December 17, 2005

THE US invasion of Iraq may have its origin in wider geo-political considerations. But its method, its attempt to impose a “regime change” there, draw upon Washington’s experience of domination in Latin America, specially in the Caribbean basin.

The US correctly claims that it never sought a colonial career. True, it acquired some colonies following the war with Spain in 1898 and brutally suppressed the Filipinos’ struggle for independence. But it ultimately freed all of them without being under any compulsion to do so.

The continental territory that America acquired during its expansion towards the Pacific Ocean was destined to be a part of its state-system. Thus, as soon as the population of any territory reached 60,000, it could apply for statehood, for a star on the US flag.

Until then, it had been a primarily agricultural country, whose products were taken by an industrializing western Europe. When its own pace of industrialization began picking up, its manufactured goods did not enjoy the same easy access to Europe that its food-stuffs and cotton did. Hence, the basic contradiction of the capitalist mode of production presented itself more pressingly with the passage of time.

This, as Rosa Luxembourg said in has critique of Marx’s theory of “simple reproduction of the capitalist economy,” is that, because the worker is not paid the full value produced by him, the entire production of a capitalist economy cannot be sold within that economy itself. A part of it must be absorbed by the pre-capitalist sector within or outside the country. The US had no pre-capitalist sector. It had started with the simple commodity economy and gone on to capitalism. The original food-gathering inhabitants had simply been exterminated because they were unable to adapt to modern labour.

The US, therefore, had to look abroad for markets for its industrial goods and for sources of raw materials it lacked and later for export of capital.

These needs could be met by Latin America countries which had a large pre-capitalist sector in their economies because although servile labour had been abolished there after 1820, peonage — a form of agricultural servitude — still existed. It not only provided cheap labour but also dragged down the wages of free labour. This resulted in low prices of raw materials and higher profits for the expatriate capital. The bigger Latin American countries could, up to an extent, control their economic exchanges and also be protected by the British, who had large capital investments there. However, the small Central American and Caribbean island states could be dominated economically and bullied militarily. It was here that the system of “banana republics” was established by the US during the period between the end of its civil war and the last year of the 19th century.

This relationship was based on an alliance with the local oligarchy, composed mainly of the landed class, and trading bourgeoisie. The US capital was engaged in mining and capitalist cultivation of commercial crops and in such means of transport and communication as these activities required.

The United States installed governments of its choice in these states, with their members (and the ruling classes generally) tied economically to its capital. The axis of this dependent relationship was the close links between the US and the local army, trained by the Americans, and led by US-trained personnel. Usually this army kept governments in line with Washington’s policy. If these governments failed the US had to intervene directly to replace them with more favourable ones.

The system can be understood better with an illustration. Guatemala’s economy was dominated by America’s United Fruit Company, which mainly grew and exported bananas. It owned over 400,000 acres of Guatemala’s cultivable land but normally cultivated only 5.2 per cent of it. It also owned a railway and the main telegraph company in the country and exported bananas in its own ships.

In 1953, an elected government of Guatemala instituted land reforms under which it gave land to 100,000 peasants. The reforms affected the local landed class and the United Fruit, which was the biggest landowner in the country. It lost 25,000 acres. The company organized a mercenary force in Honduras and Nicaragua in 1954, to which the US government lent two warplanes. It invaded Guatemala but its army refused to fight against it. The government was replaced and the land reforms undone.

In cases, where such a change cannot be effected through a local military coup or invasion by a private army, the US intervenes directly, as happened in Grenada, Santo Domingo and recently in Panama. The US invasion of Iraq is an attempt to apply the technique of regime change to the Arab world. However, it takes place in a much wider strategic context.

But it has come at a time when the US economy is withdrawing from a large range of manufacturing activities and is concentrating more on high technology, armaments and services. To meet its others needs, it depends on imports, paid for in its own currency, which are ploughed backed into its securities. This eminently convenient arrangement has become possible because the dollar has become an international currency and medium of payment.

But it may not last long. Europe — mainly France and Germany — are now becoming increasingly autonomous, shedding some of the hegemony the US enjoyed over the western world during the Cold War. Worse, its currency, the euro, is poised to challenge the dollar as a rival means of international payments.

On the other side of the globe, Japan, a firm ally of the United States, actually has more in common with China. And the fact that the Chinese products contain many sophisticated ingredients based on Japanese technology is likely to keep their industrial economies complementary to each other for a long time. The EU and China-Japan are inexorably undermining the US’s economic hegemony and its “floating” nature.

Secondly, the fact that the Americans tend to use military force so often to pursue their international agenda indicates a weakening of their ideological hegemony too. The Gulf happens to be the only region which will, for long, continue to produce far more oil than it uses. Hence, the industrialized world’s dependence on its oil. Acquisition of control over Iraqi oil gives the US power over a part of the fuel supplies to the EU, China and Japan. And turning Iraq into a US base will also enable it to dominate the Caspian oil fields.

Such control will further ensure that this oil underpins the value of the US dollar, a sort of substitute for what the American state gold holdings once were. More immediately, what precipitated the US invasion of Iraq was the grant by Saddam Hussein of oil-prospecting and producing rights in the country to China, Russia and France and specially his plan to sell oil in euro. This was a direct threat to the US’s global financial hegemony.

That Saddam, an old and trusted collaborator of the US, was discarded as part of regime-change is not surprising. He has a long list of predecessors — Trujillo, Armas, Samoza, Noriega, etc. Since he had failed to dislodge the Iranian Revolution, he had become worthless, although the Gulf war had attained a much more important western objective — thwarting of the real prospects that Iraq may achieve independent industrial development.

The problem in Iraq today is that of regime-engineering. It is obvious that the axis of any such dependent relationship forged by the US with a client state is its close, almost organic, link with latter’s army. It was for this reason that, soon after the invasion, Bremer, the first US administrator, dissolved both the Iraqi army and the police and set about creating new ones, linked and beholden to the US. This threw the dismissed officers and soldiers into the arms of the resistance, through they may not be much good at it, having got used to suppressing and torturing the masses under Saddam’s rule. The sharp edge to the resistance is provided by the ideologically-motivated civilian volunteers, though they have reduced their struggle to Sunni revanchism and, therefore, sectarianism.

The new recruits to the army and the police are mainly from among the Shias, who had hitherto been kept out of the organs of state coercion by the Sunni ruling class. And it is these new organs, in the process of being evolved, which are the special target of the resistance’s violence.

The question is which class or stratum the pro-US regime of Iraq can rely upon to give it a solid ground, or what could be the Iraqi equivalent of the Central American oligarchy.

Sunnis, being a minority, should be the preferred local US ally. But it is they who formed the ruling class just overthrown by the Americans. Moreover, an important segment of this class — state employees, both military and civilian — has been adversely affected by the US reorganization of the state machinery.

The Shia majority, although cooperating with the Americans in practical matters, is not trusted by them, as they suspect it of being open to Iranian influence, although this is far from certain.

Other hurdles in the way of a US-Shia alignment are: (a) being a majority, the Shia cooperation would be of short duration. Contradictions would emerge early; (b) since the major means of production were hitherto owned by the Sunnis, a Shia ruling stratum, which may collaborate with the US, would take time to emerge; (c) the bulk of better-off Shias consists of farmers and small traders, the strata from which the capitalist class normally arises. These strata may be socially on the right but, politically, they would uphold bourgeois nationalism, objectively opposed to the US domination of Iraq; (d) the Arabian sea-board of the Gulf has important Shia population. A US alliance with the Iraqi Shias would encourage them to demand their normal political and civic rights.

This would strain the Americans’ alliance with the Saudis and the Gulf statelets, all oil producers. That leaves the Kurds. Their support would isolate the US in the rest of Iraq.

The main point is that the Baathist land reforms had removed the landlord class, which could have become the US’s stable collaborator. The remaining Arab society in Iraq is bourgeois. It would be happy to enjoy a period of peace under the US-supervised political system after a prolonged spell of turbulence under the Baath rule. But it would not, for long, accept the American regime of Iraqi oil or a permanent regime of unequal exchange.

The best thing for the Americans would be the emergence in Iraq of a compradore big bourgeoisie from the existing petit bourgeoisie strata. But that requires time, which the US does not have.

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