it also benefitted, at least from the
capitalist perspective, from the Nazi-supported suppression of the Spanish
Republic. In the longer term, the arming of Japan and Germany had the same
effect as the stones Jack threw: it encouraged giants to battle among
themselves.


World War II and collective imperialism
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
     "If we see that Germany is winning we should help Russia and if
     Russia is winning we ought to help Germany and that way let them
     kill as many as possible . . ."
     - Harry S. Truman, 1941(4)

Seen from the perspective of Jack's tree, so to speak, the major events of
World War II make up a battle scenario worthy of a Hollywood thriller. What
basically happened is that Germany and Russia clobbered one another, while
Japan got itself embroiled throughout Asia. The US, after first arming
Germany and Japan, then switched its support to Russia and China. While the
rest of the world was becoming engulfed in war, the US made profits in turn
from both sides and engineered remotely the balance of power. Finally, after
the German advance had peaked, and when Japan's expansion had reached
alarming proportions, Jack came down from his tree. The US froze all
Japanese assets, cutting off their oil supply, and making prompt US entry
into the war inevitable.

The US had access to good intelligence regarding Japanese plans and
deployments. The British, with their phenomenal wartime decryption advances,
had broken "unbreakable" Japanese (and German) codes. Whether President
Roosevelt knew the exact day and hour of the planned raid on Pearl Harbor
may be open to question, but he knew the attack was coming, he had
nonetheless asked advance observation posts on Kauai to stand down, and he
knew enough about the timing to make sure the strategically critical
aircraft carriers were safe at sea when the attack occurred. December 7,
1941 was indeed a day of infamy, but who's infamy?

The first phase of US battle strategy was to contain Japan in the Pacific,
while concentrating US forces in Britain and North Africa. Despite the
successful raid in Hawaii, Japan posed no immediate threat to the US
mainland. US bombing raids of German-occupied territories joined those of
Britain, but the US delayed landing troops in Europe until the most
advantageous moment -- when the Soviets had begun their advance toward
Germany. In January, 1944, the Soviets kicked the Germans out of Leningrad
and Allied forces landed in Italy the same month. By Spring, Germany had
been mostly pushed out of Soviet territory, and on D-Day, June 6, Allied
forces landed in France -- the race to Berlin was on.

Even after the Allies began their drive toward Germany, there were four
German divisions on the Eastern front for every one in the West. The German
giant was still facing the Russian giant, while attempting to hold off the
Allies with a rear-guard action. Unlike Jack, Uncle Sam had to do
considerable fighting himself in Europe, or at least American soldiers did,
but as with Jack, the main battles were among others. American timing was
nearly perfect. Only the unexpectedly rapid advance of Soviet forces
prevented US troops from being the first to reach Berlin. Berlin had been
bombed continually, but the most intense raids of the war were carried out
over Berlin after Soviet troops were advancing into Germany, the objective
being, apparently, to slow Soviet progress by flooding the highways with
refugees.

The US then turned its attention toward Japan. Although America suffered
terrible casualties in fierce island warfare in the Pacific, the US
situation was immeasurably improved by the fact that Japanese forces were
spread out on the Asian continent and in Asian waters, entangled with giant
China. All in all, when the war was over, the giant-killer American strategy
had worked out brilliantly.

US casualties were miniscule compared to the tens of millions lost by
Germany, the Soviets, and the Chinese. And while the war devastated every
other major nation, for the US it was one of the most economically
profitable undertakings in world history. From the depths of the Great
Depression in the mid thirties, the US emerged in 1945 with 4x% of the
world's wealth and industrial capacity, and with all of its infrastructures
intact.

In terms of competitive imperialism, the US had pulled off a major coup. The
US had made inroads into the oil-rich Middle East, and was well poised to
push its advantage as an imperial power in the postwar era. The US
controlled the seas, and no other major power was in an economic position to
exploit the many opportunities made available by the general global
disruption. But the US had other plans -- its full strategy was yet to be
played out.

Instead of punishing the vanquished, as the victors had done at Versailles,
the US encouraged the rebuilding of Germany and Japan -- but with
nationalism and militarism taken out of the school curricula and government
policy. And instead of pressing its imperial advantage relative to its
Western rivals, the US launched the Marshall Plan. Billions of dollars of
aid was given -- not loaned -- to Europe to ensure its rapid reconstruction.
The UN was established, providing for the first time a global institution
for dealing with international conflicts and problems. Regional treaty
organizations such as NATO (North Atlantic) and SEATO (Southeast Asia) were
set up to maintain stability, and to provide the US with an excuse to keep
its forces deployed at strategic points around the world.

In 1948, under US leadership, the Bretton Woods agreements were signed.
These agreements fixed exchange rates among major currencies. Since the
value of the dollar was pegged to gold at $32 per ounce, all major
currencies would now be stabilized, and the currency collapses that plagued
the inter-war years could not recur. Part of the Bretton Woods package was
GATT (General Agreement on Tariffs and Trade), which proclaimed a general
global policy of open markets. In addition, the World Bank and the
International Monetary Fund (IMF) were established. These institutions
pooled Western investment funds and provided a systematic means of financing
imperialist development projects.

Although the rhetoric of the new world system was about the end of
imperialism, and the triumph of democracy, the reality was otherwise. The US
encouraged the gradual dismantlement of traditional European empires, but
imperialism was to continue on a collective basis, using the high-leverage
American model.

As the US had done for decades in Latin America, the new international
institutions were designed to create the conditions favorable to the
continued exploitation of traditional Western imperial territories. The
business of imperialism had always been about trade and development, on
terms favorable to the West. The mission of the IMF and World bank was
specifically to support trade and development -- and these institutions were
under firm Western control. In 194x President Truman declared(5) that the
West's former imperial territories were now the underdeveloped world, and
the stage was set for a new global system of collective Western imperialism.

Creating the conditions for collective imperialism required more than
Western-controlled financial institutions, however. There was also a need
for selective military interventions, the arranging of coups, and all those
other high-leverage techniques that had supported American-style imperialism
in Latin America. The US solution to this problem was for America to extend
globally its practice of these techniques. The Central Intelligence Agency
was formed, and in 1953 it carried out its first coup.

On May 1, 1951, Prime Minister Mossadegh of Iran had nationalized the
British-owned Anglo-Iranian Oil Company (AIOC)(6). Iran was certainly within
its rights -- Britain had recently nationalized several of its own domestic
industries, and the British government was the major owner of the AIOC. But
the nationalization was contrary to Western imperial advantage. The CIA, in
collaboration with British intelligence, put into motion a series of covert
actions, and on August 19, 1953, Mossadegh was forced to yield power to the
Shah.

In the same style as decades of Latin American tin-horn dictators before
him, the Shah became for the next 25 years America's staunchest ally in what
was to be frequently referred to as the third world. Iran, which bordered
the Soviet Union, was made available as an American intelligence outpost. A
new oil contract was signed which ended exclusive British access, and gave a
40% share to an American consortium.

This was how collective imperialism was to work. The US was to provide the
covert and military support, while the economic spoils were to be
distributed on a more or less equitable basis among Western powers. In
William Blum's Killing Hope, US Military and CIA Interventions since World
War II, there are 55 chapters. Each chapter chronicles a comparable episode
of imperial management, though many are on a vaster scale. As of this
writing, the latest episode is taking place in the Serbian province of
Kosovo, where US and German-funded Albanian mercenaries were sent in to
stage a phony civil war, with the apparent objective of separating Serbia
from Kosovo's mineral wealth. If things run true to pattern, one can expect
the faction that comes to power in Kosovo to be very friendly to Western
development interests.

[continued...]
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