BY Stan Goff
Part 3
It becomes necessary at this point to introduce a rather unfamiliar concept in order to inoculate readers from their intuition, because the reality is counter-intuitive. Fractal space-time. Don’t be alarmed. It is actually easy to understand; and I will explain it in a few sentences. I am co-opting the notion from the realm of physics, and relying in particular on my reading of Mae-Wan Ho’s book, The Rainbow and the Worm. (The bastardization of the notion is my responsibility alone; and it does not aspire to any great scientific rigor.)
Everyone has seen time-lapse photography, and most readers have probably ridden in an airplane.
In studying the “physics of organisms,” Dr. Mae-Wan notes that there are many dynamic processes in a single organism that are operating at different tempos all the time, even if the net result is a “coherent” whole that we percieve as occurring at a single tempo (the perceiver’s). She challenges the idea of space-time as happening in discrete little packets (single atoms bouncing offf one another like billiard balls; in a linear progression of “instants” of [Newtonian] time). All cycles of reality — from 10-to-the-minus-14 seconds for molecular resonant energy transfer to circadian (daily) rhythms to circannual (yearly) rhythms — are occurring simultaneously, and are probably not “differentiable” at one scale, that is, sub-dividable into neat little particles of time strung together like beads. The “difficulty” of this idea is not a function of “reality” (or whatever you want to call the shifting sum of all processes), but of perception.
Fractals are similar patterns occurring at varying scales.
Our individual perceptions of time and space — at the level of cognition (”thinking”) — are not, as they may seem from habituation, some perfect reflection of “reality,” but the concentration of perceptions arising from multiple determinants, not the least of which is our social being. We sense time with our daily concerns, our plans, our clocks, our obligations… even our physical urgencies are conformed to our socialization (one reason metropolitan Westerners become so anxious when confronted with the rhythms of daily life in cultures that are less regulated by clocks).
The perception of time for a rose, as one example, can be inferred by watching a time-lapse film that “speeds up” the behavior of the rose in order to allow us to perceive that behavior in our own tempo… the film being a kind of interpreter. If one is driving down the highway, the tempo of the activity around us seems very high; but if one observes traffic from an airplane traveling at 20,000 feet above ground level, one can perceive a larger-scale spatial process happening at a different tempo.
Social evolutions do not occur at the same tempo or spatial scale as our individual perceptions — a biologically and socially determined mental concentration of the sum of bodily processes ceaselessly interacting between the sense-of-self, nature, and society.
I indulge this digression because it so critically important for readers to make this cognitive leap. The tempo of the “international relations” and other determinants related to this question of “security” is occurring on a different scale than our own day-to-day perceptions, so it is necessary to “gain altitude” and use time-lapse descriptions of political processes to really see the behavior of the system. The capitalist world system has been responding to the same crisis for around 45 years; and the permutations of that response have been further reaction to the unintended consequences of implementing earlier decisions.
Here are some of the things we would see if we took turns riding in the airplane and watching the time-lapsed films.
European powers, gutted financially and socially by the conflagration that was World War II, lose their grips on colonies around the world. The United States enters the war late, without its terrain scorched by battle, and therefore strong. Declaring war against Japan in December 1941, the US does not decisively and massively commit forces to the European theater until the Battle of Normandy in June 1944. Hitler’s defeat has already been sealed as a near-absolute certainty by the Battle of Stalingrad — August 1942-February 1943.
Stalingrad was the bloodiest battle in human history, where more than a million and a half people were killed. The Soviet Union had absorbed the majority of the costs of the war against Hitler by the end of the war, with more than 26 million Soviet citizens and soldiers killed. After Stalingrad, the German military was a broken institution and its general defeat was never in doubt after that.
The Battle of Normandy, which began with the “D-Day Invasion” (called Operation Overlord), was a combined American-Canadian-British venture, with a few troops from other nations. Strategically, it was seen not as the Battle to defeat Germany (this result was already known), but to arrive in Berlin before the Soviets in order to create the “facts on the ground” necessary to play the dominant role in re-shaping the post-war political landscape of Europe. In some sense, D-Day was the first hot battle in the future Cold War.
President Franklin Roosevelt was an accomplished imperialist interloper who early on saw the war as a way to establish US global dominance in the wake of the Great Depression, and to fill the power voids left by the dissolution of Europe’s great colonizers. In particular, the US coveted Great Britain’s imperial sphere; and the US had been fighting for it using intergovernmental debt since World War I. Few understand that the bankrupting of Germany — which led directly to Hitler fascism — was effected by European creditors who were forced to soak Germany to pay war debts to the United States — especially Great Britain. During WWII, the US did not subsidize the war effort of its “allies” (like Great Britain), it implemented the Lend-Lease Act, which was a loan arrangement, requiring repayment with interest. When Lend-Lease was abruptly ended in September 1945, Great Britain was in debt far beyond its capacity to ever repay the loans. The US used its leverage in this circumstance, as well as UK’s need for a strong American trading partner, to gain open access to the so-called Sterling Area (British colonial subordinates); and in exchange for these concessions (effectively ending the British Empire), the US allowed UK to repay the Lend-Lease debt at pennies on the dollar (but still an amount that surpassed UK’s currency reserves). $650 million was accepted in lieu of a $12 billion debt; but UK was then, and has remained to this day, a financial colony of the United States.
This is the reason that all UK leaders are always obedient servants of all US leaders, even those as dangerously stupid as George W. Bush. These are not personalities at work, but a financial and political structure.
As the arena of conflict shifted from the battlefield to diplomatic meeting rooms, the world’s economic evolution after World War II was steered by the Inter-Allied financial negotiations that settled Europe’s reconstruction debts to the United States. What had been a contest between the Allied and the Axis Powers gave way to one among the Allies themselves, with the United States emerging victorious.
(from Michael Hudson’s Super Imperialism, page 137)
Having learned the hard way about unintended consequences from the bloody outcome of inter-Allied debt imposition after World War I, the leadership of the United States determined upon a new financial strategy that would simultaneously consolidate US gains during the war, facilitate the reconstruction of Europe and Japan as a bulwark against state socialism and markets for American industrial output, and build a firewall against the kind of speculative meltdown that catalyzed the Great Depression.
The problem facing U.S. diplomats [after WWII] was how to enable their Allies and former enemies to maintain their imports of U.S. goods and services in the absence of German reparations. What was enlightened about U.S. policy was its recognition that this time the Allies without international institutions capable of organizing and administering the anticipated growth in postwar debt needed to finance these purchases.
It was primarily to solve this problem that the United States took the lead in creating the International Monetary Fund and the World Bank to supplant German reparations as the vehicle through which to provide the Allies with institutionalized means to sustain their demand for U.S. products while maintaining the discipline of gold in international relations.
(Hudson, p. 137)
As I pointed out above, after Stalingrad the outcome of the war was no longer in doubt. The plans for the postwar world order were being drawn up in July 1944, one month after the launch of the Normandy Invasion. The meeting where those plans were outlined was conducted at the Mount Washington Hotel in Bretton Woods, New Hampshire… chosen because other hotels still disallowed Jews, which included the Secretary of the Treasury of the United States, Henry Morganthau. The Bretton Woods Conference, as it came to be known, established an international “gold standard” (alluded to in the quote above), which worked as follows: One US dollar would represent a claim on 1/35th of a Troy ounce of gold; all other currencies would then be “pegged” in their relative values to to dollar in a fixed exchange rate that could only be changed with an in-depth institutional review.
The new imperial master was waiting in the wings in 1944, with a massive industrial base built up by war but untouched by the terrible destruction of that war. Moreover, this new master had learned its lesson from the aftermath of WWI. The backward parasitism of its creditor status had killed the host. The enlightened parasitism of the new imperial order would guard the health of its host enough to ensure the long-term well-being of the parasite.
The industries of war had created machines in unprecedented numbers, all kinds of machines, as well as all kinds of consumer products. These industries were not re-tooled. A new social architecture was being designed to absorb this industrial output, from automobiles to canned goods to antibiotics. These products needed markets larger than the US, and so the population of the US was taxed to subsidize the reconstruction of Western Europe and Japan to become the junior partners in the new system of valorization for the industrial capital of the US.
Now I need to make one more digression that is not a digression. Language is linear, so we have to change perspectives to get the multi-dimensionality of things.
Machines. The engineering of machines has frequently begun with engineering to do one of two things, often connected: make money and make war. We will be coming back to machines, the power of machines, and the way we think about machines, as well as the social significance of machines… so file that thought.
Meanwhile, back at Bretton Woods, the head offices of the new financial architecture, the International Monetary Fund (IMF) and the World Bank, were open to membership all over the world, but the US maintained a veto-controlling interest.
“U.S. Government claims were thus formalized into an institutional edifice,” notes financial historian Michael Hudson, “of world economic domination.”
Check mate. Game over.
And so it went, with the Marshall Plan pumping money into Germany and Japan, converting enemies into allies for the next round: competition for influence and resources in the under-developed world against the Soviet Union. This is an oversimplification, of course. The USSR was devastated by WWII. 26.5 million dead, innumerable wounded, unimaginable property losses and displacements; and at the end, Truman sent Stalin a two-part message called Hiroshima and Nagasaki. Yet many in the underdeveloped world looked to the USSR with a certain hope. And by 1950, the world’s most populous nation — China — completed its own revolution under the leadership of a Comintern member party.
The postwar US — white America, at least — enjoyed an unprecedented economic boom. US gold amounted to a stock of $20 billion in 1945, and through the trade advantages conferred by Bretton Woods, the US increased that stock to $24.8 billion by 1948. The Soviet Union, which had made the greatest contribution to the Allies’ effort to defeat Hitler’s Germany, supported the Bretton Woods system (it was, after all, the Sterling Area of Great Britain that was under assault in this new order, not the USSR… yet). The United States was keenly interested in access to the immense raw material stores of Russia and Ukraine; and the Soviet government was faced with an unimaginable reconstruction task that would benefit from imports of the high-quality manufactured goods produced by the US. The short-term credit offered by the newly-founded IMF was a perfect fit from their perspective; and the Soviet Union regarded the currency stabilization regime of this new order — even if the US dollar was the anchor — as common sense. The poison pill was GATT.
The General Agreement on Trades and Tarriffs (GATT) was the procedural agreement that emerged from Bretton Woods alongside the IMF/WB institutional infrastructure and its currency stabilization regime. (It has now been replaced and institutionalized as the World Trade Organization.) GATT codified the principles of “free trade,” which essentially meant unlimited access to home markets by any foreign actor. This was already liberal orthodoxy; and it would eventually become the orthodoxy of today’s neoliberalism. In theory, as in all liberal theory, all actors were regarded as abstract equals; and so the Soviet Union, the United States, postwar Germany, and — for example — Poland, were all considered “equal in the eyes of the GATT.” Yes, the United States had a right to penetrate the home market of Ceylon; but Ceylon had an equal “right” to penetrate the market of the United States.
This Economic Man model of trade was considered preposterous by Soviet economists; and Soviet Foreign Minister Vyacheslav Molotov commented:
Let us take the principle of equality seriously and honestly… Romania, enfeebled by the war, or Yugoslavia, ruined by the German and Italian fascists, and the United States of America, whose wealth has grown immensely during the war, and you will see clearly what the implementation of the principle of “equal opportunity” would mean in practice.
Molotov was not alone in his skepticism. Harry Dexter White, who was also barred from many US hotels because of his Jewish lineage, was one of the main architects of Bretton Woods. An enthusiastic New Deal Democrat, White — the liaison between the Departments of Treasury and State — was the main force behind exchange stabilization, and an advocate of continued cooperation with the Soviet Union on the international stage.
Inside the US Government, a factional war was breaking out between those who favored a regulated and diplomatic approach to foreign affairs, and those who wanted to build on the massive military-industrial complex as the basis for a domestic security state and regarded the Soviets as a threat to the “free trade” regime articulated in GATT. Meanwhile, the Soviets — who thoroughly approved of the exchange stabilization and international credit plans of Bretton Woods — still had nightmares about European invasion; and regarded their new buffer states in Eastern Europe as a the only guarantee against the potential predations of a resurgent Germany. The Soviets regarded GATT as a mechanism for the economic-then-political penetration of those buffer states.
White argued that “…the United States was now dependent upon foreign supplies…”
The nation’s dire need for manganese, tungsten, graphite, zinc, lead, chrome, mercury, petroleum, platinum, vanadium, and mica could be met in substantial part by Russian production of these materials. [White] stated bluntly that “the necessity of growing U.S. dependence on foreign sources of supply in order to satisfy anticipated post-war industrial requirements and to maintain security reserves, is inescapable.” Russia could export these itemsto America only if it were provided with developmental funds.
(Patterson, Thomas G., “The Abortive Loan to Russia and the Origins of the Cold War,” Journal of American History June 1969)
By 1947, the anti-Russian faction had gained dominance in the Truman administration. White resigned abruptly and was placed under investigation as a communist sympathizer, prefiguring the McCarthyite red-baiting epoch that would bloom in less than two years, and the Cold War that would play the definitive role in international relations for the next four decades.
This would become an epoch of killer-machines, the great arms race between the US and Soviets; and the research, development, and production of weapons would have a huge role in shaping the economies and cultures of both power centers, until the weight of this arms race came crashing down on the Soviets in 1989. It will also come crashing down on the US.
End Part 3
Permission to reprint online granted provided the repost links to the original at this site.
Posted by stan in Analysis