Prognosis 2012: Towards a New World Social Order

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Richard K. Moore | Global Research

Historical background – the establishment of capitalist supremacy

When the Industrial Revolution began in Britain, in the late 1700s, there was lots of money to be made by investing in factories and mills, by opening up new markets, and by gaining control of sources of raw materials. The folks who had the most money to invest, however, were not so much in Britain but more in Holland. Holland was the leading Western power in the 1600s, and its bankers were the leading capitalists. In pursuit of profit, Dutch capital flowed to the British stock market, and thus the Dutch funded the rise of Britain, who subsequently eclipsed Holland both economically and geopolitically.

In this way British industrialism came to be dominated by wealthy investors, and capitalism became the dominant economic system. This led to a major social transformation. Britain had been essentially an aristocratic society, dominated by landholding families. As capitalism became dominant economically, capitalists became dominant politically. Tax structures and import-export policies were gradually changed to favor investors over landowners.

It was no longer economically viable to simply maintain an estate in the countryside: one needed to develop it, turn it to more productive use. Victorian dramas are filled with stories of aristocratic families who fall on hard times, and are forced to sell off their properties. For dramatic purposes, this decline is typically attributed to a failure in some character, a weak eldest son perhaps. But in fact the decline of aristocracy was part of a larger social transformation brought on by the rise of capitalism.

The business of the capitalist is the management of capital, and this management is generally handled through the mediation of banks and brokerage houses. It should not be surprising that investment bankers came to occupy the top of the hierarchy of capitalist wealth and power. And in fact, there are a handful of banking families, including the Rothschilds and the Rockefellers, who have come to dominate economic and political affairs in the Western world.

Unlike aristocrats, capitalists are not tied to a place, or to the maintenance of a place. Capital is disloyal and mobile – it flows to where the most growth can be found, as it flowed from Holland to Britain, then from Britain to the USA, and most recently from everywhere to China. Just as a copper mine might be exploited and then abandoned, so under capitalism a whole nation can be exploited and then abandoned, as we see in the rusting industrial areas of America and Britain.

This detachment from place leads to a different kind of geopolitics under capitalism, as compared to aristocracy. A king goes to war when he sees an advantage to his nation in doing so. Historians can ‘explain’ the wars of pre-capitalist days, in terms of the aggrandizement of monarchs and nations.
A capitalist stirs up a war in order to make profits, and in fact our elite banking families have financed both sides of most military conflicts since at least World War 1. Hence historians have a hard time ‘explaining’ World War 1 in terms of national motivations and objectives.
In pre-capitalist days warfare was like chess, each side trying to win. Under capitalism warfare is more like a casino, where the players battle it out as long as they can get credit for more chips, and the real winner always turns out to be the house – the bankers who finance the war and decide who will be the last man standing. Not only are wars the most profitable of all capitalist ventures, but by choosing the winners, and managing the reconstruction, the elite banking families are able, over time, to tune the geopolitical configuration to suit their own interests.
Nations and populations are but pawns in their games. Millions die in wars, infrastructures are destroyed, and while the world mourns, the bankers are counting their winnings and making plans for their postwar reconstruction investments.

From their position of power, as the financiers of governments, the banking elite have over time perfected their methods of control. Staying always behind the scenes, they pull the strings controlling the media, the political parties, the intelligence agencies, the stock markets, and the offices of government. And perhaps their greatest lever of power is their control over currencies. By means of their central-bank scam, they engineer boom and bust cycles, and they print money from nothing and then loan it at interest to governments. The power of the banking elites is both absolute and subtle…

“Some of the biggest men in the United

States are afraid of something. They

know there is a power somewhere, so

organised, so subtle, so watchful, so

interlocked, so complete, so pervasive

that they had better not speak above

their breath when they speak in

condemnation of it.”

— President Woodrow Wilson

The end of growth – capitalists vs. capitalism

It was always inevitable, on a finite planet, that there would be a limit to economic growth. Industrialization has enabled us to rush headlong toward that limit over the past two centuries. Production has become ever more efficient, markets have become ever more global, and finally we have reached the point where the paradigm of perpetual growth can no longer be maintained.

Indeed, that point was actually reached by about 1970. Since then capital has not so much sought growth through increased production, but rather by extracting greater returns from relatively flat production levels.  Hence globalization, which moved production to low-waged areas, providing greater profit margins. Hence privatization, which transfers revenue streams to investors that formerly went to national treasuries. Hence derivative and currency markets, which create the electronic illusion of economic growth, without actually producing anything in the real world.

If one studies the collapse of civilizations, one learns that failure-to-adapt is fatal. Continuing on the path of pursuing growth would be such a failure to adapt. And if one reads the financial pages these days, one finds that it is full of doomsayers. We read that the Eurozone is doomed, and Greece is just the first casualty. We read that stimulus packages are not working, unemployment is increasing, the dollar is in deep trouble, growth continues to stagnate, business real estate will be the next bubble to burst, etc. It is easy to get the impression that capitalism is failing to adapt, and that our societies are in danger of collapsing into chaos.

Such an impression would be partly right and partly wrong. In order to understand the real situation we need to make a clear distinction between the capitalist elite and capitalism itself. Capitalism is an economic system driven by growth; the capitalist elite are the folks who have managed to gain control of the Western world while capitalism has operated over the past two centuries. The capitalist system is past its sell-by date, the banking elite are well aware of that fact – and they are adapting.

Capitalism is a vehicle that helped bring the bankers to absolute power, but they have no more loyalty to that system than they have to place, or to anything or anyone else. As mentioned earlier, they think on a global scale, with nations and populations as pawns. They define what money is and they issue it, just like the banker in a game of Monopoly. They can also make up a new game with a new kind of money. They have long outgrown any need to rely on any particular economic system in order to maintain their power. Capitalism was handy in an era of rapid growth. For an era of non-growth, a different game is being prepared.

Thus, capitalism has not been allowed to die a natural death. First it was put on a life-support system, as mentioned above, with globalization, privatization, derivative markets, etc. Then it was injected with a euthanasia death-drug, in the form of toxic derivatives. And when the planned collapse occurred, rather than industrial capitalism being bailed out, the elite bankers were bailed out. It’s not that the banks were too big to fail, rather the bankers were too politically powerful to fail. They made governments an offer they couldn’t refuse.

The outcome of the trillion-dollar bailouts was easily predictable, although you wouldn’t know that from reading the financial pages. National budgets were already stretched, and they certainly did not have reserves available to service the bailouts. Thus the bailouts amounted to nothing more than the taking on of immense new debts by governments. In order to fulfill the bailout commitments, the money would need to be borrowed from the same financial institutions that were being bailed out.

With the bailouts, Western governments delivered their nations in hock to the bankers. The governments are now in perpetual debt bondage to the bankers. Rather than the banks going into receivership, governments are now in receivership. Obama’s cabinet and advisors are nearly all from Wall Street; they are in the White House so they can keep close watch over their new acquisition, the once sovereign USA. Perhaps they will soon be presiding over its liquidation.

The bankers are now in control of national budgets. They say what can be funded and what can’t. When it comes to financing their wars and weapons production, no limits are set. When it comes to public services, then we are told deficits must be held in check. The situation was expressed very well by Brian Cowan, Ireland’s government chief. In the very same week that Ireland pledged 200 billion Euro to bailout the banks, he was being asked why he was cutting a few million Euro off of critical service budgets. He replied, “I’m sorry, but the funds just aren’t there”. Of course they’re not there! The treasury was given away. The cupboard is bare.

As we might expect, the highest priority for budgets is servicing the debt to the banks. Just as most of the third world is in debt slavery to the IMF, so the whole West is now in debt slavery to its own central banks. Greece is the harbinger of what is to happen everywhere.

The carbon economy – controlling consumption

In a non-growth economy, the mechanisms of production will become relatively static. Instead of corporations competing to innovate, we’ll have production bureaucracies. They’ll be semi-state, semi-private bureaucracies, concerned about budgets and quotas rather than growth, somewhat along the lines of the Soviet model. Such an environment is not driven by a need for growth capital, and it does not enable a profitable game of Monopoly.

We can already see steps being taken to shift the corporate model towards the bureaucratic model, through increased government intervention in economic affairs. With the Wall Street bailouts, the forced restructuring of General Motors, the call for centralized micromanagement of banking and industry, and the mandating of health insurance coverage, the government is saying that the market is to superseded by government directives. Not that we should bemoan the demise of exploitive capitalism, but before celebrating we need to understand what it is being replaced with.

In an era of capitalism and growth, the focus of the game has been on the production side of the economy. The game was aimed at controlling the means of growth: access to capital.  The growth-engine of capitalism created the demand for capital; the bankers controlled the supply. Taxes were mostly based on income, again related to the production side of the economy.
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India vs Pakistan and Threat of War

Before visiting Pakistan, Robert Gates warned from New Delhi that, should 2007 Mumbai like incident occur again, India would attack Pakistan, meaning thereby that the past Mumbai killings have been solely attributed to Pakistan and if such an incident occurred again, responsibility would be that of Pakistan, and in retaliation, India would be perfectly justified to attack Pakistan. In this situation USA would not be in a position to restrain India. Rather it may support this venture.

The message is fraught with ominous consequences and therefore demands a clear assessment of our ability to respond, if such a threat develops. This assessment therefore, is based on existing ground realities, which determine the military power balance between Pakistan and India. No doubt, the Indian armed forces are numerically superior to Pakistan, but they suffer from some inherent weaknesses and, it will take them a long time to overcome these.

Indian armed forces are in the midst of a transition, – replacement of the obsolete Russian weapons system with high-tech American-Israeli-European weapons. India started this changeover in 2005 after signing the Strategic Partnership Agreement with USA and hopes to complete it by the year 2015. Already it has spent about a hundred billion dollars on the new acquisitions. Their entire military system at present therefore, is weak, because they have the old and absolute weapons and about thirty percent of the recently acquired new systems. They suffer from a predicament, similar to what we suffered in early seventies, because, USA bad abandoned Pakistan in 1965 and we had not been able to induct new weapons and equipment from other sources. India exploited this weakness and dismembered Pakistan. Thus, India suffering from such weaknesses, now, is not in a position to wage a full f1edged war against Pakistan.

India faces another serious problem, in that, despite their best efforts of the last forty years, they have failed to manufacture their own tanks, guns, cruise missiles, fighter aircrafts, battleships and submarines. This in essence, constitutes a major weakness of the Indian armed forces, because, the present day war cannot be won with weapons borrowed or purchased from others. And, contrary to the weaknesses of India and cognising the implications of self-reliance, Pakistan has achieved up to ninety percent of indigenisation of weapons and equipment. We have our own tanks, guns, cruise missiles, fighter aircrafts, battleships and submarines as well as we have a stock-pile of war reserves, of over forty days, as compared to just eleven days of war reserves in 1965 and seven days in 1971. Whereas India’s war reserves as of today are limited to 15 days only. Thus, Pakistan in this respect also enjoys a clear edge over India.

Pakistan has achieved up to ninety percent of indigenisation of weapons and equipment.

The third dimensional capability of Pakistan is, in the way of higher military education and superior military and operational strategy, which is the hallmark of our military leadership, and was demonstrated some twenty years back in 1989, during Ex-Zarb-e-Momin. The Offensive Defence concept was practised and over the period, has been actualised as the fundamental doctrine of war. Offensive Defence means that our forces having fixed the enemy, will carry the war into their territory. Compare it with the Cold Start doctrine of India, of fighting a war on two fronts, which is more of a fiction than a realistic military doctrine.

Mr Robert Gates, as well as the Indian military planners, while taking into cognisance the existing military balance between Pakistan and India, must also consider the new phenomenon of the Asymmetric War, which, during the last thirty years, has established the supremacy of Men and Missiles, over the most modern and technologically superior armed forces of the world, in Iraq, Afghanistan, Lebanon and Kashmir. The Asymmetric War, in essence is the name of the Islamic Resistance, with its hardcore resting along the Durand Line. It is our strength. Thus, conventional as well as irregular armed forces, together provide the emerging shape of the Fourth Generation of modern warfare, as Joseph S Nye, the former Assistant Secretary of Defence USA and a professor of Harvard University, defines: “The hybrid wars, conventional and irregular forces combatants and civilians become thoroughly intertwined” to win wars and help establish the new order. In case, war is forced on Pakistan, it would be a long and decisive war, where new geo-political realities would emerge, establishing new frontiers of peace in the region.

Nuclear weapons are not the weapons of war because these have never been used as such. United States used it against the Japanese in 1945, which already had lost the war, nor had the capability to retaliate. American purpose was primarily diplomatic, i.e. to declare to the world that, America was entering the centre stage of world politics, to establish its global primacy and pre-eminence. There are other instances also, where nuclear powers, possessing hundreds and thousands of atomic weapons could not use them, to save themselves from very difficult and embarrassing situations. The Americans lost the war in Vietnam; the Soviets lost their empire in Afghanistan; the Israelis could not cover the shame of defeat at the hands of Hezbollah in 2005; the Americans having suffered defeat in Iraq, now are facing a worse defeat in Afghanistan, yet they find no recourse to use their nuclear capability. Their NATO partners are equally embarrassed, yet they cannot think of using their nuclear weapons to cover the shame of impending defeat. Similarly, India and Pakistan can fight only conventional wars and win or loose, but they dare not use nuclear weapons against each other, because it would destroy everything, leaving nothing but ashes, one could hope to capture and rebuild. And therefore, our people must not carry the wrong notion that Pakistan is powerful because it has nuclear capability. On the contrary, it is the conventional military capability, which provides security and lends resilience to the nation, as of now, and provides space to the po1itical government, to establish good governance.

Nuclear weapons are also great equalizer, between nuclear capable adversaries. “Between India and Pakistan, perfect deterrence exists” – declared George Fernandis, the former Defence Minister of India, after Pakistan demonstrated its capability in May 1998. And that precisely is the function of the weapons of mass destruction. Pakistan’s policy of Minimum Credible Nuclear Deterrence, supported by the Policy of Restraint, together serves the purpose of a stable nuclear deterrence. Nuclear capability also doesn’t compensate for the conventional military capability, and working on this principle the conventional military capability of Pakistan has been so developed as to make it a real symbol of national power, to defeat all aggression from within and outside.

Such are the ground realities, which determine the capabilities of our armed forces which cannot be wiped off by contrived constructs of our adversaries, nor Pakistan can be scared of going to the brink, if a war was forced on it. J F Dulles has rightly said: “If you are scared to go to the brink you are lost.” Gen. Mirza Aslam Beg (Retd)

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