THE ECONOMIC REALITY

The following, sweeping statement comes from the National Security Strategy:

“The United States will use this moment of opportunity [referring to the post-September 11 uniting of countries] to extend the benefits of freedom across the globe. We will actively work to bring the hope of democracy, development, free markets, and free trade to every corner of the world.”

While this may seem a noble aim, this so-called “economic freedom” — some (including the PNAC) call it “pax americana” after the type of peace brought about by the Roman Empire, which dominated world affairs for four centuries — is also part of the problem. It is based upon a version of economic globalisation dominated by institutions favourable to the US and other developed countries such as the UK and Germany, and which works against the interests of many extremely poor, developing countries. For example, the US trade deficit stands at $2.2 trillion while third world debt roughly equals it at $2.5 trillion, and the poorer countries pay nearly eight times the interest. US military spending at $399 billion is thus partly subsidised by the debt payments from the world’s poorest countries.

The economic implications of the above statement, and of the war on Iraq, are key to an understanding of the present situation. While it is straightforward to reject violence, death and destruction, it can sometimes be tempting to pin hope on the “reconstruction” process following a war, and to believe that this could actually be a positive development.

But it is important to remember that the post-war Iraq plans, as far as can be discerned to date, look likely to benefit primarily US interests. As has been shown with other post-war US reconstructions, whatever the US says it will do to help the invaded country (or even its own allies), it has the will and the means to find ways of imposing economic conditions on reconstruction programmes that cost the “liberated” country dearly through impossibly expensive loans via the IMF, World Bank, etc (see The Best Democracy Money can Buy, Greg Pallast, Plume, 2003). These provide high profits for the US coffers and little for anyone else. Note also that (at the time of writing) the US has suggested that payments for post-war reconstruction costs can come from Iraqi oil revenues.

So far, five US companies have been earmarked for those lucrative reconstruction contracts but even pro-US imperialists are unlikely to benefit from these gains. Where reconstruction and/or control of newly acquired assets falls to multinationals, profits are distributed among their upper echelons and shareholders only. It has been said that the costs of wars like this are socialised while the profits are privatised. An interesting economic analysis, which sees wars as ways of investing capital externally for a return (rather than spending it internally), is presented in “Too Much of a Good Thing; Underlying the US drive to war is the need to open up new opportunities for surplus capital,” in The Guardian, 18th February 2003 but also freely available on the author George Monbiot's Web site at http://www.monbiot.com. While lucrative defence and energy contracts are by no means the full story, we should take care to assess who exactly benefits from wars like this and also to remember who bears their monstrous cost: the thousands, sometimes millions who suffer in the course of their prosecution.