Students of history all across the political spectrum see the run up to WWI as an intensified tendency of the nations of Europe, and eventually the US, to engage in the geopolitical rivalry for colonies and "spheres of influence" based significantly on economic interests and often the specific interests of big business. General Smedley D. Butler famously declared that "War is a Racket" in 1935. He knew what he was talking about; he was a United States Marine Corps major general, the highest rank authorized at that time, and at the time of his death the most decorated Marine in U.S. history. He had a thirty four year military career that spanned from the Spanish-American War (1898) to a Marine expedition to China in the late 1920s and beyond. He led the US marines during the heyday of "Gun Boat" diplomacy from 1898 to the early thirties when the US ended its long occupations Haiti and Nicaragua. Yet he hated war and said so out loud. For this he was often vilified by the US political establishment as a renegade.
Butler's critique of war was simple. It was a racket to protect the profits of big business investors abroad at the expense of the poor, human rights and democracy and the US soldiers who risk their lives for an economic agenda that doesn't benefit them one iota but only the military's rich paymasters. In this sense, Butler epitomized the populist spirit of the progressive era. To him, nothing threatened the well being of the American working class like the generally likely prospect of being sent to foreign shores to fight for some rich man's profits. "To hell with war," was the parting shot from his 1935 pamphlet against war. His most frequently quoted remark was from a socialist publication called Common Sense in which he summed up his illustrious career.
"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents."
On the issue of WWI, Butler summed up its meaning quite simply in the second chapter of his pamphlet War is a Racket.
"It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war itself. This expenditure yielded $16,000,000,000 in profits. That is how the 21,000 billionaires and millionaires got that way. This $16,000,000,000 profits is not to be sneezed at. It is quite a tidy sum. And it went to a very few."
Butler explains up to this point in detail about the specific interests that large US corporations and industries had in the war that was considered the most destructive up to that point in history. But Butler's analysis shouldn't be seen as simply a prescient or early statement of the existence of the US Military-Industrial complex. His concept of "the Great War" as inter-imperialist rivalry, the effort of many different nations competitively pursuing their rackets to advantage at the same time on behalf of their own capitalists, was revolutionary. In the first chapter of his famous pamphlet, he condemns the European powers who prepared for the Great War at the expense of the millions who suffered and died on the battlefield while "...those who foment wars... remain safely at home to profit." It is no wonder that US "revisionist" historians beginning with William A. Williams, whose students and colleagues developed and honed an influential school of thought among academic historians, quote Butler's writing with frequency.
"I Would Annex the Planets if I Could": Inter-Imperialist Rivalry as a Cause of WWI.
The age of inter-imperialist rivalry began in the late 19th century with what is called the "scramble for colonies" by the great powers such as Great Britain, France, Germany, Belgium and the US. These were powers that had to some extent or another large overseas possessions, especially France and the UK. The US had an "informal empire" in its thorough domination of much of Latin America and the Caribbean (the Monroe Doctrine kept "foreign power" out of the Western Hemisphere) plus the Philippines and some other Pacific Islands. Belgium had the Congo in the heart of Africa which was rich in copper and other minerals. In Europe, there existed "Continental Empires" such as that held by the Russian Tsar, the German Kaiser, the Austrian Habsburg Monarchy and the Ottoman Turkish Sultan (who also had great possessions in the Middle East). Both forms of imperialism reflect geostrategic and economic competition not just between nation states but between the large industrial monopolies that came to rely on the nation state to protect and enhance their interests.
The maintenance of empire, particular overseas empire, was related to the industrial boom at the end of the 19th century. Colonies provided profitable export markets for domestic industrial output, raw materials for industry, strategic control of important trade routes allowed by the establishment of a military presence, and a place to colonize and send politically destabilizing surplus urban population whose poor condition threatens to radicalize their politics. It also became a place where cheap local labor made investment in domestic manufacturing for export back to the home country profitable. Chris Harman in A People's History of the World lays out the impact of industrialization on the decision to seek imperial hegemony;
The carve up the world cannot be understood without looking at what was happening to the capitalism of the West in this period. The 1870s and 1880s were a period-often called the Great Depression-of depressed markets, falling prices, and low profits and dividends, especially in Britain. To British investors there seemed one way to maintain their incomes-investment abroad. Total investment in foreign stocks rose from 95 British million Pounds in 1883 to 393 million British Pounds in 1889. It soon equaled 8% of Britain's gross national product and absorbed 50% of savings. The money went mainly in "stocks"-fixed interest investments for the construction of railways, bridges, harbors, docks, and waterways, or for the financing of government bodies. Whatever the investments were for, they promised a level of profitability higher than to be obtained at home. (Harman; 2008; 396)
Industrial output in the home countries needed foreign markets when domestic ones were saturated with supply and lacked sufficient demand. Extending economic influence meant attempts to seize control of mineral rich areas that were strategically located overlooking key trade routes overland and sea. Colonial assets offered profitable direct investment opportunities for the main industrial powers whose domestic economies were depressed. Hence, the Great Powers fought over control of Mesopotamia's oil reserves, the construction of Berlin-Baghdad Railway, the control of ports and markets in China, the mines and mineral deposits in Africa and the control of key waterways like the Suez Canal and the Panama Canal. But as Harman points out, such "competition" was fraught with danger. The export of capital became increasingly bound up with the armed force of the state. He explains;
To put it crudely, the growth in profitability which had produced a recovery from the "Great Depression"...depended upon the spread of empires. But as the empires spread they tended to collide with each other. Those who ran the empires knew that the outcome of such collisions depended upon the strength of the armed forces. Therefore, Germany set about building battleships to challenge Britain's dominance of the seas, and Britain retaliated by building "Dreadnought" battleships of its own. France increased military service in its conscript army from two years to three, so as to be able to match the German military. Tsarist Russia set up state run arms factories, and designed its railway system with potential wars against Germany, the Austro-Hungarian Empire and the Ottoman Empire in mind. (Harman; 398)
Far from stabilizing the world capitalist system, imperialism made war far more likely. Lenin's contention that the carve up of the world by the big monopolies would lead to war seemed accurate. If the outbreak of WWI in 1914 vindicated Lenin's theory of imperialism then it meant that imperialism was not just a late stage of capitalism but a total system in which the frenzied life and death competition of the great powers for economic expansion and greater capitalist profit involved a logic of ceaseless militarization and war. The struggle for sphere's of influence was merely a heated competition for economic dominance between big power rivals. Big power diplomacy thus, became a way to manage and stabilize the carve up the world by the big monopolies and trusts. Harman explains how this led to WWI;
Behind the long chain of diplomatic activity in the summer of 1914 lay a very simple fact. The rival imperialisms which had emerged as each capitalism tried to solve its own problems by expanding across state boundaries now collided right across the world. Economic competition had turned into competition for territories, and the outcome depended on armed might. No state could afford to back down once the chain of confrontations had been set off by the Sarajevo assassination, because no state could risk a weakening of its global strength. The same imperialism which had stimulated economic growth and a belief in the inevitability of progress, was now to tear the heart of Europe apart. (Harman; 404)
The danger of this type of inter-imperialist rivalry ended in 1945. What seemed to end the old rivalries between empires was and the gradual integration and ultimate fusion of the economies of the great capitalist powers through transnational corporations. The historic concentration and centralization of capital, led by the gradual globalization of private capital investment, drove multinational corporations to eclipse nation-states in economic significance. As the power of the transnational corporation grew and foreign direct investment came to comprise an ever growing share of total global gross fixed capital formation, the big powers no longer fought to divide up the world but merely keep it open to free trade and capital flows. Military force in the global age is generally deployed as part of a multilateral process meant to protect free capital flows generally rather than on behalf of a single power or big power alliance.
Globalization and the Concentration and Centralization of Transnational Capital
In the century since WWI, the world economy has changed quite a bit. Lenin was one of the first to talk about world capital flows as a determining factor in world politics and was prescient in his understanding of the leading role that monopoly capital plays in carving out spheres of influence around the world. He would certainly not be surprised by global trends today. Lenin placed great emphasis on the role of the nation-state as capital's handmaiden in dividing up the world's wealth and resources and the globalization debates today between confirmed Leninists and globalization theorists who posit a decline in the nation-state can be quite contentious. Many globalization theorists like Jerry Harris and William I. Robinson posit the decline of nation-states as there emerges "an empire of capital" (a phrase employed by Negri and Hardt) whereby corporations control the vast majority of the worlds wealth and resources thus holding ultimate political power.
Critics of this view such as Ellen Meiksins Wood point out that there is always a nation-state which is the "imperial hegemon"-in this case the United States-which controls and directs the globalization process mostly in the interest of its own corporations' domestic and global profitability. The so called empire of capital pursues its interests in and through a system of global governance mediated by individual nation-states. Thus, a multiple state system still exists and may even be strengthened by capital's hyper-mobility. Thus, globalization is a process that is controlled by the imperial hegemon and not by a newly created transnational capitalist class (TCC) comprised of novel patterns of class formation and organized on a purely transnational basis aloof from state power (a theory posited by sociologist, Leslie Sklair). Globalization, in the Leninist tradition, is still a nation-state based process which is not weakened by capital's hypermobility rather than a shared process at the level of closely linked transnational non-state actors.
Monopoly capital is now far stronger than in Lenin's time. It hasn't actually weakened state prerogatives but only seems to at times when progressive working class coalitions wish to pursue counter-hegemony through the state by restricting capital on behalf of their side in the class war. It isn't that the state is weak; its just more available to global capital than to the working class. Just witness the current American political scene and the currently raging class war.
Yet capital has restructured the world. According to the UN Commission on Trade and Development (UNCTAD),in their most recent World Investment Report total inward stock of foreign direct investment word wide was over $25 trillion in 2013. In 1990, it was barely more than $2 trillion. This means that the total inward stock of foreign direct investment is over one third of world GDP! It also exceeds global gross fixed capital formation (nearly $17.7 trillion) by about 50%. Total assets of corporate foreign affiliates increased from just under $4 trillion in 1990 to $96.6 trillion in 2013. Sales of foreign affiliates grew from $4.7 trillion in 1990 to over $34.5 trillion in 2013. Total world employment by foreign affiliates of TNCs more than tripled from 20.6 million in 1990 to 70.7 million in 2013.
Here we get a picture of a global economy heavily dominated by transnational corporations (TNCs) whereby the cross border mobility of capital has allowed for unprecedented levels of transnationalized direct investment through the reduction of national barriers to capital's mobility. According to one brief study by the Economist the top 20 TNCs, ranked by foreign assets in 2011, earned between half and all of their gross annual revenue in foreign markets. Globalization is one major reason that corporations have been capturing more and more of the world's earnings. The Institute for Policy Studies pointed out in one study in 2000 that by 1995, more than half of the world's top one hundred economic entities by revenue were corporations not countries. According to one NGO website, by 2006, "...total sales of the top 200 transnational corporations were bigger than the combined GDP of 187 countries, more than thirty percent of world GDP..."
Inter-Imperialist Rivalry and Theories of Imperialism in the Global Age
The end of WWII saw the creation of a bipolar world, where a united capitalist bloc faced off against a fairly disunited communist one. The major capitalist powers gradually integrated their economies through trade and investment making the kind of inter-imperialist rivalry that led to two world wars impossible. After the collapse of the Communist bloc in the early 1990s, a new era in global politics dawned. It now seemed that global capitalism was more united than ever as there slowly emerged an "empire of capital" "where corporations ruled the world" and new patterns of class relations suddenly emerged with the formation of a "transnational capitalist class" which forced its political agenda on increasingly weakened nation-states. Under such a scenario inter-imperialist rivalry, a contradictory impossibility since global capital has now been united out of several formerly competing national capitals, could never even occur much less create political outcomes. Inter-imperialist rivalry is an old nation-state era phenomenon not one we expect to see in the global age.
Yet globalization is not some shared transnational process that produces new institutions of global governance willy nilly as a byproduct of the concentration and centralization of capital. Here too political agency is clearly palpable and an imperial hegemon leads the process often with resistance from rivals and reluctant allies alike. Sociologist Immanuel Wallerstein called the Operation Desert Storm "the opening war of the twenty first century" whereby the US led a "coalition of the willing" to defend against a shift in the balance of power in a vital region that would pose certain challenges to the free expansion of global capitalism. This was America's first major act as the world's sole superpower in an endeavor to lead as the imperial hegemon to impose, by force, neo-liberal, free market conditions world wide. But US hegemony would be challenged a decade later by allies who had very different global interests. Wallerstein noted that the second Iraq War (2003) was seen as an attack on European interests which is why the EU powers reacted the way they did. They had obviously rejected the US bid for global supremacy.
Political Scientist, Michael Parenti believes that globalization is led by a hegemon and is not an anarchic process. He asserts that nation-states act as "conduits" of corporate capitalism enforcing the will of transnational corporations in the global age. Parenti explains;
Until 1990, powerful states used international financial institutions and their national corporations to expand the idea of capitalism as a political ideology against the competing Soviet model of socialism. In the post-1990 globalized world, corporations and states have partnered to promote the hegemon’s influence and market access until corporations attained or even exceeded the power wielded by their native states.
Parenti asserts that "a hegemony shift" from nation-states to corporations and global capitalism has occurred with corporations and their agenda clearly more powerful than before. Regarding the second Iraq War, Parenti states;
States share “power with” corporations to solve states’ economic, political, diplomatic, and security problems. In this process, corporations may enjoy sovereign immunity and profit from their expertise by opening up the market for state functions. The second U.S.-Iraq war (2003) can be considered an effective state-corporate partnership...facilitating corporate interests by states and at the same time fulfilling states’ efficiency deficit (from supply of food to the military to the security of government officials) with what amounts to merely another profit venture for corporations.
Historian Jerry Harris sees the Iraq War as a triumph of the "Hegemonists" in the US ruling class over the "globalists" who see the US as first among equals in leading the western powers in defending global capitalism. Hegemonists, in this case the Neocons, captured power in the election of George W. Bush. Multilateralism was rejected as an obstruction to asserting America's role as the imperial hegemon. Harris explains that hegemonists are extreme nationalists who remain stalwart in "...their opposition to globalist multilateralism which they feel undermines the central importance of the nation/state." Harris explains the significance of the nationalism in a global age;
Clearly a fundamental struggle within the capitalist class is taking place that goes to different visions of U.S. society, America’s role in the world and its relationship to its most important allies. Key to hegemonist ideology is the cultural purity and political independence of the nation/state. Their rejection of multilateralism abroad is tied to their opposition to multiculturalism at home. They fear the deconstruction of an Euro-centric narrative of U.S. history will create a “post-assimilationist society” that will make “American nationhood obsolete.”
He also cites Richard Perle, a Bush Administration official, who said that, “An alliance today is really not essential…the price you end-up paying for an alliance is collective decision making...We’re not going to let the discussions…be decided by a show of hands from countries whose interests cannot be identical to our own..."
Most interestingly, Harris believes that competing industrial strategies and orientation play a large role in this split in US capitalism. He points out that;
The hegemonist/globalist struggle also has an economic aspect that extends to industrial strategy. The military’s industrial base is international not transnational. Transnational corporations manufacture using global assembly lines and supply chains, are engaged in cross-border merger and acquisitions, participate heavily in foreign direct investments, and their foreign held assets, sales and employment average between 45% to 65% of their corporate totals. International corporations have the majority of their investments, production facilities and employment in their country of origin and mainly access global markets through exports rather than through foreign owned affiliates...Defense corporations also rely on state protectionism. For example, in 2001 fully 72% of Lockheed Martin’s sales came from U.S. government procurements...a whole set of laws prevent sharing technologies or accepting foreign investments in key military industries. While international sales are growing, they are mainly national exports overseen by the Departments of Defense, Commerce and State, all with their own set of rules and restrictions...[globalists have] argued that national defense regulations have been rendered “obsolete and counterproductive by the internationalization of industrial operations.” Instead they envision a “trans-Atlantic defense market (in which) any unilateral approach would be unrealistic and unwise.” This market should have a “level play field with equivalent access to each other’s markets and the abandonment of ‘national champion’ industrial policies by governments and cultural norms that amount to ‘Buy American’ or ‘Buy European’ practices.”
Such arguments have been deployed by writers like Frankfurt School philosopher Alfred Sohn-Rethel who similarly argued that two clusters of industrial groups in early Nazi Germany, the "Bruning camp and the Harzburg Front," organized around two distinct agendas based on specific industrial imperatives, one more "high tech" and internationally oriented and another pursued by heavy industry (arms, steel etc.) which stood to benefit more clearly from Hitler's remilitarization agenda.
Harris points out that since US militarism gained ascendency, other capitalist powers have been dissatisfied with US hegemony as mostly seeking its own interests to the exclusion of those of its erstwhile allies causing destruction in the wake of their warmongering as the EU allies seek to do damage control and restore stability through humanitarian efforts. Harris points out that transnationalists on both sides of the Atlantic were put off by Bush's militarism and his nationalist vision of the US as imperial hegemon. Transnationalists see a partnership in global governance as the role of US imperialism in the global age rather than unilateral, self interested war making. With the passing of the Bush Administration, it was expected that the would US abandon the unilateralist policies of the Bush Administration but it appears as though Obama represents hegemonism-lite more than globalist multilateralism.
It could be the influence of such industrial sectors as oil, weapons production and other related industries that tend to most benefit from war, especially in the Middle East, that explain the persistence of US hegemonism. What is certain is that even in a global age where capitalist ideology is no longer in question, as it was during the cold war, inter-imperialist rivalry is on the rise. Conflict is on the rise over gas pipelines from the Middle East to Europe and the future Iran is to play in world politics and the prospects of that country becoming a nuclear power. What is clear is that America's quest to strengthen its role as the imperial hegemon for the preservation and extension of neo-liberal, corporate globalization is threatening international stability.
A Return to Inter-Imperialist Rivalry
The persistence of US hegemonism can be interpreted different ways. It can imply that the nationally oriented industries that cluster around the military-industrial complex remain stronger than more globally oriented capital. It could also signal global capitalism and the maintenance of a world safe for neo-liberal corporate globalization requires a strong imperial hegemon after all to enforce an otherwise less stable anarchic "empire of capital." It could also mean that globalization itself is chiefly a US led process which seeks to benefit its own corporate capitalists at the expense of others. Under such conditions the persistence of the nation-state and consequent US hegemonism seems more explainable albeit under much firmer control by capital than ever in history. What is more likely is that large pockets of resistance to US led corporate globalization remain and grow with interests contrary to those of US capital whose use of the nation-state to beat down this resistance while pulling reluctant allies, such as the EU, along as far as possible. Russia, Iran, Syria and various non-state actors represent such resistance to the US/UK/EU led neo-liberalism while the somewhat fractious US led coalition seeks to impose it through force pursuing a very narrow definition of "western interests."
Today's renewed inter-imperialist rivalry is different from that which occurred a century ago leading to WWI and the violent conflicts in its immediate aftermath which took the lives of nearly forty million people. The big powers in 1914 struggled in a truly multipolar world to secure advantages and opportunities for each of their national capitalist classes. Today, the US is still the world's sole superpower and imperial hegemon of a system of global capitalism in which it is the single most powerful entity. True, fewer than a fifth of the world's largest TNCs are domiciled in the US and and the US accounts for "only" about a quarter of the world's annual outward foreign direct investment flows yet the US dominates the system. America is not only by far the single largest power in the global system but the most politically powerful and influential with the greatest and most technologically advanced military and over one hundred military bases spanning the globe. The contemporary deterritorialization of the accumulation process has not eliminated the need for a hegemon but has recast the role of this hegemon toward leading an alliance of "oligopolist clusters in a transnational environment." (William I. Robinson. A Theory of Global Capitalism. 2004) Thus, US/NATO military hegemony assures the interests of transnational capital, or the most powerful cluster within the transnational capitalist class, against the forces of counter hegemony which either "threaten" or in some way rival the hegemonic cluster. These forces of "counter hegemony" could be seen as Russia, China, Iran and others whose interests in a transnationalized accumulation process differ from the dominant cluster within transnational capital.
Thus, even though the transnationalization of capital accumulation has displaced the nation-state in the traditional sense as the chief unit of the international alliance system, states as repositories of political and military power remain to pursue the interests of sections of transnational capital. Though, as Robinson points out, command and control of the global economy is concentrated in a globalized capitalist class, hegemonic states such as the US must guard the interests of that class against rival oligarchical clusters on the periphery of transnational capital that challenge the hegemonic cluster for a greater share of the system's generated surplus as well as from challenges to global capitalism itself from non-state actors and impoverished classes that are exploited by global capitalism. It is this pattern of struggle that best characterizes the current conflicting alliances in world politics today.
Much of the inter-imperialist rivalry, or challenges to hegemonic transnational cluster led by the US bloc, began with the current Ukrainian crisis. In the first two and a half decades of the unchallenged US global hegemony, America shaped the world unchallenged by resistance from other parts of the world system. The former communist bloc collapsed leaving massive investment opportunities for western capitalists who cannibalized former state owned property in the east bloc in profitable privatization schemes run by newly emerging oligarchs in former communist countries. This led to the rise of urban prices of food, housing and consumer goods though not wages forcing millions of working class families to flee to the west where their presence swelled work forces and held wage growth in check increasing the profits of the corporate rich. The east bloc was further broken up into as many mini states as possible allowing greater and greater western expansion eastward.
Key regional conflicts were resolved in favor of the US led hegemonic bloc. The Oslo Peace Process, for example, led not to the liberation of Palestine but to its reinforced domination by a cluster of transnational capitalists consisting of new Palestinian investors owning private development firms such as PADICO and PIEDCO receiving global donor aid to build export platforms (industrial free zones) as well as Gulf, Israeli and EU capital as well. Israel and the PA jointly administer and enforce this arrangement at the expense of the Palestinian masses with US aid and training.
China was turned into a giant export platform by the US, EU and Japan after the total privatization of its State Owned Enterprises (SOEs) in 1993. China's role in the rise of transnational capitalist globalization has been invaluable consisting of what many observers have called the history's "fourth industrial revolution." Russia, until recently, has either abetted or remained neutral in the process of US hegemonic expansion even considering joining NATO at some earlier point. The defeat of Serbian nationalism with the successful defense of Kosovo and Bosnia was another victory for US hegemony.
The Iraq War, though inconclusive, was meant to secure oil for the US and its allies (Iraq is now believed to have oil reserves of 143 billion barrels-the second largest in OPEC), gain profitable business contracts for private corporations, many of them allied to politically conservative parties in the west (over $137 billion worth according to a recent Financial Times report), and expand US hegemony by giving it control of a vital region. It also was an attempt to showcase a reinvented Iraqi economy as a neo-liberal, free market model (as per the one hundred Bremer orders) as part of the US/Transnational capitalist ideological war against state capitalism/socialism. Currently, foreign domination of the Iraqi economy, driven by massive new oil discoveries, has led to unprecedented GDP growth and foreign direct investment amid dire Iraqi poverty and unemployment levels of nearly thirty percent. According to a 2013 US State Department press release direct foreign investment has been robust in Iraq over the past several years and between 2008 and 2011, FDI inflows averaged over $1.5 billion a year. Another source citing an UNCTAD report puts FDI for 2012 at over $2.5 billion. Furthermore, trade has doubled over this period and new investment opportunities are opening up all the time. Most telling is the report's description of Iraq's SOE sector which is slowly being privatized. The report states;
GOI [Government of Iraq] ministries currently own and operate over 192 State-Owned Enterprises (SOEs), a legacy of the state planning system of Iraq’s former regime. These firms employ over 800,000 Iraqis...most SOEs now face increasing competition from foreign firms, most of which are privately-owned, as a result of the opening of Iraq’s market. Faced with this competition, Iraq’s SOEs are losing market share in certain sectors open to competition because their equipment and production technology are obsolete. As a result, an increasing number of Iraqi SOEs is attempting to form strategic partnerships with foreign firms to obtain newer technology, investment, and managerial expertise. Several such partnerships have already materialized, because foreign firms interested in entering the Iraqi market see SOEs as desirable partners; SOEs usually have a well-known brand, long-established distribution channels, and priority access to GOI procurement.
The report notes that privatization will be a very slow process, possibly years, but already reorganization is taking place streamlining operations and reducing employment. In 2010, the Prime Minister approved a policy of "corporatization" to implement best practices and put many SOEs under a Industrial Ministry program,
"...to help them develop business and investment plans, remove the surplus labor from the SOEs, develop corporate governance structures, and form international strategic partnerships (ISPs) with the goal of eventually becoming commercially viable entities. The Ministry of Finance is also setting up an Asset Valuation Unit, a step that is necessary to attract private and/or foreign investors. A handful of Iraqi SOEs already have foreign investors as partners; this number is expected to grow in the coming years."
FDI in an embattled country is an extremely difficult matter. Nonetheless, FDI in Iraq, especially as a share of GDP, has grown markedly since the US military redeployment in 2011. Even if the US doesn't account for a major share of this investment at this point, it has succeeded in opening up the Iraqi economy to new capital investment in the future, a key objective of the US hegemonic bloc. An open world economy for transnational capital in the global age is a key US political and military objective. By this standard, the US is largely successful even if US imperialism has failed on all other humanitarian, peace and security and democratic criteria.
Tensions with Russia are the key challenge to US hegemony. Russia did nothing to stop the US action in Libya although in Syria it cooperated with the US in getting Assad to dispose of his chemical stockpiles. Yet the US went pushed all the way to encourage the Ukraine to leave the Russian sphere of influence and join the EU and possibly NATO at some later date. Russia understandably saw this as a direct threat to its interests. Russia upped the stakes by encouraging rebels in the Donbas region stopping short of a direct intervention. The Maidan revolution, in which a pro-Russian Ukrainian government was overthrown and replaced by a sharply Ukrainian nationalist one which opposed Russian influence in any measure, was seen by Russia as a direct attack on its interests in its own "backyard." Russia responded sharply with a mix of military and political responses to shore up its position.
One scholarly paper by Dmitri Trenin, an international relations expert specializing in Russia and eastern Europe, saw the sudden US support for extreme Ukrainian nationalism partly as a reaction to the decline in the US global position after the 2008 financial crisis. Such a crisis forced the US to temporarily abandon its hegemony preserving mission and tend to domestic issues. According to Trenin the economic collapse, "...essentially drew a line under the brief period of unchallenged U.S. world dominance after the end of the Cold War and the disappearance of the Soviet Union." The attempt to pull the Ukraine away from Russia was intended to restore US hegemony after the obvious failure of the Iraq War to do so. The Russian seizure of the Crimea was a response to prevent the success of US hegemony seeking in the Black Sea area. Trenin's assessment is as follows;
With Crimea back in its hands, Russia has made a big step toward restoring its dominance in the Black Sea area. Rather than just a small stretch of the sea’s eastern shoreline, Russia now occupies the strategically strongest position in the area. The Russian Black Sea Fleet, with Sevastopol as its main base, will now grow and modernize faster, which will enhance Moscow’s capability to project power, including to the Eastern Mediterranean. By contrast, the Turkish Navy, which became the strongest force in the Black Sea after the dissolution of the Soviet Union, has lost its primacy.
Trenin believes that Russia's sharp reaction is to prevent the Ukraine from being a Western dominated asset of the EU and NATO ripped from "...its natural prominent place in the “Russian world.” The long term consequences of this big power competition is a violent, unstable and conflict ridden Ukraine for years to come. In this sense, according to Trenin, the conflict's significance in bringing an end to the post-Cold War status quo has placed it at the center of the struggle for hegemony by the big powers.
Like the big power rivalries of a century ago, the current one is also economic. The efforts to besiege Russia, in a matter of speaking, are related to energy resource competition. The US badly wants to weaken Russia's hold on vital energy markets in the West in order to enhance its strategic influence over the EU and elsewhere. One NATO assessment holds that Russia is vulnerable to sanctions against its energy exports and points out that;
For the Kremlin, Russia’s energy sector is the most important commercial asset and economic pillar of its domestic stability and foreign policy leverage. Between 2000 and 2012, the government’s dependence on oil and gas sector revenues increased from 47 to 50 per cent of its state budget, and accounts for roughly 25 per cent of Russia’s GDP
Many have speculated that the recent decline in oil prices is the result of politically motivated output increases by US allies in the Persian Gulf to weaken Russia which is similarly seen as a foe due to its increasingly friendly relations with Iran. Roughly a third of the EU's energy needs are supplied by Russia, something the US badly wanted to alter by separating the Ukraine from Russia economically and politically. NATO report promotes energy source diversification for Europe stating that, "The strategic question is no longer whether Europe has alternative gas import diversification options. It is rather whether European member states have the political will and strategic vision to oppose Russian pressure..."
The success of the US anti-Russian strategy is shown in recent efforts to get Russia to cheapen the price of its gas exports to the Ukraine. International sanctions and rising tensions in the region pressured Russia into a new posture on this issue. It is also the case that a marked decline in the share of gas imported by the Ukraine from Russia from nearly all of it in 2008 to around half currently has forced concessions from Moscow. US attempts to gain power in the region at Russia's expense is largely focused on the energy issue and the US desire to gradually gain economically at Russia's expense. Pepe Escobar, an investigative journalist for the Asia Times, has proposed the "Pipelineistan" theory of conflict in the Middle East/Russia and Eastern Europe/and Central Asia and the Indian Ocean which has to do with the inter-imperialist rivalry over the control of pipelines to supply natural gas and oil to Europe allowing the EU to diversify their energy sources.
In 2010, Syrian President Bashir al Assad announced the Four Seas Policy whereby Syria would become an energy hub with oil and gas pipelines crossing through the country from the Caspian and the Persian Gulf to the Black Sea and the Eastern Mediterranean taking fossil fuel to Europe and other areas in the region. A conflict erupted over whether a pipeline would cross through Syria from Iran and Iraq beginning in the South Pars gas field in Iran which is shared with Qatar or from Iran. In 2011, a memorandum of understanding was signed as a preliminary agreement to construct a 6,000 km pipeline for ten billion dollars from the south Pars fields to Europe through the Lebanese coast under the sea to Greece. This was known as "the Islamic Pipeline" since it traversed three countries with large Shi'ite populations (Iran, Iraq and Syria). An alternative, which was rejected by Assad, was to extend the existing Arab Gas Pipeline which already piped natural gas from Egypt to Jordan The pipeline now transmits Egyptian gas through Aqaba Jordan and up past the Jordan-Syria border to Homs in central Syria and then to two terminals one in Tripoli Lebanon and the other Baniyas both on the Mediterranean coast. The offer to extend the pipeline up to Kilis in Turkey and from there to Europe was rejected by Assad who didn't want to hurt Russian interests by cutting into their European gas markets.
An international maritime boundary divides the South Pars oil and natural gas fields in the Persian Gulf between Qatar and Iran. Both wanted to run pipelines through the Middle East to Europe. Qatar and their Saudi allies, just like Iran and Russia, want the pipeline to go through Syria which all agree is a viable energy hub assuming there is political stability in that country. But Qatar wanted the pipeline to go through Syria and Turkey by passing Iran. Iran and Syria wanted the same pipeline to go through Iran, Iraq and Syria through Lebanon by passing Turkey. Russia wanted to stop all this activity from cutting into its gas markets in the EU (Qatar is the single largest exporter of natural gas and Russia is second). Russia remained on Iran and Syria's side of the conflict because (1) the Iran/Iraq/Syria/Lebanon option blocked the Qatar/Syria/Turkish option which in fact threatened to displace much of the current Russian gas exports to Europe and (2) because the so called "Islamic Pipeline" preferred by Moscow would not significantly compete with Russian exports and in any case doesn't directly reach Europe but goes through Syria, a Russian ally, to Greece through the Mediterranean. The civil war in Syria is an attempt by the US and its Gulf allies to overthrow the pro-Russian Assad regime and control gas exports to the EU from Qatar which controls some of the largest LNG deposits in the world. In addition, gas supplied from the Iran/Iraq/Syrian pipeline would be subject to Russia's political influence.
The fight over the Assad Regime in Syria was between emerging alliances standing off over the future of natural gas and oil pipelines taking oil and gas from the Persian Gulf across Western Asia to Europe. According to Army Major Robert Taylor of the Command and General Staff College at Ft. Leavenworth;
Viewed through a geopolitical and economic lens, the conflict in Syria is not a civil war, but the result of larger international players positioning themselves on the geopolitical chessboard in preparation for the opening of the pipeline in 2016. Assad’s pipeline decision, which could seal the natural gas advantage for the three Shia states, also demonstrates Russia’s links to Syrian petroleum and the region through Assad. Saudi Arabia and Qatar, as well as al Qaeda and other groups, are maneuvering to depose Assad and capitalize on their hoped-for Sunni conquest in Damascus. By doing this, they hope to gain a share of control over the “new” Syrian government, and a share in the pipeline wealth.
Lining up on the side of the US is the Saudis, the Qataris, the EU, the UK, Egypt, Jordan, Turkey and Israel which is energy starved and wishes to see the existing Arish (Egypt)/Ashkelon branch of the AGP operations restored to take LNG to Israel and Jordan. The Iranian side wishes to stymie their efforts. Lost Russian exports to the EU will be made up by new deals with China to supply gas from western Siberian sources which over time will strengthen Putin's ability to resist western pressure over its Ukraine policies. The global era begin significantly with a series of energy wars reflecting not only scarcity in an increasingly energy starved world but the race for profit and striving for strategic hegemony that control of these resources confers on those powers that have their hand on the spigot.
What is also interesting is that in the global era, old nation/state based conflicts, such as the intractable Arab/Israeli conflict, are slowly fading as the US succeeds in cobbling together a Middle Eastern alliance of pro-US Arab states and Israel which has peace treaties with both Egypt and Jordan and which has been cooperating with America's allies in the region economically and politically. One example is the increased arms exports to the Saudis and other Gulf allies since the Syrian civil war began have well exceeded those to Israel with no objections from the Jewish State. According to a NYT report, from this month,
The United States has long put restrictions on the types of weapons that American defense firms can sell to Arab nations, meant to ensure that Israel keeps a military advantage against its traditional adversaries in the region. But because Israel and the Arab states are now in a de facto alliance against Iran, the Obama administration has been far more willing to allow the sale of advanced weapons in the Persian Gulf, with few public objections from Israel.
And herein lies the rub! Globalization may not be reduced to a mere "empire of capital" and may well involve the agency of a hegemon, and hence the state, to guide and protect the agenda and interests of global capitalism as a whole but it also replaces old nation-state based conflicts, such as the Arab/Israeli conflict with the class conflicts that span national boundaries thus creating new alliances between states that formerly conflicted in an earlier era. Globalization has laid bare the façade of Arab state pro-Palestinian sentiment and brought together nations whose ruling classes have a common interest in securing strategic access to vital resources. There is also the common interest in increasing trade and investment to expand the profitability of an increasingly stagnant global economy among a smaller and smaller transnational capitalist class. As transnational capitalists rely less and less on the health and dynamism of any particular national society, even their own, the downgrading of the conditions of the global poor everywhere through concentrating wealth among the global rich regardless of from where they originate, increasingly supplants class politics with national politics. This could explain how politics create strange bedfellows in the global era.
The Strange Death of the National Liberation Movement
One of the hallmarks of the first four decades after WII ended was anti-colonial struggles in the third world and the violent opposition to their success from the capitalist northern tier countries, mostly the US and UK. Decolonization movements in the 1950s and 1960s were followed by struggles against "neocolonialism" (Frantz Fanon's famous dictum about "white rule with a Black mask") which were often met with force by western imperialism through proxy wars, direct interventions, coups against nationalist governments that nationalized foreign property or who were simply accommodating to foreign direct investment or the destabilization of governments deemed hostile to corporate interests was common. The examples are numerous and it is not necessary to belabor the issue here. Suffice it to say that from 1945 to roughly the mid to late 1980s when the Reagan Administration intervened in Central America to thwart and reverse such struggles in El Salvador and Nicaragua, the national liberation struggle of the pre-global era was the main form of third world struggle against poverty generally involving a class coalition of the very poor to middle class (the proverbial "national bourgeoisie") in an armed struggle against foreign domination.
William Robinson's notion of what he calls "promoting polyarchy" as a means of extending neo-liberal hegemony to third world societies hinges on the observation that at a certain point in time, direct intervention and covert operations to install authoritarian regimes, generally via a coup de etat against a democratically elected government, ceased to work and only brought about greater instability, chaos and defeat for western capitalism. As Robinson said, western capitalist leaders learned to take a "Gramscian approach" to extending hegemonic domination to establishing political systems friendly to free market capitalism throughout the third world. In this sense, Robinson points out, western policy makers realized that hegemony is established in and through civil society institutions and not simply through the coercive force of authoritarian rule via the army and the state. Historian Jerry Harris defines Robinson's use of the definition of hegemony by describing it as a, "social relation which binds together a bloc of diverse classes and groups under circumstances of consensual domination"
The unviability of military intervention and covert coups made necessary a more inclusive democratic process controlled internally by elites whose connections to a transnational capitalist economy and class could be relied upon to implement new democratic procedures and institutions to give vent to democratic aspirations but which would still be as exclusive in its serving a capitalist agenda as the old authoritarian regimes. One could use the Herbert Marcuse's phrase "repressive tolerance" domination disguised as democracy or in this case, simply a kind of "soft" imposition of economic agenda contrary to the interests of the majority. Two excellent early examples of this kind of political transition to post-Authoritarian neo-liberal regimes are South Korea under Kim Young Sam and the Philippines under Corazone Aquino. Both countries were ruled by reformers formerly imprisoned and persecuted under old US supported authoritarian regimes but who, once in power, undertook to follow a neo-liberal agenda involving opening the economy to unlimited foreign direct investment and implementing draconian IMF stabilization plans when required to do so!
Robinson believes this reflects more than simply a shift in US strategy. It involves the emergence of new transnationally oriented classes as part of the new TCC which stabilize and ensure the survival of neo-liberal capitalism with a new, more democratic face. Harris describes Robinson's efforts as simply "the reconstruction of U.S. foreign policy to match the needs of globalization." Robinson explains the transformation of class society in the third world that allow the political transition to new strategies of domination. He explains;
Structural changes in the world economy associated with globalization have contributed to a new fractionation among elites in the former Third World between nationally-oriented and transnationally-oriented groups. These two overlapping yet often competing sets of elites pursued distinct development strategies in the late 20th and the early 21st centuries. The former sought to build up national circuits of accumulation while the latter sought to integrate local circuits into new transnational circuits of accumulation. These contrasting strategies for development involved distinct sets of policies: the one, policies that would protect local agents from global competition; the other, policies that integrate local agents into emergent transnational circuits.
In the pre-global era elites in the third world pursued agenda based on national development but in the global era, "...global capitalism penetrates new spheres and subjects ...[local elites] to the logic of transnational accumulation, pre-globalization classes such as peasantries and artisans tend to disappear, replaced by new dominant and subordinate class groups linked to the global economy." Hence a new kind of local politics becomes possible. National Bourgeoisies no longer exist to pursue their own "developmentalist" agenda at the expense of foreign capital and thus new local elites merge their interests and activities with a new TCC. In this sense, international conflicts between nations become transnationalized class conflicts within a world increasingly skewed between rich and poor. Much of the global violence, dislocation, instability and chaos we see today is the result of this class polarization and not the old style of international rivalry.
By Way of Conclusion
And so we come full circle. Is there an inter-imperialist rivalry as there was over a hundred years ago? Certainly not in the same manner. Corporate capital, national economies, class interests and class formation are all increasingly integrated through cross border corporate mergers and acquisitions, trade, foreign investment and the gradual globalization of the world economy and national societies. This has produced new patterns of class formation and hence politics. Global society is not one of nations but increasingly one of class and class polarization. Much of the violence we see today is by non-state actors whose often aimless violence and terrorism is an expression of the breakdown of national society and identity and the struggle against poverty and marginalization engendered by globalization. US hegemony is an attempt to protect the system as a whole against the dangers such violence poses to global power and privilege as well as to advance the interest of US capital in general. This is the current meaning of hegemony. It protects neither a stateless empire of capital or simply US capital but a global hegemonic bloc of capital consisting of America and its closest allies. Lenin saw imperialism as late capitalism's consolidation of the global economy among the most powerful countries. He didn't foresee a time when among the world's most powerful entities would be the corporation itself. Today it is the corporation, whether Gazprom or its rival Exxon, that defines the rival political agenda of competing global power blocs.
American Historian Tom McCormick once noted, in an essay on the meaning of the Iraq War for the future of the US as a global power, that there is a distinct difference between power and hegemony. Power is the ability to effectively use brute force to secure outcomes while hegemony is that ability to secure large, meaningful alliances that generally defer to the hegemon's agenda as the "first among equals." In other words, power lets you effectively push your weight around while hegemony gets others to go along with you for the long haul as you win hearts and minds. America began the new global era (since 1990) with far more power than hegemony and is now in danger of seeing both reduced in favor of a multipolar world. This is one reason that the US reacts so sharply and is so quick to use unilateral military action often disdaining the idea of long term coalitions; it is in a struggle to retain a hegemonic position that is gradually slipping away as other parts of the world develop distinct sets of interests. In the early post WWII era, more than three quarters of the world's largest multinational corporations were American; today fewer than one fifth are in that category.
In a world of diversifying transnational capital, conflict is increasingly between a loose coalition of capital and non-state actors who are increasingly marginalized and cannot articulate their resistance in the ideological ways seen in years past. Jihadists, pirates, drug cartels and various underworld criminals, gangs and bands of terrorists are the run off from globalization's dislocation and destruction. In many ways it is more dangerous, menacing, destabilizing and indicative of class conflict than was the prior competition between nation-states nearly one hundred years ago. Yet inter-imperialist rivalry as it is traditionally regarded is a thing of the past. For Lenin, inter-imperial rivalry was the result of monopoly capital's national character with inter-imperialist rivalry being that between rival national capitals. This rivalry, which Lenin determined was responsible for the major military conflagrations of his day (such as WWI), necessarily produced conflicts between nation-states the fighting between which reflected struggles for markets and competition for the control of important industrial resources. In a global age, the fusion of national capital into global capital, resulted in different types of conflict. Globalization theorists, Ernesto Screpanti, in his book Global Imperialism and the Great Crisis, puts it this way;
"...global capital tends to create a single supranational order, insofar as international competition needs to be (de)regulated and imposed upon the nations who resist globalization...firms need to have grown enough to be capable of effectively conceiving and planning productive and commercial expansion on a global scale. It can therefore be said that the imperialism that Lenin spoke of, far from being the highest stage of capitalism, was effectively on a transitory phase; that in which the larvae of big multinational firms have grown within the cocoons of nation-states before breaking out and soaring off into the world economy when they reached global proportions...Once the cocoons are broken, inter-imperial rivalries lose their virulence and those that persist, for example, due to the lust for political power of the national ruling classes and the great powers' consequent ambitions of geopolitical supremacy, acquire the significance of "contradictions among the people" of the great capital." (Screpanti; 2014, 49-50)
Thus, for Screpanti, inter-imperialist rivalry is an outdated term and a misinterpretation of current "international rifts and political conflicts" between great powers which actually represent either conflict over how to overcome resistance to globalization itself by lesser powers and non-state actors or short term differences that can be easily resolved in the long run. In the end, Screpanti reminds us, that, "Big capital can be tactically nationalist on occasion, but strategically it is cosmopolitan." (Screpanti, 50)
Many of the conflicts between the big powers today are not really conflicts at all but differences about how to solve common problems to the mutual benefit of global capital in general. Increasingly, global conflict will be about the legitimacy of the global capitalist system itself between the global rich and the global poor and not about how best to resolve this or that issue between differing parts of an increasingly growing and integrated body of global capital and the national and transnational structures that govern and protect it. This is the nature of most violent conflicts we see at the present moment. And this is exactly what makes them so intractable...and so dangerous!