Skip to main content

Truthout - August 4, 2019

The United States has a long history of manipulating global markets to the benefit of extremely wealthy, but where did it all begin? And how can we learn from that past and the current moment to save the planet and its population? T.J. Coles, author of Privatized Planet: Free Trade as a Weapon Against Democracy, Healthcare and the Environment, answers these questions and describes the economically brutal ways in which the U.S. has always been a grand manipulator.

Samantha Borek: How did the U.S. get into the position it is today, where it sort of dictates the economic climate of the world in its favor?

T.J. Coles: There’s a long and brutal history that divides, roughly, into two eras: the “discovery” of America by the Europeans in 1492 and World War II. The “discovery” led to the conquest and extermination of an estimated 56 million Indigenous peoples, who populated both South and North America. Today in the U.S., Indigenous peoples continue to suffer discrimination, unemployment and incarceration.

The founding of the modern United States as a “nascent Empire,” in the words of George Washington, profited from slavery. Around 12.5 million slaves were kidnapped and transported from Africa to the U.S. between 1525 and 1866; 2 million of whom died in transit. African Americans also experience systemic discrimination, disproportionate poverty and a prison system that basically substitutes for slavery. Consider the strategic advantage the white, male ruling classes of the U.S. had over the rest of the world: a resource-rich nation, almost emptied of its Indigenous peoples, whose most profitable industries benefited from slave labor. By 1890, despite the Civil War, the U.S. was the world’s biggest economy.

By the start of the World War II, the U.S. not only enjoyed unparalleled economic advantages, its ruling classes benefited from military insularity. The only major attack on U.S. soil by a foreign power was the British burning Washington in 1814. Only small conflicts and skirmishes followed. Pearl Harbor (1941) was, of course, an attack on a U.S. military lagoon base, not on the mainland. With the U.S. protected geographically by the two major oceans, it aided in the destruction of Asia and Germany with minimal reprisals. By the end of the war, 78 million people had died, 39 million of whom were Europeans; over 10 million as part of the Nazi genocides against Jews, Roma and others. Half of Europe’s casualties were civilian. By contrast, the U.S. lost around 400,000 people, most of whom were military personnel.

Post-war State Department planners, like George Kennan, boasted about the U.S. being the “object of envy and resentment,” having half the world’s wealth and just 6 percent of its population. Even before the end of the war, U.S. economic planners formulated a global model at the Bretton Woods Conference (1944). The U.S. dollar became the global reserve currency. International loans were made by a U.S.-led World Bank and debts managed by a U.S.-led International Monetary Fund (IMF). Trade and investment was facilitated via the General Agreement on Tariffs and Trade (GATT). Nations that didn’t conform to this model had their governments overthrown, often under the pretext that they were Soviet proxies.

The late, great William Blum documented 57 U.S.-led or supported “interventions” around the world between 1949 and 2014. Many of the victims of U.S. “intervention” were soon absorbed into the U.S.-led, debt-based, globalized economy. This is a massive, global empire; “full spectrum dominance,” as the Pentagon calls it. The U.S. ruling classes consider it outrageous that nations like Russia or China retain state-controls over their economies and resist absorption into the system.

What kind of role does austerity play in economies across the world?

Austerity is a multi-pronged weapon against working people. Firstly, we should ask: Austerity for whom? Following the global financial crisis, which began in late 2007, governments around the world cut back on social spending, supposedly to reduce national debts and deficits. Bankers enjoyed record bonuses. For a while, banks posted record profits, thanks to the taxes of working people. Consistent with a 30-plus year trend, the wealth of the top 10 percent continued to grow while the household incomes of the bottom 90 percent stagnated or declined.

Austerity follows the “loser pays” principle. Secondly, austerity is a political choice, not an economic necessity. Economists at the IMF and other institutions question austerity. But the directors ignore that advice for ideological reasons, the main one being the notion that GDPs should remain high to attract investment.

Austerity is part of the wider neoliberal agenda: huge GDP but relatively low growth, unequal share of GDP per capita, widespread privatization, insurance policies for failed businesses, and reductions in or eliminations of public services. This model was tested on the so-called third world in the 1970s and ‘80s — the Washington Consensus, as it was called. It often followed military coups and the imposition of juntas and dictators, as in the case of Chile in 1973, when the U.S. helped to install General Augusto Pinochet.

The so-called Chicago Boys (in reference to the Chicago School of Economics) helped impose economic austerity, especially in the early years. It was only from the late 1990s until recently that Latin American countries reversed some of these policies via the socialistic “pink tide” of left-leaning governments, like Lula Inácio Lula da Silva in Brazil and Hugo Chávez in Venezuela. Today, the region has lurched to the right and austerity is taking hold again. Predictably, we see a rise in migration as desperate people flee the negative and complicated effects of neoliberalism. ...
Read full interview at Truthout!