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Power Politics and the Empire of Economics: An Introduction
By: Andrew Gavin Marshall
27 May 2015
The following is a sample chapter from an upcoming book.
You can download a pdf version here: Power Politics and the Empire of Economics
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.
A Family Affair
Empires don’t just happen; they are constructed, protected, expanded and destroyed. Empires need imperialists, even if they don’t refer to themselves as such. In the Empire of Economics, the imperialists are a diverse group, including the obvious presidents, prime ministers, chancellors and other heads of state; foreign, military and intelligence officials and ministries; finance ministers, central bankers and the heads of international organizations; the large banks, corporations and institutions that control the world’s wealth and resources, and the powerful individual oligarchs and family dynasties that lie behind these institutions.
As with most empires through history, the central unit of power is often that of a ‘family’, be it royal, financial, corporate or crime. After all, the first institution into which people are born and raised is very often that of the ‘family unit’. Power becomes hereditary, passed down through generations of children raised to take the place of their fathers and mothers in expanding the influence and protecting the legacy of the family. As with any imperial – or dynastic – family structures, they are plagued with rivalries, power struggles, tragedies, divisions and declines. The modern imperial family in the Empire of Economics – emanating from the vast industrial, corporate and banking fortunes established over past centuries – is no exception to the drama and decadence of earlier imperial dynasties.
Every nation has their dynasties, some better known than others. In the United States, over the past century, several names have become synonymous with wealth, power and prestige: Vanderbilt, Carnegie, Morgan, Harriman, Astor and Rockefeller. In 2006, roughly a third of the Fortune 500 companies (that is, the largest corporations in America) were family-run businesses, often performing better than ‘professionally’ managed companies. Among them is one of the largest corporations in the world, Wal-Mart, run and largely owned by the Walton family. In 2010, six of the top ten richest individuals in the United States had inherited wealth, meaning that the richest of the rich in America were not self-made billionaires, but members of wealthy dynasties.
Rich families are often able to preserve their dynastic wealth through a family ‘trust’, which allow the super-rich to provide for future generations of the family largely free of taxes and outside claims. The proliferation of family trusts has led to what one commentator in the New York Times referred to as “an American aristocracy.” Perhaps the most recognizable family trust – and most ‘royal’ of the American dynasties – is that of the Rockefeller family. In the 19th century, John D. Rockefeller amassed a vast fortune monopolizing the oil industry into Standard Oil. In the early 20th century, the company was broken up by the government into multiple smaller companies, some of which are known today as Exxon Mobil and Chevron, among others. The Rockefeller fortune expanded into other industries and banking, and with that came an increased role in founding universities, foundations and think tanks, which were central to the process of generating the institutional and ideological foundations for American imperialism in the 20th century.
The patriarch of the family today, David Rockefeller, is currently in his 100th year. On the occasion of his 90th birthday in 2005, then-President of the World Bank, James Wolfensohn, spoke at the Council on Foreign Relations, where he said, “it’s fair to say that there has been no other single family influence greater than the Rockefeller’s in the whole issue of globalization.”
As of 2014, Rockefeller Financial Services, the family investment company, held over $100 million in investments in several large American and foreign corporations, including JPMorgan Chase, Chevron, Microsoft, Oracle, Merck & Co., TD Bank, and Wells Fargo. Rockefeller Financial also maintains significant holdings in Honeywell International, Capital One Financial Corporation, Google, Exxon Mobil, Comcast, eBay, Wal-Mart, VISA, and Royal Dutch Shell, BP, IBM, McGraw Hill Financial, PepsiCo, McDonald’s, UPS, General Electric, Ford Motor Company, Apple, Intel, Boeing, Pfizer, The Walt Disney Company, Coca-Cola, Halliburton, U.S. Bancorp, Verizon and Goldman Sachs, among many others.
Not only does the Rockefeller family office invest in major banks and corporations (on behalf of the family and its clients), but some major banks have also invested in the family office itself. In 2008, one of France’s largest banks, Société Générale, purchased a 37% stake in Rockefeller & Co. In 2012, that stake was sold to another major financial dynasty, the Rothschilds, who purchased it through RIT Capital Partners, the investment arm of the London branch of the Rothschild family, overseen by Lord Jacob Rothschild. As Barron’s magazine noted at the time, the union of these financial dynasties “should provide some valuable marketing opportunities” in which “new wealth” around the world would want “to tap the joint expertise of these experienced families that have managed to keep their heads down and their assets intact over several generations and right through the upheavals of history.”
The Rothschild banking dynasty, which has its roots in late 18th century Europe, had established several branches of the family spread throughout major European nations and capitals, with two of the most prominent being the London and Paris arms. In 2012, the French and British Rothschild banks were planning to merge their assets into a single entity, under the name of Paris Orléans, headed by David de Rothschild. Upon the announcement of the merger, David de Rothschild explained that its purpose was to “allow the bank to better meet the requirements of globalization… while ensuring my family’s control over the long term.” David, one of the richest Rothschilds today, noted in a 2010 interview with Ha’aretz that as a member of the Rothschild family, “We have an obligation to continue the dynasty.”
The Rothschilds have a long history, marred with tragedies and rivalries so common to historical dynastic clans. In the 1990s, as the French and British branches of the family were increasing their cooperation under the leadership of Baron David de Rothschild and Sir Evelyn de Rothschild, respectively, Sir Evelyn commented that, “The first important strength of the family is unity.” Evelyn viewed Jacob Rothschild – another member of the British family branch – as a potential rival in control over the British bank, N.M. Rothschild, but Jacob went off to found RIT Capital Partners. Jacob’s half-brother, Amschel Rothschild, was pressured by his father to join the family business, despite his lack of interest and talent for it. Shortly after the death of his mother in 1996, Amschel attended a business meeting in Paris, after which he went to his hotel room and hung himself at the age of 41. With his death, a crisis was seen in the future of the family dynasty, which prompted the closer connections between the British and French branches.
Sir Evelyn de Rothschild and his wife, Lady Lynn Forester de Rothschild (an American), count two prominent dynasties among their close friends: the Clintons and the British Royal Family. Lynn has long-standing ties to the Clintons, and considers Hillary to be “the woman she most admires,” while Sir Evelyn served as an usher at Queen Elizabeth II’s wedding. The couple spends occasional weekends with the Queen at Windsor Castle, and would also be frequent guests at the White House during the Clinton administration.
In Italy, the Agnelli family – presided over today by the young patriarch, John Elkann – has been considered Italian royalty for the past century. The previous patriarch, Giovanni (‘Gianni’) Agnelli, ruled the family empire from the 1960s until his death in the early 2000s. The Agnelli empire controlled the large auto-company Fiat, as well as managing a wide array of companies and investments “in shipping, oil refining, armaments, banking, insurance, retailing and manufacturing.” When the Soviet leader, Nikita Khrushchev, visited Italy, he singled out Gianni in a room filled with several Italian cabinet ministers and took the patriarch aside. “I want to talk to you,” said Khrushchev, “because you will always be in power.” The Soviet leader signaled to the cabinet ministers, adding, “That lot will never do more than just come and go.” By the late 1990s, the Fiat group was the largest employer in Italy, accounting for roughly 5 percent of the country’s gross national product (GNP), and, when combined with the other family’s holdings, the Agnelli family controlled roughly a quarter of the entire capitalization of the Milan stock market.
The Wallenberg family has dominated banking and industry in Sweden for over 200 years. In the mid-1990s, the New York Times referred to the Wallenbergs as “one of the most powerful business families in the world” and “Sweden’s answer to the Rockefellers.” For the post-war period, the business was under the leadership of Marcus Wallenberg Jr., who died in 1982 and had established “an industrial and financial empire of unprecedented scope,” with the family having controlling or influential shares in half of Sweden’s largest corporations, including Electrolux, L.M. Ericsson, Saab, and the Skandinaviska Enskilda Bank (SEB), one of Sweden’s largest multinational banks. By the mid-1980s, the family’s business empire accounted for roughly 30 percent of Sweden’s gross national product.
By the mid-1990s, the Wallenberg empire controlled companies accounting for 40 percent of the Swedish stock market, just as the fifth generation of the family was taking over the reins. Jacob and his cousin, Marcus Wallenberg, were to take over the business from Jacob’s father, Peter, determined on “making the empire a global one.” The family’s holding company, Investor AB, was valued at $6.4 billion, which was in turn owned by a foundation trust controlled by the Wallenberg family. As The Economist noted in 2006, “There is little that happens in Swedish business that does not involve the Wallenbergs,” with one prominent Swedish hedge fund manager commenting, “They are a bit like royalty.” Jacob Wallenberg told the Financial Times in 2014 that, “I think our family is very strong on tradition, it is very strong on responsibility, it is very strong on nation, and I should say family.”
In Canada, a quiet dynasty rules behind the scenes, with “undeniable” influence on provincial and federal politics, according to former U.S. Ambassador to Canada David Jacobson, who discussed the Desmarais family in a diplomatic cable leaked by Wikileaks. The family’s economic empire goes by the name Power Corporation, based in the French-speaking province of Quebec and the city of Montreal. Through its various subsidiaries and shareholdings, the corporate and financial influence of the family reaches to all significant sectors of corporate Canada, as well as Europe, Asia and the United States.
The family was presided over by Paul Desmarais, Sr. from the time he began the business in the 1950s and 60s until his death in 2013, at which time the family empire was passed on to his two sons, Paul, Jr. and André Desmarais. As the Globe & Mail reported upon the patriarch’s death in 2013, “he knew and influenced, in small ways or large, every Canadian prime minister and Quebec premier over the past five decades.” Desmarais helped Prime Minister Pierre Trudeau open relations with China in the 1970s, and established the Canada China Business Council in 1978. Prime Ministers Brian Mulroney, Jean Chrétien and Paul Martin also maintained very close connections with Desmarais and the Power Corp. empire. Jean Chrétien’s daughter, France Chrétien, even married Paul’s son, André. Paul Martin worked for Desmarais at Power Corp. for 13 years before entering politics, eventually becoming finance minister and Prime Minister. Brian Mulroney, a close friend for nearly five decades, said of Desmarais, “I loved him like a brother… He was one of the most significant players in Canadian economic history.”
The Wall Street Journal referred to Desmarais as “one of Canada’s wealthiest and most powerful businessmen” who “was closely involved in the nation’s politics.” Canada’s current Prime Minister Stephen Harper praised Desmarais for his “leadership, integrity, global vision, and profound attachment to his country.” Among the patriarch’s friends were former U.S. President Bill Clinton and former French President Nicolas Sarkozy.
Asian nations are not to be outdone, with long traditions and new manifestations for family rule with powerful dynasties in the political and economic sphere, as well as a host of monarchs. As The Australian reported in 2014, “the big family business in Asia today is not running companies, but controlling countries,” noting that apart from the obvious in North Korea, many of Asia’s nations were “permeated with political leaderships that keep governance in the family.” The newly installed Chinese President, Xi Jinping, was a ‘princeling’ – a child of the Communist Party founders and bosses – whose father was a former Vice Premier. Japan’s prime minister, Shinzo Abe, comes from a prominent political family. His grandfather was a Member of Parliament, his father was a foreign minister, and his mother’s father was a former Prime Minister. The President of Korea, Park Geun-hye, was the daughter of a previous president.
This pattern was repeated in the Philippines, Indonesia, Malaysia, Thailand, Myanmar, Singapore, Bangladesh, India, and Sri Lanka, their own versions of names like Kennedy, Bush and Clinton in the United States. An associate professor at the University of Queensland, David Martin Jones, commented, “The rise of dynasticism within democracy is little understood, and fits with a loss of popular support for mainstream parties, while these dynastic figures fit with the media/celebrity culture and spin that has undermined politics as a mode of persuasion.”
Japan was, for many years, the world’s second largest economy after the United States. Today, it stands in third place, with China picking up the mantle at second. China began its economic ‘opening’ in 1978 under the leadership of Party leader Deng Xiaoping. As the world’s most populous nation increasingly embraced Western forms of ‘capitalism’, the Communist Party leadership which dominated the country acted as patrons and subsequently profiteers of China’s economic development. The highly efficient mixture of a single-party technocratic dictatorship and state-capitalism led to rapid economic growth and immense riches being accumulated by the nation’s new oligarchy. The princelings have become a rich and powerful class, using their political contacts to study at prestigious schools in Europe and America, taking control of large businesses inside China and rising up the Party apparatus. As Bloomberg reported, in China, “wealth and influence is concentrated in the hands of as few as 14 and as many as several hundred families.”
In Turkey, two families largely dominate the economy, Koc and Sabanci, having reached their third generations with interests in banking, energy, automobiles, retail and other markets. Together, Koc Holding and Sabanci Holding – and their various subsidiaries – “make up more than a quarter of the market capitalization of the Istanbul stock market.” The U.S.-based credit ratings agency, Standard & Poor’s, gave Koc Holding a higher credit rating than Turkey.
In another ‘emerging market’ economy, South Africa, one family reigns supreme: Oppenheimer. Harry F. Oppenheimer, who died in 2000, was known as the “king of diamonds,” with an empire controlling most of South Africa’s diamonds, gold, uranium and copper, “wielding extraordinary power over some of the world’s strategic metals and minerals.” Through a complex web of corporate subsidiaries and shareholdings, the Oppenheimer family controlled the supply of the world’s diamonds through their monopoly of De Beers, which also held “vast holdings in banking, real estate, pulp and paper, bricks and pipe, coal and potash, locomotives and beer.” As head of Anglo American Corporation, Harry Oppenheimer spent twenty-five years as “the most powerful figure in his country’s economy as well as one of the richest men in the world,” noted the New York Times.
India, the world’s largest ‘democracy,’ second most populous country and one of the fastest-growing economies, is yet another example of a family business. Politically, India has long been dominated by the Gandhi and Nehru families, but behind the scenes, the families of old and new industrialists dominate the economy. Among India’s largest and most respected conglomerates is the Tata family, which has run the Tata Group for nearly 150 years. Ratan Tata took over the Tata Group in 1991, with its more than 100 companies operating in everything from steel to software. The Tata family had run the company for over a century, but was based almost entirely in India, which began opening its economy up to the West the same year Ratan took over the company. He turned the Tata Group into a global conglomerate, acquiring major British companies, including Tetley Tea, Jaguar Land Rover and Corus, a steelmaker. Ratan became, in the words of the Financial Times, “a pioneer in the country’s move toward globalization,” and both he and the Group “came to embody India’s own emergence as a world economic player over the course of the past decade.”
Germany, the second largest exporter in the world (after China) and the fourth largest economy in the world (after the U.S., China and Japan) is also no stranger to family dynasties and business empires. According to a 2012 study cited by Forbes, roughly 43% of all German exports in 2011 were accounted for by the country’s 4,400 largest family-owned firms. Many of the large companies that are not directly owned by families are often owned by foundations, which are in turn owned by prominent families. The archetypal head of a German business empire, the Financial Times explained in 2007, is “very wealthy but low-profile and frugal.” In other words, they’re rich, cheap and stay behind the scenes. Some of Germany’s wealthiest families and individuals stay so far out of the spotlight that there are few known photographs of them in existence. Susanne Klatten, daughter of the German industrialist Herbert Quandt, who built the BMW empire, is the 44th richest person in the world, with a very low public profile, even spending parts of her life operating under false names.
One reason for the publicity-shy nature of Germany’s corporate, industrial and financial elite could be due to the fact that many of them date back to Germany’s industrialization and prospered immensely through the Nazi era, where they frequently collaborated with Hitler’s murderous regime. Just as the Japanese industries and families of the imperial age were re-established to manage Japan’s post-war industrialization, so too was German industry rebranded after the Nazi era to lead Germany’s reindustrialization and rapid economic growth. The Quandt family behind BMW had collaborated heavily with Nazi Germany, with one German historian, Joachim Scholtyseck, noting, “The Quandts were linked inseparably with the crimes of the Nazis,” using some 50,000 concentration camp slave laborers at the company’s factories, building weapons for the Nazi war machine. “The family patriarch was part of the regime,” Scholtyseck added. The Quandt family also took over dozens of businesses which were seized from Jewish families.
Since the early 1970s, the Arab dictatorships – virtually all run by political dynasties – have accumulated massive wealth and influence, and have invested that wealth into Western banks and corporations. Saudi Arabia is the best example, but the Gulf monarchs include the families that run the United Arab Emirates (UAE), Bahrain, Qatar and Kuwait. One such individual who has made a name for himself in the world of finance is the Saudi Prince Alwaleed bin Talal bin Abdulaziz Al Saud, who has been referred to as the “Arabian Warren Buffett,” having become one of the largest shareholders in Citicorp by the early 1990s. In 1999, the Economist noted that while the Saudi royals were “secretive, venal and backward,” Prince Alwaleed was “open, intelligent and successful.”
As of 2013, Prince Alwaleed bin Talal was worth an estimated $27 billion, and was the second largest shareholder in the global media conglomerate, News Corp. (after the principal shareholders and owners, the Murdoch family), and is also a stockholder in Apple, TimeWarner, Citigroup, Motorola, Saks, AOL, eBay and EuroDisney, and even owns part of Twitter. Further, the Prince owns several luxury hotels in London, New York and elsewhere, partnering up with major banks and other billionaires like Bill Gates. The Prince has a fleet of some 300 cars, a 280-foot yacht which was originally built for a world famous Saudi arms dealer (Adnan Khashoggi), and a fleet of jets, one of which includes a golden throne. He became the subject of minor scandal when it was reported that at his desert encampment in Saudi Arabia, one of the Prince’s past-times is, literally, “dwarf-tossing.” But the Prince’s defenders were quick to reassure an American audience of “his great beneficence,” noting that dwarves were “outcasts” in the Saudi Kingdom, and so the Prince simply hired them as jesters, providing them with “a work ethic,” which included having them “dive for $100 bills in bonfires.”
Russia and several countries in Eastern Europe (notably Ukraine) are dominated by a handful of oligarchs, who concentrated control of resources and the economy in their hands following the collapse of the Soviet Union.
There are also individual oligarchs all across the world, and if they pass their fortunes on to their children they could establish new financial and corporate dynasties. One example in the United States is Warren Buffett, a billionaire investor who founded Berkshire Hathaway, which is a major shareholder in American Express, Coca-Cola, Exxon Mobil, Goldman Sachs, IBM, Moody’s Corporation, Munich Re, Procter & Gamble, U.S. Bancorp, Wal-Mart and Wells Fargo, among others. Buffet’s friend, fellow billionaire oligarch Bill Gates, is also a major shareholder in Berkshire Hathaway, through his own holding company, Cascade Investment.
These are just a few of the world’s major dynasties and oligarchs in the Empire of Economics, cooperating and competing with one another in what could be interpreted as globalization’s Game of Thrones. Individually, these family dynasties and oligarchs are able to exert significant and varying degrees of control over their respective national economies. Collectively, they wield immense global financial and economic power, largely unknown to outsiders. As banks and corporations became increasingly global in scope and size, so too did the interests of the individuals and families behind many of the world’s major companies. The world’s top banks and corporations, in turn, collectively own each other through shareholdings, as well as much of the rest of the network of global corporations.
The Swiss Federal Institute of Technology in Zurich published a study in 2011 of the ownership structure of the world’s largest 43,000 multinational corporations. The researchers traced the shareholdings of the companies to a small network ‘core’ of the largest 1,318 corporations, which collectively accounted for roughly 80 percent of the global revenues of the entire sample of 43,000 corporations. Within the ‘core’ is what the researchers called the ‘super-entity’, a grouping of roughly 147 closely knit companies – mostly banks and insurance companies – who own each other and collectively control 40 percent of the entire network of 43,000 companies. Thus, a global economic order in which less than 150 of the world’s top banks and financial institutions control not only each other but a large percentage of the world’s remaining corporations can hardly be said to be a “free market” of competition. In truth, the “super-entity” more closely resembles a cartel, the global financial mafia.
Among the top 50 companies of the ‘super-entity’ (as of 2008), were: Barclays, Capital Group Companies, FMR Corporation, AXA, State Street Corporation, JPMorgan Chase, UBS, Deutsche Bank, Credit Suisse, Bank of New York Mellon, Goldman Sachs, Morgan Stanley, Société Générale, Bank of America, Lloyds TSB, ING Group and BNP Paribas, among others. As of late 2014, the list of top institutions within the super-entity has changed slightly, with some previous banks merging or collapsing as a result of the financial crisis, and with the rise of asset management firms such as BlackRock.
BlackRock is the world’s largest asset management company, with roughly $4 trillion of assets under management, standing as the single largest shareholder in one out of every five corporations in the United States, owning at least 5 percent of almost half of all corporations in the country. As the New York Times noted in 2013, BlackRock has “tremendous influence.” As the Financial Times noted in 2012, when one includes the assets which BlackRock advises on (on top of managing), the total sum that the company monitors amounts to roughly $12 trillion, almost the same size as the entire U.S. economy, putting the company “in an extraordinarily influential position.” Larry Fink, the CEO of BlackRock who started his career as “a prince of Wall Street,” rose to what the Financial Times called “the pinnacle of US finance,” where he “slips in and out of the offices of the world’s financial and political elite with ease.” Fink and BlackRock have extensive influence with the major American and European banks and corporations, as well as sovereign wealth funds in the Arab world and Asia.
Fink turned BlackRock from a virtually unknown entity in 2008 to “a global colossus” with its $13.5 billion purchase of Barclays Global Investors in 2009. Vanity Fair referred to Fink in 2010 as “the leading member of the country’s financial oligarchy.” Throughout the financial crisis, Fink and BlackRock played a role as key adviser to all of Wall Street’s top CEOs, as well as the heads of the Federal Reserve System, Federal Reserve Bank of New York and the U.S. Treasury Department, playing a central role in the major bailouts and mergers that marked the crisis. One senior bank official referred to BlackRock as “almost a shadow government.” Another bank executive commented, “Larry has always wanted to be important… And now that he’s more important than he ever dreamed of, he’s loving it.” Fink also maintained very close ties to the two U.S. Treasury Secretaries who served tenures during the financial crisis, Hank Paulson (former CEO of Goldman Sachs) and Timothy Geithner (former President of the New York Fed), whom Fink referred to as “two of our best Treasury secretaries.”
This interconnected and interdependent network of the global financial mafia is in turn controlled by the shareholdings of individual oligarchs and family dynasties. After all, most mafias are ultimately family businesses, and the world of finance is no exception. But there are other key players as well, including sovereign wealth funds (state-run investment companies), central banks, and other investment vehicles. The use of the term ‘mafia’ or Mafiocracy is not simply rhetorical, as the banks and corporations which sit at the heart of this network – the “super-entity” – are repeatedly caught, fined and slapped on the wrist for excessive criminal behavior, including massive fraud and the formation of illegal cartels designed to manipulate prices and increase profits.
Nowhere is this more obvious than in the financial sector, plagued by multiple scandals since the financial crisis, including the role of banks in creating the crisis in the first place. In addition to that, however, a small network of banks has been found to function as a criminal cartel in manipulating interest rates (specifically, the LIBOR rate) and the foreign exchange (forex) market. In addition, the world’s major banks also reap immense profits (and commit grave crimes) through the laundering of billions of dollars in drug money, terrorist financing and providing other services to organized crime. And this is to say nothing of the economic and financial support that corporations and banks provide for dictators, tyrants, mass murderers, war mongering and state violence, environmental degradation and the physical plundering of the planet for short-term profit.
But the global financial mafia – and the oligarchs and dynasties who sit at its core – cannot wield significant influence without the political legitimacy that comes with state power. Successful financial dynasties (with the Rockefellers as perhaps the best example) establish complex networks of influence, building institutions and supporting ideologies that in turn influence the state and shape the minds and careers of those who rise through it. The Rockefeller family established the University of Chicago and have long been patrons of Harvard. They created philanthropic foundations which provided strategic funding to universities, research centers, think tanks and international forums, having a lasting impact on the shaping of the social sciences (notably Political Science and Economics). The Rockefeller name has made its imprint on some of the most influential American and international think tanks and forums, including the Council on Foreign Relations, the Bilderberg meetings and the Trilateral Commission, which was founded by David Rockefeller in 1973 in an effort to encourage cooperation between the ‘trilateral’ regions of North America, Western Europe and Japan.
The effect of these networks – which are replicated to varying degrees by members of the global financial mafia in their respective nations – was to create a new elite class of technocrats and professionals, strategists and policymakers whose ideologies and interests aligned with that of the Mafiocracy. For dynasties and oligarchs to exert influence over economic and political policies and society at large, they need much more than a large economic share of corporate, banking and stock market capitalization. More than anything, they need access to policymakers: presidents, prime ministers, foreign ministers, finance ministers, central bankers, technocrats and the leaders of international organizations.
In short, they need to engage and integrate actively with the world of economic and financial diplomacy, interacting and building relationships with the policymakers of the rich and powerful nations, those who have the political authority necessary to implement policies that affect the Mafiocracy. Together, policy-makers, technocrats, financial diplomats and the Mafiocracy of oligarchs and dynasties are the central players in the game of global power politics, and are the key architects in the system of global economic and financial governance, the Empire of Economics.
Machiavelli to the Mafiocracy
Dynastic control of corporations and banks, while supporting long-term influence and interests, has obvious downsides, since talent and skills are not hereditary, and thus, there is no guarantee that family members and descendants will be as savvy or effective in their management of the family business. For this reason, many oligarchs and dynasties turn to individuals outside of the family to manage their companies, advise on their wealth management strategies, and run the day-to-day business of the family empire. Such advisers, confidantes and interlocutors exist in the world of financial dynasties well beyond the scope of the family business, but help to manage the family’s social and political interests and relationships as well.
Some five hundred years ago, Niccolo Machiavelli advised Popes, princes and other rulers, writing The Prince as a dedication to the first modern financial dynasty, the Medici family of Florence. If Machiavelli were writing The Prince today, he would likely still dedicate it to the major family dynasties, Rockefeller, Rothschild, Wallenberg or perhaps the Agnelli family of Italy and other modern Medicis. With few exceptions, however, the modern imperial families of finance do not directly control the state or political apparatus as they did in past centuries. So for the Machiavellis of the modern era, they must establish close relationships not simply with the top families, but the top political authorities as well.
They act as ‘friends’ and networking agents to the major dynasties while sitting as advisers and cabinet ministers to the world’s major presidents and prime ministers. They run consulting firms, outsourcing their strategic insight and networks of contacts to the highest bidder. They sit on the boards of corporations, think tanks and foundations, fostering the development of future generations of advisers and strategists, regularly appearing in the media to voice their own “independent” analysis of world events and strategic advice. They are the Machiavellis to the global Mafiocracy, moving in and out of government but always remaining in the upper echelons of the ruling institutions. They attend international conferences, forums, professional and social events. They are essential to the global Mafiocracy, with extensive experience in the highest positions of power, understanding how state power is wielded and shaped, they know the key policy-makers at home and abroad, and are able to open doors with their recognizable names, yielding endless benefits to their dynastic patrons and friends.
Perhaps the most recognizable and “respected” consigliere to the Mafiocracy is none other than Henry Kissinger. A German émigré to the United States in the late 1930s, Kissinger became a noted academic at Harvard University, where he became acquainted with the politics of academic life, preparing him “for world politics.” With the help of his academic mentors, he established a seminar and an academic journal which effectively expanded his network of contacts with other young leaders in government, business, media and finance.
In the mid-1950s, Kissinger was invited to join the Council on Foreign Relations (CFR), the premier U.S.-based think tank focusing on foreign policy, long considered a type of training ground (or rite of passage) for any top future foreign policy officials in the United States government. The Council, founded in 1921, also happened to be an institution which was dominated by Rockefeller men and money. Kissinger was appointed as a staff director of a study group on nuclear weapons and foreign policy on behalf of the Council, out of which he wrote a book that advocated for “limited nuclear war” with the Soviet Union. From there, Kissinger was appointed as the director of a Special Studies Project run by the Rockefeller Brothers Fund. At this time, Kissinger developed a close relationship with Nelson Rockefeller, who would become the young Henry’s patron. Kissinger later recalled first meeting Nelson Rockefeller, noting that he and the other young ‘experts’ who formed a study group under Rockefeller’s patronage were “intoxicated by the proximity of power” and sought to impress Nelson in offering “tactical advice on how to manipulate events.”
Kissinger received tenure at Harvard in 1959, and served as a part-time consultant to Nelson Rockefeller, who became the Governor of New York State in 1959 (a position he would hold until 1973). He did part-time consulting with the Kennedy administration in the early 1960s, and with the Lyndon Johnson administration that followed Kennedy’s assassination. When Richard Nixon became president in 1969, Henry Kissinger joined the administration as National Security Adviser, and took on the additional role as Secretary of State in 1973. When Kissinger joined the Nixon administration, Nelson Rockefeller gave Henry a ‘gift’ of $50,000. When Nixon resigned in disgrace in August of 1974, replaced by Gerald Ford, Kissinger remained as National Security Adviser until 1975 and as Secretary of State until the end of the Ford administration in early 1977. Nelson Rockefeller, who had long sought the presidency, was appointed Vice President in the Ford administration.
During these years, Henry Kissinger was the most influential figure shaping U.S. foreign policy, and he did so with a ruthlessly pragmatic understanding of power and its uses. He oversaw the war in Vietnam, the illegal bombing of Cambodia, killing several million civilians during the Nixon administration alone. In addition to his many war crimes in Indochina (for which he won the Nobel Peace Prize in 1973), Kissinger supported Pakistan’s genocide in Bangladesh, killing several million, after which he congratulated the dictator of Pakistan for his “delicacy and tact.” He was also central in the CIA coup to overthrow the democratically elected government of Chile in 1973, of which he said, “The issues are much too important for the Chilean voters to be left to decide for themselves.” The result was the establishment of a U.S.-supported dictator, Augusto Pinochet, who murdered many thousands and tortured many tens of thousands more.
Kissinger also supported the murderous Argentine military regime which killed tens of thousands, along with the Indonesian dictator, Suharto, in his genocide in East Timor, killing several hundred thousand civilians. He supported the Turkish invasion of Cyprus, and the war against the government of Angola, which ultimately killed millions in southern Africa. These are but a few examples of Kissinger’s influence on foreign policy, resulting in the deaths of many millions of people around the world, in addition to the displacement, torture and suffering of many millions of others. With the blood of so many innocent people on his hands, Kissinger had acquired the status of a highly respected “statesman.”
When Kissinger left the government, he did not lose much influence. He remained a central figure within the foreign policy establishment. The ‘Establishment’, as it was known to many, had consisted of prominent Wall Street bankers and lawyers who effectively monopolized the key foreign-policy positions within the government in the decades leading up to and following World War II. By the 1970s, the ‘Establishment’ had given way to what Leslie Gelb (currently a president emeritus of the Council on Foreign Relations) called the “foreign policy community,” which functions as “an aristocracy of professionals.” This community consisted of roughly 300 professors, lawyers, businessmen, think tank ‘experts’, foundation officials and journalists (though today it is likely a far greater number). Whereas previous leaders in the foreign policy establishment were primarily bankers who took time off to manage foreign policy, members of the community tend to focus on foreign policy as “a full-time job.” The community had “first infiltrated, then subsumed the older and familiar establishment,” and by the 1970s it was “monopolizing the top foreign and national security posts in any administration.”
Gelb, writing in the New York Times, noted that members of the earlier Establishment “were insiders, who knew the right persons to telephone, meeting quietly, avoiding publicity.” The Community, on the other hand, “operate far more openly,” noting that, “unlike the Rockefellers, they cannot pick up the phone and speak to the President. They talk to the President indirectly, through the articles they write in journals such as Foreign Affairs and Foreign Policy or in the op-ed pages of [the New York Times] and other newspapers, or in testimony to Congressional committees, through attending conferences with high Government officials at the Brookings Institution in Washington or the Council on Foreign Relations in New York.” Citing Kissinger as one of several examples, Gelb wrote that “the professors had moved to the center of power.” The members of the foreign policy community, explained Gelb, “sometimes actually make the decisions, usually define what is to be debated and invariably manage the resulting policies.”
This foreign policy community links together major universities (particularly the Ivy League schools), philanthropic foundations (Rockefeller, Ford, Carnegie), think tanks, international conferences and forums. Among the most important think tanks in the foreign policy community are the Council on Foreign Relations, the Brookings Institution and the Center for Strategic and International Studies (CSIS), among many others. These think tanks are typically dominated by boards and trustees who are former high level government officials, top corporate executives, bankers, university professors and chancellors, foundation officials, media barons, and of course, individual oligarchs and members of financial dynasties. In addition to major national think tanks, there are a host of international think tanks and forums that bring together the members of the global Mafiocracy with policy-makers and other influential individuals. The three most important and influential of these international forums are the Bilderberg Group, the Trilateral Commission and the World Economic Forum.
The Bilderberg meetings began in 1954 as a conference of high-ranking government officials, bankers, corporate executives, European royalty, media barons, military and intelligence chiefs, academics and think tank officials drawn almost exclusively from North American and Western European nations. The meetings take place once a year, drawing roughly 130 participants who meet for a long weekend in a four-star hotel to engage in off-the-record, secret discussions behind closed doors. The meetings are governed by a Steering Committee of roughly forty individuals who are responsible for inviting other participants from their respective nations. Families such as the Rockefellers, Rothschilds, Agnellis and Wallenbergs have long been represented at Bilderberg meetings.
The Trilateral Commission, which was founded by David Rockefeller, functions as an international think tank and series of conferences uniting the policy-oriented, political, academic, corporate and financial elites of Western Europe, North America and Japan (having expanded since its founding in 1973 to include more Asian nations, notably China and India). David Rockefeller still sits as honorary chairman of the Commission, which consists of roughly 350 members who hold a full membership meeting once yearly, while holding regional meetings separately, of the North America, European and Japanese/Asian groups respectively.
The annual meetings of the World Economic Forum (WEF) in Davos, Switzerland, bring together thousands of the world’s top corporate executives, bankers and financiers with leading heads of state, finance and trade ministers, central bankers and policymakers from dozens of the world’s largest economies; the heads of all major international organizations including the IMF, World Bank, World Trade Organization, Bank for International Settlements, UN, OECD and others, as well as hundreds of academics, economists, political scientists, journalists, cultural elites and occasional celebrities.
Henry Kissinger is a regular fixture at these various think tanks, forums and conferences. He currently sits as a trustee and counselor of the Center for Strategic and International Studies (CSIS), a member (and former board member) of the Council on Foreign Relations, a member of the Trilateral Commission, a participant in World Economic Forum meetings, and as a participant (and former Steering Committee member) of the Bilderberg Group.
After he left government in 1977, Kissinger remained an important figure in foreign policy and establishment circles, making hundreds of thousands of dollars per year as an author, lecturer, academic and consultant, notably for NBC and Goldman Sachs. In 1982, Kissinger founded his own consulting firm, Kissinger Associates, which for a fee of roughly $250,000 per year, advises its clients on “strategic planning.” To help with the consultancy, Kissinger brought in his former deputy national security adviser in the Nixon administration, Brent Scowcroft, as well as a former British Foreign Secretary, Lord Carrington.
Kissinger Associates was headquartered on the corner of Park Avenue and 52nd Street in New York City, located in the same office building as the First American Bank of New York and Chase Private Banking International. Among the client list for Kissinger’s firm are several big names, including H.J. Heinz, Arco, American Express, Shearson Lehman, as well as FIAT (Agnelli), Volvo, Fluor Corporation, International Energy Corporation, Midland Bank, and L.M. Ericsson of Sweden (controlled by the Wallenbergs). As the New York Times noted in 1986, “Kissinger and his associates are by all accounts the most successful of this new breed of former senior Government officials who have decided to advise big businesses rather than join them,” noting that Defense Secretaries, State Secretaries and Treasury Secretaries had overseen millions of people and enormous budgets with which most multinational conglomerates cannot compete, and thus, “big business is too small for many of the new generation of Government superstars.”
As Kissinger himself explained, “I think that in the modern world, if you don’t understand the relationship between economics and politics, you cannot be a great statesman. You cannot do it with foreign policy and security knowledge alone.” In 2002, Leslie Gelb, a top official at the Council on Foreign Relations, commented that, “Within the foreign policy world, and among many corporate CEOs, Henry Kissinger carries more weight than any senior individual in the world today.”
Kissinger has long functioned as a glorified errand boy for the ruling global Mafiocracy. Among his close friends and associates are many of the world’s most powerful dynasties, including his original patrons, the Rockefellers, as well as the Agnelli family of Italy, the Rothschilds of Europe, the Oppenheimer family in South Africa, and a whole coterie of ruling elites in China. Sir Evelyn de Rothschild was introduced to his present wife, Lynn Forester, by their “mutual friend” Henry Kissinger at a 1998 meeting of the Bilderberg Group. Of the late patriarch of Italy’s ruling family, Kissinger said that in “the last two decades of his life, no one was closer to me than Gianni Agnelli,” noting that they spoke on the phone roughly twice a week and would visit each other “every month or so.” Kissinger described Agnelli as “the uncrowned king of Italy” and a “powerful personality who was the most influential Italian of his era.” Kissinger even helped to rebuild ties between the diamond and gold empire headed by Harry Oppenheimer and the South African president.
Kissinger has known the many powerful leaders of China over the past four decades, since he led the diplomatic ‘opening’ of U.S. relations with China in the early 1970s. As he officially established relations with Mao Zedong’s China in 1973, David Rockefeller’s Chase Manhattan Bank became the first U.S. bank to get into the country since the Communists came to power in 1949. Chase Manhattan became the “correspondent” for the Bank of China in the United States, for the purposes of financing commerce. The deal was reached following a 10-day visit by Rockefeller to China in the summer of 1973. Some four decades later, China would be the second largest economy in the world, governed by an elite new class of ‘Princelings’ and technocratic tyrants. China’s economic growth has increasingly translated in growing political power in the international arena. But behind the dry, technocratic exterior of Chinese politics lies a brutal world of factional power politics, in-fighting, scandal, corruption and a struggle for control.
China: Globalization’s Gangster State
Following Mao and Zhou Enlai, Deng Xiaoping would become China’s most powerful leader from 1979 until 1989. Henry Kissinger described Mao as “a prophet who was consumed by the objectives he had set,” and Zhou Enlai as a “most skillful diplomat.” But Deng Xiaoping, for Kissinger, was “a greater reformer,” adding, “I certainly met no other Chinese who had the vision and the courage to move China into the international system and… in instituting a market system.”
Deng Xiaoping was first among the ‘Eight Immortals’ of modern China, and principal architect of modern China. The Immortals were those who supported Deng Xiaoping’s leadership of the Communist Party, believing that only by “opening China to the outside world” would they be able to “raise living standards” and avoid “social upheaval that would threaten the Communist Party’s grip on power.” A Bloomberg special report on the influence of the descendants of the Eight Immortals noted that they ultimately “sowed the seeds of one of the biggest challenges to the Party’s authority,” by entrusting major state assets to their children, “many of whom became wealthy.” This marked “the beginning of a new elite class, now known as princelings.” Over the decades, the emergence and growth of the princeling class would increasingly fuel “public anger over unequal accumulation of wealth, unfair access to opportunity and exploitation of privilege – all at odds with the original aims of the communist revolution.”
The Deng Xiaoping era lasted roughly from 1978 until 2012, when the first princeling came to take the highest seat of power in China, with the rise of Xi Jinping. Prior to that, Deng and the Eight Immortals “towered over China,” first through Deng’s rule, and then “through Deng’s hand-chosen successors, Jiang Zemin and Hu Jintao,” noted a special report in The Diplomat. Deng Xiaoping’s China also saw the rapid rise of the factional backroom power politics that dominate the Chinese Communist Party, and by extension, the government and society. Deng articulated the strategy for China to take in its global rise: “hide your brightness; bide your time.”
The Chinese state has always presented an image of itself to its domestic population and a foreign audience as one of being united with a well-oiled political system. But since the era of Deng, the Party system – which determines who rises to the top positions of power in the country – has been governed not by a visible and public structure, but by “back-room patronage and shadowy negotiations among party elders.” The “problem” with this system, suggested the New York Times in 2012, was that “the power of those elders have diminished with each generation,” noting that then-President and party chief, Hu Jintao, who ruled from 2003 until 2013, was “weaker than his predecessor, Jiang Zemin,” who had ruled China from 1989 until 2002, “who was much weaker than Mr. Deng,” who was paramount from 1978 until his death in the 1990s.
In Chinese factional power politics, the top leaders and former top leaders establish their own networks of patronage, passing benefits and favors to others in exchange for various support, making deals, trades, negotiations and much deeper intrigues. These powerful factions occasionally go to battle with each other, orchestrating all sorts of technocratic coups (the removal of top officials loyal to one boss over the other). The large party factions, headed by their respective party bosses (sitting and former top Chinese leaders) would hold conclaves and secret meetings in which they would negotiate and horse-trade over the appointments to be made to the top ruling body in China, the Politburo Standing Committee.
In 2010, the two main party factions led by then-president Hu Jintao and former president Jiang Zemin decided upon a successor to be president of China, Xi Jinping, with Li Keqiang chosen to be the future prime minister, Hu’s first choice for president. Xi Jinping, who was allied with the Jiang Zemin faction, was ultimately considered to be a compromise candidate between the major faction leaders. Another fast-rising official in the Chinese state apparatus was Bo Xilai, allied with Jiang’s faction, and touted as a possible member of the next Politburo Standing Committee. Bo was viewed by many as “dangerous” and “capable of anything,” creating powerful enemies among top-level Chinese officials.
Bo Xilai was well known both within China and internationally among ruling circles, having risen to the position of party boss in Chongqing City in central China. Under his leadership, Chongqing built strong ties to corporate America and he even won the endorsement of none other than Henry Kissinger, who met with Bo in 2011, after which Kissinger said, “I saw the vision for the future by the Chinese leaders.”
Within a year, Bo Xilai would become the subject of a major scandal which provided a glimpse into the backroom power politics waged by China’s ruling elite and its influential factions and personalities. In a spectacular tale worthy of the palace intrigue of ancient imperial China, Bo went from rising star to serving a life sentence in prison. After making himself a powerful enemy in the form of then-Chinese president Hu Jintao, Bo and his police chief – and long-time confidante – Wang Lijun, became the targets of a quiet corruption investigation designed to prevent his rise to the Politburo Standing Committee.
In January of 2012, Wang Lijun went to his patron, increasingly worried about his own future as the investigation clamped down, hoping to secure the protection of Bo. Instead, Bo decided to toss Wang to the wolves and save himself. Bo fired him from his official post and put a police tail on him. When Wang managed to elude his unwanted entourage, he fled to the American consulate in a nearby city where he asked for asylum, claiming his life was under threat and providing evidence that Bo Xilai’s wife, Gu Kailai, had murdered a British banker (and possible spy) with cyanide in a hotel room a few months before, which he subsequently helped cover up. Suddenly, the quiet backroom attempt to remove Bo as a threat to the Party leadership became a very public scandal revealing the gangster-state nature of China’s power politics.
In a seemingly bizarre twist, the scandal even had repercussions in Canada, as Bo Xilai was “Canada’s closest ally in China’s power structure.” Specifically, Bo had close connections to Canada’s imperial family of finance, the Desmarais family of Montreal, who own Power Corporation. The Desmarais clan had close relations with Bo since the 1970s, when Bo’s father, the Chinese vice premier, Bo Yibo, established a connection with Paul Desmarais, Sr. As Bo’s power within China grew, so too did the market access of the Desmarais economic empire. Through the Desmarais network, Canada’s political elite also established close connections with Bo Xilai. Prime Minister Stephen Harper was one of the last foreign officials to have visited Bo before he was arrested on corruption charges. In fact, André Desmarais, son of Paul, Sr., was accompanied by his father-in-law, former Canadian Prime Minister Jean Chrétien, on a trip to China on behalf of the Canada China Business Council. A mere eight days after Bo’s wife murdered a British banker in a hotel room in Bo’s fiefdom of Chongqing, Bo Xilai smiled and shook the hands of Desmarais and Chrétien, greeting them “like old friends.”
A Financial Times article from 2014 explained that many top Chinese leaders, including former vice-premier of finance and current Standing Committee member, Wang Qishan, are fans of the Netflix original show, House of Cards. The show depicts a politician (Frank Underwood) and his wife, who, through their back-room deals, secret machinations, lies, deception and even murder, are able to rapidly ascend through the ranks of political power in Washington, D.C., first as a top Congressional official making his way to become Vice President and ultimately, President.
Kurt Campbell, writing in the Financial Times, noted that one possible reason for the popularity of shows like House of Cards among the Chinese leadership was that they may view the portrayal of politics in the show “as quintessentially American – perhaps even an accurate depiction of workings of U.S. government.” It was “widely believed” in China, he wrote, that “beneath the surface, America’s vaunted democracy is rife with injustice and corruption.” Not to be discounted, of course, was that the show also provided a parallel in the scandal surrounding Bo Xilai and his wife, Gu Kailai, with their rapid rise and dramatic downfall from the near-heights of Chinese political power. The scandal was “eerily reminiscent of the dirty political deeds perpetrated by Underwood in his quest for power.” Even U.S. President Barack Obama had commented that he was fascinated with the show, though he “confessed a pang of envy for the ‘efficiency’ with which things get done in the fictional Washington of its creation.”
Indeed, House of Cards more closely resembles the realities of power politics exercised at the highest levels than is reflected in most other television and cinematic productions. While often criticized as being highly ‘cynical’ (much like Machiavelli’s The Prince), the truth is that it is a more accurate interpretation of a deeply cynical power structure. The Netflix show was an American adaptation of an earlier British television miniseries of the same name, which was itself based upon a series of books written by Michael Dobbs, a former adviser to Prime Minister Margaret Thatcher and chief of staff to the British Conservative Party. Dobbs was once dubbed “Westminster’s baby-faced hit man,” with the British press noting that many of his political enemies said that he was “as calculating and conceited as some of his fictional characters.”
Dobbs, in fact, wrote the original book, House of Cards, following “a blazing row” with Margaret Thatcher, in which she delivered upon him “a verbal hand-bagging” and subsequently fired him. After that, Dobbs sat down to write his book, which was “inspired by the shenanigans he’d seen and been involved in.” In a recent interview, Dobbs told a journalist, “All of the wickedness you see on House of Cards, I’d seen or even been responsible for.” In a 2015 interview with the Wall Street Journal, Dobbs, who is now a member of Britain’s House of Lords, said, “I don’t think it matters whether it’s in Westminster or Washington – it could be in Beijing or Moscow – because it’s the story about passions, ambitions, weaknesses and wickedness, which I think is universal and almost timeless.”
It is a rarity for power to be accurately portrayed in art and cultural media. Its complexities can hardly be summarized in simple and short journalistic prose, and television news stands as an obscene testament to intellectual infantilism in modern society. Some 500 years ago, when Machiavelli was writing about the realities of power in his era, he could get away with a deliberate and direct approach since he was writing during a time where the vast majority of the population was illiterate, where those who would potentially read his text were the wealthy and powerful, those to whom it would be useful.
Over the past several centuries, with the spread of technology, education, mass communication and democracy, the global political world has become far more complex, with more players, interests, rivals and potential problems than ever before. As a corollary, the “passions, ambitions, weaknesses and wickedness” – as Dobbs described it – have become more global, impactful and entrenched. Whereas Machiavelli wrote about warring city-states, today we have competing continents and large economies, the global system of nation-states, banks and corporations. In addition, the public – the populations of nations and regions – have become literate, better educated, with more access to more information than ever before. They have become more active participants in their respective political systems than they were in past centuries and millennia.
At once, the tools of control and conquest are more advanced and efficient than ever, while the ability to exercise and justify the use of power politics and empire-building is at an historic low. The realities of mass culture and communication, largely a product of the 20th century, have changed the rhetoric and presentation of power in the modern world, though not necessarily the realities and priorities of power. The exercise of power has thus increasingly become coupled with and dependent upon the public use of vague, euphemistic, obscure and often incomprehensible language.
It is a language spoken and understood by those who are invested and involved with the world of high-powered politics, in which the key leaders and players must be able to speak publicly and purposefully in an effort to expand their interests, build their empires and play their games, but which also requires enough obscurity and evasion in order to ensure that the mass publics and populations of the world remain in the dark about the realities playing out behind the scenes. “Political language,” wrote George Orwell in a 1946 essay, “is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” In his essay, written two years prior to the publication of his famous book, 1984, Orwell explained some of the many uses of political language, writing:
It is almost universally felt that when we call a country democratic we are praising it: consequently the defenders of every kind of regime claim that it is a democracy, and fear that they might have to stop using that word if it were tied down to any one meaning. Words of this kind are often used in a consciously dishonest way. That is, the person who uses them has his own private definition, but allows his hearer to think he means something quite different.
Orwell suggested that political language was most often used to defend the indefensible, citing examples of maintaining British rule in India, Russian purges, and the use of nuclear bombs in Japan. Such things, he wrote, “can indeed be defended, but only by arguments which are too brutal for most people to face, and which do not square with the professed aims of political parties.” Thus, he noted, “political language has to consist largely of euphemism, question-begging and sheer cloudy vagueness.” When poor villages are bombed by foreign militaries, its residents machine-gunned and murdered, homes destroyed and survivors scattered, this, wrote Orwell, “is called pacification.” Political leaders cannot publicly state that they intend to murder and destroy entire communities and nations all for the benefit of imperial ambitions, so they claim instead that they must pacify the population, to secure ‘order’ and ‘stability’. The term “pacification” is never actually defined, but the policies and effects which occur under the cloaking of that rhetoric provides as clear a definition as one will get. Orwell continued:
The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns as it were instinctively to long words and exhausted idioms… All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred, and schizophrenia… But if thought corrupts language, language can also corrupt thought. A bad usage can be spread by tradition and imitation even among people who should and do know better.
Orwell’s essay, Politics and the English Language, is perhaps more relevant today than it was when it was written in 1946. One journalist, Matt Schiavenza, discussed the uses of political language in an article he wrote for The Atlantic discussing modern politics in China. With names of powerful institutions and conferences such as the Politburo Standing Committee, the Plenum and Plenary sessions of the Party Congress which promise a host of undefined ‘reforms’, Shiavenza wrote, “for lovers of clear, concise language, Chinese politics are a nightmare.” But he acknowledged its purpose: “If this language seems vague and boring, well, that’s the point: Chinese politics are designed to attract as little attention as possible.”
The same can and should be said for American, European, Japanese and other modern, advanced political societies. China is an extreme case, but by no means the exception. Chinese politics has a heavily technocratic element, in which ‘experts’ (engineers, economists, academics) frequently rule the political apparatus and manage the public debate, designing and implementing large-scale social engineering projects; reshaping, en masse, the nature and structure of society, defining purpose for the population, steering the direction and managing the many crises that result from the totalitarian domination of 1.3 billion people.
In 2010 alone, China experienced 180,000 protests, riots and mass demonstrations, an average of 500 per day, and this was in the midst of an economic ‘boom’ for the country. In such circumstances it is necessary for the Chinese elite to present an image of themselves not as in-fighting, factional, power-mad, super-rich oligarchs competing for domination, but as highly-qualified ‘experts’ who are able to make decisions and implement policies through ‘consensus’ in the interests of China and its population as a whole. Obviously, this is a fantasy world, behind which is a totalitarian system that controls the media, education, communication, transportation, and with all the necessary tools of violent repression.
Technocracy – that is, rule by experts – establishes the institutional ideology, and communicates through the technical language of Chinese politics. Only other ‘experts’ have the technical skills to understand what is being said and to participate in the process of decision-making. The public is left with obscure generalizations, flashy distractions, empty sound-bites and pre-packaged conclusions. But perhaps even worse than the “nightmare” of Chinese politics and its “vague and boring” language, is that of the global financial structure and economic diplomacy. It is within this world where the ideologies, individuals and institutions of global governance have constructed and advanced the architecture and interests of the global Empire of Economics.
The Language of Empire
The language of economics and finance is designed to be incomprehensible to those who are not ‘experts’ or experienced in the fields of economics and finance. The language reflects an ideology that is heavily institutionalized in modern ‘industrial’ society, obscuring realities behind its vague and undefined terms and concepts. We are presented with a world of trained economists, experts in the economic ‘science’ of society; politicians, presidents, prime ministers, chancellors and other heads of state who speak and decide on important matters; the finance ministers and central bank governors who meet, speak, plan and implement the world’s major economic and financial policies; the heads of acronym-named international organizations and their technocratic administrations; the banks, corporations, institutions and individuals who control most of the wealth, resources, trade and ‘financial markets’; the universities, think tanks and foundations who shape the education and training of future financial diplomats, who define the debate and discussion, who determine the policy-options and objectives; and the journalists and news publications who disseminate the economic and financial ‘news’ of the day, whose primary audience is composed of the diplomats and key players in the world of finance and economics.
It is a world little understood to outsiders, obscure and unknown even to most trained economists. Like their counterparts in political science, economists are ‘educated’ (aka: trained, indoctrinated) so that they know just enough to be active participants and administrators of the political (or economic) system, but not enough to understand its actual structure and purpose, nor question its legitimacy. Mired and focused on the technical details, ‘specialized’ in their education to focus and only understand specific sectors of the economic and financial system, the experts are segregated, knowledge is divided and divisive. With a tunnel vision focus on the technical details, most economists and experts are incapable of seeing the larger, institutional, ideological and indeed, the deeply political nature and realities of the financial and economic system.
The economic and financial system is designed this way, precisely because – much like Chinese politics – behind its technical terms, opaque objectives, and insurmountable institutions lies a world of brutal power politics, national and transnational factional battles between rivals and regions, engineering empire, enforcing state tyranny and violence, undertaking dramatic coup d’états and maintaining dynastic dominance. The world of financial power politics stands at the core of the Empire of Economics.
Economic and financial diplomacy is concerned with the design and construction of the Empire of Economics. Diplomats, by definition, hold political authority. Their job is to represent the interests of their nation, their ministry or government department, their embassies, outposts and ‘missions’. In the realm of economic and financial diplomacy, the key participants and players, those with the most political authority, are the central bankers, finance ministers, treasury secretaries, the leadership of international organizations, trade negotiators, economic advisers and of course, the presidents, prime ministers and chancellors – the heads of state.
Foreign diplomacy and international relations present itself with the public image of a convoluted and never-ending attempt at failing to help others around the world, to advance democracy, freedom, human rights, civilization and the ‘common interest’. But behind the media, the rhetoric of diplomacy, the coded language and confused causes, is an unforgiving world of empire. This world erupts in wars, coups, civil conflicts, dictators taking power or falling from it, bombs, bullets and occupation.
The famed linguist and prolific social critic, Noam Chomsky (one of the most cited intellectuals in history), has accurately described the world of ‘international relations’ between nations as functioning according to ‘Mafia principles.’ For decades, Chomsky has been one of the best known, most articulate and well-researched critics of U.S. and Western foreign policy and empire. He has spoken and written consistently that since World War II, regardless of political party or affiliation, successive presidents and their administrations were guided in their foreign policy by the “godfather principle, straight out of the mafia: that defiance cannot be tolerated.” Countries that defy the United States or its allies must be “punished” before “the contagion spreads.” Chomsky elaborated on the ‘Mafia principle’ of international relations, writing, “The Godfather does not tolerate ‘successful defiance,’ even from a small storekeeper who fails to pay protection money. It is too dangerous. It must therefore be stamped out, and brutally, so that others understand that disobedience is not an option.” This principle has been “a leading doctrine of foreign policy for the US during the period of its global dominance.”
Economic diplomacy has its parallels as the most powerful nations compete and cooperate for influence within the global Empire of Economics, also adhering to ‘Mafia principles’ in the exercise of financial power.
Diplomacy and Design of the “World Political Structure”
The Empire of Economics had been long in the making, but its modern manifestation – the various institutions, ideologies and interests that comprise the global economic and financial system – is largely a product of the 1970s. It was an era of profound monetary (currency) and economic crises and transformations. The global currency system that had existed in managing the monetary and economic relations between nations from the end of World War II was abandoned by the United States in 1971. Thereafter, the world of economic diplomacy was thrown to the center of the storm. Decisions of immense political importance had to be made and a new global monetary and financial system needed to be constructed. This task was handed to the central bankers and finance ministers of the rich and powerful nations of the world, first and foremost, the United States, followed by West Germany, France, Britain, Japan, Italy, Canada, Switzerland, the Netherlands, Belgium, Luxembourg and the Nordic nations.
Suddenly, finance ministers and central bankers were pushed to the forefront of advancing the global imperial interests of the rich, powerful nations, at times even eclipsing foreign and state ministers responsible for managing the nation’s foreign policy. It is through the frequent private meetings, international forums, conferences, social events and state visits where the finance ministers, central bankers and other technocrats engage in the very long and incremental process of negotiating the construction and evolution of the global economic and financial system. This was what Kissinger defined as the “trick” to use in creating “a world political structure.”
Banks, financial institutions, corporations and global markets were reaching far beyond the nation-state, becoming transnational in character, objectives and ideology. Political power had to follow financial and corporate power, to provide the political legitimacy necessary to advance the interests of the Mafiocracy. A bank can make a loan, but only powerful nations can force compliance to pay, to demand policies be changed, and to enforce the repercussions of failure. It was in the finance ministries and central banks of the powerful nations where state power and authority was to be exercised in closer coordination with other influential nations, and where they would consult and cooperate with concentrated transnational financial power.
Since the early 1930s, central bankers from the rich and powerful Western nations would meet in secret (usually in Basel, Switzerland) at the headquarters of the Bank for International Settlements (BIS), the central bank to the world’s major central banks. These meetings of central bankers take place behind closed doors every two months, in off-the-record conversations, after which no communiqué or press release is issued, no reporters informed. The cooperation of central bankers was in turn supported and enhanced through the establishment of the International Monetary Fund (IMF) in 1944, which brought in not only central bankers, but also finance ministers from the member nations of the Fund.
Liaquat Ahamed is a widely read and respected author within the economic world, and particularly among financial diplomats. He has worked at the World Bank, with banks, hedge funds, asset managers and is currently on the board of trustees of the Brookings Institution, an influential American think tank. In 2009, he published Lords of Finance about the major Western central bankers during the early 20th century, winning multiple awards, including the 2010 Pulitzer Price for History. In 2014, he published another work, Money and Tough Love: On Tour with the IMF, looking at the history and workings of the International Monetary Fund, interviewing many IMF officials and even attending several meetings and travelling with IMF missions to various nations.
Ahamed noted that from its origins at the end of World War II, the annual meetings of the IMF (usually taking place in September or October), consisted primarily of top financial diplomats from the founding 29 members of the Fund, which “functioned as a sort of conclave of the cardinals of capitalism, intent on rebuilding the Western financial system after thirty years of war and depression.” The annual meetings of the IMF were “grand affairs,” as most of the “financial statesmen of the era had either been bankers at the tail-end of the Gilded Age or, in the case of the British, colonial administrators.” In the late 1950s, the IMF membership had grown to sixty-eight, with several hundred officials showing up to the annual meetings.
The IMF, BIS and other international institutions such as the World Bank, Organisation for Economic Co-operation and Development (OECD), and the General Agreement on Tariffs and Trade (GATT) would play central roles in the management and expansion of the global Empire of Economics. But a great deal of power was organized often outside of these institutions, by relatively smaller groups of nations who would meet in private as ad hoc groups of finance ministers, central bankers their deputies and other technocrats and international organization officials. Together, as representatives of the rich and powerful nations and institutions, they would seek to forge a consensus between themselves, which they could then extend through the various other (larger) forums and institutions.
The first of these ad hoc groups was known as the Group of Ten (G-10), established in 1962. The G-10 would periodically bring together the central bankers and finance ministers of ten rich nations: Belgium, Canada, France, [West] Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States. Very soon after its establishment, Switzerland was invited, yet it continued to call itself the Group of Ten. Through this forum, these nations would “consult and co-operate on economic, monetary and financial matters.”
Over the first half of the 1970s, a series of committees would be formed to further coordinate policies and strategies among the powerful nations. The Group of Ten agreed to form a special group at the IMF in 1972 known as the Committee of 20 (C-20), bringing together the finance ministers and central bankers from the key constituencies represented on the IMF’s executive board, coming together at the annual and spring meetings of the IMF and World Bank in order to function as a type of steering committee for the Fund, providing strategic direction the Board of Governors.
In 1973, a separate group was formed, known as the Group of Five (G-5), bringing together the finance ministers (and occasionally the central bankers) from the United States, West Germany, Japan, the United Kingdom and France. The following year, the IMF’s C-20 was institutionalized as the Interim Committee of the IMF, and would later become known as the International Monetary and Financial Committee (IMFC), which still exists and meets today. It has a parallel group that provides strategic advice to the World Bank, known as the Joint Development Committee.
A hierarchy of these groups began to emerge, with the richest five countries holding their secretive meetings of the Group of Five, where they would seek to establish a consensus among themselves and subsequently push their agreements through the wider G-10, from where they would then advance their collective interests through the Interim Committee of the IMF. The era of ad-hoc committees to run the world had begun. The IMF’s own publication, Finance & Development, would later describe these groups as “a steering committee for the world economy,” driving the process of global governance. In 1975, the U.S. Treasury Secretary, William E. Simon, wrote to President Ford, “I believe that bringing together finance ministers from time to time in these forums is a useful way of getting decisions on difficult and technically complex financial issues.”
A few months later, Henry Kissinger would explain to President Ford the strategy “to use economics to build a world political structure.” Two days after Kissinger made that statement to the President, a larger meeting was held at the White House which included all of the top financial diplomats and economic advisers in the Ford administration, where the strategy was further discussed. As Kissinger told the other ministers during the meeting, “it is better to have the Finance Ministers be bastards, that’s where I want it.”
Before the end of the year, the Group of Five would meet for the first time at the level of heads of state, holding their inaugural meeting in Rambouillet, France, where Italy was also invited as an additional member. The following year, Canada would be invited to join, thus crowning the annual meeting as the Group of Seven (G7), which continues to meet to this very day, functioning as “an informal Western directorate,” as the New York Times described it in 1975. The ministers and central bankers of the G5 would continue to function as the primary forum for economic coordination until the mid-1980s, when the G7 ministers and central bank governors would officially replace it.
The financial and corporate power that was concentrated in the G-7 nations began to expand across the world, and so too did major economic, financial and debt crises. The powerful nations would then have to come to the rescue of their own banks by providing bailouts for foreign nations who owed the banks money and were too poor to pay. In return for financial ‘aid’, largely channeled through the IMF, the Group of Seven nations would demand strict conditions to be met, including sweeping changes to the economic, political and social structure of the nation getting the bailout. Their economies would be forced to reform to the ‘market system’, benefitting domestic oligarchs and elites, as well as large banks and corporations in the G-7 nations. A financial or debt crisis would manifest as a form of financial warfare, while the bailout programs would function as economic occupations designed to advance the interests of the Empire.
From the early 1980s to the early 2000s, these debt crises spread from Latin America to Africa, Eastern Europe, East Asia, Russia and back to Latin America. The International Monetary Fund functioned like an imperial management facility, controlling entire nations and regions like an occupying power. As early as 1977, the U.S. Treasury Secretary, Michael Blumenthal, wrote to President Jimmy Carter discussing the importance of the IMF, while acknowledging that many nations of the world were complaining about the harsh conditions attached to IMF loans. Blumenthal wrote, “The IMF for years served as a kind of whipping boy,” noting that countries that were in crisis and needed to take drastic measures to solve their financial situations (usually in the form of painful austerity measures) would “often need an external source to blame. The IMF is an ideal candidate and is accustomed to being in that position.” Further, he wrote, “If we didn’t have the IMF, 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, which “helps explain why it has long been demonized as an all-powerful, behind-the-scenes puppeteer for the third world,” in the words of 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,” which “works through a system of indirect rule that has involved the integration of leaders of developing countries into the network of the new ruling class.” When Russia was invited to these special meetings, they would be known as the Group of Eight (G-8), but the G-7 still served as the core of global governance.
In the late 1990s, a new committee was formed, known as the Group of Twenty (G-20), which consisted of the finance ministers and central bankers of the G-7 nations, the European Union and twelve major “emerging market” economies: Russia, China, India, Brazil, Mexico, Indonesia, Argentina, South Africa, Saudi Arabia, Turkey, Australia and South Korea. It would not be until the global financial crisis of 2008 that the G-20 would meet at the level of heads of state, when it held its first meeting in Washington, D.C. on November 15. By September of 2009, the G20 had effectively become “the new global economic coordinator” and “steering committee” for the world economy. From 2011 onwards, the G7 would only meet “informally,” with the G20 finance ministers and central bankers gathering prior to the IMF and World Bank spring and annual meetings in order to coordinate strategy and policies.
Despite the dry and uninspiring names of the groupings, the reality is that they function as conclaves of empire, where ministers and governors align in their respective cliques – such as advanced versus emerging market economies – and pursue their individual national and collective interests. The emerging market economies push for greater representation and authority in international organizations such as the IMF, attempting to increase their own power within the apparatus of global governance and empire. Power struggles and financial warfare between nations are left to behind-the-scenes negotiations and discussions, kept largely out of the public eye.
In 2010, the then-chairman of the International Monetary and Financial Committee (formerly the Interim Committee of the IMF) was Youssef Boutros-Ghali, the finance minister of the Egyptian dictatorship, widely respected in financial circles, though much hated among Egyptians as a representation of the dictatorship’s extreme corruption. That year, a currency war had erupted between the rich nations and the emerging market economies, in which countries like China and Brazil were seeking to make their currencies more competitive than Western currencies, thus making their exports cheaper and more attractive. Financial diplomats began to fret about the potential implications of the currency warfare. The issue was to be taken up at the IMFC meeting, though Boutros-Ghali stressed that the subject “will not be on the public agenda” during the IMF meetings. “These are issues that you solve in closed rooms,” he said, and needed “to be handled quietly and in a spirit of cooperation.” Such important issues were not for public discussion, as it could frighten markets and accidentally reveal to the public the true nature of the global economic system. Instead, Boutros-Ghali explained, “It is something that needs quiet discussions, quiet diplomacy to get things moving.”
The “quiet diplomacy” of “closed room” meetings of finance ministers and central bankers is one of the defining characteristics of the modern imperial system. There is no better example of this system today than that of the European Union and its debt crisis, which began in 2010.
Europe Under Empire
One of the most important institutions in Europe is called the ‘Eurogroup’, consisting of the finance ministers of the 19 nations that use the euro as their common currency within the 28-nation European Union. From the time that Europe’s debt crisis began in early 2010, the Eurogroup would hold meetings at least once a month, with top officials from the IMF, the European Commission (the executive body of the EU) and the European Central Bank (ECB) also participating. The Eurogroup was presided over by a president, Jean-Claude Juncker, who also served as the Prime Minister and Finance Minister of Luxembourg.
The Eurogroup functions as a type of board of directors for the eurozone economies, meeting behind closed doors at various locations across Europe where they negotiate and attempt to establish a consensus in managing the debt crisis, forcing countries in crisis (such as Greece, Ireland, Portugal, Italy and Spain) to impose austerity measures, cutting social spending and increasing unemployment and poverty for the benefit of banks and financial markets. The future of the European Union and its 500 million citizens is decided in these “secret meetings” of finance ministers, central bankers and transnational technocrats.
In April of 2011, Jean-Claude Juncker was speaking at a conference of European elites when he said, “Monetary policy is a serious issue. We should discuss this in secret, in the Eurogroup.” Juncker explained that throughout his more than two decades as prime minister of Luxembourg, making him the longest-sitting head of state in the E.U. at the time, he often “had to lie” in order to prevent financial markets from panicking. Just as monetary policy had long been discussed and decided in secret meetings of central bankers, Juncker felt that all major economic decisions should be discussed and agreed upon in the same way. “I’m ready to be insulted as being insufficiently democratic, but I want to be serious,” he explained, “I am for secret, dark debates.” The following month, he lived up to his reputation and became the target of criticism after he lied to the press about a secret meeting of the Eurogroup that was taking place in a Luxembourg castle to discuss a second possible bailout for Greece.
Presented to the public as an essentially economic issue, Europe’s debt crisis is discussed and debated through the use of financial rhetoric and terminology in all its bland and vague varieties: fiscal discipline, structural reform, austerity, labour flexibility, budget and trade deficits, external imbalances, internal adjustments, strict conditionality and deficit reduction strategies. Many of these terms are interchangeable, and while they all provide the appearance of technical expertise and understanding, they have profoundly important meanings and implications.
For example, the main policy pushed on countries in crisis is to demand that they cut all forms of social spending, including health care, education, welfare, social services, firing large amounts of public-sector workers, dismantling government programs and policies which benefit the majority of the population, creating mass unemployment and poverty. This systematic impoverishment of the population is a brutal process that results in mass misery, increased suffering, hunger, disease, skyrocketing suicide rates and social devastation. To describe this process in these terms, however, would be to prevent the policies from ever being implemented. Instead, these policies and programs are described with the following terms: austerity, fiscal discipline, fiscal adjustment, belt-tightening, deficit reduction, balancing the books, and budget consolidation.
The brutality of the European and global economic empires remains hidden behind these bland terms. But the truth is revealed in the countries and on the streets of those nations most affected by the debt crisis, in Greece and Spain, Italy, Ireland and Portugal. Unemployment has soared, particularly among youth, of whom more than 50 percent remained unemployed in Greece and Spain by 2015. Poverty and suffering under the E.U.’s economic colonization programs have prompted social unrest, resistance, riots and rebellions, new social movements, anti-austerity political parties and even the rapid rise of fascism. Germany dominates Europe and its major institutions, as the largest economy on the continent, second-largest exporter in the world after China, and fourth largest economy in the world as a whole (following the U.S., China and Japan). Its economic weight makes it the most powerful nation influencing and directing the apparatus of the European Union, including the European Commission, the European Central Bank and the Eurogroup, with significant influence (especially alongside other rich EU nations) in the IMF and Bank for International Settlements (BIS).
Germany leads a bloc of rich nations within the European Union who are the strongest advocates of “fiscal discipline” and “austerity,” among them the Netherlands, Finland, Luxembourg and Austria, generally referred to as the northern bloc or creditor countries. France, the second-largest economy in the European Union, generally leads a bloc consisting of the ‘southern’ nations, the debtor nations. The rich countries provide the majority of funding to the E.U.’s institutions, and thus wield the greatest influence.
Germany and France were the two most influential countries in constructing the European Union over the course of the previous six decades, with consistent cooperation and support among the Benelux countries (Belgium, Netherlands, Luxembourg), and occasionally the United Kingdom, though its influence has dramatically decreased in recent years. As a result of this process, the rules that were written were done so in such a way as to benefit this ‘core’ group of nations more than any others. Despite the fact that there are 28 nations in the European Union, the collective weight of a core group consisting of a handful of rich nations is able to direct the process of integration and force the other member nations to change their policies and transform their societies.
As financial markets began to punish countries for having high debt levels, plunging them into crisis, the European Union, its key institutions and leaders began to mobilize to provide large ‘bailouts’ to these countries. Big banks, most notably those based in Germany and France, had lent large amounts of money to several nations, including Greece, and wanted their interest payments to be made on time. The banking systems in the rich countries were thus under threat of potentially facing the consequences of their own bad loans. To prevent the banks from having to suffer, the rich nations agreed to establish bailout programs which would be managed by the European Commission, the European Central Bank and the International Monetary Fund (IMF). These three institutions, collectively known as the Troika, would provide the money for the bailouts and in turn would set the conditions demanded by the core nations for the bailout countries to implement, namely, austerity and impoverishment. The Troika institutions are entirely unaccountable to voters and publics, representing unelected and anti-democratic technocratic tyrannies, yet they wield unprecedented power over entire populations and societies.
The European Commission functions as the executive branch of the E.U., writing legislation and managing roughly two dozen governmental cabinet departments, headed by individual Commissioners, the most influential and important of which is the Commissioner for Economic and Monetary Affairs. For much of the debt crisis, this individual was Olli Rehn, a Finnish politician who served in that position from 2009 to 2014. Coming from Finland, Rehn was closely aligned with the core group of rich nations and was among the strongest individual proponents of austerity throughout the crisis. The Commission itself was presided over by a President, personified in the former Portuguese Prime Minister, José Manuel Barroso, who served in the role from 2004 to 2014.
The European Central Bank (ECB) manages the monetary policy for the 19 member nations of the eurozone who share a common currency. The ECB is run by a president, a role held from 2003 to 2011 by a Frenchman, Jean-Claude Trichet, a former governor of France’s central bank, the Banque du France. From late 2011 on, the role of president was held by an Italian, Mario Draghi, previously the governor of the Bank of Italy. The ECB is further managed by an Executive Board, consisting of the president, vice president and four other members appointed from different EU countries. In addition, the ECB has a Governing Council made up of the governors of the national central banks of the eurozone economies, collectively comprising what is called the Eurosystem. The German Bundesbank and its president is the most powerful individual central bank in the ECB, often allied with its Dutch, Finnish and Austrian counterparts. Both the Executive Board and Governing Board are responsible for making the major decisions in the central bank’s policies and play a highly influential role in managing the European debt crisis, especially in crisis-hit countries.
Technically speaking, the ECB is an independent institution, meaning that it is given political independence from the nation states of the European Union, serving its mandate as a technocratic institution interested only in a stable monetary policy, free of interference from political leaders. The core countries of the EU, however, wield significant influence on the ECB, and not only through their appointments to the Executive Board and their respective national central banks, but in behind-the-scenes negotiations and secret meetings. As the heads of state of the core eurozone nations frequently formed an allied bloc in their negotiations and management of the European debt crisis, these blocs were reflected inside the ECB and other EU institutions, and Germany remained the most influential of all.
The behind-the-scenes power politics between nations was also reflected in the Eurogroup of finance ministers, where Germany and France would have to negotiate an agreement, with Germany leading the group of countries demanding harsh measures, alongside the Netherlands and Finland. This has allowed Germany, the Netherlands and Finland to have some of the most influential finance ministers in managing the entire process and policies of reform and deeper integration in the European Union. Many of these policies and programs are agreed through the “secret, dark debates” of the Eurogroup meetings, to borrow Jean-Claude Juncker’s phrase.
The German Finance Ministry is located in Berlin, housed in a Nazi-era building which previously served as the headquarters for the Nazi air force, the Luftwaffe, from which Hitler’s second-in-command, Herman Goering, plotted the bombing campaigns across Europe. Today, the same building serves as the main center for managing Germany’s economic empire in the EU and the Troika occupations of crisis countries. The building “is a monument to both the Nazis’ ambition and their taste,” noted Vanity Fair, though the statues of eagles sitting atop large swastikas have been removed.
In late 2011, Europe’s debt crisis was reaching new heights, with financial markets waging a vicious assault against Greece and Italy for their failure to impose brutal austerity measures on their populations. It was at the Old Opera House in Frankfurt, Germany, where a farewell party was being held for Jean-Claude Trichet, president of the ECB, resigning from his post at the end of the month (to be replaced by Mario Draghi). Nearly all of Europe’s key policymakers were present at the party, but as the crisis escalated, a small group of top officials held an “explosive” behind-the-scenes meeting to try to come to an agreement on forming a response. Nicolas Sarkozy squared off against Trichet, with German Chancellor Angela Merkel coming to the central banker’s side. But the real significance of the meeting was that it established the formation of a small ad hoc group of eight individuals at the top of the EU’s power structure who would be able to collectively steer the course of Europe.
They called themselves the ‘Frankfurt Group’, though the media dubbed them Europe’s new ‘Politburo’, reflecting the similar functions of China’s top ruling body. The group consisted of the German Chancellor, French President, the head of the ECB, the President of the European Commission, José Manuel Barroso, the Commissioner for Economic and Monetary Affairs, Olli Rehn, the President of the Eurogroup of finance ministers, Jean-Claude Juncker, the President of the European Council, Herman Van Rompuy, and the Managing Director of the IMF, former French finance minister Christine Lagarde.
Within the following three weeks, the Frankfurt Group would orchestrate coup d’états in both Greece and Italy, removing democratically-elected prime ministers and political parties from power, replacing them with economists and central bankers, technocratic tyrants whose sole purpose was to impose the brutal austerity measures demanded by banks and financial markets. One of the key battlegrounds in the war waged by the Frankfurt Group was in the lead-up to and during the G20 summit of leaders and ministers at Cannes, France in early November of 2011.
Less than a week before the G20 summit, Greece’s prime minister, George Papandreou, surprised members of his own cabinet and infuriated Europe’s rulers when he decided to hold a referendum asking Greek citizens if they were willing to follow the conditions set by the bailout agreement with the Troika. Sarkozy went “ballistic” and summoned Papandreou to Cannes for a meeting with several officials of the Frankfurt Group in order “to put Papandreou against the wall, in the corner,” in the words of one person present at the meeting. Over the following weeks, the Group would orchestrate the removal of Papandreou from power, replacing him with Lucas Papademos, the former Vice President of the European Central Bank from 2002 to 2010, prior to which he was the governor of the central bank of Greece from 1994, simultaneously sitting as a member of the ECB’s governing council from its creation in 1998 until 2002. European Commission President José Manuel Barroso had played a central role in removing Papandreou from power, operating secretly from hotel rooms with his close aides and without the knowledge of Merkel or Sarkozy.
When the world’s major leaders headed to Cannes in early November for the G20 summit, President Obama was given an inside look into the inner workings of European power politics, even attending a meeting of the Frankfurt Group. The European debt crisis took international headlines and was the main topic of discussion at the summit. The Obama administration, with Timothy Geithner as Treasury Secretary, had for months been working quietly through financial diplomacy to encourage a more comprehensive solution to Europe’s crisis, attempting to balance the interests of global financial markets with those of Germany. Obama told Chancellor Merkel and other leaders, “Our preference is that the ECB should act a bit like the Federal Reserve did,” referring to its role in acting as a “lender of last resort,” providing funds for states or banks that needed quick cash to avoid a crisis.
The ECB’s legal mandate reflected that of its major national backer, the German Bundesbank, the chief architect and prototype of the ECB structure. Holding a far more conservative and ‘hawkish’ approach to monetary policy than most of the world’s other central banks, the mandate stressed that the central bank was not allowed to finance governments, and so instead of acting quickly to bailout governments in need, financial markets wage war against nations in need of funds while EU leaders squabble and negotiate the details of programs that require the countries to restructure their entire societies. The longer the negotiations drag out, the more vicious the assault of financial markets will be. This exacerbates the crisis and weakens the negotiating position of the crisis country, allowing the powerful countries to extract more concessions and impose more demands.
Central bankers frequently refer to the term and concept of “creative destruction,” referring to the role that financial crises play in providing the needed pressure on countries to change their policies and restructure their societies, following the orders of central bankers, finance ministers and other technocrats. Andrew Crockett was the former head of the Bank for International Settlements (BIS), the central bank to the world’s central banks, who was one of the most respected international monetary diplomats of his era. Crockett described “creative destruction” as a process of financial instability that “is not only inevitable but also positive.” It forces various governing and social systems “to change and adapt,” destroying old and creating new institutions and structures. This process “has to be allowed to work.” Former Federal Reserve Chairman Alan Greenspan referred to creative destruction as the “partner” of “free-market competition,” noting that where markets go, crises follow.
As financial markets creatively destroyed European countries, the Frankfurt Group held four meetings on the sidelines of the G20 summit in Cannes, with its eight ‘Politburo’ members wearing badges marked ‘Groupe de Francfort’. Obama was invited to one of the meetings where he received a “crash course” in Europe’s ruling structures and processes. One participant in the meeting referred to the American president as “a quick learner.” Obama continued to meet with other European leaders assembled at Cannes, attempting to help forge a response to the crisis. At one point, he pulled Angela Merkel aside just prior to a G20 working session and said, “I guess you guys have to be creative here.”
And they got creative with Italy’s Prime Minister, Silvio Berlusconi, the billionaire media oligarch who was long a thorn in the side of EU leaders, consistently failing to impose the austerity measures demanded by Brussels, Frankfurt and Berlin. Chancellor Merkel had been quietly working behind the scenes for weeks to remove Berlusconi from power. On November 12, Berlusconi was forced to resign and his replacement was Mario Monti, an economist and former European Commissioner. Monti was also a founder and honorary chairman of Bruegel, a Brussels-based international economic think tank. He served on advisory boards to Coca-Cola and Goldman Sachs, was a former Steering Committee member of the Bilderberg Group, and at the time of his appointment as Prime Minister, he was serving as the European Chairman of the Trilateral Commission, the transnational think tank founded by David Rockefeller in 1973. Lucas Papademos, the technocratic prime minister of Greece, was also drawn from among the membership of the Trilateral Commission.
It no doubt helped matters that Mario Monti was “an old family friend” of the Agnelli family, whose young patriarch, John Elkann, was also a Trilateral Commission member. Monti even served on the board of Fiat for some time. After Monti assumed his position as Prime Minister of Italy, he would meet regularly with John Elkann, who lobbied on behalf of Italian industry to promote reforms that benefit large companies. Six months into his technocratic government, John Elkann said that there was “no doubt that Monti becoming prime minister has been positive for Italy.”
Following the Frankfurt Group’s two coups, the Wall Street Journal praised the moves as “exactly the kind of game-changing display of political power euro-zone leaders have promised but failed to deliver since the start of the crisis,” adding that it was “sure to be greeted with similar jubilation in the market.” The “self-appointed Frankfurt Group,” however, lacked legitimacy and was representative of a “democratic deficit” in the European Union. The Financial Times referred to technocrats as “efficient, calculating machines” who might “lack a democratic mandate but they’re fantastically well-regarded in Frankfurt.” The job of the “brilliant but bloodless functionaries” was to push through “unpopular measures” without concern for citizens.
The New York Times referred to the technocratic coups as “the cold reality of 21st-century politics,” in which Greek and Italian citizens “have just watched democratically elected governments toppled by pressure from financiers, European Union bureaucrats and foreign heads of state.” Democracy and national sovereignty might be pleasant concepts, but when it comes to a crisis, “it’s the technocrats who really get to call the shots,” with stability for the euro and the European Union pursued “at the expense of democracy.” Real power in the European Union “would pass permanently to the forces represented by the so-called Frankfurt Group.”
Roger Altman is the chairman of Evercore Partners, a major U.S. investment bank, and a former top U.S. Treasury Department official during the Clinton administration, having served a long career between Wall Street and Washington. Altman also happens to be a member of the Steering Committee of the Bilderberg meetings, as well as writing regular columns in the financial press. In December of 2011, Altman reflected on the events of previous months in an article for the Financial Times, concluding that financial markets were “acting like a global supra-government” which is able to “oust entrenched regimes where normal political processes could not do so,” and “force austerity, banking bail-outs and other major policy changes.”
Their influence “dwarfs” that of institutions like the IMF, and apart from “unusable nuclear weapons,” financial markets “have become the most powerful force on earth.” When their power is “flexed,” he wrote, “the immediate impact on society can be painful,” with growing unemployment and the collapse of governments. Whether the power of financial markets was “healthy” for the world was not important, he suggested, but their power “is permanent.” Altman concluded, “above all, there is no stopping the new policing role of the financial markets. There may be more frequent market crises. We should not rush to conclude that they will end in tears.” At least, not in tears for those who run large banks.
Financial markets, technocrats, central bankers, finance ministers and the top political leaders of the dominant nations have wreaked havoc on Europe. The process of economic colonization of the ‘periphery’ nations of the E.U. has advanced year after year. Nations were repeatedly put under Troika occupation, with policies dictated by technocrats and politicians in Brussels, Frankfurt, Berlin, Paris and Washington. The policies create mass suffering as austerity destroys the countries, impoverishes their populations, while the various ‘structural reforms’ open up the economy to be plundered cheaply by foreign banks and corporations. Commentators in the press, however, began to increasingly warn about Europe’s “democratic deficit” and its crisis of legitimacy in the eyes of its 500 million citizens.
One of the world’s largest banks, JPMorgan Chase, published a report on Europe’s debt crisis in May of 2013, stating that the process of “adjustment” in the eurozone was “about halfway done on average,” and warning that austerity would need to continue “for a very extended period” and that leaders would need to deal with “deep seated” political problems. The bank identified what it viewed as the main problems, embedded in the constitutions and political systems of many of the countries in crisis, including the “constitutional protection of labor rights” and “the right to protest if unwelcome changes are made to the political status quo.”
There was, of course, a reason why the EU’s technocratic, political and financial elite were growing increasingly worried about “democratic legitimacy” and people exercising “the right to protest.” The citizens of Europe, especially the ‘periphery’ nations under various forms of Troika and financial market pressure, had been increasingly involved in social unrest, protests, urban rebellions and the emergence of new, populist, anti-austerity and increasingly revolutionary movements. These processes were not confined to Europe, however, as resistance movements were taking place with increased frequency and ferocity around the world in the wake of the global financial crisis.
The Age of Rage
It was in late 2010 and early 2011 that the world witnessed the start of a new phase of global uprisings, with the Arab Spring erupting and spreading across much of the Middle East and North Africa, leading to the removal of long-time U.S. and European-supported dictators in Tunisia, Egypt, and Yemen, with protests spreading across many more nations, upsetting the established order. The Saudis, along with the other Gulf Arab dynastic dictatorships, led the counter-revolution against the move to democracy, spreading violence, chaos and civil war from Libya to Syria, Iraq, Yemen, and beyond.
In the European Union, the year 2011 also turned out to be a very dramatic one in terms of protests, social unrest and anti-austerity movements. Protests of tens of thousands in Greece would erupt in violent confrontations with the police, as a new anti-austerity movement began spreading across the country, going by the name, ‘I Won’t Pay’ (for someone else’s crisis). As Portugal was strong-armed into a bailout program, the “desperate generation” of youth, inspired by the Arab Spring protests, sparked a new social movement organized via social media, struggling against the “wasted aspirations of a whole generation,” with more than 30 percent of youth unemployed across the country. Even Brussels experienced instances of riot police turning water cannons and tear gas on protesters who were opposing the E.U.’s policies and increased powers.
The protests in Portugal in turn inspired a new protest movement in Spain, where thousands of youth occupied the Puerto del Sol square in Madrid in opposition to the main political parties and austerity. Known as the ‘Indignados’ (the indignant ones), the movement spread across much of the country as unemployment among youth soared to 45 percent. The Guardian noted that, “a youth-led rebellion is spreading across southern Europe.” Thousands of protesters turned up to voice their opposition to the Group of 8 (G-7 plus Russia) summit in May of 2011. At the end of that month, tens of thousands of protesters took to the streets across Europe, from Spain to Germany, France, Greece, Portugal and beyond, answering the call for a “European Revolution” in over one hundred cities across the continent. Spain’s Indignados paved the way for similar movements to be replicated in several other countries, notably including Greece.
In the pages of the Financial Times, Gideon Rachman wrote that “2011 is turning into the year of global indignation,” from the Arab world, to Europe, India, China, Chile and even Israel. “Many of the countries hit by unrest,” he noted, “have explicitly accepted rising inequality as a price worth paying for rapid economic growth.” Protests and social unrest spread across Europe throughout the summer, particularly in Greece and Italy. In September, a protest following the examples set in the Arab world and Europe began in New York City, starting what would later be known as the Occupy Wall Street Movement. The occupation continued through the month, facing increased police repression countered with growing numbers of supporters. At the same time, Greece was facing growing domestic unrest as the Troika auditors were in Athens pressuring the government to meet ‘reform’ targets.
By October of 2011, thousands were on the streets in Portugal, over 700 Occupy Wall Street protesters were arrested on the Brooklyn Bridge, and the Occupy Movement began spreading across the United States to dozens of other cities. Tens of thousands of protesters continued to take to the streets of Athens, where they were met with the oppressive state apparatus in the form of riot police tear gassing Greek citizens. In mid-October, Occupy Wall Street had become international, igniting Occupy protests and encampments across Europe and Canada. On a global day of protest on October 15, there were demonstrations in roughly 951 different cities across 87 different countries. Roughly 150,000 people marched in Rome, thousands marched toward Angela Merkel’s Chancellery office in Berlin, with several thousand more marching on the European Central Bank headquarters in Frankfurt, as Germany experienced protests bringing out roughly 40,000 people in 50 different cities. The German Finance Minister, Wolfgang Schauble, told the media that he was taking the protests “very seriously.”
The Financial Times noted that protesters were “united in their loathing of bankers on both sides of the Atlantic,” and despite their different circumstances, they “find common ground in their outrage at the lack of economic opportunities and their alienation from mainstream politics.” The editorial warned politicians not to ignore the protests, as “failure to address these concerns would risk reinforcing the protesters’ sense of disengagement, transforming their alienation into a dangerous self-fulfilling prophecy.” The demands of most protesters were not “yet a rejection of capitalism,” many were simply expressing that they wanted “a more equitable share” in the benefits of the system. “It is therefore in everyone’s interest,” noted the editorial, “that their energy be directed into making capitalism work better rather than overturning it.”
Martin Wolf in the Financial Times suggested that protesters were “raising some big questions,” but “for this to be the beginning of a new leftwing politics” there must be the emergence of “a credible new ideology.” In discussing the issue of inequality which was raised by the protests, Wolf wrote that while it would be “impossible to define an acceptable level of inequality,” it is ultimately “corrosive if those with wealth are believed to have rigged the game rather than won in honest competition.” Thus, with growing inequality, “the sense that we are equal as citizens weakens” while “democracy is sold to the highest bidder.” Wolf concluded: “The left does not know how to replace the market. But pro-marketeers still need to take the protests seriously. All is not well.”
An Empire Under Threat
In 2012, Dominic Barton, the CEO of McKinsey & Company, the world’s largest consulting firm, wrote and published a small essay entitled, “Capitalism for the Long-Term”. Barton described the world since the global financial crisis began three years earlier, in which dramatic changes in power were taking place between the West and East (with the growth of Asia and the emerging market economies), as “a rise in populist politics and social stresses” combined with “significant strains on global governance systems.” These combinations would likely result in “increased geopolitical rivalries”, “security challenges”, and other “rising tensions.” The most important consequence of the crisis for the corporate oligarchy, however, was “the challenge to capitalism itself.” Barton noted that the crisis had “exacerbated the friction between business and society,” forcing leaders to confront “rising income inequality” and “understandable anger over high unemployment” as well as “a host of other issues.”
A March 2013 report by the large Swiss bank, UBS, referred to social unrest as “a systemic phenomenon” which “is highly uncertain, complex and ambiguous,” warning that “it is highly likely to generate ripple effects into other sectors of the economy and society, possibly leading to the toppling of governments, or even political systems.” A July 2013 report from the French insurance giant, AXA, reflected on protests and urban rebellions erupting in what were previously considered ‘stable’ emerging market nations, such as Turkey and Brazil. AXA’s Investment Managers report noted that many emerging market nations were “currently experiencing a surge in political risk due to social unrest,” the main cause of which “is the rise of the middle class in these countries.”
The World Economic Forum published its report on Global Risks in 2014 just in time for its annual meeting, having prepared the report in collaboration large insurance giants and prestigious universities. The report noted that “the generation coming of age in the 2010s faces high unemployment and precarious job situations, hampering their efforts to build a future and raising the risk of social unrest.” In general, it wrote, “the mentality of this generation is realistic, adaptive and versatile,” and while they are “full of ambition to make the world a better place,” they feel “disconnected from traditional politics and government.”
The report cited a recent global opinion survey of youth which noted that young people “think independently” of past generations, and that this “points to a wider distrust of authorities and institutions.” Having witnessed the response of governments in the wake of the financial crisis, as well as the NSA Internet spying scandals, youth populations are increasingly alienated from authorities. “Anti-austerity movements and other protests give voice to an increasing distrust in current socio-economic and political systems,” said the report, as youth populations accounted for an “important” segment of the population which expressed their “general disappointment” with both “regional and global governance bodies such as the EU and the [IMF].” The report noted that the “digital revolution” had provided youth around the world with “unprecedented access to knowledge and information worldwide,” allowing them “to build abstract networks addressing single issues and place less importance on traditionally organized political parties and leadership.” This youth population represented a “lost generation” who could fuel social unrest, “vulnerable to being sucked into criminal or extremist movements.”
The global Mafiocracy was so concerned with growing unrest, protests and the potential for revolution, that the Rothschild banking dynasty itself organized a special conference on the subject. Hosted by Lady Lynn Forester de Rothschild, wife of Sir Evelyn de Rothschild, the ‘Conference on Inclusive Capitalism’ was held in the very exclusive Mansion House in London’s financial district, closed to the public and press. The May 2014 conference was exclusively for the world’s super-rich oligarchs, institutions and dynasties. Some 250 individuals were invited, collectively responsible for managing more than $30 trillion in assets, accounting for roughly one-third of the world’s investable wealth located in one room. As NPR noted, “If money is power, then this is the most powerful group of people ever to focus on income inequality.”
Among the speakers at the Conference were Prince Charles; former President Bill Clinton (a close friend of Jacob and Lynn de Rothschild); Christine Lagarde, the managing director of the IMF; Mark Carney, the Governor of the Bank of England and a top international central banking official; Lionel Barber, an editor at the Financial Times; Dominic Barton of McKinsey & Co., as well as top executives from Honeywell, UBS, BlackRock, The Dow Chemical Company, Unilever, Google, GlaxoSmithKline and Prudential.
“Now is the time to be famous or fortunate,” said the central banker Mark Carney. He told the assembled members of the Mafiocracy, “just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself.” In other words, the capitalist system was eating itself. “Capitalism loses its sense of moderation,” said Carney, “when the belief in the power of markets enters the realm of faith.” This kind of religious “radicalism came to dominate economic ideas and became a pattern of social behaviour,” and in the decades leading up to the global financial crisis, “we moved from a market economy to a market society.”
Christine Lagarde, the managing director of the IMF, began her speech by discussing Karl Marx, “who predicted that capitalism, in its excesses, carried the seeds of its own destruction,” as “the accumulation of capital in the hands of a few” would lead “to major conflicts, and cyclical crises.” Lagarde warned that capitalism has increasingly “been associated with high unemployment, rising social tensions, and growing political disillusion.” Among the “main casualties,” she said, “has been trust – in leaders, in institutions, in the free-market system itself,” citing a recent poll which revealed that only one in five people “believed that government or business leaders would tell the truth on an important issue.” This, she explained, “is a wakeup call,” adding, “in a world that is more networked than ever, trust is harder to earn and easier to lose.”
As the global Mafiocracy grows increasingly worried about the potential revolutionary implications of the “lost generation” of youth around the world, struggling to make their parasitic planetary system of Empire legitimate in the eyes of the citizens of the world, the youth are left behind, already written off as “lost.” Youth and young adults are better educated and have more access to information and communication than ever before in human history, yet their prospects for jobs, social elevation and opportunities appear increasingly grim and uneasy. Frustrated and furious youth have been the leading force behind the resistance movements, riots, rebellions and revolutions that have spread across much of the world in the wake of the global financial crisis, from Eastern Europe to the Middle East and North Africa, the European Union, to the streets of Ferguson and Baltimore in the United States.
Western ‘democratic’ society is becoming increasingly closed. It is evolving into a high-tech police and surveillance state. The United States government continues to wage a race war against the minority black population who are treated as an internally colonized population, with high rates of police repression and imprisonment. The political system is visibly ruled by parasites, with all the pomposity of the Roman Senate. The plutocrats have lavish and distant lives, segregated in their obscene wealth and unseen influence. The middle class is a debt-slave class, fueling consumption through credit, now in the slow and painful process of being exsanguinated of their economic vitality and opportunities. Some will rise to the higher ranks, but the rest will be pushed down to where the poor have always been. Increasingly, much larger segments of the American population will find themselves in similar circumstances as their fellow black, Hispanic, Indigenous and immigrant neighbours.
In this environment, the United States still sits at the center of global monetary, financial, economic and corporate power. The U.S. dollar remains the world’s reserve currency, and the country is still the largest economy. Through the process of integrating the increasingly rich and powerful nations of Latin America, the Middle East and Asia into the Empire of Economics, the stakes have become higher and the challenges greater, as the U.S. seeks to maintain its dominant position, and thus its ability to shape the changing global order. With many new players in the game of global power politics, there are more negotiations, consultations, forums for cooperation and frequent confrontations. As the United States and Europe increasingly aggravate Russia by expanding their empire to its border, the threat for economic competition to break out into actual warfare grows.
The human species is in a deeply precarious situation. As the Empire of Economics increasingly benefits the comparatively small global Mafiocracy at the expense of most of the world’s remaining 7 billion people, the economic and military structures of global empire are rapidly accelerating their devastation of the natural environment and ecosystem upon which all life on the planet depends. Human beings are confronted with a profound question: As we soar forward on our current path toward increased poverty, exploitation and environmental destruction, at what point do we begin to more directly question the legitimacy of the existing global system which determines the fate and direction of the species? As we face the increasing possibility of a mass extinction of our species over the coming century, as the democratic facades of modern society crumble and high-tech totalitarian police states rise in their place, there has perhaps never been a time in history where it was more essential for the people of the world to begin to create alternatives to the existing global system.
The concept of a truly global, transformative revolution in the organization of human society, power relations and purpose must be contemplated in a more serious, deliberate effort. This book hopes to encourage this discussion through an expanded understanding of the realities of global power politics, the ruling Mafiocracy and the Empire of Economics. A genuine global revolution is an absolute necessity. But far from promoting a mere ideological or philosophical alternative, this text hopes to encourage a more pragmatic approach to organizing resistance both outside and within the existing global order and its various institutions.
A dual strategy is required in operating outside the global hierarchy, experimenting with creative alternatives constructed from the bottom-up, while simultaneously playing the game of power politics to directly challenge the Empire of Economics in its own arena. Instead of dividing these efforts between those who advocate for revolutionary alternatives and those who encourage reformist initiatives, a more coherent and organized strategy should be invoked, establishing alternative forums, organizations and avenues of cooperation between revolutionaries and reformers. This serves multiple purposes, as it would allow for revolutionary movements to maintain contact and provide direction to reformers and new political parties, instead of leaving them to engage only with the existing power structures, thus increasing the chances that they may be co-opted by the Empire and undermine the efforts of revolutionary groups. Instead, revolutionary movements would be encouraged to co-opt and even control the direction and efforts of reformist groups and political parties.
Strategic thinking and planning should become commonplace among revolutionary movements and efforts. Debate, discussion, coordination and creative construction among opposition groups must increasingly come to replace division, derision, co-optation and ‘creative destruction’. For this to emerge, the initiative must be taken by revolutionary groups to create the organizations and opportunities to engage with each other and reformist groups, to create a space for cooperation and provide the impetus for strategic direction. Just as the Mafiocracy has created forums and institutions through which they engage and influence policy-makers, educational and media structures, so too must revolutionary groups form parallel systems with similar functions, but opposing objectives.
This task can effectively be pursued by the “lost generation” of global youth who can become capable of finding their own way, charting their own path, imagining and creating their own world. It could be a world in which the human species has a higher purpose beyond that of contributing to “economic growth,” with greater prospects beyond that of probable extinction. Nothing less than everything we have and everyone we know is at stake.
What is frightfully clear is that the Empire of Economics does not serve the collective interests of humanity and the planetary system upon which life depends. We must do this ourselves, individually and collectively. The worst that could happen is to try and fail, remaining where we currently stand. The best that could happen is nothing if not unknown and unforeseeable, but altogether possible, if we wish and work to make it so. The future may yet belong to the people of the world, but only if we empower ourselves in the present. So perhaps it is time to become properly acquainted with the unforgiving, brutal realities of power politics, empire and resistance.
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Voice of Access: The People’s Foundation
By: Andrew Gavin Marshall
Originally published in: The Spanda Journal, Vol. 5, No. 1, Innovation & Human Development, 2014, pages 69-80
The Voice of Access: The People’s Foundation is a new initiative to establish a counter-hegemonic foundation – built upon an understanding of the hegemonic foundations that have been so pivotal in the construction and maintenance of the present social order – to effectively challenge and help to make obsolete the existing social order. Through the formation of new educational, research and media initiatives and organizations, the construction and dissemination of knowledge, connecting people and ideas from activists, intellectuals and groups around the world, The People’s Foundation hopes to aid in the multi-generational struggle of constructing a new – and fair – world order, to help lay the foundation for a future worth striving towards.
‘Voice of Access: The People’s Foundation’ is an initiative of myself and three other friends and associates, forming it as a non-governmental organization to act as a facilitator – and, when possible – a patron of organizations, activists, knowledge and social movements that seek to challenge and change the world order under which humanity now lives and struggles. From our backgrounds in research, writing, publishing, media, computer science and technology, and our experience with non-governmental organization and think tanks, we are seeking to channel our efforts into the operations of an organization dedicated to facilitating and supporting the efforts of others around the world. While we hold opposing views and philosophies to those that pervade the hegemonic foundations, our understanding of them and their successes in shaping the present global order helps us focus on methods with which we can challenge and seek to change that order.
In discussing the ways in which ‘The People’s Foundation’ would seek to operate and work toward achieving its objectives, it would first be useful to briefly outline some of the ways in which the major dominant foundations have operated in working toward their own objectives. As a case in point, I will focus on the Rockefeller Foundation, founded in 1913 by John D. Rockefeller “to promote the well-being of mankind,” as its original mission statement postulated.
The Rockefeller Foundation: Social Engineering for Social Control
In the late 19th and early 20th centuries, the United States – and much of the industrializing world – was in the midst of profound transformation and turmoil. Successive economic crises created growing uncertainty among an increasingly distrustful middle class, as the rich ‘Robber Baron’ industrialists (Rockefeller chief among them) grew ever more rich and powerful. Social unrest by the poor, workers, immigrants and others was threatening the prevailing social order. Those who sat atop the social hierarchy – notably, the ‘Robber Barons’ themselves – grew increasingly nervous at the prospect of the threat of revolution from below, as well as the growing restlessness of the middle classes. Actions and initiatives needed to be taken to safeguard powerful financial, economic, political and social interests.
It was a time not only of economic and social crises, of growing unrest, revolutionary fervor and industrial and financial consolidation into huge concentrations of economic power, but, simultaneously, was also a period of increasingly expansionist and imperialistic foreign policies. These were most notably on the part of the United States, which was extending its hegemony throughout the Caribbean and Central America, and reaching across the Pacific, with the most noteworthy example being in the Philippines, and with growing interests in China and Japan.
Changes in technology and communication were facilitating the spread of more information to more people than ever before, and the concept of ‘the public’ – and specifically, how to manipulate the public – moved to the forefront of elite intellectual discussion. It was an era that gave birth to the modern university, the advertising and public relations industries, the consumer society, and the modern philanthropic foundations.
The foundation functioned – and continues to function – as an institution dedicated to the process of social engineering with the objective of social control. In short, the foundation’s purpose was to identify major issues and areas of contention in the existing social order, and to subsequently find methods of promoting ‘reform’ and changes so as to manage the process of adaptation, undermine radical efforts at transformation and promote more moderate forces, integrating them within the existing social hierarchy and order. The goal, ultimately, was to maintain the social hierarchy itself.
Foundations would achieve these objectives by acting as major patrons of universities and the social sciences, to seek to find ‘scientific’ solutions to social problems, which were seen as technical – not structural; channeling intellectual efforts into finding ways to reform and adapt the social order instead of opposing or challenging it; sponsoring research organizations and think tanks, which bring together prominent individuals from academia, politics, finance, industry and the media in an effort to promote consensus between society’s dominant institutions and those who run them; and providing funding to social movements and initiatives so as to gain significant financial leverage over the direction of social movements, increasing support for reform-oriented and legalistic approaches to resolving social issues, and thus undermining and ostracizing more radical alternatives.
Foundations sought to manufacture ideology and consensus between elites, to institutionalize these ideologies within the existing and evolving dominant social structures, and to ‘engineer the consent’ of the governed. Over the course of the 20th century, major foundations – with the Rockefeller Foundation being perhaps the most prominent – exerted an immense, if not largely unknown, influence on the development and evolution of the United States. By virtue of the United States being an outwardly expansive and imperialistic society, that influence extended to much of the world.
Early on in their development, the U.S. Congress investigated the major foundations with a wariness of the intentions and functions they established under their extremely powerful and wealthy ‘Robber Baron’ patrons. In 1914, the Walsh Commission was formed, noting that the establishment of the Rockefeller Foundation – among others – “was the beginning of an effort to perpetuate the present position of predatory wealth through the corruption of sources of public information” and that if these foundations were left unchecked, they would “be used as instruments to change the form of government of the U.S. at a future date, and there is even a hint that there is a fear of monarchy,” noting that many of the foundations represented the interests of powerful industrial and financial dynasties. In the final report of the Walsh Commission in 1916, it was concluded that foundations represented so “grave a menace” to society that “it would be desirable to recommend their abolition.” Obviously, this did not take place.
As anthropologist David Nugent documented, the development of the modern social sciences by Rockefeller and Carnegie foundations (and later, with other foundations joining) was directly linked to the expanding global interests of the United States in becoming an imperial power and in managing domestic unrest at home. Foundation boards consisted not only of the dominant industrial and financial interests, but also of prominent intellectuals and foreign policy figures, all of whom together were well aware of the effects that industrialization and imperialism were having on people at home and abroad, and sought to find new ‘scientific’ ways of managing these changes without undermining their own social positions. This required a very careful, incremental and adaptive approach to social engineering. As a top Rockefeller philanthropy official, Wicliffe Rose, wrote in 1923, “All important fields of activity… from the breeding of bees to the administration of an empire, call for an understanding of the spirit and technique of modern science,” which “determined the mental attitude of a people, affects the entire system of education, and carried with it the shaping of civilization.”
The Rockefeller Foundation sought to establish “institutional centers of social research” in key nations around the world, facilitating exchange and collaboration between these various institutions which would ultimately “serve as a model for the development of the social sciences generally.” The initial focus was in the United States and Europe, aiming – in the 1920s – to establish roughly 12-15 major centers of social science research, one of the most important of which was the London School of Economics. Through fellowship programs sponsored by foundations, students from around the world would be taken to schools in the United States where the foundation influence over the development of the social sciences had already become significant.
Edmund Day, who ran the Rockefeller Foundation’s Social Sciences Division, wrote in 1930 that the social sciences were to engage in “human engineering” and that, “the validation of the findings of social science must be through effective social control.” Over the following years, the Foundation increasingly looked to establish within the social sciences a greater emphasis on ‘International Relations’ as well as – in the wake of the stock market crash and the start of the Great Depression – a greater emphasis on “the planning and control of economic structures and economic process.”
Max Mason, the president of the Rockefeller Foundation, wrote in 1933 that the policies of the Foundation “were directed to the general problem of human behavior, with the aim of control through understanding,” noting specifically that the “social sciences, for example, will concern themselves with the rationalization of social control,” whereas the natural and medical sciences would be concerned with “personal understanding and personal control.” Control, it seemed, was always the ultimate objective.
Concurrent with the development of the social sciences and major universities in the United States and Europe, Rockefeller and Carnegie philanthropies, among others, sought to construct an ‘educational’ system for black Americans in the South, which was deemed so successful that it was exported to several British colonies as a means of exerting colonial domination over subject populations. Beginning with a series of conferences between Wall Street bankers and northern industrialists in the late 19th century, an educational system for southern black Americans was sought in such a way as to ensure that the hierarchy which slavery had established between races would remain relatively unchanged. As one conference participant put it at the time, “the white people are to be the leaders, to take the initiative, to have direct control in all matters pertaining to civilization and the highest interest of our beloved land.” Conference participants agreed, on the other hand, that “the negro” was “best fitted to perform the heavy labor in the Southern states,” as, it was suggested, “he will willingly fill the more menial positions, and do the heavy work, at less wages.”
These conferences concluded with the establishment of what was known as the ‘Tuskegee educational philosophy,’ agreed upon in 1901, where attendees agreed on the need to “train a Negro leadership cadre” as “a strong professional class,” requiring a strengthening of certain ‘Negro colleges’, while the majority of education for black Americans was to remain “vocational and agricultural in focus… to be directed toward increasing the labor value of his race.” In time, the major foundations became involved in this endeavor, and the Phelps-Stokes Fund in particular took up this objective with a great deal of fervor, establishing schools dedicated to training black men in vocational and agricultural trades and black women in “home economics.”
In 1917, the Phelps-Stokes Fund published a two-volume survey on Southern Negro education, in which they maintained that academic and literary education was “dysfunctional for the black man” because it would create unrealistic expectations for black Americans in a segregated society. It claimed furthermore that would not provide the skills deemed necessary to become a “productive” worker, and, ultimately, it would undermine white dominance of society itself.
British colonialists took note of the success of the Tuskegee educational philosophy, and missionary educators from British colonies in Africa began cooperating with the American foundations and schools in replicating the Tuskegee educational system in several British colonies, including in Kenya and even South Africa, where it helped in the construction of the apartheid system. The education of black South Africans, in the words of a prominent Phelps-Stokes Fund official, was to keep the blacks as “junior partners in the firm.”
Not unrelated, in the early 20th century, the major American foundations – and the vast fortunes of ‘Robber Barons’ – contributed to the acceptance, institutionalization, and exportation of the eugenics movement (sometimes referred to as ‘scientific racism’). Eugenics was an extremely dangerous and destructive pseudo-science (or, rather, in truth, a religious orthodoxy in search of legitimacy) which was focused on the objective of refining the social engineering of the species, itself, to take ‘evolution’ into their own hands. This philosophy suggested that concepts such as poverty, crime, race, disabilities, mental suffering and lack of intelligence were products not of social conditions – or the social order and its devastating effects – but rather, they were inherent, genetic ‘defects’ experienced by the ‘unfit’. As a corollary, those who had risen to the top of the social hierarchy, the rich, white men of property and privilege, were considered to be the most intelligent, the racially superior, the “fit.” Thus, it was not avarice, crime, manipulation, expropriation, enslavement, theft and domination that made them their riches; it was their ‘genetic superiority’. This – conveniently – was an ideology which justified the enormous wealth and power held by a small minority, presenting it with scientific language that aimed to ground the social order as being one constructed through “natural selection” and evolution. As such, it was considered ideal for the “fit” to breed with each other (and thus, in theory, create a type of super-species), while the “unfit” were to be encouraged to stop breeding altogether.
When the eugenics movement reached the United States from Britain in the late 19th and early 20th centuries, it garnered the attention of elites in America. And very quickly, the vast fortunes of the Harrimans, Carnegies and Rockefellers – among many others – were mobilized to support the movement. As the foundations were established, eugenics became a major area of interest for their operations. The eugenics movement was arguably more successful in the United States than any other nation in the early 20th century, and in fact, it was from the United States that it was exported around much of the industrialized, western world. Eugenics affected the development and evolution of major institutions and ideologies of the era, such as the educational system, mental health, hygiene, medicine, psychology and psychiatry, migration, the criminal justice system, biology and the natural sciences. Between 1907 and 1927, twenty-three U.S. states enacted eugenic sterilization laws for the “genetically unfit,” ultimately leading to the forced sterilization of tens of thousands of people.
In fact, with the help of the Rockefeller Foundation, eugenics was exported to Weimar Germany, pouring hundreds of thousands of dollars into institutions dedicated to studying “race biology” and psychiatry. The German eugenics movement proved to be very successful, and when the Nazis came to power in 1933, eugenicists found a political movement espousing and embracing their ideas of racial inferiority and superiority. The Rockefeller Foundation continued its funding for Nazi ‘race science’ and psychiatry until the outbreak of World War II in 1939, by which time the impact had been profound. In fact, one of the most notorious Nazi war criminals, the “Angel of Death” – Dr. Josef Mengele, the infamous Auschwitz concentration camp doctor – had previously done research which was funded by the Rockefeller Foundation, whose money supported experimentation done at various concentration camps.
Of course, following World War II, the eugenics movement had been largely discredited after the world witnessed the repercussions of such institutionalized and ideological hatred and racism, as revealed by the extent of atrocities in the Holocaust – as well as those committed by the Japanese in the Pacific. Thereafter, the major proponents and patrons of the eugenics movement sought to rebrand themselves in various forms. In fact, a 1943 edition of Eugenical News – the most widely-read publication of the eugenics movement – published an article by one of the ‘fathers’ of the eugenics movement, Charles Davenport, who advocated a vision of “a new mankind of biological castes with master races in control and slave races serving them.” A 1946 edition of Eugenical News stated that following the War, “population, genetics, [and] psychology, are the three sciences to which the eugenicist must look for the factual material on which to build an acceptable philosophy of eugenics and to develop and defend practical eugenics proposals.”
One of the more prominent efforts at rebranding eugenics emerged as the ‘population control’ movement. Largely an initiative of the Rockefellers, John D. Rockefeller III established the Population Council in 1954, designed to “provide solid science to guide governments and individuals in addressing population questions.” Six of the ten founding members of the Population Council were well-known eugenicists. Matthew Connelly has written the most definitive account of the origins and evolution of the population control movement, based largely upon the internal records of the various international and private organizations involved in promoting population control, including the Rockefeller Foundation and Population Council. The primary fear of the elites behind the population control movement was the great mass of civilization that fell outside the western world: the largely non-white, poor populations of the world, seeking to toss off the chains of colonialism and chart their own way in the world.
The population control movement – with the Population Council as its “nexus” – relied on extensive funding from the Rockefeller and Ford Foundations, and became quickly institutionalized in United Nations organizations, as well as in the ideology of ‘development’ for the ‘Third World’. The result was measures designed to encourage population control becoming embedded within ‘aid’ agencies and development agencies. During the Eisenhower presidency, the issue of population had become “a national security issue” in the mind of the foreign policy establishment. The Population Council, Ford and Rockefeller Foundations, and UN agencies began working with USAID, the World Bank and other organizations in placing population control as a central element of U.S. and Western foreign policy concerns and actions, especially in countries like India, with large and largely poor populations.
As the population control movement was exported around the world, it resulted in a great deal of tragedy and repressive actions by governments, such as in India and China, where forced abortions and forced sterilizations had become rampant at various times. The movement had, however, garnered significant opposition from many countries and regions around the world, and its institutional and ideological structure experienced major setbacks going into the 1990s. However, it has never wandered far from the minds of the super-rich oligarchs and patrons of major foundations.
In 2009, a secret meeting was organized among some of the world’s richest billionaires, organized by David Rockefeller, Bill Gates and Warren Buffet. Invited guests included billionaires such as Ted Turner, George Soros, Michael Bloomberg, and even Oprah Winfrey. The meeting was designed to discuss the future of philanthropy, “what motivated their giving, the areas of focus, lessons learned and thoughts on how they might increase giving going forward.” Each guest was given 15 minutes to discuss and promote their personal favourite ‘cause,’ but after a great deal of discussion, they sought to establish an “umbrella cause” which could “harness their interests.” Apparently with Bill Gates leading the call, the billionaires agreed that “overpopulation was a priority… in which population growth would be tackled as a potentially disastrous environmental, social and industrial threat.”
Out of this meeting, a new effort was begun – largely driven by Bill Gates and Warren Buffet – to encourage billionaires and the super-rich around the world to join in giving their enormous ill-gotten wealth to ‘philanthropy’, in what is referred to as ‘The Giving Pledge’, to try to get the rich to pledge 50% of their net worth to charity during their lifetimes or after death.
At the end of World War II, the United States emerged as the dominant global power, and its institutions became oriented toward finding ways to use, maintain and extend that power. Foundations played a key role in the development of think tanks and the educational system, with a focus on creating consensus among elites on the need for empire and in training future managers of the imperial system.
The Rockefeller Foundation played a key role in transforming the United States into a global empire. One of the most influential think tanks in the United States is the Council on Foreign Relations (CFR), founded in 1921. Early on, the CFR relied upon Rockefeller Foundation funding for a great deal of its operations. Between 1927 and 1945, the Rockefeller Foundation provided the Council on Foreign Relations with more than $443,000 in funding for “study group” research, which would subsequently be implemented in official policy of the U.S. government. The Council has extensive ties to the foreign policy establishment of the United States, most notably with the U.S. State Department. In fact, during the early years of World War II, the CFR established a “strictly confidential” project in cooperation with the U.S. State Department to plan for U.S. entry into the war as well as to outline a post-war blueprint for a U.S.-dominated world. The project was entirely funded by the Rockefeller Foundation.
The results of the project outlined the areas of the world which the United States would need to control in order to maintain and expand its global power, referred to as the ‘Grand Areas’, which included, “Latin America, Europe, the colonies of the British Empire, and all of Southeast Asia.” The world was divided into four main blocs: the U.S.-dominated Western hemisphere, the British Empire and its colonies, a German-dominated continental Europe, and a Japanese-dominated East and Southeast Asia. As the war went on, slowly the ‘Grand Area’ plans changed to the point where U.S. planners decided that America ultimately had to dominate all of these regions, noting that, “as a minimum, American ‘national interests’ involved free access to markets and raw materials in the British Empire, the Far East, and the entire Western hemisphere.”
The Rockefeller Foundation took it upon itself to develop educational systems at elite universities which would be dedicated to the study of ‘International Relations’ and ‘Area Studies’ programs. Along with the Carnegie Corporation and the Ford Foundation, the Rockefeller Foundation helped to establish Soviet Studies and Area Studies programs at multiple universities around the country, focusing on providing an education which could inform the application of policy. The Ford Foundation – with considerable financial resources – moved to the forefront of this endeavor. In 1967, a survey by the U.S. State Department noted that out of 191 university centers of foreign affairs research in the United States, 107 depended primarily upon funding from the Ford Foundation. Between 1950 and 1973, the Ford Foundation contributed roughly $278 million to the development of ‘area studies’ programs at major American universities. While ‘International Relations’ was designed to focus on the study of a “realistic” approach and understanding of power (and how to apply it), ‘area studies’ programs focused on the study of the non-Western world.
The large foundations also provided financing and networking connections to aid in the establishment of other large international think tanks, such as the Bilderberg Group – which was founded in 1954 as a forum for Western European and North American elites to meet privately on an annual basis – as well as the Trilateral Commission in 1973, to bring the Japanese elite into the fold of the Western European and North American hegemonic class.
So while the major foundations were shaping the education of elites, socializing them in think tanks where they sought to establish consensus with domestic and international elites in other powerful nations and to manufacture and institutionalize dominant, imperial ideologies, they also worked to try to manage the ‘unwashed masses’ of the world. Just as these foundations had constructed an education to keep black Americans and Africans as “junior partners in the firm” in the early 20th century, in the latter half of the 20th century they sought to export the Western-style educational system – and notably the foundation-influenced social sciences – to other regions and nations around the world in order to help develop domestic elites within those societies that would ultimately serve the interests of Western hegemony and empire.
Foundation officials were extremely concerned about changes taking place across the developing world, where revolutionary and radical movements were attempting to rid their societies of European colonial domination. Foundation officials worked with members of the business and financial elite, alongside the foreign policy establishment, to attempt to manage the process and objectives of change in the ‘third world’. While acknowledging that the era of formal colonialism was at an end, these individuals were not eager to see people and nations chart their own individual paths to independence and freedom. Instead, formal colonial structures needed to be replaced with informal imperial structures. A consensus was formed between the foreign policy-makers, business class and foundation-academic officials that changes in places like Africa “must be evolutionary rather than revolutionary.” As a top Carnegie Corporation official noted: “American industry could ill-afford the loss of cheap sources of raw materials which could only be secured in the nations of Africa, Asia, and Latin America.”
With this in mind, the Rockefeller, Carnegie and Ford Foundations undertook ambitious programs in Africa, Asia and Latin America which sought to create prominent universities and programs of social science research “in areas considered of geo-strategic and/or economic importance to the United States.” These would include the training of public administrators, teachers, the development of curriculums, and exchange programs that would have young academics in these nations come to the United States to receive training and education at prominent U.S. schools like Harvard or Yale. The objective was to channel the intellectual talents of these nations away from support for radical ideologies and revolutionary movements, and push them instead into the social sciences and the construction of domestic, technocratic elites that would see social problems as ‘technical’ issues requiring reforms and slow, evolutionary change. As noted in the book Philanthropy and Cultural Imperialism:
The power of the foundation is not that of dictating what will be studied. Its power consists in defining professional and intellectual parameters, in determining who will receive support to study what subjects in what settings. And the foundation’s power resides in suggesting certain types of activities it favors and is willing to support. As [political theorist and economist Harold] Laski noted, “the foundations do not control, simply because, in the direct and simple sense of the word, there is no need for them to do so. They have only to indicate the immediate direction of their minds for the whole university world to discover that it always meant to gravitate to that angle of the intellectual compass.”
As political scientist Joan Roelofs wrote, foundations exert their influence in multiple ways:
[By] creating ideology and the common wisdom; providing positions and status for intellectuals; controlling access to resources for universities, social services, and arts organizations; compensating for market failures; steering protest movements into safe channels; and supporting those institutions by which policies are initiated and implemented… [F]oundations like Carnegie, Rockefeller, and Ford have a corrosive influence on a democratic society; they represent relatively unregulated and unaccountable concentrations of power and wealth which buy talent, promote causes, and, in effect, establish an agenda of what merits society’s attention.
Further, foundations play a role in providing extensive funding for social movements and non-governmental organizations (NGOs). Their funding for such social movement organizations typically follows years of organic and slow development of social movements from the ground up. Foundations typically move in to provide funding when a social movement is seen as a potential threat to the prevailing social order. Their funding subsequently focuses on supporting the more reform-oriented, legalistic and ‘evolutionary’ (as opposed to revolutionary) organizations, with an objective of helping them to become the dominant organizations in the movement and steer social movements in directions safe for those who own and operate the foundations themselves (representing the political, industrial and financial elites).
With this in mind, it is noteworthy that the Ford, Rockefeller and Carnegie foundations all provided extensive funding to many civil rights organizations in the 1960s and 1970s, “as a response to the threat posed by the generation of a mass-based social movement.” These foundations channeled their funding into support of “moderate civil rights organizations.” Foundation funding for civil rights groups did not become common until the early 1960s, some five years after the Birmingham bus boycott, and the peak of foundation support was in the early 1970s, roughly five years following the assassination of Martin Luther King, Jr. As more militant movements emerged in the later 1960s, such as the Black Power movement and the Black Panther Party, among many others, the foundations increased their support for more moderate organizations like the NAACP and the National Urban League.
This strategy of co-optation also explains the heavy funding and support by major foundations for the environmental and conservation movements, which originally – and still in their more radical arms – represent very direct, fundamental threats to the existing social order. Thus, today the environmental movement is dominated by large institutions like the World Wildlife Fund, Conservation International, Resources for the Future, World Resources Institute, the International Union for Conservation of Nature and Natural Resources (IUCN), and the Nature Conservancy, among others. Most of these institutions at some point depended upon financial support from major foundations, and today their boards are largely dominated by representatives from the corporate and financial world. Most of their funding comes from corporations, with whom they engage in “strategic relationships.”
Such has also been the relationship between major foundations and the so-called ‘anti-globalization’ movement. As globalization became the dominant force of the world from the 1990s onward, new movements began to spring up all around the world, opposing various policies, programs, institutions and ideologies embedded within the process of globalization. Major targets for anti-globalization activists and organizations had been the World Trade Organization, the G7/G8 meetings, the World Bank and IMF, among others. Major protests at the annual gathering of these institutions – notably at the 1999 World Trade Organization meeting in Seattle – began to strike fear into the minds of the global elite. As The Economist noted in 2000, despite the differing views and backgrounds of activists and protesters in Seattle, what they “have in common is a loathing of the established economic order, and of the institutions – the IMF, the World Bank and the WTO – which they regard as either running it or serving it.” This ‘new kind’ of protest, noted the magazine, “is more than a nuisance: it is getting in the way.”
A reaction to this development was seen in the formation of the World Social Forum, an annual meeting of NGOs and various civil society organizations acting as an alternative to more radical, protest-oriented and revolutionary movements and advocacy, and instead promoting the discussion of “reforms” to globalization. Funding for the World Social Forum has been provided by many governments and political parties, and, notably, the Ford Foundation. As Lisa Jordan of the Ford Foundation explained: “Government, business and civil society cannot solve problems separately. There must be dialogue between and amongst these three groupings. The WSF is an attempt to support a vast and complex array of public space for an integrating world.” Again, the objective is to ‘integrate’ the opposition to the existing social order within the social order, to give the ‘rebels’ a seat at the table, and thus, undermine the rebellion itself.
While reforms and evolutionary change can produce good and real results, they do not keep pace with the ever-expanding militarism, war, environmental degradation, economic and financial destruction, corporate colonization, manipulation and devastation of biodiversity, impoverishment and exploitation of the world’s masses, and the ever-growing concentration of wealth and power in the hands of very few institutions and individuals at the global level. The human species – and the planet itself – do not have the time to await the slow changes begrudgingly afforded by the institutions of empire, exploitation and domination. Reform has its place, but radical – transformative – change is of the utmost necessity in order to not only challenge the existing order, but to create alternatives to it – and to help make the existing order obsolete, so that humanity may chart a path that does not lead to eventual extinction, as our current trajectory indicates.
This is where ‘Voice of Access: The People’s Foundation’ – and organizations like it – can play a much-needed role.
A ‘Voice’ for the People, a ‘Foundation’ for Change
The establishment of ‘Voice of Access: The People’s Foundation’ represents an attempt to create a counter-hegemonic foundation, to follow familiar patterns of facilitation, patronage, exchange and interaction, the formation of new organizations, the construction of knowledge, support for social movements, connecting intellectuals, activists and communities. The objective and methods of these efforts will counter those of the dominant hegemonic foundations, however, in a few pivotal ways.
First, the People’s Foundation does not have a substantial financial base upon which to leverage projects and steer the focus of other organizations. In fact – at present – the financial standing of the People’s Foundation is non-existent. Currently, it is still in the starting stages of constructing a legal entity, and those of us who are working to create the foundation are attempting to look into various methods of financing, including approaching the traditional grant procedures, as well as exploring alternatives for specific project financing via crowd-funding measures through social media, and also encouraging donations from supporters around the world. Financial considerations – at present – aside, The People’s Foundation does not expect to ever match the financial resources of the large foundations created and operated by the world’s financial oligarchs. As such, our focus is to be more on facilitation as opposed to funding, though we do hope to increase the amounts of money we can put into projects over time.
What is the role of a facilitator foundation?
To describe the role envisioned for the foundation, it would be best to give some examples of projects that are being planned over the coming years. One key project with which there is a great interest and necessity is in building connections around the world between activists and organizations seeking to promote transformative changes in the social order, whether domestically or internationally. An example of this type of engagement is a project to work with the Mpambo Afrikan Multiversity based out of Uganda.
The founding president of Mpambo Afrikan Multiversity is Paulo Wangoola, an indigenous scholar and intellectual in East Africa. As Wangoola wrote, “The Multiversity is a post-colonial concept of higher learning of the oppressed, by the oppressed and for the oppressed, in pursuit of their community cognitive autonomy and security,” further noting that, “when Europeans colonized the world, they also colonized other people’s knowledge,” which continues under the concept of the modern university (which, I might add, was exported to Uganda and East Africa through efforts by the Rockefeller and Ford Foundations). In contrast, the ‘university’ has extended from the West into Africa “as a colonial/neocolonial design” which has advanced Western hierarchical knowledge structures at the expense of “the total eclipse of Afrikan indigenous thought, scientific knowledge, philosophy, spirituality, wisdom and epistemology; that is, the knowledge base developed over millennia, by the Afrikan Black Nation, as a self-determined people.”
The concept of the ‘Multiversity’ – on the other hand – “is based on the proposition that the people of the world and their knowledges, cultures, language and epistemologies are horizontally ordered, such that each of the knowledges is valid in itself.” This understanding of people and knowledge “is derived from Afrikan spirituality, worldview, scientific thought and ontology; by which all being and phenomena, spiritual and material, natural and supernatural, manifests itself complementally in sets of twos, female and male… balance, harmony and reciprocity.” Thus, wrote Wangoola, “each one of the world’s knowledges deserves some ample and adequate space, and resources to be advanced to its farthest frontiers, as well as to be enriched by, as it itself enriches, other knowledges, through cross-fertilization.” The Multiversity is focused on “creating some democratic intellectual space and elbow room for oppressed peoples to make and demonstrate a case for a MULTIplicity of epistemologies, thought and knowledge to blossom, as a necessity to vitalize each of the world’s knowledges, as well as the totality of human knowledge as a whole.”
Mpambo Afrikan Multiversity, more specifically, “is a community-based institution of mother tongue higher learning, centered around persons who are considered by their peers and community to be compelling experts: wise men and wise women, philosophers, sages, scientists, scholars, innovators and the highly talented. They may be primarily indigenously trained or primarily Western-trained, but both are embedded in their community, have emerged out of their people’s struggles to be free… organic intellectuals, scholars and scientists.” The word Mpambo – in the Lusoga dialect spoken by the Basoga people at the Source of the Nile in Uganda – means ‘the best seed, the most potent seed selected at the time of harvest for safe custody, for propagation in subsequent good seasons’. Mpambo Afrikan Multiversity aims “to help raise and nurture a critical mass of a world class of itself of intellectuals and scholars to three principal goals: to create capacity for a people’s socially necessary knowledge to be created close to that people and amidst themselves; to help render people to be both creators and consumers of knowledge; and to build effective capacity for Afrikan peoples to learn from themselves, and on that basis to learn intellectually, philosophically, scientifically and technically from and with the other world’s spiritual, philosophical, scientific and academic traditions and practices.”
I was fortunate enough to have spent a little time in Uganda with Mpambo Afrikan Multiversity roughly seven years ago, when I was given the responsibility by Paulo Wangoola of recruiting some young Westerners to return to Uganda in order to study and work with Mpambo, and to build up connections between the young, emergent leadership of Mpambo, so that these connections may last for generations to come. This is where there is great potential for The People’s Foundation to engage in facilitation and the construction of new knowledge networks, to provide a forum and means of exchange. Our initial project is to go to Uganda and spend roughly two months learning from the organization, documenting and discussing the activities, objectives, and establishing a means for advancing future cooperation and interaction between Mpambo and The People’s Foundation.
Unlike hegemonic foundations, which approach social movement organizations and centers of knowledge with an objective to steer such organizations in a specific direction, to act as patron and paterfamilias, the People’s Foundation approaches Mpambo Afrikan Multiversity with an objective to learn, to receive guidance, to listen, and to mutually discuss and agree upon methods and purposes of future cooperation and support. This represents a horizontal approach to facilitation and support, as opposed to the vertical (and hierarchical) approach undertaken by hegemonic foundations. We will of course be approaching Mpambo with ideas of potential cooperation – including the possibility of facilitating exchanges between African and Western intellectuals and other Indigenous peoples and communities from around the world. Ultimately, this is the type of role as facilitator that the Foundation envisions for itself among many different organizations and communities.
Hegemonic foundations have achieved immense success in providing forums for the establishment of consensus between elites, both nationally and globally, so as to effect a more precise, permanent and stable system of domination and control. The counter-hegemonic People’s Foundation aims – in the long-term – to help facilitate interaction, communication, cooperation and coordination between groups of activists, intellectuals and other counter-hegemonic groups around the world.
The world is in the midst of powerful transformations and changes. Power is globalizing like never before, with more wealth than ever previously existed being concentrated in fewer hands than ever before, with structures and ideologies of dominance and governance being institutionalized not only at national, but also regional and global levels. A corollary of this process is that of the ‘globalization of resistance and revolt.’ From Tunisia to Egypt, Israel to Turkey, Greece to Spain, Indonesia to China, South Africa to Brazil, Chile and the Canadian province of Quebec, to the Indigenous movements across North and South America, Africa and Asia, to peasant and labour resistance and militancy, the world is in the early stages of forming a truly global resistance to the processes, institutions and ideologies of domination (which have, in no small part, been constructed and institutionalized through the efforts of hegemonic foundations).
While these protests, movements and methods of resistance around the world appear disparate and often disconnected, there is enormous potential for mutual understanding, cooperation, coordination and support. The People’s Foundation hopes to play a role in attempting to connect and facilitate interactions, exchanges, conferences, and creating supporting organizations to help turn the concept of ‘solidarity’ into a solid practice. For example, imagine the possibilities of holding an international conference of activists, intellectuals and organizations involved in resistance movements to meet, discuss their respective struggles and objectives, and to find meaningful possibilities of collaboration and coordination, to establish new organizations – think tanks, media centers, educational organizations, etc. – which would represent the combined interests and activities of these seemingly-disparate groups.
The other major aspect of the People’s Foundation – the Voice of Access – reflects a priority in making information readily available to the broadest possible audience, through collaboration and publication of texts in multiple languages, offering reduced rates to schools, community groups, low-income organizations and researchers and finding ways of distributing the information – particularly through digital formats – as well as in print. The ‘Voice of Access’ moniker and meaning reflects a focus on expanding and facilitating access to information, communication and interaction. This will necessitate an increasing focus on access to and utilization of technology itself. While we take for granted our information and communications technology in the West, much of the world continues to lack access to these materials. Voice of Access would seek to find ways of helping to improve and facilitate increased access to such forms of technology, let alone the information and communication they help facilitate.
Student activism and militancy has been on the rise across much of the world, including notable examples in recent years from Greece to the United Kingdom, Chile and Quebec. In each case, students have been mobilized in opposition to the ever-expanding process of the neoliberal restructuring of the educational system: increased privatization, corporatization, leading to increased tuition and debt for prospective students, which has the dual effect of making education harder to attain, and for those who do pursue education, the effect is to shackle them through debt servitude to the social order itself; focusing their energies – upon graduation – to getting jobs so that they can pay off their debt, instead of channeling their intellectual capacities and energies into finding alternatives to the existing system.
One long-term objective of The People’s Foundation would be to help facilitate the development of connections and coordination between student movements and struggles around the world. A good starting place would be to invite not simply leadership but also participants and supporters of various student movements to participate in a conference where they could discuss their respective experiences, successes and failures, prospects and potential. Through such interaction and the development of interpersonal relationships, new ground could be broken on building support between student movements around the world, new organizations could be established to promote the sharing and development of knowledge between students and youth movements, with cooperative thinks tanks, media centers and similar organizations with a focus on advancing understanding, public awareness, and coordination about and between youth/student movements.
The People’s Foundation would have an equal interest in promoting, supporting and encouraging similar processes for activists and movements around the world. Our objective is not to be at the center of these processes, nor to become a ‘hegemonic’ institution in its own right, but rather, to attempt these initiatives and projects – and to learn from their various successes and failures – in the hope that others may build upon this and attempt similar, parallel and mutually-supportive projects. In short, it would be far more effective and beneficial to all if there were a multiplicity of similar organizations to the Voice of Access pursuing similar and parallel objectives, as opposed to simply one. These are ultimately long-term objectives, and the reality of current non-existent funds means that our initial steps will have to be small and slow. Thus, our primary aims in this area will be toward establishing channels of communication and informal relationships with activists, intellectuals and social movements locally, nationally, regionally and globally, slowly and steadily.
The People’s Foundation will look to the world with a focus on attempting to understand and share knowledge regarding the true nature and structure of our global socio-political and economic order: the institutions and ideologies of power and domination, as well as the methods and movements of resistance. We will look to this situation with a focus on examining what appears to be missing, what appears to be needed, and to try to provide what we can to address these concerns. As such, the educational and media endeavours of the People’s Foundation are essential.
In this regard, there are two organizations that the People’s Foundation has an interest in helping to establish. One – tentatively named the General Research Association for the Study of Power (or GRASP) – would be focused on bringing together young scholars and intellectuals into a cooperative organization functioning like a think tank, which would be dedicated to the study of institutions and ideologies of power and domination: the State, corporations, banks, investment facilities, international organizations/bodies, hegemonic think tanks and foundations, universities/schools, the media, military, public relations/advertising industry, etc. GRASP would aim to undertake extensive and rigorous research and study of these and other institutions and the ideologies that pervade them, historically, presently, and with a focus on trends and transformations in their future development. We are, ultimately, a society dominated not by a single institution but by many, each with their own hierarchies, structures, histories, evolution and ideologies. Yet the institutions which dominate society as whole do so on a largely cooperative basis.
For example, the educational system supports the development of intellectuals who are channeled into think tanks and foundations, where they engage in the construction of knowledge, development of strategies, social engineering, and the formation of foreign policy; from there they are channeled into the state apparatus to enact policies. Corporations and financial institutions, in turn, dominate the governance structures of universities, think tanks and foundations, and participate in the development of strategies, policies and ideology. Thus, while theoretically these are separate institutions, functionally they are interconnected and interdependent. The purpose of GRASP and its research would be to study the historical evolution of these various institutions, and their interconnections and interdependencies with other institutions, including by mapping out their shared leadership with other institutions. The objective is to establish a think tank which may ultimately provide a source of knowledge-generation promoting a more comprehensive and coordinated understanding of our present global order.
The People’s Foundation would simultaneously seek to support the dissemination of knowledge produced by GRASP, through building connections with alternative media sources, as well as pushing the knowledge into the mainstream, or, if necessary, helping to establish new media organizations or groups dedicated to the dissemination of this knowledge. GRASP would be an incredibly useful resource for scholars, researchers, journalists and interested individuals and groups around the world. Its focus would primarily be on studying and understanding the principal Western institutions of domination, and thus provide a valuable source of knowledge for others to consult.
A parallel organization to this would be a similar think tank/research organization, which would be dedicated to the study and discussion of social movements and methods of resistance around the world, historically and presently. The aim, once again, would be to connect young scholars and intellectuals in a cooperative organization, which would initially establish a regional focus-approach to the study of social movements. For example, it would be the job of one (or a few) of the scholars to focus exclusively on analyzing the present social movements, rebellions, revolutions, riots and methods of resistance across sub-Saharan Africa; others would be focused on North Africa and the Middle East, Continental Europe, East and Southeast Asia, North and South America, etc. Monthly reports could be prepared by the young scholars, examining the current state of a ‘world of unrest.’ Such an organization could become an immensely useful resource for researchers, intellectuals, journalists and interested individuals, seeking to provide a single source whose primary focus is on studying the various social/resistance movements around the world.
This is a needed resource in the world today. There are several media and research groups that focus exclusively on studying social/resistance movements, but the focus is often inconsistent, and the sheer scope of global unrest and resistance is monumental. However, an organization with a focus on studying not simply what protests are ‘popular’ and in the press more frequently than others, but rather, on examining the multiplicity of resistance movements around the world, is a needed resource to both expand understanding of the current state of global unrest, as well as supporting those social and resistance movements. How can the people of the world – especially those actively engaged in resistance – support each other if they don’t even know about each other’s respective struggles? This organization would be dedicated to the construction and dissemination of knowledge regarding the methods and movements of resistance taking place around the world, presently and historically. Here, the Voice of Access could play a part in helping to provide a voice for those who frequently go unheard in the Western world.
Such an organization would greatly help our understanding of resistance and revolution itself. With such a large focus and source of knowledge, we would be able to see larger patterns and processes, gain a better understanding of the conditions and ‘sparks’ that lead to differing social movements; to better understand the successes and failures of resistance movements; and through the raising of public awareness – to encourage active and future support for resistance movements.
For both GRASP and the as-yet unnamed research organization focused on studying global resistance, the objective for the People’s Foundation would be to bring different scholars, activists and related organizations together, in a cooperative and horizontal (i.e. non-hierarchical) structure, with a focus on undertaking extensive and rigorous research (held to academic standards), to produce research reports, articles for dissemination, books, host meetings/conferences, media consultations, educational seminars and gatherings, providing a source of important and needed knowledge to be shared as widely as possible, to undertake the dual task of advancing human understanding of the social order which dominates our world, and of the people around the world who are resisting that order’s various manifestations.
For ‘Voice of Access: The People’s Foundation’, the methods would be geared towards reaching out to young scholars and interested individuals and organizations, to begin a process of communication and consultation on the formation of these two organizations, to connect these individuals and organizations and hopefully – if possible – to provide the initial funding needed to establish the organizations.
Problems and Prospects
There are, of course, many present barriers to all the current objectives – short and long-term – of Voice of Access: The People’s Foundation. The most obvious is the financial impediment. While the People’s Foundation ultimately seeks to function as a counter-hegemonic presence with an aim towards building alternatives to the existing global social order (making present power structures obsolete), the Foundation must still operate within the existing social order. That means that, internally and legally, it must establish itself as a non-governmental organization (NGO), with its own internal hierarchy and legal structure, and, more problematic, it must seek to accumulate funds to support projects, as well as to build up a financial base capable of supporting the Foundation’s staff itself, so that we may dedicate our time and resources to the activities of the Foundation. These are obstacles which we have yet to overcome in any meaningful sense, but, through the articulation of some of our short and long-term goals and objectives, we hope to encourage support – both material/financial and otherwise – to helping Voice of Access: The People’s Foundation establish itself and begin its important work in the world.
The major hegemonic foundations have been essential and effective institutions in the process of shaping education, constructing knowledge, disseminating information, creating institutions, establishing consensus between elites – nationally and globally – and institutionalizing ideology for the benefit of the hegemonic financial and corporate interests of the world. They have operated through long-term social engineering projects to try to establish social control: to connect elites, to co-opt and deflect resistance, to promote reform and slow adaptation, so as to ultimately secure the stability of the existing social order, and the hierarchies of inequality and oppression which dominate it.
The counter-hegemonic People’s Foundation hopes to become an effective organization for the purpose of finding new means and processes of education, the construction and dissemination of new forms of much-needed knowledge, to connect people and communities – activists, intellectuals, individuals and groups – not elites, to support the growth and interconnections (and radicalization) of social movements – not to co-opt, but to cooperate – with the ultimate objectives of challenging the prevailing social order, and sowing the seeds for future generations to construct a new order, making the existing one obsolete. These are large objectives, but as with any goal, it all begins with small and slow steps in the right direction.
With an understanding of the role that has been played by hegemonic foundations in the preservation and propagation of the existing social order, it seems that there is a needed place for counter-hegemonic foundations seeking to challenge and make obsolete that same social order, until such a point where the Foundation itself may be made obsolete. Revolution is a process, not an event, and it requires one to operate within an existing social system while simultaneously challenging that social system. This is a multi-generational process, and we must begin thinking and acting with a focus on the short- and long-term.
Voice of Access: The People’s Foundation hopes to take such a short and long-term focus on encouraging and supporting social transformation for the benefit of humanity and the world as a whole, not simply the powerful few who rule over it. This requires building connections and facilitating support with groups and people around the world, to advance access to technology, communication and interaction, to be a ‘voice’ for those who go unheard, a foundation for people, a foundation for change.
To read the full report with citations and footnotes, please download the original from the Spanda Journal here.
Andrew Gavin Marshall is an independent researcher and writer based out of Montreal, Canada. He is Project Manager of The People’s Book Project, Chair of the Geopolitics Division of the Hampton Institute, Research Director of Occupy.com’s Global Power Project and the World of Resistance Report, hosts a weekly podcast at BoilingFrogsPost.com, and is a co-founder and Vice President of Voice of Access: The People’s Foundation.
World of Resistance [WoR] Report, Part 1: The Global Awakening
By: Andrew Gavin Marshall
Originally posted at Occupy.com
The world today is in the midst of the most monumental social, political and economic upheavals in human history – a state of continual protests, uprisings and what may be considered inevitable revolution on a global scale. Power that had been centralized for roughly 500 years among the Atlantic powers of Western Europe and North America is rapidly shifting to include the rise of the East, as China, India and others operating within established, institutional frameworks of power get wooed by the former Western imperial managers to become colluders in empire, instead of competition.
To add to this, global wealth and power is being centralized among a highly interconnected and transnational ruling class: a small global elite who own and operate the major banks, corporations, foundations, think tanks, universities and international organizations. It is this numerically minute group of plutocrats whom empire serves. Long established among the Western elites, this group of plutocrats is attempting to bring the oligarchies of other powerful and rising states firmly within its organizational and ideological structure.
Think of it as an established Mafia that helped build up a few other crime families in order to extend its influence – and which now has to contend with the increasing autonomy and competition that these strengthened crime families pose, as it attempts to bring them closer within the established ‘Family’ instead of risking an all-out Mafia war in which all parties would surely lose. The changing structures of global power, along with the ever-increasing unrest of populations around the world, has created perhaps the most challenging situation for any empire in human history.
Zbigniew Brzezinski has written and spoken for years on the issue, publishing in establishment journals and speaking at elite think tanks about what he calls the “Global Political Awakening.” Brzezinski is not a casual observer nor a resigned academic; he sits within the heart of the intellectual and institutional foundations of the American empire alongside other notable figures such as Henry Kissinger and Joseph Nye. Brzezinski was even recruited as a foreign policy adviser to the 2008 presidential campaign of Barack Obama, who referred to Brzezinski as “one of our most outstanding thinkers.”
Brzezinski wrote in 2005 that the United States needed to face “a centrally important new global reality: that the world’s population is experiencing a political awakening unprecedented in scope and intensity, with the result that the politics of populism are transforming the politics of power.” Thus, the “central challenge” for the U.S., noted Brzezinski, “is posed not by global terrorism, but rather by the intensifying turbulence caused by the phenomenon of global political awakening. That awakening is socially massive and politically radicalizing.”
In a 2004 speech to the elite-populated Carnegie Council, Brzezinski explained that the global awakening was partly “spurred by America’s impact on the world,” by virtue of the fact that America is able “to project itself outward” and “transform the world,” creating an “unsettling impact, because we are economically intrusive, [and] culturally seductive.” In other words, American imperialism is – by its very nature – creating its antithesis: the global awakening.
The awakening “is also fueled by globalization,” Brzezinski further explained, “which the United States propounds, favors and projects by virtue of being a globally outward-thrusting society.” The process of globalization, however, “also contributes to instability, and is beginning to create something altogether new: namely, some new ideological or doctrinal challenge which might fill the void created by the disappearance of communism.”
In other words, since the end of the Cold War, when Marxism and Communism represented the largest and most organized global ideological challenge to Western state-capitalist democracy, Brzezinski maintains there has been an ideological vacuum in terms of ideas opposing the present global order. The global awakening, however, is changing the circumstances. As he stated: “I see the beginnings, in writings and stirrings, of the making of a doctrine which combines anti-Americanism with anti-globalization, and the two could become a powerful force in a world that is very unequal and turbulent.”
Brzezinski noted in 2005 that, “the population of much of the developing world is politically stirring and in many places seething with unrest,” having become “acutely conscious of social injustice to an unprecedented degree, and often resentful of its perceived lack of political dignity.” A “community of shared perceptions” was being created by the spread of radio, television and Internet access, creating the potential for energies to be galvanized which “transcend sovereign borders and pose a challenge both to existing states as well as to the existing global hierarchy, on top of which America still perches.”
The youth of the Third World represent “a demographic revolution,” and being “particularly restless and resentful,” they also represent “a political time-bomb… creating a huge mass of impatient young people.” The “potential revolutionary spearhead” of the Third World youth was, in Brzezinski’s view, “likely to emerge from among the scores of millions of students” concentrated in the educational institutions of the developing world. Having largely originated from “the socially insecure lower middle class and inflamed by a sense of social outrage, these millions of students are revolutionaries-in-waiting… connected by the Internet… Their physical energy and emotional frustration is just waiting to be triggered by a cause, or a faith, or a hatred.”
In 2008, Brzezinski wrote in the New York Times that “global activism is generating a surge in the quest for cultural respect and economic opportunity in a world scarred by memories of colonial or imperial domination.” In his view, the necessary course of action “is to regain U.S. global legitimacy by spearheading a collective effort for a more inclusive system of global management.” Brzezinski noted, in a speech he gave that same year to Chatham House, that “in the current post-colonial era, it is too costly to undertake colonial wars” which is why the U.S. should attempt to avoid getting further “bogged down” in the Middle East and Central Asia, where America would be “engaged in a protracted post-imperial war in the post-colonial age, a war not easy to win against aroused populations.”
Later, in a 2010 speech to the Canadian International Council (CIC), an elite think tank based in Canada, Brzezinski explained the “total new reality” of the awakening of mankind, explaining that “most people know what is generally going on… in the world, and are consciously aware of global iniquities, inequalities, lack of respect, exploitation. Mankind is now politically awakened and stirring.”
In a 2012 speech at the European Forum for New Ideas (EFNI), Brzezinski stated that 20 years following the end of the Cold War, “a truly comprehensive American global domination is no longer possible [because] in recent decades, worldwide social change has experienced unprecedented historical acceleration, particularly because instant mass communications… cumulatively have been stimulating a universal awakening of mass political consciousness.”
“The resulting widespread rise in worldwide populist activism is proving inimical to external domination of the kind that prevailed in the age of colonialism and imperialism,” he continued. “Persistent and highly motivated populist resistance of politically awakened and historically resentful peoples to external control has proven to be increasingly difficult to suppress, as protracted guerrilla warfare in Vietnam, Algeria, or Afghanistan have amply demonstrated; and as the rising turmoil in both the Middle East and Southwest Asia are foreshadowing.” (“The Role of the West in the Complex Post-Hegemonic World,” Speech at the European Forum for New Ideas, 26 September 2012)
As Brzezinski explained to his fellow elites and imperialists in the United States and other powerful Western societies: “The worldwide yearning for human dignity is the central challenge inherent in the phenomenon of global political awakening.” As he stated at Chatham House in 2008, the world’s major powers, “new and old, also face a novel reality: while the lethality of their military might is greater than ever, their capacity to impose control over the politically awakened masses of the world is at a historic low. To put it bluntly: in earlier times, it was easier to control one million people than to physically kill one million people; today, it is infinitely easier to kill one million people than to control one million people.”
Institutional and imperial power structures have never been more globalized or concentrated in human history; yet, simultaneously, never have they been under more threat from an awakened humanity. We have unprecedented access to information and communication; never have we had a greater opportunity to transform the world for the better and to challenge – or make obsolete – the prevailing global power structures.
Yet, simultaneously, never has humanity – collectively – faced such a monumental challenge: a combination of a massive global economic crisis, growing levels of poverty and hunger, tens of millions dying from poverty-related causes every year, massive global land grabs, high-tech police states and surveillance societies, murder by remote control drone terror campaigns, a more distanced decision-making apparatus than perhaps ever before, and an ecological crisis of such proportions that it threatens the very survival of the human species, let alone all other life forms on Earth.
The World of Resistance (WOR) Report is a new Occupy.com series that aims to provide greater context and understanding about the causes, and the consequences, of social unrest, protests, riots, resistance, uprisings, rebellions and revolutions spreading across the globe. What form is the “global political awakening” taking in different regions, under different conditions, and with what differing degrees of success and failure?
This series aims to explore the evolution of the long road to world revolution so that we may better understand, and support, the causes of human and biological survival to ensure that people’s “central challenge” to elites – that is, the quest for “human dignity” – is made all the more impossible for 1% institutions and ideologies to undermine or repress.
Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is project manager of the People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project, and hosts a weekly podcast show with BoilingFrogsPost.
Global Power Project, Part 9: Banking on Influence With Morgan Stanley
By: Andrew Gavin Marshall
Originally published at Occupy.com
Morgan Stanley, one of the largest banks in the United States, reported a 66% increase in earnings in July over the same period last year. Morgan Stanley had taken more than $107 billion of U.S. taxpayer money through the bailout programs in the wake of the financial crisis that it helped to create, making it the largest U.S. recipient of bailout funds.
Like the other big banks, Morgan Stanley had been busy paying settlements for the massive criminal fraud conspiracies it engaged in, particularly related to the housing crisis. In 2011, the banks came to a $40 million settlement with the state of Nevada over mortgage fraud.
In 2012, Morgan Stanley paid a settlement of $4.8 million regarding electricity price-fixing charges leveled against the bank in New York State, costing consumers roughly $300 million, after generating $22 million in revenue for the bank. In a settlement over foreclosure fraud in 2013, the bank along with Goldman Sachs agreed to pay $557 million to more than 200,000 homeowners who had been foreclosed on.
A former real estate executive for Morgan Stanley pleaded guilty in 2012 to violating anti-corruption laws, and was “charged with secretly acquiring millions of dollars’ worth of property investments for himself and a Chinese government official.” In 2012, one Morgan Stanley executive was charged with a hate crime for using racial slurs and stabbing a cab driver of Egyptian descent, after having refused to pay the cab fare.
And yet it’s not simply enough for this financial behemoth to defraud the American public and profit from the economic crisis it helped create. It has also managed to profit from increasing hunger and land grabs across the so-called Third World. As big banks speculate on food prices, they drive the costs of food up, sparking food riots and increasing hunger across much of the world while making banks a nice profit in the process.
The three financial institutions most active in food speculation are Barclays, Goldman Sachs and Morgan Stanley. Thus, as millions more people get pushed into hunger, rest assured: Morgan Stanley will be there to swoop up the profits, as untold numbers of people get displaced and foreign investors purchase their lands at giveaway prices. In just one example, Morgan Stanley bought 40,000 hectares of land in Ukraine.
Thus, based on mortgage fraud, the housing crisis, bailouts, the food crisis and the great global land grabs, it’s fair to say that Morgan Stanley is a bank seeking profits at the expense of people, the environment and the world at large. The Global Power Project investigated 24 individuals on both the executive committee and board of directors of Morgan Stanley. The most highly represented institution shared by elites at Morgan Stanley is the Council on Foreign Relations, with six individual affiliations between the two organizations.
It is followed by four mutual affiliations with McKinsey & Co., and three affiliations each between the bank and the former Merrill Lynch (now owned by Bank of America), Columbia University, the Brookings Institution, and the Peterson Institute for International Economics. Further, the bank has two individual affiliations with each of the following: the World Economic Forum, the Business Council, Merck & Co., President Obama’s Economic Recovery Advisory Board, PricewaterhouseCoopers (PwC), the Conference Board, the Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Financial Group, Stanford University and Alcoa.
Meet the Elites
James P. Gorman is Chairman and CEO of Morgan Stanley, a former executive at Merrill Lynch, and a former Senior Partner at McKinsey & Co. He is a current member of the Board of Overseers of Columbia Business School, a member of the Business Council, the Partnership for New York City, the Financial Services Forum, the board of directors of the Institute of International Finance, and the International Advisory Panel of the Monetary Authority of Singapore.
Klaus Kleinfeld is on the board of directors of Morgan Stanley, and is Chairman and CEO of Alcoa, the world’s leading aluminum producer. Kleinfeld is also the former CEO of Siemens and a former director of Citigroup. He is a member of the Supervisory Board of Bayer AG, Chairman of the Board of the U.S.-Russia Business Council, a Trustee of the Conference Board, and a member of the Business Roundtable, the Board of Trustees of the Brookings Institution, the International Business Council of the World Economic Forum, the board of directors of the World Economic Forum USA, the board of directors of the U.S. Chamber of Commerce, and the Steering Committee of the Bilderberg Meetings.
Hutham S. Olayan is Senior Executive Director of the Olayan Group, President and CEO of Olayan America Corporation, and is a Trustee of the American University of Beirut. She is a member of the board of directors of the Peterson Institute for International Economics, a member of the International Board of the U.S.-Middle East Project, and a member of the International Advisory Council of the Brookings Institution. She is founding member of the Arab Bankers Association of North America, a member of the board of the MasterCard Foundation, a member of the International Advisory Board of the Blackstone Group, a member of the boards of Georgetown University and the Memorial Sloan-Kettering Cancer Center and is a Counselor of the Conference Board. Olayan is a member of the Advisory Council of the Carnegie Middle East Center and is a member of the Council on Foreign Relations.
James W. Owens is the former Chairman and CEO of Caterpillar, and a member of the board of directors of IBM, Alcoa and the Council on Foreign Relations. Owens is also Chairman of the Executive Committee of the Peterson Institute of International Economics, a Senior Advisor to Kohlberg Kravis Roberts & Co. (KKR), a former Chairman of the Executive Committee of the Business Council, and a former member of President Obama’s Economic Recovery Advisory Board. He is currently a member of the Board of Trustees of North Carolina State University.
Laura Tyson, who sits on the board of Morgan Stanley, is Professor of Global Management at the Walter A. Haas School of Business at the University of California Berkeley, and is former Dean of the London Business School and former Dean of Haas Business School. Tyson was the former National Economic Adviser to President Clinton from 1993 to 1996 and was a member of President Clinton’s National Security Council and Domestic Policy Council, as well as Chair of the White House Council of Economic Advisers. Tyson was director of the Council on Foreign Relations from 1997 to 2007, where she remains as a member, and is also a member of the MIT Corporation, as well as a former member of President Obama’s Economic Recovery Advisory Board. A Senior Advisor to McKinsey Global Institute, Credit Suisse Research Institute, The Rock Creek Group, and a Senior Fellow of the Center for American Progress, Tyson is currently a member of President Obama’s Council on Jobs and Competitiveness and has been a member of the Foreign Affairs Policy Board to the U.S. Secretary of State since 2011. She is also a member of the Advisory Council of the Brookings Institution Hamilton Project, a member of the board of AT&T, a former member of the board of Eastman Kodak Company from 1997 to 2011, and a member of the board of CB Richard Ellis and Silver Spring Network. Tyson is additionally a former director of New America Foundation, a former member of the board of the Peterson Institute of International Economics, and currently sits as a member of the Committee on Capital Markets Regulation, the Global Agenda Council of the World Economic Forum, the advisory board of Generation Investment Management and H&Q Asia Pacific, as well as a member of the National Academies’ Board on Science, Technology and Economic Policy and on the board of directors of the Committee for Responsible Federal Budget.
At Morgan Stanley, like elsewhere among the big Wall Street banks, an elite class of individuals connected through their institutional affiliations and social groups exert incredible influence over finance, corporations, the government, media, policy, educational institutions and global society at large. Regardless of the immense suffering that Morgan Stanley and its like institutions inflict on the world, so long as it is able to profit from that suffering, it considers itself safe and secure.
Too big to fail. Too big to jail. Too cancerous to care.
Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project, and hosts a weekly podcast show with BoilingFrogsPost.
Egypt Under Empire, Part 4: Dancing Between Dictatorship and Democracy
By: Andrew Gavin Marshall
Originally published at The Hampton Institute
Part 2: The “Threat” Of Arab Nationalism
Part 3: From Nasser to Mubarak
America’s Mambo with Mubarak
America’s ruling elites – and those of the Western world more generally – are comfortable dealing with ruthless tyrants and dictators all over the world, partly because they’ve just had more practice with it than dealing with ‘democratic’ governments in so-called ‘Third World’ nations. This is especially true when it comes to the Arab world, where the West has only ever dealt with dictatorships, and often by arming them and supporting them to repress their own populations, and in return, they support US and Western geopolitical, strategic and economic interests in the region. America’s relationship with Egypt – and most notably with Hosni Mubarak, who ruled Egypt from 1981 to 2011 – has been especially revealing of this imperial-proxy relationship between so-called ‘democracies’ and dictatorships.
Maintaining cozy relationships with ruthless tyrants is something US presidents and their administrations have done for a very long time, but in recent decades and years, it has become more challenging. The United States champions its domestic propaganda outwardly, presenting itself as a beacon of democratic hope, a light of liberty in a dark world, espousing highfalutin rhetoric as the expression of an adamantine code of values – beliefs in ‘freedom’ and ‘democracy’ as untouchable and non-negotiable – all the while arming despots, tyrants, and ruthless repressors to protect themselves against their own populations and to stem the inevitable tide of human history.
Simply by virtue of the fact that people are more connected than ever before, that more information is available now than ever before, and with more people rising up and demanding change in disparate regions all over the world, it has become more challenging for the United States and its imperial partners to maintain their domination over the world, and to maintain their propagandized fantasies in the face of glaring hypocrisies. In short, it’s harder for the world to take America seriously about democracy when it so consistently arms and works with dictatorships. And so, for those who justify such injustice, they must dance between rhetoric and reality, attempting to find some thin line of reasoning between both to present some pretense of rationality; all the while, attempting to undermine any attempts to understand America as an empire. This dance is difficult, often very spastic and erratic, but America is a championship dancer with dictatorships. America’s ‘Mambo with Mubarak’, however, revealed the challenges of being the ultimate global hypocrite in a world of mass awakening and popular uprisings.
Shortly after becoming president, in June 2009, Barack Obama was asked by a BBC reporter, “Do you regard President Mubarak as an authoritarian ruler?” to which Obama replied, “No, I tend not to use labels for folks. I haven’t met him. I’ve spoken to him on the phone.” Obama continued, calling Mubarak a “stalwart ally” to the United States, who has “sustained peace with Israel” and “has been a force for stability.” A few months earlier, Secretary of State Hillary Clinton gave an interview with an Arab television network in Egypt in which she said, “I really consider President and Mrs. Mubarak to be friends of my family,” and added, “I hope to see him often.”
In May of 2009, U.S. Ambassador to Egypt Margaret Scobey wrote in a diplomatic cable that Mubarak would more likely die than ever step down as president, noting, “The next presidential elections are scheduled for 2011 and if Mubarak is still alive it is likely he will run again and, inevitably, win.” The “most likely” successor to Mubarak, noted Scobey, was his son Gamal, adding, “some suggest that intelligence chief Omar Soliman [sic] might seek the office; or dark horse Arab League secretary general Amre Moussa.” Ultimately, Scobey noted, in terms of choosing a successor, Mubarak “seems to be trusting to God and the ubiquitous military and civilian security services to ensure an orderly transition.”
Before Mubarak was to visit Washington in August of 2009, Scobey wrote to the State Department that Mubarak was “a tried and true realist” with “little time for idealistic goals.” Further, Scobey noted, Mubarak’s “world view” is most revealed by his reaction to U.S. pressure to “open Egypt” to political participation and relax the police state dictatorship, of which he had only “strengthened his determination not to accommodate our views.” Scobey further reported that Egypt’s defense minister Tantawi “keeps the armed forces appearing reasonably sharp,” while Omar Suleiman and the interior minister, al-Adly, “keep the domestic beasts at bay, and Mubarak is not one to lose sleep over their tactics,” which is to say, torture and human rights abuses. Further, Scobey warned, “Mubarak will likely resist further economic reform,” which is to say, to enhance and deepen neoliberal measures which facilitate impoverishment, plundering and exploitation by a small domestic and international oligarchy at the expense of the domestic population at large, noting that Mubarak might view further reforms “as potentially harmful to public order and stability.”
Another cable from 2009 reported how, “Mubarak and [Egyptian] military leaders view our military assistance program as the cornerstone of our mil-mil [military to military] relationship and consider the $1.3b in annual [military aid] as ‘untouchable compensation’ for making and maintaining peace with Israel,” as well as ensuring that “the US military enjoys priority access to the Suez canal and Egyptian airspace.”
A 2009 cable prepared for the Pentagon’s CENTOM (Central Command) chief, General David Patraeus, in the lead-up to a visit to Egypt, noted that the United States has avoided “the public confrontations that had become routine over the past several years,” with the Bush administration. Ambassador Scobey had pressured Egypt’s interior minister to release three bloggers, a Coptic priest, and grant three U.S.-based “pro-democracy” groups to operate in the country (the latter of which was denied). In anticipation of Hillary Clinton’s visit to Mubarak in 2009, Scobey recommended that Clinton not thank Mubarak for releasing a political opponent, Ayman Nour, whose imprisonment in 2005 was condemned around the world, including by the Bush administration.
Scobey noted in another 2009 cable that Mubarak took the issue of Ayman Nour “personally, and it makes him seethe when we raise it, particularly in public.” Referring to Egypt as a “very stubborn and recalcitrant ally,” Scobey explained: “The Egyptians have long felt that, at best, we take them for granted; and at worst, we deliberately ignore their advice while trying to force our point of view on them.”
When Mubarak visited the White House in August of 2009, in a joint press conference following their meeting, Obama referred to Mubarak as “a leader and a counselor and a friend to the United States,” and went on to thank Egypt for its support to Iraq in its “transition to a more stable democracy.” Mubarak explained that it was the third time in three months he had met with Obama, describing relations between the US and Egypt as “very good” and “strategic.”
Steven Cook of the Council on Foreign Relations explained that the Obama administration did not want to view its relationship with Egypt through the issue of ‘democracy,’ noting: “I think there is an effort to see the relationship in broader terms, because the experience of looking at it through the straw hole of democracy and democracy promotion and reform proved damaging to the relationship.” Cook added, “Let’s be realistic – Hosni Mubarak and the people in the regime don’t really have an interest in reform.” At the White House, Mubarak went on to meet with Hillary Clinton and former President Bill Clinton, after all, as Hillary previously noted, they were “family friends.”
On his trip, Mubarak was also accompanied by his Foreign Minister, Ahmed Aboul Gheit, and the intelligence chief, Omar Suleiman. The dictator also met with Vice President Joseph Biden. The purpose of the meeting, noted the New York Times, was to signal “an effort to re-establish Egypt as the United States’ chief strategic Arab ally.” Former Egyptian ambassador to the United States, Abdel Raouf al-Reedy, commented, “The United States has to have a regional power to coordinate its policies with and Egypt cannot be a regional power without the United States… So there is some kind of a complementary relationship.”
To Tango with Tyranny
This “complementary relationship” between regional dictatorships and imperial powers is not confined to Egypt (or America), nor are its various rationales. The Arab Spring sparked in Tunisia in December of 2010 and led to the overthrow of its long-time dictator Zine El Abidine Ben Ali on 14 January 2011. Tunisia was, in the words of international law professor and former United Nations Special Rapporteur Richard A. Falk, a “model U.S. client.” Between 1987 – when Ben Ali came to power – and 2009, the United States provided Tunisia with $349 million in military aid, and in 2010 alone, the U.S. provided Ben Ali’s dictatorship with $13.7 million in military aid.
Tunisia, which was a former French colony, also had strong relations with France. During the outbreak of the crisis in December of 2010, the French suggested they would help Ben Ali by sending security forces to Tunisia to “resolve the situation” in a show of “friendship” to the regime. The French foreign minister suggested that France could provide better training to Tunisian police to restore order since the French were adept in “security situations of this type.” Jacques Lanxade, a retired French admiral, former military chief of staff and former French ambassador to Tunis noted that the French had “continued public support of this regime because of economic interests,” and added: “We didn’t take account of Tunisian public opinion and thought Ben Ali would re-establish his position.” In other words: we support dictators, and don’t care about human populations as a whole. So surprised were the French at the thought of a popular uprising overthrowing their stalwart ally in Tunisia, that Sarkozy later – after the fall of Ben Ali – stated that the French had “underestimated” the “despair… suffering,” and “sense of suffocation” among Tunisians. Perhaps a delicate way of suggesting that the French government does not care about the despair, suffering or suffocation of people until the people overthrow the French-subsidized dictators, forcing the imperial power to do a little dance with democratic rhetoric until it can find a replacement to support, and return to its habitual ‘underestimations’ of entire populations.
This imperial logic has been given terms and justifications from establishment intellectuals and academics in the United States and other Western powers. Academics with the Brookings Institution, an influential U.S. think tank, suggested in 2009 that this was the logic of “authoritarian bargains,” in which dictatorships in the region were able to maintain power through a type of “bargain,” where “citizens relinquish political influence in exchange for public spending,” suggesting that: “non-democratic rulers secure regime support through the allocation of two substitutable ‘goods’ to the public: economic transfers and the ability to influence policy making.”
Of course, these ‘intellectuals’ failed to acknowledge the fact that in the previous three decades, the “bargain” part of the “authoritarian bargain” was dismantled under neoliberal reforms. But facts are trifling obstructions to justifications for injustice, and such ‘intellectuals’ – who serve power structures – will wind their way with words through any and all frustrating truths, so long as the end result is to continue in their support for power. Such a “bargain” could have been argued under the likes of Nasser, but Mubarak was another creature altogether, and the intellectual discourse built around support for dictatorships had not evolved over the course of several decades, save for the words used to describe it.
In 2011, those same academics wrote an article for the Brookings Institution in which they noted that as economic conditions deteriorated and unemployment rose, with neoliberal reforms failing to provide economic opportunities for the majority of the populations, the “Arab authoritarian bargain” – or “contract” – between dictators and the populations was “now collapsing,” adding that, “the strategies used by Arab leaders to maintain power may have run their course.” They added: “Partial political liberalization may not be enough at this point to make up for the current inability to deliver economic security and prosperity, spelling the final demise of Arab authoritarian bargain.”
F. Gregory Gause III, writing in Foreign Affairs, the establishment journal of the Council on Foreign Relations, the most prominent foreign policy think tank in the United States, referred to this concept as “authoritarian stability” theory. Following the initial Arab Spring uprisings, he wrote about the “myth” of authoritarian stability, noting that many academics had focused on trying to understand “the persistence of undemocratic rulers” in the region, though implicitly without questioning the imperial relations between the local governments and the dominant Western powers. Gause himself acknowledged that he had written an article for Foreign Affairs in 2005 in which he argued that, “the United States should not encourage democracy in the Arab world because Washington’s authoritarian Arab allies represented stable bets for the future,” and that, “democratic Arab governments would prove much less likely to cooperate with U.S. foreign policy goals in the region.” Gause then reflected in 2011 that, “I was spectacularly wrong.”
Marwan Muasher is vice president for studies at the Carnegie Endowment, a prominent American think tank, and was previously foreign minister and deputy prime minister in the Jordanian dictatorship. Following events in Tunisia, Muasher wrote an article for the Carnegie Endowment in which he explained why the events were not foreseen, noting that: “The traditional argument put forward in and out of the Arab world is that there is nothing wrong, everything is under control.” Thus, wrote Muasher, “entrenched forces argue that opponents and outsiders calling for reform are exaggerating the conditions on the ground,” an argument which he noted, “has been fundamentally undermined by the unfolding events in Tunisia.” Because Tunisia had comparably low economic problems, a small opposition, and a “strong security establishment,” it was thought that “the risk of revolt was considered low.” Muasher wrote: “It wasn’t supposed to happen in Tunisia and the fact that it did proves that fundamental political reforms – widening the decision-making process and combating corruption – are needed around the entire Arab world.”
This concept of “there is nothing wrong, everything is under control,” has been referred to by Noam Chomsky as the “Muasher doctrine,” noting that this has been consistent U.S. policy in the region since at least 1958, when Eisenhower’s National Security Council acknowledged that the US supported dictators and opposed democracy, and that this was a rational policy to serve American interests in the region.
There are, however, factions within the American elite that understand that the ‘Muasher Doctrine’ is unsustainable and that they must push for ‘reform’ within the Arab world over the short-term in order to ultimately maintain ‘order’ and ‘stability’ over the long term. This is where ‘democracy promotion’ comes into play.
U.S. Democracy Promotion in Egypt: A Hidden Plot or Hedging Bets?
Following the Arab Spring’s toppling of Ben Ali in Tunisia and Mubarak in Egypt, some commentators in the West have critically noted the U.S. and Western support for pro-democracy groups within the Arab world – likening them to the Western-funded ‘colour revolutions’ that swept several former Soviet bloc countries – and concluded that the Arab Spring was a U.S.-supported attempt at ‘regime change.’
Indeed, the United States and its Western allies provided extensive funding and organizational support to civil society groups, media organizations, activists and political parties in several countries where – through contested elections – they helped to overthrow entrenched political leaders, replacing them with more favourable leaders (in the eyes of the West). In Serbia, U.S. non-governmental and even governmental organizations poured funding into the organization Otpor which helped engineer the ousting of Milosevic, providing hundreds of thousands and even millions of dollars in support through organizations like the United States Agency for International Development (USAID), the National Endowment for Democracy (NED), International Republican Institute (IRI), National Democratic Institute (NDI), among other agencies.
As several former Soviet republics slowly ‘opened’ their societies, Western-funded NGOs and civil society organizations flooded in, with powerful financial backers. Over the course of years, funding, training, organizational support, technical and material support was provided for a number of organizations and political groups that helped overthrow regimes in Georgia (2003), the Ukraine (2004), and Kyrgyzstan (2005). Not only were there government funded NGOs involved, but also private foundations, such as billionaire George Soros’ Open Society Institute.
These Western-backed ‘color revolutions’ included major organizational support from the local American embassies in whichever country they were seeking a change of government. The activists who made up Serbia’s Otpor organization aided in the training of other groups in countries like Ukraine. In Serbia, the U.S. government officially spent $41 million “organizing and funding” the operation to remove Milosevic. A primary strategy in funding these ‘colour revolutions’ was to organize the opposition within a country “behind a single candidate.” Such Western organizations also provided extensive funding for so-called “independent” media networks to promote their particular agenda in the country, following a pattern set by the CIA some decades earlier in terms of covertly funding opposition groups and media outlets.
In Ukraine, the Bush administration spent some $65 million over two years to aid in the ‘colour revolution’ which took place in 2004, and several other Western countries contributed to the process and funding as well, including Great Britain, the Netherlands, Switzerland, Canada, Norway, Sweden and Denmark. Such immense funding programs trained hundreds of thousands of activists, and when elections and protests took place, tents, cameras, television screens, food and other equipment were provided en masse, and the events were met with an immediately favourable reception in the Western media.
When it comes to Egypt and the Arab Spring, the United States did attempt to provide some funding and organizational support to various pro-democracy groups. The April 6 movement in Egypt, which was pivotal in organizing the January 25 protest in Cairo that led to the overthrow of Mubarak on February 11, was one group that received some U.S. support. Other groups in Bahrain and Yemen also received U.S. support. Egyptian youth leaders attended a ‘technology meeting’ in New York sponsored by the State Department, Facebook, Google, MTV and Colombia Law School, where they received training “to use social networking and mobile technologies to promote democracy.”
One Egyptian youth leader commented upon the meeting and U.S. support, stating, “We learned how to organize and build coalitions… This certainly helped during the revolution.” Another Egyptian activist noted the hypocrisy of the U.S., which, while funding some pro-democracy groups, was providing billions in financial support to the military dictatorship the activists had to struggle under, stating, “While we appreciated the training we received through the NGOs sponsored by the U.S. government, and it did help us in our struggles, we are also aware that the same government also trained the state security investigative service, which was responsible for the harassment and jailing of many of us.”
As several Wikileaks cables showed, however, the Western-backed Arab dictatorships were extremely suspicious of U.S.-supported democracy groups and activists. This was especially true in Egypt, where one cable from 2007 reported that Mubarak was “deeply skeptical of the U.S. role in democracy promotion.” The Egyptian Ministry of Foreign Affairs complained to the U.S. Embassy in Cairo in 2006 about the “arrogant tactics in promoting reform in Egypt.” Mubarak’s son, Gamal, was described in one 2008 cable as being “irritable about direct U.S. democracy and governance funding of Egyptian NGOs.” Ultimately, the local dictatorships would increasingly clamp down on such organizations, attempting to prevent their functioning or interaction with Americans institutions.
A December 2008 cable from the U.S. Ambassador Margaret Scobey in Cairo noted that one activist from the April 6 movement had met with U.S. government officials in the United States as well as with various think tanks. The activist (presumably Maher) reported to Scobey that the Egyptian government “will never undertake significant reform, and therefore, Egyptians need to replace the current regime with a parliamentary democracy,” noting that the activist further “alleged that several opposition parties and movements have accepted an unwritten plan for democratic transition by 2011.” However, Scobey added, “we are doubtful of this claim.” After noting that several April 6 activists had been arrested and harassed by the Egyptian dictatorship, Scobey continued: “April 6’s stated goal of replacing the current regime with a parliamentary democracy prior to the 2011 presidential elections is highly unrealistic, and is not supported by the mainstream opposition.”
Scobey further reported that the April 6 activist told her that “Mubarak derives his legitimacy from U.S. support,” and thus, that the U.S. was “responsible” for Mubarak’s “crimes,” and the activist suggested that those NGOs which sought to promote “political and economic reform” were living in a “fantasy world.” Finally, Scobey noted, the activist “offered no roadmap of concrete steps toward April 6’s highly unrealistic goal of replacing the current regime with a parliamentary democracy prior to the 2011 presidential elections.” She then noted that most of the “opposition parties and independent NGOs work toward achieving tangible, incremental reform within the current political context,” and that the activists “wholesale rejection of such an approach places him outside this mainstream of opposition politicians and activists.”
The U.S. government also provided assistance to many activists in the Arab world – including Egypt – in gaining access to technology which allows dissidents “to get online without being tracked or to visit news or social media sites that governments have blocked.” Many of the tech firms and non-profits that received funding saw huge increases in the use of their technology across the Arab world during the start of the Arab Spring, much to their surprise. As one tech firm executive stated, “We didn’t start this company to go against any government… and here we are impacting millions of people in the Middle East and helping revolutions in Tunisia and Libya. We didn’t set out to do this, but we really think it’s cool we’re doing this.”
Such funding and organizational initiatives from the U.S. government and related institutions for pro-democracy groups in the Arab world, and notably Egypt, has led some commentators to suggest that the Arab Spring is simply the Middle Eastern version of the U.S.-sponsored ‘colour revolutions’ over the previous decade, even writing that such U.S.-supported activist groups “indelibly serve US interests” in terms of “controlling the political opposition,” to “ensure that the US funded civil society opposition will not direct their energies against the puppet masters behind the Mubarak regime, namely the US government.”
There are some fundamental problems with this position. A 2011 article in EurasiaNet noted that while there were “some similarities” between the Arab Spring and the Color Revolutions the previous decade, “there are key differences as well,” primary among them being that the Arab dictatorships “were far more authoritarian and brutal than their counterparts in Georgia, Kyrgyzstan and Ukraine,” which meant that the Color Revolutions “occurred in more semi-democratic contexts, in which the regimes… allowed for more media and political freedom, and were generally less repressive.” Further, the Color Revolutions based their model for ‘regime change’ exclusively upon “an electoral breakthrough in which ballot fraud became the focal point around which the civic and political opposition could rally.” Such was not the case in Tunisia or Egypt, where the sparks for revolution were unforeseen and rapid, “suggesting that the electoral breakthrough model is only possible in countries where there is some degree of political pluralism,” noted Lincoln Mitchell, an Associate Research Scholar at Columbia University.
Further, the Color Revolutions had a “geopolitical element” in which they were incorporated into the “freedom agenda” of the Bush administration, and “occurred in countries that had been the beneficiaries of ample US democracy assistance.” While the U.S. was credited – or accused (depending upon who was speaking) – of having “an almost magical role in organizing the opposition, spreading democracy, funding various organizations and the like,” in the context of the Arab Spring, “social networking technology has displaced the United States as the apparent catalyst for protest,” with Twitter and Facebook being “perceived as the magic explanatory variable.”
Indeed, while the U.S. provided funding for several dissident groups in the Arab world, it was not comparable in to the previous ‘Color Revolutions’ in terms of dollars, training, equipment or technical assistance in any capacity. The dissidents were not organized around a single leader or singular oppositional group, and while the U.S. Embassies were establishing contacts with dissidents, there is no conclusive evidence to suggest they were heavily involved or ‘directing’ them. The fact that much of the assistance for dissidents was in the form of training and gaining access to technologies is also noteworthy. Technology – in and of itself – is neutral: it can be used for good or not. It is entirely dependent upon how the person(s) using it choose to wield it. The United States sought to help activists gain access to technologies to work around the authoritarian regimes (which the US was supporting with billions in military and economic aid), and to slowly push for ‘reforms.’ The U.S. can help activists with getting training and access to technologies, but it has no control over how those activists ultimately utilize these technologies.
Further, as was revealed by the 2008 diplomatic cable from the U.S. Ambassador to Egypt, Margaret Scobey, while the Embassy and U.S. government had established contact with the April 6 Movement, Scobey portrayed their objectives as “highly unrealistic,” and the unnamed activist in the cable even stressed that the U.S. was “responsible” for the “crimes” of Mubarak. The cable stressed that the U.S. was in contact with mainstream opposition forces in Egypt, none of which were determining factors in the revolution, whereas the April 6 Movement, as Scobey noted, was “outside this mainstream of opposition and activists,” proposing the “unrealistic goal of replacing the current regime.”
The U.S. interest in doing this was not altruistic, of course, but was ultimately aimed at ‘hedging their bets.’ Certainly, the U.S. government would be seeking to use activists and dissident groups for its own purposes, but one must also acknowledge that activists and dissident groups use the U.S. government (and its funding) for their own purposes. The State Department and USAID (which provide the majority of funding for pro-democracy groups and activists from the U.S. government) know what they are told by those groups, what the groups write in reports and grant applications. In a country like Egypt, which was ruled by a repressive military dictator for three decades, sources of funding for democracy projects and activism is not easy to come by. As an activist, you would likely take whatever sources of funding and support you could get, so long as you can use the access and support for your own objectives, which is exactly what the April 6 Movement did.
Indeed, in the Arab world, the United States and its Western allies have not been interested in promoting revolution, but rather an incremental process of reform. Top US policy planners at the Council on Foreign Relations produced a report – and strategic blueprint – for the United States to follow in 2005, entitled, In Support of Arab Democracy: Why and How, co-chaired by former Clinton-era Secretary of State Madeleine Albright, who sits on the board of the Council on Foreign Relations, the Aspen Institute, and is chair of the National Democratic Institute for International Affairs, one of the major pro-democracy funding groups based out of the US.
The other co-chair of the Task Force report was Vin Weber, former Congressman and member of the board of the National Endowment for Democracy (NED), the primary ‘democracy promotion’ organization funded by the U.S. government. Other members of the Task Force which produced the report held previous or present affiliations with First National Bank of Chicago, Occidental Petroleum, the Carnegie Endowment, the World Bank, Brookings Institution, Hoover Institution, the U.S. State Department, National Security Council, National Intelligence Council, the American Enterprise Institute, the IMF, AOL-Time Warner, and Goldman Sachs. In other words, the strategic blueprint for promoting ‘democracy’ in the Arab world was developed by major U.S. strategic and corporate elites, including those who literally run the major democracy promotion organizations (including those that funded such groups in Egypt and elsewhere).
So what did the report have to say about the American Empire’s strategy for promoting democracy in the Arab world? Firstly, the report noted that, while “democracy entails certain inherent risks, the denial of freedom carries much more significant long-term dangers. If Arab citizens are able to express grievances freely and peacefully, they will be less likely to turn to more extreme measures.” Thus, the report noted, “the United States should promote the development of democratic institutions and practices over the long term, mindful that democracy cannot be imposed from the outside and that sudden, traumatic change is neither necessary nor desirable.” Most importantly, however, the report noted: “America’s goal in the Middle East should be to encourage democratic evolution, not revolution.”
So how can we interpret this? Democracy, as the United States defines it, is more “secure” precisely because it provides an institutional framework in which control may still be exercised, but where there are various degrees of freedom, enough to allow social pressures to be released, dissent to exist, and thus, contribute to the overall stability of a society through building consent to the power structures which rule it. Dictatorships are supported by coercion, not consent.
As America’s most influential political commentator of his time, Walter Lippmann, articulated in the 1920s, that modern democracies required the “manufacture of consent” of the public by the powerful, because “the public must be put in its place… so that each of us [elites] may live free of the trampling and the roar of a bewildered herd.” Manufacturing the consent of the public to the social order – and its prevailing power structures and hierarchies – would allow for “the least possible interference from ignorant and meddlesome outsiders.” A system in which the public’s consent was manufactured, noted Lippmann, “would provide the modern state with a foundation upon which a new stability might be realized.”
That “stability” has been understood by U.S. elites for nearly a century, and it is known to be built upon the “manufacture of consent.” This is why the Task Force report on promoting Arab democracy noted that, “the denial of freedom carries much more significant long-term dangers.” The Arab Spring revolutions did not follow the criteria established by the U.S. strategy, which specifically said that, “sudden, traumatic change is neither necessary nor desirable,” though it is exactly what took place, and of course, that democracy should be promoted through “evolution, not revolution.” As the Task Force report further noted, there was a risk that, “if Washington pushes Arab leaders too hard on reform, contributing to the collapse of friendly Arab governments, this would likely have a deleterious effect on regional stability, peace, and counterterrorism operations.” While instability may arise “in the short term” from promoting democracy, the report suggested, “a policy geared toward maintaining the authoritarian status quo in the Middle East poses greater risks to U.S. interests and foreign policy goals.”
For the United States and its Western allies, “democracy” is not the goal, but rather a means to a goal. The goal is, always has been, and always will be, “stability and prosperity;” control and profit. When the dictatorships fail to bring about stability and prosperity, “democracy” – so long as it is constructed along Western liberal state-capitalist lines – will be the preferred option. The European Union, when reporting on its own efforts to promote democracy in the Mediterranean region, noted that, “we believe that democracy, good governance, rule of law, and gender equality are essential for stability and prosperity.” In other words, democracy is not the goal: control and profit are the goals. The means are merely incidental, whether they be through dictatorships, or top-down democratic structures.
The problem in the Arab world is deepened for the United States when one looks at public opinion polls from the region. Just prior to the outbreak of protests in Tunisia, a major Western poll on Arab public opinion was conducted by the University of Maryland and Zogby International, published in the summer of 2010. The results were very interesting, noting that only 5% and 6% of respondents in 2010 believed that “promoting democracy” and “spreading human rights” were the two factors (respectively) which were most important in America’s foreign policy in the region. At the top of the list of priorities, with 49% and 45% respectively, were “protecting Israel” and “controlling oil,” followed by 33% each for “weakening the Muslim world” and “preserving regional and global dominance.”
Further, 92% of respondents felt that Iran has a right to its nuclear program if it is peaceful, and 70% feel that right remains even if Iran is seeking nuclear weapons. Roughly 57% of respondents felt that if Iran acquired nuclear weapons, things would be “more positive” for the region, compared to 21% who thought it would be “more negative.” The poll asked which two countries posed the largest threat to the region, with Israel at 88% and the United States at 77%, while Iran was viewed as one of the two major threats to the region by only 10% of respondents, just above China and equal to Algeria.
In other words, if truly representative – or genuine – democracies emerged in the region, they would be completely counter to U.S. strategic interests in the region, and thus, real democracy in the Arab world is not in the American interest. Top-down democracy, however, largely influenced by Western ideas and institutions, in which people are able to select between a couple parties which articulate social differences but implement largely identical economic and strategic policies, is an ideal circumstance for imperial powers.
Interestingly, Barack Obama’s 2010 budget sought to cut funding for democracy and governance aid to both Egypt and Jordan by roughly 40%, and for Egypt specifically, “funding has been cut by nearly 75 per cent for pro-democracy NGOs of which the Egyptian government does not approve.” These are hardly the actions of an American government seeking to implement ‘regime change’ through funding pro-democracy groups. Michele Dunne, a senior associate with the Carnegie Endowment, a major U.S. based think tank, noted that the cuts to funding pro-democracy groups in Egypt (and elsewhere) show that, “the Obama administration has decided on a more conciliatory approach toward the autocratic regimes, such as Egypt’s, that dominate Middle Eastern politics.”
While funding for democracy groups in Egypt was cut by 75% for 2010, U.S. aid to the Egyptian government would amount to $1.55 billion for 2010, of which $1.3 billion was in the form of military aid. Michele Dunne noted, “My conversations with members of the [Obama] administration have made it clear that they did not want economic assistance to irritate the Egyptian government,” whereas the Bush administration’s funding for civil society groups in Egypt had caused a great deal of frustration from Mubarak and his regime. Under Bush, such funding had “doubled and tripled.” Under Obama, much of this was undone. Safwat Girgis, who runs two Egyptian-based NGOs, said that Obama’s “decision is in the best interest of the Egyptian government, not the people nor the civil society organizations… In my opinion, this is just an exchange of interests between Egypt and the United States.”
The ‘Liberal Opposition’ in Egypt
When powerful Western states seek to influence or manage ‘transitions to democracy,’ they generally support whatever elite most closely resembles themselves, usually a variation of liberal democratic state-capitalist groups. But whatever dominant institutions pre-exist in that society have to be integrated with the new ‘method’ of governance (political parties, elections, etc.), though the pre-existing oligarchy generally remains in charge. Transitions to ‘democracy’ are promoted by the American Empire as if the United States had some sort of ‘God complex,’ seeking to remake the world in its own image… or delusion, rather.
Political parties need to be organized. Those which are more ‘Western’ are deemed more acceptable to Western elites, usually the ‘liberal democrats,’ or some variation thereof. In Egypt, there was not such an organized opposition in time for the revolution. There were attempts within Egypt to develop a liberal opposition, but the dictatorship kept a firm fist over political life. One such liberal opposition figure was Mohamed ElBaradei, an international diplomat who had, for decades, lived in the West.
In 2009, the former head of the UN’s International Atomic Energy Agency (IAEA), Mohamed ElBaradei, announced that he would consider running for president of Egypt in the planned 2011 elections, commenting, “I have been listening tentatively, and deeply appreciate the calls for my candidacy for president.” He explained that he would “only consider it if there is a free and fair election, and that is a question mark still in Egypt.” ElBaradei received support in running for president from the liberal Wafd party, as well as from groups within the Kefaya (“Enough”) movement.
As ElBaradei arrived in Egypt in February of 2010, he was greeted by hundreds of Egyptians welcoming him, hopeful for his potential presidential bid. The first multiparty elections in Egypt were held in 2005, though the entire process was “marred by fraud,” unsurprisingly. While 2011 was set to have a follow-up election, most assumed that Hosni Mubarak would attempt to hand power over to his son, Gamal. That same month, ElBaradei announced that he was going to form “a national association for change” in Egypt, opening the invite for “anyone who wanted a change to the ruling party” to join the association, following talks with several opposition figures and civil society leaders, including a representative of the Muslim brotherhood. The National Association for Change would have as its “main target” to “be pushing for constitutional reforms and social justice,” explained ElBaradei.
In June of 2010, the Muslim Brotherhood officially endorsed the ‘reform campaign’ of ElBaradei, following a meeting between ElBaradei and Said al Katani, the leader of the Brotherhood’s parliamentary bloc. Both the Brotherhood and ElBaradei’s National Association for Change announced that they would plan to co-ordinate and work together in the future on promoting reform in Egypt.
The National Association for Change (NAC) created a petition which called for constitutional amendments allowing independent political candidates to run in the upcoming election, as well as providing independent supervision of the elections. Only 70,000 signatures were attached to the petition within a few months, though ElBaradei had been anticipating millions. ElBaradei had been hoping for mass protests and a boycott against the upcoming legislative elections planned for the fall of 2010, commenting that, “anyone who will participate in this charade will be giving legitimacy or pseudo-legitimacy to a regime desperate to get legitimacy.” ElBaradei also extended his criticisms to the Egyptian population, suggesting that there was “a high level of apathy and despair that anything is going to change,” and that “people need to mature… I can be a leader if I have the people behind me. I can’t bring about change single-handed.”
The following month of July 2010, Mohamed ElBaradei was appointed to the board of trustees of the International Crisis Group (ICG). The ICG describes its goals as being to work “through field-based analysis and high-level advocacy to prevent and resolve deadly conflict,” producing “regular analytical reports containing practical recommendations targeted at key international decision-takers.”
The board of trustees was made up of a number of prominent Western elites from the state, military, think tanks, corporations and international organizations, including: Thomas Pickering, former US Ambassador; George Soros, billionaire investor and chair of the Open Society Institute; Kofi Annan, former UN Secretary General (now on the international advisory board of JPMorgan Chase); Samuel Berger, former U.S. National Security Adviser and chair of the Albright Stonebridge Group; Wesley Clark, former NATO Supreme Allied Commander; Carla A. Hills, former U.S. trade representative and member of numerous corporate boards; Jessica Tuchman Matthews, the president of the Carnegie Endowment for International Peace; and Javier Solana, former NATO Secretary-General, among many others.
Senior advisers to the International Crisis Group also include Prince Turki al-Faisal, the former Saudi Ambassador to the United States; former U.S. Deputy Secretary of State Richard Armitage, former U.S. National Security Adviser Zbigniew Brzezinski, and Ernesto Zedillo, former President of Mexico, among many other former top government officials and current corporate and think tank leaders.
Further revealing how entrenched the ICG is within the Western imperial establishment, roughly 49% of its funding comes from governments, including the foreign affairs departments and aid agencies of the governments of Australia, Austria, Belgium, Canada, Denmark, the European Union, Finland, Germany, Ireland, the Netherlands, New Zealand, Norway, Sweden, Switzerland, Turkey, the United Kingdom and the United States. Roughly 20% of the ICG’s funding comes from private foundations, such as the Carnegie Corporation, Elders Foundation, William and Flora Hewlett Foundation, Henry Luce Foundation, John D. and Catherine T. MacArthur Foundation, Open Society Foundations (run by the Soros family), the Radcliffe Foundation, Stanley Foundation, and the Rockefeller Brothers Fund. Private sector support for the ICG accounts for 31% of its funding, from individuals and institutions such as: Dow Chemical, McKinsey & Company, Anglo American PLC, BG Group, BP, Chevron, Shell, Statoil, the Clinton Family Foundation, ENI, and many others.
Western elites were obviously taking note of potential changes in Egypt, and certain groups within elite circles seek to get ahead of change and try to steer ‘reforms’ into safe areas (for entrenched power structures). They were aiming to encourage ‘reform’ in Egypt, not revolution. The International Crisis Group (ICG) is a good example of this, an organization with a focus on monitoring and providing ‘advice’ to states and other powerful institutions on preventing and managing crises, bringing together corporate, financial, ‘philanthropic,’ strategic and intellectual power players into a single institution. Inviting Mohamed ElBaradei into the group was an opening to attempt to bring Egypt’s potential future leadership more closely aligned with the interests and ideas of the Western elite. When ElBaradei returned to Egypt once again – though days after the uprising began – he suspended his membership with the International Crisis Group.
Mohamed ElBaradei, after forming the National Association for Change in Egypt, spent most of his summer in 2010 abroad, though he returned in September to meet with opposition groups, especially the Muslim Brotherhood, at the Brotherhood’s annual Ramadan iftar banquet, where one leader from the Kefaya movement lambasted the Brotherhood for not taking an official stance in announcing it would boycott the coming legislative elections. Since the Brotherhood was the only large organized opposition within Egypt, the more liberal-leaning opposition groups formed a tenuous alliance with the organization.
As a leader in the National Association for Change – Cairo University political scientist Hassan Nafaa – said: “We are forced to come together.” A spokesperson for the Brotherhood commented, “There are now only two possibilities: the regime or the Muslim Brotherhood.” Still, the Brotherhood, which held the largest opposition seats in the Parliament (with 20% of the total), “has been careful not to criticize Mubarak directly and insists it would never nominate its own candidate for the presidency.” The official stance of the Brotherhood has, however, “alienated many of its most active young members,” many of whom resigned in protest. Mohamed Salmawy, the president of the Egyptian Writers’ Union, referred to the Brotherhood, saying, “They can never come up with a real platform… If they did, it would give them away. They would be found out as people who do not believe in democracy.”
That same month, ElBaradei went on to call for a national boycott of the elections and told several activists that, “regime change was possible in the coming year.” The National Association for Change had compiled nearly one million signatures demanding constitutional change, and ElBaradei commented, “If the whole people boycott the elections it will be, in my view, the end of the regime.”
Intelligent Imperialism: The Working Group on Egypt
The Working Group on Egypt was formed in April of 2010 as a co-operative effort by officials from multiple prominent U.S. think tanks to encourage a change in policy toward Egypt, and more specifically, to encourage ‘democratic reforms.’ The Working Group consisted of nine different individuals: Elliott Abrams, senior fellow at the Council on Foreign Relations, former State Department official who also served on the National Security Council in both the Reagan and George W. Bush administrations; Robert Kagan, a senior fellow at the Brookings Institution, former senior associate at the Carnegie Endowment for International Peace, former member of the State Department in the Reagan administration, and he also currently sits on the Secretary of State’s Foreign Affairs Policy Board; Scott Carpenter of the Washington Institute for Near East Policy, previously served as a Deputy Secretary of State in the Bush administration, and served as an adviser in managing the Iraqi occupation, previously having worked with the International Republican Institute (IRI); Ambassador Edward Walker of the Middle East Institute, a former Assistant Secretary of State and ambassador to Israel, Egypt, and the United Arab Emirates.
Other members of the Working Group included: Tom Malinowski, a director of Human Rights Watch, and former member of the National Security Council in the Clinton administration and former speechwriter for Secretaries of State Warren Christopher and Madeleine Albright; Ellen Bork of the Foreign Policy Initiative, former director at Freedom House, former deputy director of the Project for a New American Century (PNAC), former State Department official and member of the Council on Foreign Relations; Thomas Carothers of the Carnegie Endowment for International Peace, recognized as a ‘foremost’ authority on democracy-assistance programs, he served in the State Department working with USAID on ‘democracy assistance’ to Latin America during the Reagan administration; Michele Dunne of the Carnegie Endowment, a former member of the National Security Council staff and the State Department’s Policy Planning staff, she also served as a diplomat in Israel and Egypt, and currently is a vice president at the Atlantic Council and is on the board of directors of the National Endowment for Democracy; and Daniel Calingaert, vice president of Freedom House, formerly with the International Republican Institute (IRI), and was a researcher at RAND Corporation.
Of the nine officials that make up the Working Group on Egypt, Calingaert was the only one who did not previously serve on the National Security Council or State Department. Moreover, several of the most influential U.S.-based ‘democracy promotion’ organizations were heavily represented in the Group, such as the National Endowment for Democracy, the International Republican Institute, and Freedom House.
Thomas Carothers, a member of the Working Group, is considered by the major think tanks and establishment journals to be “one of the world’s foremost experts on democracy building.” In 1997, he wrote an article explaining the general strategy of “democracy assistance” by the United States, primarily focused on supporting ‘institutions’ that the state views as “constituent elements of democracy.” This is broken down into three areas, providing support to “the electoral arena, governmental institutions, and civil society.” In the electoral arena, the focus is on providing for “free and fair elections.” They also “aid” in the development of political parties, “primarily through technical assistance and training on campaign methods and institutional development,” with the ultimate aim of creating a “party system” in which there are several different parties which differ only in “mild ideological shadings.”
In terms of providing assistance to ‘governmental institutions,’ Carothers noted the U.S. democracy aid “seeks to help build democracy from the top down,” as opposed to allowing for democracy to generate from the bottom up (aka: genuine democracy). One of the primary facets of this program is for the U.S. to “aid” in the writing of a new constitution, “to help steer the country toward adopting a constitution that guarantees democratic government and a full range of political and civil rights,” of course including private property rights for corporations and specific privileges for elites.
The U.S. also offers “assistance” in helping to form parliamentary bodies and undertake “judicial reform… to increase the efficiency and independence of judicial systems.” In terms of support to ‘civil society,’ U.S. assistance tends to pour into NGOs, the media, and unions. The key determinant of support for NGOs is if they “seek to influence governmental policy on some specific set of issues.” Support for media aims to make it an “independent, professionalized media,” which is to say, corporate controlled; and support for unions, Carothers explained, was an older ‘assistance’ program by the U.S. government aimed at building up unions “not affiliated with leftist political parties or movements.” Again, for the United States, “democracy” is all about “top down,” which is to say, democracy engineered by (and for) elites.
In their first statement, issued to Secretary of State Hillary Clinton in April of 2010, the Working Group urged Clinton “to promote democratic reform in Egypt in advance of the upcoming elections,” warning that, “rather than progressing gradually on a path of desirable reform, Egypt is instead sliding backwards into increased authoritarianism.” Noting that, “Egypt is at a critical turning point,” the Working Group recommended that the Egyptian government should respond “to demands for responsible political change… [and] face the future as a more democratic nation with greater domestic and international support,” which is to say, ‘order and stability.'
If this is not done, they warned, “prospects for stability and prosperity in Egypt will be in doubt,” which would “have serious consequences for the United States, Egypt’s neighbors, the U.S.-Egyptian relationship, and regional stability.” The United States, they wrote, “has a stake in the path Egypt takes.” Noting that Egypt had a massive population of unemployed youth, the statement declared: “To fulfill expectations and to prevent the onset of frustration and radicalism, Egypt must expand citizens’ say in how they are governed,” explaining that there was “now an opportunity to support gradual, responsible democratic reform,” noting that the longer the U.S. waits, “the harder it will be to reverse a dangerous trend.”
The Working Group sent a follow-up letter to Clinton the next month, upon Mubarak’s decision to extend the “state of emergency” (which he initially passed when he came to power in 1981) for another two years, noting that the situation “heightens our concern that the administration’s practice of quiet diplomacy is not bearing fruit,” and that, “we are more convinced than ever of the importance of U.S. engagement… the United States is uniquely positioned to engage the Egyptian government and civil society and encourage them along a path toward reform. The time to use that leverage is now.”
Noting that when rebels ousted the corrupt Kyrgyzstan government in April of 2010, the population complained of the U.S.’s silence in the face of rigged elections and human rights abuses, “placing a clear priority on strategic cooperation with the government.” Watch out, Kagan and Dunne warned: “If the Obama administration does not figure out how to make clear that it supports the political and human rights of Egyptian citizens, while cooperating with the Egyptian government on diplomatic and security affairs, people will be saying that about the United States in Cairo one of these days – and maybe sooner than we expect.”
In November of 2010, members of the Working Group on Egypt held a meeting with members of the Obama administration’s National Security Council staff, including Dennis Ross, Samantha Power, Pradeep Ramamurthy, Dan Shapiro, and Gayle Smith. The meeting was “to discuss Egypt’s upcoming elections, prospects for political reform, and the implications for U.S. policy.”
The Working Group on Egypt was made up of a group of strategists from the dominant think tanks and ‘democracy’ promotion organizations embedded within the U.S. elite establishment, organized in an effort to promote a strategy which would secure long-term Western interests in the Arab world and Egypt in particular, pushing for ‘democratic’ reforms in order to placate the inevitable tide of history from tossing the United States out of Egypt in a revolutionary fervor. When the uprising began, and thereafter, those involved with the Working Group on Egypt became increasingly influential within U.S. policy circles, most notably at the National Security Council (NSC).
The Secret Report
In August of 2010, Obama issued a Presidential Study Directive to be undertaken by some of his advisers “to produce a secret report on unrest in the Arab world.” The 18-page report was produced by Dennis Ross, the senior adviser on the Middle East, and senior director of the National Security Council Samantha Power, along with another NSC staffer, Gayle Smith. Weekly meetings were held between these officials and representatives from the State Department, CIA, and other agencies. The conclusions of the report were – as the New York Times reported – “without sweeping political changes, countries from Bahrain to Yemen were ripe for popular revolt,” with particular ‘flashpoints’ being identified, including Egypt.
The report suggested that proposals be put forward on how to pressure Arab regimes to implement reforms before such circumstances arose. A senior official who helped draft the report later commented, “There’s no question Egypt was very much on the mind of the president… You had all the unknowns created by Egypt’s succession picture – and Egypt is the anchor of the region.”
Yemen, long ruled by Ali Abdullah Saleh, was another nation that figured prominently in the report. Another administration official acknowledged that with rising youth populations, increasingly educated, yet with few economic opportunities and access to social media and the Internet, there was a “real prescription for trouble… whether it was Yemen or other countries in the region, you saw a set of trends.” Obama also pressed his advisers to look at the popular uprisings in Latin America, Eastern Europe and Southeast Asia to draw parallels and assess successes and failures. The report laid out a basis upon which the U.S. attempted to navigate its initial strategy during the uprisings of the Arab Spring.
Imperial Dilemma: Choosing Dictatorship or Democracy?
The stage was set, change was inevitable, strategy was lagging – though developing – and the empire was thrown into a crisis when Egypt’s 18-day revolt took the world by shock. When one of the most important strategic ‘allies’ (aka: proxies) of the United States was thrown into a crisis in the form of a popular domestic uprising against the U.S.-subsidized dictatorship, the American Empire attempted to dance its way between the rhetoric – and strategic interest – of ‘democracy’ and the known stability and comfort of dictatorship. This dance over the 18-day uprising will be the focus of the next part in this series.
This report described some of the key ideas and characters that would become intimately involved in attempting to manage the situation within Egypt during the 18-day revolt and in the years since the uprising overthrew Mubarak. From the dictatorship, to democracy-promotion, and Egypt’s ‘liberal opposition,’ the Obama administration – and most especially the Pentagon, State Department, and National Security Council (often working closely with the Working Group on Egypt) sought to manage the dance between dictatorship and democracy for the Arab world’s most populous country in the midst of a popular uprising.
Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project, and hosts a weekly podcast show with BoilingFrogsPost.
 Justin Webb, “Obama interview: the transcript,” BBC, 2 June 2009:
 Political Punch, “Secretary Clinton in 2009: “I really consider President and Mrs. Mubarak to be friends of my family”,” ABC News, 31 January 2011:
 Simon Tisdall, “WikiLeaks cables cast Hosni Mubarak as Egypt’s ruler for life,” The Guardian, 9 December 2011:
 Luke Harding, “WikiLeaks cables show close US relationship with Egyptian president,” The Guardian, 28 January 2011:
 Mark Landler and Andrew W. Lehren, “Cables Show Delicate U.S. Dealings With Egypt’s Leaders,” The New York Times, 27 January 2011:
 Jeffrey Fleishman, “WikiLeaks: Diplomatic cables show Egyptian leader’s acrimony with Iran,” The Los Angeles Times, 29 November 2010:
 Press Release, “Remarks by President Obama and President Mubarak of Egypt During Press Availability,” The White House, 18 August 2009:
 Anne E. Kornblut and Mary Beth Sheridan, “Obama Optimistic About Mideast Peace,” The Washington Post, 19 August 2009:
 Michael Slackman, “Mubarak to Tell U.S. Israel Must Make Overture,” The New York Times, 16 August 2009:
 Richard Falk, “Ben Ali Tunisia was model US client,” Al-Jazeera, 25 January 2011:
 Daya Gamage, “Massive U.S. Military Aid to Tunisia despite human rights abuses,” Asian Tribune, 18 January 2011:
 NYT, “Challenges Facing Countries Across North Africa and the Middle East,” The New York Times, 17 February 2011:
 Samer al-Atrush, “Tunisia: Why the Jasmine Revolution won’t bloom,” The Telegraph, 16 January 2011:
 Steven Erlanger, “France Seen Wary of Interfering in Tunisia Crisis,” The New York Times, 16 January 2011:
 Angelique Chrisafis, “Sarkozy admits France made mistakes over Tunisia,” The Guardian, 24 January 2011:
 Raj M. Desai, Anders Olofsgard, and Tarik M. Yousef, “The Logic of Authoritarian Bargains,” Economics & Politics (Vol. 21, No. 1, March 2009), pages 93-94.
 Raj M. Desai, Anders Olofsgard and Tarik Yousef, “Is the Arab Authoritarian Bargain Collapsing?,” The Brookings Institution, 9 February 2011:
 F. Gregory Gause III, “Why Middle East Studies Missed the Arab Spring: The Myth of Authoritarian Stability,” Foreign Affairs (Vol. 90, No. 4, July/August 2011), pages 81-82.
 Marwan Muasher, “Tunisia’s Crisis and the Arab World,” the Carnegie Endowment for International Peace, 24 January 2011:
 Noam Chomsky, “Is the world too big to fail?,” Al-Jazeera, 29 September 2011:
 Roger Cohen, “Who Really Brought Down Milosevic?” The New York Times, 26 November 2000:
 Philip Shishkin, “In Putin’s Backyard, Democracy Stirs — With U.S. Help,” The Wall Street Journal, 25 February 2005:
 Ian Traynor, “US campaign behind the turmoil in Kiev,” The Guardian, 26 November 2004:
 Mark Almond, “The price of People Power,” The Guardian, 7 December 2004:
 Matt Kelley, “U.S. money has helped opposition in Ukraine,” Associated Press, 11 December 2004:
 Daniel Wolf, “A 21st century revolt,” The Guardian, 13 May 2005:
Craig S. Smith, “U.S. Helped to Prepare the Way for Kyrgyzstan’s Uprising,” The New York Times, 30 March 2005:
John Laughland, “The mythology of people power,” The Guardian, 1 April 2005:
Jonathan Steele, “Ukraine’s postmodern coup d’etat,” The Guardian, 26 November 2004:
 Ron Nixon, “U.S. Groups Helped Nurture Arab Uprisings,” The New York Times, 14 April 2011:
 “Egypt protests: secret US document discloses support for protesters,” The Telegraph, 28 January 2011:
 Ian Shapira, “U.S. funding tech firms that help Mideast dissidents evade government censors,” The Washington Post, 10 March 2011:
 Michel Chossudovsky, “The Protest Movement in Egypt: “Dictators” do not Dictate, They Obey Orders,” Global Research, 29 January 2011:
 Lincoln Mitchell, “North Africa through the Lens of the Color Revolutions,” EurasiaNet, 4 February 2011:
 “Egypt protests: secret US document discloses support for protesters,” The Telegraph, 28 January 2011:
 Madeleine Albright and Vin Weber, In Support of Arab Democracy: Why and How (Council on Foreign Relations Task Force Report, 2005), pages 49-54.
 Ibid, pages 3-4.
 Andrew Gavin Marshall, “‘A Lot of People Believe This Stuff’: Bill Clinton, Barack Obama, and the Politics of Public Relations,” Andrewgavinmarshall.com, 7 September 2012:
 Madeleine Albright and Vin Weber, In Support of Arab Democracy: Why and How (Council on Foreign Relations Task Force Report, 2005), pages 12-13.
 Michelle Pace, “Paradoxes and contradictions in EU democracy promotion in the Mediterranean: the limits of EU normative power,” Democratization (Vol. 16, No. 1, February 2009), page 42.
 Report, “2010 Arab Public Opinion Poll: Results of Arab Opinion Survey Conducted June 29-July 20, 2010,” The Brookings Institution, 5 August 2010:
 Matt Bradley, “Egypt’s democracy groups fear shift in US policy will harm their work,” The National, 29 January 2010:
 Opposition hopeful for an ElBaradei presidential run,” The National, 6 December 2009:
 Abigail Hauslohner, “Will ElBaradei Run for President of Egypt?” Time Magazine, 20 February 2010:
 “ElBaradei to form ‘national association for change’,” BBC News, 24 February 2010:
 Amro Hassan and Jeffrey Fleishman, “Egypt’s Mohamed ElBaradei creates National Front for Change,” The Los Angeles Times, 24 February 2010:
 Matt Bradley, “Brotherhood sides with ElBaradei,” The National, 6 June 2010:
 Nadia Abou el Magd, “Mohammed ElBaradei, Egypt’s wake-up caller,” The National, 26 June 2010:
 Brussels, “Crisis Group Announces New Board Members,” International Crisis Group, 1 July 2010:
 ICG, “Crisis Group Senior Advisers,” International Crisis Group:
 ICG, “Who Supports Crisis Group?” The International Crisis Group, funding for the year ending 30 June 2012:
 International Crisis Group, “Popular Protest in North Africa and the Middle East (I): Egypt Victorious?” Middle East/North Africa Report, (No. 101, 24 February 2011), page 4 (footnote #33).
 Thanassis Cambanis, “Thin Line for Group of Muslims in Egypt,” The New York Times, 5 September 2010:
 Jack Shenker, “Egyptian dissident Mohamed ElBaradei urges election boycott,” The Guardian, 7 September 2010:
 Thomas Carothers, “Think Again: Arab Democracy,” Foreign Policy, 10 March 2011:
 Thomas Carothers, “Democracy Assistance: The Question of Strategy,” Democratization (Vol. 4, No. 3, Autumn 1997), pages 112-113.
 Ibid, page 113.
 Ibid, pages 113-114.
 Working Group on Egypt, “A Letter to Secretary Clinton From the Working Group on Egypt,” Carnegie Middle East Center, 7 April 2010:
 The Working Group on Egypt, “A Second Letter to Clinton from the Working Group on Egypt,” Carnegie Endowment for International Peace, 12 May 2010:
 Michele Dunne and Robert Kagan, “Obama needs to support Egyptians as well as Mubarak,” The Washington Post, 4 June 2010:
 Press Release, “Working Group on Egypt meets with NSC staff,” The Carnegie Endowment for International peace, 2 November 2010:
 Mark Landler, “Secret Report Ordered by Obama Identified Potential Uprisings,” The New York Times, 16 February 2011:
Global Power Project, Part 8: Banking on Influence with Wells Fargo
By: Andrew Gavin Marshall
Originally posted at Occupy.com
Just recently, in late July, Wells Fargo surpassed the Industrial and Commercial Bank of China (ICBC) as the world’s largest bank by market capitalization. This followed Wells Fargo reporting a 19% increase in profits over the second quarter as the bank has been busy consolidating the housing market while other big banks have retreated from it. Wells Fargo had amassed a share of almost 40% of the U.S. mortgage market by early 2013.
Now, let’s put this in context with the company’s other recent activities.
Wells Fargo, which acquired Wachovia in the wake of the financial crisis, controlled roughly 28.8% of all home loans issued across the United States in 2012, compared to 11.2% of the market it controlled in 2007, just before the housing implosion. In 2012, the bank paid a $175 million settlement following revelations that “mortgage brokers working with Wells Fargo had charged higher fees and rates to more than 30,000 minority borrowers across the country than they had to white borrowers who posed the same credit risk.”
In the settlement, the world’s largest bank “admitted no wrongdoing,” noting in a press release that the bank simply wanted “to avoid a long and costly legal fight.” Then, in 2013, Wells Fargo agreed to a further $42 million settlement because “it neglected the maintenance and marketing of foreclosed homes in black and Latino neighborhoods across the country.” Again, of course, the bank admitted no wrongdoing.
But that’s just the tip of things. A civil mortgage fraud suit was filed against Wells Fargo in late 2012 for hundreds of millions of dollars in damages over “reckless mortgage loans” made by the bank for over a decade in the lead-up to the financial crisis. Even in light of the massive settlement in 2012 over mortgage fraud, which simultaneously forced big banks to adhere to new rules regarding the mortgage market, it was found that both Bank of America and Wells Fargo had “flagrantly violated those obligations,” increasing foreclosure risks for Americans. Also, this past May, Wells Fargo agreed to pay a $105 million settlement in a fraud case brought by Orange County, which also implicated Bank of New York Mellon to the tune of a $114 million settlement.
It gets better. In 2010, Wachovia – which was purchased by Wells Fargo in 2008 – paid a settlement of $160 million for laundering over $100 million in drug money for Mexican and Colombian drug cartels. Further, the bank admitted that it had failed to “apply the proper anti-laundering strictures” regarding the bank’s handling of $378.4 billion in currency exchanges with Mexico between 2004 and 2007. A federal prosecutor commented, “Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” as tens of thousands of Mexicans were killed in an exponentially violent drug war.
Thus, in the aftermath of the financial crisis, not only did the big banks receive sprawling government bailouts (Wells Fargo got $25 billion from the U.S. government), but according to the UN, proceeds pouring in from the global drug trade ultimately helped keep Wells Fargo and others afloat as “the only liquid investment capital” available to them during the crisis. But Wells Fargo didn’t just profit from laundering money for major drug cartels — it also profited, and continues to profit, at the other end of the drug war as a major investor in the prison-industrial complex, specifically with heavy investments in the GEO Group, the second largest private prison company in the United States.
As the largest bank in the world, Wells Fargo is deeply connected with some of the most powerful U.S. and international institutions to ensure that no matter how many crimes it commits — fraud, illegal foreclosures, money laundering, you name it — it will continue to consolidate markets, grow larger and presumably get away with its criminal activities for relatively small fines. The Global Power Project examined a total of 26 individuals on the executive committee and board of directors at Wells Fargo to assess their institutional affiliations. The most represented institutions (with three individual affiliations each) are the Council on Foreign Relations and PricewaterhouseCoopers (PwC), followed by Harvard, Citigroup, Chevron, the Financial Services Roundtable and Target Corporation (with two individual affiliations each).
Meet the Elites
Elaine L. Chao, who sits on the board of Wells Fargo, was formerly U.S. Secretary of Labor in the George W. Bush administration, from 2001 to 2009. She was a Distinguished Fellow of the Heritage Foundation from 1996 to 2001 and has resumed that position since 2009. She was also the President and CEO of the United Way of America from 1992 to 1996, Director of the Peace Corps from 1991 to 1992, and Deputy Secretary of the U.S. Department of Transportation from 1989 to 1991. Chao is a member of the board of directors of Dole Food Company, News Corporation, Protective Life Corporation, the Institute of Politics of Harvard Kennedy School of Government, and a member of Harvard Business School Board of Dean’s Advisors, as well as a member of the Council on Foreign Relations.
John S. Chen, also on the board of Wells Fargo, is a senior adviser to Silver Lake Partners, a director of the Walt Disney Company, a member of the Board of Overseers Emeriti of the Watson Institute for International Studies at Brown University, a former member of the President’s Export Council, a member of the board of trustees of the Brookings Institution, chairman of the U.S.-China Policy Advisory Roundtable at the Center for Strategic and International Studies (CSIS), and a member of the Council on Foreign Relations.
Wells Fargo board member Enrique Hernandez, Jr. is the president and CEO of Inter-Con Security Systems, and sits on the boards of Chevron, Nordstrom, McDonald’s Corporation, and the board of trustees of the University of Notre Dame. He is a member of the Harvard College Visiting and Harvard University Resources Committees and is a member of the John Randolph Haynes and Dora Haynes Foundation.
Federico F. Peña, on the Wells Fargo board, was a U.S. Secretary of Transportation and U.S. Secretary of Energy during the Clinton administration, and previously a member of the Colorado House of Representatives and a former mayor of Denver. More recently, he has been a senior adviser to Vestar Capital Partners, on the board of Sonic Corporation and a member of the Diversity Advisory Board of Toyota North America. A former national board member of the Obama-Biden Transition Team, Peña is also former National Co-Chair of Obama For America and currently a member of the Council on Foreign Relations.
John G. Stumpf, the president and CEO of Wells Fargo, is a member of the board of directors of the Financial Services Forum and chairman of the board of the Financial Services Roundtable, and is also on the boards of Target Corporation, Chevron, and on the board of trustees of the San Francisco Museum of Modern Art.
For a mega-money laundering, drug war profiteering, prison-industry enlarging global bank like Wells Fargo, the evidence is obvious: it helps to have affiliations with individuals and institutions that make up the U.S. and increasingly the international power elite. Like the other big banks, Wells Fargo is too big to fail, too big to jail, too criminal to control — and too tumorous to tolerate.
Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com‘s Global Power Project, and hosts a weekly podcast show with BoilingFrogsPost.
Global Power Project, Part 7: Banking on Influence with Citigroup
By: Andrew Gavin Marshall
Originally posted at Occupy.com
In the second quarter of 2013, the third-largest U.S. bank by assets, Citigroup, posted a 42% increase in profits which CEO Michael Corbat praised as a “well balanced” result of “cost cutting” programs, including the firing of 11,000 workers.
This big bank has a sordid history of predatory profiteering and criminal activity, not unlike all the other large banks. In the early 20th century, what was then National City Bank was the main bank for the Rockefeller Standard Oil interests. Over ensuing decades and mergers it eventually came to be Citibank, and in the late 1990s, Citigroup. At that time, the bank was dealing with accusations that it had aided in the laundering of roughly $100 million in payoffs by Mexican drug cartels.
In 2000, the mega-bank was accused of abusing borrowers and clients through predatory lending practices. The bank aroused further controversy by helping Enron evade financial rules which allowed the company to hide its real financial reporting from government regulators. In 2005, Citigroup paid a $2 billion settlement to Enron investors who had filed a class-action lawsuit against the bank for helping Enron hide billions of dollars in debt.
A 2005 report by Citigroup created the term ‘plutonomy’ to describe the modern state capitalist system in which there is only the rich “and everyone else”; an economy in which the rich increasingly become the consuming class, driven to a significant degree by “disruptive technology-driven productivity gains, creative financial innovation, [and] capitalist friendly cooperative governments.”
Referencing the United States, the U.K., Australia and Canada as modern plutonomies, Citigroup global strategist Ajay Kapur noted, “The Plutonomy is here, is going to get stronger, its membership is swelling,” and while the “risks” of plutonomies include “war, inflation, financial crises, the end of the technological revolution and populist political pressure,” Kapur noted that “the rich are likely to keep getting even richer, and enjoy an even greater share of the wealth pie over the coming years.” Indeed, Citigroup would ensure that this was the case.
In the 1990s, Bill Clinton’s Treasury Secretary Robert Rubin helped to deregulate Wall Street and allow for massive mergers and the proliferation of dangerous financial instruments in the derivatives market, which helped create the future housing crisis. After leaving the White House, Rubin became an adviser to Citigroup, and ultimately the bank’s chairman, where he helped push the mega-bank further down the path taken by Morgan Stanley and Goldman Sachs to build up an unprecedented housing bubble. When the inevitable happened, Citigroup owned tens of billions of dollars in bad debts. Meanwhile, Robert Rubin was appointed as an economic adviser to the transition team for President Obama.
Citigroup was subsequently bailed out by the federal government, that is, the U.S. taxpayer, and became the largest single recipient of bailout funds totaling some $476.2 billion in cash and guarantees. Citigroup was essentially put into receivership by the government, which decided to reward the bank after its highly effective and efficient participation in the destruction of the economy. The U.S. Treasury eventually sold the last of its shares in Citigroup in 2010.
Since that time, the bank has been quietly settling civil complaints and lawsuits, further proving that criminal activity by major financial institutions comes down to a cost-benefit analysis: if the cost of committing massive crimes is less than the benefit of engaging in such criminal activity, there is little incentive to obey the law rather than pay comparably lower fines after breaking it.
Between 2003 and 2011, the Securities and Exchange Commission (SEC) accused Citigroup of securities fraud five separate times, with the bank agreeing to pay settlements in each case, amounting to a slap on the wrist from the SEC. As a Bloomberg report stated bluntly, for Citigroup “obeying the law is too damn hard.” Or rather, simply, it is unnecessary.
In 2011, Citigroup paid a $285 million settlement with the SEC for defrauding investors. In 2012, the bank paid another settlement of $590 million for defrauding investors, though it made sure not to admit guilt as the payment was “solely to eliminate the uncertainties, burden and expense of further protracted litigation.” In 2013, Citigroup agreed to pay a further $968 million to Fannie Mae over the bad mortgage loans it sold to the company in the run-up to the financial crisis.
But before you assume that Citigroup simply defrauded investors and other institutions, know this: the bank also undertook foreclosures on hundreds of U.S. military members during the financial crisis, often while the military personnel were in Iraq or Afghanistan. After illegally foreclosing on military personnel while they were overseas fighting wars for the America’s imperialists and profiteers, Citigroup made a later appearance in Iraq, announcing in 2013 that it would be the first U.S. bank to open a branch in Bagdad “as major international oil groups as well as industrial and construction companies are looking to invest in Iraq.”
Iraq is just the latest hub of overseas criminal financial activities for Citigroup, which has meanwhile been struggling to “comply” with anti-money laundering laws after also participating in the largest financial scam in history: the Libor rate-rigging scandal. At the same time, the bank has been dooming the European Union’s crisis countries (namely Greece) to a faster decline, issuing self-fulfilling reports that suggest the region is headed for further crisis, thus reducing investor confidence and pushing the crisis-hit economies into even deeper crisis.
In sum, Citigroup’s fraudulent lifestyle – with its increased quarterly profits – is one more example of how the institutions of the financial system function as criminal conglomerates on a scale far surpassing any Mafia on record. And of course, for such criminal activity to go unpunished, the institution cannot exist in isolation. In fact, like all other big banks, Citigroup is heavily integrated in the national – and increasingly international – structure of elite institutions, with cross-membership between major corporations, think tanks, governmental positions, media and educational institutions.
Thirty-seven individuals on the executive committee and board of directors of Citigroup were examined for the Global Power Project. The most represented institution was the Council on Foreign Relations, with six individual affiliations, followed by Morgan Stanley, Banco Nacional de Mexico (Banamex), American Express, the Foreign Policy Association, IBM, the Brookings Institution, the Metropolitan Museum of Art, Yale University, and Stanford University, among many others.
Meet the Elites
On the board of directors of Citigroup is Franz B. Humer, the chairman of Roche Holding, a major pharmaceutical conglomerate. Humer also sits on the International Advisory Council of JPMorgan Chase, and is chairman of INSEAD, chairman of Diageo Plc, a member of the international advisory board of Allianz SE, a member of the board of Jacobs Holdings, and a member of the European Round Table of Industrialists (which advises EU leaders on promoting policies beneficial to large corporate and financial interests). Humer also serves, comfortingly, as chairman of the International Centre for Missing and Exploited Children.
Judith Rodin, the president of the Rockefeller Foundation, is on the board of Citigroup. Rodin also served as the President of the University of Pennsylvania from 1994-2004, after which she remained as President Emerita. A former Provost of Yale University, Rodin also serves as a director of Comcast Corporation, AMR Corporation, the World Trade Memorial Foundation and Carnegie Hall. She is a member of the Council on Foreign Relations and a former honorary director of the Brookings Institution. Additionally, Rodin is a member of the board of the Alliance for a Green Revolution in Africa (AGRA) – a joint venture between the Rockefeller Foundation and the Bill & Melinda Gates Foundation to promote the advancement of GMOs in Africa – and she served as a member of the High Level Panel of the African Development Bank. Rodin currently serves as a member of the international advisory council of the Mary Robinson Foundation, a member of the American Academy of Arts and Sciences, the American Philosophical Society, and the Institute of Medicine of the National Academy of Sciences. She is also a participant in the World Economic Forum, the Global Humanitarian Forum, the Clinton Global Initiative’s “poverty alleviation track,” and she is a board member of Obama’s White House Council for Community Solutions.
Another member of the Citigroup board is Ernesto Zedillo, the former President of Mexico from 1994 to 2000, who was pivotal in implementing the North American Free Trade Agreement (NAFTA), much to the benefit of big banks and corporations, and to the detriment of poor and working people. Zedillo had previously served a number of positions in the Mexican government, including deputy director of the Bank of Mexico. Currently, Zedillo is the director of the Center for the Study of Globalization and an International Economics and Politics professor at Yale University. He is a member of the Group of Thirty, on the board of directors of Alcoa and Procter & Gamble, and on the international advisory boards of both BP, Rolls-Royce and ACE Ltd.. He is additionally an adviser to the Credit Suisse Research Institute, a member of the Foundation Board of the World Economic Forum, a former member of the Trilateral Commission, the former chairman of the Global Development Network, a former chair of the High Level Commission on Modernization of the World Bank Group Governance, a former member of the international advisory board of the Council on Foreign Relations and the Coca-Cola Company, a former member of the Global Development Program Advisory Panel of the Bill & Melinda Gates Foundation, and he is currently a member of the board of the Peterson Institute for International Economics.
William R. Rhodes, another Citigroup board member, serves as a senior advise to Citi and is president and CEO of William R. Rhodes Global Advisors. A director of the Private Export Funding Corporation, Rhodes is a senior adviser to the World Economic Forum, the global management firm Oliver Wyman, vice chairman of the National Committee on U.S.-China Relations, a director of the Korea Society and the U.S.-China Business Council, a member of Korean President Lee’s Council of Global Advisors, a member of the international advisory board of the National Bank of Kuwait, a senior adviser to the Dalian Government in China, a member of the private sector advisory board of the Inter-American Development Bank, a member of the international policy committee of the U.S. Chamber of Commerce, a member of the board of the Foreign Policy Association, and a trustee of the Asia Society and the Economic Club of New York. Rhodes is also a member of the Council on Foreign Relations, the Group of Thirty, the Lincoln Center Consolidated Corporate Fund Leadership Committee, the Metropolitan Museum of Art Business Committee, and he sits on the advisory council of the Brazilian American Chamber of Commerce. He is a former vice chairman of the Institute of International Finance, a chairman emeritus of the Americas Society and the Council of the Americas, a director of the U.S.-Russia Business Council and the U.S.-Hong Kong Business Council, a chairman of the U.S.-Korea Business Council, a trustee and member of the board of governors of the New York Presbyterian Hospital, a chairman of the board of trustees of the Northfield Mount Hermon School, and a member of the board of overseers of the Watson Institute for International Studies at Brown University.
Like all the big banks, Citigroup is heavily integrated with other dominant institutions in American and international society, which helps explain why the bank can break so many laws and get away with it. It’s not simply financial weight that makes this bank “too big to fail” and “too big to jail.” It’s the institutional affiliations that also help make it that way.
Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com‘s Global Power Project, and hosts a weekly podcast show with BoilingFrogsPost.