Finance Capital And Us Imperial Power

The Brutal Legacy of US Ascendancy

Sujoy Bera

By the 1890s, driven by the stimulus of free competition and to counter the 'falling rate of profit' in pre-monopoly capitalism, concentration and centralization of capital started which resulted in the creation of the first giant industrial corporations, as companies like US Steel, General Electric, Standard Oil, and Bayer AC [a German company which marketed heroin in 1895 and invented aspirin in 1897] joined the railroad companies on the world's stock markets. Joint stock Company, with the idea of financing a project by a large number of Individuals resulted in increase in the productive forces manifolds with faster accumulation of capital. These ushered in the growth of "Finance Capital" and transformation of US into imperialist power took great strides. The centralization of American Industry was most rapid between 1897 and 1904 during which 4277 firms were consolidated into 257 firms. The 100 largest monopolies quadrupled in size and took control of 40% of the country's industrial capacity in a process called "Morganizatior" since all these consolidations took place under the control of biggest financial oligarchs, J P Morgan. Along with "Rockefeller", these 2 largest financial conglomerates in the world led the interpenetration between industry and banking and the transition from industrial capitalism to finance capital.

But much of the international trade and a major part of America’s own foreign trade was still financed with pound sterling by London Bank. The use of British pound sterling as a medium of international trade was an obstacle to American trading monopolies and against the long term interests of US imperialism, as it would strengthen the preference for British goods already established through long-standing connections by British monopolies. The foundation for expansion of US banks as an instrument for capital export and opening up of trade Markets were laid through massive export of capital and goods to Latin America. An independent analysis of the situation by a City Bank official outlined then: "Considering the natural resources of greatest value awaiting development in Brazil, Columbia, Argentina, Chile, Peru and other South American Republics, America should invest its surplus capital along the same lines which govern the investment of European countries in the field trade, opportunities will result in a show of return of many times the original investment." Ultimately, The Federal Reserve Act of 1913 established the legal and institutional framework for the extension of US bank branches to foreign land. This helped to harness the new financial power to coerce foreign governments into opening their markets to American goods or adopting pro-American policies. Thus "Federal Reserve System" and the international operations of American banks paved the way for the transfer of world's financial centre from London to New York.

Meanwhile, with Pacific ports now under Washington's control, Theodore Roosevelt foresaw an American Aryan march to Asia. He preached his famous "Big Stick Foreign Policy which said: Speak softly and carry a big stick; you will go far". His rhetoric about "US imperialist policies" subsequently catapulted him to become the President of US [1901-1909]. In 1905, President 'Roosevelt' dispatched the largest delegation to Asia in US history. He sent his secretary, 7 senators, 23 congressmen, and various military and civilian officials, along with his daughter on an ocean liner from San Francisco to Hawaii, Japan, Philippines, China, and Korea. To guarantee a Roosevelt name in the headlines, the president sent his daughter Alice, the glamorous Jackie Kennedy of her day. This 'friendly' delegation, headed by William Howard Taft, then secretary of war, sailed through time to cause enough ripples across the world which resulted in World War-II in the Pacific and death for more than 1,00,000 American soldiers, the Chinese Communist Revolution, the Korean War [1950-53], and array of human emotions which oozed anger and disgust against any imperialist dominance. Ironically, Roosevelt was awarded 1906 Nobel Peace Prize in recognition to America's growing ideological and political influence backed by military power.

China with its 'semi-colonial' status and immense potential for exploitation was the centre of all imperial interests. Historically, China was the most populated, civilized and wealthiest country. China's iron industry produced 125 tons of it in a year, an amount not equalled by whole Europe till 20th century. Chinese invented movable type 400 years back, before even John Guttenberg [First European who used movable type printing, 1439] was born. It took the civilized Aryans 1700 more years before they could figure out how to make Porcelain. Cast iron, deep drilling natural gas, the belt drive, the fishing reel, chess, matches, brandy, gun powder, cards, the spinning wheel, umbrella, paper, printing press and countless other innovations, were Chinese inventions. Europeans of "Anglo-Saxon" descent eventually borrowed such innovations to pursue their so called "Industrial Revolution" in the 18th and 19th century. History has often been distorted and rewritten to serve the interest of the 'ruling class or society’ such that the 'torch borrowers' eventually became 'torch bearers' of the existing society.

But it was the Chinese tea which changed the social dynamics of the European society. It not only pumped adrenaline and addiction into the Europeans and drained valuable silver in return. This was a serious economic threat to the British Empire and the illegal opium trade came to rescue. The "Bengal to China" opium trade became the world's most valuable single commodity trade of the 19th century, accounting for 15-20% of British empire revenue, providing Queen Victoria the distinguished title of history's largest drug dealer. Between 1814 and 1850, the 'Jesus-opium' trade not only sucked out more silver than it had flowed in the last 125 years, but also tore into the moral fabric of the Chinese society. The intent to stop these illegal but profitable transactions ultimately led to the "First [1839-42] and Second Opium War [1856-60]" and subsequent defeat in the hands of the British Empire.

By then, Britain had long been the dominant Western power in China. But after 1875, others have started to exert considerable influence. Although, US obtained treaty ports and extraterritorial rights in continuation of opium war, it was only after completion of the Pacific bloodbath of 1898 that US could firmly establish its stakes in China. But due to late entry, the American state that closed the Latin America doors ['closed door policy'] against European invaders through Monroe Doctrine, at the same time, pursued an 'Open Door Policy' in its colonial policy towards the Afro-Asian continents where rival powers had firm control already. This meant benevolent sharing of power to compete within one another allotted sections. This was possible because of the transformation of capitalism into imperialism with finance capital as its essence, and emergence of USA along with Britain as a strong imperialist power. These factors played a significant role in not converting China into a colony and falling into the hegemonic control of single power. By the beginning of 20th century, China, a nation of 400 million people was now a shrunken country squeezed between the 'Anglo-Saxon [US, British, German]' and "Slav [Russian]" Empires.

Meanwhile, US was practicing a 'Closed Door Policy" in the US as the Chinese were brutally killed or shipped out of America in the name of "Chinese Exclusion Act, 1882". In many of such incidents, on October 11,1903, Roosevelt's' immigration officials swooped down upon Boston China town and arrested 234 Chinese emigrants. To protest against this ongoing racial discrimination, Shanghai businessmen called for boycott of American goods. Roosevelt underestimated the anti-imperialist sentiment prevailing among the 'general barbaric' mass, as the idea spread like wildfire across the country. This was the first time that a country of 'savages' was showing an intense racial pride and showed a peaceful coordinated response against American imperialist high-handedness, which ultimately by 1905 had cut down 50% of US exports to China. Many of the leaders of boycott, including Sun Yat-sen, ultimately led a series of uprisings against 'foreign devils' which culminated in Chinese "1911 Revolution" and marked the end of over 2000 years of monarchy with establishment of "Republic of China". In today's context, American prismatic view of Aryan superiority and subsequent failure to recognize 'third world war' nationalism in the form of Aguinaldo [Philippines], and yet to come Mao-Se-Tung [China], and Ho Chi Minh [Vietnam] had actually cost millions of American lives.

Before US could dream of further expansion, it had to deal with Russia. Russian "White" people were "Slavs", and belonged to the other arm of the Aryan race. But, obviously out of expansionist compulsion, follow the sun crowd of "Anglo-Saxon" descent; saw the "Slavs" as inferior to them. The great question of the 20th century was out of these two 'superior' races, who would impress his civilization to the world. Russia was a part of Roman Empire till the fall of Constantinople to the Ottoman Turks in 1453. Thereafter, by the beginning of 19th century, the nation built on Tsarist exploitative feudal economy and autocratic rule, expanded through conquest and exploration to become the "Russian Empire", stretching, across 3 continents. Napoleonic Wars [1803-1815] tore down the ancient structure of Western Europe and created the atmosphere needed for industrial revolution and capitalist expansion. But, the Russian decisive victory over the Napoleon French army in 1812, led to the retention of serfdom and feudal society in the main and the Russian industrial development lacked behind the rest of Western Europe. Late in the 19th century, on the backdrop of social unrest at home because of the deteriorating conditions of workers and peasants, Russia with its expansionist ideology was edging towards North China to claim its hold over rest of Asia. Russia was geographically and strategically placed much near to Asia and to counter this inherent disadvantage, Roosevelt conceptualized an American ascent and Russian downfall at the cost of Japanese imperialist expansion.

Interestingly, Japan was a feudal country until mid 19th century, almost untouched by the 'White Christian imperial Powers". From 12th century until 1868, Japan was ruled by successive feudal military dictatorships in the name of Emperor. In 1614, to prevent a Christian takeover, Japan ordered a policy of 'sakoku' or 'closed country' i.e. complete sealing of the island chain. Laws forbade travel abroad and foreign ships from entering Japan. Ironically, only the Dutch were to trade as they agreed trample upon crucifixes. The result was the 'Tahei' or 'Great Peace' that existed for more than 2 centuries with no wars. This happened when all of White Christian Europe was at war. During this period of peace, Japan emerged as the most literate and civilized country in the world. While 'sakoku' protected Japan, the vacuum created because of it gave Britain, Russia, Spain, and US free contest for control of the Pacific.

Historically, Japan didn't generate much interest amongst the imperialists by itself, probably because of its small land mass. It was only because of its proximity to China, Japan came into the scheme of things. Pacific was 8 times that of Atlantic and US navy ships required island cooling stations to complete long journeys, California to Hawaii was 2100 miles and served its purpose as cooling station. The real challenge was the distance from Hawaii to China [4700 miles] and cooling station in japan could bridge that gap. Control over Japan would provide US navy the necessary base to compete with the British, and the Slavs in exploiting the riches of China. Thus with its imperialist ambitions approaching West, US Navy started to demand Japan to 'open' their 'closed' country. Between 1790 and 1853, Japanese turned away at least 27 visiting US ships. The Japanese phrasing "every nation has a right to manage its affairs in its own way" seemed naive to those who followed the sun, and ultimately in July 8, 1853, US mobilized the largest fleet of American warships to ever availed so far. Defenseless Japan surrendered meekly to the threat and opened its shores to US. More shame allowed as Russia invaded the island of Tsushima in 1861. And in 1863, both US and UK navies bombarded the city of Shimonoseki.

In response to such shame, 1868 saw the Japanese patriots headed by 'Samurai [Japanese traditional clan of feudal fighters]' stormed the royal compounds of young 15 years old emperor and renamed him as "Meiji [enlightened rule]". The subsequent revolution called "Meiji restoration" changed the very basic foundation of Japanese society forever. Japanese understood that 'White Christians' justified in subjugating Asians because they thought they were racially inferior. Thus Japanese set out to identify themselves as separate from other Asians, and more like White Christians. Japan adopted a new national slogan "Rich country, strong military". And to do so, Japan did what no other non-White, non-Christian country had done in the past. It threw open its doors to Western ways, it modernized and militarized. Instead of shunning foreign ways as China, and other Asian countries, the Japanese doffed their Chinese style robes and donned trousers and ties. Cannons, rifles and warships became a part of the state budget. Emperor Meiji was depicted in paintings wearing Western style military uniform. The Japanese eagerness to emulate the "White Christian" ways was so successful that they became "Honorary Aryans" in the American mind, often referred to as the 'Yankees of the Far East".

To counter the growing influence of Russia in Asia, and Japan firmly under the US cultural and economic influence, Roosevelt actively supported the "Japanese Monroe Doctrine" in Asia. He conceptualized the establishment of US neo-colonial hegemony in Asia at the expense of Japan which on its behalf, would act as adeterrent to European [and especially Russian] encroachment. US itself stood aloof as a distant country with love for liberty and having no inclination to encroach Asia. With US military advisors' support, Japan began its imperial campaign in 1873, by invading Taiwan. By virtue of the bloody art of conquest, Japan became the first and only non-white, non-Christian country of the imperial club. Meanwhile Korea was a small kingdom, enmeshed in a web of Confucian relationships with neighbours and had a father-son relationship with China. Japan now gazed at Korea through American style expansionist lens. Korea was strategically located near to Japan, and any Russian invasion of Korea would become a springboard for invasion of Japan. Roosevelt had written that "impotent" countries like Korea were legitimate prey for the civilized nations. These strategic and philosophical equations fed US and Japan with much needed justification to civilize Korea and subsequent China's opposition led to the first Sino-Japanese war in 1894-95. Led by Qing Dynasty, China faced a humiliating defeat and for the first time the regional dominance in East Asia shifted from China to Japan. This defeat acted as a catalyst for a series of political changes which started with the "Boxer Rebellion" in 1900, a popular armed uprisings against the foreign encroachments which were later defeated by the combined efforts of British, Japanese, Russian, Italian, German, French, US, and Austrian troops.

Meanwhile, friction between Russia and Japan grew louder over dispute on Manchuria [a region today divided between Northeast China and the Russian Far East] which eventually led to the "Russo-Japanese War (1904-5]". US stayed back and actively supported the Japanese expansion, and eventually threatened France and Germany from taking sides with Russia with imminent dire consequences. On February 8, 1904, with no declaration of war Japanese torpedo boats surprised Russian ships [Roosevelt never imagined that the surprise attack tactics he praised in 1904 would later bedevil another President Roosevelt in 1941 with the sudden attack by the Japanese on the Pearl Harbour]. History witnessed the largest armed land and navy conflict prior in the World War-I which resulted in an apparent defeat of the Russians. But in reality, Japan simply did not have the strength to march to St. Petersburg and subsequent Russian army reinforcements could have driven the Japanese from the Asian mainland. Then "Bloody Sunday" exploded in St. Petersburg on 9th January, 1905 as 200,000 unarmed protesters assailed the winter palace demanding victory over Japan or immediate end to the war. This was first in a string of events which later culminated in the "Russian revolution of 1907".

On the other hand, Japan was bleeding financially with a staggering 1 million dollar per day. Out of productive Japanese male populace of 10 million, a staggering 2 million men and boys were in the military and 1 million has endured rigours in the front. Japan did not have any strength left to demand indemnity from Russia and fervently hoped that its mentor US would mediate it on their behalf. Because of domestic and diplomatic pressure, Russia accepted mediation by US. "Treaty of Portsmouth, 1905" was signed as it ceded southern Sakhalin island to Japan, and acknowledged Japan's ascendancy in Korea and southern Manchuria, but did not provide any indemnity to Japan. The utter betrayal by the US proved to be the end of honeymoon period between Japan and America. Actually, Roosevelt's idea about civilization and barbarism blinded him to the obvious that Japan's advances to the Korean Peninsula were the stepping stone to the Japan's later expansion to all of Asia. He believed that the Russians would balance the Japanese and the "Anglo-Saxons" would walk through the "Open Door" of China. This policy ultimately turned out to be a biggest blunder in the history of 'American imperialist expansion' [Second Sino-Japanese War, 1937 and Second World War, 1941-45].

In continuation with the "Big Stick Foreign Policy", Roosevelt added the Roosevelt Corollary to the Monroe doctrine in 1904. This was a direct consequence of the "Venezuela Crisis [1902-03]" caused by conflicting European imperial interests. Original "Monroe Doctrine" prevented the settlement of any new European colonies which exposed Latin America to both European and American neo-colonial interests. Roosevelt corollary was an act of desperation which changed the very morality of the doctrine. It asserted the right of the US to intervene in Latin America in cases of "flagrant and chronic wrongdoing by a Latin American Nation" which included any conflicts between European powers and Latin America. This was to be used apparently to enforce legitimate claims to the European powers, rather than having the European powers press their claims directly. But in reality, its very existence was used to stop this very spread of European influence which was competing with American imperial interests. In the next 15-20 years, US moved into Latin America about a dozen times with military force. This happened to such an extent that US Marines become known as "State department troops" because they are always moving in to protect US imperial interests and policies. US Presidents cited the Roosevelt Corollary as justification for US intervention in Cuba [1906-1909], Nicaragua [1909-10, 1912-25 and 1926-33], Haiti [1915-34], and the Dominican Republic [1916-24].

Meanwhile, the US used the "big stick" during the pursuit of Panama Canal across Central America. The Panama Canal is a 77.1 kilometre ship canal in Panama that connects the Atlantic Ocean [via the Caribbean Sea] to the Pacific Ocean. The Canal short-cut greatly reduced the amount of time taken for ships to travel between the Atlantic and Pacific Oceans, enabling them to avoid the lengthy, hazardous Capehorn route. The US took over the project in 1904 and then on wanted to control its accessibility because of its strategic importance in the world trade. Panama, then a part of Colombia was not ready to cede to the demands of US. On November 3, 1903, Panama [with the support of the US Navy] revolted against Colombia, Panama became a new republic, receiving $10 million from the US alone. Panama also gained an annual payment of $250,000, and guarantees of independence. The US gained the rights to the canal strip "in perpetuity".

World War-I [1914-1919]
By the beginning of 20th century, more than 98% of Polynesia, 90% of Africa, and more than 56% of Asia was colonized. Britain with its colonial hegemony firmly in place led the pack with 50 colonies, followed by France 33, and Germany 13. South America was under the neo-colonial influence of US. Only 7 countries in the world had no external influence and the World was getting increasingly suffocating with no room left for further manoeuvring. World War-I was an immediate consequence of the disturbance created in the Central Europe with the decline of Ottoman Empire. The war drew in all the world's economic great powers, which were assembled in two opposing alliances: the Allies [based on the Triple Entente of the United Kingdom, France and the Russian Empire] and the Central Powers of Germany and Austria-Hungary. During the war more than 9 million combatants and 10 million civilians died, whereas an estimated 21 million wounded because of industrialized nature of warfare. While the war was going on, October Revolution [7th November, 1917] opened and world's first socialist country was established, leading not only to withdrawal of Russia from war but also to the first breakthrough from the world imperialist system. Central powers lost to the Allies and by the end of the war, four major imperial powers [German, Russian, Austro-Hungarian and Ottoman empires] ceased to exist. The major imperialist peace treaty "Treaty of Versailles [June 28, 1919]" was signed and the "League of Nations" was formed with the aim of preventing any repetition of such an appalling conflict. In reality, the aim was to humiliate Germany and redistribute its colonies and spheres of influence.

Post-War Scenario [1919-1929]
The US did not gain much in territorial sense, but emerged as the most powerful capital exporting imperialist power. During the war, the Allies [the Triple Entente Powers: England, France, and Tsarist Russia] had to rely the large scale of imports of raw materials, food stuffs, semi-manufactured products and weapons from USA. Consequently, by 1915, for the first time, American exports exceeded imports by 1 billion which made US a leading world creditor. Dollar became the major reserve currency along with Sterling, though it required another world war to replace the later completely. While all of Europe was burning and trying to recover from the financial consequences of war, US remained the only country which benefited from dead corpses. Europe generated huge demand of capital because of its failing economy. US, with its burgeoning financial reserves saw an opportunity to expand its imperial interests and financial dependency, started to export huge amount of capital into Europe. This enabled US finance magnates to speed of stock market speculation. The capital export was mainly done in the form of massive international loans which indirectly boosted American export of goods, domestic employment and strengthening of dollar. This American enthusiasm raised the economic tide from 1925-29.

Amidst these trends, destruction of the first socialist state and combating the rise and spread of revolutionary fervour to Western Europe and rest of the world were on the top of the agenda of US imperialism. It started with the "Treaty of Versailles" itself when a ring of new states was established in South Eastern and Eastern Europe to isolate the Soviet Union. US President Woodrow Wilson who became notorious for enforcing Latin America's financial dependency was the first US President to device a global war against communism. He said, "The task of civilized nations of US was nothing less than the defence of liberty in the world," which implied frontal attack on communism. He initiated COINTELPRO [Counter Intelligence Program] to free the world of communism. Wilson led the various imperialist forces to provide both intellectual and physical support to the anti-Bolshevik fractions.

Great Economic Depression [1930's]
Periodic crisis known as "Business Cycles" had been a recurrent feature of capitalism since its inception. Capitalist crisis is a crisis of relative overproduction, i.e. production doesn't exceed the absolute requirements of the society. On the contrary there is merely a superfluity of commodities produced at the existing price level in relation to the purchasing power of the society as a whole. This is because under capitalism, social consumption is not determined by the absolute productive power or by the absolute consuming power of the society, but by the consuming power based on antagonistic condition of distribution which reduces the consumption of the great mass of population to a variable minimum within more or less narrow limits. Thus crisis is a by-product of 'capitalist mode of production' of too many commodities being produced under the pressure of developing productive forces [to sustain the vicious cycle of 'falling tendency of the rate of profit').

The "Great Economic Depression" of the 1930's was a result of the post-war boom of the 1920's. The appreciation of dollar on account of unhindered speculation unleashed by American finance capital led to a unchecked growing deficit and debt burdens of European countries with inadequate reserves. The sudden panic led to a large scale of withdrawal of funds from Europe which is known as "Wall Street Crash" of October 1929. This ushered in the world's worst and most destructive crisis. Sudden withdrawal of the US speculative finance capital led to fall in domestic demands and export and subsequent fall in industrial output. This hit the transport and shipping industry heavily resulting in massive unemployment. Overproduction in agriculture created massive piled up stocks of food and raw-materials. Unemployment rate in USA rose by 3.2% in 1929 to 4.9% in 1933, and world unemployment rose to a staggering 100 million. No part of the world where imperialist capital had penetrated could escape from the 'Depression'. No nation escaped except Soviet Union, between 1929 and 1932, the industrial output of US and Germany was almost halved, whereas in Soviet Union almost doubled. Compared to 1873-96, the crisis of 1930's was much intense on account of enormous power of monopoly to control the social circulation along with wages and prices in the favor of financial oligarchs at the expense of the broad masses.

But it is erroneous to think that this 'fall in rate of profit and its resultant crisis of relative overproduction' will lead to automatic collapse of capitalism as it will continuously strive to overcome crisis by contradictory enforced destruction of a mass of productive forces, by further intensifying the exploitation of existing markets, or by colonial or imperialist conquest of new markets, and thereby creating monopolies.

New Deal
Lenin foresaw the growing 'mutual' coordination of the monopoly capital and the bourgeois state, and based on the works of Karl Marx, Lenin first coined the term "State Monopoly Capitalism". Engels earlier defined State us "...the whole only a reflection, in concentrated form, of the economic needs of the class controlling production". Under pre-monopoly capitalism the state refrains from interfering with the economic activities of the bourgeoisie and market forces were allowed unfettered freedom of action. Engels characterized this role as 'night watchman' protecting the property of bourgeois class. However, under imperialism, as capitalist competition presumes monopoly, monopoly capital begins to merge with the bourgeois state and a close union of monopolies and state emerge. According to Lenin, state monopoly capitalism combines the strength of monopolies and that of imperialist state into a single mechanism whose sole purpose is to enrich the Financial oligarchy, suppress the working class and toiling mass and launch aggressive wars to maintain the capitalist imperialist system. Developments during World War-I, the interwar period, Great Economic depression and World War-II strengthened state monopoly further. Keynesianism, a variant of bourgeois economics in its imperialist epoch was nothing but the twisted and fabricated 'capitalist outlook' of the very principles of "State Monopoly Capitalism". It emerged at the specific historical context when the "Great Depression" had clearly exposed the theoretical and political bankruptcy of the American financial oligarchy. Meanwhile, the threat of 'Socialism' was looming large as the Soviet Union as appearing to be the fastest growing economy during the 1930's and in Europe working class was featuring fast due to their active resistance against fascism. Being a bourgeois economist a strong defender of capitalism, Keynes was unwilling to recognize the inherent contradictions of capitalism, arising from the class relation of exploitation, nor he could ever visualized the economy as an integral part of the whole society. On the other hand, because of the pain of 'Great Depression', Keynesianism rejected the orthodoxy of "Laissez-faire economics" that is codified in the "Says Law" of markets which says that "supply always creates its own demand" and that unemployment and disequilibrium are temporary aberrations. This argument rests upon the assumption that if a surplus of goods or services exists, they would naturally drop in price to the point where they would be consumed. Keynes openly questioned this assertion held by then bourgeois economists [David Racardo, Adam Smith] which portrays an economic environment which champions the principles of 'free trade' and 'free competition' and transactions between private parties are free from government restrictions, tariffs, and subsidies, with only enough regulations to protect property rights.

Ksynes's been shrewd enough to foresee the socialist threat and was extremely concerned with the excessive unemployment. He first recognized the existence of "underemployment of people and resources" and admitted at "lack of effective demand" is the crux of the problem. Keynes chose to seek the causes of under-consumption, unemployment and crises. In the psychology of the people [as if people are themselves to be responsible for their own fate]. He postulated that with growing income [especially during the 'boom phase'], the percentage of circulating capital decreases and the expected relative increase in consumption falls behind, this is manifested by fall in demand and production along with unemployment. But Keynes's, himself being a much believer of capitalist system, was not ready to accept the fact that even this "lack of demand" is due to contradictions between the social nature of production and private nature of appropriation under capitalism, while Keynes visualized unemployment as a symptom of a technical fault in the capitalist 'market mechanism' fuelled by over-speculation, for Marxism, it is an indispensable component of the very process of capital accumulation since capitalism will always need a growing army of unemployed working class to intensify its exploitation.

Post his nauseating 'psychological' explanation of death and misery, Keynes came forward with a 'not so unique' solution to bail out the economy by advocating more pro-active role of capitalist "welfare state" in the economy. He suggested increase in both private and government investments as the decisive means of increasing the general levels of employment. But the whole logic is flawed since more investments come at a cost of newer technology which requires a relatively lesser number of workers due to the increase in the organic composition of capital. He postulated that instead of increasing the production of mass consumption goods, investments in heavy industry, especially arms production would employ several times than that of former. But this analysis was again equally naive since from the economic point of view, military production and maintenance of armed forces ultimately represent non-productive waste of social product. War is a perquisite for a growth in war-centric demands which leads to a temporary spurt in the growth in economy because of a 'apparent demand' created artificially at the cost of destruction of material means of production. This leads to curtailment of civilian production and further lowering of consumption, growing unemployment  deepening of economic crisis. To quote Marx: "War in direct economic terms is just the same as if nations cast part of its capital into the water."

Meanwhile in US, even though the utilization of industrial capital was reduced to half and a quarter of labour force remained unemployed, the ultra-reactionary sections in the American ruling classes were interested only maintaining the living standards of the elite. The "Glass-Steagall Act" was passed which separated the commercial and speculative banking in the context of disclosures of scandalous self-dealing and abuse of power on Wall-Street by speculators. But with the economic downfall continuing, in 1932, Franklin Roosevelt as elected to the presidency of US with one of the highest majority in the American history. During the first bear, he passed the "National Industry Recovery Act [NIRA]" to strengthen the bureaucratic apparatus for protecting monopoly interests. This led to intensification of exploitation while monopolist began shifting the whole burden to workers though rampant wage cutting. Widespread attacks on workers with backing of police and judiciary led to significant social unrest. This prompted Roosevelt to put on a populist mark and with the hope of providing some relief to the economy he introduced "Keynesian medicine" in the form of "New Deal" in 1933-39. But the euphoria was short lived, as the apparent relief lost steam by 1937 when a new recession stuck. Joblessness rose from 14.3% in 1937 to 19% in 1938. New Deal was losing popular support and the feasibility of capitalism was begun to be seriously questioned. Rising clamour for further overseas imperial expansion at the cost of other imperial powers was gathering pace. And then like a breath of fresh air, World War-II came by and the "Great Depression" merged [it never ended] with the war-oriented production, while the GDP of USA rose by almost 75% and unemployment practically vanished through thin air.

World War-II [1939-1945]
Fascism has been the outcome of the intensification of internal contradictions of imperialism during a 'severe internal crisis' which cannot be resolved through normal methods of surplus value extraction and imperialist expansion. It is a form of radical authoritarian nationalism which consistently invokes the primacy of state and claims indisputable powers, in the hope of turning the tide against the 'inevitable' economic crises. Greatly influenced by 'national syndicalism', it gave rise to economic nationalism, protectionism and encouragement to national chauvinism. Once fascism begins to make headway as a mainstream alternative, apart from petty bourgeoisie, other elements of society such as unorganized workers, unemployed youth, and criminal elements such as 'lumpen proletariat' are attached to it. Foreigners, immigrants and racial minorities are blamed for their misfortunes. Utilizing the alliance between the finance capitalists and fascist political leadership seeks to establish a strong state. A fascist state subordinates the working class within the country and tries to expand its imperial interests at the expense of rivals internationally. Integration of private fascist armies propped up by finance capitalists with monopoly state power has been the inherent trend of fascism. In nutshell, fascism is a change brought about by finance capital in the political superstructure making the regime dictatorial, terrorist and annexationist.

The concrete manifestations of fascism first appeared during the interwar period in Italy, under the leadership of Benito Mussolini, followed by Germany, under the leadership of Hitler. These are the two countries which were most weakened by the war. Germany's colonial empires were mainly divided between Britain and France, Germany was stripped off its navy, her army was limited and important raw material producing areas were taken away from her. The "Treaty of Versailles" resulted in weakened states, renewed European nationalism and the German feeling of humiliation contributing to the rise of fascism and the conditions for World War-II. It started with German invasion of Poland in April 1939. Though Britain and France declared war on Germany on September 3, they avoided major operations during the initial years of the war. Since May 1940, Hitler defeated Netherlands within 4 days, Belgium within 3 weeks, and France within 7 weeks. After that Hitler moved east invading Yugoslavia and Greece in April 1941. Taking advantage of the delay on the part of Allied powers to open a Western front, Hitler attacked Soviet Union on a 2000 mile front on June 22 and reached the outskirts of Leningrad and Moscow. However from November 1942, fascists were gradually pushed back and by 1944 Soviet Union under Stalin had recaptured all its occupied territories. Imperial Japan, the brainchild of US, was just fresh out of its "Second Sino-Japanese War, 1937" and had gathered enough imperial aspiration to attack the British and American bases in Pacific on December, 1941. Meanwhile the allied troops succeeded in ejecting both Germany and Italy from their possessions in North Africa and by the end of 1943 the tide has turned against the "Axis Powers". While Japanese troops were wiped out by nationalist movements of Asia and People's Liberation Army of China, American atomic bombing of Japan in 1945 confirmed the defeat of axis powers by mid 1945.

While US formally entered the war in December 1945, at the pretext of the Japanese Pearl Harbour bombing, American economy till then already became a war centric by the merger of "New Deal" with the war efforts in the last 3 years. Being far away from the war scene, American continent was least affected which helped US to become the biggest supplier of not only arms, and ammunitions but also of food, agricultural and industrial goods. The mobilization of 12 million people into armed forces and near full employment of the remaining civilians by the war-oriented economy generated the 'effective demand' that wiped out agricultural surpluses, legacy of the "Great Depression". The production of steel, which experienced the striking decline to one-fourth of previous high during 1931-32, achieved unseen growth. Thus, while World-II ravaged the economies of all imperialist powers, it provided an excellent opportunity to the US to make effective utilization of resources and recover from a decade of depression. At the close of World War-II, US having sucked in most of the world's capital accounted for almost half of GDP of the capitalist world and three-fourth quarters of gold reserves of the world.

Transition to Neocolonialism
Post World War-I, with entire Europe dependent on its financial reserves, US emerged as de facto leader of the Imperialist world. Meanwhile the 'nationalist' fervor generated worldwide by the October Revolution [1917] was beginning to threaten the classical type of colonialism. US, on the other hand, even prior to the advent of imperialism in the early 19th century, had perfected the strategy of global "Neocolonial" plunder via finance capital and international monopolies without having direct territorial control over the colonial world, throughout Latin America. Thus to prevent further contraction of imperialist system, US started to convince its European counterparts the impracticality of territorial expansion and emphasized the need of more economic penetration. The specific orientation was evident from the "Covenant of the League of Nations, 1919" formed just after the World War-I whose principal architect was President Woodrow Wilson. Out of 14 points drafted by Wilson, the last point suggested the "formation of a general association of nations to guarantee the political independence of all states". US imperial order was of the view that the colonies, semi-colonies and the other dependent countries have already adapted to the requirement of finance capital as the resources and the markets are already intertwined with the imperialist world system, and continuation of this economic and financial dependency is just what required. This foresightedness based on practical political and economic implications formed the basis of the present 'Neo-colonial' or "Semi-colonial" imperialistic world economic order.

Atlantic Charter, 1941
Much before America's formal entry into the war, the "Council on Foreign Relations", the US think tank sponsored by the financial oligarchy in alliance with US administration devised a Pax-Americana project replacing Pax-Britannica based on the rising and eclipsing global hegemony respectively. US and Britain jointly released the "Atlantic Charter" on August 14, 1941, envisaging the complete blueprint of the required political, economic, and military ingredients for the post war neocolonial world order. Atlantic Charter established US as the world leader and under its hegemonic role, all the imperialist powers would unite together to defend imperialism. It also drew the basic guidelines for the formal withdrawal of European powers from their erstwhile colonies and laid down the foundation for more intensified penetration of finance capital through 'neocolonisation'.

Bretton Woods System, 1944
Neocolonialism results in increasing complex equations developing out of intermingling of economic, political and military spheres and role of financial institutions achieves great importance. Therefore to address this situation, US and UK convened an international conference at Bretton Woods, New Hampshire which was attended by 44 countries. Keynes, the leading bourgeois economist of that time representing Britain, put forward a plan to establish an international currency [Bancor] and international authority to back it up. But the US, although in agreement with Keynes in principles, preferred an institution having its own veto power with its own dollar as the world currency. On account of its economic, political and military clout, countries agreed to US proposal and the outcome was creation of Bretton Woods Institutions, namely the "International Monetary Fund [IMF]" and the "International Bank for Reconstruction and Development [IBRD] or World Bank", while the IMF was for meeting short-term balance of payments, World Bank was to meet the reconstruction needs of war-torn economies and 'developmental' requirements of neo-colonial countries. US having almost three-quarters of world's gold reserve at the end of World War-II, also succeeded in establishing dollar as international currency and gold as its 'equivalent value'. Here the price of gold was fixed at 35 dollars an ounce, the price prevailing in US. All the countries had to keep dollars as medium of payment for any international exchange. Since dollar was freely convertible to gold, the former was as good as the latter. By agreement, USA had to maintain the 'dollar-gold exchange rate' free from fluctuations and be ready to exchange dollars for gold and vice-versa. The other countries were required to fix the price of their currencies in terms of dollars and indirectly in terms of gold and the IMF was entrusted with the task of supervising and managing it. This privileged position of the US as the provider of dollar to the "dollar starved" world further facilitated the export of finance capital by US and provided US financial monopolies an unparalleled opportunity to extend their neocolonial blunder. So along with the 'Bretton Woods Sisters", dollar became one of the instruments of neocolonial plunder.

The Misconception
Under the auspices of 'Imperial America", historians have purposefully created and nurtured a myth that America has always taken an anti-colonial stand and pursued a non-interventionist policy, vis-a-vis the European powers who were contending for colonial exploitations. But American finance capital and American diplomacy with military have always worked hand in hand. This state sponsored propaganda has actually helped USA to engage itself in war for more than three-fourths of the entire 19th century. A biography of an American soldier exposes the close link between military and financial oligarchy : "I spent 33 years and 4 months in active service in US Marine Corps... and during that time, I spent most of the time a high class muscle man for Big Business, Wall Street and for the bankers. In short I was a racketeer for capitalism. Thus I helped make Mexico safe for American oil interests in 1914. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-12. I brought light to the Dominican Republic for American sugar interests in 1916. I helped take Honduras 'right' for the American fruit companies in 1913. In China in 1927, I helped see to it that Standard Oil went its way unmolested." In fact, according to official data from 1800 to 1939, except for one decade, at least 54% of federal expenditures were for military activities or preparations for war. The decade of "Great Depression [1930-39]" was the only exception when the % dropped below 40%. Summing up these ends, Quincy Wright concludes: "The US, which perhaps somewhat unjustifiably prided itself on its peacefulness, has only 20 years during its entire history when its army or navy has not been in active operation some days somewhere." As of today, US military is deployed in more than 150 countries worldwide [Source: Data released by US Department of Defence on March 31, 2014].

While unravelling the brutal legacy of US ascendancy as the supreme imperialist power, it becomes so obvious that the whole trajectory is filled with loot, plunder, and extermination of the native "Red Indians", commercialization of slavery of African people, mass genocides of inhabitants of all Pacific islands including Philippines and Puerto Rico, and financial strangulation of Latin America. It was in continuation of this largely humanitarian effort to civilize the 'savages' of the rest of the world, Hiroshima and Nagasaki took place. But terror and exploitation in the post war 'neocolonial' and 'semi colonial' world order has surpassed everything that preceded them. Korea (1950), Guatemala (1954), Cuba (1961), Vietnam (1964), Indonesia (1965), Cambodia (1971), Angola (1975), Series of Middle-East interventions culminating into Gulf war (1991), Yugoslavia (1999), Iraq (2003), Libya (2011), Syria (2012)... this list is endless and unbearable. Today as there arises an unprecedented global unrest against US imperialism, it's proven beyond doubt that no ruling class in the history of mankind has ever surpassed the criminality and terrorism unleashed by US.

Autumn Number, Vol. 48, No. 14 - 17, Oct 11 - Nov 7, 2015