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About the Author:
Peter Dale Scott is Professor Emeritus of English at the University of California, Berkeley and the author of Cocaine Politics: Drugs, Armies, and the CIA in Central America and Deep Politics and the Death of JFK, both from UC Press
Wealth, Empire, Cabals, and the Public State
I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country. Thomas Jefferson, 1816
We hold it a prime duty of the people to free our government from the control of money. Theodore Roosevelt, 1912
The real truth ... is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson. Letter from Franklin D. Roosevelt to Colonel E. M. House, 1933
THE GROWTH OF GREAT WEALTH AT THE EXPENSE OF THE PUBLIC STATE
In this book I try to explain the paradoxes that distress most of the Americans I've met over the past few years. Whether they live in Berkeley, New England, or West Texas, these people wonder why the United States steered deliberately—and seemingly inevitably—into a war with Iraq that had little domestic support. They wonder why so many open processes of our government have been replaced by secret decisions at the uppermost levels. They wonder why our country, which is not currently facing any major enemies, is increasing its defense budget more rapidly than ever before.
A stock answer often used to explain these changes is to invoke the terrorist attacks of September 11, 2001. But pressures for them had been building long before 9/11. Even more disturbing, some of those lobbying for a "revolution in military affairs," including huge new defense budgets and military action against Iraq, stated before 2001 that such changes would not occur quickly without "some catastrophic and catalyzing event—like a new Pearl Harbor." Since the 9/11 attacks, leading members of the Bush administration have spoken of the attacks as a "great opportunity" (President Bush) or (in Donald Rumsfeld's words) "the kind of opportunities that World War II offered, to refashion the world."
I wrote this book in an effort to contextualize 9/11. In one sense, 9/11 is an event without precedent, and one that threatens to move America beyond the age of public politics to a new era in which power, more than ever before, is administered downward from above. But at the same time, 9/11 must be seen as a culmination of trends developing through a half century: toward secret top-down decision making by small cabals, toward the militarization of law enforcement, toward plans for the sequestering of those who dissent, toward government off-the-books operations, transactions, and assets, and toward governance by those who pay for political parties rather than those who participate in them.
Essentially, I agree with political commentator Kevin Phillips that a major answer to these questions, although not a complete one and insufficiently discussed, is found in an area beyond politics: the "connecting lines ... between tainted government, corrupted politics, corporate venality, and the unprecedented two-decade build-up of wealth itself." Domination of the public state by private wealth is not a novelty in America, as the epigraphs at the beginning of this chapter make clear. The novelty since World War II, however, lies in the secret growth and articulation of this top-down power within government. In particular, the Office of Policy Coordination (OPC), a group hidden from the public eye, was secretly created in June 1948 and dominated at first by a small ex–Office of Special Services (OSS) elite from Wall Street. Wall Street's secret intrusion of its views and personnel into American covert policy justifies our speaking of an American "overworld"—that realm of wealthy or privileged society that, although not formally authorized or institutionalized, is the scene of successful influence of government by private power.
Of all the political systems in the world, America's has traditionally been characterized by its openness to self-analysis, self-criticism, and ultimately self-correction. Past periods of wealth disparity, notably in the Gilded Age, have been followed by reform movements that compressed the income gap. But, as Phillips has warned, the type of reforms that have followed past excesses of wealth in politics must happen again soon, or they may not happen at all: "As the twenty-first century gets underway, the imbalance of wealth and democracy in the United States is unsustainable.... Either democracy must be renewed, with politics brought back to life, or wealth is likely to cement a new and less democratic regime—plutocracy by some other name."
Economist Paul Krugman has transmitted statistics for the staggering increases in income for America's most wealthy: "A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, 'Where Did the Productivity Growth Go?,' gives the details. Between 1972 and 2001, the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year.... But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent."5 Many of these increases are marked by the transfer rather than the creation of wealth and derive from what Phillips has called the "financialization" of America: the "process whereby financial services, broadly construed, take over the dominant economic, cultural, and political role in a national economy."
THE OVERWORLD, THE DEEP STATE, AND BUREAUCRATIC PARANOIA
Obviously, as the wealth of the top 1 percent has increased radically, so has its power, particularly over communications. Conversely, the public state—the realm of open and deliberated policy decisions—has diminished at the hands of private manipulators. Under both presidents Bill Clinton and George H. W. Bush, for example, the United States was committed to controversial commitments and interventions, from Uzbekistan to Kosovo, which were the product of secret lobbying by cabals, not public debate. The political power of money has been analyzed in the media and Congress chiefly as the external problem of what is often called corruption, the role of money in choosing and influencing Congress and the White House. To this, since the 1970s, has been added a coordinated campaign by a few wealthy individuals (such as billionaire publisher Richard Mellon Scaife), foundations (such as Coors, Allen-Bradley, Olin, Smith Richardson), and their media (such as Rupert Murdoch's News Corporation) to shift the political culture of the country radically to the right.
But this book also focuses on something else: the top 1 percent's direct or indirect control of certain specific domains of government, beginning in the 1940s with the creation of CIA. It is a story that looks beyond the well-defined public entities of open politics to include the more amorphous and fluid realm of private control behind them. This realm of wealthy private influence, the overworld, is a milieu of those who either by wealth or background have power great enough to have an observable influence on their society and its politics. Those parts of the government responding to their influence I call the "deep state" (if covert) or "security state" (if military). Both represent top-down or closed power, as opposed to the open power of the public state or res publica that represents the people as a whole.
I argue in this book that the power of the American public state needs to be revived, and its out-of-control deep state radically curtailed. I am not an opponent of deep states per se: publics are not infallible and sometimes need to be opposed. But in our current crisis the proper balance between the public state and the deep state has been lost, and the deep state's secret top-down powers have become a major threat to democracy. A well-functioning deep state serves to impose needed wisdom and discipline, but in recent years America's unchecked deep state has been imposing both folly and indiscipline. The tension between an open public state and a closed deep state or security state existing within it is an old and widespread phenomenon. In the United States it has become more acute since the beginning of the Cold War in the 1940s, when the investment firms of the Wall Street overworld provided President Harry Truman with his secretary of defense, James V. Forrestal. This same overworld provided them both with the ideas and personnel for a new Central Intelligence Agency.
The policy making of the closed deep state, shielded by secrecy, has tended increasingly toward global dominance at any price, without regard to consequences. The collective wisdom of foreign policy experts, usually most represented in the State Department, has been powerless to restrain it. Over and over throughout this book I reveal occasions where the relatively sane proposals of the State Department have been trumped by the bureaucratic paranoia of people whose career success was based on their commitment to worst-case scenarios. This "paranoid style in American politics" has traditionally referred to marginal elements that exist remote from true power. But there has been a paranoid tradition of the deep state as well, dating back to the Alien and Sedition Acts of 1799 (recently cited by the Department of Homeland Security as a model for its Endgame program).
Closed policy making that puts security first above all, especially when protected by secrecy, is a formula for bureaucratic paranoia. The United States experienced such paranoia with the Alien Act and the Palmer Raids of 1918 and again with the State Department and Treasury personnel purges after World War II. In this book I argue that the bureaucratic paranoia of the deep state was a major cause (as well as a result of) 9/11. I believe our present course of ever more heightened paranoia is a sure formula for more 9/11s.
This book will not address the often asked questions of to what extent the Bush-Cheney administration knew in advance of the impending attacks on 9/11, and then either let them happen or even possibly made them happen. Instead, this book makes a more general argument that the bureaucratic paranoia inside the American deep state, undisciplined by the available wisdom of the public state, helped years ago to create al Qaeda and then to create the circumstances in which, almost inevitably, elements in al Qaeda would turn against the United States.
Having worked briefly in the Canadian bureaucracy, I have observed that bureaucratic debate where power is involved tends to favor paranoid or worst-case analyses, especially those that justify budget and bureaucratic growth. Today's bureaucratic paranoia has indeed been institutionalized by what has been popularized as Vice President Cheney's "one percent doctrine": "Even if there's just a one percent chance of the unimaginable coming due, act as if it is a certainty. It's not about 'our analysis,' as Cheney said. It's about 'our response' ... Justified or not, fact-based or not, 'our response' is what matters. As to 'evidence,' the bar was set so low that the word itself almost didn't apply. If there was even a one percent chance of terrorists getting a weapon of mass destruction ... the United States must now act as if it were a certainty."
This doctrine is a license for untrammeled expansion of the secret deep state. As the deep state metastasizes, its origins in the overworld become less clear and possibly less relevant. In using the term "overworld," we must be careful not to reify it or attribute to it a unity and coherence it does not possess. It is a term of convenience to indicate, at least initially, a somewhat amorphous realm of sociopolitical change on which we should focus attention. The overworld is emphatically less cohesive than a class, despite what popular historian Frederick Lundberg and others have suggested. Ultimately its much discussed institutions, like the Council on Foreign Relations (CFR) and the Trilateral Commission, are more significant as symptoms and evidence rather than as sources of overworld power.
The overworld was clearly centered in Wall Street in the 1940s, and CIA was primarily designed there. With the postwar shifts of U.S. demographics and economic structure southward and westward, the overworld itself has shifted, becoming less defined by geography than by the interrelated functions of the petroleum-industrial-financial complex. Cheney's global oilfield services firm Halliburton, today a "bridge between the oil industry and the military-industrial complex," was nowhere near the Wall Street power center in the 1940s. This shift in the overworld led by 1968 to a polarizing debate over the Vietnam War. The expanding military-industrial complex, dedicated to winning that war at any cost, found itself increasingly opposed by elements on Wall Street (which at the time I labeled the "CIA-financial establishment") who feared the impact of the war's costs on the stability of the dollar. I argue that Nixon's inability to satisfy either of the two polarized factions—symbolized by the American Security Council and the Council on Foreign Relations—was a major factor in the unprecedented and ultimately unresolved drama of Watergate.
Today, with the relative decline of the domestic civilian economy and the proliferation of military business, we can see an emerging military-financial complex. This is symbolized by the easy movement up from the Pentagon to Wall Street of such key players as the director Bruce P. Jackson of the Project for the New American Century. One can measure the emergent power of the military in the establishment by comparing the relatively critical stance of the mainstream media toward the Vietnam War and the recent misleading White House propaganda about Iraq that was published uncritically in the New York Times. Increasingly a gap has widened between the mainstream press and television—the so-called old media—and the emerging new media of open communications via the Internet.
In a sense, the current American political crisis can be seen as a tension between the goals of this military-financial complex, on the one hand, and the requisite conditions for a healthy civilian economy and civil society on the other. This is another way of understanding the tension, described throughout this book, between the deep/security state and the public state. Through all these shifts certain essential continuities can be traced in the overworld's influence—first on CIA and increasingly on national security policy in general. Most recently, private power consolidated its influence by managing to establish a small but extremely important "shadow government," or "parallel government." The overworld did this through planning for what is officially known as continuity of government (COG), with its own secret, parallel institutions. Toward the end of this book I show how the plans for COG in a time of crisis were first implemented on 9/11. More important, they may also have contributed to changes in U.S. emergency defense responses that perhaps escalated a much smaller terrorist attack into "a new Pearl Harbor."
THE DIALECTICS OF WEALTH, EXPANSION, AND RESTRAINT
History has demonstrated, four or five times over, the dialectics of democratic openness. This process determined the fates of the ancient city-states of Athens and Rome, and since the Renaissance we have seen it again with the empires of Spain, the Netherlands, and Great Britain. An urban civil society that was relatively free and open surpassed its neighbors in generating wealth. As wealth increased, it expanded the reach of the state beyond that society's borders. And then, as Yale historian Paul Kennedy wrote in The Rise and Fall of the Great Powers, a military overstretch ensued that weakened the homeland economically and precipitated its decline.
To the extent that wealth expanded, these extra-societal institutions came to lie outside the transparency of domestic civil society. In effect, they become both powerful and secret, and new elements of the state developed to interact with these institutions on a secret level. Paradoxically, as the power, scope, and exposure of the state increased, so did that society's paranoia—the fear of being surpassed by competing states. Within the state secrecy trumped openness. There is a political sociology of secrecy: those with higher clearances participated in policy making at a level where those without clearances were denied access. The result was the increasing dominance over the officially organized public state by an undemocratic top-down deep state, one that answered to other interests than those of the homeland public. Institutions and relationships outside the geographic bounds of civil society consolidated more and more into an overworld, usually strengthened by offshore resources, that had the wealth and de facto power to influence and eventually determine the policies of the public state.
Excerpted from The Road to 9/11 by Peter Dale Scott. Copyright © 2007 The Regents of the University of California. Excerpted by permission of UNIVERSITY OF CALIFORNIA PRESS.
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Posted December 24, 2014
Posted April 17, 2008
The American author Peter Dale Scott shows how the richest 1% control key covert parts of the US state, including the Pentagon and the CIA. The private power of this military-financial complex has been secretly growing ever since President Truman founded the CIA. The US state serves the class interests of Wall Street¿s owners, not the national interest. The US state is becoming more repressive: in 1970, 31% of California¿s budget went to higher education and 4% to prisons, by 2005, 12% and 20% respectively. Scott shows how the US state built up fundamentalist Islam. From the 1950s, the CIA, allied with MI6, Saudi Arabia and Pakistan, used the mullahs and the Muslim Brotherhood against secular nationalism across the Middle East. Later the CIA outsourced its operations to MI6, the Bank of Credit and Commerce International, the Saudis, the Shah, the French intelligence service, Egypt and Morocco. In Latin America, the US state backed the fascist Operation Condor run by the military dictatorships of Argentina, Brazil, Chile and Paraguay, funded by South Korea, Taiwan and Saudi Arabia. Scott describes how the US and British states have fomented wars across Asia. From 1986, the CIA, MI6 and Pakistan¿s intelligence service launched guerrilla attacks from Afghanistan into Tajikistan and Uzbekistan. In 1988 the US and Pakistani states promised to end military aid to the mujehadin when Soviet forces left Afghanistan Thatcher and Bush ensured that they broke that promise. Scott shows how the drive for oil determines much of US foreign policy. For example, in 1997, the Wall Street Journal stated, ¿The Taliban are the players most capable of achieving peace. Moreover, they are crucial to secure the country as a prime trans-shipment route for the export of Central Asia¿s vast oil, gas and other natural resources.¿ In sum, Scott shows how the US state is not a force for peace and progress, as Gordon Brown fondly believes, but backs war and reaction. Its ruling class wants to continue their disastrous attacks on Iraq and Afghanistan: it believes what Kissinger said in 2005, ¿Victory over the insurgency is the only meaningful exit strategy.¿Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted November 9, 2009
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Posted September 11, 2010
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