• 'The Anatomy of Imperialism' (Bertrand Russell Foundation article)

The Anatomy of Imperialism in Our Time

by Russell Stetler

Pubd. Dec. 1969 in 'London Bulletin'. By permission of B.R.P.F.

Summary: Examination of the American Empire, somewhat typical of articles of the time, some of which are listed at the end (and which were, and are, ignored by most academics). No information was given about Russell Stetler. The article entirely ignores finance, as arranged mostly by Jews; the rôle of imposed central banks in taking a percentage of currency circulation and inflation, and buying up of assets, is wholly missing - Rae West.

The structure of present-day imperialism reflects, in the main, the hegemony of the United States in social, political and economic life throughout the world. This hegemony was firmly established at the end of the Second World War and was institutionalised in a series of diplomatic, military and financial agreements reached during and immediately after the war. It is in the history of these accords that one understands most clearly the nature of the new imperialism and the origins of the most acute world crisis before us today. This paper will therefore devote some attention to America's struggle for dominance, before turning to the long-range implications of the crisis we all face at this moment.
A considerable mystification has long obscured the reality of American imperialism. It has arisen, at least in part, with the common identification of imperialism with colonialism. America's failure to indulge in the sport of conquest which characterised a whole epoch of nineteenth century international politics has often induced us to neglect not only her long racialist and expansionist heritage, but also her complete acceptance of the economic objectives of traditional imperialism. As England forayed into southern Africa and France into Indochina in the last half of the nineteenth century, America completed her relentless expansion westwards, pushing the frontier farther and farther back and exterminating the American Indian in the process. Frederick Jackson Turner, the American historian who conceived the famous frontier thesis, wrote in 1896, For nearly three centuries, the dominant fact of American life has been expansio.n
When the last continental frontier had been reached, of course, America did acquire the Philippines in 1898 and embarked on a "pacification" campaign of fifteen years' duration, in which more than 100,000 troops (mainly veterans of the Indian Wars) crushed an indigenous resistance. The commanding General, Arthur MacArthur, described it as the most legitimate and humane war ever conducted on the face of the earth". America was by no means reluctant to intervene in the internal affairs of other nations, especially in South America. The U.S. State Department's "Instances of the Use of United States Armed Forces Abroad, 1798-1945" cites more than twenty military interventions between 1900 and the First World War.
It is well known that China figured predominantly in the imperialist ambitions of Washington policy makers around the turn of the century. The Philippines were indeed taken because of Manila's utility as a coaling station and naval base on the principal trade route to the Asian mainland. Although America's designs were often justified in terms of anti-colonialism and the tradition of 1776 (e.g., liberating the Filipinos from Spanish oppression) or a somewhat vaguer civilising or Christianising mission, hard commercial interests were always acknowledged to lie behind the manifest destiny. The "Open Door" policy aimed to curtail the exclusive spheres of British and European influence in China, to foster American economic penetration. As President Wilson put it succinctly, what was involved was not the open door to the rights of China, but the open door to the goods of America".
The First World War radically transformed America's position as a world power. Although Germany's position suffered most severely from the harsh Versailles Treaty, all the principal European states had paid a heavy price for the war. Their debts increased sevenfold between 1914 and 1920. The United States, which had been heavily in debt before the war, emerged as a general creditor. Wilson saw this clearly and predicted on July 21, 1917 that "when the war is over we can force them to our way of thinking, because by that time they will, among other things, be financially in our hands". The American way of thinking had been summed up by Wilson a decade before in the following terms:

"Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed must be battered down. . . . Concessions obtained by financiers must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process.

This was the successful doctrine that America had applied long before in making Latin America her private preserve, outside the control of Europe, and in gaining entry into Asia long after it had been carved up by the British, French, Dutch and Russians. The Monroe Doctrine concerning South America had been promulgated decades before at a time when the Americans were too occupied with expanding their continental territory to be able to compete effectively with European imperialism's exploitation of Africa and Asia. The Monroe Doctrine was thus a defensive measure to hold Latin America against Europe and for the United States. With the rise of industrialisation, the end of the frontier and the accompanying victory of northern capitalism over the feudal south in the Civil War, Washington began to turn its attention to new sources of markets and raw materials, especially in the Far East. John Hay's "Open Door" policy reflected the desire of the Americans to move into China on an equal footing with the other imperialist powers. Superior American merchant fleets and shipping advantages meant that an open door into China would be primarily a door for the Americans at the expense of Europe and Russia. At the same time, the American military machine would have been pitifully inadequate in any battle with the British or the French over appropriate colonial divisions of China among the Great Powers. Russia' position was the opposite: in any free trading area she would have been at a disadvantage before the superior commercial apparatus of the British, French and Americans, yet her position as an Asian as well as a European country enabled her to carve out an area of north China as a colony and to defend it, monopolising its trade in the usual colonial manner. It is in this context that America viewed her new possibilities at the conclusion of the war.
Wilson's Presidency had introduced a new era of American politics. It was his Administration which, under the guise of "Progressivism", firmly established a pre-Keynesian tradition of state intervention in support of large-scale corporations which has basically been maintained and even expanded ever since. The Progressive Era witnessed the consolidation of the giant corporations. Increasingly, Federal regulations limited the possibilities of the small business to compete with the large. (The meat packing industry is perhaps the most striking example. In the name of improving the hygienic quality of packaged meats, the Government embarked in 1904 on a campaign of publicly financed inspections which served both to eliminate the small competitor and to underwrite the large corporations then in quest of export markets.) It was also in this period that the 1913 Federal Reserve Act was passed, which provided the legal framework for the extension of United States bank branches into foreign lands. As Magdoff notes, The door was opened wider by the 1919 amendment to the Federal Reserve Act, known as the Edge Act. In effect, these legislative enactments permitted United States banks to set up subsidiary corporations (a) to facilitate the creation of banks in countries which have laws prohibiting branch banks, and (b) to enable banks to engage in a wider range of foreign financial and investments activities. These subsidiary corporations were enabled to go beyond the usual financial activities of domestic banks, including direct investment in non-financial operations - such as manufacturing, mining and trade - which banks are prohibited from doing in the United States."
Thus, from the second decade of this century the U.S.A. was actively engaged in the world-wide struggle between the great powers to increase its share of the world's wealth by opening more and more areas to the penetration of American trade. The U.S. Congress was assisting through legislation, and the Executive Branch of the Government was fully conscious of its role in behalf of American business. As Wilson's Secretary of State, William Jennings Bryan expressed it to a meeting of businessmen, "I can say, not merely in courtesy - but as a fact - my Department is your department; the ambassadors, the ministers, and the consuls are all yours. It is their business to look after your interests and to guard your rights."
If Bryan's dream of transforming the American diplomatic corps into a rough equivalent of the British foreign service was excessive, his basic outlook was nonetheless indicative of the Washington consensus. America had emerged as a world power; she was by no means "isolationist". Divisions among policy-makers were generally tactical; they shared a common strategic assumption concerning America's power, her duty to exercise and extend it, and the inextricable relation of free enterprise, Christian civilisation, and democracy. Wilson saw the League of Nations as a means of stabilising a world order based on the status quo which he had negotiated at Versailles (representing of course a considerable advantage over the status quo ante in terms of American economic interests). Opposing America's entry into the League, Cabot Lodge stated in 1919, "I would keep America as she has been - not isolated, not prevent her from joining other nations for these great purposes - but I wish her to be master of her own fate . . . ' In short, the opposition to Wilson favoured unilateral American exercise of power - to achieve the same objectives as he had articulated arguing for the League. What they feared was binding America to an association in which small nations had equal rights and power, hence enabling them potentially to curtail American prerogatives.
The 'twenties and 'thirties were a period of intense rivalry among the great powers. The British imperial apparatus was, first of all, difficult to supplant. Although built out of Britain's industrial leadership and mercantile supremacy, the dominant position of the U.K. tended to be maintained by the very structure of the world's financial institutions. The pound remained the number one reserve currency in the inter-war years. The Ottawa Agreement, the developing of the Sterling area in the nineteen thirties, followed by the Payments Agreements during World War Two, went some distance towards maintaining Britain's position of financial hegemony. America lost export markets and her ability to secure vital raw materials, especially minerals, was placed in jeopardy. English exports at once declined as a percentage of national product from 15% in 1928 to 8% in 1938 and tended increasingly to remain within the Sterling bloc or related bi-lateral systems. In 1938 the Sterling bloc had come to account for a third of the world's trade. American exports suffered drastically. They had stood at 5,400 million dollars in 1929, then dropped to 2,100 million dollars in 1933 and recovered to only 3,100 million dollars in 1938. Direct foreign investment by the United States likewise declined in this decade. The loss of markets was aggravated by America's growing inability to secure raw materials from the underdeveloped world. Export of raw materials actually increased by 10% from 1928 to 1938, but America's share of these was curtailed by the restrictive and exclusive agreements which the defensive metropolitan powers of Europe had demanded.
It is in this context that policy-makers viewed the effects of the Depression in America. The crisis hit America more acutely and lasted longer there than anywhere else. Policy was often inconsistent, reflecting in reality America's response to a world economy it could not yet dominate. Washington called for reduction of tariff barriers and the elimination of price fixing cartels but erected high tariffs (e.g. Fordney McCumber Act of 1929) and joined price-fixing associations (facilitated by the Webb-Pomerene Act of 1918) when constrained by the situation to do so (By the time World War Two broke out 40 to 50% of total international trade was subject to such restrictive agreements.) Roosevelt's hope of restoring the American economy primarily through domestic measures was patently futile. By the outbreak of the war, his Administration was ready to make a more global effort.
If a single man can be said to have authored the theory of the new imperialism, it is Cordell Hull, Roosevelt's Secretary of State during the most critical period of the Second World War. All told, he served under F.D.R. for twelve years, longer in fact than any other Secretary before or after. A dedicated disciple of Wilson, he wrote in his memoirs:

"But toward 1916 I embraced the philosophy I carried throughout my 12 years as Secretary of State. . . . From then on, to me, unhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war. Though realising that many other factors were involved, I reasoned that, if we could get a freer flow of trade - freer in the sense of fewer discriminations and obstructions - so that one country would not be deadly jealous of another and the living standards of all countries might rise, thereby eliminating the economic dissatisfaction that breeds war, we might have a reasonable chance for lasting peace."

He envisioned the prospect of recreating the world economic system after the war, along what he called "multi-lateral" lines. This meant dismantling the old Empires and restrictive bi-lateral policies, opening not only Europe but also the vast continents of Asia and Africa to "unhampered" U.S. trade. As Kolko notes:

"The impact of the pre-war world depression and the experience of the 1930s profoundly coloured United States planning of its post-war peace aims. Hull unsuccessfully attempted to cope with that upheaval and he and the other leaders in Washington were determined to undo its still pervasive consequences to the world economy, and perhaps above all, to prevent its recurrence. For this reason, the United States did not simply wish to repair the pre-war world economy, but to reconstruct it anew. There was a remarkable unanimity in Washington on this objective, and it was by far the most extensively discussed peace aim, surpassing any other in the level of planning and thought given to it. While the United States faltered for a time in regard to its postwar political objectives, it entered and left the war with a remarkably consistent and sophisticated set of economic peace aims."

Hull's conceptions - non-discrimination in availability of raw materials and more generally in "international commercial relations" - clashed sharply with those put forward by Lord Keynes. Churchill responded to the American proposals by noting the British experience in adhering to Free Trade for eighty years in the face of ever-mounting American tariffs. . . . All we got in reciprocation was successive doses of American protection." Article IV of the Atlantic Charter represented a compromise, stating that the Allies will endeavour with due respect for their existing obligations, to further the enjoyment by all States, great and small, victor or vanquished, of access, on equal terms, to the trade and to the raw materials of the world which are needed for their economic prosperity." But the Americans exercised their power more ruthlessly in dictating the terms of the Master Lend-Lease Agreement in 1942. This Agreement provided the model for all future Lend-Lease. Although the British subsequently attempted to equivocate on its terms, it had quite specifically required "the elimination of all forms of discriminatory treatment in international commerce and . . . the reduction of tariffs, and other trade barriers". Hull had regarded it as "a long step toward the fulfillment after the war of the economic principles for which I had been fighting for half a century." Hull's "new internationalism" was explicitly conceived to foster America's economic interest. As he stated,

"Leadership toward a new system of international relationships in trade and other economic affairs will devolve very largely upon the United States because of our great economic strength. We should assume this leadership, and the responsibility that goes with it, primarily for reasons of pure national self-interest."

This "national self-interest" was always meant to include the right to extract wealth from what we now call the Third World. In Hull's words,

"Through international investment, capital must be made available for the sound development of latent natural resources and productive capacity in relatively undeveloped areas."

The new world order was to serve a number of different ends. First, it was to provide markets, which would in turn permit the U.S. economy to continue to function at full capacity after the war. It was generally agreed in Washington that domestic consumption would not be adequate to absorb the surplus of goods which would result from full employment and full utilisation of available plant. The New Deal consensus had acknowledged from the outset that domestic consumption could not be adequately increased without a radical re-distribution of wealth which was completely unacceptable to their way of thinking. Henry Wallace's book We Must Choose stated these alternatives sharply at the beginning of the New Deal and argued emphatically for the opening of new markets to avert catastrophe at home. Fear of a new depression at home was linked to a second consideration: the possible repetition of an international economic crisis. This, too, would be eliminated, in the view of the State and Treasury Departments, by non-discriminatory trade. Thirdly over-expanded wartime production had generated a capital surplus, which could also be absorbed only by foreign outlets for investment. An economic necessity from one point of view, this need could also be portrayed as an act of benevolence towards the recipient countries. As Dean Acheson put it at the time, "The wise investment of United States capital abroad benefits the United States and the world at large." It was assumed, of course, that such investment would have to be profitable. And these profits, in turn, required profitable trade, which in turn would permit the repayment of loans. Finally, the new world order would have to guarantee "non-discriminatory" access to coveted raw materials. The traditional definitions of the Open Door policy had demanded access on terms equal to those already most favourably granted to other foreign powers. But as American power became absolutely supreme, it was extended to demand access on terms of equal opportunity "even with the capital and enterprise of the country in whose territory the resource existed ".
The implementation of the Hullian doctrine came at Bretton Woods. The initial American proposals were seen by the British as a brazen attempt to promote American exports and ensure a raw materials supply. The British counter-proposal, largely reflecting the thinking of Lord Keynes, understandably urged the creation of a monetary fund in which control would depend on a nation's pre-war volume of trade. Keynes wished to promote internal development, without linking loans to trade and the balance of payments. In the end, the American scheme carried the day, although the British succeeded in imposing certain modest limits. Hull's obsession with the elimination of foreign exchange restrictions "was incorporated in the constitutive charter of the International Monetary Fund. Moreover, the amount of capital contributed to the Fund roughly determined the voting power of a member nation. Thus, the U.S. (with its Latin American satellites) gained predominance from the start. The International Bank for Reconstruction and Development likewise reflected American dominance in its voting and was always to have an American President. Although the I.B.R.D. promoted private investments, it offered loans for developing necessary infrastructures and its authority masked private investments with a facade of benevolence. The Bretton Woods agreement ensured that trade would be conducted within the structure most desired by American corporations. As a leading State Department economics expert put it, "The United States could not passively sanction the employment of capital raised within the United States for ends contrary to our major policies or interests. . . . Capital is a form of power. . . . But willingness on our part to subordinate the independent use of our financial power to joint decision must be limited and kept in step with the willingness of other countries to act likewise in other matters. ..."
The establishment of the I.M.F. amounted to the substitution of the dollar for the pound as number one reserve currency. Article IV of the Treaty which set up the I.M.F. states, "The par value of the currency of each member shall be expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight and fineness in effect on July 1, 1944." As Magdoff has stated, "It is clear that this equating of the dollar with gold sets up a relationship of dependency of all capitalist nations on the United States. The degree of dependency will vary in accordance with the relative strength of the various capitalist nations. The reliance on the United States dollar means that in the final analysis - and this becomes painfully apparent on the brink of crisis - the holders of the United States I.O.U.s can use them only to purchase United States goods at United States prices (assuming, of course, that the United States keeps its faith when it itself is faced with special difficulties). . . . The world role of the dollar has become one of the main instruments of control which the United States attempts to exercise...
The crucial monetary agreements had their political counterparts in the Big Power conferences which attempted to settle the fates of millions of erstwhile colonised peoples through "mandates" (the favourite U.S. scheme since World War One for providing a transition to independence whilst grooming a local elite well disposed to the West). The vast United Nations Organisation was similarly viewed by American policy-makers as a means of maintaining an overall framework for the new world order. Having thus established U.S. financial hegemony and secured a broad agreement from the Great Powers to sustain the new order on terms acceptable to Washington, the United States did not delay in taking advantage of its newly won position.
The rest of the story is perhaps too well known to detail. The nuclear weapons monopoly permitted an even more aggressive phase of U.S. policy. Despite the conservatism of Stalin's foreign policy, U.S. strategists were troubled by their inability to incorporate the Soviet Union into the new economic order through the traditional pressures of Lend-Lease and similar devices. They likewise felt that American interests (such as her pre-war holdings of 85 % of Rumania's oil) were threatened by Soviet defensive policies in Eastern Europe. The strength of the left in Western Europe, coupled with the severe economic dislocations caused by the war, prompted massive American economic intervention, through the Marshall Plan, to shore up the conservative status quo.
America of course exploited the weakened positions of the former imperial powers. In the case of oil, for example, the U.S.A. replaced Britain in the Middle East as the major foreign country involved in the area's exploitation. Before the war the U.S.A. had held 13% against Britain's 60% share of Middle Eastern oil. By 1960 the shares stood at 65% to 30%, in favour of the Americans. A system of military alliance - N.A.T.O., C.E.N.T.O. and S.E.A.T.O. -were devised to protect American interests and support pro-American regimes. By now more than 3,000 American bases are deployed around the globe. And with the bases we find an ever increasing network of American banks. The number of U.S. bank branches outside the U.S.A. has increased from 89 in 1939 to 298 in 1967 - of which 259 are owned by the three giants, First National City Bank, Chase Manhattan and Bank of America. Deposits abroad have been growing at a rate seven times greater than deposits at home. The impact of Americanisation is reflected equally in the distortion of social priorities which results. In Karachi, for example, there are only three sources of bottled milk in the city, one public and two commercial; yet one can drink Bubble Up, Canada Dry, Citra, Coca Cola, Double Kola, Kola Kola, Fanta, Hoffman's Mission, Pepsi Cola, Perri Cola and Seven Up - all prepared from imported concentrates.
Beneath many levels of mystification lies the reality of contemporary imperialism. Of the 115,000 million dollars in "foreign aid" given by America since the close of World War Two, less than a third has gone for economic development. Even what is considered economic development" is often road-building or airport-construction primarily undertaken for military reasons. The major recipients of this aid have been the decayed capitalist powers, in any event. The developed countries have received 39% of U.S. aid, as against 31% for America's "clients" who provide bases on the American defence perimeter - and only 30% to the remainder of the Third World, in which 70% of mankind live. Aid is an instrument of control - for breaking down trade barriers, gaining access to natural resources and shoring up decaying regimes. The Foreign Assistance Act of 1963, now accepted by 70 countries, specifies that no aid will go to a country without a guarantee on American investments - i.e., against nationalisations, against radical social change.
We shall not speak here of the compelling reasons for such change. Nor shall we recite the catalogue of American military interventions which have crushed recent movements for change in the Third World. These matters should be evident to all who read the daily press. Imperialism persists - stripped of the most obscene trapping of colonialism, but nonetheless aggressive and exploitative. It is a system of social, political and economic relations; it is a global system, a totality. It cannot be changed piecemeal. Those nations which have sought partially to oppose it whilst participating in its most elementary institutions including the Soviet Union - have failed. This failure is reflected in growing misery in the underdeveloped countries and increasing violence against those who seek change. But America's defeat in Vietnam marks a turning point which must inspire all those who cherish justice and look to the day when imperialism will be finally eliminated.

A note about sources
Since this paper was originally prepared as a contribution to a seminar discussion, without a view to future publication, we neglected to include footnotes for the sources of citations and failed to acknowledge the interpretations of many authors who have led us to our understanding of contemporary imperialism. It is difficult, retrospectively, to compensate for these omissions in the original work without undertaking a major revision of the essay. We shall therefore acknowledge this fault and offer the reader a short list of the most important books upon which we have relied.
Our greatest debt is to Dr. Gabriel Kolko, for his brilliant work The Politics of War: The World and the United States Foreign Policy, 1943-1945 (London, 1969). This comprehensive survey of the complex interaction among the Great Powers and between these Powers and the popular movements which arose from the decayed social order in Europe and the former colonies will stand for a long time as the most important reading for any serious student of world affairs. We should also mention Kolko's earlier work, The Triumph of Conservatism, A Reinterpretation of American History, 1900-1916 (New York, 1963), which documents the rise of the large corporations as a dominant feature of American life and their reliance on the State to achieve and to maintain this position.
We have also made extensive use of Harry Magdoff's valuable book The Age of Imperialism: The Economics of U.S. Foreign Policy (New York, 1969), which assembles a great deal of basic information on the subject under discussion. Two other works in economic analysis, Paul A. Baran's The Political Economy of Growth and Baran's and Paul M. Sweezy's Monopoly Capital, provide a framework of interpretation which is central to our argument.
The corps of contemporary historians who have reinterpreted American twentieth century history should also be mentioned, especially William A. Williams, Walter Lafeber, and Lloyd Gardner. The latter's Economic Aspects of New Deal Diplomacy is especially relevant. Finally, David Horowitz's latest book, Imperialism and Revolution, has been a very stimulating attempt to integrate revisionist historiography and economic interpretation of U.S. foreign policy in a context of original political analysis. The earlier parts of our argument owe much to this effort.

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