In the hierarchy of schemes that are driven by the intention of controlling the wealth of other nations, financial imperialism is a serious contender. It is a time-tested technique for acquiring wealth from developing or emerging countries without physically occupying their lands.
The conventional wars of the past are now out of vogue and may soon be obsolete. Violent conflicts emerge in selected regions of the world; The Middle East is one of them, struggling hard to survive the looting of petroleum. In any case, it is expensive, cumbersome and dangerous to operate in that manner. Colonialism is not an option any more. Even peacekeeping is risky, in the end.
Financial imperialism is an easy and perfect answer
While mercantilism is an innocent-looking attempt, international trading is an advanced technique which is used to achieve similar goals. Yet, both of these are passive initiatives, so to speak. Financial imperialism is certainly the behavior of an aggressive nation-state.
The term neo-colonialism was popularised by Kwame Nkrumah, president of Ghana (1960-66), to describe the socio-economic and political control that can be exercised economically, linguistically, and culturally, by multinational companies. The ideology is also discussed in the works of Jean-Paul Sartre (1905-80), philosopher-writer and Noam Chomsky (1979), linguist philosopher, as well as the Argentine revolutionary Che Guevera (1928-67).
Financial imperialism is the full-time occupation of dominating weaker countries, by more powerful ones. By steering the wheel of international trade in their favor, which they do by innocuous recommendations in trade meetings or by stern directions given privately, they take the drivers’ seat of the economy of the oppressed country. It manifests itself in various domains, such as sale of high cost weapon systems, currency control, monopolistic trade practices, an artificially-low cost labour force etc.
Neo-colonialism and financial imperialism 101
Advanced nations understand that economies are best sustained by the cycle of production and destruction, and they do everything to keep this going for themselves. Products must be developed, sold, and then destroyed, before ushering in products that are more sophisticated.
They are conscious of their technological superiority, and they dedicate serious efforts to retain it by deploying wealth in the course of acquiring more of it from others. They are displeased with the attrition of their imperial and colonial strength of past decades. To sustain this supremacy, they adopt a two-pronged strategy; self-protection by innovative satellite based defense systems, and muscle-flexing by deploying mobile lethal weapon systems at strategic locations around the world.
This reincarnated form of imperialism operates through financial and political processes and uses cultural imperialism as its ally. Unlike in the physical colonisation, the subjugated citizens would perhaps never awaken to demand freedom from financial imperialism; instead, they wither in its slavery.
How Markets are Prompted in the Victim Country
This mechanism operates on the economy of the victimised country by manipulating the mindset of its political leadership and citizens. It uses political acumen to exploit the greed for money and power of political leaders. Financial imperialism incorporates itself by way of three distinct mechanisms:
- It incorporates favourable clauses in international trade agreements with the consent of the political leadership of the victim country. The local financial policies, systems, and institutions, then fall into place, automatically.
- It conspires and contrives, to create a hostile environment with bordering countries. Different forms of conflict are introduced and fueled, using political connections in both of the countries, the victim and its neighbour. Cross-border terrorism, is the easiest of them to inculcate. This gives the politicians on both sides, a plausible excuse to vociferate on the presence of the imminent threats from across the border — and the need to acquire weapons and support systems for cutting-edge technologies. Super high-cost weapon systems are then procured surreptitiously by both countries.
- Good use is made of cultural imperialism. Soft targets such as teenagers and homemakers, are subjected to specially prepared soap operas that highlight improvements in fashion and living style; which products are produced in the advanced countries only. Elderly audiences are barraged with media coverage that underline usefulness of health or wellness products produced only in the advanced countries. Travelogue is deployed emphasising even ordinary tourist spots. In this way, the citizens are conditioned and encouraged to shop for foreign goods and services. They are enslaved voluntarily. Only years after this exploitation, citizens may wake up from their slumber; but by then it is too late to for the domestic system to recapture its losses.
How the Environment is Created
There are many variations and options, but basic to all empire-building are the following:
- Establishing a system where money can be manipulated using power or authority. It creates the framework for corruption, money-laundering and distinct lines between the ruling and the ruled class
- Creating international forums and cliques, where favourable rules can be framed for international trade agreements
- Acquiring dominant control of a banking system that operates internationally to provide finance and ameliorate liquidity problems
- Establishing or helping to establish corporations, that operate internationally and can easily move profits and costs across the globe to avoid taxes, and keep weaker countries poor
- Establishing corporations to politically influence leaders of countries
- Colluding with at least one powerful country to provide political cover, subvert small governments, and to initiate military action when required
The textbook example of how financial imperialism is initiated and sustained, is the way the British East India Company did it in India, centuries ago. Subsequent practitioners have fine-tuned and optimised it.
Today, the Jews, who were disliked by the Germans who accused them of siphoning money from the German system, are controlling a substantial chunk of the international money pool. Have they built a financial empire and do they dictate terms to others? Probably, yes. Is the European Union attempting the same? Probably, yes.
Developing economies, blinded by their ill-founded conflicts with the neighbors, must resist — and they must help each other to resist.
The views expressed in this article are the author’s own and do not necessarily reflect Arabian Gazette’s editorial policy.