#15
Vedomosti
No. 29
February 20, 2003
[translation from RIA Novosti for personal use only]
WAR AND THE US ECONOMY
A Russian Expert's Survey
Alexander DUGIN, director, Center of Geo-Political Expert Examinations, chairman of the Eurasia party

The United States is now preparing to attack Iraq; meanwhile the possible consequences of this war are being examined in a rather simplistic context time and again. Experts are trying to predict possible oil-price trends; moreover, they would like to find out whether this will be a fast-paced or a protracted war. Its possible influence on stock-market investment, as well as on US economic growth this year, also seems to be a topical issue. However, one also gets the impression that this war's causes and consequences are more profound.

The so-called disastrous forecast implies that global oil prices will skyrocket, eventually totalling $40 or even $70 per barrel (sic!). This might lead to a global crisis reminiscent of the one, which had flared up in the 1970s. For its own part, the US economy would be tottering on the brink of a lengthy recession. On the contrary, an optimistic scenario, which might come true as a result of a quick and victorious war, would bring oil prices down; consequently, a barrel of oil might cost $20 and even less. The US economy would grow stronger as a result.

Naturally enough, all those opposing the policies of President George Bush Jr. can be called pessimists. I'm talking about the Democratic Party in this connection. In the meantime, the US President's supporters are quite optimistic. As a rule, foreign analysts tend to be rather biassed, while analyzing the US line. Those advocating US domination usually prefer the optimistic scenario. On the other hand, though, their opponents opt for the pessimistic scenario.

So, let's try and examine this issue in a broader context. How does the projected US war against Iraq tally with the US economic-development logic over the last few decades? What role can this war play, or is destined to play, in the context of subsequent US economic-development stages?

First of all, one should always keep in mind that America's economic might, which was reached at the end of the 20-th century, highlights an intricate system of historical factors, including geo-politics, strategy, culture, diplomacy, the socio-political system and civilizational trends. In other words, the US economy is just one aspect of a multi-faceted process, i.e. America's elevation to the rank of a hyper-power. The world used to have many first-rate powers, as well as two super-powers; however, only one hyper-power exists today. Well, this is the most understandable and graphic form of prosperity and supremacy, albeit not the only and most important one.

It took the United States a lot of time to attain prosperity and to start dominating the world; that policy was also quite consistent. The US economy played the role of an engine at some stages, with certain other factors also coming to the fore. Among other things, such factors made it possible to cope with economic crises. FDR's (Franklin Delano Roosevelt's) New Deal enabled the US economy to weather the 1929-1932 Great Depression. One can safely say that the New Deal amounted to direct state intervention, also boiling down to economic-development plans and elements of national socialism. All economists used to predict after the Second World War that the US economy would collapse once again, after switching over to civilian production. However, the Cold War saved the day, resulting in permanent defense contracts. This is a highly important circumstance - in spite of liberal theoreticians' declarations, the US economy and the state are not miles apart, helping each other in difficult situations for the sake of attaining the sublime goal, i.e. America's global domination.

The US economic situation changed after the Soviet Union's demise. The US leadership was deprived of certain maneuvering room after its main geo-political rival disappeared. The resultant international situation implied that economic prosperity had to be attained by mostly economic means. To cut a long story short, the White House lost its most important argument, i.e. the enemy image, which could be used any time when economic processes approached the critical mark. The US boasted an "over-heated" stock market at the turn of the century, also posting a tremendous balance-of-payments deficit. All this was fraught with yet another Great Depression-style crisis. Incidentally, all these problems are largely a side-effect of America's worldwide geo-political strategy; in other words, this amounts to economic instruments of political might. Drastic changes in the world's political structure also served to drastically alter their economic essence.

In the obtaining situation, the United States needed a new enemy image. This requirement stemmed from the very US economic structure, rather than the blood-thirsty essence of US war hawks alone. The existence of an "external" enemy was supposed to become an instrument for ensuring the "patriotic mobilization" of US citizens; moreover, this new enemy image was called on to play the part of an argument in political-economic accords involving the United States and its different allies the world over, also serving as legal grounds for preserving a bloated defense budget and swelling it still further. If necessary, this factor could justify emergency measures, including those in the economic sphere.

Unlike the USSR and the socialist bloc, whose "hostile" nature was obvious and confirmed both ideologically and historically for decades on end, the new enemy that was sorely needed by the United States had to prove its viability. Otherwise this myth would fail to work. This doesn't necessarily mean that the United States can't do without an enemy. Theoretically, this is possible, but only in the long-term prospect. Meanwhile it became obvious at the turn of the century that the United States needed an "external" enemy.

All the main US economic parameters hit an all-time low in 2001, threatening to wreck the entire system. New York's World Trade Center was rammed by two jet-liners September 11, 2001, subsequently collapsing and causing thousands of casualties. After those horrendous attacks the whole world learned about the notorious Osama bin Laden. The United States thus received an obvious enemy, who had perpetrated sufficiently impressive outrages. Washington's subsequent actions matched a time-tested scenario. New defense appropriations were set aside; the United States conducted a military operation in Afghanistan, also voicing additional arguments in order to persuade its allies and opponents alike to follow in the wake of Washington's policy, economic policy included. The war against the Taliban and bin Laden was portrayed as an operation aiming to ensure the safety of the entire human race; however, America's allies, i.e. Europe, Japan and Russia, had to sustain economic and strategic losses.

Afghanistan gradually depleted its geo-political significance; consequently, the US Administration is now busy looking for yet another enemy. President Bush lists Iraq, Iran and North Korea among the so-called axis of evil. Iraq was perceived as the easiest target of them all; therefore America decided to attack Baghdad, for openers. The war against Iraq is called on to revitalize the enemy image, to make it more specific and to give it a new lease of life. The United States needs an enemy, which can be fought, rather than defeated. America needs war as a process.

Barring the short-term economic situation, as well as eventual oil prices, the war in Iraq would be expected to solve some really serious problems now facing the United States. The war will seriously distract the attention of American citizens from the real-life economic situation; moreover, the defense industry will get additional contracts, thereby creating thousands of new jobs and facilitating the development of state-of-the-art technologies. Emergency measures will, if necessary, be implemented. The price of world domination and its economic infrastructure is so impressive that the United States can overlook such trifles as lack of conclusive evidence proving Saddam Hussein's connections with Al-Qaeda and conflicting expert reports.

The US economy is now suffering from an even more serious crisis than one may think. This is a comprehensive, rather than superficial, crisis. Among other things, it is connected with America's new status as a hyper-power. This status implies that, instead of merely implementing old-time world-domination methods, the United States should elevate them to an entirely new level. It's now hard to say whether the United States will manage to cope with this task; however, this objective can't be accomplished without an enemy and without war.

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