Monday, February 18, 2013

East India Company


The East India Company had its origins at the beginning of the 17th century under the royal charter, titled Governor and Company of Merchants of London, by Elizabeth I, in order to compete with Portuguese traders in India and the Far East.  By 1708, the original joint-stock company had merged with a competing firm to create the Honorable East India Company.  The company amassed wealth in a variety of trade areas that included opium, cotton, tea, indigo, and silk.  By 1740, the company “was purely a commercial enterprise, which imported and exported from its factories in India”, and by the middle of the eighteenth century controlled the opium producing regions of Bengal and Bihar [1]  As the company expanded its territorial control over Mysire, Hyderabad, Punjab and the Mahratha states through a display of superior technological arms, “other Indian princes chose to preserve their independence by seeking an accommodation with the Company through unequal treaties, in which they agreed to surrender revenues” [ 2]  By 1815, the East India Company “owned the most powerful army in India and governed, directly and indirectly, Bengal, much of the upper Ganges basin and extensive areas of eastern and southern India”, and by  the turn of the 19th century, became “principally dependent on land taxes collected from the provinces it ruled” [3]  The private company found the most colonial success in the decentralization of Indian rule “where the central authority of Mughal emperors was dissolving” [4].

War, conquest and expansion also was a lucrative business which generated “profits, most of which found their way into the hands of soldiers” instead of making it “on to the Company’s reckoning sheets”[5]  The obvious difference between enlisting in the Royal military and the private Company military in India was that a man could acquire a handsome “nest egg for retirement or to provide an annuity for the families at home” more easily under the enlistment of the private sector.

The export profits in Opium were also immense until, in 1799, China, under emperor Kia King, banned the importation and cultivation of opium.  Prior to the Chinese ban on opium, it appears that the East India Company attempted to keep their ships out of the direct Opium trade into China by inserting middle men opium agents, who would buy it from company owned producers and processors. [6]  After the turn of the century, medical studies showing the benefits of opium became popular and opium exports were shifted toward Europe and the United States.

The accumulating wealth and military power of the East India Company was a growing concern within the British government and it appears that some of the Company’s overall profits were utilized in the form of bribes to Parliament and the Bank of England, “The power the East India Company had obtained by bribing the Government, as did also the Bank of England, it was forced to maintain by bribing again, as did the Bank of England. At every epoch when its monopoly was expiring, it could only effect a renewal of its Charter by offering fresh loans and by fresh presents made to the Government.” [7] 

With the loss of the American colonies after the Revolutionary War, bribes were no longer enough as the British Empire looked to rebound from their lost North American revenues.  After all, the British had accumulated a great level of debt from the American Revolution and the Seven Years War before that.   The India Bill was introduced in 1783 by Charles Fox and was defeated, but the following year a modified version was passed and from that point forward the British Empire began to slowly take control of the East India Company.  The Company finally ended trade in 1873.

[1] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 123.

[2]  James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 128-29.

[3] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 123.

[4] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 124.

[5] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 130.

[6] Opium Throughout History. Frontline.  Public Broadcasting System, WGBH, 1998.  Accessed on Monday, February 18, 2013 from http://www.pbs.org/wgbh/pages/frontline/shows/heroin/etc/history.html

[7] Marx, Karl.  The East India Company-Its History and Results.  New-York Herald Tribune, June 24, 1853.  Accessed on February 18, 2013 from http://www.marxists.org/archive/marx/works/1853/07/11.htm

“The events of the Seven-Years-War transformed the East India Company from a commercial into a military and territorial power[122]. It was then that the foundation was laid of the present British Empire in the East. Then East India stock rose to £263, and dividends were then paid at the rate of 12 1/2 per cent. But then there appeared a new enemy to the Company, no longer in the shape of rival societies, but in the shape of rival ministers and of a rival people. It was alleged that the Company’s territory had been conquered by the aid of British fleets and’, British armies, and that no British subjects could hold territorial sovereignties independent of the Crown. The ministers of the day and the people of the day claimed their share in the “wonderful treasures” imagined to have been won by the last conquests. The Company only saved its existence by an agreement made in 1767 that it should annually pay £400,000 into the National Exchequer.  But the East India Company, instead of fulfilling its agreement, got into financial difficulties, and, instead of paying a tribute to the English people, appealed to Parliament for pecuniary aid. Serious alterations in the Charter were the consequence of this step. The Company’s affairs failing to improve, notwithstanding their new condition, and the English nation having simultaneously lost their colonies in North America, the necessity of elsewhere regaining some great Colonial Empire became more and more universally felt. The illustrious Fox thought the opportune moment had arrived, in 1783, for bringing forward his famous India bill, which proposed to abolish the Courts of Directors and Proprietors, and to vest the whole Indian government in the hands of seven Commissioners appointed by Parliament. By the personal influence of the imbecile King [George III] over the House of Lords, the bill of Mr. Fox was defeated, and made the instrument of breaking down the then Coalition Government of Fox and Lord North, and of placing the famous Pitt at the head of the Government. Pitt carried in 1784 a bill through both Houses, which directed the establishment of the Board of Control, consisting of six members of the Privy Council” – Karl Marx, New York Herald Tribune (June 24, 1854)

Thursday, February 14, 2013

Jamaica - Foreign Private Sector Investment and IR Dependency Theory

“Dependency theory emerged in the 1960s as a critique of the modernization approach. It focused on the allegedly baleful legacy for developing countries, not only of imperialism, but also of the Western-dominated international economic system” (Cook, 2013).

Jamaica is a developing island nation, the third largest in the Caribbean, which has surpassed the 2.7 million people in population and falls under a representative, or parliamentary, democracy government structure. The country is riddled by crime, corruption and poverty. Natural resources in Jamaica consist of forestry, agriculture (cane, bananas, coconuts, coffee, tobacco rice), and Minerals (Bauxite, gypsum, limestone, marble, silica). The state of Jamaica has only been an independent nation for slightly over 50 years, and was previously under British control when “at midnight on Aug. 6, 1962, in the national stadium, the flag of the British empire was lowered for the final time and replaced by the gold, black and green Jamaican flag” (McFadden, 2012).

Jamaica, being relatively young in gaining independence from British colonialism, seems to fall heavily within the conditions described under dependency theory in that the Jamaican economy is shaped and reliant on foreign industrialized actors, in this case by American and international private sector corporations unleashed under the North American Free Trade Agreement, established in 1994. In attempting to narrow down one example of dependency theory, which today appears to rest on international corporate actors instead of solely relying on developed foreign government economies on the international stage, I came across a trade and investment agency named the Jamaica Promotions Corporation (JAMPRO). This gateway entity, which operates under the Jamaican government’s Ministry of industry, Investment and Commerce, facilitates foreign investments into the country. The list of foreign and international corporations that invest in Jamaica, and therefore establish economic dependency, are numerous and the names well known to most Americans: Microsoft, Fujitsu, IBM, Xerox, Citibank, Alcoa, Texaco, Sealy, and these are only a few of the larger known conglomerates. There are already a very large number of foreign corporations in Jamaica, and it appears that this developmental economic reliance, which theorists from the Marxist school of thought might term exploitation, appears to be expanding.

With expansion plans to expand the Panama Canal by 2015, commercial maritime activity is expected to boom. The government of Jamaica, with assistance from the World Bank Group and JAMPRO, plans to create a massive logistics hub in order to become a major logistics link in the global free market chain. The proposed project, announced in January, is the centerpiece of the Jamaican Government’s growth strategy and is expected to create jobs and position Jamaica on the international stage alongside Rotterdam, Singapore and Dubai. Of course, the World bank Group and their international private sector investors have already been able to get their hands into the early phases of the project as the “World bank has been working closely with the Industry, Investment and Commerce Ministry over the past month and a half to determine how best to take advantage of Jamaica’s competitive edge in terms of attracting specific investments” (Smith-Edwards, 2013).

Cook, Elizabeth. Lesson Notes Week 2 Theories of Development. AMU. Accessed February 12, 2013 from https://edge.apus.edu/xsl-portal/site/207381/page/0f7045fd-d18a-4b96-907c-262fe631922d

Herath, Dhammika. Development Discourse of the Globalists and Dependency Theorists: Do the Globalisation Theorists Rephrase and Reward the Central Concepts of the Dependency School? Third World Quarterly, 29 (4), 2008.

Investing in Jamaica 2012. JAMPRO Trade and Investment. Jamaican Ministry of Industry, Investment and Trade. Accessed February 13, 2013 from http://www.jamaicatradeandinvest.org/7F6E533D-740A-4329-9AF8-CD8AF2384E9C/FinalDownload/DownloadId-46DD60B66317188432F168D1782D7A31/7F6E533D-740A-4329-9AF8-CD8AF2384E9C/documents/InvestJamaica2012_web.pdf

Lee, Wendy. Introduction to the Geography and Natural Resources of Jamaica. Hofstra University, 1985. Accessed on Febriary 13, 2013 from http://people.hofstra.edu/jason_d_williams/HUML/Handbooks/19-Geography.pdf

Smith-Edwards, Alecia. World Bank to Provide Assistance on Logistics Hub Project. Jamaican Information Service. Government of Jamaica, February 12, 2013. Accessed on February 13, 2013 from http://www.jis.gov.jm/news/leads/32965

U.S. Department of State. The Bureau of Consular Travel. Jamaica, 2011. Accessed on February 13, 2013 from http://travel.state.gov/travel/cis_pa_tw/cis/cis_1147.html

Monday, February 11, 2013

Brief Note: Difference of British colonies in the so-called new world from Spanish, Portuguese , French and Dutch Colonies

The largest contrast between the British colonies of North America and the Spanish, French, and Portuguese territories in the so-called new world, to include the colonies in the West Indies and the Caribbean, was religion. The British colonies were predominately Protestant and Puritan in character while the Spanish, Portuguese and French colonies were overall Catholic. The only exception to this religious balance of power was the Dutch Quakers. The animosity between the protestant and Catholic religions could be seen from the beginning phases of British colonialism to North America as “all Hispanophobes and passionate anti-Catholics” were “willing to support colonization projects as a means of damaging Spain” and as “a way of removing potentially subversive Catholics from England” (James, 5). The divide between these religions was so great in the early North American colonies that in 1634, Catholics in the settlement of Maryland “were officially cautioned to hold their masses discreetly for fear that they might antagonize their protestant neighbors” (James, 10).

The conflicting ideologies of Protestant-Puritanism and Catholicism can also be seen in the new world conflicts between Britain and Spain. After Portugal and the Dutch had been humbled by British power, British leaders such as Cromwell began to view attacks on Spanish territories in the West Indies as an opportunity to “simultaneously damage the wealth and prestige of a leading Catholic power” which would be “interpreted as a victory for Protestantism” (James, 30). The British strike into the West Indies not only served as a protestant victory, it gained the Jamaica for the British Empire, which would become a major sugar producer for the rising hegemon.

Other notable differences were in the fields of agriculture and colonial work force characteristics. In the west Indies and the Spanish dominated Caribbean, where Britain held Barbados and later took Jamaica, Sugar was the staple crop that “enabled some plantation owners to become millionaires” (James, 17). In the North American British colonies, such as Virginia, it was the tobacco crop that “began a revolution that transformed the infant colony and the British economy” (James, 7). In order to export these valuable commodities, a large labor force that could handle physical labor was required. The Spanish colonies of the Caribbean, as a result of the Catholic Papal Bull Dum Diversas issued by Pope Nicolas V in 1452 to the king of Portugal, were already using African slaves prior to the emergence of noticeable British North American colonies. While European colonies in the Caribbean and North America attempted to utilize indentured servants, or settlers, for their main labor forces at the beginning of their colonization process, the African slave trade, provided by Portugal trade vessels, started to flourish during the 16th century in the Spanish Caribbean. The first records of African slaves in British North America show a much later exposure to African slave labor. The first written record of African slaves within a British North American colony were 20 Africans sold at Jamestown, Virginia around the year 1619.

The final difference that separated the British Colonies of North America from the Spanish, Portuguese, Dutch and French territories is that Britain was a rising hegemon that “from 1650 onwards” embarked on a massive ship building program in order to dominate the seas (James, 29). This “blue water school of foreign policy” advanced colonial possessions for Britain, advanced autarky and mercantilism, and eventually allowed the British Empire to become the predominate force in both the trans-Atlantic slave trade and international trade.

James, Lawrence. Rise and Fall of the British Empire, 3rd Ed. New York: St. Martin’s Press, 1997.

Public Broadcasting Station, WNET New York. Slavery and the Making of America: Time and Place. Educational Broadcasting Corporation, 2004. Accessed on February 11, 2013 from http://www.pbs.org/wnet/slavery/timeline/index.html

Sweet, James. Spanish and Portuguese Influences on Racial Slavery in British North America, 1492-1619. Accessed on February 11, 2013 from http://yale.edu/glc/events/race/Sweet.pdf

Thursday, February 7, 2013

Third World was for Cold War, Developing is for Globalization

Just as the term ‘third world’ was an appropriate Cold War term for “countries which were neither ‘Western’ AICs, with well-developed free market economies, nor countries of the Soviet bloc”, I view the term ‘developing countries’ as a reflection of economic globalization and view these ‘developing’ countries to be heavily laden with natural resources, and in most cases suffering from political instability, mass poverty, civil or foreign initiated conflict, or economic collapse (Calvert & Calvert, 2007).

What once was an international stage filled with individual nation-states under a model of realism, with each individual actor pursuing nation-state goals and interests, has now become an international stage where the majority of nation-state actors are integrated into a multi-level globalized economic market in which private sector actors (corporate-states) pursue interests and profits within a model of realism similar to how nation-states competed and warred with each other during the period between the Treaty of Westphalia and the end of the Second War World. With the creation of the United Nations and the United Nations Security Council after World War II, private sector globalization was granted international structure through IGOs such as the World Bank Group, International Monetary Fund (which sets currency exchange rates to allow capital to move across nation-state borders), and the World Trade Organization. The Marshall Plan set the standard for private sector reconstruction.

During the Cold War era the global stage was divided into a private sector capitalist market bloc and a communist bloc, with ‘third world’ nation-states that were not affiliated to either. Once the Soviet Union collapsed in 1991, the western nation-state powers, championing the banner of free market capitalism, and the private sector wasted little time in expanding the free market eastward to assimilate post-Soviet satellite nation-states into the global market. Some of these nation-states were anxious for the opportunity, while others, such as natural resource-rich Bosnia-Herzegovina, required UN peacekeeping intervention. Today, under the ideology that “Africans need the same things Europe and Japan needed after World War II: infrastructure, energy, integrated markets linked to a global economy”, the majority of ‘developing’ countries are in Africa and South America, many of which are still dealing with political and economic ramifications from colonialism as they transition into private sector ‘development’ (Zoellick, 2010). Similar to Marshall Plan after World War II, the private sector is brought into a nation-state under the guise of reconstruction, or some other humanitarian guise, behind the World Bank Group which “evolved from the International Bank for Reconstruction and Development as facilitator of post-war reconstruction and development” (World Bank, 2012). Similar to how NAFTA impacted South America, the “World Bank Group is already working with Africans and Chinese to create industrial zones” (Zoellick, 2010).

The majorities of ‘developing’ countries become ripe for entry into, and open to the exploitation of their natural resources, by the global private sector market under three methods: 1) Political instability or post-war destruction 2) Extreme poverty, disease, sanitation, or any of the UN Millennium goals or 3) Sanctions and regime removal by unilateral nation-state or collective UN coalitions (which means the carrots did not work, so it is stick time).

This is not to say that the population of a ‘developing’ nation-state does not benefit in some areas from foreign private sector investment, but the primary goal of private sector capitalism is to maximize profit.

Calvert, Peter & Susan. Politics and Society in the Developing World, 3rd ed. (Harlow, England: Pearson Longman, 2007). Accessed on February 6, 2013 from https://edge.apus.edu/xsl-portal/site/207381/page/0f7045fd-d18a-4b96-907c-262fe631922d

World Bank. World Bank Official Web page, 2012. Accessed on February 7, 2012 from http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK:20653660~menuPK:72312~pagePK:51123644~piPK:329829~theSitePK:29708,00.html
Zoellick, Robert. 2010. The End of the Third World. The International Economy (Spring): 40-43.

Sunday, December 30, 2012

International Realism: From Nation-States to Private Capital


"And every nation has its appointed term; when their term is reached, neither can they delay it nor can they advance it an hour (or a moment)." – The Quran (Al-Araf)

Introduction

                From the nation-state anarchy that emerged after the Treaty of Westphalia through the first decade of the twenty-first century, the international stage has been in constant transformation, through a series of historical events consisting of conflicts, treaties and the creation of international organizations, which have evolved world international relations into a new epoch.  From Westphalia onward, individual nation-states struggled and created alliances in order to pursue and protect national interests under the model of anarchy.  Through two major international conflicts, World War I and II, in which the victorious alliance of nation-states established a collective hegemon and inadvertently propelled a new nation-state power, the United States, to the international stage creating a world balance of power between capitalism and communism, termed the Cold War, under the influencing forces of created International Governmental Organizations such as the United Nations, the World Bank and the International Monetary Fund.  As anarchical nation-state power struggles consolidated under a single superpower nation-state after the Cold War and private sector capitalism pushed freely across the globe through mechanisms of established international governmental organizations, the world authority model of global governance which nation-state governments had evolved to became mere mechanisms utilized by a new model of anarchy that had emerged on the international stage in which private sector corporate actors ruthlessly competed for resources and interests as nation-states had once done at the time of Westphalia.  The events of the last century have brought an end of international anarchy between nation-states, consolidating and constraining nation-states under globalization, while unleashing the anarchy of private sector capitalism which has marked a new epoch in international relations.

Nation-State Anarchy and World War I

                As the young nation-state power, the United States, was on a quietly rising path of economic strength due to its vast natural resources, its ability to export to both sides of the European balance of power and the isolated geographic distance from Europe prior to World War I, the nation-states of Europe were entangled in thick political chains of anarchy and near the brink of continental conflict.  As a natural component of nation-state anarchy, alliances contributed heavily in the conditions that caused World War I as Britain, France and Russia created the Triple Entente and Germany, Austria and Italy created a Triple Alliance.  These alliances were the direct results of concerns by Britain, Russia and France toward the rapidly rising economic and military power conversion of unified Germany, as “Germany had pulled even with Great Britain, the preeminent power in Europe, and was three times wealthier than France or Russia. In 1913, one year before the war broke out; German wealth exceeded that of Great Britain by 40 percent”.  Germany, on the other hand, had their own security concerns about being geographically encircled by the nation-states of the Triple Entente, especially the arms embargo implemented by the Triple Entente in order to prevent neutral U.S arms sales from reaching Germany.

                Commonly in regional anarchic nation-state conflicts, vulnerable satellite or colonial territories belonging to or protected by larger nation-states can often create sparks that ignite regional conflagration.  This was the case leading into World War I when, in 1914, Austria-Hungary, backed by Germany, declared war on Serbia, which was backed by Russia, after the assassination of Archduke Franz Ferdinand.  The result was a Russian military mobilization and a German declaration of war which began what historians call the Great War, World War I.  The United States would join the side of Britain toward the end of the conflict claiming the issue of German submarine warfare and the provocative Zimmerman Telegram which offered Mexico the opportunity to become a German ally.

Nation-State Anarchy and First Attempt at Collective Security

                The defeat of Germany in World War I brought to the European surface several ramifications from the Treaty of Versailles which included German surrender of colonial possessions, heavy economic reparations on Germany and the loss of German control over the Ruhr Valley, Germany’s leading industrial area, to French occupation.  Even more important in the aftermath of World War I was the first attempt to establish a liberal model of collective security in the creation of the League of Nations.

                The liberal League of Nations was a failure in moving the world into a model of world authority in global governance mainly because it placed all nation-states, the victorious and the defeated of World War I, on equal footing as “all Council members, great and small, had a veto”.  Despite the intentions behind Wilson’s Fourteen Points plan and the League of Nations, the goal of collective security was not reached and the result was a formal meeting place for continued nation-state anarchy.   As a result, individual nation-states again came face to face with the same balance of power, along with the same fears and alliances that had originally caused World War I and Europe once again faced the rise of German economic and military power, which was erroneously left unified after World War I by the winning states of that conflict.

The Second War, Consolidated Balance of Power, and IGOs

                Several pertinent developments occurred after the conclusion of World War II, in which the winners of WWII repeated the victory of the First World War, and the United States propelled itself to the position of an international military power with nuclear capability.  Those developments were:  1) the previous mistake of nation-state equality within the failed League of Nations was corrected in the establishment of the United Nations Security Council.  2)  International Governmental Organizations aimed to promote private sector capitalism were created at Bretton Woods which would loosen private sector capitalism from the previous restraints of nation-state borders. 3)  A bipolarity balance of power developed between communism, led by the Soviet Union in the East, and Capitalism, led by the United States in the West which began a massive arms race, beneficial to private sector capitalism, which would stretch above the planet under the category of space exploration.

World Authority, UN Security Council, Bretton Woods & Cold Balance

                International anarchy on a nation-state level began degeneration with the establishment of the United Nations, and more specifically the establishment of the UN Security Council with five permanent members possessing veto power: the United States, Britain, France, Russia and China.  While the United Nations were successful in establishing a collective hegemony and world authority to prevent further international conflict, it did not prevent the international stage from dividing into bipolarity between the two major military superpowers after World War II: The communist nation-state of the Soviet Union, which developed nuclear weapons in 1949, and the United States, who following World War II would champion the banner of private sector capitalism by creating the Bretton Woods international organizations of the International Monetary Fund and the World Bank.  These International Governmental Organizations would eventually develop into powerful instruments that would allow private capital to manipulate, and eventually control at times, nation-states that had embraced or had been opened to capitalist markets.  It is the creation of the Bretton Woods international governmental organizations that mark the beginning phase of private sector anarchy on the international scene.  As the nation-states of the globe consolidated further into a world authority model under globalization, the more anarchical model of private sector competition branched out and grew more competitive.  In order to fully understand the beginning phases of capital anarchy, it is vital to understand the creations at Bretton Woods.

                The International Monetary Fund, with its current 188 nation-state members, “came into formal existence in December 1945, when its first 29 member countries signed its Articles of Agreement. It began operations on March 1, 1947.”   The International Monetary Fund is the organization that sets the international exchange rates between various nation-state currencies.  This international exchange rate is the vital human skeleton for international private sector capitalism and allows capital to cross national borders and assume various physical and monetary forms depending on final destination.  After World War II the International Monetary Fund “began to expand in the late 1950s and during the 1960s as many African countries became independent and applied for membership. But the Cold War limited the Fund's membership, with most countries in the sphere of influence not joining”.  The World Bank, on the other hand, is an International Governmental Organization, also with 188 nation-state members, that had earned its international reputation through nation-state reconstruction efforts, with conditional loans to open private sector investment into devastated post-war European nation-states after the Marshall Plan, and in aftermath of the Cold War, intensified efforts of ushering private sector capital into post-Soviet states in Eastern Europe and post-colonial nation-states in Africa.  Today, it is the reconstruction of post-colonial African nation-states by the World Bank and the infiltration of the private sector while in the period following the Cold War and the emergence of the U.S. international hegemony, Eastern Europe was the primary target.  In order to grasp the U.S. position within the World Bank, “The five largest shareholders are, France, Germany, Japan, the United Kingdom and the United States”, three of five permanent members of the United Nations Security Council.

Private Capital Utilization of World Authority

                Using war ravished Europe as a successful test bed for a global private sector market, “The original Bretton Woods plan was at first subsumed by the Cold War. The Marshall Plan announced in 1947 provided the USA with a more immediate bilateral way to ensure stabilization, investment and reconstruction in Western Europe.  Nevertheless, by the 1950s both the IMF and the World Bank were modestly assuming a place in the international economy.”

                The restricting boundaries of the Cold War prevented any further expansion of international capitalist markets into the Soviet sphere of influence, but after the collapse of the Soviet Union at the conclusion of the Cold War, the United States was instantly propelled to the level of unilateral superpower in the ashes of what was the most equally distributed international balance of power in history.   As a true champion of international private sector capitalism, the United States and her lesser nation-state allies instantly went to work through so-called United Nations Peace Keeping missions throughout Eastern Europe in order to spread the private market eastward into former Soviet satellite nation-states and bring them into the world market.  The United States was a founding member of the dual International organizations created at Bretton Woods, the International Monetary Fund and the World Bank, and these two organizations would be main instruments in spreading private sector capitalism as far as it would extend after the United States Cold War victory against Soviet Communism.  The utilization of the World Bank and International Monetary Fund, along with the economic and military might of the United States in the United Nations Security Council were pivotal in expanding capitalism eastward through so-called UN peacekeeping operations in territories left unstable, politically void or politically divided, such as Bosnia and Herzegovina.  While the private sector ushered in by the World Bank and International Monetary Fund had ridden the coattails of United Nations peacekeeping operations in many post-colonial African and post-Soviet nation-states in order to target natural resources, the example of the 1992 war in Bosnia-Herzegovina will clearly illustrate the methodology that is utilized by these organizations.

UN Peace Keeping Mission in Bosnia-Herzegovina

                The war in Bosnia between 1992 and 1995 was a direct result of the collapse of the Soviet Union.   Bosnian independence from Yugoslavia plunged the territory into civil war as “Bosnian Serbs did not want to break away from Yugoslavia, and so the Serbs left the Bosnian parliament to form their own parliament. The Bosnian Serb decision to split from the Bosnian parliament inspired the Bosnian Croats to also declare their autonomy”.  The early UN peacekeeping mission in Bosnia, a territory plunged into civil war, had difficulty in achieving, through proposed peace negotiations, the goal of stabilizing a unified Bosnian independence, and a government that could be brought into the world market, and eventually UN peacekeeping efforts were turned over to NATO military air strikes,  Operation Deliberate Force, and the champion of world capitalism, the United States, led the way by providing the most military and most economic contributions to operational missions.   This was the case until “U.S. troops marked the end of their nine-year peacekeeping role in Bosnia on Wednesday [December 24, 2004] as NATO prepared to hand over the task to the European Union in December [2004]” .

                As the region of Bosnia-Herzegovina began a stabilization process after the Dayton Peace Accords, the World Bank was eagerly present with lofty promises of reconstruction funding and the ushering in of foreign private sector capital investments which would target domestic natural resources in minerals, petroleum, hydropower, and other resources of commercial importance in Bosnia-Herzegovina.

Private Capital Anarchy and Nation-State World Authority

                From the example of the United Nations peacekeeping mission in Serbia, it becomes clear that nation-state governments under the world authority model burden the economic costs of military action and also burden the blood of lost national sons and daughters while private sector actors, using the instruments of the World Bank and International Monetary Fund in order to gain access to the natural resources inside nation-state borders while burdening nothing except capital spending to generate capital profit.

What began as the establishment of an international market spanning from the United States to war ravished Europe, gained acceleration with eastward expansion after the collapse of the Soviet Union and southward in post-colonial nation-states.  On the modern stage, nation-states, such as Iraq and Libya, that do not accept private sector ‘carrots’ are often removed by UN and NATO military ‘sticks’ and promptly rebuilt by the World Bank Group and private sector investors.  In extreme cases of military occupation, unsuspecting military members are placed on the ground to stabilize the region for private sector profiting.  The danger of these UN-NATO operations, often the results of brilliantly placed, inescapable economic sanctions, is that the most powerful military nation-states on the international scene today are representative democracies and representative democracies are the easiest governments on the international stage to be influenced or purchased into political or military action through the capital of domestic or international lobbyist forces.

With the massive increase of multi-national corporations battling for the opportunity to accumulate capital profits, the nation-states that have created the international organizations to promote capitalism and opened the international stage for private sector capitalism have become consolidated, and concreted, into a world authority model of global government that is easily manipulated, used and discarded by the anarchy of private sector capital actors.  The international stage is no longer the sole property of nation-states, for nation-states have become the indentured servants of the new international actor, private sector capital.

 

               

 

 

 

 

 

 

 

 

References

Ghoniem, Amira A.  United Nations Peacekeeping Operations: Improvements for Mission Success.  University of Stanford, 2003.  (Accessed on December 27, 2012 from http://www.stanford.edu/class/e297a/United%20Nations%20Peacekeeping%20Operations.pdf)

International Monetary Fund Website.  History of the IMF, Accessed on December 27, 2012 from http://www.imf.org/external/about/histcoop.htm)

Nau, Henry. Perspectives on International Relations. 3rd ed. (Washington, D.C.: CQ Press, 2012).

Treaty of Westphailia.  Yale Law School.  Lillian Goldman Law Library.  Avalon Project: Documents in Law, History and Diplomacy.  (Accessed on December 27, 2012 from http://avalon.law.yale.edu/17th_century/westphal.asp)

U.S. Troops Mark End of Mission in Bosnia.  Associated Press.  November 25, 2004, accessed December 27, 2012 from http://www.washingtonpost.com/wp-dyn/articles/A11164-2004Nov24.html)

Woods, Ngaire.  The International Monetary Fund and the World Bank, p. 955.  (Accessed on December 29, 2012 from http://www.globaleconomicgovernance.org/wp-content/uploads/Woods%20for%20Routledge.pdf)

World Bank Group Website.  About the World Bank, Leadership.  (Accessed December 27, 2012 from http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK:22428930~menuPK:1697011~pagePK:51123644~piPK:329829~theSitePK:29708,00.html)

Saturday, December 29, 2012

Private Sector Betrayal of the Nation-State that Championed the Banner of Capitalism




               
                The United States has been a member of the United Nations Security Council since its inception after the conclusion of World War II and possesses permanent member veto power with the other four permanent members of the Security Council: China, France, Britain and Russia.  Since the emergence of superpower status on the international stage following World War II and being elevated to the role of the premiere hegemonic international superpower after the conclusion of the Cold War, the United States has always championed capitalism and the international free market.  In 1984, President Ronald Reagan told the nation that he would “propose a broader strategy in the field of international trade--one that increases the openness of our trading system”.  The political position of the United States, that of private sector capitalism, has been clearly evident in her association in International Governmental Organizations (IGOs) and Non-Governmental Organizations (NGOs), as well as the United Nations peace keeping missions that she has participated in over the past three decades.

Conclusion of the Cold War, the Rise of U.S. Hegemony and the Utilization of IGOs

                After the collapse of the Soviet Union at the conclusion of the Cold War, the United States was instantly propelled to the level of unilateral superpower in the ashes of what was the most equally distributed international balance of power in history.   As a true champion of international private sector capitalism, the United States and her lesser nation-state allies instantly went to work through so-called United Nation Peace Keeping missions throughout Eastern Europe in order to spread the private market eastward into former Soviet satellite nation-states and bring them into the world market.  The United States was a founding member of the dual IGOs created at Bretton Woods, the International Monetary Fund and the World Bank, and these two IGOs would be main instruments in spreading private sector capitalism as far as it would extend under the balance of power after the conclusion of WWII, bolstering an international market across war-ravished Western Europe through the Marshall Plan, and extending capitalism even further eastward after the victory of the Cold War against Soviet Communism.  The utilization of these two private sector structured IGOs, the World Bank and IMF, along with the economic and military might of the United States in the UN Security Council were pivotal in expanding capitalism eastward through so-called UN peacekeeping operations in territories left unstable by politically voids or political divide, such as Bosnia and Herzegovina.

Understanding the Roles of the World Bank and the IMF

                In order to understand the true planning process of the United States and her nation-state, and private sector, allies in spreading the international capital market eastward after the collapse of the international balance of power with the Soviet Union after the Cold War through UN peace keeping missions in Eastern European former Soviet satellite territories such as Bosnia-Herzegovina, it is imperative to understand the purpose and roles of the IMF and World Bank. 

The IMF, with its current 188 nation-state members, “came into formal existence in December 1945, when its first 29 member countries signed its Articles of Agreement. It began operations on March 1, 1947.”    The IMF is the organization that sets the international exchange rates between various nation-state currencies.  This international exchange rate is the vital human skeleton for international private sector capitalism and allows capital to cross national borders and assume various physical and monetary forms depending on final destination.  After WWII the IMF “began to expand in the late 1950s and during the 1960s as many African countries became independent and applied for membership. But the Cold War limited the Fund's membership, with most countries in the Soviet sphere of influence not joining”.  The World Bank, on the other hand, is an IGO, also with 188 nation-state members, that had earned its international reputation through nation-state reconstruction efforts, with conditional loans to open private sector investment into devastated post-war European nation-states after the Marshall Plan, and in aftermath the Cold War, intensified efforts of ushering private sector capital into post-Soviet states in Eastern Europe and post-colonial nation-states in Africa.  Today, it is the reconstruction of post-colonial African nation-states by the World Bank and the infiltration of the private sector while in the period following the Cold War and the emergence of the U.S. international hegemony, Eastern Europe was the primary target.  In order to grasp the U.S. position within the World Bank, “The five largest shareholders are, France, Germany, Japan, the United Kingdom and the United States”

UN Peace Keeping Mission in Bosnia-Herzegovina

                The war in Bosnia between 1992 and 1995 was a direct result of the collapse of the Soviet Union.   Bosnian independence from Yugoslavia plunged the territory into civil war as “Bosnian Serbs did not want to break away from Yugoslavia, and so the Serbs left the Bosnian parliament to form their own parliament. The Bosnian Serb decision to split from the Bosnian parliament inspired the Bosnian Croats to also declare their autonomy”.  The early UN peacekeeping mission in Bosnia, a territory plunged into civil war, had difficulty in achieving, through proposed peace negotiations, the goal of stabilizing a unified Bosnian independence, and a government that could be brought into the world market, and eventually UN peacekeeping efforts were turned over to NATO military air strikes,  Operation Deliberate Force, and the champion of world capitalism, the United States, led the way by providing the most military and most economic contributions to operational missions.   This was the case until “U.S. troops marked the end of their nine-year peacekeeping role in Bosnia on Wednesday [December 24, 2004] as NATO prepared to hand over the task to the European Union in December [2004]”.

                As the region of Bosnia-Herzegovina began a stabilization process after the Dayton Peace Accords, the World Bank was eagerly present with lofty promises of reconstruction funding and the ushering in of foreign private sector capital investments which would target domestic natural resources in minerals, petroleum, hydropower, and other resources of commercial importance in Bosnia-Herzegovina.

Private Sector Betrayal of the Nation-State Champion of Capitalism 

                In closing, international history clearly illustrates how the United States has championed private sector capitalism from that nation-state’s emergence onto the international stage as an economic and military power, the victory over communism during the Cold War, and becoming the leading superpower on the globe.  IGO instruments such as the UN, NATO and so-called peacekeeping operations, backed by nation-state members’ military and economic power but mostly burdened by the U.S., forced open the way for private sector capitalism in Eastern Europe and post-Colonial Africa through private sector IGO/NGOs such as the World Bank Group and the IMF, along with the World Trade Organization.  The rise of the United States as a single nation-state hegemon, steering and clearing the way for private sector NGO activities through IGO military and political operations, marked the evolution from individual nation-state actors vying for power to private sector corporate actors consolidating and owning the international stage.  With American corporations becoming international and many others manufacturing in foreign nation-states with lower wage requirements in order to maximize profits, it is time to consider whether private sector capitalism has forsaken the nation-state that has championed the banner of private sector capital on the international stage .  

References

Ghoniem, Amira A.  United Nations Peacekeeping Operations: Improvements for Mission Success.  University of Stanford, 2003.  (Accessed on December 27, 2012 from http://www.stanford.edu/class/e297a/United%20Nations%20Peacekeeping%20Operations.pdf)

International Monetary Fund Website.  History of the IMF,( Accessed on December 27, 2012 from http://www.imf.org/external/about/histcoop.htm)

Ronald Reagan.  State of the Union Speech, 1983.  Public Broadcasting Website.  (Accessed on December 27, 2012 from http://www.pbs.org/wgbh/americanexperience/features/primary-resources/reagan-union-1983/)

 U.S. Troops Mark End of Mission in Bosnia.  Associated Press.  November 25, 2004, accessed December 27, 2012 from http://www.washingtonpost.com/wp-dyn/articles/A11164-2004Nov24.html)

World Bank Group Website.  About the World Bank, Leadership.  (Accessed December 27, 2012 from http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK:22428930~menuPK:1697011~pagePK:51123644~piPK:329829~theSitePK:29708,00.html)


Thursday, December 27, 2012

Global Governance Models and the Future

The different forms of global governance models are world hierarchy, world authority, and world anarchy and world constitutionalism.

Under the world hierarchy category, the text uses IGO relationship examples of Islamic empires, Communism and Colonialism. The idea that Islamic governments are unwilling to work well with non-Islamic governments should be dispelled by looking at the UN General Assembly, and communist governments often receive most favorite nation status from capitalist nations. Does the IMF still offer currency rates for communist nation-states? As for colonialism, I hold the view that it never truly ended and actually evolved into private sector colonialism through IGOs such as the World Bank, IMF and WTO. It is possible that a centralized unitary government may exist one day on the international stage, but I would have to predict it to emerge out of the private sector if it ever occurred.

The world authority example is evident in the United Nations hegemony of the UN Security Council. As the text book states, there is no significant role for NGOs under the world authority because the dominant forces are really not pressured by NGOs and will only utilize the information and influence generated by NGOs if it does not conflict with the economic-military-political interests of the most powerful nation-states, or if that information can be used to justify occupation or regime removal which would generate more revenue off natural resources. The UN has been able to work for several decades now, but it is evident that members of the five-seat Security Council are beginning to develop differing interests that they deem vital for protection or enhancement, and our children could very possibly see the UN begin to develop similarities to the League of Nations during their lifetime.

World Anarchy, or realism, is where I would expect the international stage to return to, if not for globalization and the quickening consolidation of world capital by international private sector blocks. At some point since WWII, and more specifically since the Cold War, the shift in power has evolved from nation-states to private capital. As things stand now, I predict a realist model of individual pursuits by private sector (corporate states, if you can call them that) similar to how nation-states competed after Westphalia.

World Constitutionalism, with its examples of the EU and UN general assembly, are nice illusions using examples of democratic voting by people or parliaments, but the weight of the votes are stacked in most important international IGOs like the UN and EU, or even more dangerous is the element of votes vulnerable to purchase by private sector lobbyists (which can be found in domestic representative democracies all the way up to international, parliamentary structured IGOs).

The future will be interesting.