[THS] !!!! James Petras: Military or Market-Driven Empire Building

[Peter Webster]

http://www.informationclearinghouse.info/article19843.htm
[excellent analysis, long and detailed, don't miss the conclusion]

Military or Market-Driven Empire Building: 1950-2008

By James Petras

30/04/08 "ICH" -- - -From the middle of the 19th century but especially
after the Second World War, two models of empire building competed on a
world scale: One predominantly based on military conquests, involving
direct invasions, proxy invading armies and subsidized separatist military
forces; and the other predominantly based on large-scale, long-term
economic penetration via a combination of investments, loans, credits and
trade in which ‘market’ power and the superiority (greater productivity) in
the means of production led to the construction of a virtual empire.

Throughout the 19th to the middle of the 20th centuries, European and US
empire building resorted to the military route, especially in Asia, Africa,
Central America, North America and the Caribbean. By far the British and
US colonized the greatest territories through military force, followed by the
introduction of state directed mercantile systems, the Monroe doctrine for
the US and imperial preference for the British. South America following
independence became the site of the growth of market powered empire
building. British and later US capital successfully captured the commanding
heights of the economies, especially the agro-mining and petroleum export
sectors, trade, finance and in some cases attached customs and treasury to
cover debt collection. As late developing capitalist countries and emerging
imperial powers (EIP), the US, Germany and Japan faced the hostility of the
established European empires and limited access to strategic markets and
raw materials. The EIP adopted several strategies in challenging the existing
empires. These included demands for free trade with their colonies and the
end of imperial (colonial) privilege/ preference. The EIP established parallel
colonial settlements and concessions, bordering the old empires. They
fomented and financed ‘anti-colonial’ revolts to replace existing colonial
collaborators and pursued economic penetration via superior production.
They disseminated political propaganda promoting ‘democratic’ values
within a market driven empire. World War Two marked the decline of the
European military based colonial empire and the US transition from a
predominantly market to military-based empire. This ‘transition’ was
facilitated by earlier military occupations in the Philippines and the
Caribbean and a multitude of invasions in Central America.

Nationalist liberation movements, based on liberal, nationalist and socialist
leaders and programs, drawing on returning soldiers, weakened colonial
control and post-war European anti-fascist and anti-war sentiments, led to
the dismantling of their military-based empires. Internal reconstruction and
domestic working class radicalism influenced the agenda for most European
colonial powers. The attempts by the European powers to re-impose their
colonial empires failed despite bloody wars in Indo-China, Kenya, Algeria,
Malaya and elsewhere. The French, English and Israeli invasion and
occupation of the Egyptian Suez (1956) marked the last major attempt at
military-driven imperialism.

The US opposition to this effort at European re-colonization marked the
supremacy of US-centered empire building and, paradoxically, the
beginning of US military-driven empire building. The European powers,
especially Great Britain, engineered a strategic shift from a colonial-military
empire toward market-driven empires based on supporting pro-capitalist
nationalist against socialist revolutionaries (India, Malaysia, Singapore, etc.).
While Europe transited to the market-driven empire building model based
first and foremost on the reconstruction of their war-torn domestic capitalist
economy, the US quickly moved toward a military based empire building
approach. The US established military bases throughout Europe, militarily
intervened in Greece, elaborated a complex and comprehensive military
buildup to challenge Soviet spheres of influence in Eastern Europe and
intervened in the Chinese and especially the Korean and Vietnamese civil
wars.

Immediate Post-WWII: The Combination of Market and Military Roads to
Empire

Because the US economy and military came out of the victory during WWII
with enormous resources far surpassing any other country or group of
countries, it was able to pursue a dual approach to empire building,
engaging in military and economic expansion. The US dominated over 50%
of world trade and had the greatest surplus public and private capital to
invest overseas. The US possessed technological and productivity
advantages to promote ‘free trade’ among its would-be competitors and to
increase domestic living standards.

These advantageous circumstances, directly related and limited to the first
decade of the post-WWII period, became embedded in the practice and
strategic thinking of US policymakers, Congress, the Executive branch and
both major parties. The conjunctural ‘world superiority’ generated a
plethora of elite ideologies and a mass mind set in which the US was seen
to be ‘by nature’, by ‘divine will’, destined by ‘history’ and its ‘values’, by its
‘superior education, technology and productivity’ to rule over the world. The
specific economic and political conditions of the ‘decade’ (1945-1955) were
frozen into an unquestioned dogma, which denied the dynamics of
changing market, productive and political relations that gradually eroded
the original bases of the ideology.

Divergence in the World Economy: US-Europe-Japan

Beginning with the massive military buildup with the ‘Cold War’ and the
subsequent hot war in Korea, the US allocated a far greater percentage of
its budget and GNP to war and military empire building than Western
Europe or Japan.

By the mid-1950’s, while the US vastly expanded its state military apparatus
(armed forces, intelligence agencies and clandestine armies), Western
Europe and Japan expanded and built up their state economic agencies,
public enterprises, investment and loan programs for the private sector.
Even more significantly, US military spending and purchases stimulated
Japanese and European industries. Equally important state-private
procurement policies subsidized US industrial inefficiency via cost over-runs,
non-competitive bidding and military-industrial monopolies.

US empire building via projections of military power absorbed hundreds of
billions of dollars in government expenditures in regions and countries with
low economic payoffs in the Caribbean, Central American, Asia and Africa.

While military-driven empire building did increase short term domestic
growth and rising income, and led to some important civilian spin-offs and
technological breakthroughs that entered the civilian economy, European
and Japanese market-based empire building moved with greater dynamism
from domestic to export led growth and began to challenge US
predominance in a multiplicity of productive sectors.

The US prolonged and costly war against Indo-China (roughly 1954-74)
epitomized the replacement of European colonial-military empire building by
the US version. The hundreds of billions of dollars in US government war
spending spilled over into Japanese and South Korean high-growth
manufacturing industries. Western European manufacturing achieved
productivity gains and export markets in former African and Asian colonial
nations, while the US Empire’s murderous wars in South East Asia
discredited it and its products throughout the world. Domestic unrest,
widespread civilian protests and military demoralization further weakened
the US capacity to pursue its imperial agenda and defend strategic
collaborating regimes in key regions.

The relative decline of US manufacturing exports was accompanied by the
massive growth of US public debt, which in turn stimulated the vast
expansion of the financial sector which then shaped regional and national
policy toward de-industrializing central cities and converting them into a
finance-real estate and insurance monoculture.

The contrasting and divergent roads to empire building between the US on
the one hand and Europe and Japan on the other, deepened with the
advent of the ‘Second Cold War’ under the Carter-Reagan years. While the
US spent billions in proxy wars in Southern Africa (Angola and
Mozambique), Latin America (Nicaragua, Chile, El Salvador and Guatemala)
and Asia (Afghanistan), the Europeans were expanding economically into
Eastern Europe, China, Latin America and the Middle East. Even at the
moment of greatest imperial success, the overthrow of Communism in the
USSR and East Europe and China’s transition to capitalism, the US militarily
driven empire failed to reap the benefits: Under Clinton the US promoted
the raw pillage of the Russian economy and destruction of the state (civilian
and military), market and scientific base rather than stabilize and jointly
exploit its existing markets and human and material resources. The US
spent billions undermining Communism, but the Europeans, primarily
Germany, and to a much lesser degree France, England and Japan, were
the prime beneficiaries in terms of securing the most productive industries
and employing the better part of the skilled labor and engineers in the
former Soviet bloc. By the end of the Clinton era and the bursting of the
information technology speculative bubble, the European Union eclipsed the
US in GNP, outperformed the US in accumulating trade surpluses and
foreign debt management.

Market Versus Military Empire Building in the 1990’s

During the Bush-Clinton years, US military-driven empire-building vastly
expanded its commitments in financing and providing troops into the Balkan
and Iraq wars, military entry into Somalia, the bombing of the Sudan, the
increased subsidy of Israel’s colonial wars, the Afghan wars, Colombia’s
counter-insurgency and to a lesser extent the Philippine’s counter-
insurgency and counter-separatist wars. While the US spent billions to prop
up a gangster-ridden and corrupt KLA regime in Kosova in order to spend
billions more in building a huge military base, Germany was reaping the
economic benefits of its economic hegemony in the relatively prosperous
regimes of Croatia, Slovenia and the Czech Republic. While the US spent
hundreds of billions in the First and Second Gulf Wars, China, the new
emerging market-driven empire builder, was looking to sign lucrative oil and
gas contracts in the Middle East, especially with Iran. While the US was
backing an unpopular minority regime backed by its client Ethiopian military
force in Somalia, China was signing major oil contracts in Sudan, Angola
and Nigeria and even in Northern Somalia (Puntland). While the US
military-centered empire-building state was giving away over $3 billion in
military aid (plus transferring its most up-to-date military technology to
competitor firms) per year to Israel, European, Asian and Latin American
private and public enterprises were signing long-term lucrative contracts
with the Gulf oil states as well as with Iran.

A clear sign of the long-term economic decay of the US global competitive
position between 2002-2008 is evidenced by the fact that a 40%
depreciation of the dollar has failed to substantially improve the US balance
of payments, let alone produce a trade surplus. Despite the handicap of
appreciating currencies, China, Germany and Japan continued to
accumulate trade surpluses, especially with the US. While the US spent
hundreds of billions in Asian wars, CIA propaganda and subversive
operations in the former USSR, Eastern Europe, the Baltic States, the
Caribbean (Cuba/Venezuela) and the Caucuses, the principle beneficiaries
were the revitalized European market-driven empire-builders and the newly
emerging market empire builders.

While the US spends enormous sums in building new military bases
surrounding Russia, including new offensive operations in Kosova, Poland
and the Czech Republic, with new preparations for NATO bases in Georgia
and the Ukraine, Russian, Chinese and European capital expands buying
out or investing in privatized and public-private strategic mining, petrol and
manufacturing enterprises in Africa, Latin America, Australia and the Gulf.

While China harnesses foreign capital, including major US MNCs to make
itself the ‘manufacturing workshop of the world’, Germany with its high
precision heavy manufacturers are prospering by ‘constructing the
workshops’ for the Chinese. US manufacturers and productive capital flee to
state-subsidized (via tax reductions and low interest rates) financial, real
estate and speculative sectors, and go overseas to avoid high rent and
fringe payments to US labor. The resulting decline of the domestic market
and a shrinking base of industrially trained labor reinforce the overseas and
speculative movements on US capital. These capitalist structural changes
undermined the economic fundamentals underlying the financial sector.

The deterioration of the US economy became apparent as the speculative
paper pyramid (sub-prime and credit crises) collapsed during the 2007-08
recession. The recycling of multiple layers of ‘exotic’ financial ‘instruments’
each more precarious than the other, each more divorced from any
tangible productive unit in the real economy characterized this period. Their
predictable collapse dragged the US into recession. Even among the big
banks and financial houses there is no knowledge of the real value of the
paper being traded or of the ‘material collateral’ (housing and commercial
property being held). The fictitious economy revolves around unloading the
devalued paper, to cover costs and lessen losses
and let the next holder of
the paper face the risks and uncertainties. As a result there is a total lack of
confidence in the market because the ‘objects’ up for sale have become so
lacking of value, i.e. so intangible and unrelated to the real economy.

The decline of the real producer basis of goods and social services and the
predominance of the paper economy accentuated the divergence between
military-directed empire building and the global economic interests of the
US. The paper economy is not directly influenced by imperialist militarism,
as is the case with US MNC’s with physical assets at risk from imperial wars,
armed resistance, the disruption of trade routes, the destruction of overseas
markets and the disarticulation of access to minerals and energy sources.

The ascendancy of speculative finance capital coincides with the greater
autonomy of the militarist empire builders over and against the residual
influence of American manufacturing and commercial interests supporting
market imperialism. The extraordinary role that the pro-Israel power bloc
plays in shaping a bellicose Middle East foreign policy over and above what
US oil companies looking to sign contracts with Arab countries exercised,
can only be understood within the large upsurge of ‘militarist driven
imperial policy’.

Washington’s unconditional support of Israel’s militarist colonial regime
reflects two important structural changes in US empire building. One is the
extraordinary organization and influence of the principle pro-Israel Jewish
organization over local, regional, national legislative and executive bodies
and in the mass media and financial institutions. The second change is the
rise of a political class of executive and legislative militarist policy-makers,
which has an affinity with Israeli colonialism and its offensive military
strategy. Israel is one of the few – if not only – military-driven ‘emerging
imperial powers’ and that is part of the reason for the ‘resonance’ between
Jewish leaders in Israel and Washington policy-makers. This is the real basis
of the often stated and affirmed ‘common interests and values’ between the
two ‘countries’. Military-driven imperial powers, like the US and Israel, do
not share ‘democratic values’ – as even the most superficial observer of
their savage repression of their conquered peoples and nations (Iraq and
Palestine) can attest – they share the military route to empire-building.

Historic Comparison of Market and Military Driven Imperialism

A rational cost efficient evaluation of the US major and minor military
invasions demonstrates the high economic cost and low economic benefits
to both the capitalist system as a whole and even to many key economic
enterprises.

The US blockade and subsequent war with Japan ultimately unleashed the
Asian national liberation movements, which undercut European, and US
colonial-style military imperialism. The Korean War ignited the massive re-
industrialization of Japan and created optimal conditions for Korea’s model
of protectionism at home and free trade with the US (so-called Asian state-
led export model). The result was the creation of two major manufacturing
rivals to the US economic expansion in Asia, North America and later in the
rest of the world.

The US invasion, colonial occupation and imperial war in Indochina and its
subsequent defeat severely weakened the military capacity to subsequently
defend global imperial interests and client states in Southern Africa, Iran
and Nicaragua. More to the point, by concentrating resources on war-
making the US lost markets to the emerging market empire-builders and
diverted capital from increasing the productivity and productive forces
which create market dominance.

In the broader picture, military and market driven imperialism, which
coexisted and seemed to complement each other diverged in the period
between 1963-1973, with the militarist faction gaining supremacy in
directing US empire-building. The divergence was papered over by several
instances of complementary activity such as the overthrow of President
Allende in Chile on behalf of US MNCs and similar earlier cases as in
Guatemala (1954), Iran (1953) and in other countries where quick imperial
victories over smaller countries did not seem to carry any significant
economic or political costs.

The ascendancy of Reagan and the negative long-term economic impact of
new arms buildup were obscured by the break-up of the Communist system
and the Chinese and Vietnamese transitions to capitalism. The windfall
gains to US economic interests in the former European communist
countries, especially Russia, were largely based on pillaging existing
resources in alliance with gangster-capitalists. Long-term, large-scale
benefits were not due to US capitalist taking over and developing the forces
of production and developing the internal markets of the ex-communist
countries. The political and military gains that accrued to US military empire
building obscured the continued loss of economic power in the world
marketplace to the market-driven imperial powers. Moreover, China
unleashed a large-scale, long-term process of dynamic capital
accumulation, which in less than two decades displaced the US from
manufacturing markets and challenged its access to energy markets.

In other words favorable resolution of the US-Soviet conflict led to their
mutual economic decline. What is worse from a practical historical
perspective, the military-driven empire builders saw their ‘victory’ over
Communism as vindication and license to escalate their militarist approach
to empire building. According to this line of argument, the Soviets fell
because of military pressure, backed by ideological warfare. Moreover in the
absence of a countervailing military pole, the Bush-Clinton-Bush
Presidencies saw an open field for pursuing the military road to empire
building.

From the Gulf, to the Gulf and Back to the Gulf : 1990-2008 (and beyond)

The first Bush Presidency assumed the military road to empire building but
tried to avoid the high costs of occupation and colonization. The Israeli
colonial model had to await the Zionist occupation of policy-making positions
in later administrations. The first Iraq War was intended to project US
imperial military power, secure US economic interests among the Gulf oil
states (Kuwait and Saudi Arabia) as well as expand Israeli influence in the
Middle East. Most of all it was seen as the launching of a ‘New World Order;
centered in US world supremacy, supported by docile allies and financed by
rich Arab oil states.

Shortly after the Gulf War, the triple alliance, which emerged during the
war, collapsed as Europe pursued its own market-driven empire in
competition with the US, Saudi Arabia paid some of the US military
expenditures and then abruptly ended its funding, and domestic opposition
grew as the electorate demanded less imperial expenditures and the re-
building of the domestic economy.

Military-Driven Empire-Building (MDE) and Zionism

The Zionist Power Configuration in the United States successfully secured
from the White House and Congress massive sustained multi-billion dollar
military and economic grant and aid packages for Israel throughout the
1980’s ensuring Israel’s military superiority in the Middle East. Yet both
Presidents Reagan and Bush (father) tried to maintain a balance between
the interests of major US oil multi-nationals working with Arab regimes on
the one hand and on the other Israeli and Washington’s military-driven
empire building (MEB).

Bush Senior’s attack of Iraq in the First Gulf War, greatly reduced
Baghdad’s military capability but he refrained from destroying its armed
forces or overthrowing Saddam Hussein as Israel and the ZPC were
demanding at the time. Above all Bush did not want to destabilize the
region for US oil deals in the Gulf, even as he imposed a US military
presence to ensure dominance.

With the election of Clinton and the Democratic-controlled Congress, the
MDE and the ZPC gained strategic positions in the elaboration and
implementation of foreign policy. Madeleine Albright, ‘Sandy’ Berger, Dennis
Ross, Cohen, and Martin Indyk and an army of lesser known functionaries,
militarists and Zionists launched a series of wars, military attacks and severe
sanctions against Yugoslavia, Somalia, Sudan and Iraq. They devastated
their population (over 500,000 children died in Iraq as a direct result of US
starvation sanctions), destroyed their national productive facilities and,
intentionally disarticulated and fragmented their nations into violent ethno-
tribal and religious mini-states. While Clinton embraced the military road to
empire building, he was also totally committed to the financial sector of the
US economy (in particular, the most speculative activities) by de-regulating
all controls, oversight and constraints on ‘hedge funds’, investment banks
and equity houses. Under the tutelage of the Chairman of the Federal
Reserve Bank, the pro-Israel Alan Greenspan, the Clinton regime became
the launching pad for the full conversion of the US into a speculation-driven
economy, culminating in the dot-com bubble which burst in 2000-2001, and
the massive Enron and World Com swindles leading up to the current
financial meltdown of 2006-2008.

While the MDE gained a dominant role, the ascendance of speculative
capital marginalized and eroded the political influence and economic weight
of productive capital, forcing it overseas and/or to transfer funds into the
financial-speculative sector. The socio-economic basis of market-driven
empire-building (MDEB) was weakened relative to the militarists and the
ZPC in setting the US foreign policy agenda. This new power configuration
opened the door for the total takeover by these same forces during the 8
years of Bush (Junior)’s presidency. The latter quickly eliminated any
residual influence of the market-driven imperialists, forcing the resignation
of his first Treasury Secretary O’Neal and others. Even hybrid market-
militarists like Colin Powell who went along with the global war strategy but
raised tactical questions were subsequently forced into retirement.

MDE were in total control of the government in all spheres, from the
elaboration of war propaganda, the build-up of a global network of terror
and assassination teams, to colonial wars and the systematic use of torture
abroad and the savaging of elementary freedoms at home. Within the MDE,
the ZPC gained dominance, especially in the formulation and the
implementation of total war strategies in Iraq and the unconditional backing
of Israel’s genocidal politics in Gaza and the West Bank. Every sector of the
government was geared to war, bellicose action and especially to
subordinating economic policies to military practices informed by the
military-driven Israeli colonization.

The convergence of policy and practice between the MDE and the ZPC
within the highest levels of government and their mutual reinforcement,
gave US foreign policy its extremist military character. Zionist cultural and
media power provided an army of academic and journalistic ideologues and
mass media platforms which the MDE previously lacked – and amplified
their message. The linking of traditional US MDE and the emerging power
of the Israeli-ZPC buttressed the spread of authoritarian controls and harsh
and widespread censorship over any politician, intellectual or media critic of
Israel and its unconditional supporters in the ZPC.

The joint forces of the MDE and ZPC have reshaped the US military
command to serve their plans for new major wars – against Iran – and the
prolongation and extension of wars against Iraq, Afghanistan, Somalia,
Lebanon and elsewhere. The MDE have failed to pursue the free trade
openings in Latin America, Asia and the Middle East – leaving the field wide
open for entirely new trading and investment networks involving China,
Europe, Japan, India, Russia and the Middle Eastern sovereign funds. Even
with the onset of the recession in the US and the meltdown of the financial
markets, the militarists have refused to change or alter their stranglehold on
the budget and foreign policy, causing the government to resort to printing
currency to finance the bailout of speculators and their investment banks.

Imperial Wars, Social Revolutions and Capitalist Restorations

The historical record demonstrates that imperial wars destroy the productive
forces and social networks of targeted countries. In contrast, market-driven
economic empire building gains hegemony via collaboration with local
political and economic elites, taking control of strategic industries, minerals
and energy via direct investments and loans, privatizations and
denationalization, and favorable trade and monetary agreements. Market-
driven empire building takes over, it does not destroy the productive forces;
it does not demolish the social fabric, it reconstructs or ‘adjusts’ it to
accommodate its accumulation needs.

The evolution of social revolutionary regimes in a post liberation period
shows a common pattern reflecting the political-economic external
constraints imposed by military imperialism. The revolutionary regimes
expropriate and nationalize the major means of production, control foreign
trade and organize the planning of the economy. They eliminate foreign
control over strategic economic sectors, centralize political and economic
control as well as redistribute land and income. In many cases these radical
measures were imposed upon the revolutionary governments by imperial
economic boycotts, the flight of capitalist and landlords, the non-
cooperation of managers and technicians and by the necessity of
reconstruction in the face of large-scale destruction. The US embargo and
similar constraints on external financial aid have forced revolutionary
governments to rely on the rationing of scarce resources for priority public
projects, limiting its capacity to increase individual consumption.

As a result, the post-revolutionary regimes were forced to deal with market-
driven empire builders. They contracted large-scale short-term and long-
term trade agreements, joint investment ventures through equitable profit
sharing agreements and a broad range of technological contracts involving
royalty payments. In other words, given the unfavorable position of the
revolutionary economy in the world market and the low level of
development of the forces of production, the market-driven empire building
countries were in a position to secure lucrative economic opportunities. In
contrast, the military driven empire attempted to inflict maximum economic
damage to compensate for its military defeat.

The revolutionary regimes under Communist leadership featured
characteristics, which foreshadowed positive future relations with market-
driven imperial countries. Their vertical leadership and concentrated political
power facilitated quick and relatively easy changes from collectivist to neo-
liberal policies, while hindering the democratic mechanisms, which might
have corrected erroneous and harmful economic decisions. Secondly,
unchecked power at the top in a time of scarcity led to the conversion of
power into privilege, corruption and social inequalities. These developments
created a wealthy nepotistic elite with an interest in deepening ties with
their capitalist counterparts from the imperial states. These internal changes
coincided with the interests of market-driven capitalists willing to establish
lucrative ‘beach heads’ and relations with elite groups in the post-
revolutionary society and state. Market-driven empire builders were
attracted to the tight controls exercised over labor and the lack of
competition from other military-driven imperial states.

Post-revolutionary economies continued to be embedded in the world
capitalist marketplace and subject to its competitive demands. In the best of
circumstances, even with a democratic and socially egalitarian leadership
and relatively favorable world commodity prices, the revolutionary regime
would need to balance the social demands of a socialist domestic economy
(with demands for increases in income, social services and workplace
improvement and consumer goods) and the world market demands for
greater efficiency, increased capital investments, rising productivity and
labor discipline. Given the built-in biases toward political and military
security embedded in the bureaucratic centralist structures, it was not
surprising that production would stagnate. The constraints and the
centralized elites’ inability to micro-manage the economy beyond the period
of reconstruction was one reason for stagnation. The other was that the
regime would prefer a hierarchical organized capitalist structure (over any
democratic changes from below), which would not challenge, but rather
strengthen, the communist elite’s position in a ‘new’ eclectic system.

In other words there would be a dual transition from imperial-dominated
extractive capitalism to centralized socialism which would entail a period of
reconstruction and national unification with an organized and disciplined
labor force. This would be followed by a transition to a centralized mixed
state capitalist economy, increasingly penetrated by market-driven imperial
capital.

Was ‘Socialism a Detour to Capitalism’? Were ‘Imperial Wars Necessary for
Capitalist Expansion’?

The historical record documents the continued growth and expansion of
market-driven empire building throughout the post World War II period,
without wars, significant military intervention, boycotts, embargos or other
offensive belligerent actions. The expansion took place in the context of
non-revolutionary, revolutionary and post-revolutionary regimes. Germany’s
market-driven empire builders traded with the Communist East, China and
Russia before, during and after the fall of Communism, accumulating huge
trade and productive advantages over the US. The same occurred with
Japan with regard to China and other Asian communist countries.

The market imperialists did not depend, as some apologists for military
imperialists argue ‘on the protective umbrella’ of US militarism, but on their
superior position in the world market and the greater development of the
forces of production, which allowed them to enter and secure favorable and
lucrative economic positions.

In contrast, the US empire builders, who started the post-war 1945-50
period in a uniquely favorable position in the world market, wasted their
massive economic resources in funding wars against successful revolutions -
China, Korea, Indochina, Cuba, and now in prolonged colonial wars in Iraq
and Afghanistan. Billions more have been spent in numerous surrogate
wars in Angola, Nicaragua, Guatemala and Chile with no economic payoffs
for US MNCs over and against its European and Asian competition. The US
imperial wars failed to enhance its economic empire. US Empire builders
shifted massive resources away from producing goods for the international
market and upgrading their industrial productivity in order to retain world
and domestic market shares to its monstrous and wasteful military budgets.
The result has been a steady decline of the US economic empire relative to
its competitor market-driven empires. Ironically, when the centralized
collectivist regimes eventually made the transition toward capitalism, it was
because of their inner social and economic contradictions and not because
of US military policies. The restoration of capitalism had little to do with the
hundreds of billions of dollars in US military spending.

In contrast, the market-driven empires from the end of the 1940’s benefited
from US imperial wars, by securing lucrative US military contracts and were
able to concentrate their state expenditures and investment policies on
securing overseas markets. They were in an ideal position to reap the
benefits resulting from the socialist regimes’ transition to capitalism.

Given the emergence of post-Communist political and social ruling elites
who blindly adhered to free market dogma with their corrupt, authoritarian
and privileged political practices, in retrospect ‘socialism’ did appear as a
‘detour’ to capitalist restoration. However the structural changes of some
communist political elites, especially in China and Vietnam, created the
essential foundations for a capitalist take-off. They unified the country,
educated and trained a healthy, disciplined work-force, launched basic
industries, eliminated war lords and local ethnic fiefdoms. Subsequently
Communist liberalization opened the door to the peaceful economic invasion
of market-driven imperialism, safeguarded by a strong centralized state
limiting any working class or nationalist opposition or protest. The
Communist elites established a framework ideal for subsequent imperialist
reentry and expansion.

The historical record makes it clear that imperial wars were not necessary
for economic expansion. Empire-driven militarism thoroughly undermined
the US long-term competitive position. If the driving force of empire
building is economic conquest, then market-driven empires are far superior
to military-driven empires. The goal of ‘colonial political dominance’,
pursued by military-driven imperialists, is in the modern period, a chimera,
as demonstrated by a history of political defeats in Asia, Africa, Latin
America and now in Iraq and Afghanistan.

Military-Driven Imperialism Today and the Newly Emerging Imperial Powers

One might conclude that the US imperial leadership would have ‘learned
the lessons’ of failed military-driven empire building from the their
experience over the past 50 years. But as we pointed out earlier, the
internal structural dynamics of the US economy and the reconfiguration of
the political elite directing the political system have led in the opposite
direction. The 21st century has witnessed the ascendancy of the most
zealous exponents of military-driven empire building in the entire post-
World War II period. An overview of US imperial policy shows the
proliferation and intensification of direct wars, surrogate wars, military
confrontations in which the US favors militarist allies over countries with
lucrative markets and profitable investment opportunities in natural
resources.

Market-Driven Versus Militarist Alliances

The militarist and Zionist takeover of US empire building in the 21st century
is manifested in their strategic decisions, alliances and priorities, each and
everyone of which is diametrically opposed to market-based empire building
and ultimately doomed to further erode the position of the US empire.

The newly emerging empire building states (like China), rely almost
exclusively on market-driven strategies designed by political elites linked to
industrialists and technocrats. They are quickly dominating manufacturing
markets, accessing strategic raw materials and securing long-term trade
agreements at the expense of the increasingly militarist, but internally
deteriorating US empire. Near the end of the first decade of the 21st
century, the imperial policies of the US militarists and Zionists have
demonstrated their willingness to make deep sacrifices in market growth by
choosing to align the US with costly and dubious militarist regimes in all
regions of the world, beginning with the US alliance with Israel.

In the Middle East, unlike market-driven empire builders, the US militarists
and Zionists have invaded Iraq and Afghanistan, destroying many lucrative
oil deals and joint ventures and leading to the quadrupling the world price
of oil. Instead they have invested (and lost) over a trillion dollars in non-
productive, non-economic, military activity. Militarist imperialism has
weakened the entire economic fabric of the US Empire without any
‘compensatory’ gains on the military side. The prolonged war in Iraq (6
years and running) has demoralized the US ground troops and weakened
US military capability to engage in any ‘third front’ in which the US has
important economic interests. US liberal market-driven imperialists describe
this as ‘imperial overstretch’. While the US invests in non-productive and
unsuccessful military conquests, profoundly indebting the domestic
economy, China, India, Korea, Russia, Europe, the Middle East and even
Latin America pile up trade surpluses while expanding their economic
empires via private and sovereign investments.

Largely because of the political fusion and strategic convergence of interests
between militarists and Zionists, the US empire builders choose to sacrifice
lucrative ties to the richest markets among the Gulf State in the Middle East
and among predominantly Muslim countries in order to favor Israel, a
resource-poor militarist-colonial state with a third rate market for goods and
investments. US militarists have subjected America’s empire building to
strategies in the Middle East, which mostly favor Israel’s colonial and
regional hegemonic drive. This places the US on a direct confrontational
path with Lebanon, Syria, Iran and even the Gulf States who feel
threatened by Israel’s constant resort to offensive military power to attack
its neighbors. No Arab oil country, no matter how conservative and pro-
capitalist, can afford to open its economy to the US, if it believes that
Washington will subordinate it to the vision of a militarist Israel-US
dominated sphere of influence. By unconditionally backing Israel’s colonial
and hegemonic interests, American militarists have gained a strategic
domestic political ally (the Zionist Power Configuration) but it has come at
an enormous cost to US economic empire building. Moreover the Israeli
state has run the biggest and most aggressive espionage operations in the
US of any country since the fall of the USSR, thus calling into question its
‘security benefits.’ The multiplicity of enemies resulting from Israel’s racist-
colonialist policies ensures that the US will be engaged in decades of war,
or as long as the US taxpayers can sustain the demands of the military
empire.

Military-driven empire building is manifested not only in the Middle East but
throughout the world. In Africa, the US backs the Ethiopian military regime
and its weak and isolated puppet regime in Somalia against an Islamist-
secular nationalist coalition representing the majority of Somalis.
Washington and Israel finance and arm the Sudanese separatists in Darfur
against the oil-rich central Sudanese government. In both Somalia and
Sudan, China and other emerging imperial powers have secured access to
strategic oil rich sites. While the US spends billions of dollars on endless
wars, propaganda campaigns and sanctions, China reaps hundreds of
millions in profits. While the US financed African wars destroy the entire
fabric of production and society in Somalia, militarizing impoverished
Ethiopia, the Chinese build roads and infrastructure to facilitate exports in
both the Sudan and Northern Somalia. Pentagon-directed colonial wars in
Africa, conducted by surrogates, undermine the political support of
economic collaborators while the market-driven empires enhance their ties
with local economic elites and political rulers.

In Latin America, the US military imperialists have so far contributed $6
billion dollars in military aid to Colombia’s militarist regime during the 21st
century, destroying the entire social fabric in the rural areas, while the rest
of Latin America expanded their ties with Europe, Asia and the Middle East.
Washington has spent hundreds of millions of dollars in failed efforts to
destabilize Venezuela’s nationalist-democratic Chavez Government. As a
result US capitalists have lost out on billions of dollars in investments and
trading contracts in Venezuela to China, Russia, Brazil, Argentina and Iran.
By making Colombia the centerpiece of their South American policy, US
militarist empire builders have lost out on the enormously lucrative
economic opportunities accompanying the commodity price boom in
Argentina, Brazil, Ecuador and Bolivia.

In Asia, despite the deepening US economic dependence on China to
sustain to the rapidly depreciating US dollar (China holds $1.5 trillion dollars
in foreign reserves which has lost 60% of its value since 2002), the US
militarists still engage in sustained anti-Chinese propaganda campaigns and
highly provocative incidents. The US-backed violent protests against the
Chinese presence in Tibet fomented by the Dalai Lama and CIA-funded
exile organizations is only the more recent example. American Zionists have
directed a political campaign against the expansion of Chinese investments
and contracts (market-driven imperialism) in the Sudan. The Zionist role in
the so-called ‘Darfur’ campaign is based on Sudan’s support for the
Palestinians and opposition to Israel’s genocidal policy in Gaza.

China has so far generally overlooked US military provocations such as the
shooting down of a Chinese fighter plane, spy flights over Chinese offshore
territory, the deliberate bombing of its embassy in Belgrade and the sale of
advanced missiles to Taiwan. The US financing of the separatist
demonstrations among Tibetan exiles is designed to tarnish China’s image in
the lead up to its hosting the 2008 Summer Olympics. China’s market-driven
empire builders ignore US military provocations because they had little
effect on Chinese overseas and domestic economic expansion. Nevertheless
China has increased spending on modernizing its military defense
capabilities. More significantly, as the US economy declines and enters a
deep recession in 2008, and as the dollar continues to fall ($1.60 to 1 Euro
as of May 2008), China has turned toward the Asian, European, Middle
Eastern markets. Asian markets now account for 50% of world trade growth
as of 2008. In 2007 China increased production and the development of its
market to sustain growth rates at least five times higher than the militarist-
dominated US Empire. Even more significant, the great majority of Chinese
exporters (over 800,000) have shifted payments to Euros, Yen, Pounds
Sterling and the Renminbi in its trading with non-US trading partners.

Russia, shaking off the shackles of Clinton-backed pillage during the
gangster capitalism of the Yeltsin years in the 1990’s, has taken off during
the 21st century under the leadership of President Putin. US military-driven
empire builders were able to integrate and subordinate all the former
members of the Russia-centered Warsaw Pact into the US-dominated
NATO. In the 21st Century, the Russian economy has expanded rapidly
between 6% and 8%, established majority control over strategic resources
and has sought to lessen its vulnerability to US military encirclement. While
Germany, Italy and most of the major Asian trading countries (China, India
and Japan) have obtained lucrative trading and investment agreements
with Russia, the US militarists have concentrated on military encroachment
along Russia’s European and Asian borders. The US is pushing to
incorporate Ukraine and Georgia into NATO, and preparing to station
offensive, so-called ‘missile shields’ in Poland and the Czech Republic on the
absurd pretext that such highly sophisticated installations are intended to
protect Western Europe from attacks by distant Iran rather than target
Moscow, just 5 minutes away by missile attack.

Conclusion

US military-driven empire building has made costly military alliances with
peripheral countries at a catastrophic economic cost. The persistence of
militarist empire builders has systematically undercut market-driven empire
building and has pushed the domestic US economy to near bankruptcy.
The twin motors of the contemporary empire and domestic economy,
speculative finance and militarism, have driven the US economy backwards
at the same time that established and emerging imperial competitors are
advancing.

Comparative historical data covering the entire half-century to the present
demonstrates that European, Japanese and now China and India’s market-
driven expansion has been far more successful in securing market shares,
developing the productive forces and accessing strategic raw materials than
US military empire building.

Market-driven empire building has both resulted from and created a strong
civil society in which socio-economic priorities take precedent in defining
domestic and foreign economic policy over military priorities and definitions
of international reality. US empire builders, academics and political advisers
have interpreted, what they call ‘the rise of US global power its victory in
the Cold War and the decline of Communism’ as a vindication of military-
driven empire building. They have ignored the rise of capitalist competitors
and the relative and absolute decline of the US as an economic power. It
can be argued that the newly emerging market-driven former Communist
countries (like China and Russia) represent a greater global challenge to the
US Empire than the previous stagnant bureaucratic Communist regimes.

Militarism is deeply embedded in the structure, ideology and policies of the
entire US governing class, its political parties, the executive and legislative
branches, the judiciary and the armed forces. Over the same half-century
countervailing market-driven empire builders have declined as a defining
force in the formulation of foreign policy in the US. The growing
encroachment of the militant Zionist power configuration within the policy-
making directorate has been greatly facilitated by the ascendancy of
militarism and the relative decline of economic-empire building.

The long period of incremental decline of US economic empire building and
the trillions of dollars wasted by military-driven empire building has come to
a climax. In the new millennium with the profound devaluation of the
imperial currency (the dollar), the huge indebtedness and loss of markets
Washington is totally dependent on the good will of its commercial partners
to keep accepting constantly devalued dollars in exchange for essential
commodities.

The immediate outcome is likely to be a major domestic crisis, which could
be accompanied by one more desperate and futile military attack on Iran
and/or Venezuela or a forced confrontation with China and/or Russia.
Desperate acts of declining military empires have historically accelerated the
demise of imperial rulers.

Out of the debris of failed empires two possible outcomes could emerge. A
new rabidly nationalist authoritarian regime or the re-birth of a republic
based on the reconstruction of a productive economy centered on the
domestic market and social priorities, free from foreign entanglements and
power configurations whose only purpose is to subordinate the republic to
overseas colonial ambitions.

The dismantling of the military driven empire will not occur ‘by choice’ but
by imposed circumstances, including the incapacity of domestic institutions
to continue to finance it. The demise of the militarist governing class will
follow the collapse of their domestic economic foundations. The result could
be a withered empire, or a democratic republic. When and how a new
political leadership will emerge will depend on the nature of the social
configurations, which undertake the reconstruction of US society.