Military spending is the capitalist world’s fuel

It is common for activists to decry the enormous sums of money spent on the military. Any number of social programs, or schools, or other public benefits could instead be funded.

Not least is this the case with the United States, which by far spends the most of any country on its military. The official Pentagon budget for 2015 was $596 billion, but actual spending is far higher. (Figures for 2015 will be used because that is the latest year for which data is available to make international comparisons.) If we add military spending parked in other portions of the U.S. federal government budget, we’re up to $786 billion, according to a study by the War Resisters League. Veterans benefits add another $157 billion. WRL also assigns 80 percent of the interest on the budget deficit, and that puts the grand total well above $1 trillion.

The War Resisters League notes that other organizations estimate that 50 to 60 percent of the interest would be more accurate. Let’s split the difference — if we assign 65 percent of the interest payments to past military spending (midway between the high and low estimates), then the true amount of U.S. military spending was $1.25 trillion. Yes, that is a gigantic sum of money. So gigantic that it was more than the military spending of every other country on Earth combined.

(Cartoon by Carlos Latuff)

(Cartoon by Carlos Latuff)

China is second in military spending, but far behind at US$215 billion in 2015, according to an estimate by the Stockholm International Peace Research Institute. Saudi Arabia ($87.2 billion), Russia ($66.4 billion) and Britain ($55.5 billion) round out the top five. And lest we chalk up the bloated Pentagon budget to the size of the U.S. economy, the official $596 billion budget constituted 3.5 percent of its gross domestic product, the fourth-highest ratio in the world, while China spent 2.1 percent of its GDP on its military. But if we use the actual total of U.S. military spending, then U.S. spending as a share of GDP leaps to second place, trailing only Saudi Arabia.

The U.S. maintains military bases in 80 countries, and has military personnel in about 160 foreign countries and territories. Another way of looking at this question is the number of foreign military bases: The U.S. has around 800 while the rest of the world combined has perhaps 30, according to an analysis published in The Nation. Almost half of those 30 belong to Britain or France.

Asking others to pay more is endorsing imperialism

Is there some sort of altruism in the U.S. setting itself up as the gendarme of the world? Well, that’s a rhetorical question, obviously, but such self-deception is widespread, and not just among the foreign-policy establishment.

One line of critique sometimes heard, especially during this year’s presidential campaign, is that the U.S. should demand its allies “pay their fair share.” It’s not only from Right-wing quarters that phrase is heard, but even from Left populist Bernie Sanders, who insisted during this month’s Brooklyn debate with Hillary Clinton that other members of NATO ought to pay more so the Pentagon budget can be cut. Senator Sanders said this in the context of pointing out the superior social benefits across Europe as compared to the U.S., but what it really implies is that militarism is justified.

Setting aside that Senator Sanders’ record on imperialism is not nearly as distant from Secretary Clinton’s as his supporters believe, it is a reflection of how deeply imperialism is in the bones of United Statesians when even the candidate positioning himself as a Left insurgent doesn’t seriously question the scale of military operations or their purpose.

So why is U.S. military spending so high? It’s because the repeated use of force is what is necessary to maintain the capitalist system. As top dog in the world capitalist system, it’s up to the U.S. to do what is necessary to keep itself, and its multi-national corporations, in the driver’s seat. That has been a successful project. U.S.-based multi-nationals hold the world’s highest share in 18 of 25 broad industrial sectors, according to an analysis in New Left Review, and often by commanding margins — U.S. multi-nationals hold at least a 40 percent global share in 10 of those sectors.

A partial list of U.S. interventions from 1890, as compiled by Zoltán Grossman, a professor at Evergreen State College in Olympia, Washington state, lists more than 130 foreign military interventions (not including the use of troops to put down strikes within the U.S.). Consistently, these were used to impose U.S. dictates on smaller countries.

At the beginning of the 20th century, U.S. President William Howard Taft declared that his foreign policy was “to include active intervention to secure our merchandise and our capitalists opportunity for profitable investment” abroad. Taft overthrew the government of Nicaragua to punish it for taking a loan from a British bank rather than a U.S. bank, and then put Nicaragua’s customs collections under U.S. control and handed two U.S. banks control of Nicaragua’s national bank and railroad. Little has changed since, including the overthrows of the governments of Iran (1953), Guatemala (1954), Brazil (1964) and Chile (1973), and more recently the invasion of Iraq and the attempted overthrow of the Venezuelan government.

Muscle men for big business

We need only recall the statement of Marine Corps general Smedley Butler, who summarized his highly decorated career in 1935, in this manner:

“I spent thirty three years and four months [in] the Marine Corps. … [D]uring that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and for bankers. In short, I was a racketeer for capitalism.”

The bipartisan refusal to acknowledge this is exemplified in U.S. narratives concerning the Vietnam War. The “debate” that is conducted in the corporate media is only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting. Never mind that tonnage of bombs dropped on Vietnam were greater than what was dropped by all combatants in World War II combined, 3 million Vietnamese were killed, cities were reduced to rubble and millions of acres of farmland was destroyed. By what sane measure could this be said to be fighting “without really trying,” as Right-wing mythology still asserts?

No modern corporate enterprise would be complete without subcontracting, and the Pentagon has not stinted here. That is not a reference to the massive, and often guaranteed, profits that military contractors enjoy as more supply operations are handed over to connected companies, but rather to the teaching of torture techniques to other militaries so that some of the dirty work of maintaining capitalism can be undertaken locally.

military bases surround RussiaThe U.S. Army’s infamous School of the Americas, lately masquerading under the deceptively bland-sounding name Western Hemisphere Institute for Security Cooperation, has long been a finishing school for the personnel enforcing the rule of military and civilian dictatorships throughout Latin America. Major Joe Blair, who was the director of instruction at the School of the Americas from 1986 to 1989, had this to say about the curriculum:

“The doctrine that was taught was that if you want information you use physical abuse, false imprisonment, threats to family members, and killing. If you can’t get the information you want, if you can’t get that person to shut up or stop what they’re doing, you assassinate them—and you assassinate them with one of your death squads.”

The change of the name more than a decade ago was cosmetic, Major Blair said while testifying at a 2002 trial of School of the Americas protestors:

“There are no substantive changes besides the name. They teach the identical courses that I taught, and changed the course names and use the same manuals.”

The entire history of capitalism is built on violence, and violence has been used to both impose and maintain the system from its earliest days. Slavery, colonialism, dispossession of the commons, draconian laws forcing peasants into factories and control of the state to suppress all opposition to economic coercion built capitalism. The forms of domination change over the years, and are often financial rather than openly militaristic today (although the armed fist lurks in the background); regardless, exploitation is the lifeblood of wealth. Demanding that the cost of this should be spread around is a demand to continue exploitation, domination and imperialism, and nothing more.

New right-wing government cedes Argentina’s sovereignty to Wall Street

Argentina’s new right-wing president, Mauricio Macri, pledged to put an end to the country’s sovereignty, and on that he has been true to his word. The capitalist principal that windfall profits for speculators is the raison d’état for the world’s governments has been upheld.

Or, to put it in a different way, the government of Argentina will again be allowed to borrow on international financial markets — so that it can borrow money for the sole purpose of paying billions of dollars to speculators.

Argentina had been one of the few countries that refused to bleed its population to pay off odious debt under the 12-year husband and wife rule of Néstor Kirchner and Cristina Fernández. Their left-wing populism has been overstated — they left capitalist relations untouched and at best merely tolerated the movement of recovered factories — but they did consistently put the interests of Argentine working people ahead of international financiers. The election of the right-wing President Macri has put an end to that, along with his introducing the repression that austerity requires.

Entre Rios province, Argentina (photo by Felipe Gonzalez)

Entre Rios province, Argentina (photo by Felipe Gonzalez)

Argentina’s difficulties have a long history. The fascistic military dictatorship of 1976 to 1983 laid waste to the Argentine economy while unleashing horrific human rights abuses, and subsequent civilian governments sold off state enterprises at fire-sale prices while imposing austerity until the economy crashed at the end of 2001. Upon assuming office, President Kirchner suspended debt payments that would have impoverished the country. He offered to negotiate with bond holders, 93 percent of whom ultimately agreed to accept 30 percent of their bonds’ face value.

There were holdouts, most notably two hedge funds that waged a 15-year battle to extract the full value of the bonds, even though they bought them from the original holders for a fraction of the price. These two funds leading the holdouts were NML Capital, a subsidiary of Paul Singer’s Elliot Capital Management, and another hedge fund, Aurelius Capital Management. Mr. Singer, the type of character for which the term “vulture capitalist” was coined, is notorious for his scorched-earth tactics. At different points, he had an Argentine naval training ship seized in Ghana and attempted to seize Argentina’s presidential plane. His dedication to extracting every possible dollar regardless of cost to others was nicely summarized in 2011 by investigative journalist Greg Palast:

“Singer’s modus operandi is to find some forgotten tiny debt owed by a very poor nation (Peru and Congo were on his menu). He waits for the United States and European taxpayers to forgive the poor nations’ debts, then waits a bit longer for offers of food aid, medicine and investment loans. Then Singer pounces, legally grabbing at every resource and all the money going to the desperate country. Trade stops, funds freeze and an entire economy is effectively held hostage.

Singer then demands aid-giving nations pay monstrous ransoms to let trade resume. … Singer demanded $400 million from the Congo for a debt he picked up for less than $10 million. If he doesn’t get his 4,000 percent profit, he can effectively starve the nation. I don’t mean that figuratively — I mean starve as in no food. In Congo-Brazzaville last year, one-fourth of all deaths of children under five were caused by malnutrition.”

Buy low, demand very high

He’ll make a windfall profit off Argentina as well. The “special master” who presided over negotiations between the holdouts and the Argentine government — a veteran corporate lawyer who specializes in representing financiers and banks opposed to regulation — announced that NML Capital, Aurelius Capital and two other big hedge funds will receive 75 percent of the full principal and interest demanded by the holdouts. How big of a profit will this be? Only the funds themselves know for certain, but the lowest public estimate is a profit of nearly 400 percent.

Even that lowest estimate likely understates the profit. Bloomberg News reports that Mr. Singer will be paid $2.3 billion, or close to four times the $617 million in principal his firm holds. But as he likely paid only a small fraction of that principal, his profit is likely far greater. A Columbia University researcher estimates that NML Capital will receive $620 million for a portion of bonds for which it paid $48 million in 2008. That’s nearly a 13-fold profit in six years! As former President Fernández remarked when refusing to pay anything more than the 30 percent to which the other bondholders agreed, “I don’t even think that in organized crime there is a return rate of 1,608 per cent in such a short time,” adding that Argentina would not “submit to such extortion.”

President Fernández was referring to the profit Mr. Singer would have reaped had she given in to his full demands. She was speaking in a national address following two U.S. Supreme Court decisions in 2014 that upheld U.S. District Judge Thomas Griesa’s ruling that Argentina is not allowed to continue to pay the bondholders who agreed to accept 30 percent (or “haircuts” in financial parlance) until it reached an agreement with the holdouts. The Supreme Court also ruled that federal courts in the U.S. can order sovereign countries to hand over information on their assets to speculators. In other words, U.S. law, wielded to generate windfall profits for the most greedy, was decreed to apply to other countries, as if they are not sovereign.

The Kirchner-Fernández governments refused to yield their country’s sovereignty, but President Macri took office promising to pay off the vulture capitalists. Not only was Argentina’s ability to determine its own policy at risk, but the very concept of debt relief has been put in danger. The bondholders who agreed to take 30 percent made the calculation that something is better than nothing, and it enabled Argentina to recover from a severe economic crisis. The Kirchner-Fernández governments consistently offered the same deal to the holdouts. But now that the holdouts extracted so much more, will those who accepted the earlier deal now demand the same 75 percent given to the holdout funds? If they do, will they seek to enforce that after-the-fact better deal in the courtroom of Judge Griesa, who consistently showed himself biased in favor of the vulture capitalists?

Consider the assessment of two United Nations officials, Juan Pablo Bohoslavsky, the U.N. independent expert on the effects of foreign debt on human rights, and Alfred de Zayas, the the independent expert on the promotion of a democratic and equitable international order:

“A settlement would validate the type of predatory litigation that has been on the increase during the last decade. Such deals will make it more difficult to solve debt crises in a fair, timely and efficient manner by emboldening and rewarding the behavior of those who refuse to participate in debt restructuring efforts. These are no good news for attempts to solve debt crises in a timely and human rights sensitive manner.”

Paying debt through taking on more debt

The Macri government has now committed itself to paying $6.4 billion to the holdouts. How will it pay for that? By borrowing. Argentina had been blocked from borrowing in international credit markets, and as part of the deal will be allowed to borrow in those markets again. Judge Griesa’s injunction against resuming payments to the 93 percent of bondholders is also to be lifted. (That was enforceable because Argentina paid its debts to those bondholders through the Bank of New York, which was prohibited by the judge to pass through those payments under pain of legal penalties. Alternative routes through non-U.S. banks are difficult to use because of U.S. control over the global financial system.)

The deal also requires that the Argentine parliament reverse a law that blocks the country from offering any deal to holdouts better than terms agreed to by others. President Macri’s Let’s Change bloc does not hold a majority in the Chamber of Deputies, but picked up votes from the Peronist opposition to effect the necessary legal reversal this week. The Senate must still vote, but the expectation has been that the bill would have an easier time there.

The Puerto Madero district of Buenos Aires. (Photo by Juan Ignacio Iglesias)

The Puerto Madero district of Buenos Aires. (Photo by Juan Ignacio Iglesias)

Why is President Macri ceding his country’s sovereignty? Right-wing ideology of course plays a significant role here, but it is also self-interest. While the military dictatorship was conducting a reign of terror against Argentines that ultimately led to hundreds of thousands murdered, “disappeared,” tortured, kidnapped, arrested or forced to flee into exile, Mauricio Macri and his family were adding to their wealth. (Remember that this régime had the approval of Henry Kissinger and was blessed by David Rockefeller, whose loans financed it, with his infamous statement that “I have the impression that Argentina has a regime which understands the private enterprise system.”)

The Macri Society, or Socma, the family business, had close ties to the dictatorship. TeleSUR English reports that Socma “directly benefited” from the dictatorship:

“In 1973, prior to the 1976 military coup that ousted the civilian Peronist government of President Maria Estela de Peron and installed a dictatorship, Socma owned seven companies. When the dictatorship ended 10 years later, in 1983, the Socma corporate empire had expanded to 46 companies. Among Socma’s dozens of companies were various businesses that benefited the Macri family economically by providing services to the dictatorship regime.”

The new president, a director of the family conglomerate from a young age, is opposed to an Argentine parliamentary decision to launch an investigation of people and businesses that participated in the military dictatorship’s crimes, TeleSUR reports. La Nacion, a conservative Buenos Aires newspaper that backed President Macri, the day after the election published an editorial calling for an end of efforts to seek justice for the dictatorship’s victims, denouncing the quest for justice as a “culture of revenge.” Perhaps to emphasize this, the president has appointed as the new secretary for religious affairs Santiago Manuel de Estrada, who served as secretary for social security during the military dictatorship, which presided over severe reductions in wages and living conditions to go along with its death squads and torture facilities.

A monopoly for press backers, repression for opponents

Argentina’s biggest media conglomerate, Clarín, also backs President Macri, and no wonder: He has already moved to eliminate Argentina’s anti-monopoly law, which restricts the number of TV, cable and radio licenses a company can hold at one time, so that a handful of corporations can completely control the mass media. Such laws have precedent; for example, U.S. communications law long restricted anyone from owning more than 14 radio stations and seven television stations until overturned during the Reagan era. The Macri government is moving swiftly to silence opposition — it has forced a popular radio broadcaster, Victor Morales, off the air. According to the Buenos Aires Herald:

“ ‘I’m being kicked out because this company needs government advertising … No radio in Argentina can survive without government ads. They can’t mess with Macri,’ said the journalist.”

Demonstrations against these developments have already taken place, as have a public-sector strike against massive layoffs, demonstrations against the new government’s anti-protest law and protests against the imprisonment of Indigenous leader Milagro Sala. A total of 25,000 public workers have been dismissed as part of the Macri government’s austerity policies, and a new “security protocol” enables indiscriminate arrests and restricts the press’ ability to cover such events, opponents say. A coalition organizing against these new repressive policies states:

“The new protocol implies that every protest is now a criminal offense, and empowers the Security Forces — the same forces that played an active role in Argentina’s last military dictatorship — to allow or forbid any protests. The criminalization of protests violates several judicial decisions that state the right to demonstrate supersedes any occasional traffic problems that may be caused.

This year, on the 40th anniversary of the military coup in Argentina, the Mauricio Macri government has begun a campaign to eliminate an essential human right — the fundamental right to protest and demonstrate. With this new protocol, the government will try to prevent workers from protesting against redundancies or demanding salary increases, or mobilize against power outages and mining projects. This protocol openly defies the constitutional rights of the Argentine people as well as international treaties on human rights.”

Ms. Sala, imprisoned for the past two months, was arrested after protesting the policies of a provincial governor aligned with the president. She was acting in support of an organization she heads that provides social services. Parliamentarians, civil organizations and human rights campaigners across South America have denounced her arrest as political, and the United Nations has called for an explanation of her continued detention. The Buenos Aires Provincial Commission for Memory has issued this statement:

“Organizing collective action does not mean ‘inciting crimes,’ a massive demonstration is not ‘public disturbance’ and to oppose a government decision is not ‘an act of sedition.’ They are all democratic freedoms.”

They should be. But not when a right-wing government is determined to impose the rule of capital, or, in the case of the Macri government, to be a willing subaltern of international capital. The logic of the rule of financiers can only lead to not only intensified austerity, but increased repression.

Work harder to be born into the right family

If we were to believe the fairy tales of capitalism, we would have to believe that 500 multi-billionaires work harder than the entire population of Japan. OK, I know that sounds crazy, but that is nothing more than following capitalist ideology to its intended conclusion: The wealthy are wealthy because their worked harder than you.

The 500 richest people on Earth are worth a collective US$4.7 trillion, Forbes magazine breathlessly informs us, and that total is a little more than the gross domestic product of Japan, the world’s third-largest economy.

The 20 richest people alone are worth a collective $900 billion! There are only 16 countries on Earth that have a larger gross domestic product than that. Quite a feat — 20 people possess slightly more assets than what is produced in an entire year by the 250 million people of Indonesia or the 17 million people of the Netherlands, one of the most highly productive peoples among the world’s advanced capitalist countries.

So these billionaires must work awfully hard to accumulate such riches, right? Let us see.

Wells Fargo Plaza, HoustonAmong the 20 riches people on Earth we find six technology moguls who took advantage of the Internet and world wide web created by governments using public money; seven people who inherited their wealth; a monopolist who was handed his country’s telecommunications system by a president to whom he made a large donation; one who made a fortune from the fashion industry; another who made a fortune in luxury goods; and a casino magnate. Two of those who inherited a fortune and their fathers’ business, Charles and David Koch, spend fortunes (not for them, but it would be a fortune to almost anybody else) to counter all efforts to reverse the global warming and environmental devastation that their business interests requires. Four others, members of the Walton family, receive billions of dollars a year just for being born into the right family.

To zoom out to a bit to more of the tip of the pyramid, Credit Suisse’s Global Wealth Report 2015 reports that the richest one percent of the world’s population owns 50 percent of the world’s wealth, a higher percentage than the one percent owned at the start of the global economic downturn in 2008. The bottom 70 percent of humanity owns three percent. That the richest have so much more means that the rest of us have less. The global median wealth per adult has fallen from US$4,200 in 2007 to $3,200 in 2015. In a very rare concession in a report that otherwise dispassionately reports trends in wealth as if they are as part of the natural world as ocean tides, the Credit Suisse report said:

“Part of the decline is due to adverse exchange rate movement movements, but rising inequality is the principal reason why the global trend in median wealth has not followed the path of mean wealth per adult.” [page 20]

Exchange rates are referenced because the Credit Suisse report converts wealth holdings elsewhere into U.S. dollars for the sake of comparison, and most currencies of the world have lost value against a strong U.S. dollar, thereby rendering those holdings artificially lower than they actually are. But the main point here is average wealth increases but median wealth has been declining. The reason is this: Average measures the difference between the highest and lowest, while median is the point where half are higher and half are lower. As the joke goes, if Bill Gates walks into a bar, everybody there has become, on average, a millionaire.

Unfavorable exchange rates or not, it is no surprise that the U.S. in particular, and the global North in general, are home to a huge majority of the world’s millionaires. Centuries of one-sided extraction of natural resources, control of land and financial plunder have increased global inequality. This is hinted at in a 2009 paper written by Branko Milanović, then a World Bank researcher, who calculated that the standard measure of inequality, a statistic known as the gini coefficient, has increased greatly since the early 19th century. But, he wrote, most of the inequality of the early 19th century was due to differences among individuals within countries and less by difference in wealth between countries. In the early 21st century, by contrast, the author estimates that about 90 percent of global inequality is due to differences between countries and only a small percentage due to differences among individuals within countries. He concludes:

“[I]nequality between individuals is much higher today than 200 years ago, but—more dramatically—its composition has totally reversed: from being predominantly driven by within-national inequalities (that is, by what could be called ‘class’ inequality), it is today overwhelmingly determined by the differences in mean country incomes (what could be called ‘location’ or citizenship-based inequality).”

We wouldn’t expect issued by a World Bank economist, even a working paper that is “unofficial,” to acknowledge class differences. The implication that class differences have ceased to be relevant can easily be corrected every time we walk into our place of employment, both by the relations there and by who pockets the value created by the workforce. Not to mention the drastic and growing inequality within countries. Nonetheless, Dr. Milanović’s reference to differences between countries is of course true, and although the World Bank certainly wouldn’t use the term, we can call that international inequality by its name: Imperialism.

As they have needed to expand under the pressures of competition, the capitalists of the global North moved in to newer locations, from which they could ship massive profits back home while leaving the local populations destitute and forced to work for starvation wages. This process of primitive accumulation, not much different from the sort of primitive accumulation that occurred in England and elsewhere at the dawn of capitalism, kept local elites happy but, more so, fattened the wallets of the corporate elites who set up operations. This transnational profiteering, a process known as imperialism, primarily filled bulging corporate coffers, but inevitably some tiny amount of it filtered down for some working people in the North. Jobs for administrators, sales representatives, warehouse workers and others related to supporting exports as new markets are forced open would be a direct manifestation, and manufacturing jobs tied to the expansion of production destined for export are created.

But competitive pressures inevitably force production to be moved to countries with much lower wages — thus the age of buoying living standards through export of locally made products comes to an end, supplanted by corporate globalization that moves jobs overseas and drives down wages. The shipping of production to locations with ever lower wages and regulations, accelerated by multi-national corporations pressing governments to adopt ever more one-sided “free trade” agreements, although a new form of imperialism, is one that drives down wages in the global North and increases inequality.

Thus, the era of corporate globalization promises more inequality. In your next life, work harder to be born into the right family.

TPP promises health care for profits, not patients

Health care will take a large step toward becoming a privilege for those who can afford it rather than a human right under the Trans-Pacific Partnership. Government programs to hold down the cost of medications are targeted for elimination in the TPP, which, if adopted, would grant pharmaceutical companies new powers over health care.

This has implications around the globe, as such rules could become precedents for the Transatlantic Trade and Investment Partnership and Trade In Services Agreement, two other deals being negotiated in secret.

The U.S. Congress’ difficulties in passing “fast-track” authority has thrown a roadblock in the path of the Trans-Pacific Partnership, but by no means has this most audacious corporate power grab been defeated. The latest leak of TPP text, the annex on pharmaceutical products and medical devices published by WikiLeaks earlier this month, makes clear that the U.S. pharmaceutical industry is taking aim at health care systems that put accessibility above corporate profiteering.

Craters of the Moon Geothermal Area, New Zealand (photo by Pseudopanax)

Craters of the Moon Geothermal Area, New Zealand (photo by Pseudopanax)

People in other countries should be extremely wary of any attempt to make their health care systems more like that of the United States. The U.S. health care system is designed to produce profits for pharmaceutical, insurance and other health care industry corporations, not to provide health care. Because of this, health care in the U.S. is by far the world’s most expensive while delivering mediocre results. How expensive? During the decade of 2001 to 2010, U.S. health care spending was $1.15 trillion higher per year than it would have been otherwise.

As always with the TPP, bland-sounding text written in stilted, bureaucratic language contains more danger than initially meets the eye. New Zealand’s Pharmaceutical Management Agency, which makes thousands of medicines, medical devices and related products available at subsidized costs, is a particular target of TPP and the U.S. pharmaceutical lobby because it is an example that drug companies do not wish to be emulated elsewhere. Agencies of other governments will also be under threat.

U.S. government targets New Zealand subsidies

A “Special 301 Report” issued in April 2015 by the U.S. government under the name of U.S. Trade Representative Michael Froman specifically names no less than 17 countries in which it seeks to undo health-system protections. Taking direct aim at New Zealand, the report said:

“With respect to New Zealand, U.S. industry has expressed serious concerns about the policies and operation of New Zealand’s Pharmaceutical Management Agency (PhARMAC), including, among other things, the lack of transparency, fairness, and predictability of the PhARMAC pricing and reimbursement regime, as well as the negative aspects of the overall climate for innovative medicines in New Zealand.” [page 25]

Note that the wishes of “U.S. industry” are presented as the only possible point of view. This is consistent with the fact that 605 corporate lobbyists have access to the TPP text as “advisers,” while the public is shut out. The real issue is that the New Zealand agency holds down the price of medicines, cutting down the industry’s exorbitant profit-gouging. A 2011 submission to the U.S. government by corporate lobby group Pharmaceutical Research and Manufacturers of America, called the New Zealand agency an “egregious example” because of its “focus on driving down costs.”

Professor Jane Kelsey of New Zealand’s University of Auckland, who has closely followed TPP issues for years, leaves little doubt that New Zealanders will pay more for medications if TPP comes into force. In an analysis of the leaked health care annex text, she writes:

“This leaked text shows the [TPP] will severely erode Pharmac’s ability to continue to deliver affordable medicines and medical devices as it has for the past two decades. That will mean fewer medicines are subsidised, or people will pay more as co-payments, or more of the health budget will go to pay for medicines instead of other activities, or the health budget will have to expand beyond the cap. Whatever the outcome, the big global pharmaceutical companies will win, and the poorest and most vulnerable New Zealanders will lose.” [page 2]

But other countries are in the cross hairs

The Pharmaceutical Management Agency estimates it has created savings of more than NZ$5 billion since 2000. The language of the TPP health care annex specifically targets “national health care programs” that make pricing decisions and not direct government procurement of medicines and medical devices. Professor Kelsey sees a nationalist agenda behind this specific wording, writing:

“ ‘National’ is presumably chosen to preclude such programmes that are run by states and provinces, which are politically sensitive in the US and Canada. In effect, the US has excluded almost all its own programmes, while targeting New Zealand, as it did with the [Australia-U.S. Free Trade Agreement].” [page 3]

But U.S. Medicare and Canadian provincial programs will certainly be targets as well. Medicare is prohibited under U.S. law from from negotiating prescription prices with drug makers, and the same language that would undermine New Zealand’s program would block any attempt to allow Medicare, or any other agency, from instituting a similar pricing program. Per-capita spending on drugs is far higher in the U.S. than elsewhere, in part thanks to this prohibition, which would become irreversible under the TPP.

The advocacy group National Committee to Preserve Social Security and Medicare notes:

“The fact that Medicare is forbidden in the law that created Medicare Part D to negotiate lower prices is no accident. The drug lobby worked hard to ensure Medicare wouldn’t be allowed to cut into the profits which would flow to big Pharma thanks to millions of new customers delivered to them by Part D.”

“Part D” is a program that shifted millions of people from Medicaid, which pays much less for drugs, to Medicare, a boon to pharmaceutical companies.

The TPP health care annex also contains language that the annex’s provisions are exempted from the “investor-state dispute mechanism,” the secret tribunals in which corporate lawyers sit as judges when corporations sue governments under so-called “free trade” agreements. The annex’s text is misleading, however. Language elsewhere in the TPP that requires “fair and equitable treatment” of foreign “investors” would still enable challenges to New Zealand’s program or any other. Thus, governments could be sued using provisions other than the annex, Professor Kelsey writes:

“The biggest risk is the obligation to provide ‘fair and equitable treatment’, which investors may claim includes a legitimate expectation that governments will comply with their obligations in making regulatory and administrative decisions. They could launch a claim for many millions of dollars compensation, including expected future profits, if they believed New Zealand’s process in general, or in specific cases, violated their expectations under the Transparency Annex and adversely affected the value or profitability of their investment.” [page 6]

Who gets to “consult”?

Deborah Gleeson, a lecturer at La Trobe University in Australia, points out another danger. A “consultation” mechanism that requires governments to consider corporate objections in pricing decisions could be used to apply pressure to make changes to benefit pharmaceutical and medical-device corporations. She writes:

“The inclusion of the Healthcare Transparency Annex in the TPP serves no useful public interest purpose. It sets a terrible precedent for using regional trade deals to tamper with other countries’ health systems and could circumscribe the options available to developing countries seeking to introduce pharmaceutical coverage programs in future.” [page 2]

As elsewhere in the TPP, the U.S. government is taking the most hard-line approach, and has been opposing efforts to exempt the poorest countries from attacks on health care subsidies. Judit Rius Sanjuan of Médecins Sans Frontières/Doctors Without Borders said:

“If the US proposal is accepted, the poorest countries would be forced to limit access to affordable medicines long before their public health needs are under control. The fact remains that no country, rich or poor, should accept limitations on its sovereign ability to ensure medicine is accessible and affordable for all those who need it.”

It’s not as if pharmaceutical companies are not already hugely profitable. They like to whine that they have high research and development costs, and while that is true, the prices they charge are well beyond reasonable expenses. They enjoy one of the highest, if not the highest, profit margin of any industry — nearly 20 percent for 2013. The world’s 10 largest pharmaceutical corporations racked up a composite US$90 billion in profits for 2013, according to a BBC analysis. As to their expenses, these 10 firms spent far more on sales and marketing than they did on research and development.

“Free trade” agreements have very little to do with trade. The Trans-Pacific Partnership, and the similar Transatlantic Trade and Investment Partnership and the Trade In Services Agreement, are nothing more than initiatives to cement corporate control over all aspects of society, in which governments lock themselves into binding agreements that elevate corporate profits above all other human considerations. Don’t get sick.

War crimes and forgetting

Forty years after the long Vietnamese struggle for independence concluded with the capture of Saigon, the mythologies surrounding the war on the other side of the Pacific Ocean have not loosened their grip. The “debate” surrounding the war is a textbook example of corporate media obfuscation.

A strong debate played out in the corporate media outlets of the United States concerning the Vietnam War at the end of the 1990s, and that same debate, with the same parameters, continues today. This debate, however, is only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting.

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

Left out are the widely held views that the war should never have been fought because it was a war to extend U.S. hegemony or that the U.S. simply had no business fighting in another country’s civil war. Further, the first “acceptable” viewpoint implies, and the second explicitly states, that the U.S. didn’t really fight hard to win the war, ignoring the actual intensive level of the U.S. war effort in which most of North Vietnam’s larger cities were reduced to rubble, much of the farming lands were destroyed and three million Vietnamese were killed.

Thus there was all the appearance of a free and open media at the same time that the media obscured.

Elections only when you do as we say

What were some of the messy things going on in Southeast Asia at the time? (Most of the following is taken from Manufacturing Consent by Noam Chomsky and Edward S. Herman, Pantheon Books, 1988.) The U.S. sabotaged the scheduled 1956 all-Vietnam election that was a cornerstone of the 1954 agreement that ended the French intervention; an election that was not allowed to occur precisely because Ho Chi Minh would have won. The U.S. set up South Vietnam as an artificial puppet state, overthrew and killed South Vietnam’s “leaders” and installed new “leaders,” who were invariably military thugs.

The U.S. invented the Gulf of Tonkin attack, a deliberate lie to create a cover for increasing the U.S. military role. By the time of the U.S. land intervention in 1965, American aerial bombing, napalming and gassing had already killed 15,000 Vietnamese. The U.S. carried out a policy of rural and urban terror. The military forced peasants in wide parts of the country off their land and into “strategic hamlets” — in reality, rural concentration camps — and killed peasants who refused to leave their homes. Tens of thousands were swept from their homes and sent to camps in single ground operations.

A writer in Foreign Affairs wrote that destroying the countryside and forcing rural residents into cities was necessary because the Viet Cong were “a powerful force which cannot be dislodged from its constituency so long as the constituency continues to exist.” The U.S. systematically destroyed by force any South Vietnamese grouping opposed to the installed military dictators, even non-Communist groups such as organized Buddhists.

The U.S. leveled major cities — 77% of the buildings in Hue, one of Vietnam’s biggest cities, were completely destroyed. Dams were blasted away, allowing salt water from the South China Sea to flood farmland, making the growing of food impossible. When North Vietnam agreed to the Paris Peace Agreements in 1972, Henry Kissinger decided not to accept the pact, began demanding major changes to an agreed-upon document, then launched the Christmas bombings of Hanoi and Haiphong when the North Vietnamese government insisted the agreement be signed.

In South Vietnam, 9,000 of 15,000 hamlets were damaged or destroyed, as were 25 million acres (100,000 square kilometers) of farmland and 12 million acres of forest. Killed were 1.5 million cattle. One million widows and 800,000 orphans were left behind.

In North Vietnam, 34 of the largest 36 cities suffered significant damage, with 15 completely razed, while 4,000 of about 5,800 communes were damaged. More than one million acres of farmland and 400,000 cattle were destroyed in the North. The Central Intelligence Agency admitted that at least 30,000 North Vietnamese were killed per year by 1967 by U.S. bombing, with these deaths primarily civilian. The total tonnage of bombs dropped by the U.S. in Vietnam exceeded that of all bombing by all countries during World War II. Reports of the countryside at the end of the war spoke of entire regions as “bare, gray and lifeless.”

No mercy in neighboring countries

Next door, in Laos, following a 1958 election in which a two-party Left coalition won 13 of 21 legislative seats, the U.S. swiftly overthrew the government, with the new government seated by the U.S. vowing to disband the Pathet Lao, which had won the most seats. Two years later, that new government was overthrown by the U.S., which installed a CIA-backed extreme Right-wing general.

In rural Laos, entire districts were wiped out by bombing. A series of articles in Le Monde reported on a district capital that had been deserted for three years because of repeated bombings. This capital was a portion of a 20-mile area stretching into the countryside in which not a single building was left standing and in which were found the remnants of American fragmentation bombs, which are dropped to maximize civilian casualties.

There were areas of Laos where villagers hid in nearby mountains, in caves or in ditches during daytime because of the ceaseless bombardment and who could conduct life only at night. Craters so saturated some areas that it was impossible to distinguish them, and all vegetation was destroyed. More than 350,000 Laotians — more than 10% of the country’s population — were killed and a similar number left homeless.

In Cambodia, bombing by the U.S. during the period 1969 to April 1975 resulted in 600,000 deaths and two million refugees, according to the same Finnish Inquiry Commission that concluded one million people died during the subsequent Khmer Rouge régime. As the bombing was ending in 1975, the U.S. government estimated that deaths from starvation in the Cambodian capital, Phnom Penh, were near 100,000 per year.

This horrific bombing is believed to have played a role in the rise of the Khmer Rouge, which the U.S. covertly sided with during its murderous four-year reign. A U.S. government report in 1975 said 75 percent of Cambodia’s draft animals had died and that it would likely be three years before the country could regain rice self-sufficiency.

The carnage inflicted on Vietnam reverberates still. An estimated 19 million tons of toxic herbicides were applied that has resulted in more than half a century of damage to health and birth defects.

Such is the price of empire, paid by those on the receiving end. If these are not war crimes, then what would be?

New development banks unlikely to threaten World Bank

Forecasts that new development banks sponsored by the largest developing countries are destined to erode the economic dominance of the United States are quite premature, but it is nonetheless no contradiction that the global hegemon has vigorously sought to stop them. More than a little hypocrisy is at work here.

The newly created Chinese-led Asian Infrastructure Investment Bank has drawn much more of Washington’s ire than has the BRICS New Development Bank formed by the five “BRICS” countries of China, Russia, India, China and South Africa. The U.S. government has leaned heavily on Australia and other countries sufficiently firmly that Canberra has declined to join the Asian Infrastructure Investment Bank despite its initial interest, nor have Indonesia and South Korea.

Although the infrastructure bank is to be capitalized with US$100 billion, it would be ridiculous to say that the World Bank or International Monetary Fund will be put out of business. It will not necessarily go much beyond complementing the existing Asian Development Bank, a regional multi-lateral institution controlled by the U.S. and Japan. And even the World Bank says Asia will require trillions of dollars to build its infrastructure in coming years that it and existing institutions can’t supply.

Protest at the World Bank. (Photo by "Jenene from Chinatown," New York City)

Protest at the World Bank. (Photo by “Jenene from Chinatown,” New York City)

The politics of imperialism are at work here. The very idea that a country outside the control of the U.S. dares to set up an institution outside the control of the U.S. is an example that Washington, as the ultimate enforcer of multi-national corporations’ prerogatives, is determined to stamp out.

In a front-page article, The New York Times reported:

“American officials have lobbied against the [infrastructure] bank with unexpected determination and engaged in a vigorous campaign to persuade important allies to shun the project, according to senior United States officials and representatives of other governments involved.”

And what excuse does the U.S. government give for its opposition? Officially, the Obama administration is not talking, but, quoting a “senior official” granted anonymity, the Times reports:

“A senior Obama administration official said the Treasury Department had concluded that the new bank would fail to meet environmental standards, procurement requirements and other safeguards adopted by the World Bank and the Asian Development Bank, including protections intended to prevent the forced removal of vulnerable populations from their lands. … ‘How would the Asian Infrastructure Investment Bank be structured so that it doesn’t undercut the standards with a race to the bottom?’ asked the senior official.”

Has the Obama administration, or, more accurately, the government apparatus that has steered U.S. policy on behalf of corporate interests for generations, suddenly grown a conscience? Quite unlikely. The World Bank and International Monetary Fund, as well as regional banks such as the Asian Development Bank, have been under U.S. suzerainty since their founding. Does the World Bank really uphold development ideals? The record firmly says otherwise.

The World Bank’s record of destruction

The World Development Movement, a coalition of local campaign groups in Britain, reports that the World Bank has provided more than US$6.7 billion in grants to projects that are destructive to the environment and undermine human rights, a total likely conservative. To cite merely three of the many examples, the World Bank:

  • Loaned an energy company in India more than $550 million to finance the construction of two coal-fired power plants. Local people, excluded from discussions, were beaten, their homes bulldozed and complain of reduced food security and deteriorating health as a result of the power stations.
  • An Indonesian dam, made possible by the World Bank’s $156 million loan, resulted in the forcible evictions of some 24,000 villagers, who were subject to a campaign of violence and intimidation.
  • In Laos, a hydropower project made possible by World Bank guarantees displaced at least 6,000 Indigenous people and disrupted the livelihoods of around 120,000 people living downstream of the dam who can no longer depend on the rivers for fish, drinking water and agriculture.

A study of World Bank policies, Foreclosing the Future by environmental lawyer Bruce Rich, found that:

“Drawing on Bank studies, project evaluations and sectoral reviews, it is shown that the World Bank still suffers from a pervasive ‘loan approval culture’ driven by a perverse incentive system that pressures staff and managers to make large loans to governments and corporations without adequate attention to environmental, governance and social issues. In 2013, Bank Staff who highlight social risks and seek to slow down project processing still risk ‘career suicide.’ … [The bank] has continued to binge on enormous loans to oil and gas extraction, coal-fired power stations and large-scale mining generating environmental damage, forest loss and massive carbon emissions.”

A study prepared by the Institute for Policy Studies and four other organizations found that World Bank lending for coal, oil and gas was $3 billion in 2008 — a sixfold increase from 2004. In the same year, only $476 million went toward renewable energy sources.

It could be pointed out that China’s industrialization has had serious environmental consequences, and that Chinese money was critical to the building of the Three Gorges Dam, the construction of which led to the forced removal of at least 1.3 million people. True enough, but Canadian, French, German, Swiss, Swedish and Brazilian capital were also necessary to build the dam. The World Bank also provided loans associated with Three Gorges and provided experts during the project’s planning stages.

Despite the pressure from Washington, 21 countries signed up to be founding members of China’s Asian Infrastructure Investment Bank, including India, Singapore and the Philippines.

BRICS bank expected to bow to the logic of capital

China’s new bank was formed three months after the BRICS New Development Bank. The BRICS bank will be more modest, with a goal of US$100 billion capitalization, spread equally among the five countries. In a July 2014 communiqué, the five countries said their bank will have the “purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies.” They also pledged to organize a “BRICS Contingent Reserve Arrangement” to “help countries forestall short-term liquidity pressures” resulting from foreign-exchange or debt markets.

Although this bank is intended as a gesture of independence from the U.S.-dominated world financial system, and will use some combination of the BRICS currencies, detaching from the world system is not a simple matter of setting up new institutions. A New Delhi economics professor, C.P. Chandrasekhar, sees the bank being limited in what it can potentially do. Writing on Naked Capitalism, he said:

“However, the new development bank is fundamentally not detached from the global financial system. Being a bank, even if a specialised one, it must ensure its own commercial viability. And it must do so when a large part of the resources it lends would be mobilised from the market. … [W]anting to be seen as respectful of the sovereign interests of borrowing countries, the [New Development Bank] would be careful not to frame its lending rules in ways that threaten the policy sovereignty of borrowing countries. If the countries that approach the institution are pursuing neoliberal strategies, there may be clear limits in terms of what the new development bank itself can achieve.”

Professor Chandrasekhar concludes:

“The decision of the BRICS to set up mini-versions of the World Bank and the IMF seems to be more a symbolic declaration of resentment at the failure of the US and its European allies to give emerging countries a greater say in the operations of the Bretton Woods institutions. … The desire to redress the obvious inequities in the global financial system seems far less important.”

If it is a safe haven, it is not going away

That, for at least the near future, U.S. hegemony is not threatened received fresh confirmation during October’s week-long decline in the world’s stock markets — money from around the world quickly poured into U.S. treasuries as a safe haven. From a capitalist standpoint, doing so is entirely rational: If the U.S. government unravels, the entire global capitalist system disintegrates.

Although predictions of the U.S. eventually being dethroned will one day come true — every empire has an expiration date — that such a dethronement is imminent is wishful thinking. This is not to say that U.S. power is not eroding, but there is no conceivable replacement for the U.S. at the center of the world capitalist system. The U.S. spends about as much money on its military as every other country on Earth combined and the dollar remains the world’s reserve currency; that the world continues to buy U.S. debt as a safe haven enables the U.S. to continue to run up deficits and finance its military.

There is no military remotely in a position to become the global enforcer of capital, nor any currency that could replace the dollar at the present time. The euro is not a candidate because the eurozone is too fractured and unstable; the renminbi is not fully convertible. According to the Bank of International Settlements, the U.S. dollar was involved in 87 percent of the world’s foreign-exchange transactions in April 2013, while the euro was involved in 33 percent and the renminbi in 2 percent.

The U.S. needs China to buy its debt but China needs the U.S. as an export destination; Chinese growth continues to be dependent on unsustainable levels of investment rather than internal consumption, a situation difficult to adjust because production is moved to China to take advantage of its low sweatshop wages. A contradiction on the other side of the Pacific is that U.S. foreign policy treats China as a capitalist competitor that must be contained at the same time that U.S.-based multi-national corporations are instrumental in transferring production to China.

A change in the global hegemon from the U.S. to another country or bloc, leaving the capitalist system intact, provides no salvation, no more than did the early 20th century’s transfer from Britain. Another world is possible only with an entirely new economic system. Otherwise, the subaltern will remain subaltern, be they nation or people.

You don’t spend a trillion dollars on the military for benign reasons

The idea that a country spends as much on its military as the rest of the world and has military personnel deployed in three-quarters of the world’s countries does so for purely defensive reasons is the absurdity it appears to be.

As former U.S. Secretary of State Madeleine Albright memorably said to General Colin Powell, “What’s the point of having this superb military you’re always talking about if we can’t use it?” Ah, bipartisanship. Neither Republican nor Democratic administrations have been shy in this regard: The United States militarily has invaded Latin American and Caribbean countries 96 times, including 48 times in the 20th century. That total constitutes only direct interventions and doesn’t include coups fomented by the U.S., such as Guatemala in 1954 and Chile in 1973.

Secretary Albright doesn’t have a short memory so much as ideological blinders. She of course is far from alone there. But before tackling some of those details, an examination of the size of U.S. military spending is in order, although that is not necessarily an easy number to determine. What is undisputed is that the U.S. spends many times more than any other country on Earth.

PentagonOne measure of the world’s military spending is provided by the Stockholm International Peace Research Institute, a self-described independent research organization that is nonetheless largely funded by the Swedish government. According to its figures, the U.S. spent $640 billion in 2013, roughly equal to the combined military spending of the next nine largest spenders combined.

The Stockholm Institute estimates China’s military spending (the world’s second highest) at $188 billion, about 50 percent higher than the figure found in the official Chinese budget, based on its analysis of China’s budget. That is reasonable, but the same standard should be applied to the United States, rather than simply accepting the Pentagon budget figure as the Stockholm Institute has done.

Pentagon budget only part of U.S. military spending

One estimate of actual U.S. military spending in 2013, put forth by the War Resisters League, is $1.355 trillion. The league arrives at that figure by adding military spending deriving from parts of the government other than the Pentagon, including veterans’ benefits and assigning 80 percent of the interest on the national debt. These are in addition to the official Pentagon budget.

In its annual pie charts exposing this spending, the league notes that other groups estimate that 50 to 60 percent of the national debt is attributable to military spending. For the sake of argument, splitting the difference between the high and low figures (using a figure of 65 percent debt assignment), lowers U.S. military spending to about $1.285 trillion. Adjusting U.S. spending to that level, while accepting the Stockholm Institute’s upward revisions for China and Russia, means that the United States spends more on its military than every other country on Earth put together.

There is no conceivable defensive purpose for such massive spending.

Nor is there one for the geographical breadth of the Pentagon. A web site for veterans, Vet Friends, states that the United States currently has military personnel deployed in about 150 countries, and 56 countries have hosted at least 1,000 U.S. troops at some time since 1950. The number of overseas U.S. military bases to which personnel are assigned is a matter of dispute. The Pentagon, in a 2003 report, said it had 702 overseas installations. As the Bush II/Cheney administration’s “war on terror” was then in its early stages, that number has likely grown. A report published by the conservative Canadian newspaper National Post estimates the actual figure is anywhere from 700 to 1,000.

The cost of that vast overseas deployment is no easier to estimate. David Vine, writing for Al-Jazeera, did his best to pin down a reasonable figure:

“How much does the U.S. spend each year occupying the planet with its bases and troops? How much does it spend on its global presence? Forced by Congress to account for its spending overseas, the Pentagon has put that figure at $22.1bn a year. It turns out that even a conservative estimate of the true costs of garrisoning the globe comes to an annual total of about $170bn. In fact, it may be considerably higher. Since the onset of ‘the Global War on Terror’ in 2001, the total cost for our garrisoning policies, for our presence abroad, has probably reached $1.8 trillion to $2.1 trillion.”

Playing the ‘democracy’ card never gets old

Why does the United States government put itself into debt for such unjustifiable spending? The usual story spoon-fed to United Statesians and to the rest of the world is a benign, even self-sacrificing, willingness to be the world’s policeman. The question then becomes one of “Can we afford to do this?” The actual reason — to enforce and extend U.S. dominance and to boost profitability of U.S.-based multi-national corporations — is treated as if such considerations did not exist, despite being repeatedly demonstrated by the words of U.S. government officials.

A splendid example of this self-serving myopia is a 2012 paper produced by the Cato Institute, a font of far right, libertarian material taken seriously in such circles, at least before the Koch Brothers’ coup two years ago that tightened their control over the organization. This paper, “Why the U.S. Military Budget is ‘Foolish and Sustainable,’ ” does acknowledge that military spending “is designed for projecting power abroad, not protecting Americans.” But the paper would have us believe that is because the U.S. is too nice:

“We adopted our current strategy — which amounts to trying to run the world with the American military — because we could, not because it was wisest. … U.S. security guarantees can create moral hazard — emboldening weak allies to take risks they would otherwise avoid in their dealings with neighbors, heightening instability and threatening to pull the United States into wars facilitated by its benevolence.”

The problem, this Cato Institute paper asserts, is that the U.S. allows its allies to “free-ride” on its “benevolence” while receiving nothing tangible in return. The solution to this is to force other countries to spend more on their militaries. In this fairy tale, a global arms buildup would bring an end to the “infantilization” of U.S.-allied countries. Better to force the rest of the world to grow up, the paper asserts:

“Abandoning the pretension that global trade depends on U.S. protection would allow vast reductions in overseas missions and peace-time military expenditures. Avoiding the conflation of foreign disorder would allow American leaders to plan for fewer occupational wars.”

Although those on the receiving end of imperial bombs and dictated “structural adjustments” are not in doubt about the phantasmagoria of these Cato Institute arguments — consistent as they are with the level of debate found in elite circles and the corporate mass media — let us at least dip our toes into a real world-based examination of U.S. foreign policy.

Bankers, banana barons and military interventions

At the beginning of the 20th century, U.S. President William Howard Taft declared that his foreign policy was “to include active intervention to secure our merchandise and our capitalists opportunity for profitable investment” abroad. Those were not idle words. A Nicaraguan dictator, José Santos Zelaya, was overthrown in 1909 because he angered the United States by accepting a loan from British bankers instead of U.S. bankers. Taft then placed Nicaragua’s customs collections under U.S. control and refinanced the loan through two U.S. banks, which were given control of Nicaragua’s national bank and railroad as a reward.

Half a century later, the U.S. overthrew Guatemala’s democratically elected president, Jacobo Arbenz, on behalf of the United Fruit Company. That was a company with friends in high places — Central Intelligence Agency Director Allen Dulles and Secretary of State John Foster Dulles earlier in their careers were partners in United Fruit’s main law firm, Sullivan & Cromwell. A 1952 “national intelligence estimate” (a joint document put together by the CIA and other U.S. intelligence agencies) had this to say about United Fruit’s efforts to maintain its dominant position:

“If the company should submit to Guatemalan demands the political position of the Arbenz Administration would be greatly strengthened. The result, even if it were a compromise agreement, would be presented as a national triumph over ‘colonialism’ and would arouse popular enthusiasm. … The Government and the unions, under Communist influence and supported by national sentiment, would probably proceed to exert increasing pressure against other U.S. interests in Guatemala, notably the Railway.”

Note the use of quote marks around “colonialism,” as if such a concept did not exist, and a privately owned railroad is a “U.S. interest.” Class interests are also revealed by the ritual reference to “Communist influence” — a phrase implying that Guatemalans, or anybody else subject to the formulation, are intellectually incapable of analyzing their own lives and experiences.

In the following decade, the United States backed a military coup overthrowing a democratically elected government in Brazil in 1964. The U.S. ambassador to Brazil, who served in the Kennedy and Johnson administrations, said the coup, which installed a right-wing dictatorship that tortured opponents, would “create a greatly improved climate for private investment.” In more recent times, the Bush II/Cheney administration sought to sweep away all constraints limiting the plundering of Iraq by U.S. multi-national corporations following the invasion, establishing a foothold intended to be replicated elsewhere. That it didn’t succeed doesn’t ameliorate that the attempt was made nor the enormous damage done.

That isn’t only in the history books

And as the failed U.S.-backed coup in Venezuela in 2002, and the current destabilization attempt there, demonstrate, any country that doesn’t orient government policy to the enrichment of foreign capital above all other considerations quickly becomes a target. As a 2006 secret memo revealed by WikiLeaks discusses, the U.S. government spends considerable money destabilizing countries it does not like. This memo, circulated to the Army command for South America in addition to various U.S. embassies, outlines a five-point program to topple then president Hugo Chávez that included tens of millions of dollars funneled through the U.S. Agency for International Development and the creation of opposition groups.

Typical of the warped prism through which U.S. elites view the world, the memo’s first sentence is: “During his 8 years in power, President Chavez has systematically dismantled the institutions of democracy and governance.” That was said of a president whose movement won 16 of 17 national elections, almost all by at least 10 percentage points. (Sixteen more legitimate national electoral victories than achieved by George W. Bush for those keeping score.)

Former U.S. President Jimmy Carter, an observer, characterized the Venezuelan election process as “the best in the world.” Voters in Venezuela make their selections on computers in which party and independent observers participated in 16 pre-election audits, election-machine software has built-in systems to prevent tampering, and a paper receipt is printed out for every vote. A system of community councils is building up participatory democracy, and processes intended to build economic democracy are ongoing.

Venezuela is attempting to create an economy geared toward the betterment of its population, rather than the maximization of corporate profits. The majority of Venezuelans, previously shut out of political participation by the country’s capitalists, are now involved in creating popular institutions.

That is what is seen as a threat by the U.S. government, acting on behalf of its industrialists and financiers, as it has done since the 19th century. Although nowadays financial pressure is the preferred methodology thanks to the development of a global web of banks and multilateral institutions, force underlies the enforcement of these interests around the world. Violence has always been the handmaiden of capitalism.