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An Anarchistic Understanding of the Social Order: Environmental Degradation, Indigenous Resistance, and a Place for the Sciences
An Anarchistic Understanding of the Social Order: Environmental Degradation, Indigenous Resistance, and a Place for the Sciences
By: Andrew Gavin Marshall
FOR ROUGHLY FIVE HUNDRED YEARS, INDIGENOUS peoples have been struggling against the dominant institutions of society, against imperialism, colonialism, exploitation, impoverishment, segregation, racism, and genocide. The struggle continues today under the present world social order and against the dominant institutions of ‘neoliberalism’ and globalization: the state, corporations, financial institutions and international organizations. Indigenous communities continue to struggle to preserve their cultural identities, languages, histories, and the continuing theft and exploitation of their land. Indigenous resistance against environmental degradation and resource extraction represents the most direct source of resistance against a global environmental crisis which threatens to lead the species to extinction. It is here that many in the scientific community have also taken up the cause of resistance against the destruction of the global environment. While Indigenous and scientific activism share similar objectives in relation to environmental issues, there is a serious lack of convergence between the two groups in terms of sharing knowledge, organization, and activism.
Indigenous groups are often on the front lines of the global environmental crisis – at the point of interaction (or extraction) – they resist against the immediate process of resource extraction and the environmental devastation it causes to their communities and society as a whole. The continued repression, exploitation and discrimination against Indigenous peoples have made the struggle – and the potential consequences of failure – significantly more problematic. This struggle has been ongoing for centuries, and as the species heads toward extinction – as it is along our current trajectory – Indigenous peoples will be on the front lines of that process. Many in the scientific community have been struggling for decades to address major environmental issues. Here, the focus is largely on the issue of climate change, and the approach has largely been to work through institutions in order to create enough pressure to reform. Yet, after decades of organizing through academic and environmental organizations, lobbying governments, corporations and international organizations, progress has been slow and often ineffectual, with major international conferences being hyped up but with little concrete results. Indigenous peoples continue to struggle against the dominant institutions while many in the scientific community continue to struggle within the dominant institutions, though their objectives remain similar.
A major problem and disparity becomes clear: Indigenous peoples – among the most repressed and exploited in the world – are left to struggle directly against the most powerful institutions in the world (states and transnational corporations), while many in the sciences – an area of knowledge which has and continues to hold enormous potential to advance the species – attempt to convince those powerful institutions to profit less at exactly the point in history when they have never profited more. Indigenous communities remain largely impoverished, and the scientific community remains largely dependent for funding upon the very institutions which are destroying the environment: states, corporations and international organizations. Major barriers to scientific inquiry and research can thus be established if the institutions feel threatened, if they choose to steer the sciences into areas exclusively designed to produce ‘profitable’ forms of knowledge and technology. As humanity enters a critical stage – perhaps the most critical we have ever faced as a species – it is important to begin to acknowledge, question, and change the institutional contradictions and constraints of our society.
It seems only logical that a convergence between Indigenous and scientific activism, organization, and the sharing of knowledge should be encouraged and facilitated. Indeed, the future of the species may depend upon it. This paper aims to encourage such a convergence by applying an anarchistic analysis of the social order as it relates to environmental degradation, specifically at the point of interaction with the environment (the source of extraction). In classifying this as an anarchistic analysis, I simply mean that it employs a highly critical perspective of hierarchically organized institutions. This paper does not intend to discuss in any detail the issue of climate change, since that issue is largely a symptom of the problem, which at its source is how the human social order interacts directly with the environment: extraction, pollution, degradation, exploitation and destruction at the point of interaction.
This analysis will seek to critically assess the actions and functions of states, corporations, international organizations, financial institutions, trade agreements and markets in how they affect the environment, primarily at the point of interaction. It is also at this point where Indigenous peoples are taking up the struggle against environmental degradation and human extinction. Through an anarchistic analysis of Indigenous repression and resistance at the point of interaction between the modern social order and the environment (focusing primarily on examples from Canada), this paper hopes to provide encouragement to those in the scientific community seeking to address environmental issues to increase their efforts in working with and for the direct benefit of Indigenous peoples. There exists a historical injustice which can and must be rectified: the most oppressed and exploited peoples over the past five hundred years of a Western-dominated world are on the front lines of struggling for the survival of the species as a whole. Modern science – which has done so much to advance Western ‘civilization’ – can and should make Indigenous issues a priority, not only for their sake, but for the species as a whole. Indeed, it is a matter of survival for the sciences themselves, for they will perish with the species. An anarchistic analysis of the social order hopes to encourage a convergence between Indigenous and scientific knowledge and activism as it relates to resolving the global environmental crisis we now face.
GLOBAL CORPORATE POWER
Corporations are among the most powerful institutions in the world. Of the top 150 economies in 2010, 58% were corporations, with companies like Wal-Mart, Royal Dutch Shell, ExxonMobil, and BP topping the charts. According to Fortune’s Global 500 list published in 2012, the top ten corporations in the world were: Royal Dutch Shell, ExxonMobil, Wal-Mart, BP, Sinopec Group, China National Petroleum, State Grid, Chevron, ConocoPhillips, and Toyota Motor. The Global 500 corporations posted record revenues for 2011 at USD 29.5 trillion, up 13.2% from the previous year. Eight of the top ten conglomerates were in the energy sector, with the oil industry alone generating USD 5 trillion in sales, approximately 17% of the total sales of the Global 500. The second largest sector represented in the Global 500 was commercial banks, followed by the auto industry.
A scientific study conducted by the Swiss Federal Institute of Technology in Zurich analyzed the ‘network of control’ wielded through 43,000 transnational corporations (TNCs), identifying “a relatively small group of companies, mainly banks, with disproportionate power over the global economy.” The researchers identified a ‘core’ of 1,318 companies which owned roughly 80% of the global revenues for the entire network of 43,000 TNCs. Above the core, the researchers identified a ‘super-entity’ of 147 tightly-knit corporations – primarily banks and financial institutions – collectively owning each other’s shares and 40% of the wealth in the total network. One researcher commented, “In effect, less than 1 per cent of the companies were able to control 40 percent of the entire network.”
Writing in the Financial Times, a former US Treasury Department official, Robert Altman, referred to financial markets as “a global supra-government,” explaining:
They oust entrenched regimes where normal political processes could not do so. They force austerity, banking bail-outs and other major policy changes. Their influence dwarfs multilateral institutions such as the International Monetary Fund. Indeed, leaving aside unusable nuclear weapons, they have become the most powerful force on earth.
The “global supra-government” of financial markets push countries around the world into imposing austerity measures and structural reforms, which have the result of benefiting the “super-entity” of global corporate power. The power and wealth of these institutions have rapidly accelerated in the past three decades of neoliberal ‘reforms’ promoting austerity, liberalization, deregulation, privatization and financialization. Neoliberal ideology was politically championed by Ronald Reagan in the United States and Margaret Thatcher in Great Britain, but was largely imposed upon the so-called ‘Third World’ (Latin America, Asia, and Africa) through major international organizations like the World Bank and the IMF. The results of this massive transfer of wealth and power to an increasingly connected and small fraction of the world’s population have been devastating for humanity and the world as a whole. This process guided by neoliberal dogma has been most often referred to as ‘globalization.’
As the 1980s debt crisis gripped the ‘Third World,’ the IMF and World Bank came to the ‘rescue’ with newly designed loan agreements called ‘Structural Adjustment Programs’ (SAPs). In return for a loan from these institutions, countries would have to adhere to a set of rigid conditions and reforms, including austerity measures (cutting public spending), the liberalization of trade, privatization, deregulation, and currency devaluation. The United States controls the majority shares of both the World Bank and IMF, while the US Treasury Department and Federal Reserve work very closely with the IMF and its staff. If countries did not adhere to IMF and World Bank ‘conditions,’ they would be cut off from international markets, since this process was facilitated by “unprecedented co-operation between banks from various countries under the aegis of the IMF.” The conditions essentially opened up the borrowing countries to economic imperialism by the IMF, World Bank, and transnational corporations and financial institutions, which were able to gain access and control over the resources and labour markets of poor countries. Thus, the 1980s has been known as the “lost decade of development,” as many ‘Third World’ countries became poorer between 1980 and 1990. Joseph Stiglitz, a former chief economist at the World Bank, wrote that, “such conditions were seen as the intrusion by the new colonial power on the country’s own sovereignty.”
The structural adjustment programs imposed upon the Third World devastated the poor and middle classes of the borrowing countries, often resulting in mass protests against austerity. In fact, between 1976 and 1992, there were 146 protests against IMF- sponsored austerity measures in 39 different countries, including demonstrations, strikes and riots. The governments, in response, would often violently repress protests. The government elites were often more integrated with and allied to the powerful institutions of the global economy, and would often act as domestic enforcers for the demands of international banks and corporations. For many countries imposing structural adjustment programs around the world, authoritarian governments were common. The IMF and World Bank structural adjustment programs also led to the massive growth of slums around the world, to the point where there are now over a billion people living in urban slums (approximately one out of every seven people on earth).
Further, the nations of the Third World became increasingly indebted to the powerful financial institutions and states of the industrial world with the more loans they took. The wealthy elites within the Third World plunder the domestic wealth of their countries in cooperation with global elites, and send their money into Western banking institutions (as ‘capital flight’) as their domestic populations suffer in poverty. The IMF and World Bank programs helped facilitate capital flight through the deregulation and ‘liberalization’ of markets, as well as through the opening up of the economies to unhindered exploitation. Some researchers recently compared the amount of money in the form of aid and loans going into Africa compared to that coming leaving Africa in the form of capital flight, and found that “sub-Saharan Africa is a net creditor to the rest of the world by a substantial margin.” The external debt owed by 33 sub-Saharan African countries to the rest of the world in 2008 stood at USD 177 billion. Between 1970 and 2008, capital flight from those same 33 African countries amounted to USD 944 billion. Thus, “the rest of the world owes more to these African countries than they owe to the rest of the world.”
The neoliberal ideology of ‘profit before people’ – enforced by the dominant states, corporations, banks and international organizations – has led to a world of extreme inequality, previously established by centuries of empire and colonialism, and rapidly accelerated in the past three decades. As of 2004, one in every three human deaths was due to poverty-related causes. In the twenty years following the end of the Cold War, there were approximately 360 million preventable deaths caused by poverty-related issues. Billions of people go hungry, lack access to safe drinking water, adequate shelter, medicine, and electricity. Nearly half of humanity – approximately 3.1 billion people as of 2010 – live below the USD 2.50/day poverty line. It would take roughly USD 500 billion – approximately 1.13% of world income (or two-thirds of the US military budget) – to lift these 3.1 billion people out of extreme poverty. The top 1% own 40% of the world’s wealth, while the bottom 60% hold less than 2% of the world’s wealth. As Thomas Pogge wrote, “we are now at the point where the world is easily rich enough in aggregate to abolish all poverty,” but we are “choosing to prioritize other ends instead.” Roughly 18 million people die from poverty-related causes every year, half of whom are children under the age of five. Pogge places significant blame for these circumstances upon the “global institutional arrangements that foreseeably and avoidably increase the socioeconomic inequalities that cause poverty to persist […] [policies which] are designed by the more powerful governments for the benefit of their most powerful industries, corporations, and citizens.”
In 2013, Oxfam reported that the fortunes made by the richest 100 people in the world over the course of 2012 (USD 240 billion) would have been enough to lift the world’s poorest people out of poverty four times over. An Oxfam executive, Barbara Stocking, noted that this type of extreme wealth – which saw the world’s richest 1% increase their income by 60% in the previous twenty years – is “economically inefficient, politically corrosive, socially divisive and environmentally destructive […] We can no longer pretend that the creation of wealth for few will inevitably benefit the many – too often the reverse is true.” A study by the Tax Justice Network in 2012 found that the world’s superrich had hidden between USD 21 and 32 trillion in offshore tax havens, meaning that inequality was “much, much worse than official statistic show,” and that “for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of superrich,” with the top 92,000 of the world’s superrich holding at least USD 10 trillion in offshore accounts.
THE ENVIRONMENTAL IMPACT OF INEQUALITY
The human social order – dominated by states, corporations, banks and international organizations – has facilitated and maintained enormous inequality and poverty around the world, allowing so few to control so much, while the many are left with little. This global social and economic crisis is exacerbated by the global environmental crisis, in which the same institutions that dominate the global social order are simultaneously devastating the global environment to the point where the future of the species hangs in the balance.
Just as the dominant institutions put ‘profit before people,’ so too do they put profit before the environment, predicating human social interaction with the environment on the ideology of ‘markets’: that what is good for corporations will ultimately be good for the environment. Thus, the pursuit of ‘economic growth’ can continue unhindered – and in fact, should be accelerated – even though it results in massive environmental degradation through the processes of resource extraction, transportation, production and consumption.
Trading arrangements between the powerful rich nations and the ‘periphery’ poor nations allow for the dominant institutions to exploit their economic and political influence over weaker states, taking much more than they give. These trading relationships effectively allow the rich countries to offshore (or export) their environmental degradation to poor countries, treating them as exploitable resource extraction sources. As the resources of poor nations are extracted and exported to the rich nations, the countries are kept in poverty (with the exception of their elites who collude with the powerful countries and corporations), and the environmental costs associated with the high consumption societies of the industrial world are ultimately off-shored to the poor countries, at the point of interaction. Thus, international trade separates the societies of consumption from the effects of extraction and production, while the poor nations are dependent upon exports and exploiting their cheap labour forces. This process has been termed ecological unequal exchange.
Between the mid-1970s and mid-1990s, the majority of the world’s non-renewable resources were transferred from poor to rich nations, accelerating in volume over time (due to technological advancements), while decreasing in costs (to the powerful nations). Thus, between 1980 and 2002, the costs of resource extraction declined by 25% while the volume of resource extraction increased by more than 30%. Environmentally destructive processes of resource extraction in mining and energy sectors have rapidly accelerated over the past few decades, resulting in increased contamination of soils, watersheds and the atmosphere. Negative health effects for local populations accelerate, primarily affecting Indigenous, poor and/or migrant populations, who are subjected to excessive pollutants and industrial waste at nearly every part of the process of extraction, production and transportation of resources and goods.
In an examination of 65 countries between 1960 and 2003, researchers found that the rich countries “externalized” the environmentally destructive consequences of resource over-use to poor, periphery nations and populations, thus “assimilating” the environments of the less-developed nations into the economies of the powerful states, disempowering local populations from having a say in how their resources and environments are treated. Rich societies consume more than can be sustained from their own internal resource wealth, and thus, they must “appropriate” resource wealth from abroad by ‘withdrawing’ the resources in environmentally destructive (and thus, more economically ‘efficient’) ways. Apart from ecologically destructive ‘withdrawals,’ the rich nations also facilitate ecologically destructive ‘additions,’ in the form of pollution and waste which cause environmental and health hazards for the poor societies. This is facilitated through various trading arrangements (such as the development of Export Processing Zones), consisting of minimal to no environmental regulations, cheap labour and minimal restrictions on corporate activities.
While Japan and Western Europe were able to reduce the amount of pollutants and ‘environmental additions’ they made within their own societies between 1976 and 1994, they accelerated their ‘additions’ in waste and pollutants to the poor countries with which they traded, “suggesting a progressive off-shoring over the period onto those peripheral countries” not only of labour exploitation, but of environmental degradation. Foreign Direct Investment (FDI) by transnational corporations has been linked to extensive environmental hazards within the countries in which they are ‘investing,’ including growth in water pollution, infant mortality, pesticide use, and the use of chemicals which are often banned in the rich nations due to high toxicity levels and dangers to health and the environment, and greater levels of carbon dioxide emissions. Indeed, between 1980 and 2000, the total anthropogenic CO2 emissions from the rich countries increased by 21%, while over the same period of time in the poor countries it more than doubled. While forested areas in the rich nations increased by less than 1% between 1990 and 2005, they declined by 6% over the same period of time in poor countries, contributing to soil erosion, desertification, climate change and the destruction of local and regional ecosystems.
According to an analysis of 268 case studies of tropical forest change between 1970 and 2000, researchers found that deforestation had shifted from being directed by states to being directed and implemented by corporations and ‘economic’ interests across much of Latin America, Africa, and Asia. This was largely facilitated by the IMF and World Bank agreements which forced countries to reduce their public spending, and allowed for private economic interests to obtain unprecedented access to resources and markets. The rate of deforestation continued, it simply shifted from being state-led to “enterprise driven.”
Using a sample of some sixty nations, researchers found that IMF and World Bank Structural Adjustment Programs (SAPs) were associated with higher levels of deforestation than in countries which did not sign the SAP agreements, as they allowed rich nations and corporations to “externalize their forest loss” to poor nations. Further, “economic growth” as defined by the World Bank and IMF was related to increased levels of deforestation, leading the researchers to acknowledge that, “economic growth adversely impacts the natural environment.” World Bank development loans to countries (as separate from structural adjustment loans) have also been linked to increased rates of deforestation in poor nations, notably higher rates than those which exist in countries not receiving World Bank loans.
Military institutions and armed warfare also have significant environmental impacts, not simply by engaging in wars, but simply by the energy and resources required for the maintenance of large military structures. As one US military official stated in the early 1990s, “We are in the business of protecting the nation, not the environment.” While the United States is the largest consumer of energy among nations in the world, the Pentagon is “the world’s largest [institutional] consumer of energy.” The combination of US tanks, planes and ships consume roughly 340,000 barrels of oil per day (as of 2007). Most of the oil is consumed by the Air Force, as jet fuel accounted for roughly 71% of the entire military’s oil consumption.
Nations with large militaries also use their violent capabilities “to gain disproportionate access to natural resources.” Thus, while the US military may be the largest single purchaser and consumer of energy in the world, one of its primary functions is to secure access to and control over energy resources. In an interview with two McKinsey & Company consultants, the Pentagon’s first-ever assistant secretary of defense for operational energy and programs, Sharon E. Burke, stated bluntly that, “My role is to promote the energy security of our military operations,” including by increasing the “security of supply.”
In a study of natural resource extraction and armed violence, researchers found that, “armed violence is associated with the extraction of many critical and noncritical natural resources, suggesting quite strongly that the natural resource base upon which industrial societies stand is constructed in large part through the use and threatened use of armed violence.” Further, when such armed violence is used in relation to gaining access to and control over natural resources, “it is often employed in response to popular protest or rebellion against these activities.” Most of this violence is carried out by the governments of poor nations, or by mercenaries or rebels, which allows for distancing between the rich nations and corporations which profit from the plundering of resources from the violent means of gaining access to them. After all, the researcher noted, “other key drivers of natural resource exploitation, such as the IMF, World Bank, WTO, and global marketplace, cannot, on their own, guarantee core nation access to and control over vital natural resources.” Perhaps unsurprisingly, then, the United States – and other powerful nations – and the major arms companies within them are the largest arms dealers in the world.
It is clear that for scientists – and anyone else – interested in addressing major environmental issues, the source of the problem lies in the very structure and function of our dominant modern institutions, at the point of interaction. In short: through states, armed violence, banks and corporations, international organizations, trade agreements and global ‘markets,’ the environment has become a primary target of exploitation and destruction. Resources fuel the wealth and power of the very institutions that dominate the world, and to maintain that power, they engage in incredibly destructive activities with negative consequences for the environment and the human species as a whole. The global environmental crisis is intimately related to the global social and economic crises of wealth inequality and poverty, labour exploitation, and ‘economic growth.’ To address the environmental crisis in a meaningful way, this reality must first be acknowledged. This is how an anarchistic understanding of the environmental crisis facing the world and humanity can contribute to advancing how we deal with these profound issues. For the sciences, the implications are grave: their sources of funding and direction for research are dependent upon the very institutions which are destroying the environment and leading humanity to inevitable extinction (if we do not change course). Advancing an anarchistic approach to understanding issues related to Indigenous repression and resistance to environmental degradation can help provide a framework through which those in the scientific community – and elsewhere – can find new avenues for achieving similar goals: the preservation of the environment and the species.
INDIGENOUS REPRESSION AND RESISTANCE
Indigenous peoples in the Americas have been struggling against colonialism, exploitation, segregation, repression and even genocide for over 500 years. While the age of formal colonial empires has passed, the struggle has not. Today, Indigenous peoples struggle against far more powerful states than ever before existed, transnational corporations and financial institutions, international organizations, so-called “free trade” agreements and the global ‘marketplace.’ In an increasingly interconnected and globalized world, the struggle for Indigenous peoples to maintain their identity and indeed, even their existence itself, has been increasingly globalizing, but has also been driven by localized actions and movements.
Focusing upon Indigenous peoples in Canada, I hope to briefly analyze how Indigenous groups are repressed, segregated and exploited by the dominant institutions of an incredibly wealthy, developed, resource-rich and ‘democratic’ nation with a comparably ‘good’ international reputation. Further, by examining Indigenous resistance within Canada to the destruction of the natural environment, I hope to encourage scientists and other activists and segments of society who are interested in environmental protection to reach out to Indigenous communities, to share knowledge, organizing, activism, and objectives.
A LEGACY OF COLONIALISM
Historically, the Canadian government pursued a policy of ‘assimilation’ of Indigenous peoples for over a century through ‘Indian residential schools,’ in what ultimately amounted to an effective policy of “cultural genocide.” In 1920, Canada’s Deputy Minister of Indian Affairs Duncan Campbell Scott bluntly explained: “I want to get rid of the Indian problem […] Our object is to continue until there is not a single Indian in Canada that has not been absorbed into the body politics and there is no Indian question, and no Indian Department.”
The segregation, repression and exploitation of Indigenous communities within Canada is not a mere historical reality, it continues to present day. Part of the institutional repression of Indigenous peoples is the prevalence of what could be described as ‘Third World’ conditions within a ‘First World’ nation. Indigenous communities within Canada lack access to safe drinking water at a much higher rate than the general population. Indigenous people and communities in Canada also face much higher levels of food insecurity, poverty, unemployment, poor housing and infant mortality than the rest of the population. Accounting for roughly 4% of the population of Canada (approximately 1.2 million people as of 2006), Indigenous peoples also face higher rates of substance abuse, addiction, and suicide.
Indigenous people – and especially women – make up a disproportionate percentage of the prison population. Further, as Amnesty International noted, “Indigenous women [in Canada] are five to seven times more likely than other women to die as a result of violence.” The Native Women’s Association of Canada has documented roughly 600 cases of missing or murdered indigenous women in Canada, more than half of which have occurred since 2000, while Human Rights Watch reported that the Royal Canadian Mounted Police (RCMP) in northern British Columbia had “failed to properly investigate the disappearance and apparent murders of [indigenous] women and girls in their jurisdiction.”
RESOURCE EXTRACTION, ENVIRONMENTAL DEGRADATION, AND INDIGENOUS PEOPLES
Industries seeking to develop land and extract resources are increasingly turning to Indigenous territories to develop and seek profits on the land and environment upon which such communities are so often dependent for survival. At the point of interaction with the environment, Indigenous peoples are left to struggle with the damaging environmental and health consequences caused by state and corporate interests extracting resources and wealth from the land and environment.
The Alberta tar sands (or oil sands) is a primary example of this process. Many environmental, indigenous and human rights organizations consider the tar sands development as perhaps “the most destructive industrial project on earth.” The United Nations Environmental Programme identified the project as “one of the world’s top 100 hotspots of environmental degradation.” The dense oil in the tar sands (diluted bitumen) has to be extracted through strip mining, and requires enormous amounts of resources and energy simply to extract the reserves. It has been documented that for every one barrel of oil processed, three barrels of water are used, resulting in the creation of small lakes (called ‘tailing ponds’), where “over 480 million gallons of contaminated toxic waste water are dumped daily.” These lakes collectively “cover more than 50 square kilometres (12,000 acres) and are so extensive that they can be seen from space.” The processing of the oil sands creates 37% more greenhouse gas emissions than the extraction and processing of conventional oil.
While the United States consumes more oil than anywhere else on earth, Canada is the main supplier of foreign oil to the United States, exporting roughly 1.5 million barrels per day to the US (in 2005), approximately 7% of the daily consumption of oil in the US. The crude bitumen contained in the tar sands has been estimated at 1.7 trillion barrels, lying underneath an area within Alberta which is larger than the entire state of Florida and contains over 140,000 square km of boreal forest. In 2003, the United States Department of Energy officially acknowledged the reserves of crude bitumen in the Alberta tar sands, and elevated Canada’s standing in world oil markets from the 21st most oil-rich nation on earth to the 2nd, with only Saudi Arabia surpassing.
Alberta’s tar sands have attracted the largest oil companies on earth, including Royal Dutch Shell, ExxonMobil, BP, and Total S.A. Local indigenous communities thus not only have to struggle against the devastating environmental, health and social consequences caused by the tar sands development, but they also have to struggle against the federal and provincial governments, and the largest corporations on earth. The Athabasca River (located near the tar sands development) has been depleted and polluted to significant degrees, transforming the region “from a pristine environment rich in cultural and biological diversity to a landscape resembling a war zone marked with 200-foot-deep pits and thousands of acres of destroyed boreal forests.” Indigenous peoples have been raising concerns over this project for years.
Disproportionate levels of cancers and other deadly diseases have been discovered among a local Indigenous band, the Fort Chipewyan in Athabasca. These high levels of cancers and diseases are largely the result of the enormous amounts of land, air, and water pollution caused by the tar sands mining. One Indigenous leader in Fort Chipewyan has referred to the tar sands development as a “slow industrial genocide.” As pipelines are planned to be expanded across Canada and the United States to carry tar sands oil, this will have devastating impacts for “indigenous communities not only in Canada, but across the continent.”
Between 2002 and 2010, the pipeline network through Alberta experienced a rate of oil spills roughly sixteen times higher than in the United States, likely the result of transporting diluted bitumen (DilBit), which has not been commonly transported through the pipelines until recent years. In spite of the greater risks associated with transporting DilBit, the US agency responsible for overseeing the country’s pipelines decided – in October of 2009 – to relax safety regulations regarding the strength of pipelines. In July of 2010, a ruptured Enbridge pipeline in Michigan spilled 800,000 gallons of DilBit, devastating the local communities in what the government referred to as the “worst oil spill in Midwestern history.” In July of 2011, an Exxon pipeline spilled 42,000 gallons of DilBit into the Yellowstone River in Montana.
IDLE NO MORE: THE RISE OF INDIGENOUS RESISTANCE
In 2009, the Canadian Ministry of Indian Affairs and Northern Development announced the Federal Framework for Aboriginal Economic Development which sought to “improve the participation” of Indigenous people “in the Canadian economy,” primarily by seeking “to unlock the full economic potential of Aboriginal Canadians, their communities, and their businesses.” An updated report on the Framework in 2012 reaffirmed the intent “to modernize the lands and resource management regimes on reserve land in order to increase and unlock the value of Aboriginal assets.” As John Ibbitson wrote in the Globe and Mail, “businesses that want to unlock the potential of reserves, from real estate development to forestry and mining, need the legal certainty that a property regime makes possible.”
In late 2012, Canadian Prime Minister Stephen Harper’s Conservative Party introduced an omnibus Budget Bill (C-45) which amended several aspects of the Indian Act (without proper consultations with Indigenous groups). Bill C-45 also moved forward to “unlock” barriers to resource extraction, environmental degradation, and corporate profits with an amendment to the Navigable Waters Act, which dramatically reduced the number of protected lakes and rivers in Canada from 40,000 to 97 lakes, and from 2.5 million to 63 rivers.
Following the introduction of Bill C-45 to the Canadian Parliament, a group of four Indigenous women in the province of Saskatchewan held a “teach-in” to help increase awareness about the Bill, quickly followed by a series of rallies, protests and flash mobs where Indigenous activists and supporters engaged in ‘round dances’ in shopping malls, organized through social media networks like Twitter and Facebook. This sparked what became known as the ‘Idle No More’ movement, and on December 10, 2012, a National Day of Action took place, holding multiple rallies across the country. The immediate objectives of the Idle No More movement were to have the government “repeal all legislation that violates treaties [with Indigenous peoples], including those that affect environmental regulations,” such as Bill C-45 and the previous omnibus Bill C-38. The longer-term objectives of the movement were to “educate and revitalize aboriginal peoples, empower them and regain sovereignty and independence.”
Pamela Palmater, a spokesperson for Idle No More and a Ryerson University professor noted that Indigenous people in Canada were opposing Bill C-45 “not just because it impacts their rights, but also because we know that it impacts the future generations of both treaty partners,” referring to both Indigenous and non-Indigenous Canadians. “The question,” she added, “really should be whether Canadians will rise to protect their children’s futures alongside First Nations.”
Theresa Spence, an Indigenous chief from a northern Ontario community (Attawapiskat) went on a hunger strike for 44 days to support Idle No More and raise awareness about a serious housing crisis in her community. Spence only ended her hunger strike upon being hospitalized and placed on an IV drip. Her community of Attawapiskat had been experiencing a major housing crisis for a number of years, and in 2011, a state of emergency was declared in response to the fact that for over two years, many of the community’s 1,800 residents were “living in makeshift tents and shacks without heat, electricity or indoor plumbing.” James Anaya, a United Nations human rights expert expressed his “deep concern about the dire social and economic condition” of the Attawapiskat community to the Canadian government, which reflected a situation “akin to third world conditions.” The Conservative government of Stephen Harper (which came to power in 2006) blamed the crisis on the internal handling of funds within Attawapiskat, claiming that the government provided CAD 90 million in funding for the community since 2006. However, analysis of the funds revealed that only CAD 5.8 million in funding had gone toward housing over the course of five years. Meanwhile, estimates put the necessary funds to resolve the housing crisis alone at CAD 84 million. The former Minister for Aboriginal Affairs acknowledged that the government had known about the housing crisis for years, saying that it “has been a slow-moving train wreck for a long time.”
In 2005, the community of Attawapiskat had signed a contract with the international mining conglomerate De Beers to develop a diamond mine 90 km near their community. The mine officially opened in 2008, projecting a 12-year contribution to the Ontario economy of CAD 6.7 billion. In 2005, De Beers dumped its sewage sludge into the Attawapiskat community’s lift station, causing a sewage backup which flooded many homes and exacerbated an already-developing housing crisis, followed by another sewage backup potentially caused by De Beers in 2008. Afterward, the company donated trailers to the community to serve as “short-term emergency shelters,” yet they remained in place even four years later.
As the Idle No More movement took off in late 2012 and early 2013, members of the Attawapiskat community undertook road blockades leading to the De Beers mine. The company sought a legal injunction against the protesters, and the blockade was ended just as a large number of police were headed to the community to “remove the barricades.” After successfully blocking the mine from properly functioning for nearly twenty days, the company announced that it was considering taking legal action against the protesters.
The Idle No More mission statement called “on all people to join in a revolution which honors and fulfills Indigenous sovereignty which protects the land and water […] Colonization continues through attacks to Indigenous rights and damage to the land and water. We must repair these violations, live the spirit and intent of the treaty relationship, work towards justice in action, and protect Mother Earth.” The movement’s manifesto further declared that, “the state of Canada has become one of the wealthiest countries in the world by using the land and resources. Canadian mining, logging, oil and fishing companies are the most powerful in the world due to land and resources. Some of the poorest First Nations communities (such as Attawapiskat) have mines or other developments on their land but do not get a share of the profit.” As Pamela Palmater noted, Idle No More was unique, “because it is purposefully distances from political and corporate influence. There is no elected leader, no paid Executive Director, and no bureaucracy or hierarchy which determines what any person or First Nation can and can’t do […] This movement is inclusive of all our peoples.”
The Athabasca Chipewyan Indigenous band which had been struggling for years against the tar sands development were further mobilized with the eruption of Idle No More onto the national scene, including by establishing a blockade on Highway 63 leading to the tar sands development. As Chipewyan chief Allan Adam noted, “The way I look at it, the First Nations people are going to cripple this country if things don’t turn out […] Industry is going to be the target.” He also added: “We know for a fact that industry was the one that lobbied government to make this regulatory reform.” Indeed, this was no hyperbole.
THE STATE IN SERVICE TO CORPORATIONS
Greenpeace obtained – through access to information laws – a letter sent to the Canadian government’s Environment minister and Natural Resources minister dated December of 2011, written by a group called the Energy Framework Initiative (EFI), representing the Canadian Association of Petroleum Producers, the Canadian Energy Pipeline Association, the Canadian Fuels Association, and the Canadian Gas Association. The letter sought “to address regulatory reform for major energy industries in Canada” in order to advance “both economic growth and environmental performance.” It specifically referenced six laws that it wanted amended, including the National Energy Board Act, the Canadian Environmental Assessment Act, the Fisheries Act, the Species at Risk Act, Migratory Birds Convention Act, and the Navigable Waters Protection Act. Referring to many of these laws as “outdated,” the letter criticized environmental legislation as “almost entirely focused on preventing bad things from happening rather than enabling responsible outcomes.”
Less than a month after receiving the letter, the Canadian Natural Resources Minister Joe Oliver lashed out at activists opposing the construction of Enbridge’s Northern Gateway pipeline shipping oil from Alberta’s tar sands to the B.C. coast for shipment to Asia, stating, “Unfortunately, there are environmental and other radical groups that would seek to block this opportunity to diversify our trade… Their goal is to stop any major project no matter what the cost to Canadian families in lost jobs and economic growth. No forestry. No mining. No oil. No gas. No more hydro-electric dams.” Oliver went on, saying that such “radical groups” were threatening “to hijack our regulatory system to achieve their radical ideological agenda,” and accused them of using funding from “foreign special interest groups.”
Documents from the energy industry revealed that big corporations advised the Harper government not to amend the many environmentally related acts separately, but to employ “a more strategic omnibus legislative approach,” which resulted in the two omnibus bills over 2012, Bills C-38 and C-45, which included “hundreds of pages of changes to environmental protection laws […] weakening rules that protect water and species at risk, introducing new tools to authorize water pollution, as well as restricting public participation in environmental hearings and eliminating thousands of reviews to examine and mitigate environmental impacts of industrial projects.” The energy industry got virtually everything it asked for in the two omnibus bills, including – as their letter to the Harper government suggested – reforming “issues associated with Aboriginal consultation.”
Documents from Environment Canada showed how the minister informed a group of energy industry representatives that the development of pipelines were “top-of-mind” as the government pursued “the modernization of our regulatory system.” When the new legislation passed, the Canadian Environmental Assessment Agency announced that it has cancelled roughly 3,000 environmental assessments, including 250 reviews related to pipeline projects. Other documents showed that at the same time the minister was informing energy corporations that he was serving their interests, he was to inform Indigenous leaders that any “changes to the government’s environmental assessment or project approvals regime” were “speculative at this point” and that they would “respect our duties toward Aboriginal peoples.”
As the Harper government became the primary lobbyist for the Alberta tar sands, documents showed how the government compiled a list of “allies” and “adversaries” in its public relations campaign, referring to energy companies, Environment Canada and the National Energy Board as “allies,” and the media, environmental and Indigenous groups as “adversaries.” The Canadian government even ran an “outreach program” where diplomats would attempt to secure support among American journalists for the Keystone XL pipeline project – taking oil from the Alberta tar sands to the Gulf Coast in the United States.
As the Canadian government revised its anti-terrorism strategy in early 2012, it listed “eco-extremists” alongside white supremacists as a threat to national security. A review of Canadian security documents from the national police force (RCMP) and the Canadian intelligence agency (CSIS) revealed that the government saw environmental activism such as blockades of roads or buildings as “forms of attack” and “national security threats.” Greenpeace was identified as “potentially violent,” as it had become “the new normal now for Canada’s security agencies to watch the activities of environmental organizations,” noted one analyst.
IDLE NO MORE AND OIL PIPELINES
The government of Canada acknowledged in early 2013 that it expected – over the following decade – that there would be “a huge boom in Canadian natural resource projects,” potentially worth CAD 600 billion, which is foreseen to be taking place “on or near” Indigenous lands. One Indigenous chief in Manitoba warned that the Idle No More movement “can stop Prime Minister Harper’s resource development plan and his billion-dollar plan to develop resources on our ancestral territory. We have the warriors that are standing up now, that are willing to go that far.”
In an official meeting between the Harper government and the Assembly of First Nations in January of 2013, Indigenous ‘leaders’ presented a list of demands which included ensuring there was a school in every indigenous community, a public inquiry into the missing and murdered Indigenous women, as well as several other very ‘moderate’ reforms. For the government, the objectives were much more specific, as internal documents revealed, written in preparation for Harper’s meeting with Indigenous leaders. As one briefing memo stated, the government was working towards “removing obstacles to major economic development opportunities.”
For the Idle No More movement, which does not consider itself to be ‘represented’ by the Assembly of First Nations leaders, the objective is largely “to put more obstacles up,” as Martin Lukacs wrote in the Guardian. Indigenous peoples, he noted, “are the best and last defense against this fossil fuel scramble,” specifically in mobilizing opposition to “the three-fold expansion of one of the world’s most carbon-intensive projects, the Alberta tar sands.”
In March of 2013, an alliance of Indigenous leaders from across Canada and the United States announced that they were “preparing to fight proposed new pipelines in the courts and through unspecified direct action,” specifically referring to the Northern Gateway, Keystone XL and Kinder Morgan pipeline projects. One Indigenous leader at the formation of the alliance warned, “We’re going to stop these pipelines one way or another.” Another Indigenous leader commented: “We, as a nation, have to wake up […] We have to wake up to the crazy decision that this government’s making to change the world in a negative way.”
The territories of the ten allied Indigenous groups “are either in the crude-rich tar sands or on the proposed pipeline routes.” One Indigenous leader from northern British Columbia referred to the Canadian government, stating, “They’ve been stealing from us for the last 200 years […] now they’re going to destroy our land? We’re not going to let that happen […] If we have to go to court, if we have to stand in front of any of their machines that are going to take the oil through, we are going to do that. We’re up against a wall here. We have nowhere else to go.”
Roughly one week after the Indigenous alliance was formed, an ExxonMobil pipeline carrying Alberta tar sands oil through the United States ruptured in the town of Mayflower, Arkansas, spilling thousands of barrels of oil into residential neighbourhoods and the surrounding environment. Exxon quickly moved in with roughly 600 workers to manage the cleanup and sign checks “to try to win over the townsfolk and seek to limit the fallout.” The United States Federal Aviation Administration (FAA) put in place a “no fly zone” over Mayflower, Arkansas, within days following the oil spill. The ‘no fly zone’ was being overseen by ExxonMobil itself, thus, as Steven Horn commented, “any media or independent observers who want to witness the tar sands spill disaster have to ask Exxon’s permission.”
Between March 11 and April 9 of 2013 (in a span of roughly thirty days), there were 13 reported oil spills on three separate continents, with more than a million gallons of oil and other toxic chemicals spilled in North and South America alone. The oil spills included an Enbridge pipeline leak in the Northwest Territories in Canada (March 19), a tar sands ‘tailing pond’ belonging to Suncor leaking into the Athabasca River in Alberta (March 25), a Canadian Pacific Railway train derailment spilling tar sands oil in Minnesota (March 27), the Exxon spill in Mayflower (March 29), oil-based hydraulic fluid spilling into the Grand River from a power plant in Michigan (March 31), a CN Rail train derailment in Ontario (April 3), a drilling leak in Newfoundland (April 3), the Shell pipeline leak in Texas (April 3), a condensate spill at an Exxon refinery in Louisiana (April 4), and a pump station ‘error’ in Alaska (April 9). Another spill took place in June on Kinder Morgan’s Trans Mountain pipeline in British Columbia, one of the pipeline extensions being opposed by Indigenous groups.
Meanwhile, Stephen Harper was in New York in May, speaking to the highly influential US think tank, the Council on Foreign Relations, where he explained that the proposed Keystone XL pipeline “absolutely needs to go ahead,” adding that it was “an enormous benefit to the US in terms of long-term energy security.” TransCanada, the company aiming to build the Keystone XL pipeline, along with the government of Alberta, hired a team of lobbyists with connections to the Obama administration and Secretary of State John Kerry in particular to pressure the US government to approve the pipeline. In late April, the president of the American Petroleum Institute confidently declared, “When it’s all said and done, the president will approve the pipeline.” In late May, the CEO of TransCanada said, “I remain extremely confident that we’ll get the green light to build this pipeline.”
Leaders from 11 different Indigenous bands in the United States “stormed out” of a meeting in May being held with federal government officials in South Dakota in protest against the Keystone XL pipeline. The leaders criticized both the project and the Obama administration, with one leader commenting, “We find ourselves victims of another form of genocide, and it’s environmental genocide, and it’s caused by extractive industries.” Another Indigenous leader who walked out of the meeting warned, “What the State Department, what President Obama needs to hear from us, is that we are going to be taking direct action.” TransCanada has even been supplying US police agencies with information about environmental activists and recommendations to pursue charges of “terrorism” against them, noting that the company feared such “potential security concerns” as protests, blockades, court challenges, and even “public meetings.”
While Indigenous communities in Canada and elsewhere are among the most repressed and exploited within our society, they are also on the front lines of resistance against environmentally destructive practices undertaken by the most powerful institutions in the world. As such, Indigenous groups are not only standing up for environmental issues, but for the future of the species as a whole. With the rapidly accelerating ‘development’ of the tar sands, and the increasing environmental danger of huge new pipelines projects, resistance to how our modern society treats the environment is reaching new heights. Indigenous organizing – much of which is done along anarchistic ideas (such as with the Idle No More movement) – is presenting an unprecedented challenge to institutional power structures. Thus, there is an increased need for environmentalists, scientists, and others who are interested in joining forces with Indigenous groups in the struggle against environmental degradation and the potential extinction of the species. In Canada, there is an even greater impetus for scientists to join forces with Indigenous communities, for there is a state-sponsored assault upon environmental sciences that threaten to devastate the scientific community in the very near term.
THE CANADIAN GOVERNMENT’S ATTACK ON ENVIRONMENTAL SCIENCE
Since Stephen Harper’s Conservative government came to power in 2006, there has been a steady attack upon the sciences, particularly those related to environmental issues, as the government cut funding for major programs and implemented layoffs. One major facet of this attack has been the ‘muzzling’ of Canadian scientists at international conferences, discussions with the media, and the publication of research. At one conference hosted in Canada, scientists working for Environment Canada were forced to direct all media inquiries through the public relations department in an effort “to intimidate government scientists.” Under new government guidelines, scientists working for the Department of Fisheries and Oceans (DFO) cannot publish material until it is reviewed by the department “for any concerns/impacts to DFO policy.” The Canadian Association of University Teachers (CAUT) expressed in a letter to Stephen Harper their “deep dismay and anger at your government’s attack on the independence, integrity and academic freedom of scientific researchers.” Hundreds of Canadian scientists marched on Parliament Hill in July of 2012 in what they called a “funeral procession” against the government’s “systematic attack on science.”
One of the world’s leading science journals, Nature, published an editorial in March of 2012 calling on the Canadian government to stop muzzling and “set its scientists free.” Journalists requesting interviews with Canadian government scientists on issues related to the Arctic or climate change have had to go through public relations officials, provide questions in advance, adhere to “boundaries for what subjects the interview could touch upon,” and have a PR staffer “listen in on the interviews.”
Dozens of government agencies and programs related to environmental sciences have had their budgets slashed, scientists fired, or were discontinued altogether. The Environmental Law Centre at the University of Victoria lodged a formal complaint with Canada’s Federal Information Commissioner about the muzzling of scientists, outlining multiple examples “of taxpayer-funded science being suppressed or limited to prepackaged media lines across six different government departments and agencies.” Natural Resources Canada now requires “pre-approval” from the government before any scientists give interviews on topics such as “climate change” or the “oilsands.”
The attack upon the sciences is part of the Harper government’s 2007 strategy, Mobilizing Science and Technology to Canada’s Advantage, which directed “a major shift away from scientific goals to economic and labour-market priorities,” aiming to focus on science and research which would be directly useful to industry and for commercial purposes. The Natural Sciences and Engineering Research Council of Canada (NSERC) has been steered by the government “toward industry-related research and away from environmental science.” The government’s minister of state for science and technology noted that the focus for research was to be on “getting those ideas out to our factory floors, if you will, making the product or process or somehow putting that into the marketplace and creating jobs.” Further, the National Research Council (NRC) was “to focus more on practical, commercial science and less on fundamental science” which wouldn’t be as beneficial to corporate interests. The minister of state for science and technology, Gary Goodyear, announced it as “an exciting, new journey – a re-direction that will strengthen Canada’s research and innovation ecosystem for many years to come.” The president of the NRC noted that, “We have shifted the primary focus of our work at NRC from the traditional emphasis of basic research and discovery science in favour of a more targeted approach to research and development.”
As Stephen Harper said, “Science powers commerce,” but apparently to Harper, that is all it should do, even though many scientists and academics disagree. The implications should be obvious: just as society’s interaction with the environment is unsustainable, so too is the dependency of the sciences upon those institutions which are destroying the environment.
Regardless of one’s position in society – as a member of an Indigenous group, an activist group, or within the scientific community – all of human society is facing the threat of extinction, accelerated by our destruction of the environment sourced at the point of interaction (the location of extraction) between the dominant institutions of our world and the natural world itself. Roughly half the world’s population lives in extreme poverty, with billions living in hunger, with poor access to safe drinking water, medicine and shelter, monumental disparities in wealth and inequality, the production and maintenance of unprecedented weapons of death and destruction, we are witnessing an exponentially accelerating plundering of resources and destruction of the environment upon which all life on Earth depends. If there has ever been a time in human history to begin asking big questions about the nature of our society and the legitimacy of the institutions and ideologies which dominate it, this is it.
An anarchistic understanding of the institutions and ideologies which control the world order reveals a society blinded by apathy as it nears extinction. The institutions which dictate the political, economic and social direction of our world are the very same ones destroying the environment to such an extent that the fate of the species is put at extreme risk. To not only continue – but to accelerate – down this path is no longer an acceptable course of action for humanity. It is time that socially segregated populations begin reaching out and working together, to share knowledge, organizational capacity, and engage in mutual action for shared objectives. With that in mind, it would appear to be beneficial not only for those involved – but for humanity as a whole – if Indigenous peoples and segments of the scientific community pursued the objective of protecting the environment together. Acknowledging this is easy enough, the hard part is figuring out the means and methods of turning that acknowledgement into action.
This is again where anarchist principles can become useful, emphasizing the creative capacity of many to contribute new ideas and undertake new initiatives working together as free individuals in collective organizations to achieve shared objectives. This is not an easy task, but it is a necessary one. The very future of humanity may depend upon it.
For notes and sources, download the paper here.
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 Pro-ject, and hosts a weekly podcast show with BoilingFrogsPost.
Fighting the “Rising Tide” of Arab Nationalism: The Eisenhower Doctrine and the Syrian Crisis
By: Andrew Gavin Marshall
The following sample is a compilation of unedited research, largely drawn from official government documents of the State Department, CIA, Pentagon, White House, and National Security Council, outlining the development of the Eisenhower Doctrine and the American imperial perceptions of the threat of ‘Arab Nationalism.’
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The Eisenhower Doctrine and the Threat of Arab Nationalism
Following the Suez Crisis, Nasser’s influence and reputation was enormously strengthened in the Arab, Muslim, and wider decolonizing world, while those of Britain and France were in decline. Nasser’s support for nationalist movements in North Africa, particular Algeria, increasingly became cause for concern. Pro-Western governments in the Middle East stood on unstable ground, threatened by the ever-expanding wave of Pan-Arab nationalism and indeed, Pan-African nationalism spreading from North Africa downward. The United States, however, noting the power vacuum created by the defeat of Britain and France in the conflict, as well as the increasing support from the Soviet Union for nationalist movements in the region as elsewhere, had to decide upon a more direct strategy for maintaining dominance in the region.
As President Eisenhower stated in December of 1956, as the Suez Crisis was coming to a final close, “We have no intention of standing idly by… to see the southern flank of NATO completely collapse through Communist penetration and success in the Mid East.” Secretary Dulles stated in turn, that, “we intend to make our presence more strongly felt in the Middle East.” Thus, the Eisenhower Doctrine was approved in early 1957, calling for the dispersal of “$200 million in economic and military aid and to commit armed forces to defend any country seeking assistance against international communism,” explaining that, “the existing vacuum… must be filled by the United States before it is filled by Russia.” Thus, Eisenhower told Congress, this new doctrine was “important… to the peace of the world.” Some Senators opposed the doctrine; though, with powerful political figures supporting it, as well as the New York Times providing an unfailing endorsement, it was approved in early March of 1957. In the Middle East, Libya, Lebanon, Turkey, Iran, and Pakistan endorsed the doctrine in the hopes of receiving economic and military aid (even before the U.S. Congress approved it), King Hussein of Jordan endorsed it, and funds were further given to Iraq and Saudi Arabia.
The main opposition to the Eisenhower Doctrine came from Syria and Egypt. Nasser later reflected that the doctrine appeared to be “a device to re-establish imperial control by non-military means,” and therefore he would “have nothing to do with it and felt it was directed at Egypt as much as at any communist threat.” This was not, as it turned out, far from the truth. A State Department Policy Planning Paper from early December of 1956 discussed the formation of a new regional policy (which resulted in the Eisenhower Doctrine), and while focusing on the notion that, “[t]he primary threat to the interests of the United States and the West in the Middle East (especially oil, Suez Canal and pipelines) arises from Soviet efforts at penetration,” Nasser and Egypt figured prominently in this formulation, but couched in the rhetoric of the Cold War. In fact, “Soviet penetration” of the Middle East was stated to rest on three main factors, the first of which was identified as the “ambitions of Nasser and the willingness of Nasser and the Syrians to work with the Soviets, especially to obtain arms.” The other two main factors were identified as, “instability and divisions among the other Middle Eastern nations,” referring to Western puppet governments in the region, and “increased animosity toward the UK and France resulting from their military action against Egypt and intensified by the fact that their action was taken in conjunction with Israel’s invasion of Egypt.”
Thus, while the strategy was presented as a means to prevent Soviet “penetration” of the Middle East, the actual content and objectives of the strategy being formulated were directly related to checking Egyptian influence in the region and beyond. Of course, Soviet advances in the area were of concern to the Americans, that cannot be denied, but the prevalence of Egypt and Nasserist influence as a decisive “Third Force” was undeniable as a source of fear among imperial strategists. The strategy overtly stated that “efforts to counter Soviet penetration” in the region “must include measures to… [c]ircumscribe Nasser’s power and influence.” Noting that the American stance during the Suez Crisis has “greatly increased our prestige and opportunity for leadership,” in presenting the view that the United States is “firmly committed to support[ing] genuine independence for the countries concerned,” the State Department document noted that the U.S. would have to avoid “counter suspicion that our aim is to dominate or control any of the countries or to reimpose British domination in a different form. For this reason, our actions will be largely self-defeating if they create a general impression that our objective is directly to overthrow Nasser.” That of course, implies that it is the “indirect objective” of the policy to overthrow Nasser. Noting that Egypt would likely oppose all the measures put forward by the United States in its regional policy, the Policy Planning Paper stated that, “We should play upon [Nasser’s] opposition to stigmatize Egypt as an impediment to peace and progress in the Middle East,” of which the objective would be “to mobilize opinion against Nasser and to circumscribe his power and influence.” The paper stated that it would be important to inform the U.K. and France that the U.S. objective of the program “is directed toward countering Soviet penetration in the Middle East and circumscribing Nasser’s power and influence,” and thus, it would “serve their interests as well as ours,” having in mind “the vital importance of the Middle East to Western Europe.” As such, the U.K. and France should be convinced to “avoid injecting themselves in the Middle East and leave to the US the primary responsibility of restoring the Western position in the area.”
A National Security Council (NSC) report explained that the “opportunistic and nationalistic Nasser government of Egypt gained in influence throughout the area and other Arab heads of state were less able to resist the formation of governments which catered to this surge of nationalism.” Syria was an obvious example; however, even Western friendly governments had to submit to various nationalistic pressures, as Jordan abrogated the Anglo-Jordanian Treaty with Britain, and “King Saud, while publicly friendly to Nasser and the Arab cause, maintained an independent position using his influence for moderation on nationalistic elements, steering a course between the extreme pro-Soviet and strongly pro-West Arab groups.” It’s important to note how Arab nationalism is described as “the extreme pro-Soviet” course when it actually represented a “Third Force” not allied to either the West or East. While the U.S. had an “extremely favorable” position in the Middle East following the Suez Crisis, the USSR was subsequently “given the greatest credit in the Arab world for the cessation of hostilities in Egypt.” Egypt and Syria increased their economic and military ties with the Soviet bloc, and through such support to these and other Arab nations, “the Soviet Union appeared as the defender of the sovereignty of small countries and of Arab nationalism against the threats of Western ‘imperialism’.” Explaining the “major operating problems” facing the United States in the region, nationalism was identified as the primary threat. The NSC Operations Coordinating Board report stated:
Throughout the Arab area there have been increasing manifestations of an awakened nationalism, springing in part from a desire to end both real and imagined vestiges of the mandate and colonial periods, but stimulated by opportunism, Soviet propaganda, aid and infiltration, and by Egyptian ambitions and intrigue. Because the former mandatory and colonial powers were from Western Europe, the nationalism has assumed generally an anti-Western form. This situation has created opportunities for Soviet exploitation, and has, at the same time, placed the United States in a difficult position. The natural U.S. sympathy with those genuinely desirous of becoming free and completely sovereign nations runs, at times, into sharp conflict with actions required to maintain the strength of the Western alliance and to support our closest allies.
Further problems include the threat to Western economic interests in the area, with the potential for nationalization following the example of the Suez Canal, which could put at risk substantial U.S. private investments in the Arab world. Another major problem was with the divides within the Western alliance itself on how it viewed the Arab world and its problems. Significantly, “the United States sees in nationalism much that represents a threat to the West,” but “it tends to regard this nationalism as an inevitable development which should be channeled, not opposed,” whereas “Britain and France have seen this nationalism… as a threat to their entire position in the area.” The NSC paper lamented that, “It is likely that for the time being Nasser will remain the leader in Egypt,” but “the United States cannot successfully deal with President Nasser.” The United States, then, must determine “the degree to which it will actively seek to curb Nasser’s influence and Egyptian activities in the Near East and Africa.”
Syria became an important part of this equation. Increasingly left-leaning, with major pipelines carrying oil to the Mediterranean supplying much-needed oil for Western Europe’s recovery, and the largest Communist Party in the Arab world, Syria was a strategic nightmare for Western interests. After the Suez Crisis, Syria and Egypt both edged toward closer ties with the Soviet Union, not out of an ideological proclivity toward communism, but because of a pragmatic approach toward preserving and expanding Arab nationalism, which the West was actively opposed to while the USSR had endorsed, naturally, as a means to gaining strategic inroads into the Middle East, not out of any benevolent conception of justice for colonized peoples. In 1956, President Eisenhower stated:
Syria was far more vulnerable to Communist penetration than was Egypt. In Egypt, where one strong man prevailed, Colonel Nasser was able to deal with Communists and accept their aid with some degree of safety simply because he demanded that all Soviet operations be conducted through himself. In Syria, where a weak man was in charge of the government [Quwatli], the Soviet penetration bypassed the government and dealt directly with the various agencies, the army, the foreign ministry, and the political parties. Syria was considered ripe to be plucked at any time.
The fears of Soviet penetration were of course exaggerated beyond the on-the-ground realities, as per usual. The real fear was the potential for Syria to more closely align with Egypt and become a strong partner in Nasser’s non-aligned “Third Force” which happened to be in a location of major strategic interest to the West. As the Eisenhower Doctrine framed the language in terms of the Cold War confrontation between the West and East, the internal documents leading to the formation of the doctrine pointed to the isolation and diminution of Egyptian influence in the region as the main objective. Britain’s only remaining pseudo-protectorate in the region through which it could protect its oil interests was in Iraq, while its relationship with Jordan was faltering under nationalistic pressure. The British then, had a major interest in Syria, a an idea was being pushed through Iraq where the leader of the country, Nuri al-Said, “had sought to take the leadership of the Arab nationalist movement away from Egypt by instituting a ‘Fertile Crescent’ union of Iraq, Syria, Lebanon, Palestine, and Jordan.” The British objective and vision for the region, not coincidentally, “corresponded with this ambition.” Syria was viewed as a potential point through which to secure access to oil by ensuring a pro-Iraqi government, as well as checking Arab nationalism and Nasser.
In October of 1957, the United States produced a National Intelligence Estimate analyzing “probable developments affecting US interests” in the Middle East “during the next several years.” The outlook for the United States and the West in the Middle East “has deteriorated,” stated the estimate. The USSR’s influence has increased by “supporting the radical element of the Arab nationalist movement,” meaning Nasser. The NIE stated that, “radical Arab nationalists control only Egypt and Syria” at the moment, however, “sympathy and support for their strong anti-Western, revolutionary, and pan-Arab policies come from a substantial majority of the Arabs of the Near East,” while the indigenous support for the West in the region “comes largely from the outnumbered and often weakly-led conservative nationalist elements.” Acknowledging that the regimes in Syria and Egypt were likely to maintain for a few years, their reliance upon the Soviet Union would likely increase, and, moreover, “Nasser and the Syrian leaders will probably continue to exert a powerful influence over radical Arab nationalists throughout the area, except in the unlikely event of their emerging clearly as Soviet puppets.” Even if these specific regimes collapsed, noted the NIE, “the radical Arab nationalist movement will continue as a basic element in the Near East situation.”
The “conservative grouping” which supports the West in the region, consists of Saudi Arabia, Jordan, Iraq, and Lebanon, “forms a loose coalition of regimes that look to the US for aid because of their common interest in the existing system and opposition to the forces of revolution represented by the radicals.” While they do not oppose Arab nationalism in general, for it also justifies their own self-rule, they remain conservative and opposed to radical elements typified by Nasser. The NIE noted that the potential “for broadening or consolidating the position of the conservative forces in the Arab states are poor, although these forces will continue to be an important factor in the area.” One of the main problems was the continued Arab-Israeli dispute, of which prospects for a solution were poor. The NIE warned that the United States believed “that there will almost certainly be some armed conflict in the area during the next several years,” likely in Syria, Jordan, Yemen, and potentially with Israel. While France and the U.K. have lost influence in the region, the USSR has increased its own, with supplying arms to Egypt, Syria, and Yemen, and the U.S. is the main representative of the West in the Middle East. As such, the NIE stated, the region “has thus become a principal arena of the contest between the US and the USSR.”
Since the Suez Crisis, “Nasser has become… the spokesman and symbol of radical Pan-Arab nationalism.” Yet, the conservative forces in the region, especially Iraq, Lebanon, Jordan, and Saudi Arabia, remained increasingly distrustful of Nasser, and thus welcomed the Eisenhower Doctrine “as an opportunity to strengthen their own positions,” resulting in “a division of the Arab Near East into two loose groupings.” The radical Pan-Arab nationalist movement of Nasser and Syria “advocate the union of all Arabs in a single state,” and are “both the most dynamic and the most violent in their anti-Westernism, the most interested in a military buildup as a symbol of Arab strength, and at the present time the most activist in their hostility toward Israel.” Nasser and the Syrian leaders, stated the NIE, “are revolutionaries who believe in replacing many traditional social and economic institutions with a state socialism of their own devising.” Importantly, the NIE observed that, “[t]he majority of politically conscious Arab Moslems throughout the Near East, particularly the middle class intelligentsia, are sympathetic to this concept of Arab nationalism,” and believe that the interests of the West in the region are “Israel, oil, and domination of the area.” Further, they “also believe the West to be opposed to their concept of Arab unity.” The conservative elements, which reject the radical notions of Arab nationalism, reject ties to the Soviet Union, and draw themselves close to the West, are “largely confined to the upper and professional classes and [have] little popular support.” In other words, the pro-West regimes are simply dominated by “conservative and traditional” elites, while the majority of the population of the region support Nasser’s vision of Pan-Arab nationalism.
Oil interests in the region remained paramount for the West. The NIE took note of the fact that the “non-Communist world looks increasingly for its petroleum requirements to the vast reserves of the Middle East,” which was “particularly true of Western Europe,” which in 1957, “consumes almost three million barrels of oil per day, of which 72 percent comes from the Middle East,” and that rate was expected to increase by 1965. Nationalistic governments and movements in the region were exerting increasing pressure upon the “existing pattern of oil production and transportation” in seeking “increased revenue and more control over oil operations.” Luckily for the West, the conservative elements control the major oil producing areas, but transportation of oil through pipelines and waterways go through areas dominated by the radical Arab nationalist regimes. In fact, 35% of oil going to the West from the region was transported by pipeline, while 65% went through the Suez Canal. The NIE noted, however, that “Egypt and Syria are unlikely, except under extreme provocation, to exercise their capability to stop the flow of oil from the Persian Gulf area to the Mediterranean.” Opposition to Israel was identified as “the principal point of agreement among all factions of Arabs and acute tension between the Arab states and Israel will continue.” The Cold War struggle between the West and East “is regarded as a battle of giants which concerns the Arab world only insofar as it intrudes in Arab affairs or offers opportunities to the Arabs to advance their own interests.” Thus, Arab views toward the Soviet Union and the West are not framed in the Cold War dialectic of the “Free World” versus “Communist dictatorship,” but rather “the result of past experience, present friction, and future aspirations,” which naturally put the West in the part of imperial aggressors, while the Soviet Union can legitimately portray itself as ‘anti-imperial.’ The United States will continue to represent the West in the region, but “Britain, France, and other Western states will be critical of US policy if it does not act effectively to protect Western interests, particularly in petroleum, when threatened.”
Western influence had increased among the conservative Arab regimes over the preceding year, but has failed to be recognized “among the Arab public,” who fail “to understand Western indignation at Nasser’s nationalization of the Suez Canal Company and at his taking Soviet arms.” The French-British-Israeli invasion of Egypt confirmed the radical Arab nationalist portrayal of “Western imperialists,” and, while U.S. actions during the crisis increased its favor in the region, the “Soviet threats against the UK made an equal or greater impression on the Arab public.” The U.S. stance during the crisis “was misinterpreted among the Arabs as an indication that the US intended to back the Pan-Arab program against the UK and France, and many became confused and disillusioned when this turned out not to be the case.” While radical Arab nationalism will continue over the following years, stated the NIE, “[t]he forces of conservative Arab nationalism are likely to continue to be generally identified with the West,” and in some areas this could lead to “instability.” Israel, for its part, “will continue to receive outside financial and diplomatic support [largely from France] and will persist as a dynamic force within the area,” as well as seeking “to keep its armed forces qualitatively superior to those of its Arab opponents.”
For Western interests in the region, a number of factors had to dictate American policy. Naturally, the possibility of cooperation with Syria and Egypt remained slim, while conservative Arab governments were “likely to become progressively more dependent upon the US,” which would mean that “economic progress in these states will be regarded in the area as an index of the value of association with the US.” The increasing “public expectation of improvement in economic standards and welfare will impose difficulties upon governments,” as the “radical nationalist governments of Egypt and Syria are committed to ambitious social and economic reforms,” though they may likely fail to “fulfill their expectations, even with Soviet assistance, and they will probably experience political difficulties as a consequence.” For the conservative governments, which are home to the vast oil reserves of the region, they will have the “financial resources with which to effect reforms which would probably broaden the base of popular support and thus ultimately strengthen their position and that of the conservative grouping.”
Syria and Jordan: The Evolution of a Crisis
The Syrian Crisis emerged between July and October of 1957, after the Ba’ath Party (an Arab Socialist party) won control of the Parliament and Cabinet in early January, with increased Syrian disputes with Turkey over territory, reluctance to grant the Saudi ARAMCO company a pipeline across the country (owned by the Rockefeller Standard Oil Company), and the acceptance of left-wing Arab groups, the “moderate” Syrian leadership was increasingly sidelined. The United States and its Western allies, particularly Britain, had been involved for a number of years in supporting various coups in Syria. One coup was supposed to take place in 1956, but was outflanked by the importance of the Suez Crisis. Codenamed Operation Straggle, it was felt that the plans could be resumed once the British and French had left Suez. Thus, in late 1956, the British and Americans began again discussing “certain operational intentions regarding Syria,” and the CIA stated that “the UK, France, Turkey, Israel, and Iraq all… would welcome US participation and support in strong measures to check or counter the leftward trends in Syria.” With the passing of the Eisenhower Doctrine, Syria had been identified “as evidence of Russian intent” in the region. Syria, of course, denounced the doctrine, and American strategists, such as Allen Dulles at the CIA, increasingly painted Syria with a Soviet brush.
Jordan played an increasingly important role in this situation. King Abdullah, long supported and in fact, put in power by the British, had been assassinated by a Palestinian in 1951. In 1953, King Hussein emerged as the conservative leader of the country. Jordan, situated between Israel, Syria, and Saudi Arabia, was a pivotal player in any schemes at regional “stability” and preventing the spread of Pan-Arab nationalism. As Britain’s influence in the region dissipated, King Hussein sought to cement his regime’s ties with the Americans. Jordan had, for years, been subjected to cross-border raids from Israeli commandos, and the conservative pro-Western government of Jordan had to subdue national public opinion to refrain from striking back. The U.S. attempted to pressure Jordan into a peace settlement with Israel, but when Colonel Ariel Sharon destroyed a West Bank village in 1953, killing sixty-nine Palestinians, most of whom were women and children, “such a hope [had] been dashed to smithereens,” said a U.S. official at the time. Jordan had to wrestle with the reality of being home to a massive Palestinian refugee population, which was the source of enormous instability and caution for any regime in power. While King Hussein, due largely to domestic pressures, refrained from joining the Baghdad Pact (an alliance between Britain, Iraq, and Turkey), once Nasser had purchased Soviet arms in 1955, both the UK and United States began to see Hussein’s Jordan as “virtually impotent” in the confrontation of “universal popular Jordanian enthusiasm for [the] flame of Arab political liberation ignited by Nasser’s arms deal.” Thus, reported an American official in Amman, the capitol of Jordan, the “[p]olitical situation in Jordan is disintegrating and resulting instability is playing into [the] hands of anti-Western nationalists and Communists.”
The British, in response, attempted to entice Jordan to join the Baghdad Pact, which was looked favourably upon by King Hussein. However, when news of this spread to the West Bank, wrote Douglas Little, “anti-Western demonstrations erupted and pro-Nasser Palestinians demanded that Hussein sever his ties with Britain and rely instead on Soviet arms and Saudi gold.” Thus, lamented a British official, “If Saudi/Egyptian/Communist intrigue can prevent Jordan joining the Pact… despite the King and Government wishing to do so… how far has the rot spread?” The “rot” referred to by the British official, of course, was Arab nationalism. Many American officials felt that Britain would be completely extricated from Jordan, leaving CIA Director Allen Dulles to comment in early 1956 that, “The British… have suffered their most humiliating defeat in modern history.” King Hussein shortly thereafter removed the head of the Arab Legion, which was the British-controlled Jordanian army, and put the army under absolute Jordanian control, leading the British to cut Jordanian economic and military aid in retribution. The Americans, however, felt this was a smart move by Hussein, as the “King is now [a] hero and no longer [a] puppet.” Hussein put in place a new leader of the Arab Legion, described by some as an “anti-Western opportunist,” of whom the British presented as having an objective for Jordan that, “is likely to be a military dictatorship on the lines of Colonel Nasser.” This leader, Abu Nuwar, even invoked many concerns among the Americans, who were wary of his pro-Nasser stance and his ties to Palestinian leaders in the West Bank. With the Suez Crisis under way, Jordan requested Iraq send hundreds of military advisers, to which Israel responded with “savage blows” against the Arab Legion, in Eisenhower’s own words, increasing the fear that, “Jordan is going to break up… like the partition of Poland.”
In October of 1956, elections in Jordan led to the formation of a Government coalition of Communists and anti-Western nationalists, “led by Sulieman Nabulsi, a pro-Palestinian East Bank activist whom [King] Hussein reluctantly named prime minister on the eve of the Suez war.” As British participation in the Suez war became clear, Jordan’s government threatened to toss out the Anglo-Jordanian Treaty of 1948, leading Arab Legion chief Abu Nuwar to warn U.S. diplomats that, “If [the] US wants to salvage anything in Jordan,” it would have to act quickly to “furnish military and economic aid… [to] compensate for British aid which will soon be ended.” Hussein warned the Americans that Nuwar and Nabulsi were even considering Soviet aid as a replacement for British subsidy. Thus, the United States jumped into Jordan with $30 million in aid. With the Eisenhower Doctrine unveiled in early 1957, Hussein quietly endorsed the program, to which he was rewarded with suitcases of cash from the CIA, and in April, Hussein forced the prime minister to resign, instigating large anti-Western protests. At that time, however, Allen Dulles informed the National Security Council, “The situation in Jordan had reached the ultimate anticipated crisis… The real power of decision rests largely with the Army, whose loyalty to the King is uncertain.” Two days later, amid protests denouncing the Baghdad Pact and the Eisenhower Doctrine, Nuwar, the head of the Army, attempted to oust King Hussein in a coup. The King, however, was not taken by surprise. With the help of the CIA’s Kermit Roosevelt, he had mobilized loyalist army factions who forced Nuwar into exile in Syria. The crisis, however, continued, as massive anti-US demonstrations took place in Amman and Jerusalem, leading Hussein to ask Secretary of State John Foster Dulles if he could count on US support in proposing “to take a strong line in Jordan, including martial law on the West Bank.” Dulles then urged Eisenhower to send a battalion of US Marines into the Eastern Mediterranean “to signal US support for the embattled Hussein.”
The United States then immediately granted $10 million in economic aid to Jordan, followed closely with $10 million in military aid, both provided through the auspices of the Eisenhower Doctrine, designed to ensure that the Arab Legion remained as “as effective force for the maintenance of internal security,” which translates into domestic repression. Jordan got a new Prime Minister, ostensibly pro-Western, and America increasingly replaced the British as the imperial master of Jordan. Problems persisted, however, as Secretary Dulles noted, as within “wretchedly poor” Jordan, the Palestinians “were a continuing menace to stability,” and “the King sat on dynamite where the refugees were concerned.”
The Syrian Crisis
At the same time, as the crisis began to boil over in Syria, Eisenhower stated that, “If by some miracle stability could also be achieved in Syria,” by which he means pro-Western subservience, “American would have come a long way in an effort to establish peace in that troubled area,” by which he means domination. The CIA, for its part, was already encouraging right-wing factions of the Syrian military to “join forces effectively against the leftists.” In May of 1957, the CIA was attempting to remove “the pro-Communist neutralists” and “achieve a political change in Syria.” With Syrian elections, both Communists and Ba’athist made large gains, while an oil refinery was being constructed at Homs by Czech engineers from the Soviet bloc, and Soviet military advisers made inroads into the nation, resulting in a $500 million grain-for-weapons deal signed with Soviet Premier Khrushchev in July of 1957. In August, the National Security Council’s Operations Coordinating Board produced a report explaining that, “Syrian leaders seem more inclined to accept Soviet influence blindly than in any other country in the area… There was evidence that the Soviets are making Syria the focal point for arms distribution and other activities, in place of Egypt.” Within two days, the United States gave authorization for the covert operation against Syria, which the CIA had been planning for months, aiming to install the former Syrian pro-West leader, Shishakli. This operation, however, according to the U.S. Ambassador to Syria in 1957, was “a particularly clumsy CIA plot” which had been “penetrated by Syrian intelligence.” It was later revealed that, “[h]alf a dozen Syrian officers approached by American officials immediately reported back to the authorities so that the plot was doomed from the start.” Therefore, on August 12, the head of Syrian counterintelligence expelled known CIA agents, arrested their local assets, and put the U.S. Embassy under surveillance. Eisenhower expelled the Syrian ambassador to the United States, which was reciprocated with Syria expelling the American ambassador. Painting the picture of a Syria which was about to “fall under the control of International Communism and become a Soviet satellite,” Secretary Dulles supported invoking the Eisenhower Doctrine.
On August 21, 1957, an emergency meeting on Syria was held at the White House, and Secretary Dulles asked the Chairman of the Joint Chiefs of Staff to attend, stating that, “We are thinking of the possibility of fairly drastic action… so come with anybody he needs in that respect.” Though the actual minutes of the meeting remain classified, Eisenhower’s memoirs reflect on some of the discussion that took place: “Syria’s neighbors, including her fellow Arab nations, had come to the conclusion that the present regime in Syria had to go; otherwise the takeover by the Communists would soon be complete.” The U.S. would then encourage Iraq and Turkey to mass troops along their borders with Syria, and “if Syrian aggression should provoke a military reaction” – note how it’s defined as “Syrian aggression” as opposed to “reaction” or “defense” to an aggressive military buildup on its borders – the United States would “expedite shipments of arms already committed to the Middle Eastern countries and, further, would replace losses as quickly as possible.” As such, the U.S. Sixth Fleet was again ordered to the eastern shores of the Mediterranean, as it was during the Jordanian crisis earlier that year, while U.S. jets were sent from Western Europe to a NATO base in Turkey. Over the following two weeks, the Americans slowly backed down from their aggressive strategy, which threatened to provoke a major regional war drawing both the Soviet Union and the United States directly into the conflict. Soviet leader Khrushchev wrote a letter to Eisenhower in early September warning him not to intervene in Syria. John Foster Dulles claimed that the crisis had created “a period of the greatest peril for us since the Korean War,” saying that Khrushchev was “more like Hitler than any other Russian leader we have previously seen.” In typical Orwellian fashion, changing the actual crisis from that of a major covert and potentially overt American aggression in the region, Dulles, when speaking to the press, expressed his “deep concern at the apparently growing Soviet Communist domination of Syria.”
While the conservative Arab allies were hesitant to pursue aggressive American policies against Syria, Turkey seemed to be ready for war, as even “despite words of caution from American diplomats and NATO officials,” Turkey “refused to demobilize the 50,000 troops they had massed along the Syrian frontier.” Dulles attempted to placate the Soviets, explaining that Eisenhower was convincing the Turks to retract, and Khrushchev warned, “if Turkey starts hostilities against Syria, this can lead to very grave consequences, and for Turkey, too,” which was a NATO ally, and thus, if Turkey was “to go it alone in Syria,” the Soviet Union would “attack Turkey, thereby precipitating an open, full scale conflict between ourselves and Russia.” With this in mind, U.S. officials bribed Turkey with economic and military aid to demobilize the border in late October. Following the crisis, Syrian leaders saw a dual threat of either Soviet domination of their country or Turkish invasion. In response to this, they promoted a formal union with Egypt along the lines espoused by Pan-Arab nationalism, and in early 1958, the United Arab Republic (UAR) was formed between Syria and Egypt. The Americans then feared that Nasser would use the UAR “to threaten Lebanon, Jordan, Saudi Arabia and Iraq and perhaps engulf them one by one.” However, despite the American fears that the UAR would seek to absorb other Arab states, the United States felt that a merger with Egypt would repress Communist elements in Syria, and that open hostility to the UAR would only incur Arab resentment. Thus, while the UAR was formed on 1 February 1958, the United States formally recognized it on 25 February, and the Syrian crisis came to an end.
U.S. Policy After the Syrian Crisis
On 24 January 1958, a National Security Council report on “Long-Range U.S. Policy Toward the Near East” was issued which explained that the Middle East was “of great strategic, political, and economic importance to the Free World,” as the region “contains the greatest petroleum resources in the world and essential facilities for the transit of military forces and Free World commerce.” Thus, it was deemed that the “security interests of the United States would be critically endangered if the Near East should fall under Soviet influence of control,” and that the “strategic resources are of such importance” to the West, “that it is in the security interest of the United States to make every effort to insure that these resources will be available and will be used for strengthening the Free World,” noting also that the “geographical position of the Near East makes the area a stepping-stone toward the strategic resources of Africa.” The Report went on note:
Current conditions and political trends in the Near East are inimical to Western interests. In the eyes of the majority of Arabs the United States appears to be opposed to the realization of the goals of Arab nationalism. They believe that the United States is seeking to protect its interest in Near East oil by supporting the status quo and opposing political or economic progress, and that the United States is intent upon maneuvering the Arab states into a position in which they will be committed to fight in a World War against the Soviet Union. The USSR, on the other hand, had managed successfully to represent itself to most Arabs as favoring the realization of the goals of Arab nationalism and as being willing to support the Arabs in their efforts to attain those goals without a quid pro quo. Largely as a result of these comparative positions, the prestige of the United States and of the West has declined in the Near East while Soviet influence has greatly increased. The principal points of difficulty which the USSR most successfully exploits are: the Arab-Israeli dispute; Arab aspirations for self-determination and unity; widespread belief that the United States desires to keep the Arab world disunited and is committed to work with “reactionary” [i.e., dictatorial] elements to that end; the Arab attitude toward the East-West struggle; U.S. support of its Western “colonial” allies [France and Britain]; and problems of trade and economic development.
These points of “exploit” are, further, accurate. The United States, affirmed the NSC report, “supports the continued existence of Israel,” and “our economic and cultural interests in the area have led not unnaturally to close U.S. relations with elements in the Arab world whose primary interest lies in the maintenance of relations with the West and the status quo in their countries – Chamoun of Lebanon, King Saud, Nuri of Iraq, King Hussein [of Jordan].” These relations, stated the document, “have contributed to a widespread belief in the area that the United States desires to keep the Arab world disunited and is committed to work with ‘reactionary’ elements to that end,” while the USSR can proclaim “all-out support for Arab unity and for the most extreme Arab nationalist aspirations, because it has no stake in the economic, or political status quo in the area.” In its look at the advances of Communism in the region, the report stated that, “Communist police-state methods seem no worse than similar methods employed by Near East regimes, including some of those supported by the United States,” while the “Arabs sincerely believe that Israel poses a greater threat to their interests than does international Communism.” Lamenting against perceptions of the West in the region, the NSC document noted that the Arabs “believe that our concern over Near East petroleum as essential to the Western alliance, our desires to create indigenous strength [i.e., police-states, dictatorships, strong militaries] to resist Communist subversion or domination, our efforts to maintain existing military transit and base rights and deny them to the USSR, are a mere cover for a desire to divide and dominate the area.”
Unfortunately for the United States reputation, the NSC report stated, “[t]he continuing and necessary association of the United States in the Western European Alliance makes it impossible for us to avoid some identification with the powers which formerly had, and still have, ‘colonial’ interests in the area.” In other words, yes, the United States supports colonialism and imperialism in the Middle East. Further, “[t]he continuing conflict in Algeria excites the Arab world and there is no single Arab leader, no matter how pro-Western he may be on other issues, who is prepared to accept anything short of full Algerian independence as a solution to this problem,” and thus, this creates “fertile ground for Soviet and Arab nationalist distortion of the degree of U.S. and NATO moral and material support to the French in Algeria.” While the area is rife with “extremes of wealth and poverty,” the blame is put on “external factors” such as “colonialism” as well as “unfair arrangements with the oil-producing companies, and a desire on the part of the West to keep the Arab world relatively undeveloped so that it may ultimately become a source of raw materials and the primary market for Israeli industry.” The NSC document then stated that, “we cannot exclude the possibility of having to use force in an attempt to maintain our position in the area,” but that, “we must recognize that the use of military force might not preserve an adequate U.S. political position in the area and might even preserve Western access to Near East oil only with great difficulty.”
As an American objective in the region, the NSC document stated that, “[r]ather than attempting merely to preserve the status quo, [the United States should] seek to guide the revolutionary and nationalistic pressures throughout the area into orderly channels which will not be antagonistic to the West and which will contribute to solving the internal social, political and economic problems of the area.” However, the report went on to essentially counter this point with the policy objective of seeking to “[p]rovide military aid to friendly countries to enhance their internal security and governmental stability,” or in other words, to maintain the status quo, and, “where necessary, to support U.S. plans for the defense of the area.” The document did, however, recommend that when a “pro-Western orientation is unattainable,” to “accept neutralist policies of states in the area even though such states maintain diplomatic, trade and cultural relations with the Soviet bloc… so long as these relations are reasonably balanced by relations with the West.” The United States should “provide assistance… to such states in order to develop local strength against Communist subversion and control and to reduce excessive military and economic dependence on the Soviet bloc.”
In dealing with the “threat” of Pan-Arab nationalism, the NSC report recommended that the United States should proclaim its “support for the ideal of Arab unity,” but to quietly “encourage a strengthening of the ties among Saudi Arabia, Jordan and Iraq with a view to the ultimate federation of two or all of those states.” The aim of this would be to create a “counterbalance [to] Egypt’s preponderant position of leadership in the Arab world by helping increase the political prestige and economic strength of other more moderate Arab states such as Iraq, the Sudan, Saudi Arabia, and Lebanon.” In Syria, the aim was simply to seek “a pro-Western, or if this is not possible, a truly neutral government.” Further, it was essential to continue “friendly relations with King Saud and continue endeavors to persuade him to use his influence for objectives we seek within the Arab world.” Referencing the potential use of covert or overt warfare and regime change, the document stated that the United States had to “[b]e prepared, when required, to come forward, as was done in Iran [with the 1953 coup], with formulas designed to reconcile vital Free World interests in the area’s petroleum resources with the rising tide of nationalism in the area.”
The preceding was a research sample of a chapter on the American Empire in the Middle East in The People’s Book Project. This chapter was made possible through donations from readers like you through The People’s Grants. The new objective of The People’s Grants is to raise $1,600 to finance the development of two chapters on a radical history of race and poverty. If you find the following research informative, please consider donating to support The People’s Book Project.
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Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.
 Peter L. Hahn, “Securing the Middle East: The Eisenhower Doctrine of 1957,” Presidential Studies Quarterly, (Vol. 36, No. 1, March 2006), pages 39-40.
 Ibid, page 41.
 Document 161, “Paper Prepared in the Bureau of Near Eastern, South Asian, and African Affairs and the Policy Planning Staff,” Foreign Relations of the United States, 1955-1957, Vol. 12, Near East Region; Iran; Iraq, 5 December 1956.
 Document 178, “Operations Coordinating Board Report,” Foreign Relations of the United States, 1955-1957, Vol. 12, Near East Region; Iran; Iraq, 22 December 1956.
 Ivan Pearson, “The Syrian Crisis of 1957, the Anglo-American ‘Special Relationship’, and the 1958 Landings in Jordan and Lebanon,” Middle Eastern Studies (Vol. 43, No. 1, January 2007), pages 45-46.
 Ibid, pages 46-47.
 Document 266, “National Intelligence Estimate,” Foreign Relations of the United States, 1955-1957, Vol. 12, Near East Region; Iran; Iraq, 8 October 1957.
[11 – 15] Ibid.
 Douglas Little, “Cold War and Covert Action: The United States and Syria, 1945-1958,” Middle East Journal (Vol. 44, No. 1, Winter 1990), pages 68-69.
 Douglas Little, “A Puppet in Search of a Puppeteer? The United States, King Hussein, and Jordan, 1953-1970,” The International History Review (Vol. 17, No. 3, August 1995), pages 512, 516-519.
 Ibid, pages 519-522.
 Ibid, pages 522-524.
 Ibid, pages 524-525.
 Douglas Little, “Cold War and Covert Action: The United States and Syria, 1945-1958,” Middle East Journal (Vol. 44, No. 1, Winter 1990), pages 69-71.
 Ibid, pages 71-73.
 Ibid, pages 73-74.
 Peter L. Hahn, “Securing the Middle East: The Eisenhower Doctrine of 1957,” Presidential Studies Quarterly, (Vol. 36, No. 1, March 2006), page 44.
 Document 5, “National Security Council Report,” Foreign Relations of the United States, 1958-1960, Vol. 12, Near East Region; Iraq; Iran; Arabian Peninsula, 24 January 1958.
The U.S. Strategy to Control Middle Eastern Oil: “One of the Greatest Material Prizes in World History”
The U.S. Strategy to Control Middle Eastern Oil: “One of the Greatest Material Prizes in World History”
By: Andrew Gavin Marshall
NOTE: The following is a research sample from The People’s Book Project. It is unedited and in draft format, but is intended as an excerpt of some of the research that is going into the book. This research sample is drawn from a recently written chapter on the history of American imperialism in the Middle East and North Africa. Please support The People’s Book Project by contributing a donation to The People’s Grant to reach the target goal of $1,600 to fund two major chapters in the book on a radical history of race and poverty.
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In the midst of World War II, Saudi Arabia secured a position of enormous significance to the rising world power, America. With its oil reserves essentially untapped, the House of Saud became a strategic ally of immense importance, “a matter of national security, nourishing U.S. military might and enhancing the potentiality of postwar American hegemony.” Saudi Arabia welcomed the American interest as it sought to distance itself from its former imperial master, Britain, which it viewed with suspicion as the British established Hashemite kingdoms in the Middle East – the old rivals of the Saudis – in Jordan and Iraq.
The Saudi monarch, Abdul Aziz bin Abdul Rahman al Saud had to contend not only with the reality of Arab nationalism spreading across the Arab world (something which he would have to rhetorically support to legitimate his rule, but strategically maneuver through in order to maintain his rule), but he would also play off the United States and Great Britain against one another to try to ensure a better deal for ‘the Kingdom’, and ensure that his rivals – the Hashemites – in Jordan and Iraq did not spread their influence across the region. Amir (King) Abdullah of Transjordan – the primary rival to the Saudi king – sought to establish a “Greater Syria” following World War II, which would include Transjordan, Syria, Iraq, Lebanon and Palestine, and not to mention, the Hejaz province in Saudi Arabia. The image and potential of a “Greater Syria” was central in the mind of King Abdul Aziz. The means through which the House of Saud would seek to prevent such a maneuver and protect the ‘Kingdom’ was to seek Western protection. As the United States had extensive oil interests in the Kingdom, it seemed a natural corollary that the United States government should become the ‘protector’ of Saudi Arabia, especially since the British, long the primary imperial hegemon of the region (with France a close second), had put in place the Hashemites in Transjordan and Iraq. For the Saudis, the British could not be trusted.
The Saudi King rose to power and established the Kingdom of Saudi Arabia in 1927 and made formal ties with the United States in 1931. An oil concession was soon granted to the Rockefeller-owned Standard Oil of California, and thereafter, large quantities of oil were discovered in the Kingdom, thus increasing the importance of the Saudi monarch. This was especially true during World War II, when access to and control over petroleum reserves were of the utmost importance in determining the course of the war. In 1943, President Franklin Roosevelt acknowledged as much when he signed Executive Order 8926, which stated that, “the defense of Saudi Arabia [is] vital to the defense of the United States.” United States Secretary of the Interior Harold Ickes, several months earlier, suggested to President Roosevelt that the United States be more involved in organizing oil concessions in Saudi Arabia not only for the war effort, but “to counteract certain known activities of a foreign power which presently are jeopardizing American interests in Arabian oil reserves.” That “foreign power” was Great Britain. In fact, there was immense distrust of British intentions in the Middle East, and specifically in Saudi Arabia, on the part of the State Department’s Division of Near East Affairs (NEA). A great deal of this tension and antagonism, however, emerged from Saudi diplomacy which sought to play off the two great powers against one another in the hopes of securing for itself a better deal.
Anthony Eden, the British Foreign Secretary (and later Prime Minister), wrote to Prime Minister Winston Churchill in September of 1943 that, “our difficulty is to keep the Americans in line,” in relation to Saudi Arabia. As Roosevelt’s Executive Order categorized Saudi Arabia as “vital to the defense of the United States,” this allowed Saudi Arabia to qualify for the Lend-Lease program during the war, reducing Saudi dependency upon the British, and which included arms sales to the Kingdom. Following this event, British Foreign Office officials lamented, “We would not dream of entertaining a direct application for arms from a South American country for example, without at once consulting the American arms representative in London and deferring to his views.” This, of course, was a reference to Latin America in the context of the Monroe Doctrine – America’s “backyard” – and thus, was implying, that the Middle East was Britain’s “backyard.”
Adolf A. Berle, Roosevelt’s Assistant Secretary of State explained to the British the objective of American designs for the Middle East. As Simon Davis summarized, European imperial “spheres of influence were to give way to open political and economic circumstances in which Americans interests were not to be demarcated by other great powers.” In short, it was to be the demise of formal imperialism for the rise of informal empire, led by the United States. The “open political and economic circumstances” desired by American officials were in no small part influenced by petroleum concerns. Technical studies had been undertaken which pointed to the Middle East as the most oil-rich region in the world. At the time, Saudi Arabia was the only country in which American oil interests had established themselves prior to World War II. The British had actually approached the United States on behalf of the House of Saud in the early 1940s to secure funds for the Saudi government, as the British were stretched thin by the war in Europe. The United States had at first rejected the proposals, suggesting that Saudi Arabia was British responsibility. The American Minister in Cairo, Alexander Kirk, complained that such a move suggested to the Arab world that the United States was “resigning to the British all initiative in the Near East generally and in Saudi Arabia particularly.” The Saudis then approached American oil companies for support in 1942, who in turn approached the State Department’s Division of Near East Affairs, raising fears that leaving “responsibility” for the Near East and Saudi Arabia to the British would eventually mean a loss of oil concessions in Saudi Arabia to British interests. At the same time, Saudi officials were also quietly approaching the British to increase their interest in the Kingdom, suggesting that the Americans were attempting to maneuver the British out of the Near East. The Saudi Foreign Minister told a British official in December of 1942 that, “although [King Ibn Saud’s] relations with United States are friendly both in themselves and because United States is Britain’s ally… yet his relations with United States could never be so close and friendly as with His Majesty’s Government with whom he has so many interests in common.”
A deceptive diplomatic game between the United States, Great Britain, and Saudi Arabia ensued. As the Americans shifted their interest in Saudi Arabia in 1943, Gordon Merriam, the assistant chief of the State Department’s Division of Near Eastern Affairs suggested in January of 1943 that the possibility of the British pushing their way into America’s oil concessions in the Kingdom after the war “has been very much on our minds.” Secretary of State Cordell Hull wrote that, “It should be kept clearly in mind that the expansion of British facilities serves to build up their post-war position in the Middle East at the expense of American interests there.”
Britain, however, was not trying to exclude the United States, but to include it in an Anglo-American approach to the region. British Foreign Office documents stressed that the British were “by no means prepared to sacrifice a century of hard-earned political influence in the Middle East to their upstart American cousins,” however, the British sought to “coopt rather than preempt US interests.” Churchill even wrote to Roosevelt to stress “the fullest assurance that we have no thought of trying to horn in upon your interests and property in Saudi Arabia.” The British even acknowledged in their internal correspondence that, “it seems probably that sooner or later the United States will become the foreign power most concerned with Saudi Arabian affairs.” The aim of the British, then, was not to expand their influence at the expense of the Americans, but to maintain their influence as the U.S. increased its own.
In July of 1944, British diplomat Lord Halifax wrote to the United States, “We have made it perfectly plain that we have no wish to oppose increased American influence in Saudi Arabia so long as it does not seek to crowd us out. But it would be helpful if the Americans would realize that they cannot hope to achieve overnight quite the same position that we have built up over long years.” The United States was pressuring Britain to replace their representative in Saudi Arabia, S.R. Jordan, over State Department fears that Jordan was the primary British antagonist of expanding American influence in the Kingdom. Jordan was ironically, at that time, writing in cables to the British that, “Strategically, it would appear that we have little to fear from the presence of increasing US participation in Saudi Arabian affairs.” What became most frustrating to the British, however, was not the expansion of American power, but rather the perspective of Americans at the State Department (with fears stoked by the oil companies and Saudis) that the British were trying to keep the US out of Middle Eastern affairs. As the British Minister of State in the Middle East, Lord Moyne, observed, “I am afraid it is another of the many cases we have had in the Middle East where the local American idea of cooperation is that we should do all the giving and they all the taking.” As the British realized the Saudi role in creating these fears among the Americans, Moyne wrote, “It has subsequently turned out that the Finance Minister and the King’s Syrian advisers have been furnishing misleading figures and exploiting their position for political ends.”
In 1944, President Franklin Roosevelt wrote a memo to the American Director of Economic Operations in the Middle East in which he made clear: “The Middle East is an area in which the United States has a vital interest.” That interest, of course, was oil. Roosevelt made assurances that Middle Eastern oil belonged to the Western imperialist nations and not the Middle East itself, as he wrote that “the objective of the United States” in the Middle East “is to make certain that all nations are accorded equality of opportunity,” and that “special privileges… should not be afforded to any country or its nationals.” This was, of course, indirectly referring to France and especially Great Britain, the imperial hegemons of the Middle East. The “equality of opportunity” to exploit the resources of the Middle East was simply referring to the expansion of America’s “vital interest” in the region.
In 1945, the British were increasingly frustrated with the American approach to Middle East relations. Some internal documents from the British Foreign Office reflected the varied positions of their diplomats:
The Americans are commercially on the offensive… we shall enter a period of commercial rivalry, and we should not make any concession that would assist American commercial penetration into a region which for generations has been an established British market.
For some years the United States have been showing an increasing interest in the Middle East. They worried us by an obstructive and disapproving attitude, the basis and reason of which remained obscure… On the American side there is the lively conviction that the USA have the right to go where they wish and to the extent that they wish… But we, on our side, feel that the Americans, irrespectively of any suspicion on their part that we are trying to exclude them, are trying by means that seem to us both aggressive and unfair to build up a position for themselves at our expense, or at any rate without regard to our established interests.
It seemed, then, that both the Americans and the British feared and suspected each other of attempting the same thing: to increase their own influence in the region and decrease that of the other power. The Saudis, in the middle, were playing a game between two great powers in the hopes of securing their own interests. And they had good leverage which allowed them to play such a game: oil.
There was continuous reference to Britain’s apparent ‘right’ to the Middle East, drawing the comparison to the United States Monroe Doctrine (of 1823) declaring a U.S. ‘right’ to Latin America. As one British official wrote, “The U.S. hasn’t invited us to share her influence in Panama… we are entitled to our Monroe Doctrine in the Arab countries.”
In 1945, President Roosevelt held a formal meeting with the Saudi King aboard the USS Quincy. The issue of Palestine was an important one in discussions, and was viewed as a major challenge to the cause and potential of Arab nationalism across the Middle East. Roosevelt informed Aziz that the U.S. would make “no decision altering the basic situation of Palestine… without full consultation with both Arabs and Jews,” and that, “he would do nothing to assist the Jews against the Arabs and would make no hostile move to the Arab people.” Aziz, in the meeting, also stressed the issue of Syrian and Lebanese sovereignty, seeking to ensure they kept separate from a potential Hashemite “Greater Syria,” to which Roosevelt ensured that if Saudi sovereignty were ever under threat, the United States would undertake “all possible support short of the use of force.”
King Ibn Saud asked Roosevelt, inquiring on the future of Saudi-US ties, “What am I to believe when the British tell me that my future is with them and not with America? They constantly say, or imply, that America’s principal interest in Saudi Arabia is a transitory war-interest… and that America, after the war, will return to her preoccupations in the Western Hemisphere… and that Britain alone will continue as my partner in the future as in the early years of my reign.” To this, Roosevelt assured the King that the United States would maintain an interest and added that the America wanted freedom and prosperity for all, while the British wanted “freedom and prosperity” which was marked: “Made in Britain.” The King replied, “Never have I heard the English so accurately described.”
American interest in Saudi Arabia and the Middle East more broadly did not die with Roosevelt. His successor, Harry Truman, was just as eager to “open the door” to the Middle East. A 1945 memorandum to President Truman written by the Chief of the Division of Near Eastern Affairs in the U.S. State Department, Gordon Merriam, stated: “In Saudi Arabia, where the oil resources constitute a stupendous source of strategic power, and one of the greatest material prizes in world history, a concession covering this oil is nominally in American control.” Adolf A. Berle, one of Franklin Roosevelt’s closest advisers, particularly in relation to the construction of the post-War world, years later remarked that controlling the oil reserves of the Middle East would mean obtaining “substantial control of the world.”
For King Abdul Aziz, his main concerns continued to be focused on his rivals, the Hashemites, and the possibility of “Greater Syria.” This naturally increased his interest in promoting the Palestinian cause of self-determination, and thus also put him at odds with the United States on issues related to Palestine. Abdul Aziz had spoken out against policies in Palestine, and was increasingly framing himself as the leader of the Arab world. The rivalry between the Arab kingdoms of Transjordan and Iraq on one side, and Saudi Arabia on the other, prevented the Arabs from uniting on the issue of Palestine. The American Minister to Saudi Arabia, James Rives Childs, warned that, “Unless we proceed with the utmost circumspection in considering all phases of the possible repercussions of the Palestinian question… we may raise difficulties for ourselves in this most strategic area of vital national interest which will plague the United States constantly in years to come.” However, while King Abdul spoke out publicly against Western interference in Palestine, he privately informed American officials that he intended “never to let Palestine interfere with his relations with the United States… I’m talking big because everyone else is… it seems to be the most effective course.”
King Abdul was increasingly worried about the British possibly supporting Jordan’s King Abdullah in his plan for a “Greater Syria” as they sought to end the British Mandate in Palestine and find a new alternative to the “Palestinian question.” Between 1946 and 1947, Saudi princes relayed the King’s concern to President Truman that there existed a British conspiracy with the Hashemites to depose him and destroy the Saudi dynasty. The State Department informed the Saudis that the United States had no information “which would cause it to believe that the British government was giving support to any scheme for the extension of British influence in the Middle East through the establishment of a Greater Syria.” Abdul Aziz was not convinced, and felt “that the development of strong economic ties with the United States offers the greatest possible available insurance from invasion.” As the British handed the Palestine Mandate to the United Nations in 1947, the Saudi King relayed to the United States that the question of Palestine, and thus ‘Greater Syria,’ was “the only thorn in Saudi-American relations.” However, as the United Nations partitioned Palestine, despite Saudi protests against the United States on the issue, King Abdul Aziz wrote:
I occupy a position of preeminence in the Arab world. In the case of Palestine, I have to make a common cause with the other Arab states. Although the other Arab states may bring pressure to bear on me, I do not anticipate that a situation will arise whereby I shall be drawn into conflict with friendly western powers over this question.
In 1948, after a great deal of diplomatic back-and-forth on the Palestine issue, the Arab states invaded after months of ethnic cleansing of the Palestinian population by militant Zionists in the British Mandate. Saudi Arabia, together with Egypt, Syria, Lebanon, Yemen, and even Jordan and Iraq, invaded Palestine immediately after the Zionists declared the State of Israel in May of 1948. However, as the Arabs were distrustful of one another, their incursion was doomed to failure, and they grossly underestimated the military strength of the Zionists, which was built up under the British Mandate.
The United States took a stated position of neutrality amid the conflict, in order to prevent upsetting its relations with the Arab world, which already were so damaged as a result of recognizing the state of Israel, an act which had created immense protest and condemnation from the State Department. In January of 1949, a cease-fire was signed between Israel and Egypt, and Israel emerged the obvious victor in the 1948-49 war. Thereafter, the United States lifted its arms embargo to the Middle East to provide the Saudis with military aid. The United States had emerged from the birth of Israel with a deeply scarred image in the Arab world, and with that, increased fear over Soviet expansion into the area led the U.S. to conclude that it had to support “strong men” in the region, such as Abdul Aziz. In 1949, a U.S. survey mission was sent to Saudi Arabia to examine the potential for building up a strong Saudi military force. King Abdul desired “a military force equal to or greater than the forces [of] Jordan and Iraq.” The U.S. mission recommended “the training and equipping of a Saudi defensive force totaling 43,000 officers and men, composed of 28,000 combat troops and 15,000 Air Force support and logistic personnel.” Thus, a strong Saudi-American relationship was established as one of the main outposts of U.S. influence in the Middle East, control over oil, and containment of the Soviet Union.
The aim, as articulated by State Department strategists, was to maintain “substantial control of the world” through control of Middle Eastern oil: “one of the greatest material prizes in world history.” In a 1948 State Department Policy Planning Paper written by George Kennan – the architect of the ‘containment’ policy toward the USSR – it was explained that following World War II, America held 50% of the world’s wealth, yet had only 6.3% of the world’s population, a “disparity [which] is particularly great as between ourselves and the peoples of Asia,” thus, destined to create “envy and resentment.” The real task for America, then, wrote Kennan:
is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.
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Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.
 Maurice Jr. Labelle, “‘The Only Thorn’: Early Saudi-American Relations and the Question of Palestine, 1945-1949,” Diplomatic History (Vol. 35, No. 2, April 2011), page 257.
 Ibid, pages 257-258.
 Ibid, pages 259-260.
 Barry Rubin, “Anglo-American Relations in Saudi Arabia, 1941-45,” Journal of Contemporary History (Vol. 14, No. 2, April 1979), page 253.
 Simon Davis, “Keeping the Americans in Line? Britain, the United States and Saudi Arabia, 1939-45: Inter-Allied Rivalry in the Middle East Revisited,” Diplomacy & Statecraft (Vol. 8, No. 1, 1997), page 96.
 Ibid, page 97.
 Barry Rubin, “Anglo-American Relations in Saudi Arabia, 1941-45,” Journal of Contemporary History (Vol. 14, No. 2, April 1979), pages 254-255.
 Ibid, page 256.
 Simon Davis, “Keeping the Americans in Line? Britain, the United States and Saudi Arabia, 1939-45: Inter-Allied Rivalry in the Middle East Revisited,” Diplomacy & Statecraft (Vol. 8, No. 1, 1997), pages 97-98.
 Barry Rubin, “Anglo-American Relations in Saudi Arabia, 1941-45,” Journal of Contemporary History (Vol. 14, No. 2, April 1979), pages 257-258.
 Ibid, pages 260-261.
 Letter from President Roosevelt to James M. Landis, American Director of Economic Operations in the Middle East, Concerning the Vital Interest of the United States in the Middle East, Foreign Relations of the United States, The Near East, South Asia, and Africa, 6 March 1944.
 Amikam Nachmani, “‘It’s a Matter of Getting the Mixture Right’: Britain’s Post-War Relations with America in the Middle East,” Journal of Contemporary History (Vol. 18, No. 1, January 1983), pages 120-121.
 Ibid, page 117.
 Maurice Jr. Labelle, “‘The Only Thorn’: Early Saudi-American Relations and the Question of Palestine, 1945-1949,” Diplomatic History (Vol. 35, No. 2, April 2011), pages 260-261.
 Simon Davis, “Keeping the Americans in Line? Britain, the United States and Saudi Arabia, 1939-45: Inter-Allied Rivalry in the Middle East Revisited,” Diplomacy & Statecraft (Vol. 8, No. 1, 1997), pages 125-126.
 Report by the Coordinating Committee of the Department of State, “Draft Memorandum to President Truman,” Foreign Relations of the United States, Diplomatic Papers, The Near East and Africa, Vol. 8, 1945, page 45.
 Lloyd C. Gardner, Three Kings: The Rise of an American Empire in the Middle East After World War II (The New Press, 2009), page 96; Noam Chomsky, “Is the World Too Big to Fail?” Salon, 21 April 2011: http://www.salon.com/2011/04/21/global_empire_united_states_iraq_noam_chomsky/
 Maurice Jr. Labelle, “‘The Only Thorn’: Early Saudi-American Relations and the Question of Palestine, 1945-1949,” Diplomatic History (Vol. 35, No. 2, April 2011), pages 264-265.
 Ibid, pages 266-268.
 Ibid, page 270.
 Ibid, pages 274-279.
 George F. Kennan, “Review of Current Trends U.S. Foreign Policy,” Report by the Policy Planning Staff, 24 February 1948.
Entering the Greatest Depression in History
More Bubbles Waiting to Burst
Global Research, August 7, 2009
While there is much talk of a recovery on the horizon, commentators are forgetting some crucial aspects of the financial crisis. The crisis is not simply composed of one bubble, the housing real estate bubble, which has already burst. The crisis has many bubbles, all of which dwarf the housing bubble burst of 2008. Indicators show that the next possible burst is the commercial real estate bubble. However, the main event on the horizon is the “bailout bubble” and the general world debt bubble, which will plunge the world into a Great Depression the likes of which have never before been seen.
Housing Crash Still Not Over
The housing real estate market, despite numbers indicating an upward trend, is still in trouble, as, “Houses are taking months to sell. Many buyers are having trouble getting financing as lenders and appraisers struggle to figure out what houses are really worth in the wake of the collapse.” Further, “the overall market remains very soft […] aside from speculators and first-time buyers.” Dean Baker, co-director of the Center for Economic and Policy Research in Washington said, “It would be wrong to imagine that we have hit a turning point in the market,” as “There is still an enormous oversupply of housing, which means that the direction of house prices will almost certainly continue to be downward.” Foreclosures are still rising in many states “such as Nevada, Georgia and Utah, and economists say rising unemployment may push foreclosures higher into next year.” Clearly, the housing crisis is still not at an end.
The Commercial Real Estate Bubble
In May, Bloomberg quoted Deutsche Bank CEO Josef Ackermann as saying, “It’s either the beginning of the end or the end of the beginning.” Bloomberg further pointed out that, “A piece of the puzzle that must be calculated into any determination of the depth of our economic doldrums is the condition of commercial real estate — the shopping malls, hotels, and office buildings that tend to go along with real- estate expansions.” Residential investment went down 28.9 % from 2006 to 2007, and at the same time, nonresidential investment grew 24.9%, thus, commercial real estate was “serving as a buffer against the declining housing market.”
Commercial real estate lags behind housing trends, and so too, will the crisis, as “commercial construction projects are losing their appeal.” Further, “there are lots of reasons to suspect that commercial real estate was subject to some of the loose lending practices that afflicted the residential market. The Office of the Comptroller of the Currency’s Survey of Credit Underwriting Practices found that whereas in 2003 just 2 percent of banks were easing their underwriting standards on commercial construction loans, by 2006 almost a third of them were relaxing.” In May it was reported that, “Almost 80 percent of domestic banks are tightening their lending standards for commercial real-estate loans,” and that, “we may face double-bubble trouble for real estate and the economy.”
In late July of 2009, it was reported that, “Commercial real estate’s decline is a significant issue facing the economy because it may result in more losses for the financial industry than residential real estate. This category includes apartment buildings, hotels, office towers, and shopping malls.” Worth noting is that, “As the economy has struggled, developers and landlords have had to rely on a helping hand from the US Federal Reserve in order to try to get credit flowing so that they can refinance existing buildings or even to complete partially constructed projects.” So again, the Fed is delaying the inevitable by providing more liquidity to an already inflated bubble. As the Financial Post pointed out, “From Vancouver to Manhattan, we are seeing rising office vacancies and declines in office rents.”
In April of 2009, it was reported that, “Office vacancies in U.S. downtowns increased to 12.5 percent in the first quarter, the highest in three years, as companies cut jobs and new buildings came onto the market,” and, “Downtown office vacancies nationwide could come close to 15 percent by the end of this year, approaching the 10-year high of 15.5 percent in 2003.”
In the same month it was reported that, “Strip malls, neighborhood centers and regional malls are losing stores at the fastest pace in at least a decade, as a spending slump forces retailers to trim down to stay afloat.” In the first quarter of 2009, retail tenants “have vacated 8.7 million square feet of commercial space,” which “exceeds the 8.6 million square feet of retail space that was vacated in all of 2008.” Further, as CNN reported, “vacancy rates at malls rose 9.5% in the first quarter, outpacing the 8.9% vacancy rate registered in all of 2008.” Of significance for those that think and claim the crisis will be over by 2010, “mall vacancies [are expected] to exceed historical levels through 2011,” as for retailers, “it’s only going to get worse.” Two days after the previous report, “General Growth Properties Inc, the second-largest U.S. mall owner, declared bankruptcy on [April 16] in the biggest real estate failure in U.S. history.”
In April, the Financial Times reported that, “Property prices in China are likely to halve over the next two years, a top government researcher has predicted in a powerful signal that the country’s economic downturn faces further challenges despite recent positive data.” This is of enormous significance, as “The property market, along with exports, were leading drivers of the booming Chinese economy over the past decade.” Further, “an apparent rebound in the property market was unsustainable over the medium term and being driven by a flood of liquidity and fraudulent activity rather than real demand.” A researcher at a leading Chinese government think tank reported that, “he expected average urban residential property prices to fall by 40 to 50 per cent over the next two years from their levels at the end of 2008.”
In April, it was reported that, “The Federal Reserve is considering offering longer loans to investors in commercial mortgage-backed securities as part of a plan to help jump-start the market for commercial real estate debt.” Since February the Fed “has been analyzing appropriate terms and conditions for accepting commercial mortgage-backed securities (CMBS) and other mortgage assets as collateral for its Term Asset-Backed Securities Lending Facility (TALF).”
In late July, the Financial Times reported that, “Two of America’s biggest banks, Morgan Stanley and Wells Fargo … threw into sharp relief the mounting woes of the US commercial property market when they reported large losses and surging bad loan,” as “The disappointing second-quarter results for two of the largest lenders and investors in office, retail and industrial property across the US confirmed investors’ fears that commercial real estate would be the next front in the financial crisis after the collapse of the housing market.” The commercial property market, worth $6.7 trillion, “which accounts for more than 10 per cent of US gross domestic product, could be a significant hurdle on the road to recovery.”
The Bailout Bubble
While the bailout, or the “stimulus package” as it is often referred to, is getting good coverage in terms of being portrayed as having revived the economy and is leading the way to the light at the end of the tunnel, key factors are again misrepresented in this situation.
At the end of March of 2009, Bloomberg reported that, “The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year.” This amount “works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.”
Gerald Celente, the head of the Trends Research Institute, the major trend-forecasting agency in the world, wrote in May of 2009 of the “bailout bubble.” Celente’s forecasts are not to be taken lightly, as he accurately predicted the 1987 stock market crash, the fall of the Soviet Union, the 1998 Russian economic collapse, the 1997 East Asian economic crisis, the 2000 Dot-Com bubble burst, the 2001 recession, the start of a recession in 2007 and the housing market collapse of 2008, among other things.
On May 13, 2009, Celente released a Trend Alert, reporting that, “The biggest financial bubble in history is being inflated in plain sight,” and that, “This is the Mother of All Bubbles, and when it explodes […] it will signal the end to the boom/bust cycle that has characterized economic activity throughout the developed world.” Further, “This is much bigger than the Dot-com and Real Estate bubbles which hit speculators, investors and financiers the hardest. However destructive the effects of these busts on employment, savings and productivity, the Free Market Capitalist framework was left intact. But when the ‘Bailout Bubble’ explodes, the system goes with it.”
Celente further explained that, “Phantom dollars, printed out of thin air, backed by nothing … and producing next to nothing … defines the ‘Bailout Bubble.’ Just as with the other bubbles, so too will this one burst. But unlike Dot-com and Real Estate, when the “Bailout Bubble” pops, neither the President nor the Federal Reserve will have the fiscal fixes or monetary policies available to inflate another.” Celente elaborated, “Given the pattern of governments to parlay egregious failures into mega-failures, the classic trend they follow, when all else fails, is to take their nation to war,” and that, “While we cannot pinpoint precisely when the ‘Bailout Bubble’ will burst, we are certain it will. When it does, it should be understood that a major war could follow.”
However, this “bailout bubble” that Celente was referring to at the time was the $12.8 trillion reported by Bloomberg. As of July, estimates put this bubble at nearly double the previous estimate.
As the Financial Times reported in late July of 2009, while the Fed and Treasury hail the efforts and impact of the bailouts, “Neil Barofsky, special inspector-general for the troubled asset relief programme, [TARP] said that the various US schemes to shore up banks and restart lending exposed federal agencies to a risk of $23,700bn [$23.7 trillion] – a vast estimate that was immediately dismissed by the Treasury.” The inspector-general of the TARP program stated that there were “fundamental vulnerabilities . . . relating to conflicts of interest and collusion, transparency, performance measures, and anti-money laundering.”
Barofsky also reports on the “considerable stress” in commercial real estate, as “The Fed has begun to open up Talf to commercial mortgage-backed securities to try to influence credit conditions in the commercial real estate market. The report draws attention to a new potential credit crunch when $500bn worth of real estate mortgages need to be refinanced by the end of the year.” Ben Bernanke, the Chairman of the Fed, and Timothy Geithner, the Treasury Secretary and former President of the New York Fed, are seriously discussing extending TALF (Term Asset-Backed Securities Lending Facility) into “CMBS [Commercial Mortgage-Backed Securities] and other assets such as small business loans and whether to increase the size of the programme.” It is the “expansion of the various programmes into new and riskier asset classes is one of the main bones of contention between the Treasury and Mr Barofsky.”
Testifying before Congress, Barofsky said, “From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase ‘toxic’ assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity.” He explained that, “The total potential federal government support could reach up to 23.7 trillion dollars.”
Is a Future Bailout Possible?
In early July of 2009, billionaire investor Warren Buffet said that, “unemployment could hit 11 percent and a second stimulus package might be needed as the economy struggles to recover from recession,” and he further stated that, “we’re not in a recovery.” Also in early July, an economic adviser to President Obama stated that, “The United States should be planning for a possible second round of fiscal stimulus to further prop up the economy.”
In August of 2009, it was reported that, “THE Obama administration will consider dishing out more money to rein in unemployment despite signs the recession is ending,” and that, “Treasury secretary Tim Geithner also conceded tax hikes could be on the agenda as the government worked to bring its huge recovery-related deficits under control.” Geithner said, “we will do what it takes,” and that, “more federal cash could be tipped into the recovery as unemployment benefits amid projections the benefits extended to 1.5 million jobless Americans will expire without Congress’ intervention.” However, any future injection of money could be viewed as “a second stimulus package.”
The Washington Post reported in early July of a Treasury Department initiative known as “Plan C.” The Plan C team was assembled “to examine what could yet bring [the economy] down and has identified several trouble spots that could threaten the still-fragile lending industry,” and “the internal project is focused on vexing problems such as the distressed commercial real estate markets, the high rate of delinquencies among homeowners, and the struggles of community and regional banks.”
Further, “The team is also responsible for considering potential government responses, but top officials within the Obama administration are wary of rolling out initiatives that would commit massive amounts of federal resources.” The article elaborated in saying that, “The creation of Plan C is a sign that the government has moved into a new phase of its response, acting preemptively rather than reacting to emerging crises.” In particular, the near-term challenge they are facing is commercial real estate lending, as “Banks and other firms that provided such loans in the past have sharply curtailed lending,” leaving “many developers and construction companies out in the cold.” Within the next couple years, “these groups face a tidal wave of commercial real estate debt — some estimates peg the total at more than $3 trillion — that they will need to refinance. These loans were issued during this decade’s construction boom with the mistaken expectation that they would be refinanced on the same generous terms after a few years.”
However, as a result of the credit crisis, “few developers can find anyone to refinance their debt, endangering healthy and distressed properties.” Kim Diamond, a managing director at Standard & Poor’s, stated that, “It’s not a degree to which people are willing to lend,” but rather, “The question is whether a loan can be made at all.” Important to note is that, “Financial analysts said losses on commercial real estate loans are now the single largest cause of bank failures,” and that none of the bailout efforts enacted “is big enough to address the size of the problem.”
So the question must be asked: what is Plan C contemplating in terms of a possible government “solution”? Another bailout? The effect that this would have would be to further inflate the already monumental bailout bubble.
The Great European Bubble
In October of 2008, Germany and France led a European Union bailout of 1 trillion Euros, and “World markets initially soared as European governments pumped billions into crippled banks. Central banks in Europe also mounted a new offensive to restart lending by supplying unlimited amounts of dollars to commercial banks in a joint operation.”
The American bailouts even went to European banks, as it was reported in March of 2009 that, “European banks declined to discuss a report that they were beneficiaries of the $173 billion bail-out of insurer AIG,” as “Goldman Sachs, Morgan Stanley and a host of other U.S. and European banks had been paid roughly $50 billion since the Federal Reserve first extended aid to AIG.” Among the European banks, “French banks Societe Generale and Calyon on Sunday declined to comment on the story, as did Deutsche Bank, Britain’s Barclays and unlisted Dutch group Rabobank.” Other banks that got money from the US bailout include HSBC, Wachovia, Merrill Lynch, Banco Santander and Royal Bank of Scotland. Because AIG was essentially insolvent, “the bailout enabled AIG to pay its counterparty banks for extra collateral,” with “Goldman Sachs and Deutsche bank each receiving $6 billion in payments between mid-September and December.”
In April of 2009, it was reported that, “EU governments have committed 3 trillion Euros [or $4 trillion dollars] to bail out banks with guarantees or cash injections in the wake of the global financial crisis, the European Commission.”
In early February of 2009, the Telegraph published a story with a startling headline, “European banks may need 16.3 trillion pound bail-out, EC document warns.” Type this headline into google, and the link to the Telegraph appears. However, click on the link, and the title has changed to “European bank bail-out could push EU into crisis.” Further, they removed any mention of the amount of money that may be required for a bank bailout. The amount in dollars, however, nears $25 trillion. The amount is the cumulative total of the troubled assets on bank balance sheets, a staggering number derived from the derivatives trade.
The Telegraph reported that, “National leaders and EU officials share fears that a second bank bail-out in Europe will raise government borrowing at a time when investors – particularly those who lend money to European governments – have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain to pay it back.”
When Eastern European countries were in desperate need of financial aid, and discussion was heated on the possibility of an EU bailout of Eastern Europe, the EU, at the behest of Angela Merkel of Germany, denied the East European bailout. However, this was more a public relations stunt than an actual policy position.
While the EU refused money to Eastern Europe in the form of a bailout, in late March European leaders “doubled the emergency funding for the fragile economies of central and eastern Europe and pledged to deliver another doubling of International Monetary Fund lending facilities by putting up 75bn Euros (70bn pounds).” EU leaders “agreed to increase funding for balance of payments support available for mainly eastern European member states from 25bn Euros to 50bn Euros.”
As explained in a Times article in June of 2009, Germany has been deceitful in its public stance versus its actual policy decisions. The article, worth quoting in large part, first explained that:
Taking the case of Latvia, the author asks, “If the crisis expands, other EU governments – and especially Germany’s – will face an existential question. Do they commit hundreds of billions of euros to guarantee the debts of fellow EU countries? Or do they allow government defaults and devaluations that may ultimately break up the single currency and further cripple German industry, as well as the country’s domestic banks?” While addressing that, “Publicly, German politicians have insisted that any bailouts or guarantees are out of the question,” however, “the pass has been quietly sold in Brussels, while politicians loudly protested their unshakeable commitment to defend it.”
The author addressed how in October of 2008:
So Eastern Europe is getting, or presumably will get bailed out. Whether this is in the form of EU federalism, providing loans of its own accord, paid for by European taxpayers, or through the IMF, which will attach any loans with its stringent Structural Adjustment Program (SAP) conditionalities, or both. It turned out that the joint partnership of the IMF and EU is what provided the loans and continues to provide such loans.
As the Financial Times pointed out in August of 2009, “Bank failures or plunging currencies in the three Baltic nations – Latvia, Lithuania and Estonia – could threaten the fragile prospect of recovery in the rest of Europe. These countries also sit on one of the world’s most sensitive political fault-lines. They are the European Union’s frontier states, bordering Russia.” In July, Latvia “agreed its second loan in eight months from the IMF and the EU,” following the first one in December. Lithuania is reported to be following suit. However, as the Financial Times noted, the loans came with the IMF conditionalities: “The injection of cash is the good news. The bad news is that, in return for shoring up state finances, the new IMF deal will require the Latvian government to impose yet more pain on its suffering population. Public-sector wages have already been cut by about a third this year. Pensions have been sliced. Now the IMF requires Latvia to cut another 10 per cent from the state budget this autumn.”
If we are to believe the brief Telegraph report pertaining to nearly $25 trillion in bad bank assets, which was removed from the original article for undisclosed reasons, not citing a factual retraction, the question is, does this potential bailout still stand? These banks haven’t been rescued financially from the EU, so, presumably, these bad assets are still sitting on the bank balance sheets. This bubble has yet to blow. Combine this with the $23.7 trillion US bailout bubble, and there is nearly $50 trillion between the EU and the US waiting to burst.
An Oil Bubble
In early July of 2009, the New York Times reported that, “The extreme volatility that has gripped oil markets for the last 18 months has shown no signs of slowing down, with oil prices more than doubling since the beginning of the year despite an exceptionally weak economy.” Instability in the oil and gas prices has led many to “fear it could jeopardize a global recovery.” Further, “It is also hobbling businesses and consumers,” as “A wild run on the oil markets has occurred in the last 12 months.” Oil prices reached a record high last summer at $145/barrel, and with the economic crisis they fell to $33/barrel in December. However, since the start of 2009, oil has risen 55% to $70/barrel.
As the Times article points out, “the recent rise in oil prices is reprising the debate from last year over the role of investors — or speculators — in the commodity markets.” Energy officials from the EU and OPEC met in June and concluded that, “the speculation issue had not been resolved yet and that the 2008 bubble could be repeated.”
In June of 2009, Hedge Fund manager Michael Masters told the US Senate that, “Congress has not done enough to curb excessive speculation in the oil markets, leaving the country vulnerable to another price run-up in 2009.” He explained that, “oil prices are largely not determined by supply and demand but the trading desks of large Wall Street firms.” Because “Nothing was actually done by Congress to put an end to the problem of excessive speculation” in 2008, Masters explained, “there is nothing to prevent another bubble in oil prices in 2009. In fact, signs of another possible bubble are already beginning to appear.”
In May of 2008, Goldman Sachs warned that oil could reach as much as $200/barrel within the next 12-24 months [up to May 2010]. Interestingly, “Goldman Sachs is one of the largest Wall Street investment banks trading oil and it could profit from an increase in prices.” However, this is missing the key point. Not only would Goldman Sachs profit, but Goldman Sachs plays a major role in sending oil prices up in the first place.
As Ed Wallace pointed out in an article in Business Week in May of 2008, Goldman Sachs’ report placed the blame for such price hikes on “soaring demand” from China and the Middle East, combined with the contention that the Middle East has or would soon peak in its oil reserves. Wallace pointed out that:
Goldman Sachs was one of the founding partners of online commodities and futures marketplace Intercontinental Exchange (ICE). And ICE has been a primary focus of recent congressional investigations; it was named both in the Senate’s Permanent Subcommittee on Investigations’ June 27, 2006, Staff Report and in the House Committee on Energy & Commerce’s hearing last December. Those investigations looked into the unregulated trading in energy futures, and both concluded that energy prices’ climb to stratospheric heights has been driven by the billions of dollars’ worth of oil and natural gas futures contracts being placed on the ICE—which is not regulated by the Commodities Futures Trading Commission.
Essentially, Goldman Sachs is one of the key speculators in the oil market, and thus, plays a major role in driving oil prices up on speculation. This must be reconsidered in light of the resurgent rise in oil prices in 2009. In July of 2009, “Goldman Sachs Group Inc. posted record earnings as revenue from trading and stock underwriting reached all-time highs less than a year after the firm took $10 billion in U.S. rescue funds.” Could one be related to the other?
Bailouts Used in Speculation
In November of 2008, the Chinese government injected an “$849 billion stimulus package aimed at keeping the emerging economic superpower growing.” China then recorded a rebound in the growth rate of the economy, and underwent a stock market boom. However, as the Wall Street Journal pointed out in July of 2009, “Its growth is now fuelled by cheap debt rather than corporate profits and retained earnings, and this shift in the medium term threatens to undermine China’s economic decoupling from the global slump.” Further, “overseas money has been piling into China, inflating foreign exchange reserves and domestic liquidity. So perhaps it is not surprising that outstanding bank loans have doubled in the last few years, or that there is much talk of a shadow banking system. Then there is China’s reputation for building overcapacity in its industrial sector, a notoriety it won even before the crash in global demand. This showed a disregard for returns that is always a tell-tale sign of cheap money.”
China’s economy primarily relies upon the United States as a consumption market for its cheap products. However, “The slowdown in U.S. consumption amid a credit crunch has exposed the weaknesses in this export-led financing model. So now China is turning instead to cheap debt for funding, a shift suggested by this year’s 35% or so rise in bank loans.”
In August of 2009, it was reported that China is experiencing a “stimulus-fueled stock market boom.” However, this has caused many leaders to “worry that too much of the $1-trillion lending binge by state banks that paid for China’s nascent revival was diverted into stocks and real estate, raising the danger of a boom and bust cycle and higher inflation less than two years after an earlier stock market bubble burst.”
The same reasoning needs to be applied to the US stock market surge. Something is inherently and structurally wrong with a financial system in which nothing is being produced, 600,000 jobs are lost monthly, and yet, the stock market goes up. Why is the stock market going up?
The Troubled Asset Relief Program (TARP), which provided $700 billion in bank bailouts, started under Bush and expanded under Obama, entails that the US Treasury purchases $700 billion worth of “troubled assets” from banks, and in turn, “that banks cannot be asked to account for their use of taxpayer money.”
So if banks don’t have to account for where the money goes, where did it go? They claim it went back into lending. However, bank lending continues to go down. Stock market speculation is the likely answer. Why else would stocks go up, lending continue downwards, and the bailout money be unaccounted for?
What Does the Bank for International Settlements (BIS) Have to Say?
In late June, the Bank for International Settlements (BIS), the central bank of the world’s central banks, the most prestigious and powerful financial organization in the world, delivered an important warning. It stated that, “fiscal stimulus packages may provide no more than a temporary boost to growth, and be followed by an extended period of economic stagnation.”
The BIS, “The only international body to correctly predict the financial crisis … has warned the biggest risk is that governments might be forced by world bond investors to abandon their stimulus packages, and instead slash spending while lifting taxes and interest rates,” as the annual report of the BIS “has for the past three years been warning of the dangers of a repeat of the depression.” Further, “Its latest annual report warned that countries such as Australia faced the possibility of a run on the currency, which would force interest rates to rise.” The BIS warned that, “a temporary respite may make it more difficult for authorities to take the actions that are necessary, if unpopular, to restore the health of the financial system, and may thus ultimately prolong the period of slow growth.”
Of immense import is the BIS warning that, “At the same time, government guarantees and asset insurance have exposed taxpayers to potentially large losses,” and explaining how fiscal packages posed significant risks, it said that, “There is a danger that fiscal policy-makers will exhaust their debt capacity before finishing the costly job of repairing the financial system,” and that, “There is the definite possibility that stimulus programs will drive up real interest rates and inflation expectations.” Inflation “would intensify as the downturn abated,” and the BIS “expressed doubt about the bank rescue package adopted in the US.”
The BIS further warned of inflation, saying that, “The big and justifiable worry is that, before it can be reversed, the dramatic easing in monetary policy will translate into growth in the broader monetary and credit aggregates,” the BIS said. That will “lead to inflation that feeds inflation expectations or it may fuel yet another asset-price bubble, sowing the seeds of the next financial boom-bust cycle.”
Major investors have also been warning about the dangers of inflation. Legendary investor Jim Rogers has warned of “a massive inflation holocaust.” Investor Marc Faber has warned that, “The U.S. economy will enter ‘hyperinflation’ approaching the levels in Zimbabwe,” and he stated that he is “100 percent sure that the U.S. will go into hyperinflation.” Further, “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”
Are We Entering A New Great Depression?
In 2007, it was reported that, “The Bank for International Settlements, the world’s most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.” Further:
In 2008, the BIS again warned of the potential of another Great Depression, as “complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system, all form part of the loose monetarist policy that could result in another Great Depression.”
In 2008, the BIS also said that, “The current market turmoil is without precedent in the postwar period. With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point,” and that all central banks have done “has been to put off the day of reckoning.”
In late June of 2009, the BIS reported that as a result of stimulus packages, it has only seen “limited progress” and that, “the prospects for growth are at risk,” and further “stimulus measures won’t be able to gain traction, and may only lead to a temporary pickup in growth.” Ultimately, “A fleeting recovery could well make matters worse.”
The BIS has said, in softened language, that the stimulus packages are ultimately going to cause more damage than they prevented, simply delaying the inevitable and making the inevitable that much worse. Given the previous BIS warnings of a Great Depression, the stimulus packages around the world have simply delayed the coming depression, and by adding significant numbers to the massive debt bubbles of the world’s nations, will ultimately make the depression worse than had governments not injected massive amounts of money into the economy.
After the last Great Depression, Keynesian economists emerged victorious in proposing that a nation must spend its way out of crisis. This time around, they will be proven wrong. The world is a very different place now. Loose credit, easy spending and massive debt is what has led the world to the current economic crisis, spending is not the way out. The world has been functioning on a debt based global economy. This debt based monetary system, controlled and operated by the global central banking system, of which the apex is the Bank for International Settlements, is unsustainable. This is the real bubble, the debt bubble. When it bursts, and it will burst, the world will enter into the Greatest Depression in world history.
 Barrie McKenna, End of housing slump? Try telling that to buyers, sellers and the unemployed. The Globe and Mail: August 6, 2009:
 Gene Sperling, Double-Bubble Trouble in Commercial Real Estate: Gene Sperling. Bloomberg: May 9, 2009:
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 Reuters, Fed Might Extend TALF Support to Five Years. Money News: April 17, 2009:
 Francesco Guerrera and Greg Farrell, US banks warn on commercial property. The Financial Times: July 22, 2009:
 Mark Pittman and Bob Ivry, Financial Rescue Nears GDP as Pledges Top $12.8 Trillion. Bloomberg: March 31, 2009:
 Gerald Celente, The “Bailout Bubble” – The Bubble to End All Bubbles. Trends Research Institute: May 13, 2009:
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 John Whitesides, Warren Buffett says second stimulus might be needed. Reuters: July 9, 2009:
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 Carly Crawford, US may increase stimulus payments to rein in unemployment. The Herald Sun: August 3, 2009:
 David Cho and Binyamin Appelbaum, Treasury Works on ‘Plan C’ To Fend Off Lingering Threats. The Washington Post: July 8, 2009:
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 Douwe Miedema, Europe banks silent on reported AIG bailout gains. Reuters: March 8, 2009:
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 Simone Meier, BIS Sees Risk Central Banks Will Raise Interest Rates Too Late. Bloomberg: June 29, 2009:
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 HEATHER SCOFFIELD, Financial repairs must continue: central banks. The Globe and Mail: June 29, 2009:
Origins of the American Empire: Revolution, World Wars and World Order
Global Power and Global Government: Part 2
Global Research, July 28, 2009
This essay is Part 2 of “Global Power and Global Government.” Part 1, “The Evolution and Revolution of the Central Banking System” published by Global Research can be viewed here:
Russia, Oil and Revolution
By the 1870s, John D. Rockefeller’s Standard Oil Empire had a virtual monopoly over the United States, and even many foreign countries. In 1890, the King of Holland gave his blessing for the creation of an international oil company called Royal Dutch Oil Company, which was mainly founded to refine and sell kerosene from Indonesia, a Dutch colony. Also in 1890, a British company was founded with the intended purpose of shipping oil, the Shell Transport and Trading Company, and it “began transporting Royal Dutch oil from Sumatra to destinations everywhere,” and eventually, “the two companies merged to become Royal Dutch Shell.”
Russia entered into the Industrial Revolution later than any other large country and empire of its time. By the 1870s, “Russia’s oil fields, including those in Baku, were challenging Standard Oil’s supremacy in Europe. Russia’s ascendancy in natural resources disrupted the strategic balance of power in Europe and troubled Britain.” Britain thus attempted to begin oil explorations in the Middle East, specifically in Persia (Iran), first through Baron Julius de Reuter, the founder of Reuters News Service, who gained exploration rights from the Shah of Iran. Reuter’s attempt at uncovering vast quantities of oil failed, and a man named William Knox D’Arcy took the lead in Persia.
By the middle of the 19th century, “the Rothschilds were the richest family in the world, perhaps in all of history. Their five international banking houses comprised one of the first multinational corporations.” Alfonse de Rothschild was “heavily invested in Russian oil at least forty years before William Knox D’Arcy began tying up Persian oil concessions for the British. Russian oil, which in the 1860s was already emerging as the European rival to the American monopoly Standard Oil, was the Baron [Rothschild]’s pet project.” In the early 1880s, “almost two hundred Rothschild refineries were at work in Baku,” Russia’s oil rich region.
By the mid-1880s, “the Rothschilds were poised to become the chief oil supplier, not only to Europe but to the Far East,” however, “the Baku-Batum railroad was already proving inadequate to transport the volume of oil being produced. Another route was needed, and came in the form of the recently opened Suez Canal, which shortened the journey to the Far East by four thousand miles. Palestine was suddenly of interest to the Rothschilds as it provided access to the Suez.” When the Egyptian government was bankrupt in 1874, British Prime Minister Benjamin Disraeli turned to his close friends, the Rothschilds, “for the colossal cash advance necessary” to buy shares in the Suez Canal Company. By this time, the Rothschilds were already principle shareholders in the Bank of France, and the Bank of England, sitting alongside other notable shareholders such as Baring Brothers, Morgan Grenfell and Lazard Brothers.
The Rothschilds “had long been involved in developing Czarist Russia’s nascent industry and banking system, while that country’s growing network of railroads was largely financed by Rothschild-managed loans.” When the Czar died, he was succeeded by his son, Czar Nicholas II, who instituted anti-Semitic pogroms, discriminating against Jews, which had the effect of stimulating a massive emigration of Jews out of Russia and Eastern Europe and into Western Europe. However, these East European and Russian Jewish émigrés grew up in a newly industrializing nation in which the tyranny of the government and collusion between it and powerful financial and industrial interests left the great majority of people dispossessed and incited more socialist tendencies in thought and action.
The English Rothschilds were very alarmed “when the socialist tendencies of the émigrés contributed to a massively disruptive tailors’ strike in the East End of London in 1888. A young Georgian communist who would become known to the world as Joseph Stalin was already organizing laborers to strike at the Rothschild oil interests in Batum.” The British Rothschilds were very concerned with this wave of Jewish immigrants into Western Europe and Britain, as they were intensely anti-Czarist and progressively socialist, and the Rothschilds were known for their heavy collaboration with the Czarist regimes of Russia. One potential solution considered to the problem of increased socialist-leaning Jewish immigrants in Britain was to institute restrictions on immigration. However, this would likely backlash, in the sense that it would be viewed as comparable to expulsion. So, Edmond Rothschild began his personal campaign to create a Jewish homeland in Palestine in order to create a release valve for Jewish émigrés to put their political action behind a new cause, and to promote them emigrating to Palestine, and out of Western Europe.
On top of this, as the pre-eminent Zionist in Britain, his proposal for the creation of a Jewish homeland in Palestine served major economic interests of the Rothschilds and of the British Empire, in that several years prior, Rothschild bought the Suez Canal for the British, and it was the primary transport route for Russian oil. Palestine, thus, would be a vital landmass as a protectorate for British and Rothschild imperial-economic interests.
The Rothschilds, despite their overtly pro-Zionist and pro-Jewish rhetoric, did not stop their support of the Russian regime and economic activities within anti-Semitic Russia. In 1895, the Rothschilds, then one of the world’s leading producers and distributors of oil, “had gone so far as to co-sign an agreement with rival producers – including America’s Standard Oil [of Rockefeller interests] – to divide up world markets. It never took effect, presumably because of the opposition of the Russian government.” In 1902, the Rothschilds “entered into a partnership with Royal Dutch and Shell (soon to become a single global company) to form the Asiatic Petroleum Company for exploiting the fields of Southern Russia.”
In the early 1900s, the Rothchilds were the primary oil interests in Russia, second in the world only to the Rockefellers. As industrialization was under way, conditions worsened for the great majority of Russian people. This spurred protests and riots, and a “young Stalin himself led the agitation against the Caucasian oil industry in general, [and] the Rothschilds in particular. Mass action by oil workers in Baku [the major oil fields in Russia] in 1903 was the spark that set off the first general strike across the Russian landmass.” Then with the Russian loss in the Russo-Japanese War of 1904, and further protests, came the Revolution of 1905. In the following years, the Rothschilds sold their Russian oil interests to Royal Dutch Shell, gaining significant shares in the international oil company.
The specter of political and social instability within Russia was high and did not go without notice from international banking, oil, and industrial interests. Naturally, the international banking houses were keeping a close eye on developments within Russia. The Rothschilds had to lessen their overt involvement with Russia, as they could not maintain such a relationship with the most anti-Jewish nation in the world at the time, while also claiming to be the primary advocates of Jewish aspirations for a homeland. This is why they sold their Russian oil interests to Royal Dutch Shell, but then gained significant shares in the company itself. So while publicly cutting their ties with Russia, they still held massive interests in its industrial capacity. Following the Russo-Japanese War, the Rothschilds “refused to participate in underwriting a major loan, this at a time when Russia desperately needed funds to stabilize the regime.”
So, in 1906, John D. Rockefeller stepped in to aid Czarist Russia, and offered $200,000,000, or “400,000,000 rubles for a concession for railroads from Tashkend to Tomsk and from Tehita to Polamoshna and a grant of land on both sides of the prospective lines.” These international financiers were still clearly intent upon maintaining their interests within Russia.
However, the Russian governments refusal to allow the deal between the Rockefellers and Rothschilds and other major oil monopolies to divide up the world’s oil reserves, may well have spurred discontent among these powerful interests. If Russia refused to allow them to control all the oil and have a right to all oil, did this mean that Russia was planning on building a domestic oil industry? If this were the case, it could pose a threat to all the entrenched economic and financial interests, particularly those of the Rockefellers and Rothschilds, as Russia’s significant oil reserves and resources would allow it to possibly even surpass the United States in industrialization. Further, Czarist Russia became an increasingly unstable investment environment, controlled by an increasingly unpredictable monarchy.
The 1917 October Revolution “inspired workers’ uprisings in the oil fields against low wages and harsh working conditions. In 1919, Azerbaijan took advantage of the political unrest to declare sovereignty over the Baku fields. That same year SONJ [Standard Oil of New Jersey] made an agreement with the Azerbaijani government to purchase undeveloped land for exploration in the Baku region. Amidst the chaos, foreign oil companies rushed into Russia hoping to collect concessions at reduced rates. The Nobel brothers sold much of their operations to SONJ (today ExxonMobil) to build an alliance in 1920.”
Antony C. Sutton, economist, historian and author, as well as research fellow at Stanford University’s Hoover Institution, wrote in Wall Street and the Bolshevik Revolution, that both fascist and communist systems are “based on naked, unfettered political power and individual coercion. Both systems require monopoly control of society. While monopoly control of industries was once the objective of J.P. Morgan and J.D. Rockefeller, by the late nineteenth century the inner sanctums of Wall Street understood that the most efficient way to gain an unchallenged monopoly was to ‘go political’ and make society go to work for the monopolists,” and that, “the totalitarian socialist state is a perfect captive market for monopoly capitalists, if an alliance can be made with the socialist powerbrokers.” Thus, the major money powers of the west decided to put their money behind the creation of a totalitarian communist state in Russia, in order to create a captive economy, which they could exploit and remove from competititon.
When the Revolution began, Trotsky was in New York, and was immediately granted an American passport by President Wilson, and then given a Russian entry permit and a British transit visa, in order to return to Russia and “carry forward” the revolution. Trotsky, while traveling, was arrested in Canada, but was released as a result of British intervention.
Trotsky traveled on board a ship in 1917, leaving New York, along with an interesting cast of fellow passengers, including “other Trotskyite revolutionaries, Wall Street financiers, American Communists, and a man named Charles Crane. Charles Richard Crane, former chairman of the Democratic Party’s finance committee, whose son, Richard Crane, was an assistant to U.S. Secretary of State Robert Lansing, played a significant part in what occurred in Russia. Former U.S. Ambassador to Germany, William Dodd, said that Crane, “did much to bring on the [Alexander] Kerensky revolution which gave way to Communism.” Kerensky was the second Prime Minister in the Russian Provisional Government, which followed the collapse of the Czarist government, and preceded the Bolshevik. Crane also thought that the Kerensky government “is the revolution in its first phase only.”
The Revolution occurred in the midst of World War I, which broke out in 1914, and had all the major European powers at war. Morgan and Rockefeller interests, organized in Wall Street and centralized in the Federal Reserve Bank of New York, the most powerful of all the regional Federal Reserve Banks, used “the Red Cross Mission as its operational vehicle” in Russia at the time of the Bolshevik Revolution. The Red Cross Mission in Russia got its endowment from wealthy people such as J.P. Morgan, Mrs. E. H. Harriman, Cleveland H. Dodge, and Mrs. Russell Sage, and “in World War I the Red Cross depended heavily on Wall Street, and specifically the Morgan firm.” When the American Red Cross set up a mission to Russia, “William Boyce Thompson, director of the Federal Reserve Bank of New York, had ‘offered to pay the entire expense of the commission’.” All expenses were paid for by William Boyce Thompson, who was a major stockholder in Chase National Bank, whose President had Thompson appointed head of the New York Fed.
The Mission was primarily made up of lawyers, financiers, their assistants, people affiliated with Standard Oil and the Rockefeller’s National City Bank. The Mission supported through a loan, the Provisional government of Alexander Kerensky, yet, William B. Thompson of the New York Fed “made a personal contribution of $1,000,000 to the Bolsheviki for the purpose of spreading their doctrine in Germany and Austria.” Interestingly, when the Bolsheviks took control, “The National City Bank branch in Petrograd had been exempted from the Bolshevik nationalization decree – the only foreign or domestic Russian bank to have been so exempted.” Ultimately, the Red Cross mission in Russia “was in fact a mission of Wall Street financiers to influence and pave the way for control, through either Kerensky or the Bolshevik revolutionaries, of the Russian market and resources.”
The American International Corporation (AIC), was “created in 1915 to develop domestic and foreign enterprises, to extend American activities abroad, and to promote the interests of American and foreign bankers, business and engineering.” It was created and controlled by Morgan, Stillman and Rockefeller interests, and its directors were affiliated with National City Bank (Rockefeller), the Carnegie Foundation, General Electric, the DuPont family, New York Life Insurance, American Bankers Association and the Federal Reserve Bank of New York. Members of its board financially supported the Bolsheviks and urged the US State Department to recognize the Bolshevik government.
In 1920, Russian gold was being siphoned through Sweden, where it was melted down and stamped with the Swedish mint, funneled through the Federal Reserve Bank of New York and into Kuhn, Loeb & Company and Guaranty Trust Company (Morgan), two of the primary banking interests behind the creation of the Federal Reserve System.  During the civil war in Russia between the Reds and the Whites, while Wall Street financiers were aiding the Bolsheviks quietly, they also began to finance Aleksandr Kolchak (of the Whites) with millions of dollars, in order to ensure that whoever emerged victorious in the war, Wall Street would win.
As Antony Sutton wrote, “Russia, then and now, constituted the greatest potential competitive threat to American industrial and financial supremacy,” and that, “The gigantic Russian market was to be converted into a captive market and a technical colony to be exploited by a few high-powered American financiers and the corporations under their control.”
Eventually, the Bolsheviks emerged victorious, and Wall Street won. Under Stalin’s Five-Year Plans in the early 1930s, Soviet industrialization “required Western technology and expertise,” and in a “frequently overlooked contribution” that came “from abroad,” American firms aided in the industrialization of the USSR, including Ford, General Electric and DuPont, with Standard Oil, General Electric, Austin Co., General Motors, International Harvester, and Caterpillar Tractor trading heavily with the Soviet Union.
Standard Oil bought “gargantuan quantities of Red Oil,” General Electric received a $100,000,000 contract from the Soviet Union to build “the four largest hydroelectric generators in the world,” Austin Co., got a $50,000,000 contract to erect the City of Austingrad, “complete with tractor and automobile factories involving an additional $30,000,000 contract for parts and technical assistance with Ford Motor Corp.” On top of this, “Other [Soviet] business friends are General Motors, DuPont de Nemours, International Harvester, John Deere Co., Caterpillar Tractor, Radio Corp. and the U. S. Shipping Board, which sold the Reds a fleet of 25 cargo steamers.” Banks with close ties to the Russian economy included Chase National, National City Bank and Equitable Trust, all of which are either Rockefeller or Morgan interests.
World War Restructures World Order
In the midst of World War I, a group of American scholars were tasked with briefing “Woodrow Wilson about options for the postwar world once the kaiser and imperial Germany fell to defeat.” This group was called, “The Inquiry.” The group advised Wilson mostly through his trusted aide, Col. Edward M. House, who was Wilson’s “unofficial envoy to Europe during the period between the outbreak of World War I in 1914 and the intervention by the United States in 1917,” and was the prime driving force in the Wilson administration behind the establishment of the Federal Reserve System.
“The Inquiry” laid the foundations for the creation of the Council on Foreign Relations (CFR), the most powerful think tank in the US, and “The scholars of the Inquiry helped draw the borders of post World War I central Europe.” On May 30, 1919, a group of scholars and diplomats from Britain and the US met at the Hotel Majestic, where they “proposed a permanent Anglo-American Institute of International Affairs, with one branch in London, the other in New York.” When the scholars returned from Paris, they were met with open arms by New York lawyers and financiers, and together they formed the Council on Foreign Relations in 1921. The “British diplomats returning from Paris had made great headway in founding their Royal Institute of International Affairs.” The Anglo-American Institute envisioned in Paris, with two branches and combined membership was not feasible, so both the British and American branches retained national membership, however, they would cooperate closely with one another. They were referred to, and still are, as “Sister Institutes.”
The Milner Group, the secret society formed by Cecil Rhodes, “dominated the British delegation to the Peace Conference of 1919; it had a great deal to do with the formation and management of the League of Nations and of the system of mandates; it founded the Royal Institute of International Affairs in 1919 and still controls it.” There were other groups founded in many countries representing the same interests of the secret Milner Group, and they came to be known as the Round Table Groups, preeminent among them were the Royal Institute of International Affairs (Chatham House), the Council on Foreign Relations in the United States, and parallel groups were set up in Canada, Australia, New Zealand, South Africa and India.
World War I had marked a monumental period in history in what can be understood as “transitional imperialism.” What I mean by this is that historically, periods of imperial decline and transition (that is, the rise or fall of an empire or empires), are often marked by increased international violence and war.
World War I was the result of the culmination of imperial ambitions by various powers. This was the natural result of the wave of “New Imperialism” that swept the industrialized world in the 1870s. In 1879, the German Empire and Austria-Hungary created the Dual Alliance to combat growing Russian influence in the Balkans with the decline of the Ottoman Empire. Italy joined in 1882, making it the Triple Alliance. In 1892, the Franco-Russia Alliance was made, which was a military alliance between France and the Russian Empire to counteract the German Empire’s supremacy over Europe. In 1904, the Entente Cordiale, a series of agreements between France and Britain, was agreed upon in order to maintain a balance of power in Europe. In 1907, the Anglo-Russia Entente was formed in an effort to end their long-running Great Game by setting the boundaries of their imperial control over Afghanistan, Persia and Tibet. It also acted as a balance to the growing German Empire’s might and influence in Europe. After the signing of the Anglo-Russian Entente, the Triple Entente was cemented between Britain, Russia and France as a significant counter to the Triple Alliance.
The decline of the Ottoman Empire had been a long and slow process. The Ottoman Empire dated back to 1299, and lasted until 1923. “From 1517 until the end of World War I, a period of 400 years, the Ottoman Empire was the ruling power in the central Middle East. Ottoman administrative institutions and practices shaped the peoples of the modern Middle East and left a legacy that endured after the empire’s disappearance.”
In the late 16th century, “Ottoman raw materials, normally channeled into internal consumption and industry, were increasingly exchanged for European manufactured products. This trade benefited Ottoman merchants but led to a decline in state revenues and a shortage of raw materials for domestic consumption. As the costs of scarce materials rose, the empire suffered from inflation, and the state was unable to procure sufficient revenues to meet its expenses. Without these revenues, the institutions that supported the Ottoman system, especially the armed forces, were undermined.” This was largely done through commercial treaties known as Capitulations. The first Capitulation “was negotiated with France in 1536; it allowed French merchants to trade freely in Ottoman ports, to be exempt from Ottoman taxes, and to import and export goods at low tariff rates. In addition, the treaty granted extraterritorial privileges to French merchants by permitting them to come under the legal jurisdiction of the French consul in Istanbul, thus making them subject to French rather than Ottoman-Islamic law. This first treaty was the model for subsequent agreements signed with other European states.”
The Ottoman state had been sufficiently weakened by the early 20th century, which happened to be the same time period that Europeans, particularly the British, were looking at Middle East oil to fuel their empires. The major European alliances sought to take advantage of this weakened Ottoman position. In 1909, Austria-Hungary annexed Bosnia-Herzegovina, inciting the anger of the Russia Empire. The First Balkan War was fought between 1912 and 1913, in which Serbia, Montenegro, Greece and Bulgaria fought the Ottoman Empire. The settlement that followed angered Bulgaria, which then began to engage in territorial disputes with Serbia and Romania. Bulgaria then attacked Greece and Serbia in 1913, followed by Romania and the Ottoman Empire declaring war against Bulgaria, which was the Second Balkan War.
This further destabilized the region, and Austria-Hungary grew wary of the growing influence of Serbia. When Austrian Archduke Franz Ferdinand was assassinated in 1914, Austria delivered an ultimatum to Serbia, where the assassin was from, and then declared war. The Russian Empire mobilized for war the next day, with German mobilization following behind, and France behind it. Germany then declared war on Russia, and World War I was under way.
The end of the Great War saw the disillusion of the Ottoman Empire, breaking up its territory, which was carved up between France and Britain at the Paris Peace Conference. The German Empire and Austro-Hungarian Empires also officially ended as a result of the war, for which Germany was given the sole blame for the war and punished through the Versailles reparations. The Russian Empire ended with the Bolshevik Revolution, which resulted in Russia pulling out of the war in 1917, the same year the United States entered the war. The Great War turned the United States into a powerful nation in the world, becoming a leading creditor nation with significant international influence. The British and French maintained their empires, though they were in decline. However, they attempted to maintain significant control over the Middle East.
World War I was thus the culmination of a massive build-up of imperial nations seeking expanded influence and markets for their capital. Entering the War, there were many empires, leaving it, there were two dominant European Empires (France and Britain) and an emerging new force in the world, the United States.
The Great Depression
– Sir Josiah Stamp, Director of the Bank of England, 1927
Benjamin Strong, Governor of the Federal Reserve Bank of New York, and Montagu Norman, Governor of the Bank of England, who worked closely together throughout the 1920s, decided to “use the financial power of Britain and the United States to force all the major countries of the world to go on the gold standard and to operate it through central banks free from all political control, with all questions of international finance to be settled by agreements by such central banks without interference from governments.” These men were not working for the governments and nations of whom they purportedly represented, but “were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down.”
In the 1920s, the United States experienced a stock market boom, which was a result of the commercial banks providing “funds for the purchase of stock and took the latter as collateral,” creating a massive wave of underwriting and purchasing of securities. The stock market speculation that followed was the result of the banks “borrowing substantially from the Federal Reserve. Thus the Federal Reserve System was helping to finance the great stock market boom.”
In 1927, a meeting took place in New York City between Montagu Norman of the Bank of England, Hjalmar Schacht, President of the Reichsbank, the German central bank of the Weimar Republic; Charles Rist, Deputy Governor of the Bank of France and Benjamin Strong of the New York Fed. The topic of the meeting was the “persistently weak reserve position of the Bank of England. This, the bankers thought, could be helped if the Federal Reserve System would ease interest rates to encourage lending. Holders of gold would then seek the higher returns from keeping their metal in London.” The Fed obliged.
The Bank of England had a weak reserve position because of Britain’s position as champion of the gold standard. Foreign central banks, including the Bank of France, were transferring their exchange holdings into gold, of which the Bank of England did not have enough to supply. So the Fed lowered its discount rate, and began buying securities to equal French gold purchases. Money in the US, then, “was going increasingly into stock-market speculation rather than into production of real wealth.”
In early 1929, the Federal Reserve board of governors “called upon the member banks to reduce their loans on stock-exchange collateral,” and took other actions with the publicly pronounced aim of reducing “the amount of credit available for speculation.” Yet, it had the reverse effect, as “the available credit went more and more to speculation and decreasingly to productive business.” On September 26, 1929, London was hit with a financial panic, and the Bank of England raised its bank rate, causing British money to leave Wall Street, “and the over inflated market commenced to sag,” leading to a panic by mid-October.
The longest-serving Federal Reserve Chairman, Alan Greenspan, wrote that the Fed triggered the speculative boom through its pumping excess credit into the economy (sound familiar?), and eventually this resulted in the American and British economies collapsing due to the massive imbalances produced. Britain then “abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930’s.”
The Bank for International Settlements
In 1929, the Young Committee was formed to create a program for the settlement of German reparations payments that emerged out of the Versailles Treaty, written at the Paris Peace talks in 1919. The Committee was headed by Owen D. Young, founder of Radio Corporation of America (RCA), as a subsidiary of General Electric. He was also President and CEO of GE from 1922 until 1939, co-author of the 1924 Dawes Plan, was appointed to the Board of Trustees of the Rockefeller Foundation in 1928, and was also, in 1929, deputy chairman of the New York Federal Reserve Bank. When Young was sent to Europe in 1929 to form the program for German reparations payments he was accompanied by J.P Morgan, Jr.
What emerged from the Committee was the creation of the Young Plan, which “was assertedly a device to occupy Germany with American capital and pledge German real assets for a gigantic mortgage held in the United States.” Further, the Young Plan “increased unemployment more and more,” allowing Hitler to say he would “do away with unemployment,” which, “really was the reason of the enormous success Hitler had in the election.”
The Plan went into effect in 1930, following the stock market crash. Part of the Plan entailed the creation of an international settlement organization, which was formed in 1930, and known as the Bank for International Settlements (BIS). It was purportedly designed to facilitate and coordinate the reparations payments of Weimar Germany to the Allied powers. However, its secondary function, which is much more secretive, and much more important, was to act as “a coordinator of the operations of central banks around the world.” Described as “a bank for central banks,” the BIS “is a private institution with shareholders but it does operations for public agencies. Such operations are kept strictly confidential so that the public is usually unaware of most of the BIS operations.”
The BIS was established “to remedy the decline of London as the world’s financial center by providing a mechanism by which a world with three chief financial centers in London, New York, and Paris could still operate as one.” As Carroll Quigley explained:
The BIS was founded by “the central banks of Belgium, France, Germany, Italy, the Netherlands, Japan, and the United Kingdom along with three leading commercial banks from the United States, including J.P. Morgan & Company, First National Bank of New York, and First National Bank of Chicago. Each central bank subscribed to 16,000 shares and the three U.S. banks also subscribed to this same number of shares.” However, “Only central banks have voting power.”
In a letter dated November 21, 1933, President Franklin Roosevelt told Edward M. House, “The real truth .. is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson – and I am not wholly excepting the administration of W[oodrow]. W[ilson]. The country is going through a repetition of Jackson’s fight with the Bank of the United States – only on a far bigger and broader basis.”
Banking on Hitler
Throughout the 1930s, with the loans provided through the Dawes and Young Plans, Germany was able to create a few dominant industrial cartels, which were all financed by Wall Street bankers and industrialists. These cartels provided the basis for and main financial backing of the Nazi regime. Collaboration between the German Nazi industry and American industry and finance continued, specifically with Morgan and Rockefeller interests, as well as Ford and DuPont. The Morgan-Rockefeller international banks and companies associated with them “were intimately related to the growth of Nazi industry.” Rockefeller’s Standard Oil Empire “was of critical assistance in helping Nazi Germany prepare for World War II.” On top of this, the Rockefeller Foundation was also pivotal in not only funding the racist and elitist eugenics movement in the United States, but played a pivotal part in bringing the eugenics ideology to Nazi Germany, facilitating the beliefs that brought about the Holocaust.
Hjalmar Schacht, the President of the Reichsbank throughout Weimar Germany, stayed on as President of the German central bank from 1933 until 1939, and was thus a central figure in Nazi Germany, being a major driver being the German plans for reindustrialization, redevelopment and rearmament. Hitler, in 1934, made Schacht his Minister of Economics.
Central banks across Europe began to purchase Nazi gold, which was smuggled and melted down and re-stamped in Switzerland, (much like was done with Soviet gold). Sweden, Spain, Portugal, Argentina, Turkey, France, Great Britain, Poland, Hungary, and the United States all “traded with the Nazis with gold transferred by the BIS.” This was done as a collaborative effort among central banks, as “the BIS did enter into gold and currency transactions with Nazi Germany through its participation with the Reichsbank.” Schacht wielded his significant influence and “had become instrumental in placing high-ranking Nazi officials and foreign collaborators on the BIS Board of Directors.”
Empire, War and the Rise of the New Global Hegemon
World War Two also marked a period of massive imperial transition. The build-up of the Third Reich led to Nazi imperialism throughout Europe and North Africa and the Japanese Empire expanded into China. At the end of the War, the British and French Empires were all but vanished, holding onto remaining colonies in Africa and Asia. The Soviet Union was devastated and Germany, with much of Europe, was in ruins. What emerged from this war that was most significant was the rise of a new empire, the American Empire. America’s intervention into the war and expansion into Europe as a liberating force allowed it to set up bases throughout Europe as well as in Japan on the Pacific. The Soviet Union, having taken Europe from the East, expanded its influence and dominance across Eastern Europe. Following Churchill’s speech that an “Iron Curtain” had fallen across Europe, the Cold War was underway. Thus, World War II ended the age of many European empires, even of those in decline, and created a bi-polar world, which was divided between the USSR and the USA.
Following World War II, the US, as the only major nation in the world whose industrial base survived the devastation of the war, assumed the position of global hegemon. It began to set up the infrastructure, both national and international, to assume the position of global superpower, exerting its hegemony across the globe. The crown had been passed from the British Empire to the American Empire. Ultimately, both were and are owned and controlled by the same interests, primarily represented through the central banks and the private banking interests that make up the dominant shareholders.
Before America had even entered the war in late 1941, the Council on Foreign Relations (CFR), the American branch of the round table groups Carroll Quigley discussed as having originated from the secret society of Cecil Rhodes, was planning on America entering the war. The CFR had essentially captured US foreign policy firmly in the grips of the banking elite. The establishment of the Federal Reserve (1913) ensured that the United States would become indebted to and owned by international banking interests, and thus, act in their interest. The Fed financed the US role in World War I, provided the credit for speculation, which led to the Great Depression, and massive consolidation for the interests that own the Federal Reserve System. It then financed US entry into World War II.
The CFR, established six years after the Federal Reserve was created, worked to promote an internationalist agenda on behalf of the international banking elite. It was to alter America’s conceptualization of its place within the world – from isolationist industrial nation to an engine of empire working for international banking and corporate American interests. Where the Fed took control of money and debt, the CFR took control of the ideological foundations of such an empire – encompassing the corporate, banking, political, foreign policy, military, media, and academic elite of the nation into a generally cohesive overall world view. By altering one’s ideology to that of promoting such an internationalist agenda, the big money that was behind it would ensure one’s rise through government, industry, academia and media. The other major think tanks and policy institutions in the United States are also represented at the CFR. They are constitutive of divisions within the elite, however, such divisions are predicated on the basis of how to use American imperial power, where to use it, on what basis to justify it, and other various methodological differences. The divide amongst elites was never on the questions of: should we use American imperial power, why has America become an Empire, or should there even be an empire? If one takes such considerations to heart and questions these concepts, be it within the foreign policy establishment, intelligence, military, academia, finance, corporate world, or media; chances are, such a person is not a member of the CFR.
The CFR effectively undertook a policy coup d’état over American foreign policy with the Second World War. When war broke out, the Council began a “strictly confidential” project called the War and Peace Studies, in which top CFR members collaborated with the US State Department in determining US policy, and the project was entirely financed by the Rockefeller Foundation. The post-War world was already being designed by members of the Council, who would go into government in order to enact these designs.
The policy of “containment” towards the Soviet Union that would define American foreign policy for nearly half a century was envisaged in a 1947 edition of Foreign Affairs, the academic journal of the Council on Foreign Relations. So too were the ideological foundations for the Marshall Plan and NATO envisaged at the Council on Foreign Relations, with members of the Council recruited to enact, implement and lead these institutions. The Council also played a role in the establishment and promotion of the United Nations, which was subsequently built on land bought from John D. Rockefeller, Jr.
The Rise of the American Empire and Keynesian Political Economy
Within liberal political economy, a prominent individual and British economist, John Maynard Keynes, undertook the process of evolving liberal theory into what later became known as Keynesian economics. Following in the footsteps of the dominance of the liberal order, in which the economic and political realms were viewed as separate, and necessarily so, Keynes sought to re-imagine the political-economic relationship. His work was largely influenced by the events leading up to and following the Great Depression, which was largely seen as a failure of the liberal economic order. Keynes wanted to combine state and market forces, not rejecting the liberal notion of the “invisible hand,” however, relegated that to a more distinct area, and imagined a broader role for the state in the economy.
Keynes advocated for the state to act, or invest, when private individuals would not, in an effort to stave off financial or economic crises. Thus, Keynes would argue, the state strengthens the market. A Marxist theorist would likely point to this as an example of how the state, within a capitalist society, functions as an institutional organ which protects the interests of the capitalist class. Keynes advocated a liberal international order composed of free markets, however he recommended state intervention domestically, particularly to protect jobs and control inflation.
Keynesian political economic theory served in large part as a basis for the creation of the Bretton-Woods System, established in 1944, and his concept of embedded liberalism (promotion of liberal international economy, and state intervention in domestic economy), reigned supreme until the 1970s.
In 1944, representatives of the 44 Allied nations met for the Bretton Woods conference (the United Nations Monetary and Financial Conference) in New Hampshire, in an effort to reorganize and regulate the international financial and monetary order following the war. The UK was represented by John Maynard Keynes; with the American contingent represented by Harry Dexter White, an American economist and senior US Treasury department official. It was out of this conference that the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD), now part of the World Bank, and the General Agreement on Tariffs and Trade (GATT), now institutionalized in the World Trade Organization (WTO), originated. They were designed to be the institutionalized economic foundations of exerting American hegemony across the globe; they were, in essence, engines of economic empire.
In 1947, President Harry Truman signed the National Security Act, which created the position of Secretary of Defense overseeing the entire military establishment, and the Joint Chiefs of Staff; as well as created the CIA modeled on its war time incarnation of the Office of Strategic Services (OSS); and the Act also created the National Security Council, headed by a National Security Adviser, and designed to give the President further advice on foreign affairs issues separate from the State Department. Essentially, the Act created the basis for the national security state apparatus for empire building.
The founding of the CIA was urged by the War and Peace Studies Project of the Council on Foreign Relations in the early 1940s, and the architects of the CIA, designing the shape and organization of the Agency, as well as its functions; were all Wall Street lawyers, largely made up of members of the Council on Foreign Relations. The Deputy Directors of the CIA for the first two decades were all “from the same New York legal and financial circles.”
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From Global Crisis to “Global Government”
US Intelligence: A Review of Global Trends 2025
Global Research, December 19, 2008
The United States’ National Intelligence Council has released a report, entitled “Global Trends 2025: A Transformed World“. This declassified document is the fourth report of the Global Trends 2025: The National Intelligence Council’s 2025 Project,
The report outlines the paths that current geopolitical and economic trends may reach by the year 2025, in order to guide strategic thinking over the next few decades. The National Intelligence Council describes itself as the US Intelligence Community’s “center for midterm and long-term strategic thinking,” with the tasks of supporting the Director of National Intelligence, reaching out to non-governmental experts in academia and the private sector and it leads in the effort of providing National Intelligence Estimates.
The report was written with the active participation of not only the US intelligence community, but also numerous think tanks, consulting firms, academic institutions and hundreds of other experts. Among the participating organizations were the Atlantic Council of the United States, the Wilson Center, RAND Corporation, the Brookings Institution, American Enterprise Institute, Texas A&M University, the Council on Foreign Relations and Chatham House in London, which is the British equivalent of the CFR.
Among the many things envisioned in this report to either be completed or under way by 2025 are the formation of a global multipolar international system, the possibility of a return of mercantilism by great powers in which they go to war over dwindling resources, the growth of China as a great world power, the position of India as a strong pole in the new multipolar system, a decline of capitalism in the form of more state-capitalism, exponential population growth in the developing world, continuing instability in Africa, a decline in food availability, partly due to climate change, continued terrorism, the possibility of nuclear war, the emergence of regionalism in the form of strong regional blocks in North America, Europe, and Asia, and the decline of US power and with that, the superiority of the dollar.
The Economics of Change
The discussion of global economics begins with analyzing the potential repercussions of the current global financial crisis. It states that the crisis “is accelerating the global economic rebalancing. Developing countries have been hurt; several, such as Pakistan with its large current account deficit, are at considerable risk. Even those with cash reserves—such as South Korea and Russia—have been severely buffeted; steep rises in unemployment and inflation could trigger widespread political instability and throw emerging powers off course.” However, it states, “if China, Russia, and Mideast oil exporters can avoid internal crises,” they may be able to buy foreign assets, provide financial assistance to struggling countries and “seed new regional initiatives.” It says that the biggest change for the West will be “the increase in state power. Western governments now own large swaths of their financial sectors and must manage them, potentially politicizing markets.” It continues in saying that there is a prospect for a new “Bretton Woods,” to “regulate the global economy,” however, “Failure to construct a new all-embracing architecture could lead countries to seek security through competitive monetary policies and new investment barriers, increasing the potential for market segmentation.”
The report states that as a result of the major financial disruptions under-way and those still to come, there is a need to rebalance the global economy. However, “this rebalancing will require long-term efforts to establish a new international system.” It states that major problem to overcome will be a possible backlash against foreign trade and investment by corporations, particularly in “emerging economies,” with the potential of fueling “protectionist forces” in the US; an increasing competition for resources between emerging economies such as Russia, China, India and even Gulf states; a decline in democratization, as the China-model for development becomes attractive to other emerging economies, authoritarian regimes and even “weak democracies frustrated by years of economic underperformance”; the role of Sovereign Wealth Funds (SWFs) in providing more financial assistance to developing countries than the World Bank and IMF, which could lead to “diplomatic realignments and new relationships” between China, Russia, India and Gulf states with the developing world; the loss of the dollar as the “global reserve currency,” as “foreign policy actions might bring exposure to currency shock and higher interest rates for Americans,” and a “move away from the dollar” which would be precipitated by “uncertainties and instabilities in the international financial system.”
The dollar’s decline as a “global reserve currency” will be relegated to “something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing.”
It states that for the first time in history, the financial landscape will be “genuinely global and multipolar,” and that, “redirection toward regional financial centers could soon spill over into other areas of power.” It states that there is potential for a divide within the West between the US and EU, so long as they continue divergent economic policies, where Europe is more state-centric and with the US as more market-based. However, “the enhanced role of the state in Western economies may also lessen the contrast between the two models.” This enhanced role of the state in economic matters is largely due to the current financial crisis.
In outlining Latin America’s path for the next two decades, the report states that many countries will have become middle income powers, however, “those that have embraced populist policies, will lag behind—and some, such as Haiti, will have become even poorer and still less governable.” It says Brazil will become the major power of the region, but that, “efforts to promote South American integration will be realized only in part. Venezuela and Cuba will have some form of vestigial influence in the region in 2025, but their economic problems will limit their appeal.” However, it said that many parts of Latin America will remain among “the world’s most violent areas,” and that, “US influence in the region will diminish somewhat, in part because of Latin America’s broadening economic and commercial relations with Asia, Europe, and other blocs.”
In discussing the issue of Muslim immigration into the European Union, the report states that, “Countries with growing numbers of Muslims will experience a rapid shift in ethnic composition, particularly around urban areas, potentially complicating efforts to facilitate assimilation and integration.” Further, “the increasing concentration could lead to more tense and unstable situations, such as occurred with the 2005 Paris suburban riots.” This mass immigration and reactions of Europeans, among other factors, “are likely to confine many Muslims to low-status, low-wage jobs, deepening ethnic cleavages. Despite a sizeable stratum of integrated Muslims, a growing number—driven by a sense of alienation, grievance, and injustice—are increasingly likely to value separation in areas with Muslim-specific cultural and religious practices.”
The report also states that by 2025, Europe “will have made slow progress toward achieving the vision of current leaders and elites: a cohesive, integrated, and influential global actor able to employ independently a full spectrum of political, economic, and military tools in support of European and Western interests and universal ideals. The European Union would need to resolve a perceived democracy gap dividing Brussels from European voters and move past protracted debate about its institutional structures.” In other words, the move toward a European superstate will revolve around convincing the public that it is not a threat to democracy or sovereignty.
It further states that Europe should and likely will take in “new members in the Balkans, and perhaps Ukraine and Turkey. However, continued failure to convince skeptical publics of the benefits of deeper economic, political, and social integration and to grasp the nettle of a shrinking and aging population by enacting painful reforms could leave the EU a hobbled giant.”
Russia: Boom or Bust?
The report’s focus on Russia stresses two possible scenarios. One in which Russia triumphs as an international player in the new international system, with the “potential to be richer, more powerful, and more self-assured in 2025 if it invests in human capital, expands and diversifies its economy, and integrates with global markets. [Emphasis added]” However, Russia could also take another path, where “multiple constraints could limit Russia’s ability to achieve its full economic potential,” such as a shortfall in energy investment, an underdeveloped banking sector, and crime and corruption. It also points out that a “sustained plunge in global energy prices before Russia has the chance to develop a more diversified economy probably would constrain economic growth.” Could this be a veiled threat to Russia to either join into and merge with the international system, which is directed by Western elites, or face a possible economic backlash, perhaps in the form of manipulating oil prices? This strategy has not by any means been unheard of, as a look at the 1973 oil crisis and the lead up to the first Gulf War in 1991 have proven.
In contemplating Russia’s likely future, the report states that with a more “proactive and influential foreign policy” Russia could become an “important partner for Western, Asian, and Middle East capitals; and a leading force in opposition to US global dominance.” However, it states that, “shared perceptions regarding threats from terrorism and Islamic radicalism could align Russian and Western security policies more tightly.” In other words, perhaps increased incidents of terrorist activity in or near Russian territory can force it to align more closely with the West, if only at first in security integration. It also elaborates on the other potentiality for Russia, saying that it is “impossible to exclude alternative futures such as a nationalistic, authoritarian petro-state or even a full dictatorship.”
The report states that there are alternatives with Iran. In one instance, “political and economic reform in addition to a stable investment climate could fundamentally redraw both the way the world perceives the country and also the way in which Iranians view themselves.” This could move Iran away from “decades of being mired in the Arab conflicts of the Middle East.” Or the other option is Iran starts a nuclear arms race, continues to become the object of Western alienation, and may even become unstable and mired in conflict.
A Post-Petroleum World?
The report states that by 2025 there will likely be a “technological breakthrough that will provide an alternative to oil and gas, but implementation will lag because of the necessary infrastructure costs and need for longer replacement time.” In this instance, it states that “Saudi Arabia will absorb the biggest shock,” and “In Iran, the drop in oil and gas prices will undermine any populist economic policies,” and that, “Incentives to open up to the West in a bid for greater foreign investment, establishing or strengthening ties with Western partners – including the US – will increase.” The report also states that, “Outside the Middle East, Russia will potentially be the biggest loser, particularly if its economy remains heavily tied to energy exports, and could be reduced to middle power status. Venezuela, Bolivia, and other petro-populist regimes could unravel completely, if that has not occurred beforehand because of already growing discontent and decreasing production.” Again, this raises the issue of the manipulation or control of oil prices for political purposes, as the states all likely to be affected negatively by a plunge in oil prices also happen to be the states most at odds with the West, and specifically, the United States.
Africa: More of the Same
The report starts off by saying that “Sub-Saharan Africa will remain the most vulnerable region on Earth in terms of economic challenges, population stresses, civil conflict, and political instability. The weakness of states and troubled relations between states and societies probably will slow major improvements in the region’s prospects over the next 20 years unless there is sustained international engagement and, at times, intervention. Southern Africa will continue to be the most stable and promising sub-region politically and economically.” This seems to suggest that there will be many more cases of “humanitarian intervention,” likely under the auspices of a Western dominated international organization, such as the UN.
Further, the region will “continue to be a major supplier of oil, gas, and metals to world markets and increasingly will attract the attention of Asian states seeking access to commodities, including China and India.” However, “Poor economic policies—rooted in patrimonial interests and incomplete economic reform—will likely exacerbate ethnic and religious divides as well as crime and corruption in many countries.”
It also states that there will likely be a democratic “backslide” in the most populous African countries, and that, “the region will be vulnerable to civil conflict and complex forms of interstate conflict—with militaries fragmented along ethnic or other divides, limited control of border areas, and insurgents and criminal groups preying on unarmed civilians in neighboring countries. Central Africa contains the most troubling of these cases, including Congo-Kinshasa, Congo-Brazzaville, Central African Republic, and Chad.”
Resurgent Mercantilism and the “Arc of Instability”
The report states that there is a likely possibility of the resurgence on the world stage of mercantilist foreign policies of great powers, as access to resources becomes more limited. Perceptions of energy scarcity “could lead to interstate conflicts if government leaders deem assured access to energy resources to be essential to maintaining domestic stability and the survival of their regime.” In particular, “Central Asia has become an area of intense international competition for access to energy.”
The report also states that, “The Middle East and North Africa (MENA) will remain a geopolitically significant region in 2025, based on the importance of oil to the world economy and the threat of instability.” It gives a positive and negative scenario. In the positive, where economic growth becomes “rooted and sustained,” regional leaders will ensure stability both economic and political. However, “in a more negative scenario, leaders will fail to prepare their growing populations to participate productively in the global economy, authoritarian regimes will hold tightly to power and become more repressive, and regional conflicts will remain unresolved as population growth strains resources.”
The report elaborates that, “youth bulges, deeply rooted conflicts, and limited economic prospects are likely to keep Palestine, Yemen, Afghanistan, Pakistan, and others in the high-risk category. Spillover from turmoil in these states and potentially others increases the chance that moves elsewhere in the region toward greater prosperity and political stability will be rocky. The success of efforts to manage and resolve regional conflicts and to develop security architectures that help stabilize the region will be a major determinant of the ability of states to grow their economies and pursue political reform.” In other words, expect continued destabilization of the region.
It states of Iran, that its “fractious regime, nationalist identity, and ambivalence toward the United States will make any transition from regional dissenter toward stakeholder perilous and uneven. Although Iran’s aims for regional leadership—including its nuclear ambitions—are unlikely to abate, its regional orientation will have difficulty discounting external and internal pressures for reform.”
In relation to Afghanistan, the report states that, “Western-driven infrastructure, economic assistance, and construction are likely to provide new stakes for local rivalries rather than the basis for a cohesive Western-style economic and social unity.” Further, as “Globalization has made opium Afghanistan’s major cash crop; the country will have difficulty developing alternatives, particularly as long as economic links for trade with Central Asia, Pakistan, and India are not further developed.” It states that sectarian conflicts will continue and increase.
The report describes Pakistan as a “wildcard,” especially in relation to conflict in Afghanistan. It states that its Northwest Frontier Province and tribal areas “will continue to be poorly governed and the source or supporter of cross-border instability.” It states that, “If Pakistan is unable to hold together until 2025, a broader coalescence of Pashtun tribes is likely to emerge and act together to erase the Durand Line,” and fractionalize Pakistan into ethnic divides. Essentially, expect Pakistan to be broken up into ethnically divided countries and territories.
It also stipulates that Iraq will continue to be plagued by sectarian and ethnic conflicts, which will spillover into other countries of the region, as “Iran, Syria, Turkey, and Saudi Arabia will have increasing difficulty staying aloof. An Iraq unable to maintain internal stability could continue to roil the region. If conflict there breaks into civil war, Iraq could continue to provide a strong demonstration of the adverse consequences of sectarianism to other countries in the region.” Put another way, Iraq will collapse into civil war, break up and become an example to the rest of the region regarding what happens to countries that pursue divergent policies from those of the West.
The report states that there is a likely increase in the risk of a nuclear war, or in the very least, the use of a nuclear weapon by 2025. “Ongoing low-intensity clashes between India and Pakistan continue to raise the specter that such events could escalate to a broader conflict between those nuclear powers.” Further, “The prospect of a nuclear-armed Iran spawning a nuclear arms race in the greater Middle East will bring new security challenges to an already conflict-prone region, particularly in conjunction with the proliferation of long-range missile systems.” The report also brings up the prospect of nuclear terrorism as an increased risk.
The report states that terrorism will by no means disappear from the international stage by 2025. It interestingly postulates that there is a possibility of Al-Qaeda’s influence as a terrorist group greatly diminishing, or all together disappearing, being replaced with new terrorist threats.
It discusses the actions that will likely be pursued by countries in reaction to terrorist threats, saying that many governments will be “expanding domestic security forces, surveillance capabilities, and the employment of special operations-type forces.” Counterterrorism measures will increasingly “involve urban operations as a result of greater urbanization,” and governments “may increasingly erect barricades and fences around their territories to inhibit access. Gated communities will continue to spring up within many societies as elites seek to insulate themselves from domestic threats.” Essentially, expect a continued move towards and internationalization of domestic police state measures to control populations.
The report states that there is a distinct possibility of a global pandemic emerging by 2025. In this case, “internal and cross-border tension and conflict will become more likely as nations struggle—with degraded capabilities—to control the movement of populations seeking to avoid infection or maintain access to resources.” It states that such a likely candidate for a pandemic would be the H5N1 avian flu.
It states that in the event of a global pandemic, likely originating in a country such as China, “tens to hundreds of millions of Americans within the US Homeland would become ill and deaths would mount into the tens of millions,” and “Outside the US, critical infrastructure degradation and economic loss on a global scale would result as approximately a third of the worldwide population became ill and hundreds of millions died.”
A New International System Is Formed
In discussing the structure and nature of a new international system, the report states that, “By 2025, nation-states will no longer be the only – and often not the most important – actors on the world stage and the ‘international system’ will have morphed to accommodate the new reality. But the transformation will be incomplete and uneven.”
The report states that under a situation in which there are many poles of power in the world, yet little coordination and cooperation between them all, it would be “unlikely to see an overarching, comprehensive, unitary approach to global governance. Current trends suggest that global governance in 2025 will be a patchwork of overlapping, often ad hoc and fragmented efforts, with shifting coalitions of member nations, international organizations, social movements, NGOs, philanthropic foundations, and companies.” In other words, by 2025, there won’t be an established global government, but rather an acceleration of the processes and mechanisms that have been and currently are underway in efforts to create a world government.
The report also interestingly points out that, “Most of the pressing transnational problems – including climate change, regulation of globalized financial markets, migration, failing states, crime networks, etc. – are unlikely to be effectively resolved by the actions of individual nation-states. The need for effective global governance will increase faster than existing mechanisms can respond [Emphasis added].” In other words, due to the growing threat of international problems, which are essentially the result of Western political-economic-intelligence activities and policies, the solution is a move toward international governance, which will be overseen and run by those same Western interests.
In discussing the rise of the emerging powers, particularly China and India, the report observes that their economic progress has been “achieved with an economic model that is at odds with the West’s traditional laissez faire recipe for economic development.” So the question is, “whether the new players – and their alternative approaches – can be melded with the traditional Western ones to form a cohesive international system able to tackle the increasing number of transnational issues.” It continues, saying that “the national interests of the emerging powers are diverse enough, and their dependence on globalization compelling enough, that there appears little chance of an alternative bloc forming among them to directly confront the more established Western order. The existing international organizations – such as the UN, WTO, IMF, and World Bank – may prove sufficiently responsive and adaptive to accommodate the views of emerging powers, but whether the emerging powers will be given – or will want – additional power and responsibilities is a separate question.” So, as the new powers emerge, as a result of Western elite-directed globalization, they will likely merge with the Western controlled world order as opposed to becoming an alternative or opposition force to it.
The report discusses the topic of regionalism in different areas of the world: “Greater Asian integration, if it occurs, could fill the vacuum left by a weakening multilaterally based international order but could also further undermine that order. In the aftermath of the 1997 Asian financial crisis, a remarkable series of pan-Asian ventures—the most significant being ASEAN + 3—began to take root. Although few would argue that an Asian counterpart to the EU is a likely outcome even by 2025, if 1997 is taken as a starting point, Asia arguably has evolved more rapidly over the last decade than the European integration did in its first decade(s).” It further states that, “movement over the next 15 years toward an Asian basket of currencies—if not an Asian currency unit as a third reserve—is more than a theoretical possibility.”
The report elaborates on the concept of regionalism, stating that, “Asian regionalism would have global implications, possibly sparking or reinforcing a trend toward three trade and financial clusters that could become quasi-blocs (North America, Europe, and East Asia).” Such blocs “would have implications for the ability to achieve future global World Trade Organization agreements and regional clusters could compete in the setting of trans-regional product standards for IT, biotech, nanotech, intellectual property rights, and other “new economy” products.” So these three main regional blocs will make up the initial structure of international governance by 2025, progressing toward the ultimate goal of a global government.
The Decline of Democracy
The report states that with democratization around the world, “advances are likely to slow and globalization will subject many recently democratized countries to increasing social and economic pressures that could undermine liberal institutions.” Part of this reasoning is that “the better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government. The surveys we consulted indicated that many East Asians put greater emphasis on good management, including increasing standards of livings, than democracy.” Of great significance, the report also states that, “even in many well-established democracies, surveys show growing frustration with the current workings of democratic government and questioning among elites over the ability of democratic governments to take the bold actions necessary to deal rapidly and effectively with the growing number of transnational challenges.”
This is a very important point, as among many “well-established democracies” are the United States, which is already experiencing a massive shift away from democracy. China, which has been able to emerge rapidly as a result of Western-controlled globalization, and which remains authoritarian, can essentially be viewed as a model for the international system being shaped, as democracies take a turn toward authoritarianism and other rising powers choose to pursue development in the same manner. Essentially, the new international system will mark a move away from democracy and towards international authoritarianism.
It is important, when reviewing the above information provided by the report, to understand the perspective of the authors. The US intelligence community worked closely with businesses, prominent academic institutions and powerful think tanks, all of which play extremely significant roles in shaping our current world order. Thus, the perspectives outlined in the report come with an inherent bias, and so it is important to “read in between the lines.” The report does NOT state what the objectives of the US intelligence community, academic institutions, businesses or think tanks will be in this future 2025 scenario, but you can be assured that they will not play backseat roles and merely observe situations. These are among the most powerful players in the international arena, and this vision of 2025 is the world they are shaping.
So when the report suggests the likely fractionalization of Pakistan, they do not say that it is a US objective to do so, but rather that it is a likely possibility that such a scenario will occur. Thus, it is important to comprehend this information with an understanding that those who wrote the report, have been, are currently, and will in all likelihood, continue to be among the most powerful actors shaping the world order and the new international system. They have been behind the great “transnational issues” and are now proposing their “international solutions.”
 NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: Acknowledgements
 NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: 10
 Ibid, 11
 Ibid, 11-12
 Ibid, 94
 Ibid, 12-13
 Ibid, 13-14
 Ibid, 15
 Ibid, 25
 Ibid, 32
 Ibid, 31
 Ibid, 32
 Ibid, 36
 Ibid, 46
 Ibid, 56
 Ibid, 63
 Ibid, 65
 Ibid, 72-73
 Ibid, 67
 Ibid, 69-70
 Ibid, 70-72
 Ibid, 75
 Ibid, 81
 Ibid, 82
 Ibid, 83
 Ibid, 87
Breaking Iraq and Blaming Iran
British Black Ops and the Terror Campaign in Basra
Global Research, July 3, 2008
British Black Ops in Basra
In September of 2005, the southern Iraqi oil city of Basra, under British occupation since the 2003 invasion, was the scene of an extraordinarily controversial incident, which has since exposed the anatomy of the Anglo-American “dirty war” in Iraq, and in fact, the relevance to the wider “War on Terror”.
On September 19, 2005, two white men, dressed as Arabs, obviously suspicious to the British-trained Iraqi police, were pulled over in their car as they approached the city center of Basra. As the Independent reported, “the two men had been driving in an unmarked car when they arrived at a checkpoint in the city.” What followed was a confrontation between the two men and the Iraqi police, with shots fired and an Iraqi police officer killed and another wounded. The men were then detained by the Iraqi police and taken to the central jail. As it turned out, the two men were members of the British elite SAS Special Forces.
In an interview with Al-Jazeera TV, Fattah al-Shaykh, a member of the Iraqi National Assembly representing Basra, stated that, “I could see that the UK forces were always provoking the Iraqi people in Basra. There are indiscriminate arrests and pressure,” and that a representative of the British embassy informed him that, “two UK soldiers were trying to stir up disturbances. Explosive materials were found in their car and they opened fire.” He further elaborated that, “what the UK forces are doing is not necessarily known by the Iraqi forces or coordinated with them through exchange of information. There are occupation forces, armoured vehicles, tanks and military aircraft in Basra. Moreover, there are members of the British intelligence present in Basra especially, since Basra is currently a sensitive and important area in Iraq. There are members of the Central Intelligence Agency [CIA] and Mossad [word indistinct], as well as many institutions in this city.”
British journalist Robert Fisk asked in an article he wrote on the subject, “what [were] our two SAS lads were doing cruising around Basra in Arab dress with itsy-bitsy moustaches and guns? Why did no one ask? How many SAS men are in southern Iraq? Why are they there? What are their duties? What weapons do they carry? Whoops! No one asked.”
An astounding part of the story about the two British SAS agents is not simply what they were up to in Basra, but what happened to them after being arrested. Once arrested, they were questioned by Iraqi police, and as a Basra government official stated, “They refused to say what their mission was. They said they were British soldiers and to ask their commander about their mission.”
Within hours of the arrests, ten British tanks backed by helicopters stormed the jail where the men were held and destroyed the building, freeing roughly 150 Iraqi prisoners in the process. However, the British government initially stated that the men were released as a result of negotiations. British Defense officials “insisted they had been talking to the Iraqi authorities to secure the release of the men, but acknowledged a wall was demolished as British forces tried to “collect” the two prisoners.” The Basra Provincial Governor described the incident as “barbaric, savage and irresponsible.”
Later, the story was changed again, as the British Army reported that they staged the “rescue” because after the two soldiers were arrested, they were “then handed over to a militia group,” and likely as a result of British pressure, “Iraq’s interior ministry ordered the police force in Basra to release the soldiers but that order was ignored.” Brigadier John Lorimer, who led the operation, said, “that under Iraqi law the soldiers should have been handed over to coalition authorities, but this failed to happen despite repeated requests.” It should be noted, however, that the Iraqi law being referred to was written up by the Anglo-American Coalition Provisional Authority upon its initial occupation of the country in 2003.
As John Pilger noted in the New Statesman, “Although reported initially by the Times and the Mail, all mention of the explosives allegedly found in the SAS men’s unmarked Cressida vanished from the news. Instead, the story was the danger the men faced if they were handed over to the militia run by the “radical” cleric Moqtada al-Sadr.” He further reported on how what was found in the car included, “weapons, explosives and a remote-control detonator.”
It is an amazing display of Orwellian double-think for the British to be able to be responsible for inciting terror, orchestrate a massive assault on an Iraqi police station with tanks and helicopters, and yet, somehow spin it so that it looks like a heroic act of patriotism of the kind depicted in the classic World War 2 film, The Great Escape, where British and American POWs undertake a massive escape from a German POW camp. Although, far from a heroic escape, or valiant rescue, this was an overt military operation aimed at returning British terrorists into British hands.
A month after the “rescue” operation, the British government “officially apologized to Iraq over the recent Basra events,” and a British statement “said that London apologizes to the Iraqi people and government, Basra residents, city and province councils and the police force over mistakes made by the British.”
The day after Britain officially apologized for terrorizing Basra, a “senior British military police officer in Iraq involved in the investigation of alleged abuse of Iraqi civilians by soldiers [has] been found dead at a camp in Basra.” Captain Ken Masters, commander of 61 Section of the Special Investigations Branch (SIB), “was found in his bed at the airport at the weekend.” The Independent quoted Defense sources as saying the death was “not due to hostile action and also not due to natural causes.” Friends referred to the incident as a “total surprise,” and it was reported that no suicide note or firearms were found.
Masters’ job consisted of investigating all serious incidents involving the British military in Iraq, and as the Times reported, “Captain Masters’s biggest current investigation was ordered after the incident on September 19 when two SAS troopers had to be rescued by British troops in armoured vehicles after they had been arrested by Iraqi police. During a day of violent confrontations, the Iraqi authorities in Basra claimed that seven Iraqis were killed and 43 injured, many of them police.” The article elaborated on Masters’ duties, stating, “Compensation to the families of alleged Iraqi victims who died during the fracas depended on the official investigation being carried out by Captain Masters and his team.”
The British Ministry of Defense “said the circumstances surrounding the death on Saturday of Captain Ken Masters, 40, were not suspicious.” The day before Masters died, the official line put forward by the British military of the Basra incident was that, “the SAS had been ordered to carry out surveillance operations against several members of the Iraqi police, who were believed to be responsible for torturing prisoners at the notorious Jamiyat prison in Basra.”
Later, the official line put out after an investigation was that Masters did indeed kill himself, due to work pressures. Masters, who was a husband and father of two, was due to return home from tour five days after he apparently killed himself.
On December 25, 2006, the British again stormed the Basra headquarters of the serious crimes unit, the same police station where the SAS officers were held the previous September. The British killed seven men and destroyed the building, which “had been demolished with explosives after the pre-dawn assault by about 1,000 troops.” Further, “The operation came three days after British soldiers arrested the head and other members of the serious crimes unit on suspicion of involvement in the kidnap of two SAS soldiers and the murder of several Iraqis last year.” The “kidnap” being referred to here is an Orwellian double-speak version of the events describing the arrest of the two SAS officers for injuring and killing Iraqi police.
The official reason for the assault was that the serious crimes unit headquarters, “has long been accused of involvement in murders, attacks on coalition forces and kidnappings in the southern oil city, where rival Shia factions are fighting for control,” and that, “The British military acted after learning that some of the prisoners, all suspected criminals, inside the police station faced imminent execution.” Captain Dunlop stated, “We had clear directions from the prime minister and governor to dissolve the unit.”
Three days earlier, on December 22, 2006, the “senior Iraqi policeman who allegedly masterminded the abduction of two SAS soldiers last year was arrested yesterday following a major security operation in Basra.” In other words, the senior Iraqi officer who was present for the arrest, detention and questioning of the SAS soldiers was taken into British custody. The Telegraph reported that, “Under cover of thick fog, 800 British troops in tanks and armoured vehicles swooped on the home of the policeman and six other Iraqi officers.” The Telegraph again re-wrote history when they reported that, “The two SAS troopers were allegedly minutes away from being sold to insurgents and certain death after they were abducted by rogue police at a checkpoint in the Jamiat area of Basra on Sept 19 last year.”
In reaction to the storming and total destruction of the Serious Crimes Unit HQ in Basra, the Basra Council “described the raid as illegal and has suspended co-operation with the military,” and called the raid “provocative.” Notably, “A Ministry of Defence spokesman said 1,000 troops were involved and hundreds of seized files and computers have been taken as evidence.” What exactly was contained on those files and computers? As reported by the New York Times, the “battle lasted nearly three hours. There were no British casualties, but the streets around the station were littered with bombed-out cars and rubble.”
Considering the fact that the mainstream media and British officials put massive spin on and manipulated the facts of the story about the SAS soldiers in relation to this story, it raises the question as to what they may be lying about in relation to the actual storming of the prison once again. What exactly was the purpose of this massive undertaking? Surely, the police forces in Iraq are corrupt and influenced by local militias; it is, after all, a state of war. But, it seems that as long as the corruption is in line with Anglo-American strategy in the region, a blind-eye is turned. Was the real problem that the Serious Crimes Unit was actually doing its job, investigating the Basra incident involving the SAS? This could explain why the computers and files were taken. The current official line that the SAS were investigating corrupt officials can support why they were dressed as Arabs. But as to why they were heavily armed, had explosives and detonators and were the first ones to shoot during the confrontation with the police, this explanation does not stand up to scrutiny.
Also, to storm the jail under the pretense of preventing torture and executions is highly hypocritical considering what the Coalition is guilty of in Iraq and around the world. So, it begs the question, what else is being lied about in this situation, and for what purpose?
Following very much in line with previous British actions in Basra, from the 2005 “rescue” of black-ops SAS state-terrorists, to the 2006 destruction of the jail, “rescue” of its computer records and arrest of its leading officials, the British again made their destabilizing presence known. On March 4, 2007, “Iraqi special operation forces and British troops swept into an Iraqi intelligence ministry building” in Basra, and, “found prisoners with signs of torture, British officials said.” Interestingly, “All 30 prisoners escaped during the surprise raid, which was triggered by information gleaned from suspects arrested hours earlier in another sweep.” The public explanation for the raid is very much the same as the previous Basra raid a year earlier, which actually appeared to be an operation aimed at retrieving information about and arresting all the officials involved with the previous year’s arrest of the two SAS soldiers. Officially, this 2007 raid was undertaken to “rescue” abused prisoners.
Iraqi Prime Minister, Nouri al-Maliki, referred to the raid as an “unlawful and irresponsible act.” As the Washington Post reported, “A British military statement said its forces acted quickly because it had gained information hours earlier that presented a high threat.” According to the Telegraph, the British captured “an alleged death squad leader and four other militants.” The article further reported that, “A British military spokesman said it had not been possible to warn the provincial authorities before the raid because it was ordered just hours earlier, on the basis of information received from a detained insurgent.” About the prisoners that escaped during the raid, “the British denied they were deliberately freed, saying they “regrettably” took advantage of the chaos to make their escape.”
The Iraqi Prime Minister released a statement saying that he “has ordered a prompt investigation into the incident of breaking into the security complex headquarters in Basra and he affirmed the need to punish those who have carried out this unlawful and irresponsible act.” The BBC reported on the incident, stating that, “The British government said the Army’s main bases in the city [of Basra] would be closed and the total British strength reduced by several thousand over time,” and that, “The theory behind this is that the Iraqi forces are now ready to take over. The raids over the weekend were indeed led by the Iraqi security forces – but targeted other parts of the Iraqi security forces.”
The question must be asked: What was the mission really about? Surely, and sadly, the only unique prison in Iraq would be one where torture does not occur, regardless of who is in control of it. And to say certain facilities under Iraqi government control are corrupt and involved in supporting terrorists and death squads is a diversionary point, as the Iraqi government itself is under Anglo-American control. The fact that the Iraqis were not told of this raid not only demonstrates that the British (and Americans) act above the law, but that the raid was something they did not want to have known by the Iraqis. There was a purpose behind the raid on the prison. It is important to note that it occurred a mere three months after the previous raid in December of 2006, in which the British seized “hundreds of files” and took computers “as evidence,” likely related to the British SAS incident. Since this was the Iraq intelligence unit in Basra, could it be that the previously destroyed Serious Crimes Unit had passed along some intelligence to the Iraqi Intelligence Ministry building? It would seem likely. And so, it would also seem to be likely that the British would follow the paper trail of evidence with their trail of terror.
In an August, 2007 article, the Washington Post reported that, “As British forces pull back from Basra in southern Iraq, Shiite militias there have escalated a violent battle against each other for political supremacy and control over oil resources, deepening concerns among some U.S. officials in Baghdad that elements of Iraq’s Shiite-dominated national government will turn on one another once U.S. troops begin to draw down.” The article quoted a think tank called the International Crisis Group (ICG) as saying that Basra is plagued by “the systematic misuse of official institutions, political assassinations, tribal vendettas, neighborhood vigilantism and enforcement of social mores, together with the rise of criminal mafias that increasingly intermingle with political actors.”
In September of 2007, amid widespread disenchantment among the British for their participation in the Iraq war and occupation, the British “pulled out of Basra Palace, the onetime southern residence of Saddam Hussein that became the symbol of the UK’s role in the US-led invasion.” As the Independent reported, “The British departure from their last remaining base inside the walls of Basra City, signalled their disengagement from the conflict and has highlighted a growing and public discord between Washington and London over Iraq, with the Americans claiming the move will severely undermine security.” The British were to remain at Basra airport only, which is on the outskirts of the city, “while what remains of the British-controlled south is handed over to the Iraqi authorities.” One Iraqi who is a resident of Basra was quoted as saying, “One thing we are uneasy about are rumours that the Americans may come to Basra to replace the British. We see what is happening in Baghdad and we don’t want that here.”
On September 12, 2007, it was reported by the Independent that, “British forces have been sent from Basra to the volatile border with Iran amid warnings from the senior US commander in Iraq that Tehran is fomenting a “proxy war”,” and that, “The deployment came within a week of British forces leaving Basra Palace, their last remaining base inside Basra city, and withdrawing to the airport for a widely expected final departure from Iraq.” The move to the Iranian border was apparently at the request of the Americans, as “The move came as General David Petraeus, the US commander in Iraq, and Ryan Crocker, the US ambassador to Iraq, made some of the strongest accusations yet by US officials about Iranian activity. General Petraeus spoke on Monday of a “proxy war” in Iraq, while Mr Crocker accused the Iranian government of “providing lethal capabilities to the enemies of the Iraqi state”.”
In December of 2007, the British officially “handed over control of Basra Province to Iraq’s government,” and as the New York Times reported, “American officials believe the transfer of control will be a serious test of Iraqi political and military leaders to maintain Basra — a strategically vital and politically fractious southern province, and the port city of the same name — under Iraqi control, and prevent Iran or Shiite militias from gaining too much influence.” However the British would remain in a “support role” in the Iraqi province that “holds most of Iraq’s proven petroleum reserves.” A British General was quoted as saying, “We will continue to help train Basra security forces.”
So was the British departure from Basra really a drawing down of participation in the war? Was it for political legitimacy within the UK? Or, was there another reason behind this action? Basra’s strategic importance cannot be underestimated, being in the south of Iraq, the most oil-rich province, close to Iran and in the heart of the Gulf.
The British used to govern Iraq under a League of Nations mandate from its “independence” from the Ottoman Empire until 1932. In 1940, an anti-British nationalist leader, Rashid Ali, came to power in Iraq. After engaging in closer relationships with fascist Italy and quietly with Nazi Germany, he was replaced in 1941 as Prime Minister. A few months later, he orchestrated a coup d’état and returned to power. The British immediately responded by seizing Basra, what was seen, even then, as a vital supply route. The British also had a major military base in Basra. Significantly, also in 1941, Iran’s King was developing close ties to Germany. Britain was afraid of Iran’s oil reserves falling out of the hands of the Anglo-Iranian Oil Company (now known as BP – British Petroleum), and into hands of Germany. So, a couple months after Britain took back Iraq, the British and USSR launched a joint invasion of Iran. The British of course invaded from the south in Iraq, from their bases, notably their base in Basra.
Could this glimpse into the past present any understanding of the present British situation in Basra? Considering that the British went from Basra and moved to a base on the Iranian border, it seems likely. But why leave Basra? Well, if the strategy of tension in the Middle East is directed at destabilizing the region, spilling civil war and conflict across borders, perhaps it might be necessary for the British to step back and see if Basra collapses in on itself. Or perhaps, there would be some outside help in Basra’s implosion, but without the British forces present, foreign involvement would not be discussed as a cause of the problem, and could therefore be discussed as a possible solution to any implosion.
The Battle of Basra
Three months after handing control of Basra over to the Iraqis, a large battle was underway. The western media tenaciously referred to it as the “Battle of Basra.” On March 24, 2008, Iraqi Prime Minister Nouri al-Maliki went to Basra to oversee the planned Iraqi offensive to rid Basra of its Mahdi Army militia in key Sadrist neighborhoods of those loyal to Mahdi Army leader, Muqtada al-Sadr. This was the first major operation undertaken by the Iraqi Army.
The Battle lasted until March 31, resulting in hundreds of dead and significantly hundreds more wounded. During the battle, British papers such as the Times were calling for Britain to abandon its withdrawal timetable from the base outside of Basra, in order to remain in case of a need to “rescue” Basra.
The Iraqi government forces were surprised by the resilience of the Mahdi Army in Basra, and were suffering a great deal at the defenses of the militia. This resulted in American forces having to be drawn into the battle to support the Iraqi government forces. US warplanes were used, ultimately killing civilians, and even the British were drawn into the fighting directly from their base at the airport. The Independent reported that, “If US and British forces engage in direct military action on a wide scale with the Sadrist militia, then Mr Sadr could call for a general uprising, which would engulf all of Shia Iraq in war.” According to the BBC, “There have also been a small number of both British and American special forces on the ground” in Basra during the Battle.
It was on March 29, that Muqtada al-Sadr called for a ceasefire between the Shi’a militia and Iraqi forces. The Independent reported that, “The Sadrists’ ceasefire was unexpected since they have prevented government forces from advancing in Basra and Baghdad. Hours before the announcement, militiamen stormed the state television station in Basra, forcing the guards to flee and setting armoured vehicles on fire.” As it turned out, the ceasefire between Iraqi government officials and Sadr’s militia was brokered by Iran. USA Today reported that, “Iran has close ties with both al-Sadr’s movement and [Prime Minister] al-Maliki, who spent several years in exile there,” and that, “the agreement was brokered by the commander of Iran’s al-Quds Brigade, which is considered a terrorist organization by Washington.”
What was Behind the Battle of Basra?
How exactly did the Battle of Basra begin, other than the initial attack by government forces? What was the reasoning and purpose behind this major offensive? Surely, a puppet government such as Iraq would never undertake such an operation without in the very least, the support of the Americans or British, but even more likely, at the direction of the Anglo-Americans. The Battle of Basra must be put into a wider context.
A week before the Battle broke out, Vice President Dick Cheney took a surprise tour of the Middle East. If George Bush is the “Decider” as he once proclaimed, Dick Cheney is certainly the “Destabilizer,” not to mention, the “Decider’s Decider.” On March 17, Cheney made a surprise, unannounced visit to Iraq, where his “first meeting was a classified briefing with U.S. Ambassador Ryan Crocker and Gen. David Petraeus, the top U.S. military commander in Iraq who met him at the airport.” He also met with Prime Minister Nouri al-Maliki. Among many of the possible topics of discussion during Cheney’s trip was that, “The Iraqis do not yet have a law for sharing the nation’s oil wealth among the Shiites, Sunnis and Kurds, a law that the Bush administration believes will trigger multinational energy companies to invest in exploration and production in Iraq,” as well as, “a plan for new provincial elections. Iraq’s presidential council, which must give its nod to laws passed by the Iraqi parliament, rejected a plan for new elections last month, shipping it back to the legislature.” The rejection was seen as “a setback to the U.S. campaign for national reconciliation, [which] came despite Cheney’s last-minute phone call to the main holdout on the three-member panel: Vice President Adel Abdul-Mahdi, a Shiite.” Cheney’s trip included visits to Oman, Israel, Saudi Arabia, Turkey and the Palestinian territories.
Among much of the discussion regarding Cheney’s trip to the Middle East was rumours of preparing for a possible war with Iran. As the Telegraph reported, “Mr Cheney, whose nine-day tour has included stops in Turkey, the Gulf and Afghanistan, insisted that Iran must not be allowed to develop nuclear weapons.” A surge of violence in Basra would provide Cheney with a convenient excuse to point the finger at Iran for “troublesome meddling” in Iraq.
It is important to take a closer look at possible reasons for the outbreak of violence in Basra in late March, a mere nine days after Cheney’s visit to Iraq. The main reasons, (none of which include the Iraqi government’s “decision” to displace the Mahdi Army), include scoring political points on the war issue in domestic American politics, passing an Iraqi oil law, pressing forward with provincial elections, building the case or creating a pretext for a war with Iran, and justifying a permanent occupation of Iraq.
Scoring Political Points
At Congressional hearings in early April following the Basra offensive, where Ambassador to Iraq Ryan Crocker and General David Patraeus testified, Senator Ted Kennedy asked Crocker, “Were you at any meetings with the Vice President… where the issue of the Basra invasion took place?” Crocker responded, “Um, that was not discussed.” Kennedy pressed, “It wasn’t discussed at all, during the Vice President’s visit to Baghdad, ah, that the, the possibility of Maliki uh, going into Basra, was not discussed, you were not at any meetings where the Vice President was present or where this was discussed in his presence?” Crocker again replied, “Uh, it was not discussed in any meeting I attended, no, sir.” Kennedy then looked to General Patraeus, “Ah, General?” Patraeus replied, “Same, Senator.”
Ray McGovern, former 27-year CIA analyst who delivered several daily intelligence briefings to US Presidents, stated that, “I think Kennedy knows more than the rest of us know. I think it’s very clear that if you’re looking for why Maliki went off half-cocked for a big offensive down against Moqtada al-Sadr in southern Iraq, it was because Cheney had told him to. And I would be shocked if Cheney didn’t tell Patraeus and Crocker what he was going to tell Maliki.” He continued, “Patraeus has hundreds of troops there [in Basra] embedded with the Iraqi forces, he had to know exactly what was going on. He just couldn’t stop it. Why? Well, well he didn’t want to stop it because Cheney is running things. The plan was to get down there into the south to show that this fellow [Maliki] can take the initiative and be – well, the President was instructed two days later to say this was a ‘defining moment’ – a defining moment of the leadership of Prime Minister Maliki. Well, yeah, it was, but not the way they meant.” McGovern elaborated, “And so Patraeus and Crocker could come before Congress and say, ‘look, you told us – you told us last time that the Iraqis had to take more initiative, so that we’re not doing the fighting. Well, look, just what happened, they cleaned out the whole of southern Iraq. And they still played that theme… [that] Maliki took the initiative.” He further stated, “Ironically, they wanted to give the initiative to Maliki because they thought it might succeed, but then they wanted to give the initiative to Maliki because it failed miserably.”
The Oil Law
Iraq has failed to pass an oil law for some time. Basra, the most oil rich province in Iraq, is of vital importance in any decision made regarding an oil law. In 2001, before 9/11, Afghanistan, and Iraq, Vice President Cheney met in secret with executives from Exxon Mobil Corp., Conoco (before its merger with Phillips), Shell Oil Co. and BP America Inc., in what was known as the Cheney Energy Task Force.
Interestingly, Judicial Watch, a public interest group and government watchdog, sued to get Commerce Department documents pertaining to Cheney’s secret Energy Task Force meetings. The documents contained “a map of Iraqi oilfields, pipelines, refineries and terminals, as well as 2 charts detailing Iraqi oil and gas projects, and ‘Foreign Suitors for Iraqi Oilfield Contracts’.” Further, “The Saudi Arabian and United Arab Emirates (UAE) documents likewise feature a map of each country’s oilfields, pipelines, refineries and tanker terminals. There are supporting charts with details of the major oil and gas development projects in each country that provide information on the projects, costs, capacity, oil company and status or completion date.”
Months after the Battle at Basra and Cheney’s visit, the International Herald Tribune reported that, “The Iraqi Oil Ministry is negotiating with Royal Dutch Shell on a joint venture deal to develop natural gas associated with oil production in southern Iraq,” and that, “The head of the Basra Economic Development Committee, Munadhil Abid Khanjar, said that Shell had approached the Oil Ministry last December with its plans and since then meetings have been held outside Iraq.” Two days later, it was reported that, “Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.” The main oil companies are “Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — [and they], along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.” It was further reported that, “The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India.”
So, if Cheney’s visit to Iraq was to do with oil, then, Mission Accomplished. However, it doesn’t seem likely that this was the reasoning behind the outbreak of violence in Basra. Surely, it was a topic of discussion between Cheney and Iraqi officials, however, it does not account for a push for violence in Basra, unless it is an issue of legitimizing a permanent occupation of the oil rich Basra province under the auspices of “stabilizing” the volatile region, but in reality, maintaining a presence there to protect the oil fields for Royal Dutch Shell, Exxon, and BP.
The Provincial Elections
In February of 2008, it was reported that, “Iraq’s three-member presidency council has rejected a draft law to hold provincial elections and returned it to parliament,” and that, “The bill is expected to boost the powers of the provinces to launch their own economic projects with the money allocated by the central government.” Two days after Cheney’s visit, “Iraq’s three-member presidential council on Wednesday approved legislation that sets a time frame for provincial elections, a development that Iraqi lawmakers called an important step toward reconciling rival factions in the divided government.” This appears to be following the directions of the Council on Foreign Relations, among many other think tanks, in balkanizing Iraq, or as they put it, reverting to a federal system. Although pushing for a federal system for Iraq came after initial calls for a “three state solution,” as was the title of a Leslie Gelb article in the New York Times, who is President Emeritus of the Council on Foreign Relations. The article he wrote called for the Balkanization of Iraq based upon the model of Yugoslavia, which, incidentally, was fractured largely through Western-financed, Al-Qaeda affiliated terrorist organizations in Bosnia and Kosovo.
President Bush said in a speech on March 27, 2008, during the Battle of Basra, that, “Last week, leaders reached agreement on a provincial powers law that helps define Iraqi federalism, and sets the stage for provincial elections later this year. And that’s an important piece of legislation because it will give Iraqis who boycotted the last provincial election — such as Sunnis in Anbar or Ninewa provinces — a chance to go to the polls and have a voice in their future.”
Reverting to a more federal system will allow for the political fracturing of Iraq. Not only will it separate the regions likely according to Sunni, Kurd and Shi’a factions, but it will allow bigger powers, such as the United States and the United Kingdom, to not have their influence threatened by any actual strengthened and united Iraqi federal government.
As the Berkeley Daily Planet reported after the Battle of Basra, Muqtada al-Sadr, as a nationalist, “supports a unified Iraq with a strong central government,” while Prime Minister Nouri al-Maliki has “pushed for dismembering Iraq into separate provinces dominated by the country’s three major ethnic groups—Sunnis in the west, Kurds in the north, and Shiites in the south. Since most of the oil reserves are in the south, as is the country’s only port, whoever controls the south essentially controls 70 percent of Iraq’s economy.” Further, the provincial election law that was passed “sets up an October election in which the various provinces will vote on whether they want to remain a unified country or splinter into separate provinces.” The author stipulates that Maliki attacked Basra in an effort to win political points in driving out the militias in order to win the Basra provincial election come October, and thus, retain control over the oil reserves.
However, my problem with this hypothesis is that in the originally proposed recommendations from the Council on Foreign Relations in turning Iraq into a federal system, they state that oil laws are to be the prerogative of the federal government, not provincial. Not to mention, Maliki has slim, if any chance, of ever winning the south of Iraq. Thus, it may be more likely that in attacking Basra, it creates great resentment among Shi’as and thusly, a federal political system will be so fractured and divided that it will likely lead to separation naturally. If the Iraqi provinces separated of their own accord, it would be harder to point the finger at the US for the balkanization of Iraq, which has long been a strategic aim.   When the US Senate passed a resolution in support of a federal system as a solution for Iraq, the Arab world, and even the Iraqi Prime Minister denounced it as an attempt to divide Iraq. But, if the Iraqi Parliament passes a law for provincial elections, which could lead to fracture, it is a “break through for democracy.”
Promoting War With Iran
The Financial Times reported prior to Cheney’s trip to the Middle East that, “On Iran, the vice-president is expected to urge countries in the region to do more to isolate Tehran diplomatically and economically,” and that, “The trip comes at a time of renewed interest in policy towards Iran after a senior US military commander resigned last week because of perceived differences with the White House over the issue. Admiral William Fallon was widely considered a dovish voice on Iran and his departure sparked speculation that hawkish figures such as Mr Cheney were regaining the upper hand over the issue.” The day after Cheney visited Saudi Arabia, the government began preparing “national plans to deal with any sudden nuclear and radioactive hazards that may affect the kingdom following experts’ warnings of possible attacks on Iran’s Bushehr nuclear reactors.”
The outbreak of violence in Basra delivered the perfect opportunity to continue doing what the administration has been doing for so long, blaming Iran for the violence in Iraq. Amid the heated Battle of Basra, on March 27, it was reported that, “The U.S. military stated Iran is orchestrating the Shi’ite insurgency in southern Iraq and outbreaks of violence throughout the country,” and a Defense Department spokesman stated that, “There has been a persistent and troublesome meddling by Iran.”
A month later, the US envoy to the United Nations blamed Iran “for fueling recent clashes in the southern Iraqi city of Basra and in Baghdad, saying Tehran was training and supplying weapons to militias.” Ambassador Zalmay Khalilzad, a member of the Council on Foreign Relations and signatory to several PNAC documents, stated, “The recent clashes between criminal militia elements and Iraqi government forces in Basra and Baghdad have highlighted Iran’s destabilizing influence and actions.” However, what he (intentionally) failed to realize is that Sadr had declared a ceasefire long before the Battle of Basra began, from August of 2007, (interestingly at the time that Bush’s “surge” strategy in Iraq became a “success” in reducing violence), and that the Battle began when the Iraqi government attacked Sadr strongholds in Basra. Khalilzad also mistakenly blamed Iran for being a destabilizing force. Yet, it was Iran that brokered the ceasefire, making Iran the most stabilizing force in the region.
On June 6, 2008, it was reported that, “Pentagon officials firmly opposed a proposal by Vice President Dick Cheney last summer for airstrikes against Iranian Revolutionary Guard Corps (IRGC) bases by insisting that the administration would have to make clear decisions about how far the United States would go in escalating the conflict with Iran, according to a former George W. Bush administration official.” The report continued, “J. Scott Carpenter, who was then deputy assistant secretary of state in the State Department’s Bureau of Near Eastern Affairs, recalled in an interview that senior Defence Department (DoD) officials and the Joint Chiefs used the escalation issue as the main argument against the Cheney proposal,” and that Cheney had proposed “launching airstrikes at suspected training camps in Iran.” It further stated that, “The question of escalation posed by DoD officials involved not only the potential of the Mahdi Army in Iraq to attack, Carpenter said, but possible responses by Hezbollah and by Iran itself across the Middle East,” and that, “Cheney’s proposal was perceived as a ploy to provoke Iranian retaliation that could used to justify a strategic attack on Iran.”
Cheney’s plan to provoke Iran through airstrikes on camps in Iran was rebuked by the Pentagon, and the attempt at scaring the world with threats of Iran acquiring nuclear weapons was rebuked by the National Intelligence Estimate (NIE) of all 16 US intelligence agencies in December of 2007, which said that Iran gave up attempting to build nuclear weapons in 2003. It was even reported that Cheney tried to suppress the NIE from becoming public for over a year. It seemed as if provoking a situation within Iraq was the best option for Cheney. However, because Iran acted quickly in ending the violence and brokering a ceasefire, Cheney’s plan backfired.
Having a massive outbreak of violence in Iraq could have provided an excellent reason to justify a permanent occupation of Iraq. On April 8, 2008, a week after the fighting in Basra reached a ceasefire, the Guardian reported that, “A confidential draft agreement covering the future of US forces in Iraq, passed to the Guardian, shows that provision is being made for an open-ended military presence in the country,” and that the “secret” and “sensitive” agreement was dated “March 7,” and, “is intended to replace the existing UN mandate and authorises the US to “conduct military operations in Iraq and to detain individuals when necessary for imperative reasons of security” without time limit.”
On June 5, it was reported by the Independent that, “A secret deal being negotiated in Baghdad would perpetuate the American military occupation of Iraq indefinitely, regardless of the outcome of the US presidential election in November,” and that, “Iraqi officials fear that the accord, under which US troops would occupy permanent bases, conduct military operations, arrest Iraqis and enjoy immunity from Iraqi law, will destabilise Iraq’s position in the Middle East and lay the basis for unending conflict in their country.” Further, “Under the terms of the new treaty, the Americans would retain the long-term use of more than 50 bases in Iraq. American negotiators are also demanding immunity from Iraqi law for US troops and contractors, and a free hand to carry out arrests and conduct military activities in Iraq without consulting the Baghdad government.” The article reported that, “The Iraqi government wants to delay the actual signing of the agreement but the office of Vice-President Dick Cheney has been trying to force it through. The US ambassador in Baghdad, Ryan Crocker, has spent weeks trying to secure the accord.”
Important to note is that, “The agreement artfully drafted by US officials will not only jeopardize the Iraqi sovereignty but will also give the US military the right to use Iraq as a launching pad for attacks against other countries, including Syria and Iran.” As of June 19, “Iraqi and U.S. officials are seeking a compromise on the pending issues over a new security agreement between the two countries.”
Understanding the anatomy of the conflict that has raged in Basra since 2003 is a pivotal study in understanding the wider “War on Terror.” The British, for nearly a century maintaining a destabilizing presence in the region, notably in Basra, have not given up their Empire’s long-standing tradition of “Divide and Conquer.” From the two SAS terrorist, to their dramatic “rescue,” the destruction of the Serious Crimes Unit and eventually, the liquidation of the Basra Intelligence Ministry, the British have maintained a position of being above the law and beyond moral restraint.
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 Gareth Porter, US/IRAN: Fearing Escalation, Pentagon Fought Cheney Plan. IPS: June 6, 2008: http://ipsnews.net/news.asp?idnews=42696
 Mark Mazzetti, U.S. Says Iran Ended Atomic Arms Work. The New York Times: December 3, 2007: http://www.commondreams.org/archive/2007/12/03/5588/
 Gareth Porter, POLITICS-US: Cheney Tried to Stifle Dissent in Iran NIE. IPS: November 8, 2007: http://ipsnews.net/news.asp?idnews=39978
 Seumas Milne, Secret US plan for military future in Iraq. The Guardian: April 8, 2008: http://www.guardian.co.uk/world/2008/apr/08/iraq.usa
 Patrick Cockburn, Revealed: Secret plan to keep Iraq under US control. The Independent: June 5, 2008:
 Ismail Salami, US hidden agenda in Iraq security agreement. Press TV: June 7, 2008: http://www.presstv.ir/detail.aspx?id=59060§ionid=3510303
 AP, Iraq, US seek security compromise. Associated Press: June 19, 2008: http://ap.google.com/article/ALeqM5g4Sx1RDO6xF-Ggz2GsqBY6y0vq6AD91DC1TG1