The Multinational Monitor



The Logic of U.S. Geopolitics

An Interview with Gabriel Kolko

Gabriel Kolko, 57, is a professor of history at York University in Toronto, Ontario. He is also the author of several books including, most recently, Confronting the Third World: United States Foreign Policy, 1945-80.

The principal challenge to American power in Latin America after 1945 doesn't come from the left but from the nationalist center and right, constituencies who believe in developing self-contained import-substitution economies which are fundamentally hostile to U.S. interests and domination. Multinational Monitor: Historically, what factors have determined the pattern of U.S. interventions in the Third World and to what extent have economic interests been important?

Gabriel Kolko: There is no such thing as a single U.S. relationship to the Third World. You have to consider it by region, and within each region look at the weight of U.S. investment, the intrinsic importance of the commodities involved and the U.S. relationship to the powers already in political control. In Africa, for example, you have a predominance of British and French influence whereas in Latin America, U.S. influence is overwhelming and operates in a vacuum. The most complicated, of course, is East Asia, where the U.S. interests are slight, where the geopolitics of the region are much more intricate and where symbolic factors become quite overwhelming, transcending the purely economic.

MM: At what point did the United States start to become fundamentally concerned with its ability to do business overseas and start to use that to shape foreign policy accordingly?

Kolko: The United States' objective position in the world economy as an importer of raw material emerges at the end of the Second World War. Until 1945 it had deficits in a few minerals, but the average position of the American economy in raw materials was one of surplus until then.... After 1945, as well, the emergence of high tech industries required new kinds of materials, such as chromium and platinum group materials that are absolutely essential to advanced aerospace and high tech industries. The post-1945 period was the real break[ing] point in the U.S. relationship to the Third World. But the United States' needs were still relatively modest until the late 1950s, by which time the burgeoning needs of the aerospace industry demanded much more of those crucial raw materials. During the same period the United States became a deficit nation even in oil. At first, the imports came from politically secure areas like Canada and Venezuela, then, after 1960, the Middle East entered the picture. These changes posed the problem of political instability in the areas from which the United States imports its materials. And with the advent of Castro in Cuba it became clear to the United States that Latin America was no longer politically secure to it....

I want to emphasize, however, that the principal challenge to American power in Latin America after 1945 doesn't come from the left but from the nationalist center and right, constituencies who believe in developing self-contained import-substitution economies which are fundamentally hostile to U.S. interests and domination. This theme of conflict between U.S. mastery and the aspirations of a relatively conservative Latin economic nationalism reasserts itself over and over again in the post-1960 period.

MM: What are some examples of that?

Kolko: Brazil was the most important single challenge. The center-right coalition, aligned with the military, was in favor of autonomous industrial development and after 1950 they didn't see their place in the hemisphere as a part of the U.S. system. These are the people in Latin America who presented the most headaches for the United States in the immediate post-war period. Although the left emerged after 1960 as a troublesome challenge in the Western hemisphere, this kind of industrially- oriented, high tariff, import substitution economic strategy continued to become even more powerful in the hands of the right-wing regimes. These people have posed a consistent challenge to U.S. hegemony, since 1950, in certain ways more durable than the left, because the United States can't control them by evoking the problem of anti-communism. This emerged in Peru, with the military regime from 1968 onward, and was to a large extent the pattern in Chile from 1960 to 1973, where there was a consensus between the Christian Democrats and the Socialists on this kind of economic development. After all, the copper nationalization in Chile was begun by the Christian Democrats. Allende just completed the process--he didn't initiate it. Conservative nationalism presented a new kind of crisis. It was a challenge not from the left, but of alternate patterns of economic development, autonomous of U.S. mastery.

MM: But, in Chile Christian Democratic President Eduardo Frei was very close to the CIA whereas Allende was the target of a CIA coup. If you are arguing that they shared this economic point of view, why wouldn't the U.S. have been at least somewhat opposed to Frei instead pushing him and the Christian Democrats as the way to prevent Allende-style governments?

Kolko: Frei at various crucial times during the Vietnam War tried to raise the price of copper. That is to say, Frei was anti-communist, but he also believed in national economic development, and the United States was very unhappy with him. They pressured the regime by withholding economic aid at crucial points....

The United States decided by the end of the fifties that the multilateral banks such as the World Bank and the International Monetary Fund offered the best means of relating to this kind of problem and putting pressure on countries seeking to follow a more independent path. That was certainly the case with Brazil and Argentina and has become even more true since 1979. But the problem was that after 1973 the multilateral banks lost their leverage to the private banking market, which recycled petro- dollars from the Middle East and presented poorer countries with alternative sources of capital. Only now are the multilateral banks in the process of getting back the power they had before 1973.

MM: Was there any effort by the U.S. government to get control over the activities of the private banks, or among the private bankers was there any sense that they might be working at cross purposes to the policy the United States was trying to advance through the IMF and the World Bank?

Kolko: During the seventies, no, but later they became aware that they'd all have to work together. During the first stage, in the seventies, banks just wanted to loan out the oil states' money. Only after '79-'80 did it become clear that unless the multilateral banks were brought back into the picture the private lenders wouldn't get repaid. The kinds of conditions the United States and the private banks wanted to impose could be imposed much more effectively by multilateral banks, and so they were brought back in.

MM: How exactly have the right-wing governments in Brazil posed a threat to U.S. economic interest?

Kolko: While the generals are anti-communist and they're anti- democratic, they also believe in creating an independent, diversified economy on which to develop Brazilian power. The Brazilian arms industry, which is now one of the largest in the world in terms of export trade, is founded upon such an autonomous economic base.

The United States and the generals disagreed consistently after 1964. They agreed on only one thing, Goulart [the Brazilian general, overthrown by the military in April 1964]. Beyond that point the consensus broke down. Pressure on the generals came from the national bourgeoisie to continue Goulart's import substitution policy, because they were its main beneficiary. They really needed a basic state steel industry so they could fabricate steel into products.

The United States opposed then, as it does today, the subsidies pouring into the Latin steel industry, to develop the basic production infrastructure; or to develop petroleum. The United States objected very strongly but the Brazilian generals continued to build the manufacturing and steel capacity which was essential to an autonomous industrial sector, which now exists. In Brazil you have a large multinational corporation sector but also a large state sector and then, of course, a totally private capital component....ln statistical terms these three sectors are about equal. [Indirect subsidies] to the domestic industrial businessmen who compete with the multinationals have led to the United States applying terrific pressure on the generals and their successors, including trying to hold up loans, etc. The Alliance for Progress in its last years was preoccupied with these kinds of problems. The Alliance became a vehicle to try to, in effect, inhibit nationalist economic development in Latin America.

Brazil and Mexico, the two biggest countries in Latin America, have both pursued this kind of economic strategy. The Chileans tried, as did the Peruvians, but the latter didn't have the clout. The Argentines tried also and have, in some critical instances, succeeded. These challenges to U.S. hegemony have come overwhelmingly from quite conservative nationalist elements. They use the United States, of course, whenever it serves their interests and reinforces their power. But in the last analysis they have their own class privileges to advance and protect.

The major countries of South America have been much more influenced by European ideas, classic laissez-faire doctrine has relatively little influence. Their leaders have basically been people who studied in Europe and were influenced to some extent by the corporatism coming from Spain and Italy during the thirties. This is why the United States always attacked Peron as being a fascist. Peron was not a fascist, but there is no question that fascism and corporatism had an influence on theories of economic development in these nations, and certainly in Argentina.

More recently, the emergence of European and Japanese multinationals has given the Brazilians and others more leverage. Since the early 1970s, they've begun re-negotiating their relations with U.S. multinationals and obtaining better terms. The emergence of rivalry between Europeans, Japanese and Americans is an important inhibition on U.S. power in the region.

MM: How has the United States divided its foreign policy attention and resources between Europe and the Third World?

Kolko: The United States has always looked at the Third World, so to speak, over its shoulder. It has been Eurocentric; its focus, historically, is predominantly on problems involving the Soviet Union; it has dealt, economically, principally with the EEC countries and Japan; it has never wanted to get involved excessively in the Third World and hence, when it has become committed unavoidably, it is out of necessity, perhaps because one of its proxies has done a frightfully bad job, as with Somoza, or as a crisis arises which they simply can't sidestep.... The United States has never relinquished what it sees as its responsibility for controlling the direction of affairs in Europe.

And after 1945 it assigned political and economic responsibility for important parts of the Third World to various European powers: for example, economic responsibility for Africa went to Britain and France, and it assigned Indonesia to Japan after 1965.

MM: How long after WW II did Europe continue as the center of U.S. policy?

Kolko: In 1973, Kissinger declared that he wanted to make it the year of Europe. The Vietnam War had completely thwarted the U.S. position there. Vietnam had so affected the American economy that Europe and Japan raced ahead and filled the world market for consumer goods, which of course they've never lost control of since. It was only at that time that people started buying Japanese and German consumer goods and automobiles in mass quantities.

MM: You've written that the principal U.S. reason for prosecuting the Vietnam war after 1963 was to maintain credibility. Credibility for what?

Kolko: To prove that United States had the power and was ready to use it. Power isn't effective, according to this logic, unless you're ready to go out and attack someone. Otherwise they'll think Washington is bluffing. It's a very simple mode of reasoning and the shocking thing is that it has guided foreign policy on countless questions.

MM: Why does the United States want that power in the first place? To keep markets open and maintain economic arrangements favorable to the United States? What is the ultimate goal?

Kolko: Credibility in the American calculus exists on several levels. One level is the pure credibility of military power, which doesn't involve markets and economics at all, and that is the ability of the U.S. weapons to eliminate challenges to itself and its surrogates. That kind of obsession is built into the system. It emerged after 1945 and by 1949 there was a general consensus among top decision makers that establishing the credibility of American power was worth an important investment of U.S. national resources. It was codified in National Security Council directive 68, when the Truman administration decided on a great extension of the national security establishment and a tripling of the military budget. The Korean War substantially consolidated this trend.

The relation of credibility to economic activity demands a more complicated mode of analysis but it exists too, and it's always a part of the equation. In Vietnam there was no direct economic interest of any consequence but the United States never saw Vietnam in a purely national context, but rather in a regional framework. While Vietnam's resources are negligible, the resources of the region are very important, Indonesia, above all, but Malaysia and Thailand also. The United States was committed not to lose these resources not simply for its own direct objectives but also because of its triangular conception of Asian economic power: that is to say, it wanted to see Japan involved in the world economy and for that to occur Japan had to have raw materials and resources. The interests of its own companies were a lessor factor; the key factor was to keep Japan integrated in a world economy of which the United States was the leader.

MM: Why did the United States want to see Japan involved in the world economy?

Kolko: Because, basically, since China became communist the United States has regarded Japan as the anchor of U.S. power in East Asia and its single most important ally. But now that Japan is so powerful, of course, Japan has its own interests. On a certain level they are congenial with the United States, but at another level they're rivals. This has always been true of the ambiguous relationship between the United States and other major capitalist nations with which it has political alliances.

MM: How are U.S. interests defined?

Kolko: You can't always see the United States' interests in a country as being simply those of its own investors and multinationals. For example, in the mid-sixties, the United States was frightfully concerned about the world price of copper. It was concerned that if the Belgians were thrown out of Zaire, the price of copper would go up; that is to say, African copper would leave the world market and what the United States had to pay for Latin copper would be affected. The United States has always seen world raw material prices as part of the integrated world structure. Therefore, in Africa it supported not its own direct interests but those of the Belgians, the British, and the French. That's America's typically triangular perception.

MM: What are other examples where the US policy has been shaped by a desire to keep a given market in line?

Kolko: That has been the case with oil, it has always wanted to see output high to keep prices down. In the case of bauxite one would find the same thing. The United States has been concerned not so much about losing control over bauxite in Jamaica but about the price of bauxite going up in the world market. There is an indirect effect that if a producer leaves the market--even if its someone else's big producer--the United States will pay for it indirectly.

MM: What does that point of view imply for U.S. policy towards South Africa? You mentioned before that in the post war period with the development of high technology certain strategic minerals have become much more important. The supply of many of those minerals is concentrated in South Africa. What does that mean for the future of U.S. policy in South Africa?

Kolko: They must have the area's materials. The United States has worked with South Africa consistently. Even when the United States has supported United Nations proclamations due to African pressure, the fact is that the United States has always dealt covertly with the South Africa. A 1985 report by the U.S. Office of Technology Assessment called Strategic Materials: Technologies to Reduce U.S. Imports and Vulnerability argues that there are key materials which are irreplaceable--they can't be substituted and they must be accessible if the United States is to maintain its high technology industries. They are chromium, cobalt, manganese and the platinum group--platinum, palladium, rhodium, iridium etc. Those all come from southern Africa. Basically, what it means is that the United States must deal with whoever can supply these minerals and it has done so consistently. Although their dollar value is modest, the United States can't operate its modern advanced military technology without these minerals, and it simply wouldn't have an aviation industry without access to these metals. I think the United States understands this very well and this is the constraint on its policy, apart from the fact that it has never thought that the black liberation movements are especially attractive. But on the other hand, U.S. policy obviously becomes more complex in places like Angola, where the United States maintains contact with all sides and funds UNITA.

MM: It seems that one of the premises of U.S. policy for years has been that in order to have access to raw materials and markets, you have to control the governments involved. Has that assumption been correct or is it correct in the current economic climate? Because it seems that there are a number of cases like Angola, even Iran and Libya, where governments that are politically very hostile to the United States have wanted to deal economically and have wanted to sell their goods on the market. Is it necessarily the case that the United States has to be in charge of these governments calling the shots politically in order to deal with them economically?

Kolko: That, in recent years, has been a revelation to the United States. If the United States had entered the cold war in 1946-47 with the realization that Marxist-Leninist movements are ready to adapt free market principles and buy and sell like everybody else, it could have formulated a strategy for dealing with them in a different fashion--a much more co-optive one and it could have saved itself hundreds of billions of dollars in military outlays. Trading with revolutionary regimes came up in Angola and it was a surprise, and Washington was pressured by American business interests to not rock the boat. If you have ideologues like Kissinger or many of the people in the Reagan administration, they eventually become dysfunctional. They don't realize the potential of simply buying the so-called enemy. I think that in the next years the United States will try to operate on the basis of coopting leftist regimes. They now feel that they've won on the question of economic principles and they believe, quite rightly in many cases, that these regimes are coming around very, very quickly to them.

MM: Do you think that is true?

Kolko: Well, it certainly is true in China to a large extent and it's increasingly the case in Poland, Hungary and Vietnam. The Vietnamese have followed the pre-June 1989 Chinese line on economic issues. There is only one problem, as I think the events in China proved in May and early June, and that is that these policies are not viable.

MM: On a local, popular level?

Kolko: The population isn't accepting the so-called free market. The Chinese students simply galvanized diverse social forces whose grievances had been building up. This is likely to occur also in Poland. The desire there now is to introduce a democracy, but one in which Solidarity will also help cut back on the workers' standard of living and end strikes so that Poland can pay off the foreign banks and introduce much more stringent economic principles. People will not like it. The kinds of social crises which confront nominally capitalist regimes can and will also upset nominally socialist regimes if they introduce market principles. If they become capitalist- Leninist regimes then all they have left is the party, which, devoid of socialist goals, has no social legitimacy whatsoever. Even some of the nationalist riots in the Soviet Union and elsewhere result in part from the fact of rising unemployment among young workers; prices have gone up and they are very unhappy. In Vietnam there's now 25 percent unemployment and you have skyrocketing inflation, and there are very critical social tensions built into these facts. So the Americans may not win their goal of establishing market economies in all these countries so easily.

MM: How has Vietnam been moving in the market direction?

Kolko: Basically the present Vietnamese strategy has been defined by the IMF. There's high unemployment, they now have an open market on currency, they've implemented the IMF recommendations on interest rates, they've cut consumer subsidies for rice, etc. There's a dispute within the party on these issues but, to a critical extent, the IMF has largely affected the economic policy in many so-called Marxist countries.

MM: What in particular about the Chinese movement indicates they were reacting to pressures and problems brought about by the economic changes in China?

Kolko: Well, of course, they were complaining about many things for a long time, not the least of which was their standard of living. There is growing unemployment, and there has been a decline in real income because of inflation that the open market created.

I saw this in Vietnam when I was there at the end of 1987. I'd been there six times before and I'd never seen such extremes of wealth and poverty. Now you have people who are doing extremely well and you also have people sleeping on the streets. From 1973 to 1983, I had never seen people sleeping on the streets of Hanoi. It's becoming a society of winners and losers. To this extent, you're right about the ability of the United States and Western nations to buy into these places. But that policy may not work much longer because we're now going through a unique period in modern history. We have, on one hand, a profound instability in world capitalism involving the debt question, social tensions, problems of the banking structure, trade and budget deficits and innumerable other vital matters. But parallel to this crisis you have a crisis of Marxist-Leninism and a questioning of whether to continue to pursue socialist ideology and principles. There are two parallel crises in tandem. But, clearly, Marxism-Leninism as a viable force is no longer going to be important at this rate, and I think it is being delegitimized as the historic alternative to capitalism it has been since 1917 by the policies in the Soviet Union and especially China.

The crisis on the left notwithstanding, I think the United States is not going to find developments in the Third World very congenial because the assertive market economy strategy it is propounding cannot succeed. It has too many internal social tensions. It simply doesn't work in developing countries. It may be relevant, lets say, to the Hungarian economy, though even that remains to be seen. But its certainly not going to develop the Philippine economy, for example.

MM: There is a situation now where Marxism-Leninism is withering but at the same time you have increasing misery in much of the non-socialist Third World. Is it possible we'll start to see the emergence of a new round of revolutionary movements or grassroots opposition movements that maybe are not Marxist- Leninist, but come from some other direction?

Kolko: Yes, I think that's definitely in the cards, and I think it's to be welcomed because successful movements have always defined their goals and objectives on the basis of national needs and priorities. I think we're entering into a transition in the world left in which new movements will emerge and they'll no longer call themselves Leninist, and they'll rethink the problem of the role and pretensions of party, because the problem of China really is, to a vital degree, the problem of the party and its relevance or irrelevance. Of course Gorbachev has tackled the problem of the party much more strongly, and he's ready to downgrade it rather traumatically. This is also happening in Poland, so basically these regimes will alter and parties like the Italian Communist party will change their name and lose their historic identity. In this regard the profound revisions that can come out of this crisis in Leninism can be positive in the medium- and the long-run. But in the short-run there is no question an element of extreme depression has been introduced into the world left. People are bewildered, they don't know how to explain all these changes.

MM: What is the economic approach that makes sense in this context in a poor Third World country? Where can they look for either models or allies in terms of developing their own countries economically?

Kolko: The best place they can look is to themselves. They have to develop their own economic analytic capability, and they have to prepare not just for the seizure of power but for the responsibility of running economies. They have to develop a deeper analysis. Because of oversimplification within the Marxist-Leninist movement, there was a tremendous amount of self-confidence in the efficiency of the party. And as a consequence of this self-confidence collapsing the Americans and others have substituted with astonishing ease a bankrupt analytical alternative. When I was in Vietnam at the end of '87 senior party people lectured me about the virtues of the free market, telling me things about economic development in the capitalist world which simply were historically inaccurate. These issues of economic development have to be engaged directly and people have to be candid and realistic and not simply politely endorse the poor solutions which yesterday's national liberation heroes propound today. There's a responsibility in thinking about administrating power and fulfilling the objectives of the revolutionary effort that extends to their friends as well. They have failed in much of the Marxist- Leninist world and we must encourage those in the Philippines and elsewhere who are still struggling to think about these issues in a very serious and realistic fashion.

You can't always see the United States' interests in a country as being simply those of its own investors and multinationals.
The kinds of social crises which confront nominally capitalist regimes can and will also upset nominally socialist regimes if they introduce market principles.
[P]eople have to be candid and realistic and not simply endorse the poor solutions which yesterday's national liberation heroes propound today.

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