Britain & America: the evolution of a partnership, Part 1

2005-07-10

Richard Moore

Friends,

I've been continuing to read William Engdahl's, "A Century of
War: Ango-American Oil Politics and The New World Order," and
have it to be a uniquely revealing red pill. I thought I had
escaped from the Matrix, but here I found a whole new
coherence to actual reality that I hadn't known about. Lots of
things click into place more neatly, and Engdahl's scholarship
seems to be first rate.

I haven't been able to absorb it all on first reading, but
what I've learned so far is, I think, worth sharing. I'd like
to briefly trace a few parallel threads in British and U.S.
history. Many elements are involved, but the interesting thing
is how clear the picture becomes when the elements are seen in
their true relationships. The words below are my own: this is
my updated analysis after having been informed by Engdahl.

---

The first thread has to do with the evolution of capitalist
states in general, and in particular the relationship between
industry and banking. Not all capitalist states succeed in
following the full course, but those that have done so seem to
follow this basic trajectory. In particular, this has been
true of the U.S. and Britain.

In the first phase, the state becomes rich and strong by
industrializing, building up its infrastructure, and gaining
wealth through profitable trade arrangements. To the extent
that diplomatic or military initiatives are deployed in
support of these operations, they tend to focus on (1) opening
up markets and gaining access to resources needed by home
industries, and (2) maintaining position within the
geopolitical arena (aka competitive imperialism).

During this phase, the elites which dominate state
policy-making tend to include very strong representation from
industrialists, as with Herr Krupp, J.D. Rockefeller, the
early factory and mill operators in Northern England and
Scotland, etc. While the early days of phase 1 might be
characterized by sweatshop labor conditions, the later stages
tend to be characterized by high-employment and improving
living conditions for the general domestic population
(Victorian England, 50s USA).

In some cases, as with Germany and World Wars 1 and 2, a state
is prevented by competitors from developing beyond phase 1.
But if phase 1 develops fully, it breeds the seeds of its own
demise, ushering in phase 2.  What happens is that accumulated
wealth increasingly concentrates in banks and related
financial institutions, out of the process of (1) financing
industrial development, (2) financing the wars that are
required to maintain geopolitical position, and (3) managing
deposits, settlement accounts, etc.

Phase 2 begins at that point where the wealth and influence of
the financial sector (Wall Street, The City) eclipses that of
the domestic industrial sector (Detroit, Manchester). The
focus of state policy formulation, which in phase 1 was
essentially the maximization of domestic industrial growth,
becomes in phase 2 the maximization of financial-sector
investment returns. Domestic industrial and infrastructure
development must now compete with other investment
opportunities.

Because of all the international relationships that financial
institutions have established in the course of supporting
industrial trade during phase 1, the financial sector is well
able to pursue its investment opportunities on a more-or-less
global scale. Investment in a less-developed state economy,
one on the up-curve of phase 1, can offer far greater returns
than investments in an aging domestic industrial sector.
Domestic industry deteriorates, unemployment rises, and the
domestic economy goes into decline - while the financial
sector continues to amass wealth. We see this in the rotting
smokestack industries of America's north east, and we saw it a
century before in the decline of once-proud British industry.

In phase two the mission of diplomatic and military
initiatives naturally shifts in alignment with overall state
priorities - supporting the interests of the domestic
financial sector. The mission is no longer to obtain raw
materials for domestic industry, but rather to open up
economies to investment, to control resources which have value
on international markets, and other objectives we'll be
looking at in a moment.

From these considerations we can begin to find a clear and
simple answer to the question: "Who are THEY? Who, exactly,
are these elites who supposedly run the world?". At the very
top of the pyramid of policy formulation, in today's world and
at past times as well, are the big banks. In particular,
today, we are talking about the wealthy few who control the
biggest and most influential financial institutions in New
York and London. . . . but that gets us ahead of our story.

---

The second thread has to do with with role of oil in world
affairs over the past century or so. Oil's central importance
has been multi-faceted and all-pervasive. For those of you
into chaos theory, we can see the impact of oil as being a
chaotic event leading to profound, non-linear, surprising
shifts in system dynamics.

When Britain was still at its height of influence, in the
years leading up to World War 1, its phase-2 elites had
already recognized that oil was destined to become the
lifeblood of a new kind of global economy - what we might
today call 'the energy economy'. This became abundantly clear
to them as British fleets were converted from coal to oil, and
the greater energy density provided clear strategic advantages
in terms of range, speed, payload, etc. Furthermore the
importance of airplanes was beginning to become apparent to
those with vision, and here oil was the only viable fuel
source. All sea fleets and airplanes, and for similar reasons
many other infrastructures globally, would eventually need to
adapt to oil to in order to maintain competitive productivity
and performance.

Armed with this foresight, it became clear to Anglo elites
that control over oil resources and oil markets would be the
key to maintaining the power of The City, while the British
Empire descended into decay, having lost its industrial
backbone. An elite fraternity (network) was assembled,
consisting of elements from British Intelligence, top banking
houses, and oil operators. Every oil executive running some
foreign business operation, for example, was at the same time
acting as an agent for British Intelligence, providing
valuable insider information about local conditions, and able
to provide cover and contacts for visiting intelligence
operatives. At the same time our executive would be accessing
investment funds from The City and depositing his profits in
select City banks.

This fraternity was kept highly secret, and it was able to
effectively coordinate the resources of British Intelligence
and diplomacy, strategic state policy, the investments of the
financial sector, and oil explorations, operations,
acquisitions, alliances etc. This was a clear example of what
we might a call a "secret government by conspiracy" - and in
typical British fashion, the fraternity operated as a
relatively coherent team, competently secretive, and
single-minded in pursuing its objectives. The supreme British
virtues - team-spirit, diplomacy, and theater (in this case,
acting & deception) - found useful application.

Oil was the central lever which promised control over the
future global economy, but the oil business itself was not the
main focus of interest of top Anglo elites in The City.
Control over oil was a means to a much grander end: control
over global finance.

To put it simply, the real goal of the The City was to retain
its position as the primary banking hub of global commerce, a
position it had gained on the back of Britain's phenomenal
phase-1 industrial and imperial achievements. With this goal
in mind, we can understand the importance of maintaining the
pound as the leading reserve currency, and we can see the
power that provides to the banks who control pound-lending
interest rates. By controlling oil and oil markets, the price
of oil in those markets, and the exchange currency, The City -
with a little help from its fraternal friends - would have
many ways by which to maintain its general dominance over
global finance.

Again, as in our first thread, we see parallel scenarios,
played out first by Britain and later by the USA. Each enjoyed
a remarkably successful phase 1 period, each made the
transition to phase 2 for very similar reasons, each
experienced domestic economic decay, and each ended up
pursuing a strategy of global financial dominance by means of
oil dominance.

---

For our next thread, we will examine the intertwining of these
parallel stories, the Anlo-American rivalries, the passing of
the golden baton of supreme power from London to New York, and
the establishment of a unique and enduring partnership
arrangement between the U.S. and Britain - a remarkable
accomplishment by British diplomatic and banking circles which
in strategic importance can be considered the equal of
Nelson's victory at Trafalgar. The public friendship display
between Bush and Blair is a more or less accurate cartoon
portrayal of the actual relationship enjoyed between elite New
York and London banking circles.

Britain's nemesis, as a national power, was World War 1. The
City's strategy of financial and oil dominance was being
threatened by Germany's phase-1 success and its growing
financial sector. This was worrisome, but The City could still
maintain financial dominance if it could control Germany's oil
supply. That's why Germany's Berlin-to-Baghdad railway project
was seen as a dire strategic threat by City observers. If
Germany completed the railway, and gained independent access
to Middle East oil sources, The City's financial dominance
would indeed be in jeopardy. Not only would Germany have its
own source of oil - and the ability to manage the cost of
production, the rate of extraction, and the price - but the
railroad would also open up a continental trading network that
would rival Britain's traditional sea-lane dominance, and
bring similar rewards to the new gate-controller. The mark
would threaten the pound in the reserve currency arena, and
German financial elites would become pretenders to the
banking-hub throne traditionally held by The City.

America figures little in this scenario so far. The rivalries
and collaborations between British and U.S. interests
continued at their own pace and in their own way separate from
the British challenges on its own side of the pond. Germany
and most of Europe were in Britain's 'sphere of oil
influence', and America had its own spheres. Already before
World War 1 we see a proto-cartel scenario on a global scale
among these two players

The City - with its fraternity of intelligence and diplomatic
operatives - undertook two projects in response to the German
threat. Plan A was to frustrate the Berlin-Baghdad rail
project by whatever means necessary. Plan B was to prepare for
war with Germany, making astute use of alliances to maximize
the probability of success and to shift the burden of warfare
as much as possible to others. Again, diplomacy shows its face
as Britain's strongest geopolitical suit, displaying itself
initially by its ability to build friendships and alliances,
while later displaying itself in the skill and timing by which
those alliances are later betrayed.

Britain orchestrated an elaborate network of secret
mutual-defense alliances, creating a hidden level of extreme
volatility that few knew even existed, and the extent of which
the Germans did not fully appreciate. The City and its
fraternity intentionally created a powder keg, kept it
concealed as a terrorist does his bomb, and arranged that when
the powder keg exploded everyone would be fighting everyone
else, and Britain would be able to deal with the war from its
traditional balance-of-powers perspective.

Plan A and Plan B intersected in the Balkans. That's where the
fraternity was making its last-ditch attempt to stop the rail
line, and the Balkans can be considered to be the geographical
focal point of the various secret alliances - midway between
the Great Powers and the Middle East oil reserves. Almost any
spark could have ignited the power keg, Britain had all of her
ducks in place, and whether or not the fraternity was behind
the Duke's assassination doesn't really matter - they might as
well have been and the outcome is the same whoever did the
deed.

The main forces at work on the ground here were Germany's
determination to complete the rail line vs. Britain's
determination to stop it. The unstoppable force of Germany's
ambition was colliding with the immovable object of The City's
hold on power. Two tectonic plates were colliding, and the
Balkans were right on the fault line, at a point of maximum
stress. We could expect the earthquake to strike there, and
the actual triggering event is in some sense an irrelevancy,
as is the particular match which might get tossed onto dry
grass.

Britain had arranged the inevitable earthquake, and had
created for itself a viable strategy framework for victory.
The alliances were more or less balanced from a military
perspective; accessing all-important oil would be difficult
for the German side, and Britain's sea dominance would
presumably play a key role in supporting its alliances,
defending its homeland, and in giving Britain maximum
flexibility in choosing its theaters of engagement. Germany on
the other hand, a much more straightforward and forthright
player, in nowhere near the same league as Britain
diplomatically, was comparatively ill-prepared for strategic
engagement. It would be depending on its own brute strength,
its more authoritarian style of alliance management, and
whatever war strategy it could cobble together in response to
the elaborate secret system the fraternity had so carefully
orchestrated. And it would need to devote much of its effort
to obtaining oil supplies.

---

There was however one tiny fly in The City's ointment. Not so
tiny actually. In the vaults of the British treasury,
unfortunately, the cupboard was bare. A dandy war had been
orchestrated by the fraternity, all the ducks were in order,
the strategy was viable, but a funding source was missing. For
want of a nail the horseshoe might be lost, etc., and Germany
might gain the upper hand after all.

Once again it is British skills in diplomacy and banking that
save the day, as regards proceeding with the planned war
project. In particular, the close fraternal connections
between certain top bankers in New York and London provided a
channel by which funding for the war effort could be obtained.
New York's J.P. Morgan became the exclusive broker for The
City in America, arranging financing, handling the
transactions, and managing Britain's procurements (food,
weapons, etc.) from sources on the U.S. side of the pond.
Morgan made money had over fist in all sorts of ways, his
agents like a swarm of mosquitos sucking blood, as he carried
out his all-important role in enabling The City to pursue its
war plans.

As the war continued on longer than anticipated, British and
allied debts grew to unprecedented heights. Morgan had
orchestrated the largest private financing deal the world had
ever seen. Many other banks and investors had been brought in,
creating a link between British victory and the continued
strength of the American economy. If Britain and its allies
were to lose the war and default on their loans, Morgan would
be left holding the bag, along with his network of investors,
and the U.S. economy would go into a tumble. Germany proved to
be more resilient and resourceful than the fraternity had
anticipated, and it became apparent that U.S. military
intervention would be necessary to assure victory and bring
the war, finally, to a conclusion.

The main obstacle here was a nearly universal isolationist
sentiment in the U.S., not only in the realm of public
opinion, but in top business and political circles as well.
Furthermore, among those with some measure of war fervor, at
least as many were pro-German as were pro-British. Germany had
presented no particular problems for America, and had been a
good trading partner, while Britain had been through the years
frequently a thorn in the side of U.S. interests, competing
for Latin American oil sources, and in other ways.

Such a challenge was not beyond the capabilities of the
fraternity, with its first-rank covert operatives, and with
typically astute British diplomacy running cover. Among the
primary British strategic virtues, I earlier forgot to mention
their genius in the realm of propaganda (a tradition we can
still witness any day on BBC). The City had links to Wall
Street, Wall Street had links to the big U.S. newspaper
chains, and we see the emergence of effective anti-German
pieces, chipping away at isolationist and pro-German views.

With Germany publicly claiming the right to attack any vessel
it considered to be of military relevance, the fraternity and
its American counterparts arranged for the  Lusitania to sail,
with the public being told the vessel carried civilian
passengers only, while German intelligence was led to suspect
that armaments might be secretly aboard, as many claim was
actually the case. In coordination with this operation, this
arranged 'outrage incident', a coordinated media campaign set
the stage for anti-German hysteria, and was then fully
unleashed in the aftermath of the actual torpedo event. By
these and other means the fraternity, with the help of its
Wall Street collaborators and their media friends, American
opinion was brought into line with the necessities of pulling
Morgan's bacon out of the fire, assuring a British victory,
and thereby, somewhat indirectly, giving The City a new lease
on life. In the final analysis, the tail had wagged the dog.

---

This has gone on longer than I anticipated, but I think it may
be of some interest to many of you. I'll continue tomorrow,
beginning with the aftermath of World War 1.

rkm
-- 

============================================================
If you find this material useful, you might want to check out our website
(http://cyberjournal.org) or try out our low-traffic, moderated email 
list by sending a message to:
      •••@••.•••

You are encouraged to forward any material from the lists or the website,
provided it is for non-commercial use and you include the source and
this disclaimer.

Richard Moore (rkm)
Wexford, Ireland
blog: http://harmonization.blogspot.com/

"Escaping The Matrix - 
Global Transformation: 
WHY WE NEED IT, AND HOW WE CAN ACHIEVE IT ", old draft:
    http://www.ratical.org/co-globalize/rkmGlblTrans.html
_____________________________
    "...the Patriot Act followed 9-11 as smoothly as the
      suspension of the Weimar constitution followed the
      Reichstag fire."  
      - Srdja Trifkovic

    There is not a problem with the system.
    The system is the problem.

    Faith in ourselves - not gods, ideologies, leaders, or programs.
_____________________________
cj list archives:
    http://cyberjournal.org/cj/show_archives/?lists=cj

newslog list archives:
    http://cyberjournal.org/cj/show_archives/?lists=newslog
_____________________________
Informative links:
    http://www.indymedia.org/
    http://www.globalresearch.ca/
    http://www.greenleft.org.au/index.htm
    http://www.MiddleEast.org
    http://www.rachel.org
    http://www.truthout.org
    http://www.williambowles.info/monthly_index/
    http://www.zmag.org
    http://www.co-intelligence.org
============================================================

Share:

ekbonus bahis forum linkegit.com