Historical Struggle for Dominance in World Trade

With Europe’s discovery of the sea route to the West and America, the maximum control of natural resources as well as markets for manufactured products could be attained through gaining title to lands of easily conquerable people.

The race was on to colonize the world. “By 1900 Great Britain had grabbed 4,500,000 square miles…. France had gobbled up 3,500,000; Germany, 1,000,000; Belgium 900,000; Russia, 500,000; Italy, 185,000; and the United States, 125,000.”[1]

An imperial center must be careful about importation of manufactured products from either its colonies or from other great powers:

So it is now,” explained the [British] Protectionist Act of 1562, “that by reason of the abundance of foreign wares brought into this realm from the parts of beyond the seas, the said artificers are not only less occupied, and thereby utterly impoverished … [but] divers cities and towns within this realm greatly endangered, and other countries notably enriched.[2]

In the late 17th century, Jean Baptiste Colbert, French Naval Secretary of State and Finance Minister, recognized the threat if France became dependent upon British mercantilism as was being established by Lord Shaftesbury. Therefore, Colbert duplicated Britain’s industrial development efforts.

France purchased the latest technology, encouraged skilled workers, protected the home markets, eliminated internal tariffs, and constructed canals and roads. France developed flourishing industries, a profitable shipping industry, and a powerful navy.

However, wars, spendthrift governments, the revocation of the Edict of Nantes—which encouraged persecution of Protestants and forced 500,000 of France’s most productive workers to flee—and the 1786 Eden Treaty with Britain—a replay of the Methuen Treaty’s monopoly agreements which severely damaged Portugal, Holland, and Germany—impoverished the French economy.[3]

Napoleon understood Britain’s economic warfare and in 1807 issued his Continental Decrees to establish manufacturing, to protect France’s market from Britain, and to prevent the loss of continental wealth:

Napoleon was forced to devise a new tactic to deal with his perpetual enemy [Britain]: the Continental System. Developed during 1806/1807, this policy called for economic warfare against the “nation of shopkeepers,” whereby France, either through the cooperation of friends or by the use of force against enemies, would close the entire European continent to British trade and commerce. By weakening Britain’s economy, Napoleon would destroy her ability to wage war, and also make it impossible for Great Britain to provide the huge subsidies to Continental allies which had characterized all the previous coalitions against France.[4]

Napoleon’s resurrection of Colbert’s protective system started the rapid industrialization of Europe. This immense trading bloc would have meant the end of Britain’s dominance of world trade.

Britain, the European monarchies, and the Church—fearful ever since the French Revolution—quickly entered into a “Holy Alliance” and finally defeated Napoleon at Waterloo. The markets of Europe were breached and industries throughout the continent collapsed.[5]

That collapse, along with the unequal trades imposed upon the fledgling United States alerted Friedrich List and Alexander Hamilton to the necessity of protecting regional industries and markets.

One cannot miss the similarity between the industrial collapse on the Continent and its dependency upon Britain after the French defeat and the 1991-99 successful destabilization of Russia.

At its peak Britain was manufacturing 54% of the finished products in world trade. The British “exulted at their unique state, being now, as the economist Jevons put it in 1865, the trading center of the universe.” The world was Britain’s “countryside,” a huge plantation system feeding its developed imperial center of capital:

The plains of North America and Russia are our corn fields; Chicago and Odessa our granaries; Canada and the Baltic our timber forests; Australia contains our sheep farms, and in Argentina and on the Western prairies of North America are our herds of oxen; Peru sends her silver, and the gold of South Africa and Australia flows to London; the Hindus and the Chinese grow our tea for us, and our coffee, sugar and spice plantations are all in the Indies. Spain and France are our vineyards and the Mediterranean our fruit garden; and our cotton grounds, which for long have occupied the Southern United States, are being extended everywhere in the warm regions of the earth.[6]

To funnel this wealth to the mother countries, exclusive trading companies—East India Company (English, Dutch, and French), Africa Companies, The Hudson Bay Company, etc, were established.

Forcing the natives to work for nothing while providing their own subsistence created enormous profits. Thus Indians were enslaved in Spanish mines and Africans were enslaved to replace the Indians when over 95% of their population died off under such oppression.

Wealth on the periphery—American, African, and Asian colonies—was claimed by Europe in trade for trinkets, knives and guns.

The wealth accumulation power of imperialists was bound only by the limits of their naval and military power which were used to prevent other societies from infringing on their control of trade and accumulation of capital and wealth.

The Battle for Trade Supremacy Continues

As a participant writing the training manuals and briefing presidents and pentagon chiefs on these covert operations, Colonel Prouty points out:

One of the least-known divisions of the CIA is that headed by the Deputy Director of Economics. This division moves into a country to work with a new regime and to begin the task of selecting and setting up new franchise holders for as many goods as possible to assure that they are imported from American companies and that those from other sources, formerly the Soviet sphere in particular, are excluded…. The CIA screens and selects these new “millionaires’ and arranges for them to meet with various companies they will front for under the new regime. It might be said that this cleansing of the economic system is the real reason for most of the coups d’état and that political ideology has very little to do with it…. Some of the more daring, in an attempt to escape the severe financial and profit-making controls placed upon them and their government by U.S. manufacturers and by the canopy of international banks that is spread over all imports and exports to their country, attempt to make deals with other countries. They believe they may be able to buy essential goods cheaper that way and to sell their labor and resources at better rates…. As such actions increase, the national leadership will be increasingly attacked by the United States on the grounds that it is turning toward communism and becoming a base for the infiltration of the communist ideology and military system into the hemisphere.[7]

Various countries have proven America’s worldwide listening posts, utilizing ECHELON software operated by the National Security Administration, have stolen proprietary corporate and government information and passed that information on to American corporations and trade negotiators.

American corporations were then able to patent what others invented and American trade negotiators knowledge of other governments’ bottom lines gave them an unassailable advantage in negotiations.[8]

Throughout much of the Cold War the entire world was kept track of through Operation Statewatch. Those breaking free via the ballot box were targeted for destabilization. Countries alert enough to avoid covert takeovers of their economies faced open warfare.

The cover stories justifying the invasion of Iraq in 2003 were in tatters so the final cover is that America is bringing democracy to the Middle East. No one doubts any more that control of Iraq’s oil and that of its neighbors was the sole purpose of that war.

Expanding upon this bold view, on August 5, 2004, the Office of the Coordinator for Reconstruction and Stabilization was established. Their mandate was to keep track of nations, just as Operation Statewatch had formerly done, and privatize the economies of up to three nations at a time.

The legal structure of nations would be changed before the citizenry would realize what was happening.[9] Total privatization was the plan, property rights laws establishing exclusive titles to nature’s resources and technologies which would deny others their proper share of the wealth produced.

The bottom line is always the same, lock the world into monopoly capital’s legal structure, Adam Smith free trade and exclusive title to nature’s resources and technologies laying claim to the wealth of others, hold down the price of labor, control the price of commodities required to run industry, through those low wages preventing the development of consumer markets on the periphery of empire, and thus siphon the wealth of the world to the imperial centers of capital.

There we have it. All intelligence agencies have been, and are still in, the business of destabilizing undeveloped countries so as to maintain their dependency. It is the dependency of weak nations that maintains the flow of the world’s natural wealth to powerful nations’ industries at a low price and provides markets for those industrial products at a relatively high price.

The military forces of today’s powerful nations are for the same purpose as those raiding parties from the city states 800 years ago as addressed in the previous article, America Gains Economic Freedom.

Those are attributes of fascism and everything is in place for that in America itself. In End of America Naomi Wolf explains the ten steps that all such societies went through to reach that stage:

1) Evoke an external and internal threat.

2) Establish secret prisons.

3) Surveil ordinary citizens.

4) Develop a paramilitary force.

5) Infiltrate citizen groups.

6) Arbitrarily detain and release citizens.

7) Target key individuals.

8) Restrict the press.

9) Cast criticism as espionage and dissent as treason.

10) Subvert the rule of law.[10]

Former Colonies do not yet have Economic Freedom

The former colonial societies furnishing most of the world’s natural resources were defeated centuries ago. We are taught they are now free but this is not so, rhetoric they are notwithstanding.

Labor is too poorly paid in defeated, weak, and dependent nations to create buying power and those cheap resources are processed into useful products by the industrialized nations which become the wealth of the militarily powerful imperial centers.

A small share of those manufactured products is returned to the weak defeated nations to pay for the raw material from which those manufactured products, created wealth, were made.

To purchase a small share of manufactured products from the industrialized countries produced with developing world resources, defeated societies must sell even more of their natural wealth.

Manufactured product purchases, money wasted on arms, and corruption continually increase the debts of the dependent nations. Servicing continually increasing debt requires the sale of even more resources.

Heavy investment in extraction of the natural wealth of weak resource-wealthy nations while paying local labor subsistence wages assures a surplus of production and low prices for those natural resources while simultaneously denying both the accumulation of capital and buying power in the dependent nation.

Of course, those debts cannot be paid off and that is the much spoken of, but little understood, debt trap. Control of trade, and thus control of who becomes wealthy, has for centuries been through monopolization of technology and unequal currency values.

The cooperative approach to Germany, Japan, and Asia we witnessed for 40 years as technology was shared and currency values equalized with allies was only to gain supporters for the battle to suppress the breaks for freedom worldwide which we address in The World Breaking Free Frightened the Security Councils of Every Western Nation and elsewhere.

That almost every region of the world has more natural resources than Japan attests to, once it has industrial capital, an efficient internal transportation system, and access to markets, the developing world being able to, on the average, produce more cheaply than Japan.

Where are Hong Kong’s resources? Where are South Korea’s resources? Where are Taiwan’s resources? Where are the resources of most of Europe? The answer, of course, is those resources are primarily in the impoverished world and that natural wealth has been confiscated through inequalities of trade to become the wealth of the imperial centers of capital.

The centuries-long process of embedding excessive rights into exclusive title to nature’s resources and technologies has created an economic monster consistently laying claim to wealth of others. We grow up within this monstrosity, no other system for comparison is permitted to evolve, everything looks normal to us, and people are instinctively threatened by thoughts of major changes.

But consider this: The greater share of low-paid labor we have been describing is essential work while over half the labor in the high-paid services in the industrialized world is, except as a method of distribution, over 50% wasted labor and resources.

The rights of property are so excessive and the rights of labor so inadequate that, throughout the Industrial Revolution, distribution by unnecessary labor has evolved to pull some of the unearned wealth back from property.

It is the buying power of the masses from the wages of unnecessary labor that created more demand, created more industry, and created the developed world’s economy dependent upon distributing wealth through unnecessary labor and wasted resources.

Wasted labor within what appeared to be an efficient economy has been outlined in classics by Benjamin Franklin 200 years ago, Charles Fourier 180 years ago, and Thorstein Veblen, Bertrand Russell, Lewis Mumford, Stuart Chase, Upton Sinclair, and Ralph Borsodi in the first half of the 20th century. Later writers describing the same phenomenon are Juliet Schor, Seymour Melman, Samuel Bowles, David Gordon, Thomas Weiskopf, Jeremy Rifkin, Andre Gorz, and numerous European authors.

As winners decide the rules, World Wars Decides Who Controls World Trade

Those crucial 170 words describing an honest, efficient, capitalist economy. Does anyone have the ear of President Barack Obama’s Economic Recovery Team?

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[1] Prouty, JFK, pp. 236-37, 341.

[2] Blum, Rogue State, chapter 21.

[3] In The Shock Doctrine: The Rise of Disaster Capitalism, 2007, Naomi Klein thoroughly addresses the philosophical foundation for the covert actions discussed in this chapter and its horrors. Because the record is there for all to see, the word in intellectual circles is that no one will openly push these policies any more. Countries will be waiting to try them for war crimes if they ever set foot on their soil.

[4] Naomi Wolf, End of America, White River Jct, VT, Chelsea Green Pub, 2007

[1] E.K. Hunt, Howard J. Sherman, Economics (New York: Harper and Row, 1990), p. 144.

[2] William Appleman Williams, Contours of American History (New York: W.W. Norton & Company, 1988), introduction, especially p. 43.

[3] Friedrich List, The National System of Political Economy (Fairfield, NJ: Augustus M. Kelley, 1977), pp. 33, 41-60, 72, 323, 342, 357, 369, 391.

[4] Gordon C. Bond, The Grand Expedition (Athens: University of Georgia Press, 1979), pp. 1-2, 8.

[5] List, National System, chapters 6 and 25, pp. 39, 72-73, 85-87, 323, 343-45, 357, 421-22.

[6] Paul Kennedy, Rise and Fall of Great Powers (New York: Random House, 1987), pp. 151-52, quoted from R. Hyam, Britain’s Imperial Century 1815-1914 (London: B.T. Batsford, 1976), p. 47. Economist John Stuart Mill also believed the colonies were Britain’s fields (Frances Moore Lappé, Joseph Collins, Food First: Beyond the Myth of Scarcity, rev. (New York: Ballantine, 1979), pp. 63 – 64, reproduced and quoted from Douglas H. Boucher, The Paradox of Plenty; Hunger in a Bountiful World (Food First, 1999).

[7] Prouty, JFK, pp. 236-37, 341.

[8] Blum, Rogue State, chapter 21.

[9] In The Shock Doctrine: The Rise of Disaster Capitalism, 2007, Naomi Klein thoroughly addresses the philosophical foundation for the covert actions discussed in this chapter and its horrors. Because the record is there for all to see, the word in intellectual circles is that no one will openly push these policies any more. Countries will be waiting to try them for war crimes if they ever set foot on their soil.

[10] Naomi Wolf, End of America, White River Jct, VT, Chelsea Green Pub, 2007

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