Home » Empire
Category Archives: Empire
Why Paris Reveals the Horror – and the Hypocrisies – of Global Terrorism
By: Andrew Gavin Marshall
23 November 2015
Originally posted at Occupy.com on 17 November 2015
The world was shocked and horrified at the terror inflicted upon Paris on the night of Friday the 13th, 2015, when ISIS-affiliated militants killed well over 100 civilians in one of the world’s most iconic cities. An outpouring of grief, solidarity, support and condolences came in from across the world. The tragedy, and tyranny, of such terror cannot be underestimated, but it should also be placed in its global context: namely, that the chief cause of terrorism is, in fact, terrorism, and that the chief victims are the innocent, wherever they may be.
While ISIS claimed responsibility for the attacks, following attacks the group undertook in previous days in both Beirut and Baghdad, it is worth remembering and reflecting on what led to the development of ISIS itself. The so-called Islamic State had its origins in the Iraq War, launched by the United States and closely supported by the United Kingdom in March of 2003. After overthrowing Saddam Hussein, a dictator once favored by the U.S., the occupying powers struggled to deal with a growing Sunni insurgency against their military occupation. In response, the U.S. helped create death squads in Iraq that further fueled a sectarian conflict between Shi’a and Sunni communities, which likewise fueled a growing regional rivalry between Shi’a Iran and Sunni Saudi Arabia.
The resulting civil war in Iraq killed hundreds of thousands, and the U.S. aligned itself even more tightly with Saudi Arabia, a country the West considers to be “moderate” in comparison to both Iran and Syria, yet it was the primary financier of al-Qaeda. The broader aim, in Iraq and across the Middle East, was to support the regional hegemony of the West’s allies – Saudi Arabia and other Gulf Arab dictatorships – against their chief rivals, Iran and Syria. If it meant supporting the countries that supported al-Qaeda and other terrorist groups, so be it.
After all, it has never been much of a secret that the Saudis and their Gulf neighbors were the major financial backers of global terrorists; even then-Secretary of State Hillary Clinton admitted as much in a memo leaked by Wikileaks. Nor was it a secret that Saudi Arabia was responsible for more destabilization and terrorism inside Iraq than Iran, which nonetheless received most of the blame.
The Saudis and the Gulf dictatorships are U.S. and Western allies, with immense oil riches that have made them some of the largest investors and shareholders in Western banks and corporations. Iran and Syria, on the other hand, are not.
Al-Qaeda did not exist inside Iraq until after the U.S. invasion and occupation. Over the years, since the war and occupation began, the group has undergone a number of name changes and transitions. One such evolution of the group is the al-Nusra front. And another is now known as the Islamic State, or ISIS.
Origins of the Current Terror
When the Arab uprisings began against Western-supported dictators back in late 2010 and early 2011, the U.S. and its key Middle East allies faced an unprecedented crisis. The longtime French and U.S.-supported dictator of Tunisia, Ben Ali, fled his country in January of 2011. The following month, it was Egypt’s dictator, Hosni Mubarak, a “family friend” of Hillary Clinton’s, who had to leave.
The Saudis and other Arab dictators were furious that the U.S. could toss one of its major regional clients aside, fearful that if Mubarak could be removed, any of them could be next. Thus, Saudi Arabia and other Arab dictators led a counter-revolution against the Arab Spring, pouring in money to support dictators they considered friendly (such as in Jordan), sending in troops to violently crush uprisings (such as in Bahrain), and arming rebel groups and terrorists against long-time foes in an effort to take advantage of the uprisings and undermine their rivals (such as in Libya).
In Libya, NATO led a war against long-time dictator Colonel Gaddafi in cooperation with many extremist rebel groups, including al-Qaeda. France and Britain were the main proponents of the war against Libya, which is hardly surprising given that both countries have hundreds of years of experience invading, occupying, colonizing and waging war against peoples of the Middle East and Africa. The war in Libya was of course a monumental disaster. While it removed a dictator long despised by both the Western powers and the Gulf Arab dictators, its ultimate effect was to plunge the country into civil war and chaos, terrorism and collapse.
Meanwhile, the weapons looted in Libya during the war began making their way into neighboring Mali and the more-distant Syria. As the arms crossed borders, so too did terror and warfare, and the French weren’t far behind. In early 2013, France launched airstrikes in Mali, leading to a ground invasion that ended in 2014. Around the same time, France also military intervened in the Central Africa Republic.
In 2013, Western powers including France, the UK and U.S. began increasing their participation in the Syrian civil war, which was already a full-blown regional proxy war pitting Syria’s government, led by Bashar al-Assad allied with Iraq and Iran, against Saudi Arabia, Qatar, the United Arab Emirates, Jordan and Turkey. The Gulf dictatorships armed and funded religious extremist sects to fight against the Syrian government, and were aided in this process by Western countries.
The U.S., France and Britain provided training and support to so-called “moderate” rebels inside Jordan to fight against the Syrian government. The CIA has been involved in arming and training Syrian rebels at least since 2012, in close cooperation with Turkey, Saudi Arabia and Qatar. The official line stressed that the CIA’s efforts aimed to prevent weapons from getting into the hands of extremist groups like al-Qaeda – yet virtually all of the rebel groups it was aiding inside Syria were hardline religious extremists.
Even as reports emerged that secular and moderate rebel groups had all but collapsed, the CIA continued to funnel more sophisticated weapons (in cooperation with Saudi allies) to these mythical “trustworthy” rebel groups. France was not far behind in delivering arms to Syrian rebel groups.
Around the same time, an internal CIA study noted that in its decades of experience arming insurgencies against regimes that the U.S. opposed, the agency’s efforts had largely failed. The main “exception” to the litany of failures, ironically, was when the CIA armed and trained the Mujahideen in Afghanistan against the Soviet Union. That “success,” as we now know, led directly to the creation of al-Qaeda and the Taliban.
A Plan Backfires
With all the support given to Syrian rebel groups in the form of training and arms, those same groups quickly became enemies of the West that had armed and trained them. This includes ISIS, whose rise was fueled by U.S. involvement in both Syria and Iraq, and who is funded and supported by key U.S. allies in the region such as Saudi Arabia, Qatar and Turkey.
In fact, a report prepared by the Defense Intelligence Agency in 2012 predicted the rise of ISIS, noting that such al-Qaeda-affiliated groups were the “major forces driving the insurgency in Syria,” and added that they were being supported in their efforts to take over large parts of Syria and Iraq by “western countries, the Gulf states and Turkey.” Further, the document noted, this was “exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime.” A former Pentagon official who ran the DIA even suggested that the U.S. not only didn’t “turn a blind eye” to its support of such groups, but that “it was a willful decision.”
Here is the takeaway: the Syrian civil war, combined with the effects of the Iraq war, Libyan war and other conflicts in the region that were fueled by Western powers and their regional allies, has resulted in the massive refugee crisis Europe faces today, as millions of civilians flee the conflicts plaguing their nations while Western powers continue to pour weapons and money into them. Conflict and terror has bred further conflict and terror.
Yet when terrorism hits inside Western nations, like it did Friday in Paris, the reaction by Western governments is fairly, and tragically, typical. The Paris attacks occurred less than two months after France began launching air strikes against ISIS inside Syria, and have already prompted calls for a more aggressive strategy against ISIS in the future. So what can we expect as a result? Simply, more terror.
In short, if the objective is to oppose or prevent terrorism, the most logical strategy is not to dismantle civil liberties at home and send militaries and weapons abroad, but to stop participating in terrorism itself. This does not take away from the tragedy of the lives lost in Paris on Nov. 13, but the hypocrisy in how we acknowledge and address terrorism only enhances the tragedy. French President Francois Hollande called the attacks that killed 129 people an “act of war,” which it was. But in turn, he declared that “France will be merciless” in its response, and this is something we have yet to see.
If 200,000 dead Syrians, millions of refugees, and regional warfare spreading from state to state is considered “merciful” participation by Western nations in Middle East conflicts, the terror that might now be unleashed abroad – and the new terror that will, inevitably, once again wash ashore as a result – is indeed something to fear. To end terror, perhaps Western states should consider stopping its own participation in terror. In the very least, it would be a first step in the right direction.
Who Rules Europe?
By: Andrew Gavin Marshall
22 July 2015
If you like this video, please consider making a donation to support my work.
Blaming the Victim: Greece is a Nation Under Occupation
By: Andrew Gavin Marshall
17 July 2015
In the early hours of Thursday morning, July 16, the Greek Parliament passed a host of austerity measures in order to begin talks on a potential third bailout of 86 billion euros. The austerity measures were pushed onto the Parliament by Greece’s six-month-old leftist government of Syriza, elected in late January with a single mandate to oppose austerity. So what exactly happened over the past six months that the first anti-austerity government elected in Europe has now passed a law implementing further austerity measures?
One cannot properly assess the political gymnastics being exercised within Greece’s ruling Syriza party without placing events in their proper context. It is inaccurate to mistake the actions and decisions of the Greek government with those taken by an independent, sovereign and democratic country. Greece is not a free and sovereign nation. Greece is an occupied nation.
Since its first bailout agreement in May of 2010, Greece has been under the technocratic and economic occupation of its bailout institutions, the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF). For the past five years, these three institutions known as ‘the Troika’ (though now referred to as ‘the Institutions’) have managed bailout programs in Greece and other nations of the eurozone. In return for loans, they got to dictate the policies and priorities of governments.
Behind the scenes, Germany rules an economic empire expanding across Europe, enforcing its demands upon debtor nations in need of aid, operating largely through the European Union’s various institutions and forums. Germany has consistently demanded harsh austerity measures, structural reforms, and centralization of authority over euro-member nations at the EU-level.
Greece has served as a brutal example to the rest of Europe for what happens when a country does not follow the orders and rules of Germany and the EU’s unelected institutions. In return for financial loans from the Troika, with Germany providing the largest share, Greece and other debtor nations had to give up their sovereignty to unelected technocrats from foreign institutions based in Brussels (at the European Commission), Frankfurt (at the ECB), Washington, D.C. (at the IMF), and with ultimate authority emanating from foreign political leaders in Berlin (at the German Chancellery and Finance Ministry).
The Troika would send teams of ‘inspectors’ on missions to Athens where they would assess if the sitting government was on track with its promised reforms, thus determining whether they would continue to disburse bailout funds. Troika officials in Athens would function as visiting emissaries from a foreign empire, accompanied by bodyguards and met with protests by the Greek people. The ‘inspectors’ from Brussels, Frankfurt and Washington would enter Greek government ministries, dictating to the Greek government and bureaucracy what their priorities and policies should be, with the ever-present threat to cut off funds if their demands were not followed, holding the fate of successive governments in their hands. Thus, unelected officials from three undemocratic and entirely unaccountable international institutions were dictating government policy to elected governments.
In addition to this immense loss of sovereignty over the past five years, Greece was subjected to further humiliation as the European Commission established a special ‘Task Force for Greece’ consisting of 45 technocrats, with 30 based in Brussels and 15 at an outpost in Athens, headed by Horst Reichenbach, dubbed by the Greek press as the ‘German Premier’. European and German officials had pushed for “a more permanent presence” in Greece than the occasional inspections by Troika officials. Thus, the Task Force was effectively an imperial outpost overseeing an occupied nation.
When a nation’s priorities and policies are determined by foreign officials, it is not a free and sovereign nation, but an occupied country. When unelected technocrats have more authority over a nation than its elected politicians, it is not a democracy, but a technocracy. Germany and Europe’s contempt and disregard for the democratic process within occupied (bailout) countries has been clear for years.
When Greece’s elected Prime Minister George Papandreou called for a referendum on the terms of Greece’s second bailout in late 2011, German Chancellor Angela Merkel, French President Nicolas Sarkozy, and Europe’s unelected rulers were furious. The economic occupation and restructuring of a nation was too important to be left to the population to decide. Europe’s leaders acted quickly and removed the elected government from power in a technocratic coup, replacing Mr. Papandreou with the former Vice President of the European Central Bank, Lucas Papademos. Thus, a former top official of one of the Troika institutions was put in direct control of Greece.
Papademos, who was not elected but appointed by foreign powers, had two major mandates from his German-Troika overlords: impose further austerity and conclude an agreement for a second bailout. Within a week of the coup, the EU and IMF demanded that the leaders of Greece’s two large political parties, New Democracy and PASOK, “give written guarantees that they will back austerity measures” and follow through with the bailout programs.
Troika officials and European finance ministers wanted to ensure that regardless of what political party wins in future elections, the Troika and Germany would remain the rulers of Greece. Troika officials threatened that unless political party leaders sign written commitments they would continue to withhold further bailout funds from being disbursed to Greece. So the leaders signed their commitments. The leaders of Greece’s two main political parties, Antonis Samaras (New Democracy) and Evangelos Venizelos (PASOK), which had governed the country for the previous several decades, “became reluctant partners, propping up a new prime minister.” In February of 2012, the new Greek government agreed to a second major bailout with the Troika and Germany, thus extending the economic occupation of the country for several more years.
Greece was set to hold elections in April of 2012 to find a suitable ‘democratic’ replacement for the ‘technocratic’ government of Lucas Papademos. But German Finance Minister Wolfgang Schauble was growing impatient with Greece, and publicly called for the elections to be postponed and to keep a technocratic government in power for longer. As the Financial Times noted in February of 2012, the European Union “wants to impose its choice of government on Greece – the eurozone’s first colony,” noting that Europe was “at the point where success is no longer compatible with democracy.”
But the elections ultimately took place in May of 2012, though Greece’s fractured political parties failed to form a coalition government, and thus set the country on course for a second round of elections the following month. The May elections were seen as a major rejection of the bailouts and the two parties that had dominated Greece for so long, marking the rise of the neo-Nazi Golden Dawn party on the far-right and Syriza on the left.
But with a second round of elections set for June of 2012, Europe’s leaders repeated their threats to the democratic process in Greece. The Troika threatened to withhold bailout funds until the next government approved the package of reforms demanded by the creditors. Jorg Asmussen, a German member of the Executive Board of the ECB, warned, “Greece must know that there is no alternative to the agreed to restructuring arrangement, if it wants to stay a member of the euro zone.” The German President of the European Parliament, Martin Schulz, said that, “The Greek parties should bear in mind that a stable government that holds to agreements is a basic prerequisite for further support from the euro-zone countries.” As Philip Stephens wrote in the Financial Times, “As often as Greece votes against austerity, it cannot avoid it.”
At a May meeting of the Eurogroup of finance ministers, it became clear that Europe’s rulers were increasing their threats and ultimatums to Greece. “If we now held a secret vote about Greece staying in the euro zone,” noted Eurogroup President Jean-Claude Juncker (who is now president of the European Commission), “there would be an overwhelming majority against it.”
When the second elections were held the following month, the conservative New Democracy party won a narrow victory over Syriza, forming a coalition with two other parties in order to secure a majority to form a new government. Upon the announcement of a new coalition government on June 20, 2012, Chancellor Angela Merkel of Germany warned that Greece “must stick to its commitments.” Antonis Samaras of New Democracy was the third prime minister of Greece since the bailout programs began in 2010, and led the country as a puppet of its foreign creditors until his government collapsed in late 2014 and he called for elections to be held at the end of January of 2015.
Upon the collapse of the government, Alexis Tsipras, the leader of Syriza, declared that, “austerity will soon be over.” German Finance Minister Wolfgang Schauble warned that new elections in Greece “will not change any of the agreements made with the Greek government,” which “must keep to the contractual agreements of its predecessor.”
Jean-Claude Juncker, who was the newly-appointed (unelected) President of the European Commission, warned that Greeks “know very well what a wrong election result would mean for Greece and the eurozone,” adding that he would prefer “known faces” to rule Greece instead of “extreme forces,” in a reference to Syriza. A couple weeks before the elections, the European Central Bank threatened to cut its funding to Greece’s banking system if a new government rejected the bailout conditions.
Syriza won the elections on January 25, 2015, forming a coalition government with the Independent Greeks, a right-wing anti-austerity party. Alexis Tsipras, who would become Greece’s fourth prime minister in as many years, declared “an end to the vicious circle of austerity,” adding, “The troika has no role to play in this country.” Christine Lagarde, the Managing Director of the IMF, warned, “There are rules that must be met in the eurozone,” while a member of the executive board of the ECB added, “Greece has to pay, those are the rules of the European game.”
Nine days after the election, the ECB cut off its main line of funding to Greek banks, forcing them to access funds through a special lending program which comes with higher interest rates. Mark Weisbrot of the Center for Economic and Policy Research suggested that following Syriza’s election victory, the strategy of European officials was “to do enough damage to the Greek economy during the negotiating process to undermine support for the current government, and ultimately replace it.” The ECB, under its President Mario Draghi, quickly took a hardline approach to dealing with Greece, increasing the pressure on Athens to reach a deal with its creditors.
In early March, the ECB added pressure on Greece by indicating that it would only continue lending to Greek banks once the country complied with the terms of the existing bailout. On 9 March, a meeting of the Eurogroup was held where ECB president Mario Draghi warned the Greeks that they must let Troika officials return to Athens to review the country’s finances if they ever wanted any more aid. The same message was delivered by officials of the European Commission and the IMF. The Greeks were forced to comply. As negotiations continued, it became increasingly clear that the unelected institutions of the IMF and ECB had immense power over the terms and conditions of the talks.
Negotiations were dragged out, and the economy continued its collapse. By mid-June, Prime Minister Tsipras accused the creditors of “trying to subvert Greece’s elected government” and encourage “regime change.” James Putzel, a development studies professor at the London School of Economics (LSE) noted that Greece was being forced to choose between more austerity and reforms under Troika demands, or being booted from the eurozone and losing the common currency (something which the Greek people did not want). “Greece’s creditors,” he wrote, “seem bent on forcing the demise of the Syriza government.” Robert H. Wade, a political economy professor at LSE agreed, referring to the strategy as a “coup d’état by stealth.”
In late June, as Greece was faced with an ultimatum to implement more austerity or be pushed out of the eurozone, Alexis Tsipras threw out the wild card option in a final attempt to gain a better negotiating position by calling for a referendum on the terms demanded by the Troika and creditors. Europe’s leaders reacted as they did the previous time a Greek Prime Minister called for a referendum, and moved to put the squeeze on the economy. The ECB froze the level of its emergency aid to Greek banks, forcing bank closures and capital controls to be imposed on the country, essentially cutting off the flow of money to, from, and within Greece.
Chancellor Merkel, French President Francois Hollande and Commission President Jean-Claude Juncker “coordinated how they would respond” to the Greek government’s call for a referendum. As Mr. Tsipras publicly campaigned for a ‘No’ vote (which would reject the terms of the bailout), Europe’s leaders pushed for a ‘Yes’ vote, attempting to redefined the terms of the referendum as not being about the bailout, but about membership in the eurozone, threatening to kick Greece out if they voted ‘No’.
As Paul Krugman noted in the New York Times, the ultimatum agreement that was delivered to the Greeks by the Troika was “indistinguishable from the policies of the past five years,” and was thus meant to be an offer that Tsipras “can’t accept, because it would destroy his political reason for being.” The purpose, wrote Krugman, “must therefore be to drive him from office.” Mark Weisbrot wrote in the Globe & Mail that, “European authorities continue to take steps to undermine the Greek economy and government, hoping to get rid of the government and get a new one that will do what they want.”
Europe’s leaders increased their threats to Greece in the run-up to the referendum, warning the country that voting ‘No’ would mean voting against Europe, against the euro, and result in isolation and further crisis. But Greece voted ‘No’ in a landslide referendum on July 5, 2015, in a massive rejection of austerity and the bailouts.
Mr. Tsipras made a gamble with the referendum, hoping that a further democratic mandate from the Greek people would give him a stronger hand in negotiations with the creditors. But the opposite happened. Europe’s leaders instead decided to completely ignore and dismiss the wishes of the Greek people and continued to put the squeeze on Greece, whose economy was pushed to the brink so far that Mr. Tsipras announced the country’s intentions to enter into negotiations for a third bailout program. On July 10, the Greek government submitted a formal bailout request to its creditors.
Europe, noted the Wall Street Journal, was “demanding full capitulation as the price of any new bailout.” The Greek government was betting that Europe wanted to keep Greece in the euro more than Greece wanted to get away from austerity, but Germany – and in particular, Finance Minister Wolfgang Schauble – were willing to back a ‘Grexit’ scenario in which Greece would be given a five-year “timeout” from the eurozone. As Paul Krugman noted, “surrender isn’t enough for Germany, which wants regime change and total humiliation.”
As Greek leaders negotiated with their European counterparts over the possibility of a new bailout, it became clear that Greece was in for a reckoning. The demands that were being made of Greece, wrote Krugman, went “beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.” The lesson from the past few weeks, he added, was that “being a member of the eurozone means that the creditors can destroy your economy if you step out of line.”
Financial journalist Wolfgang Münchau wrote in the Financial Times that Greece’s creditors “have destroyed the eurozone as we know it and demolished the idea of a monetary union as a step towards a democratic political union.” The eurozone was instead “run in the interests of Germany, held together by the threat of absolute destitution for those who challenge the prevailing order.” With Germany threatening to kick Greece out of the euro for failure to capitulate entirely, this amounted to “regime change in the eurozone.” As Münchau wrote: “Any other country that in future might challenge German economic orthodoxy will face similar problems.”
After 22 hours of talks, Greece was forced to agree to the new terms. The Greek government would have to pass into law a set of austerity measures and reforms before Europe’s leaders would even begin talks on a new bailout. “Trust needs to be restored,” said Chancellor Merkel. A new fund would have to be established in Greece, responsible for managing the privatization of 50 billion euros of Greek assets. As the Wall Street Journal noted, the deal “includes external control over Athens’s financial affairs that no eurozone bailout country – even Greece until this point – has had to endure.” The Financial Times called it “the most intrusive economic supervision programme ever mounted in the EU.” Tony Barber wrote that the conditions set for the country were so strict that “they will turn Greece into a sullen protectorate of foreign powers.” One eurozone official who attended the summit at which Greece conceded to the German demands commented, “They crucified Tsipras in there.”
And so after six months of a Syriza-led Greece it is evident that Syriza does not rule Greece, Germany and the Troika do. What Syriza’s “capitulation” tells us is not that the party betrayed its democratic mandate from the Greek people, but that staying in the euro is a guarantee that no matter who is elected, they are little more than local managers of a foreign occupation government.
Blaming Mr. Tsipras and the Greeks for the current predicament is a bit like blaming a rape victim for getting raped. It doesn’t matter how they were ‘dressed’, or if they ‘could’ have fought back, because it’s ultimately the decision of the rapist to commit the crime, and thus, the rapist is responsible.
Syriza could become a party of liberation, of a proud, sovereign and democratic nation. But this is only possible if Greece abandons the euro. Until then, the Greek government has about as much independent power as the Iraqi government under American occupation. Syriza made several gambles in negotiations with the country’s creditors, most of which failed. But Greece was never on an equal footing.
Andrew Gavin Marshall is a freelance researcher and writer based in Montreal, Canada.
Please consider making a donation to help support my research and writing.
Between Berlin and a Hard Place: Greece and the German Strategy to Dominate Europe
By: Andrew Gavin Marshall
7 July 2015
“They just wanted to take a bat to them,” said former U.S. Treasury Secretary Timothy Geithner, referring to the attitude of European leaders towards debt-laden Greece in February of 2010, three months before the country’s first bailout. Mr. Geithner, Treasury Secretary from 2009 until 2013, was attending a meeting of the finance ministers and central bankers of the Group of Seven (G7) nations: the United States, Japan, Germany, France, Britain, Italy and Canada.
It was the first occasion he had to meet Germany’s new Finance Minister, Wolfgang Schauble, presenting an opportunity to pressure the Europeans to end the crisis. The Europeans, specifically Germany and the European Central Bank (ECB), always had the ability to end the crisis. Putting up enough money in a regional bailout fund or allowing the ECB to fund governments (acting as a ‘lender of last resort’) would provide enough reassurance to the markets that no country would go bankrupt and therefore the crisis would end. It was referred to as the ‘big bazooka’ option, but Mr. Geithner had no such luck in convincing the Europeans to act quickly, largely due to German resistance.
The Europeans arrived at the G7 meeting in the remote Arctic Canadian city of Iqaluit wanting “to teach the Greeks a lesson” and “crush them,” explained Mr. Geithner. The Treasury Secretary warned them, “You can put your foot on the neck of those guys if that’s what you want to do,” but they still had to take action to reassure markets that the crisis would not spread to other countries, or threaten the euro itself. “I thought it was just inconceivable to me they would let it get as bad as they ultimately did,” said Mr. Geithner.
As the United States and the rest of the world would learn, the European strategy for the debt crisis that began in Greece and spread across the eurozone would be dictated by Germany, “the undisputed dominant power in Europe.” More than five years later, the Americans are still pressuring the Europeans to resolve their debt crisis problems, but to little effect. The stakes are now even higher as the U.S. fears the possibility of losing Greece to Russia, a conflict in which Germany is increasingly involved.
The Americans would attempt to influence Europe’s crisis through extensive contact between Mr. Geithner and Mr. Schauble at the German Finance Ministry, Mario Draghi at the ECB, and Christine Lagarde at the International Monetary Fund (IMF). The Americans knew that for anything to get done in Europe, you needed the Germans and the central bankers on board. The U.S. spy agency, the NSA, was even wiretapping the phone calls of German Chancellor Angela Merkel, top officials of the Finance Ministry and the ECB, with a particular interest in economic issues and Greece.
Germany’s political strategy was to allow the debt crisis to spread, creating the pressure required to force eurozone nations to accept German demands of restructuring their economies in return for financial aid from the EU. The German magazine Der Spiegel described Frau Merkel’s overall European strategy: “the aim was to solve the debt crisis in a step-by-step fashion.”
“If the euro fails, then Europe fails,” said the Chancellor in May of 2010, shortly after the first Greek bailout program was agreed. “The euro is in danger. If we do not avert this danger, then the consequences for Europe are incalculable and then the consequences beyond Europe are incalculable.” Merkel worked closely with Mr. Schauble at the Finance Ministry and her Minister of Economics, Rainer Brüderle, to write a draft proposal outlining the changes Germany wanted in the European Union.
The German publication Der Spiegel was leaked a copy of the draft, and concluded: “Berlin is serious about taking the lead as the euro zone struggles with a suddenly weak currency.” Germany wanted a Europe where the European Commission had the power to suspend the voting rights of nations for violating the eurozone’s debt and spending laws, including plans for managing the bankruptcy of a member nation. “Europe,” said Angela Merkel, “needs a new culture of stability.” But that culture would be enforced through the destabilizing power of financial market crises.
The German bet was that the EU could outrun financial markets, using the crisis as an opportunity to advance fiscal and political integration and impose their demands upon the rest of Europe, while simultaneously preventing markets from creating a crisis so severe that it threatened the euro or the economies of the more powerful nations. Without the pressure of financial markets, the EU could not force its member nations to restructure their economies and societies. Chancellor Merkel would frequently describe the European debt crisis to her colleagues as a “poker game” between financial markets and politicians. The first to flinch would lose.
In 2011, Bloomberg noted that Merkel was “turning Europe’s sovereign-debt crisis into an opportunity to reshape the euro region in Germany’s image,” concluding that she had “pulled ahead for now in her battle to restore policy makers’ mastery over the market.” A biographer of Merkel explained, “It’s policy by trial and error.”
Merkel’s powerful Finance Minister, Mr. Schauble, was one of the chief architects of the German strategy for Europe’s crisis. In March of 2010, he wrote in the Financial Times that, “from Germany’s perspective, European integration, monetary union and the euro are the only choice.” But aid comes with strings attached and harsh penalties for violations. “It must, on principle, still be possible for a state to go bankrupt,” wrote Mr. Schauble. “Facing an unpleasant reality could be the better option in certain conditions.”
The German minister believed “the financial crisis in the eurozone is not just a threat, but an opportunity,” as markets would “force the most debt-laden members of the 17-nation currency union to curb their budget deficits and increase their competitiveness.” This would pressure governments to accept further integration into a “fiscal union” defined and shaped by Germany. “We need to take big steps to get that done,” Mr. Schauble said in 2011. “That is why crises are also opportunities. We can get things done that we could not do without the crisis.”
Financial markets were happy to oblige the German-EU strategy, as the crisis would force the reforms long demanded by banks as a solution to the irresponsible spending of governments: austerity and structural reform. From 2002 to 2012, Josef Ackermann led Germany’s largest bank, Deutsche Bank. In 2011, the New York Times described Ackermann as “the most powerful banker in Europe” and “possibly the most dangerous one, too,” standing “at the center of more concentric circles of power than any other banker on the Continent.”
When the financial crisis struck in 2008, Angela Merkel and Josef Ackermann established a close working relationship, though not without its ups and downs. “We have a cordial and professional relationship,” said Mr. Ackermann in 2011. The banker would advise Frau Merkel on her strategy through the financial and debt crises, also working closely with Jean-Claude Trichet, then-president of the ECB. From his “seat at the nexus of money and politics,” Ackermann was “helping to shape Europe’s economic and financial future.”
After he left Deutsche Bank in 2012, Ackermann delivered a speech to the U.S.-based think tank, the Atlantic Council, where he outlined Germany’s overall strategy for Europe’s crisis. When asked why Germany simply didn’t say that it would do whatever it took to protect the euro and eurozone nations from bankruptcy (thus ending the financial crisis), Ackermann explained that it was largely due to a “political tactical consideration.” While such an option would surely end the market panic and save the euro, it would be unacceptable to the German public, let alone the German parliament.
But another major problem, noted Mr. Ackermann, was that if Germany made such an announcement, other eurozone nations “would then say, well, why then go on with our austerity programs? Why go on with our reforms? We have what we need.” Thus, he said, “I think to keep the pressure up until the last minute is probably a – not a bad political solution.” However, “if it comes to the worst,” with the potential of a eurozone collapse, the banker had “no doubt” that Germany would come to the rescue.
If the eurozone collapsed, not only would an economic and financial contagion spread with drastic consequences for all its members and the world economy as a whole, but there was also a strong political element. “A fragmented Europe has no way for self-determination,” said Mr. Ackermann. “We will have to accept what the United States, China, India, Brazil and other countries will finally define for us.” But Germany was to define the future of Europe.
“My vision is political union,” said Chancellor Merkel in January of 2012. “Europe has to follow its own path. We need to get closer step by step, in all policy areas.” In the Chancellor’s Europe, Brussels (home of the European Commission) was to be given immense new powers over member nations. “In the course a long process,” she said, “we will transfer more powers to the Commission, which will then work as a European government.” Outlining the EU’s path to a federation of nations functioning like individual states within the U.S., Merkel said, “This could be the future shape of the European political union.” Further integration among eurozone nations was a major objective, she explained, “we need to give institutions more control rights and give them more teeth.”
As Chancellor Merkel and other German leaders would frequently remind the rest of Europe and the world, with 7% of the world population, 25% of global GDP and 50% of world social spending, Europe’s economic system was unsustainable and uncompetitive in a globalized economy. Germany’s vision for Europe was aimed at introducing “rules to force Europe’s economies to become more competitive.” But competitiveness was defined by Germany, and thus, “the rest of Europe needs to become more like Germany.”
Germany wanted Greece and the rest of Europe to impose ‘budgetary discipline’ through austerity measures: cutting public spending in order to reduce the debt. But these are painful and highly destructive policies that depress the economy, impoverish the population, destabilize the political system, undermine democracy and devastate the wider society. If you live in a country where the government funds healthcare, education, social services, welfare, pensions and anything that benefits the general population, under austerity measures, now you don’t! Not surprisingly, austerity is always unpopular with the people who are forced to live through it.
Only in times of crisis can austerity be pushed through. When financial markets threaten to cut a country off from its sources of funding, it must to turn to larger nations and international organizations for financial aid. “The current strategy of the EU,” wrote Wolfgang Münchau in a November 2009 article for the Financial Times, “is to raise the political pressure – perhaps even provoke a political crisis – with the strategic objective that the Greek government might eventually relent.” And the government would have to relent to the diktats of Germany and “the Troika”: the European Commission, European Central Bank (ECB), and the International Monetary Fund (IMF), who collectively managed Europe’s bailout programs.
In early 2010, European banks held more than 141 billion euros of Greek debt, with the largest share being held by French and German banks. The first bailout largely went to bailout these very banks. Karl Otto Pohl, the former President of the German Bundesbank noted back in 2010 that the Greek bailout was about “rescuing the banks and the rich Greeks,” especially German and French banks. As the Troika bailed out the banks, these institutions took on the Greek debt.
The second bailout organized by the Troika largely went to paying interest on Greek debt owed to the Troika. Thomas Mayer, a senior adviser to Deutsche Bank, said, “the troika is paying themselves.” Between May 2010 and May 2012, Greece had received roughly $177 billion in bailouts from the Troika. A total of two-thirds of that amount went to payoff bondholders (banks and rich Greeks), while the remaining third was left to finance government operations.
In 2015, a study by the Jubilee Debt Campaign noted that of the total 252 billion euros in bailouts for Greece over the previous five years, over 90% ultimately went “to bail out European financial institutions,” leaving less than 10% for anything else. At the time of the first bailout in 2010, Greece had a debt-to-GDP ratio of roughly 130%. As a result of the bailouts and austerity, the debt ratio has risen to 177% of GDP at the beginning of 2015. Thus, after more than five years of supposed efforts to reduce its debt, that debt has grown substantially.
But the banks are no longer the largest holders of Greek debt. Today, the Troika owns 78% of the 317 billion euro Greek debt. Greece now owes the IMF, ECB, and eurozone governments a total of 242.8 billion euros, with the largest single holder being Germany with more than 57 billion euros in Greek debt. And now the Troika wants to be paid back. “In short,” wrote Simon Wren-Lewis in the New Statesman, “it needs money from the Troika to repay the Troika.”
The effects on Greece of more than five years of living under the domination of Germany and the Troika have been palpable. Greece is a ruined economic colony of the European Union. Austerity in Greece led to the creation of “a new class of urban poor” with more than 20,000 people being made homeless over the course of 2011, and dozens of soup kitchens and charities opening up to attempt to address the growing social and human crisis.
As austerity continued to collapse the economy, unemployment and poverty soared. By 2013, more than 27% of Greeks were unemployed and 10% of school-age children were going hungry. Between 2008 and 2013, the Greek government cut 40% of its budget, healthcare costs soared, tens of thousands of doctors, nurses and other healthcare workers were fired, drug costs rose, as did drug use with HIV infections doubling and a malaria outbreak was reported for the first time since the 1970s, while suicide rates increased by 60%.
By early 2014, more than a million Greeks were left without access to healthcare, accompanied by rising infant mortality rates. A charity director in Athens noted that, “Alcoholism, drug abuse and psychiatric problems are on the rise and more and more children are being abandoned on the streets.” By 2015, roughly 40% of children in Greece lived under the poverty line while the richest Greeks, responsible for roughly 80% of the tax debt owed to the government, were hiding tens of billions of euros in offshore accounts.
Unemployment has grown to 26% (and over 50% for youth), wages dropped by 33%, pensions were cut by 45%, and 40% of retired Greeks now live below the poverty line. Just prior to the Greek elections that brought his party to power in January of 2015, Alexis Tsipras wrote in the Financial Times that, “This is a humanitarian crisis.” Joseph Stiglitz, the Nobel Prize-winning former chief economist of the World Bank, wrote in late June of 2015 that, “I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences.”
Thus, the German-Troika strategy of prolonging the debt crisis to reshape Europe has resulted in a human, social and political crisis that threatens the future of democracy in Europe itself. Germany has, in effect, established an economic empire over Europe, largely operating through the Troika institutions, all of which are unaccountable technocratic tyrannies.
The first pillar of the Troika is the International Monetary Fund (IMF), based in Washington, D.C., just a few short blocks down the road from the White House and U.S. Treasury Department. The United States is the largest single shareholder in the IMF, and the only one of its 188 member nations with veto power over major Fund decisions. The Financial Times referred to the IMF as “a tool of US global financial power.”
In 1977, U.S. Treasury Secretary Michael Blumenthal described the IMF as “a kind of whipping boy” in a memo to President Carter. In return for a loan to a country in crisis, the Fund would demand harsh austerity measures and other ‘structural reforms’ designed to restructure the economy along the lines desired by Washington. “If we didn’t have the IMF,” wrote Blumenthal, “we would have to invent another institution to perform this function.”
In the early 1990s, the IMF was managing ‘programs’ in over 50 countries around the world, and was “long been demonized as an all-powerful, behind-the-scenes puppeteer for the third world,” noted the New York Times. In 1992, the Financial Times noted that the fall of the Soviet Union “left the IMF and G7 to rule the world and create a new imperial age.” Operating through the Troika, IMF Managing Director Christine Lagarde took a “tough love” approach to Greece, with the Fund being referred to as “the toughest” of the three institutions.
The European Central Bank (ECB) is another pillar of the Troika, run by unelected central bankers responsible for managing the monetary union, with its headquarters in Frankfurt, Germany, home to the German central bank (the Bundesbank) and Germany’s large financial sector. Throughout the crisis, Brussels has pushed to give the ECB more powers, specifically to oversee the formation and management of a single ‘banking union’ for the EU. The ECB has, in turn, advocated for more power to be given to Brussels.
The ECB played a central role in the debt crisis, pushing Greece into a deep crisis in late 2009, making “an example” of the country for the rest of Europe, blackmailing Ireland into accepting a Troika bailout program, then blackmailing Portugal into doing the same, and putting political pressure on Italy and Spain to implement austerity measures.
In late 2014, ECB President Mario Draghi rebooted efforts to advance integration of the economic and monetary union. When the anti-austerity Syriza government came to power in Greece in early 2015, the ECB was placed to be “the ultimate power broker” in negotiations between the country and its creditors. A member of the central bank’s executive board welcomed the democratic victory in Greece by warning, “Greece has to pay, those are the rules of the European game.”
The ECB took a hardline approach to dealing with Greece, increasing the pressure on Athens to reach a deal with its creditors, with The Economist referring to the central bank as “the enforcer.” This unelected and democratically unaccountable institution holds immense, undeniable power in Europe.
The European Commission is the third pillar of the Troika based in Brussels, functioning as the executive branch of the European Union overseeing a vast bureaucracy of unelected officials with responsibility for managing the union. Throughout the crisis, the Commission has been given sweeping new powers over economic and spending policies and priorities of member nations.
Brussels was to be given the centralized power to approve and reject national budgets of eurozone nations, establishing a technocrat-run ‘fiscal union’ to match the ECB’s role in managing the monetary union. EU institutions would have “more powers to serve like a finance ministry” for all the nations of the eurozone, potentially with its own finance minister, “who would have a veto against national budgets and would have to approve levels of new borrowing,” said Mr. Schauble, the German Finance Minister.
In 2007, European Commission President José Manuel Barroso mused aloud during a press conference. “Sometimes I like to compare the E.U. as a creation to the organisation of empires,” he said. “We have the dimension of Empire but there is a great difference. Empires were usually made with force with a centre imposing diktat, a will on the others. Now what we have is the first non-Imperial empire.” Eight years later, it is clear that the EU is officially an imperial empire, using bailouts not bombs, choosing the Troika over tanks, Brussels over bullets, austerity instead of armies, advocating for consolidation instead of colonization.
Philippe Legrain, a British political economist, author, and adviser to President Barroso from 2011 to 2013 wrote that the debt crisis “divided the euro zone into creditor nations and debtor ones,” and the EU’s institutions “have become instruments for creditors to impose their will on debtors, subordinating Europe’s southern ‘periphery’ to the northern ‘core’ in a quasi-colonial relationship. Berlin and Brussels now have a vested interest to entrench this system rather than cede power and admit to mistakes.”
“In general,” wrote Gideon Rachman in the Financial Times in 2007, “the [European] Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective,” he concluded, “only when it is anti-democratic.”
Perhaps the greatest lesson of the past five years of crisis is that in a Europe under the rule of Germany and the Troika, the people and democracy suffer most. For democracy to survive in Europe, the technocratic tyranny of the Troika and debt-based domination of Germany must be challenged. Democracy is too important to be sacrificed at the altar of austerity. It is any wonder why Greeks voted ‘no’ to the status quo?
Andrew Gavin Marshall is a freelance researcher and writer based in Montreal, Canada.
Please consider making a donation to help support my research and writing.
Kissinger’s Plan: “Use Economics to Build a World Political Structure”
Power Politics and the Empire of Economics, Part 1
By: Andrew Gavin Marshall
1 June 2015
The following is an excerpt of the introductory chapter to my book. Read the full chapter here.
The President sat and listened to his closest adviser as they plotted a strategy to maintain Western domination of the world economy. The challenge was immense: divisions between industrial countries were growing as the poor nations of the world were becoming increasingly united in opposition to the Western world order. From Africa, across the Middle East, to Asia and Latin America, the poor (or ‘developing’) countries were calling for the establishment of a ‘New International Economic Order,’ one which would not simply serve the interests of the United States, Western Europe, and the other rich, industrial nations, but the world as a whole. It was on the 24th of May 1975 when President Gerald Ford was meeting with his Secretary of State and National Security Adviser, Henry Kissinger, easily the two most powerful political officials in the world at the time. Kissinger told the President: “The trick in the world now is to use economics to build a world political structure.”
Ford and Kissinger agreed that the United States could not accept a new ‘economic order’ that would undermine American and Western power throughout the world. Uprisings, revolutions and liberation movements across Africa, Asia and beyond had largely thrown off the shackles of European colonial domination, establishing themselves as independent political nation-states with their own interests and objectives. Chief among those goals was for economic independence to follow political independence, to take control of their own resources and economies from the Europeans and Americans, to determine their own economic policies and help to redistribute global wealth along equal and just lines.
The problem for the Western and industrial nations, with the United States at the center, was that formal colonial domination was no longer considered acceptable. In previous decades and centuries, the rich and powerful nations would directly colonize and control foreign societies, establishing puppet governments and protectorates, extracting resources, exploiting labour and expanding their own national power and international prestige. Following the end of World War II, such practices were no longer politically or publicly acceptable. The era of decolonization had taken hold, and the people of the world were failing to remain passive and obedient in the face of great injustices and inequality. War had become a bad word, colonialism was no longer en vogue, and belligerent political bullying by the rich countries increasingly risked a major backlash, threatening to unite the entire world against the West.
A new strategy for global domination had to be constructed. The West could not afford a direct political or ideological confrontation with the developing world, with many top American officials, including Henry Kissinger, acknowledging that if they were to pursue such a strategy they would be isolated and lost, with even the Europeans and Japanese abandoning them. Foreign ministers and heads of state could not appear to be attacking or seeking to dominate the developing world.
It was decided that the war would have to be waged largely in the world of economics and finance, where the conversation would change from that of colonialism and imperialism to the technical details of economic policy. The imperial interests and objectives of the powerful nations that had existed for centuries could no longer be articulated in a direct way. But those same interests and objectives would not vanish. Instead, they would be hidden behind bland, vague and technical rhetoric. The language of economics provides the appearance of impartiality, backed up by pseudo-scientific-sounding studies and ideologies, accessible only to those with the proper training, education and experience, otherwise inaccessible and incomprehensible to the general public. Empire was a thing of the past. In its place rose a new global economy, built by banks not bombs, expanding the reach of corporations not colonies, managing debt not dominions.
The “world political structure” which Kissinger described would not, however, make militaries and foreign ministers and diplomats irrelevant. They would still have a role to play in maintaining and expanding empire, though never calling it by its proper name, instead using words like ‘democracy’, ‘freedom’ and ‘markets’. But the role of such officials would often become secondary to that of the financial and economic diplomats, who would increasingly become the first line of offense in constructing the “world political structure,” the Empire of Economics.
Two days after Kissinger articulated this strategy to President Ford, another meeting was held at the White House with several more high-level cabinet officials. The discussion was a follow-up on the U.S. strategy to construct such a system. Stressing that political diplomats and foreign ministers could not take on the developing world directly, Kissinger told the assembled officials, “it is better to have the Finance Ministers be bastards, that’s where I want it.”
This book is the story of how financial diplomats, politicians, bankers, billionaires, family dynasties and powerful nations have used economics to build a “world political structure,” engaging in a constant game of power politics with and against each other and the rest of the world to construct and maintain their Empire of Economics for the benefit of a small ruling class, the global Mafiocracy: a super-rich, often criminal cartel of global oligarchs and family dynasties.
It is a brutal, vicious world of secret meetings, behind-the-scenes intrigue, financial warfare and coup d’états, economic colonization and debt domination. It is the unforgiving world of empire, an immense concentration of global wealth and power, a parasitic system of world domination built on the impoverishment and exploitation of billions. And it is a world obscured and hidden behind the dry, dull and seemingly empty rhetoric of economics. It is a language in need of translation, a reality in need of elucidation, and an empire in need of opposition.
Power Politics and Empire
It was the largest and most powerful empire the world had ever known. It spanned the globe, across oceans and seas, countries and continents, enveloping much of the known world – and the people throughout it – within the domineering shadows of its political, economic, social, cultural and financial institutions and ideologies. Those who ruled were the wealthy and war-like family dynasties, individual oligarchs, kings of coin, titans of industry, and a religious priesthood of proselytizing propagandists. These rulers would engage in a constant game of ‘power politics’ with and against each other in the quest to gain title, money and influence.
They lie, cheat, steal, kill and conquer; they plant their flags and preach their gospels, serve their interests and those of their unknown (or sometimes) masters. It requires a constant cunning, managing an endless lack of trust for all those around you, fearful that on your way up, others might seek to cut you down. To play the game of power politics in the age of empires is to be pragmatic, strategic and ruthless; it requires no less, but frequently more. It is a practice passed down through families, institutions and ideologies. No, this is not ‘Game of Thrones’, but rather, the Game of Globalization in the Empire of Economics: power politics of the 21st century.
But the game itself has been with humanity as long as empire, and was always seen at the center of the system of power within every empire. Human systems – that is, what we call ‘civilization’ and ‘society’ – are, ultimately, human creations with humans in control. Thus, power – at its center – is always dependent upon the interactions, relationships and emotions of the few individuals and families who rule. When such people get angry or throw a tantrum – because the neighbor boy stole his toy (or Russia annexed Crimea, for example) – wars are waged, and the poor are sent to go murder or be murdered, cities burn to the ground, nations crumble into dust.
The game is not known to many, save for those who play it. The masses are left with simple images, rumours and speculation, if anything at all. A public persona of the more visible rulers must be carefully constructed so as to legitimize their authority. The people must be satisfied to the bare minimum, so that they do not rise up in resentment and fury against the few who live in the most obscene opulence and imperial impunity. If the consent of the population is not maintained, a ruler must seek to control them in other ways, which generally means seeking to crush them, to punish them into submission and subservience. Kill and conquer at home and you can kill and conquer abroad.
Control is based upon a mixture of consent and coercion. The people must be either willing to let the rulers rule, to accept their position in society without question, or they must be made to fear the reach and wrath of the rulers, to be punished and persecuted, segregated and isolated, beaten, raped and murdered. The rulers must be vicious, but appear virtuous. If, however, a choice must be made between acting ruthless and appearing righteous, it is better for the rulers to be wretched and murderous, for the game of power politics is never won by virtue alone, but being vicious can get you far enough without assistance.
Niccolo Machiavelli wrote his book The Prince more than 500 years ago as an examination of power politics and methods through which one can achieve and maintain power within the old warring Italian city-states. Having long served as an adviser and strategist to various rulers, including princes, popes and dynasties, Machiavelli asserted that “it is desirable to be both loved and feared; but it is difficult to be both and, if one of them has to be lacking, it is much safer to be feared than loved.” He explained that this was so because “love is sustained by a bond of gratitude which, because men are excessively self-interested, is broken whenever they see a chance to benefit themselves.” On the other hand, “fear is sustained by a dread of punishment that is always effective.” Machiavelli has long been accused of being a cynic or pessimist in his interpretations of human nature, but this misses the point.
Machiavelli’s work was examining the attitudes, nature and actions of those who wielded significant power, which was always a small minority of the population. Indeed, far from a cynical interpretation, The Prince is rather a pragmatic and accurate interpretation of a deeply cynical world where every institution and individual wielding significant influence engages in a constant game of power politics designed to benefit themselves, maintaining or expanding their own power, often at the expense of others. It is a world where every relationship, title, position and even marriage holds strategic significance. For those individuals and families who rule, every decision must be made as a calculated attempt to preserve and expand their power. If this is not done, they will not remain rulers long, for this is how the game is played and won, and if one does not play by the rules, others will. Thus, the more cunning and ruthless a strategist, the more likely they are to elevate through the hierarchy because they will do what others will not, acting without hesitation to manipulate or crush others in order to rise higher.
It is a game – like that of all empires past – in which the few compete and cooperate with one another in the advancement of their own individual, familial, national or global interests, expanding their empires. It is a game in which the vast majority of humanity are – as they have long been – left to suffer the consequences, fight the wars, drown in debt, poverty, hunger and misery. On occasion, and increasingly often, groups of people – segments of the population – rise up in resistance, riot, revolt or even revolution. This is when the people are able to engage more directly in the game of power politics, because they change the game. Suddenly, all the key players at the top notice the building fury of the masses and so the game itself is put at risk. The key players will almost always – even in spite of their frequent competition and opposition to each other – work together if it means protecting the game itself.
A useful comparison is that of a Mafia crime network, in which the various heads of families may sit at the same table though they often feud with one another, working together to mutual benefit when possible, though occasionally whacking one another off when the competition grows fierce. It is a delicate balancing act of competition and cooperation, but when the criminal network is itself threatened, perhaps through the efforts of an ambitious district attorney or crackdown on organized crime, the various families will seek to unite in their efforts to protect the racket which benefits them all. If they remain divided in the face of growing opposition and potential external threats, they increase the risk that they will be conquered. When the game is threatened, the players must stand together or fall apart.
For successful rulers, the balance of competition and cooperation – vicious and virtuous – is present both in their relationships with other rulers, and with the larger populations. And so the rulers themselves – the oligarchs and dynasties – span both private and public realms: they are presidents and prime ministers, kings, queens and sultans, corporate chiefs, billionaires and bankers, consultants and advisers, academics and intellectuals, technocratic tyrants and plutocratic princelings. Their world is not our world. But it rules, wrecks and ravages our world and the people and life within it. It is a game that steers humanity toward certain extinction resulting from excessive environmental devastation, guided by that ever-present drive within those who have the most for more, more, more.
The game is little more, at its core, than basic gangsterism, its players little more than petty tyrants. Such personalities, egos and interests populate all sectors of society, all institutions, frequently appearing in inter-personal relationships. The more power they have, the greater the repercussions of the game. At the top of the global power structure are the personalities and families of immense wealth, political influence and prestige. With the same basic principles of a Mafia structure, the individuals and institutions that play the game of power politics in the age of globalization – in the Empire of Economics – are perhaps best understood as a global Mafiocracy. It makes no difference whether a nation is ruled by a monarchy, a dictatorship or democracy: the Mafiocracy is ever-present, and ever-expanding in its wretched reach.
The State of Empire
The world is defined and dominated largely by institutions, individuals and ideologies. The institution of the nation-state is perhaps the most obvious example, best represented by the world’s most powerful country, the United States of America. The government of the United States is composed of three separate branches (or institutions): the executive (President and Cabinet), legislative (Congress/Senate) and judiciary (the Supreme Court). The executive leads the government, while the role of the legislative and judiciary is (theoretically) designed to keep a check on executive power, preventing it from accumulating too much authority in one branch, threatening the potential for tyranny.
Since World War II, the executive branch has accumulated increased powers within the U.S. government, with a wide mandate to manage foreign and economic policies specifically, with little oversight and few checks from the legislative and judiciary branches. The executive is composed of a wide array of institutions itself, each with their own specific mandates, interests, and varying degrees of influence. These include the many cabinet departments, such as the Treasury Department, Defense Department (Pentagon), State Department, CIA, National Security Council (NSC), Department of Homeland Security, and many more. In addition, since 1913, the Federal Reserve has functioned as the central bank of the United States, operating with a large degree of independence from the other branches of government, including political independence from the executive branch (apart from the President’s ability to appoint the Chairman and Board of Governors), and no oversight from Congress (though the Fed chairman will occasionally testify to Congress).
Individually and collectively, these government departments and institutions manage hundreds of billions and even trillions of dollars in assets and funds, making them individually larger than most multinational corporations and banks in the world. These departments within the U.S. government are largely responsible for the maintenance and expansion of the American imperial system. Since the time of ancient Nubia and Egypt thousands of years ago, much of the world has been dominated by empires, rising, expanding and collapsing over centuries and millennia, running through ancient Greece, Rome, China, Aztec and Inca, Persian, Ottoman, and in the past five hundred years with the rise and demise of the European empires whose reach expanded the globe. For the most part, imperial systems have been dominated by families, often called royalty, sultanates, emperors or emirs. The essential interest and priority of all empires has been to protect and expand their empire, largely for the benefit of its ruling class or groups, with the imperial family at the center of power.
It is only a phenomenon of the post-World War II period that denial of the existence of empire is commonplace. Through the two World Wars of the 20th century, empires collapsed and faded into history. World War I led to the collapse of the German, Russian, Austro-Hungarian and Ottoman empires. World War II led to the collapse of the Japanese and Nazi empires, and its aftermath resulted in the erosion of European colonial domination, as the British, French, and other European colonial powers had to adjust to a new global order under American hegemony. It was in the post-World War II period that the United States had achieved unprecedented economic and political power. With just over 5 percent of the world’s population, the U.S. controlled roughly half the world’s wealth. Citing this very statistic, the U.S. State Department (responsible for managing diplomacy and foreign policy) published a policy paper in which top officials acknowledged that the global inequality that existed between the U.S. and the rest of the world would lead to “envy and resentment.” The “real task” of the United States was “to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security,” doing away with “the luxury of altruism and world-benefaction.”
Europe was devastated by the war, and the United States occupied the West with the Soviet Union occupying the East of the continent. The European empires were crumbling, and the process of decolonization had begun to take the world by storm, with the U.S. attempting to manage the process on behalf of its Western European allies. In its strategy for world domination, the United States sought to rebuild its former war-time enemies – Germany and Japan – into economic powerhouses, with West Germany acting as the locomotive for European integration (into what is now the European Union) and Japan acting as a counterweight to the spread of Communism in East Asia. Western Europe, Japan and other allies depended upon the United States military to protect their ‘security’ interests around the world, arming favorable dictators, supporting coups, fuelling civil wars, undertaking large occupations and counter-insurgency operations targeting independence, anti-colonial and revolutionary movements around the world.
Despite the imperial realities of this system, there was an overwhelming tendency within the United States and its industrial allies to deny the existence of imperialism altogether. Instead, these nations were merely economically and technologically advanced democracies who sought to protect ‘freedom’ and ‘democracy’ around the world in a largely ideological confrontation with the Soviet Union, which presented itself as the image of socialism and communism in a struggle against the capitalist imperial powers of the West. The Soviet Union’s influence was dominant in Eastern Europe, with a few close allies scattered across the Middle East, Africa and Latin America. The United States and its Western allies, however, were the dominant powers across much of the rest of the Middle East, Asia, Africa and Latin America. The only real sense in which the Soviet Union presented a challenge for the United States was in its military and nuclear capabilities. This was the period known as the ‘Cold War’, though despite its confrontational rhetoric dividing East and West, communist states from capitalist democracies, it was largely a struggle waged against the rest of the world, the ‘Third World’, otherwise known as the developing world or ‘Global South’. It was in the poor, colonized nations and regions of the world where the majority of the world’s resources were located, and thus, where the Western imperial powers needed to maintain control.
While the United States rebuilt Germany and Japan into economic locomotives, becoming the second and third richest countries in the world, American economic power experienced a relative decline. This created strong allies for the United States, and while they remained militarily dependent upon their imperial patron, their growing economic power gave them increased leverage. With their increased economic power came increased potential to act independently of the U.S. and other rich nations. Competition between the great powers increased during the same period that newly independent nations of the developing world were increasingly uniting in opposition to a Western-dominated world order.
On May 1, 1974, the vast majority of the world’s nations voted in favour of the U.N. Declaration on the Establishment of a New International Economic Order (NIEO), proclaiming that “the greatest and most significant achievement during the last decades has been the independence from colonial and alien domination of a large number of peoples and nations which has enabled them to become members of the community of free people.” Among the ‘principles’ adopted in forming the NIEO were “equality of States, self-determination of all peoples,” and the outlawing of war, seeking “the broadest co-operation” of all nations of the world in banishing the “prevailing disparities” and securing “prosperity for all.”
Each nation of the world would have the right “to adopt the economic and social system that it deems the most appropriate for its own development,” and establish control over their own natural resources. The people who continued to live under colonial domination, racial oppression and foreign occupation had a right “to achieve their liberation and the regain effective control over their natural resources and economic activities.” In 1974, this would include Israeli-occupied Palestine, South African apartheid, and U.S.-occupied Vietnam. The last line in the document stated that the Declaration should “be one of the most important bases of economic relations between all peoples and all nations.”
But Henry Kissinger had other plans. As Secretary of State and National Security Adviser, Kissinger was the chief imperial strategist in the United States, and remains one of the most influential foreign policy strategists in the nearly four decades since he left office. Kissinger’s “trick” to use economics in building a “world political structure” would largely be pursued through the finance ministries, central banks and international organizations (such as the IMF and World Bank) which are controlled by the rich and powerful nations. In the face of a growing threat, the rich nations banded together in various forums, conferences and diplomatic gatherings, the most notable of which came to be known as the Group of Seven, bringing together the U.S., Germany, Japan, the United Kingdom, France, Italy and Canada. Through these various institutions and initiatives, a “world political structure” would be incrementally constructed as the Empire of Economics.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada.
 Memorandum of Conversation, 24 May 1975: Foreign Relations of the United States, 1973-1976, Vol. XXXI, Foreign Economic Policy, Document 292:
 Memorandum of Conversation, 26 May 1975: Foreign Relations of the United States, 1973-1976, Vol. XXXI, Foreign Economic Policy, Document 294:
 Niccolo Machiavelli, The Prince (Cambridge University Press, 1988), page 59.
 Memo by George Kennan, Head of the US State Department Policy Planning Staff. Written February 28, 1948, Declassified June 17, 1974. George Kennan, “Review of Current Trends, U.S. Foreign Policy, Policy Planning Staff, PPS No. 23. Top Secret. Included in the U.S. Department of State, Foreign Relations of the United States, 1948, volume 1, part 2 (Washington DC Government Printing Office, 1976), 509-529:
 General Assembly, “Declaration on the Establishment of a New International Economic Order,” Resolution adopted by the General Assembly, United Nations, Resolution 3201 (S-VI), 1 May 1974:
 General Assembly, “Declaration on the Establishment of a New International Economic Order,” Resolution adopted by the General Assembly, United Nations, Resolution 3201 (S-VI), 1 May 1974:
The Global Mafiocracy and the Empire of Economics
By: Andrew Gavin Marshall
26 March 2015
I am aiming to raise $500 in order to complete and publish for all to view and read a sample introduction chapter to my book about the Global Mafiocracy and the Empire of Economics. The chapter would provide a sampling of the subject matter, style and approach to discussing these complex issues in a way that is understandable and approachable to as wide an audience as possible. The sample chapter would be completed relatively soon (in the next week or two), so long as the funding objective is reached so that I can afford to put in the time to complete the draft.
So what is the subject matter and focus of the book?
– Translating the world of Economics and Finance into basic English, dismantling the ‘technical’ language of ‘experts’ into a more direct and honest dialectic
– An introduction to the Global Mafiocracy: the banks, corporations, asset management firms, sovereign wealth funds, insurance companies and holding companies that collectively own each other and the wider network of global corporate and financial institutions, manifesting as a relatively small cartel of roughly 150 large financial institutions that wield unparalleled financial power in the modern world. How did the cartel evolve? What institutions are dominant within it? Who are the individuals and groups that lead these organizations? How is the cartel’s wealth and power accumulated and exercised? What role does the cartel play in the world of global finance, economic and politics?
– Behind the major corporate and financial institutions are individuals and families, smaller units of concentrated power who own the largest shares and steer the operations of the global cartel. These individual oligarchs and family dynasties – from the Rockefellers in the US, to the Wallenbergs in Sweden, Agnellis in Italy, Desmarais’ in Canada, to the House of Saud in Saudi Arabia, Oppenheimer in South Africa, among others – control and.or influence large percentages of wealth within their respective nations and in the world of globalized financial and corporate networks. How did these dynasties and oligarchs emerge? What do they own and control? How is their wealth and power organized and exercised? What are their ideologies, beliefs, objectives?
– Empire and Economics: When people think of Empire, they often imagine the old European colonial powers venturing off to Africa, Latin America and Asia where they would militarily occupy and colonize foreign lands, regions and peoples for their own imperial benefit. While formal colonialism is largely an historical anachronism, unjustifiable and increasingly untenable in the modern world, Empire itself has never vanished. While the military and overtly political components of empire and imperialism remain relevant in the modern world (think: U.S. military, CIA, State Department, NATO, etc.) the most effective and evolved means of imperialism in the world are exercised through the economic and financial spheres. In these realms, empire is more effective because its ideology, objectives, actions and effects are hidden behind vague and obscure language, the “expertise” of economists, finance ministers, central bankers and other technocrats who claim to be separate of politics and only interested in economics. Empire is more evolved in these spheres because it has become the vanguard of the global Mafiocracy and imperial system, leading the political and often military apparatus of empire, far more institutionalized and advanced on a global scale than any parallel in political and military spheres.
– Global Financial Diplomacy and Governance: What are the institutions that manage and shape the imperial economic order? In the world of financial diplomacy and governance, those institutions which wield incredible (and increasingly expanding) power and authority remain largely unknown or misunderstood to the general public. The book will examine some of the origins, evolution and character of many of these institutions, including: the International Monetary Fund (IMF), World Bank, Bank for International Settlements (BIS), Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), central banks and finance ministries, among others. What are the specific roles, functions and objectives of these institutions? How do they wield power? In whose interest do they operate? Who leads them?
– State Power: The institutions that make up the world of financial diplomacy and governance rely principally upon state power for legitimacy and political might. Whether it’s a central bank, a finance ministry, the IMF or other agencies, the role of powerful nation states such as the United States and other rich nations is central to the system and structures of the global Empire of Economics. The centrality of state power is made all the more apparent through an examination of the origins and evolution of less formal groupings of nations, such as the Group of Seven (G7), the Group of Five (G5), the Group of Ten (G10) and the Group of Twenty (G20), the principal political forums for the system of global governance and empire. Who attends these forums? What institutions are represented? What are the ideologies and competing interests? What effect do they have? What is the role of the ’emerging market’ nations of China, Russia, Brazil, India, Turkey and South Africa within this system?
– The Global Financial Mafia: What is the relationship and interaction between state power, the various Groups of nations, international institutions, finance ministries and central banks with the global cartel of banks and corporations, and the oligarchs and family dynasties that control the cartel? In what forums do the individuals who lead these various institutions interact, cooperate, communicate, socialize and organize? At various global and national think tanks, foundations, forums, conferences and social events, politicians, finance ministers, central bankers and top technocrats meet, often in secret, with the heads of banks and corporations, patriarchs and matriarchs of powerful family dynasties and other oligarchs. Among such events and forums are: the Bilderberg Group, International Monetary Conference (IMC), World Economic Forum (WEF), the Trilateral Commission, the Institute of International Finance (IIF), and the Group of 30, among others. These forums and events provide political leaders and the heads of influential institutions with a private forum where they are able to have off-the-record, often secretive discussions on important issues of global importance to the populations of their respective nations and the planet as a whole. Collectively, this group, and the institutions which dominate it, compose the Global Mafiocracy: a global political, social and economic system dominated by relatively few nations and institutions that operate largely in the interests of a small, criminal cartel of banks and corporations, a global financial Mafia.
– Top-Down: These institutions, individuals and ideologies will be examined and discussed not as a dry, historical account, but in terms of telling a series of stories. I want to try to present this information and analysis in the same way in which it appeals most to me, a fantastic, interesting, often horrifying and shocking tale of intrigue, empire, power politics, petty tyrants, in-fighting, domination, destruction and empire. I want the people who lead and participate in this system to become as familiar to the reader as they are to me, to see an image and read stories about the personalities and complexities of those who rule and wield power. What emerges is a story, or series of stories, worthy of the the intrigue and interest in historical and fictional accounts of imperial families and ancient empires, of mythical worlds, fantasy tales and science fiction societies. Get a view of our world from the top-down.
– Bottom-Up: In parallel to the institutions, individuals and ideologies that dominate and shape our world from the top-down, there are also processes, people, protests and mass movements or revolutions that shape and re-create and re-imagine the world from the bottom up. While Europe’s finance ministers meet in secret, off the record conversations in distant castles located in Luxembourg, deciding the fate of Europe and its citizens, mass protests and demonstrations and riots take place on the streets of Athens, Madrid, Lisbon, Rome and Frankfurt, in which the populations oppose and reject the decisions being made in far-off places by largely unelected technocrats who do not serve their interests. What role do protests and popular movements have in shaping and changing the modern world? How do the dominant institutions and individuals view and respond to such events and processes? Do they fear the potential of the people? What is that potential, or what could it be? What is the bottom-up story of the Global Mafiocracy and Empire of Economics?
– A Series of Stories: History, its chief actors, institutions and evolution is best understood when told as a story, with characters that readers and observers can relate to, understand, find an interest in, to be intrigued and even horrified. It would seem that the best way to explain the overly and unnecessarily complicated world of economics and finance is to explain it not as one would read in a textbook or industry publication, nor reportage in the financial press, nor through the dry and deceptively dull language and rhetoric of economics, academics, finance ministers, central bankers, technocrats and politicians. No, this is a world best understood through the stories, characters, challenges, triumphs, disasters and wars waged by the personalities and people who have shaped and changed this world. A system of human ‘civilization’ is, after all, ultimately a product of humans, and is, therefore, as deeply flawed, complex, conflicted and intriguing as are most human tales of the rise and fall of kings, queens, emperors, dictators, or the triumphs and tribulations of the ‘common person’, those on the streets, in the schools, bustling around the cities, towns and in the urban slums. Human beings understand human struggles and human stories. Thus, this book is not a history of economics and finance, it is a story of human beings, struggle, suffering, success and complexity. In short, it is a story like any other.
I need your help to write these stories and complete this book, what will be the first in a series. For now, my objective is to write a sample chapter, drawing from the many thousands of pages of research I have done in recent months and years. This chapter would be made available online for all to read, to truly gain a better understanding of the focus, approach and objectives of this book. To do this, I need your help. If this is something you would be interested in reading, please consider donating or sharing and promoting this through social media and other avenues.
My objective is to raise $500 in the short-term. If that goal is reached, the sample chapter will be completed (in rough form) and published online for all to read in April of 2015.
Thank you very much for all the support and encouragement.
Andrew Gavin Marshall