Such was the situation in Cambodia after the collapse of the Khmer Rouge, the retreat of the Vietnamese and the arrival in the fall of 1991 of United Nations administrators, aid organizations and NGO's armed with limitless quantities of dollars. Foolish expenditures created an artificial economy serving a greedy and corrupted class of businessmen and politicians, while doing nothing to get the country back on its feet. If the same mistakes are not avoided one may expect to see a similar pattern in Afghanistan .
A sum of money is nothing more than the expression of an abstract relation between supply and demand, an essentially dimensionless index obtained as the quotient of substantive values. Like the ratio between the number of persons waiting in line a post office, to the number of postal clerks, its value is actually a dimensionless ratio. Increasing the number of clerks decreases the waiting time in proportion.
In much the same way as distances are measured in miles, or weight in pounds, we mistakenly measure wealth directly in dollars. The simple mathematical error in doing so is clear: a dollar signifies a ratio. By contrast, measurements are used to compute a physical quantity which, only afterwards, can be entered into the numerator or denominator of a ratio.
Since much of this article will be taken up with the effect of such economic paradoxes on the situation in the Middle East, it is insightful to note that the Koran shows more imagination in this regard that the Free Market philosophy of the Modern West. The Koran distinguishes four kinds of wealth: precious metals, lands, livestock and merchandise. Tax structures in the traditional Islamic world were adjusted differently for each category. For reasons good , bad, or dubious the Eurocentric global economy has reduced this list to its first category, gold and silver, to be immediately supplanted by a promissory note that one is expected to trust as much as one trusts God, and therefore non-negotiable.
Clearly money is supposed to be treated as more important than the things which it can or cannot buy. No apparent distinction is made between the paper contract, and the obligation to fulfill same. There are plenty of people truly believe that laws exist which oblige persons to supply merchandise whenever enough dollars are presented, as if the only obstacle to harvesting apples on the floor of the ocean is the lack of 2 million dollars - or whatever. In the same way, most of the citizenry of the industrialized world persist in believing that the billions of dollars given away by their governments on a daily basis to Third World countries around the world, are really intended to bring them prosperity, or further their development into competitive equals in the world economy! [1]
There are many ways in which the power of the dollar can actively inhibit and even destroy the natural wealth of a nation :
Both models have been systematically employed in American neo-colonialism of more than half a century. The following quotations illustrate how they have been used in Central America and the Congo. The first is from Walter LeFeber " Inevitable Revolutions", pg. 203-204 ( All referenced books are listed in the bibliography) . Speaking about the Nixon Doctrine as applied to Central America in the 70's , he writes:
" The Central American military enjoyed the best of both worlds: its direct assistance levels remained relatively high, and since the U.S. Treasury provided liberal credit, arms sales for cash rose steadily. In 1972 Guatemala, whose Indians averaged $83 a year income, bought $6.5 million of military goods from North America, much of it on credit [...} North American arms aid and sales ... continued in amounts that threatened to engulf some of the small nation's budgets [...] And as U.S. aid came in, military debt piled up until the countries began to bend under the burden . "
The second quote is fromLaurie Garrett " Betrayal of Trust", pg. 56-57:
" In exchange for Mobutu's willingness to act as Africa's proxy for Western anti-Soviet interests the dictator gained tremendous power and personal wealth. From 1963 to 1984 France, Belgium, South Africa and the United States provided the dictator with astounding amounts of foreign aid - often in the form of zero-interest, no-strings attached loans - and direct military assistance [...] North American and European countries routinely paid hefty "fees" to Mobutu and his cronies in exchange for access to Zaire's genuine wealth: her cobalt ( 60 percent of the world's reserves, and a strategic metal), copper, cadmium, gold, silver, uranium, tin, germanium, zinc, manganese, oil, diamonds, ivory and rubber. While per capita income stagnated for twenty years, never exceeding $180 per year, Mobutu became one of the world's wealthiest men, Belgium's biggest property owner, and a key real estate player in France and Switzerland."
The weaponry sent to the Middle East comes from the same nations which import its oil. Companies like Lockheed, Northrop, Grumman, Dassault, Vickers, etc. maintain employment for thousands of workers at home, paying them with the same dollars that were initially exchanged for Middle Eastern oil.
In a nutshell: the exchange of oil for arms ties in with the balance of payments in such a way as to return vitalizing currency back to the societies of the oil importing nations, without them having to return anything of real value. [4]
This fallacious exchange drives the motors of industry and eases labor discontent at home and helps local politicians get re-elected, while in the Middle East rust trickling off the gargantuan stockpiles of atavistic /futuristic /obscene /obsolescent weaponry mingle its haemoglobin dye with the desert sands, to create abstract paintings which, in the dazzling heat, celebrate the spiritual and material sterility of the once great Islamic civilization.[5]
This situation prevails around the world, not only in the Middle East. Third World countries in all parts of the globe, broken by their burdens of poverty, disease, illiteracy, hunger, without communications, roads, lacking an educated class or industrial base, are still somehow managing to arm themselves from scalp to toenails with the most sophisticated modern weapons, Exocet and Stinger and Scud B and Nike-Hercules missiles, with laser guided aircraft, 'people sniffers' and other electronic sensors , fragmentation bombs, napalm, pineapple grenades, computerized surveillance networks, the gruesome chemical weapons which are a Russian specialty , biological and even nuclear weapons, and so forth.[6]The United States, the self-styled 'arsenal of democracy' , controlling as it does more than 50% of the world's arms trade, has joyously accepted far more than its share of blood guilt:
" United Nations figures show that of one hundred dollars per capita increase in wealth that Latin Americans gained during the sixties, only two dollars reached the poorest 20 percent of the population. " ( LeFeber, op. cit., pg. 192)
This effective strategy for subverting the exchange rate for that nation's currency opens the door for the outright exploitation of its labor force by the multi- national corporations, as well as the rip-off of its natural resources.
Observe the ease with which the Bush administration "forgave" Egypt's 7 billion dollar military "debt" on September 2,1990. This debt had in fact been paid back many times over by our exploitation of its economy. Most of the "foreign aid' which the United States gives to the Third World appears to take the form of bribes, either to the military, the ruling elite, or to a small group of private individuals. This money, ending up in Swiss bank accounts, or lubricating the gears of corruption in the government and the army, gets charged to the nation as a whole.
This pattern was never so clearly present as in the Nixon administration's support of the Shah of Iran in the 70's. Aid went directly to him, his family, or the gratification of his lunatic passion for advanced fighter aircraft. The bill was, however, passed on to the Iranian people [7]
"... The arms race in the Middle East was not initiated by any perceived new threat from the East but by the commercial opportunities coinciding with the diplomacy of the Nixon doctrine and the British retreat from the Persian (or Arabian) Gulf, which had resulted in a general loss of control over arms sales... "
( pgs. 242-243) "...[in 19691 ... Nixon and Kissinger expounded the 'Nixon doctrine'. by which the United States would supply arms rather than troops, equipping their reliable allies with large arsenals in crucial areas .... In 1971 the United States foreign trade balance showed a deficit for the first time since 1893-The need for exports was now far more urgent than ten years before, when McNamara and Henry Kissinger had first unleashed the Pentagon's salesmen, and the aerospace slump and unemployment added to the crisis. In the White House, Nixon discussed how to redress the trade balance, and was pressed, for both political and economic reasons, to relax restrictions on arms sales... "
( pg. 252) "...Nixon agreed to sell Iran 'virtually any conventional arms it wanted', supported by unlimited American technicians in Iran: and he personally told the Shah that he could choose between the two new-generation planes, the Tomcat and the Eagle. It was the first time that any non-industrial country had been allowed to reach the same level as the United States in the 'state of the art'. There had been no major review beforehand and Nixon's decision was passed to the Pentagon with no chance to revise it .... There was little evidence .... that Nixon had recognized the far-reaching policy implications.. ."
The Nixon Doctrine continues to yield its fruits up to the present day. Few informed persons need to be reminded of the sources from which the Taliban, Al-Qaeda and Osama ben Laden requisitioned their sophisticated weaponry during the Soviet invasion of Afghanistan.
In 1982 Saudi Arabia's so-called 'military budget' , a country with a standing army of no more than 70,000, was $26 billion ! This works out to 15% of its GNP, and $2,500 per Saudi citizen. In contrast, the per capita expenditure in the United States was $520 per capita.( Ghassan Salamé , "Political Power and the Saudi State", pg. 584 , The Modern Middle East ) . By 1989, on the eve of the Gulf War, its CSS-2 missiles could strike as far east as Afghanistan, Pakistan, India and Bangladesh, Ethiopia and the Sudan, and as far north as Czechoslovakia, Poland and much of the former Soviet Union.
India, Israel and Pakistan, all nations with nuclear capability, have missiles of precision accuracy in their arsenals, with ranges of over a thousand miles. No one can say what the true capability of Iraq is at the present moment, given the hideous campaign of disinformation mounted by the Pentagon and the administration, but one can be certain that Sadaam Hussein has not be asleep at the wheel.
Geopolitical strategy transcends ideology or nationality. In the 1950's China advanced similar reasons of 'homeland security' to justify its occupation of Tibet, strategically located relative to the Soviet Union Russia and the rest of Asia. [8]
The Oil-Money-Arms-Cycle, ( and the correlate pillaging of the natural resources of Africa and Latin America) , are the polluting engines driving the phenomenal prosperity of the so-called First World: guns, generals and despots keep the lid on social discontent, while the money system serves merely to cloak an obscene system of barter hardly worth the dignity of the name of "Free Market". Even as the lid must be kept tightly screwed onto a pressure cooker, this cycle must be maintained in operation around the clock. Were it to halt, even for a single day, the illusory economic security of the West would come crashing down .[9]