Day 300: Austerity

Perhaps the most famous characterization of American austerity thinking comes from a line attributed to Herbert Hoover’s treasury secretary Andrew Mellon in response to the crisis of the late 1920s and early 1930s: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” The result would be that “rottenness [will be purged] out of the system. … People will … live a more moral life … and enterprising people will pick up the wrecks from less competent people.” Adam Smith, it seems, was alive and well on the Potomac. Yet, despite the moral invocations, the Hoover administration did not exactly cleave to Mellon’s “liquidationist” line.

America by 1930 hardly looked like a pure laissez faire economy. The Sherman acts of 1912, which regulated monopolies and busted “trusts” were deeply interventionist, and Hoover, as president, urged a variety of interventions to alleviate unemployment. Yet these interventions were, by their design, either voluntary agreements between business and the state that had little teeth, or they were regulations designed to make markets “more” perfect by increasing competition and reducing the size of firms. Thus, both sides of liberalism were present in America at this time: the one that adapted to the state and saw its utility, and the one that sought to limit it and increase the scope of the market.

Tending toward the latter view, American economists of this period did not see depressions as accidents amenable to treatment. They saw them as a part of the nature of capitalism itself: regular, cyclical, and expected occurrences. The basic model drew upon what was called “modern business cycle theory,” which was cut from broadly similar cloth as the Austrian ideas described above. A particularly clear expression of this theory can be found in publications of the 1923 President’s Conference on Unemployment, which Hoover had created as commerce secretary under President Coolidge. The lead author of the report, Columbia University economist Wesley Mitchell, argued that “a period of depression produces after some time certain conditions which favor an increase of business activity … [that paradoxically] also cause the accumulation of stresses within the balanced system of business, stresses which ultimately undermine the conditions upon which prosperity rests.”

These “certain conditions” were elaborated upon a decade later in another authoritative volume, this time by a collection of Harvard economists. In it Joseph Schumpeter, an Austrian émigré and follower of the work of other Austrian economists of the period, such as Hayek and Von Mises, argued that capitalism has at any given point a distinct “capital structure,” that long-run evolutionary form alluded to earlier, which manifests itself as the particular mix of productive assets that investment has generated over a given cycle. When there are investment booms, as there inevitably are in capitalism, both “too much” and “too much of the wrong type” of capital is invested in the economy. Coming off the crash of 1929, when the stock market blew up, and after an entire history of railroad investment booms and busts over the prior century, such a view made more than intuitive sense. What turned this intuitive sense into a theory, however, was the concept of growth that was drawn from it.

Echoing the role Hume and Smith accorded to merchants, Schumpeter put entrepreneurs at the center of his analysis of the Depression and what to do about it. For Schumpeter, entrepreneurs make investments, many of which go bad, but capitalism progresses because of these failures, not despite them. We need failures, or capitalism does not evolve. The process of liquidation, of failure, produces the raw material for the next round of innovation and investment. As such, intervention, whether inflationary or otherwise, would cause two problems. First, it would obstruct the necessary liquidation process, propping up firms with cheap money, only postponing the inevitable day of reckoning. Second, it would disrupt the price signals that entrepreneurs rely upon so that they would not know in which sectors to invest. Investment would fall, despite the government intervention that was intended to increase it.

Liquidationism therefore argues for an inevitability—the slump must happen—and also for intervention’s unintended consequences—if you get in the way of that inevitability you will end up making it worse. The consequence of this line of thinking is austerity—purging the system and cutting spending—which becomes the essence of recovery. Austerity may be painful, but it is unavoidable since undergoing such emetic periods is the essence of capitalism’s process of investment and discovery. There was, therefore, no alternative.

The Hoover administration therefore actively sought not alternatives to austerity, but compliments and palliatives that took the form of voluntary policies to smooth the adjustment of labor and capital to new uses. Those policies were always conceived of as helping adjustment pro-cyclically rather than compensating for it countercyclically. For to do the latter would, Schumpeter warned, “lead to a collapse worse than the one it was called into remedy.”

This Austrian strain in American thinking about the inevitability of cycles, the centrality of the entrepreneur, and the importance of failure, coexisted with and was boosted by another line of American economic thought that stressed the need for a policy of “sound finance.” Favored by the banking community, these ideas reinforced the Austrian flank by insisting that business confidence, the key to supply-side growth, would only be restored if the government credibly signaled that it would allow the emetic process to unfold as it had to via austerity. While temporary relief of the symptoms of unemployment could be countenanced, the state’s role in such moments devolved to balancing the budget, even raising taxes in a recession if this was deemed necessary, to restore the investor confidence. During 1931, the last year of his administration, Hoover did exactly this to signal resolve in the face of financial difficulties. The result was the worst depression in American history.

~~Austerity : The History of a Dangerous Idea -by- Mark Blyth

Day 262:The Jazz Exiles

As the war raged on in Europe, a musical revolution, spearheaded by the standard-bearers of bebop, was taking place on New York's 52nd Street. Charlie Parker, Dizzy Gillespie, and Thelonious Monk led a brigade of experimenters who sought to free themselves from the confines of the big swing bands and into the more adventuresome harmonic and rhythmic complexities of what would become known as bebop. In Europe, the boom in traditional jazz continued, but even in America the new developments in jazz were obscured by an additional factor.

A recording ban, which went into effect on August 1, 1942, and lasted until the fall of 1944, prevented anything like a mass audience from hearing the bands of Earl "Fatha" Hines, singer-trumpeter Billy Eckstineboth of whom employed a number of bebop musiciansor the small groups of Gillespie and Parker.
   
By 1945, bebop was firmly entrenched, and its effects were already causing reverberations in the big dance bands that had been the mainstay of the swing era. The bebop innovators injected their own ideas into the big band format and forged an entirely new music. In addition to Gillespie, Parker, and Miles Davis, pianists Bud Powell and George Wallington, bassist Oscar Pettiford, and drummers Max Roach and Kenny Clarke all sought and found new outlets for a new music. Pianist Tadd Dameron would emerge as the most important arranger of this period. Of these key musicians, four would become exiles.   

Although there were a number of holdouts from the more traditional forms of jazz, many of the leading swing players found themselves working alongside the beboppers in the clubs that dotted 52nd Street. Coleman Hawkins and Lester Young were two such musicians, but it was tenor saxophonist Don Byas who was regarded as the best to bridge the gap between swing and bebop. For Byas, 52nd Street proved to be only a brief stopover on the road to Europe, where he would become the first important modern exile. Byas had come to New York with Eddie Mallory's band in 1937. He remained for eighteen months before brief stints with Don Redman, Lucky Millinder, and Andy Kirk. In 1941, Byas joined the Count Basie Band. When he got off the bus in 1943, he began to work with Gillespie, a number of all-star groups, and several small bands under his own name.

Byas's playing was much in the vein of Coleman Hawkins, and the early records with Gillespie clearly show Byas was at home with the demands of the new music. His already melodic lines were further enriched by the influence of Parker and his disciples. With the lifting of the recording ban, Byas recorded for several of the new, small jazz labels that were springing up everywhere. He even had a minor hit with his own version of "Laura" in 1946. The same year, he garnered first place honors in the Esquire jazz poll. But Byas was restless, and when Don Redman formed another band, Byas joined him for an extended European tour. When the tour ended, Byas stayed on in Europe to have a look around. He was still looking around a quarter of a century later. He was not seen or heard in the State again until 1970 when he appeared at the Newport Jazz Festival. His Newport appearance was to be the final scene in a documentary film on his life in jazz, produced by a Dutch production company.
   
As the first of the postwar exiles, Byas became a guiding figure in the careers of the many musicians who would follow in his footsteps. Living first in France, Byas later settled permanently in Holland and was regularly featured at jazz festivals throughout Europe as a soloist with visiting bands such as Duke Ellington, or with Norman Granz's Jazz at the Philharmonic tours with Coleman Hawkins and Stan Getz.

While in Europe, Byas took up skin diving and deep-sea fishing and became something of a physical fitness buff. He had left a drinking problem behind, which was one of the principal reasons he had left the States, but eventually encountered the hazards many of the exiles experienced. His stay in Europe was so lengthy that he began to be taken for granted and was considered a "local" by many promoters and club owners. The mushrooming number of exiles that followed Byas's lead made working conditions difficult and bruised his fierce ego. He began to drink heavily again and his physical condition deteriorated. Finally, he became almost inactive, playing only sporadically, but often losing jobs to other Americans who ironically had come to Europe after him.

At one point, Byas considered going home. "I may do that," he said. "One more trip, one grand tour. I'll make some money, come back, and then I'll lie down and die." He returned to the States for the 1970 Newport appearance and toured Japan with Art Blakey's Jazz Messengers in 1971. He returned to Holland the following year and at age fifty-nine died of cancer.

~~The Jazz Exiles : American Musicians Abroad -by- Bill Moody

Day 248: The Bombing War

The bombing of Bulgaria recreated in microcosm the many issues that defined the wider bombing offensives during the Second World War. It was a classic example of what has come to be called ‘strategic bombing’. The definition of strategic bombing is neither neat nor precise. The term itself originated in the First World War when Allied officers sought to describe the nature of long-range air operations carried out against distant targets behind the enemy front line. These were operations organized independently of the ground campaign, even though they were intended to weaken the enemy and make success on the ground more likely. The term ‘strategic’ (or sometimes ‘strategical’) was used by British and American airmen to distinguish the strategy of attacking and wearing down the enemy home front and economy from the strategy of directly assaulting the enemy’s armed forces.

The term was also coined in order to separate independent bombing operations from bombing in direct support of the army or navy. This differentiation has its own problems, since direct support of surface forces also involves the use of bombing planes and the elaboration of target systems at or near the front whose destruction would weaken enemy resistance. In Germany and France between the wars ‘strategic’ air war meant using bombers to attack military and economic targets several hundred kilometres from the fighting front, if they directly supported the enemy’s land campaign. German and French military chiefs regarded long-range attacks against distant urban targets, with no direct bearing on the fighting on the ground, as a poor use of strategic resources. The German bombing of Warsaw, Belgrade, Rotterdam and numerous Soviet cities fits this narrower definition of strategic bombing. Over the course of the Second World War the distinction between the more limited conception of strategic air war and the conduct of long-range, independent campaigns became increasingly blurred; distant operations against enemy military, economic or general urban targets were carried out by bomber forces whose role was interchangeable with their direct support of ground operations. The aircraft of the United States Army Air Forces in Italy, for example, bombed the monastery of Monte Cassino in February 1944 in order to break the German front line, but also bombed Rome, Florence and the distant cities of northern Italy to provoke political crisis, weaken Axis economic potential and disrupt military communications. The German bombing of British targets during the summer and autumn of 1940 was designed to further the plan to invade southern Britain in September, and was thus strategic in the narrower, German sense of the term. But with the shift to the Blitz bombing from September 1940 to June 1941, the campaign took on a more genuinely ‘strategic’ character, since its purpose was to weaken British willingness and capacity to wage war and to do so without the assistance of German ground forces. For the unfortunate populations in the way of the bombing, in Italy or in Britain or elsewhere, there was never much point in trying to work out whether they had been bombed strategically or not, for the destructive effects on the ground were to all intents and purposes the same: high levels of death and serious injury, the widespread destruction of the urban landscape, the reduction of essential services and the arbitrary loss of cultural treasure. Being bombed as part of a ground campaign could, as in the case of the French port of Le Havre in September 1944 or the German city of Aachen in September and October the same year, produce an outcome considerably worse than an attack regarded as strategically independent.

In The Bombing War no sharp dividing line is drawn between these different forms of strategic air warfare, but the principal focus of the book is on bombing campaigns or operations that can be regarded as independent of immediate surface operations either on land or at sea. Such operations were distinct from the tactical assault by bombers and fighter-bombers on fleeting battlefield targets, local troop concentrations, communications, oil stores, repair depots, or merchant shipping, all of which belong more properly to the account of battlefield support aviation. This definition makes it possible to include as ‘strategic’ those operations that were designed to speed up the advance of ground forces but were carried out independently, and often at a considerable distance from the immediate battleground, such as those in Italy or the Soviet Union, or the aerial assault on Malta. However, the heart of any history of the bombing war is to be found in the major independent bombing campaigns carried out to inflict heavy damage on the enemy home front and if possible to provoke a political collapse. In all the cases where large-scale strategic campaigns were conducted – Germany against Britain in 1940–41, Britain and the United States against Germany and German-occupied Europe in 1940–45, Britain and the United States against Italian territory – there was an implicit understanding that bombing alone might unhinge the enemy war effort, demoralize the population and perhaps provoke the politicians to surrender before the need to undertake dangerous, large-scale and potentially costly amphibious operations. These political expectations from bombing are an essential element in the history of the bombing war.

The political imperatives are exemplified by the brief aerial assault on Bulgaria. The idea of what is now called a ‘political dividend’ is a dimension of the bombing war that has generally been relegated to second place behind the more strictly military analysis of what bombing did or did not do to the military capability and war economy of the enemy state. Yet it will be found that there are many examples between 1939 and 1945 of bombing campaigns or operations conducted not simply for their expected military outcome, but because they fulfilled one, or a number, of political objectives. The early bombing of Germany by the Royal Air Force in 1940 and 1941 was partly designed, for all its military ineffectiveness, to bring war back to the German people and to create a possible social and political crisis on the home front. It was also undertaken to impress the occupied states of Europe that Britain was serious about continuing the war, and to demonstrate to American opinion that democratic resistance was still alive and well. For the RAF, bombing was seen as the principal way in which the service could show its independence of the army and navy and carve out for itself a distinctive strategic niche. For the British public, during the difficult year that followed defeat in the Battle of France, bombing was one of the few visible things that could be done to the enemy. ‘Our wonderful R.A.F. is giving the Ruhr a terrific bombing,’ wrote one Midlands housewife in her diary. ‘But one thinks also of the homes from where these men come and what it means to their families.’

The political element of the bombing war was partly dictated by the direct involvement of politicians in decision-making about bombing. The bombing of Bulgaria was Churchill’s idea and he remained the driving force behind the argument that air raids would provide a quick and relatively cheap way of forcing the country to change sides. In December 1943, when the Mediterranean commanders dragged their feet over the operations because of poor weather, an irritated Churchill scribbled at the foot of the telegram, ‘I am sorry the weather is so adverse. The political moment may be fleeting.’ Three months later, while the first Bulgarian peace feelers were being put out, Churchill wrote ‘Bomb with high intensity now’, underlining the final word three times. The campaign in the Balkans also showed how casually politicians could decide on operations whose effectiveness they were scarcely in a position to judge from a strategic or operational point of view. The temptation to reach for air power when other means of exerting direct violent pressure were absent was hard to resist. Bombing had the virtues of being flexible, less expensive than other military options, and enjoying a high public visibility, rather like the gunboat in nineteenth-century diplomacy. Political intervention in bombing campaigns was a common feature during the war, culminating in the decision eventually taken to drop atomic weapons on Hiroshima and Nagasaki in August 1945. This (almost) final act in the bombing war has generated a continuing debate about the balance between political and military considerations, but it could equally be applied to other wartime contexts. Evaluating the effects of the bombing of Bulgaria and other Balkan states, it was observed that bombing possessed the common singular virtue of ‘demonstrating to their peoples that the war is being brought home to them by the United Nations’. In this sense the instrumental use of air power, recently and unambiguously expressed in the strategy of ‘Shock and Awe’, first articulated as a strategic aim at the United States National Defense University in the 1990s and applied spectacularly to Baghdad and other Iraqi cities in 2003, has its roots firmly in the pattern of ‘political’ bombing in the Second World War.

~~The Bombing War : Europe 1939–1945 -by- Richard Overy

Day 206: Deception: The Untold Story of East West Espionage

Harder evidence comes from an operation involving the Estonian Voldemar Kiik, one of the most successful British agents of the post-war era. His story is almost entirely unknown outside Estonia, where he was buried with military honours in the national cemetery, next to Rebane, after his death in 2002. His mission was to reconnoitre the airfield at Tartu, Estonia’s second city. Details of his mission remain classified to this day, but it would have been of huge interest to British and American intelligence to know about any hardened hangars, the quality and quantity of air defences, and signs of nuclear weapons storage and transport. Kiik was a medical student in London when Rebane approached him, probably in 1950. He was the ideal recruit – brainy, determined and a cut above the other Estonian young men in London, whose patriotism often outweighed their other talents (they, in turn, found his successful womanising tiresome). He was already battle-hardened. Mobilised by the Red Army in 1940, he jumped off a troop train and hid in a forest before being conscripted by the Germans. Wounded in the head in the battle of Velikaya Luka near Leningrad, he was left for dead during a German retreat, only to be rescued during a counterattack. He detested both occupying powers equally. Rather than exchange the mandatory ‘Heil Hitler!’ greeting, he and the other Estonians in his unit would shout ‘Ei Ütle!’ (Don’t Say!). The pronunciation was close enough to fool the Germans, and gave a pleasant tingle of resistance.

As well as the usual tradecraft, he was schooled intensively in Russian (which he did not speak) and in Pelmanism – the knack of remembering large quantities of data. But in a notable difference from the carelessness that surrounded Operation Jungle, he does not seem to have been trained with the other Estonians. With a cyanide pill sewn into his lip he parachuted into Estonia in the summer of 1952. Though tempted to visit his mother – it would have been his only chance to see her before she died – he concentrated on his mission, perhaps using the remnants of a pre-war British network for support. His route back involved a perilous crossing of the Norwegian–Soviet frontier where disaster nearly struck. Another British agent making the same crossing shortly beforehand had come across some border guards asleep at their post and had shot them, perhaps unaware that he was complicating things for anyone else. The result was a frenzy of border-guard activity. Starving, sodden and fearing capture, Kiik waited in a swamp for two weeks, living off berries. He then took a Benzedrine pill he had been saving for emergencies and crossed the border where his reception party was still waiting, as this previously unpublished picture depicts (Kiik is on the right).bh His name did not appear on a list of Estonians wanted by the KGB, and his family was not harassed, showing that the Soviet authorities never got wind of his mission (they believed he had emigrated to Canada). Prematurely grey after his ordeal, he then worked for the British government as an instructor in covert operations (among his pupils, he once said, was the future King of Norway).

Kiik’s successful mission, the mysterious agent who crossed the border before him, Captain Nelberg’s letter and some other evidence of separate, successful missions all support the theory that SIS, perhaps as early as 1950 and certainly by 1952, had reason to continue Operation Jungle as a bluff. If so, the human calculations are chilling. Were the agents still inside the Soviet Union counted as good as dead? What of the men being sent to join them? The verdict of sheer incompetence might be moderated by the steel nerves and stunning cynicism that such decisions would involve.

Meanwhile a conflict between intelligence and political objectives was plaguing the other side too. The Soviet authorities wanted to lure a senior Estonian émigré figure – ideally Rebane – across the border for a humiliating show trial. The KGB was more interested in further penetration of SIS and the CIA. But with Rebane belatedly aware of the deception, the hunters had become the hunted. It is unclear how far Rebane and SIS were at cross-purposes in the final years of the operation. The wily Estonian claimed later that even after the closure of the Latvian and Lithuanian operations, he fought to maintain the radio games with the KGB-controlled partisans, in the hope of getting his own agents back. He succeeded in at least one instance, but his career with SIS was over. The once-dashing officer ended up working as a night watchman before moving to Germany and a job in that country’s intelligence service. Having dodged repeated attempts by the KGB to entrap him, he died in 1976, having burned his papers; his devoted secretary Liis Dillie Lindre lived to see her country regain independence in 1991, yet continued to sleep with a loaded revolver by her bed (in a suburb of Brussels) even after the Soviet Union collapsed. Rebane’s Latvian and Lithuanian colleagues moved to the United States. Carr was shunted first sideways and then out of the service; until his death in 1988 he blamed Philby, not his own incompetence, for the fiasco. Viktor van Jung, a cerebral and charismatic Estonian émigré who had trained two CIA agents who went on a doomed mission in 1954, went on to a high-flying career in the agency. Strong indications are that he was the CIA officer who ran Ryszard Kukilński, a senior Polish officer who passed on invaluable Warsaw Pact secrets to NATO.

According to Rositzke, none of the CIA operatives returned from their missions. But a sprinkling of former agents who survived inside the Soviet Union did crop up after 1991, with embarrassing consequences for their spymasters. One of the most conspicuous cases involved Sweden, a country that had maintained a stony silence over its espionage efforts in the Baltics, which seem to have been every bit as disastrous as those of SIS and the CIA. The activities of the C-byrån (C-Agency), renamed in 1946 as T-kontoret (T-Office), began during the war and were stepped up in 1948 when a Soviet attack on Sweden seemed all too likely. Using Baltic émigrés and run in close cooperation with SIS, they finished in 1957, after the humiliating public exposure of a Swedish spy ring and a formal Soviet diplomatic protest.

~~Deception: The Untold Story of East West Espionage Today -by- Edward Lucas

Day 143: Book Excerpt: The Empire Trap

Formal imperialism was off the table after 1900, but the property rights of Americans continued to come under threat from a combination of feckless foreign governments and political instability. Governments in Venezuela and the Dominican Republic confiscated American direct investments, while other Latin American governments defaulted on their debts to American creditors. After the 1893 intervention in Hawaii, the 1895 resolution of the Venezuela-Guyana boundary dispute, the 1898 Spanish-American War, and the 1903 machinations that cleaved Panama from Colombia, it would be hard for any American administration to argue that it did not have the power to intervene on behalf of American investors.
U.S. administrations may have had the power to intervene on behalf of private interests, but their willingness to intervene depended on both the character of the president and the strength of the pressures brought upon him. When investor groups lined up the same way and could make a credible case that intervention served strategic interests, then intervention became more likely. Conversely, if investor groups were divided and there was no strategic interest, then intervention would be practically impossible.
In 1904, as instability threatened American direct investments, President Theodore Roosevelt was under pressure to intervene in the Dominican Republic, but he waited to build political support. In fact, he waited until the Dominican government joined bondholders and direct investors in requesting intervention. Roosevelt then proclaimed his intervention in terms of broad principles. The United States would exercise an “international police power” across the entire Western Hemisphere should Latin American governments engage in “chronic wrongdoing” or collapse into chaos.
By phrasing his reasons in the broadest possible terms, Roosevelt effectively committed his successors to the protection of American property rights across the circum-Caribbean. With Roosevelt’s declaration, risk premiums fell on all sovereign debt issues across the circum-Caribbean (that is, all countries with a Caribbean coastline, plus El Salvador), not just those of the Dominican Republic. A future president could not back down from that commitment without risking a strong adverse market reaction. In fact, when crises emerged in the U.S. intervention sphere, markets did react adversely until the administration of the day showed its willingness to act.
A corollary of the argument that intervention was likely when the interests of investors were aligned is that intervention was not likely when the interests of investors were divided. Such a situation in fact occurred in Venezuela in 1902. President Cipriano Castro confiscated the assets of an American asphalt company. Castro, however, carefully designed his expropriation around conflicting claims between two American asphalt interests—and the interests that benefited from Castro’s actions were closely connected to powerful Republican politicians. Castro therefore managed to forestall an American reaction. He did not prevent the aggrieved asphalt interests from privately funding a revolt against his government, but he did keep the United States from using its power against him.
...
Theodore Roosevelt was not usually a man to choose inaction when action was an option. He nevertheless moved slowly in declaring hegemony over the Americas. It took an unfortunate and extended series of events in the Dominican Republic to get the American president to declare that the United States would exercise an “international police power” over the hemisphere.
The Dominican Republic had been chronically unstable since independence from Haiti in 1844. The republic suffered armed revolts in 1849 and 1857. Fearing a Haitian invasion (and hoping to stabilize his government), President Pedro Santana agreed to annexation by Spain in 1861. Spain, unfortunately, proved unable to bring stability: after four years of civil war, Madrid withdrew in 1865. In 1870, President Buenaventura Báez invited the United States to assume sovereignty. President Ulysses Grant signed an annexation treaty that promised Santo Domingo territorial status and eventual statehood, but race-based opposition against the admission of a “Negro republic” into the Union caused the treaty to fail on a 28 to 28 vote on the Senate floor.
Dominican political instability translated into financial instability. In 1869, the Dominican government contracted £757,000 ($89.7 million in 2011 dollars) in debt on the London market. The government promptly defaulted. In 1888, the Dominican government arranged a new issue worth £770,000. It used £142,820 to pay off the defaulted 1869 debt—at 45 pence to the pound—and the rest to finance the government. As security, the Dominican government placed the customhouses under the formal control of the underwriter, Westendorps & Co., a Dutch company, which sent managers from Europe to the republic. Two years later, in 1890, Westendorps underwrote a £615,000 issue intended to build a forty-two-mile railroad across the mountainous terrain between Santiago and Puerto Plata on the coast. The issue failed, and Westendorps assumed the debt. By 1892, eleven miles of railroad had been completed, at which point the Dominican government forcibly took back control of the customhouses and again defaulted on its debt. The Dutch government protested, but it had no legal recourse and took no action.
In 1892, a newly incorporated American firm bought out Westendorps’s interest. It sold the debt at 65 cents on the dollar to the San Domingo Improvement Company (SDIC), headquartered in New York. The SDIC gained “control” over the customhouses, but its managers understood that they could do little if Santo Domingo decided to revoke their privileges. As security, therefore, the SDIC wrote into the contract that, in the case of default, the governments of Belgium, France, the Netherlands, the United Kingdom, and the United States would appoint a “financial commission” to take direct control of Santo Domingo’s finances. SDIC refinanced the Dominican Republic’s existing debt and issued new bonds to finish the construction of the railroad.

~~The Empire Trap -by- Noel Maurer

Day 125: Book Excerpt: The Blood Telegram

Meanwhile, the press too kept up a drumbeat. Reporters snuck into East Pakistan, and the refugees in India brought with them terrible tales, which Pakistan could not censor. From Calcutta, the Indian army did what it could to encourage journalists to venture across the border into East Pakistan.
Bengalis were stunned to hear that some U.S. arms were still making their way to the Pakistan army. In the midst of the army’s terror, these fearful people got their news by radio. “Why are you sending the army more guns?” a Bengali bitterly asked a Washington Post reporter.

In London, the Sunday Times published a detailed and gruesome story by a Pakistani journalist, Anthony Mascarenhas, with the screaming headline GENOCIDE. Newsweek ran a horrific cover story. Village after village had been reduced to rubble, with stinking corpses. The magazine said that a quarter of a million Bengalis had died. It told of a three-year-old child and his teenage mother, both of them refugees: “They sat on ground made muddy by the steady drizzle of the summer rains. The baby’s stomach was grotesquely distended, his feet swollen, his arms no thicker than a man’s finger. His mother tried to coax him to eat some rice and dried fish. Finally, the baby mouthed the food feebly, wheezed—and died.”

Trying to blunt the impact of these terrible stories, Pakistan allowed in some foreign correspondents. Sydney Schanberg of the New York Times, who had been expelled from Dacca in March, jumped at the chance. He remembers the Pakistan army’s contempt for Bengalis: “Even the officers in charge of these units would say, ‘You can’t trust these people, they’re low, they lie.’ ” The officers gave “no denials that they had just killed them.” He recalls, “You’d see places where they had marked little wooden houses as Hindus.” Survivors told him that the army would “come through yelling, ‘Are there any Hindus there?’ When they found out there were, they would kill them.” He concludes, “It was a genocide”—perhaps even a more clear case than Cambodia.

In the New York Times, Schanberg reported, “The Pakistani Army has painted big yellow ‘H’s’ on the Hindu shops still standing in this town.” Emphasizing the targeting of Hindus, he described “the hate and terror and fear” throughout the “conquered province.” Back in Dacca at last, Schanberg found the city “half-deserted,” with fresh loads of troops arriving daily from West Pakistan at the airport. Terrified merchants had taken down signs in the Bengali language and put up new ones in English, because they did not know Urdu. He wrote that foreign diplomats estimated that the army had killed at least two hundred thousand Bengalis.
...
George Harrison knew the uses of celebrity. The guitarist for the Beatles, who had broken up in 1970, was a soulful, confused, and tender-hearted man, but also an unexpectedly politically savvy operator.
Over the last few years, he had grown close with Ravi Shankar, the famed Indian musician. Harrison spent six weeks in India, gulping in lessons in the sitar and spirituality; sitar music popped up in classic Beatles songs like “Norwegian Wood.” Now, as the number of refugees in India soared into the millions, Shankar, a Bengali, asked Harrison for help with a benefit concert.

Other musicians spoke up too, such as Joan Baez, who wrote a mournful “Song of Bangladesh.” But Harrison had a practical purpose in mind—to raise some money, as he later explained, but mostly to raise awareness that Bengalis “were getting killed and wiped out, and there was a lot of countries were supporting Pakistan with armaments and stuff.” Since the concert was being held in New York, there was no doubt about which country in particular Harrison and his friends had in mind.

The Concert for Bangladesh was the first rock event for humanitarian relief—the precursor for shows like Live Aid in 1985, with all the attendant sincerity, vapidity, and showy self-righteousness. Harrison and his crew threw together the event at breakneck speed, choosing August 1 because it was the only date on which Madison Square Garden, in midtown Manhattan, was available. Two shows sold out fast to more than forty thousand fans.

Under the spotlights, in a cream suit with a hideous orange shirt, sporting shaggy hair and a huge scraggly beard, Harrison was a fervid countercultural figure to dumbfound the generals in Rawalpindi. With rather more adrenalized benevolence than comprehension, he ardently sang, “Bangla Desh, Bangla Desh / Such a great disaster, I don’t understand / But it sure looks like a mess / I’ve never known such distress.” Harrison had hastily assembled a scruffy all-star band from his old friends, including Ringo Starr on drums and Eric Clapton on guitar, although John Lennon and Paul McCartney never showed. Shankar and other Indian musicians played sitar to general puzzlement.
Of course, the eager young crowd came mainly for the music. But many of them knew about the horrors, and Shankar explained to the audience the misery of the Bengalis. In between freewheeling sets, the musicians showed devastating films of the refugee camps, with corpses and starving children. The Village Voice wrote, “How glorious—to be able to launder one’s conscience by laying out a few tax-deductible dollars to hear the biggies.”

After a series of blazing performances, Harrison had a rare surprise. “I’d like to bring out a friend of us all,” he told the startled crowd, “Mr. Bob Dylan.” This, the Village Voice raved, was the “real cortex-snapping moment.” Dylan—who had been largely in seclusion since a near-fatal motorcycle accident—appeared from the darkness, slight and unmistakable, in a jean jacket, with a guitar and a harmonica. After the pandemonium subsided, he blazed through thrillingly emotional renditions of “A Hard Rain’s A-Gonna Fall” and “Blowin’ in the Wind.” As if aiming at Nixon, he sang passionately, “How many deaths will it take till he knows / Too many people have died?”

~~The Blood Telegram: Nixon, Kissinger and a Forgotten Genocide -by- Gary J. Bass

Day 124: Book Excerpt: Mindless

When I first did research on Walmart’s workplace practices in the early 2000s, I came away convinced that Walmart was the most egregiously ruthless corporation in America. However, ten years later, there is a strong challenger for this dubious distinction—Amazon Corporation. Within the corporate world, Amazon now ranks with Apple as among the United States’ most esteemed businesses. Jeff Bezos, Amazon’s founder and CEO, came in second in the Harvard Business Review’s 2012 world rankings of admired CEOs, and Amazon was third in CNN’s 2012 list of the world’s most admired companies. Amazon is now a leading global seller not only of books but also of music and movie DVDs, video games, gift cards, cell phones, and magazine subscriptions. Like Walmart itself, Amazon combines state-of-the-art CBSs with human resource practices reminiscent of the nineteenth and early twentieth centuries.

Amazon equals Walmart in the use of monitoring technologies to track the minute-by-minute movements and performance of employees and in settings that go beyond the assembly line to include their movement between loading and unloading docks, between packing and unpacking stations, and to and from the miles of shelving at what Amazon calls its “fulfillment centers”—gigantic warehouses where goods ordered by Amazon’s online customers are sent by manufacturers and wholesalers, there to be shelved, packaged, and sent out again to the Amazon customer.

Amazon’s shop-floor processes are an extreme variant of Taylorism that Frederick Winslow Taylor himself, a near century after his death, would have no trouble recognizing. With this twenty-first-century Taylorism, management experts, scientific managers, take the basic workplace tasks at Amazon, such as the movement, shelving, and packaging of goods, and break down these tasks into their subtasks, usually measured in seconds; then rely on time and motion studies to find the fastest way to perform each subtask; and then reassemble the subtasks and make this “one best way” the process that employees must follow.

Amazon is also a truly global corporation in a way that Walmart has never been, and this globalism provides insights into how Amazon responds to workplaces beyond the United States that can follow different rules. In the past three years, the harsh side of Amazon has come to light in the United Kingdom and Germany as well as the United States, and Amazon’s contrasting conduct in America and Britain, on one side, and in Germany, on the other, reveals how the political economy of Germany is employee friendly in a way that those of the other two countries no longer are.

Amazon, like General Electric and Walmart, prides itself as a self-consciously ideological corporation, with Jeff Bezos and his senior executives proclaiming an “Amazon Way” that can illuminate the path forward for less innovative businesses. In December 2009 Mark Onetto, chief of operations and customer relations at Amazon and a close collaborator of Bezos, gave an hourlong lecture on the Amazon Way to master’s of business administration students at the University of Virginia’s Darden School of Business. Onetto is a disconcerting figure, because once he starts talking, style and substance are in sharp contrast. He is French born, and he still speaks with the rather faded insouciance of Maurice Chevalier and “Gay Paree,” and he makes much of this in his lecture. But there was nothing gay (in the traditional sense) or insouciant about the Amazon workplace that Onetto described for UVA’s MBA candidates.

Like most such corporate mission statements, Onetto’s uses a coded language that hides the harshness of his underlying message, which needs translation along with a hefty reality check. As with Walmart so at Amazon, there is a quasi-religious cult of the customer as an object of “trust” and “care”; Amazon “cares about the customer,” and “everything is driven” for him or her. Early in the lecture, Onetto quotes Bezos himself as saying, “I am not selling stuff. I am facilitating for my customers to buy what they need.”

Amazon’s larding of its customer cult with the moral language of “care” and “trust” comes with a strong dose of humbug because Amazon’s customers are principally valued by the corporation as mainstays of the bottom line, and not as vehicles for the fulfillment of personal relationships. There is still more humbug in the air because Amazon treats a second significant grouping of men and women with whom it has dealings—its employees—with the very opposite of care and trust. Amazon’s employees are almost completely absent from Onetto’s lecture, and they make their one major appearance when they too are wheeled in as devotees of the cult of the customer: “We make sure that every associate at Amazon is really a customercentric person, that cares about the customer.”

~~Mindless -by- Simon Head

Day 120: Book Excerpt: America's Secret War

Al Qaeda was born out of the end of the Afghan war. Thousands of young mujahideen, or holy warriors, had gone to Afghanistan to fight the Russians, urged to do so by their own governments, religious leaders, and the Americans. They came from everywhere in the Islamic world, among them the brightest, most idealistic, and most courageous. Many died, and all were scarred by combat against a brutal enemy whose actions were not encumbered by CNN crews filming the fighting.

In many ways, the fate of the survivors was much worse than what happened to America's Vietnam veterans. The latter came home to a country that treated their sacrifice with indifference and contempt. The mujahideen, in many cases, weren't able to go home at all.

When the Afghan war ended, those who remained alive were a special breed. They had been hardened by the war physically and spiritually. Their contact with the relatively primitive Afghan tribesmen, whose faith was both simple and violent, intensified their own personal beliefs. These were men who prayed with an intensity that was rare in the Islamic world, and who also knew how to handle hand grenades and rocket launchers. Before the war, countries like Saudi Arabia and Egypt had been afraid of the Soviets, wanted to please the United States, and—in some cases—were frightened of the religious fervor of these young warriors. The governments thought these passionate young men would be much better off getting killed in Afghanistan than staying at home and causing trouble. After the war, the last thing that most Islamic regimes wanted was to have these men return home.

The United States, which had been instrumental in arming, training, and deploying these men, lost interest in Afghanistan once the Soviet Union withdrew its troops and began to collapse. Afghanistan was not of great strategic interest to the U.S., and the cost of maintaining its network of operatives—let alone its secret army—was high. The first Bush administration made a decision that was obvious at the time and disastrous in retrospect: to pull the plug on the Afghani operations. It shut down all operations and left its erstwhile allies dangling in the breeze.

Many of these operatives had been functioning covertly in Afghanistan and Pakistan. Their own passports and identity papers had been replaced by Afghan and Pakistani documents. That was standard operating procedure for everyone's protection. However, as the United States shut down its operations, it did not return the original papers—which were in Washington or had been destroyed—nor did it make any provisions for returning the Islamic international brigade to their homes. This was partly due to U.S. indifference. Even more, however, it was a response to the pressure of allied Islamic governments, which didn't want these holy warriors back.

The best of them, a few thousand perhaps, were left stranded thousands of miles from their homes in a foreign country that was in shambles. There is a Western medieval term: paladin, meaning a knight who is somewhere outside of the normal social structure. Skilled at war, he is available for hire, as long as the cause is just. The paladin is also seen as a force for good, serving and protecting the faith as he travels homeless through the world. The end of the Afghan war created a band of paladins, bound together by the shared agony of Afghanistan and their betrayal by their own government and the Americans. Homeless but skilled in war, they were stranded in a strange land. But it was a land where their skills were needed by the factions fighting one another in the long civil war that followed victory over the Soviets.

In due course, some were able go home either because they were well connected or because they obtained forged papers. The rest remained scattered. They were bound together by the memory of war, the sense of victory, and the profound feeling of betrayal. The sentiment was aimed not only at the United States—the U.S. was to them just a Christian country that was using them, something that was not unexpected. The much deeper wounds of betrayal were attributed to their own governments—particularly the Islamic monarchies of the Arabian Peninsula that they labeled “hypocrites.”

This is a subtle aspect of the warriors' psyche—but crucial to understanding them. They did not regard this as simply a personal betrayal. For them, it represented the fundamental disease of the Islamic world. The outside threats to Islam (the Soviet Union and the United States) were manageable, but the real problem was the internal corruption of the Islamic world. Until that was dealt with, the Islamic world could never deal with Christians, Jews, Hindus, and Communists who were using, abusing, and oppressing the Islamic world for their own ends.

It is vital to remember that the Afghan warriors were among the best and brightest. Like the International Brigade that fought in the Spanish Civil War, many were well educated. Obviously, all had traveled a bit, and all knew the arts of warfare. They knew more than a little about the world and its history and could analyze events through their religious prism. A theory developed among them as to what was wrong and what was to be done.

The Problem

From their point of view, the problem of the Islamic world went back to the Christian Crusades and the loss of the Caliphate. Islam, which originated in the Arabian Peninsula, had swept through North Africa and the Indian Ocean basin in a series of brilliant political and military maneuvers. At various times, this vast empire covered points from the Pyrenees to the Philippines, as far south as Zanzibar and as far north as Grozny and Vienna. The range of the empire over time was far grander than the Roman Empire ever was.

At the heart of the empire was the Caliph, a ruler who combined political, military, and religious authority. His task—and that of the political and religious bureaucracy through which he governed—was to hold the Caliphate together, to protect it from foreign encroachment, and to extend its sway. In one sense, it was simply one of many human empires and behaved like it. In another sense, like the Holy Roman Empire in its earliest conception, it represented a divine presence in the world.

It was the intention of the mujahideen to resurrect the Caliphate and ultimately to raise it to the greatness it once had. This did not strike them as at all improbable. Empires come and go. They had—in their minds—brought down the Soviet Union. Israel had been resurrected after 2,000 years. The United States, a relatively unpopulated continent 200 years ago, was now a global empire. In 1600, Britain was a savage island of warring tribes, and 250 years later, it ruled the world. The Islamic world had much fewer challenges than any of these. Nothing had to be invented. The pieces simply had to be put together again.

~~America's Secret War: Inside The Hidden Worldwide Struggle Between America and Its Enemies -by- George Friedman

Day 109: Book Excerpt: Homelessness Handbook

Scavenging, the third type of shadow work, involves searching through discarded material for food, for usable or salable items, or for money. Many of the homeless regard scavenging, particularly the variant known on the streets as dumpster diving, as one of the baser forms of shadow work. For those who undertake it, dumpster diving is not a simple matter, as to be successful involves not only knowing when and where to look, but also what to look for in terms of edibility or salability. When an individual finds a good dumpster, he  or she often revisits it. Such knowledge is also relevant to other forms of scavenging, such as searching for and collecting aluminum cans—­one of the most commonly scavenged and profitable items because there is a market outlet for returned aluminum cans in most communities in which the homeless reside. When such external markets don’t exist, the homeless often sell to each other or to other pedestrians by laying their scavenged goods out on the sidewalk.

The last category of shadow work is theft and related criminal activities such as burglary or fencing stolen goods. Although this has not been a widely researched topic, one study comparing the rates of arrest of domi­ciled and homeless males in one city found that nearly 90 percent of the felonies for which the homeless were arrested involved theft or burglary for the purpose of theft. Given the impoverishment of the homeless and abundant opportunity for theft in most cities, with large numbers of convenience stores and gas stations in which goods can be easily stolen, it is hardly surprising that theft would be a salient form of shadow work for some of the homeless.    Another important category of survival strategies is the negotiation of social relationships, particularly friendships with other homeless people. Fieldwork has shown that most of the homeless do not live in social isolation, but that their street friendships are somewhat different from friendships born under other circumstances. Homeless street relationships are paradoxical in that they can serve many important functions in the lives of homeless people, yet also be sources of uncertainty.

One important function of personal relationships on the streets is that they can provide a measure of safety and security. Street ties often help individuals secure material resources, such as food or money. For example, some groups of homeless companions pool money in a “group bank” for all members to share. Companions also provide one another with entertainment in the form of joking, storytelling, or singing. A person may also get help gaining entrance to certain programs through street connections. In some group situations, such as in homeless camps, there may be a sense of community and reciprocal obligation. For example, scavenged or purchased food may be prepared and eaten together, residents may share chores, suggesting a division of labor, and sometimes members function as caretakers for sick campmates.

Friendships often develop quickly, but they may be quite fleeting. These relationships serve both expressive and instrumental functions. Companions, friends, or associates function as a nonstigmatizing reference group and may provide homeless people with ­self-­validation. However, because many homeless people cycle on and off the streets, the relationships can be unstable, and many are superficial, often imbued with a greater sense of intimacy by participants than actually exists. Gatherings of people make it easy to “buddy up” to make daily rounds or for sleep buddies. However, buddies may not even know one another’s names. Nicknames, often ones that describe personal characteristics, are commonly used in place of people’s legal names.

While a sense of intimacy may be associated with these relationships, a lack of trust in others, including close companions, is pervasive. In addition, although sharing is important in intimate relations, individuals sometimes fear their companions are exploiting them. Even though social relationships can help the homeless get by on a daily basis, group obligations can also prevent individual members from pursuing their own economic interests, to the extent that in some instances street relationships may actually impede exit from the streets.

~~Homelessness Handbook -ed- David Levinson and Marcy Ross

Day 27

O.S: Do the particular origins of the US Empire make it in any way different, more prone to ignore or deny history?

T.A: When I think about the origins of the American Empire, the first thing that comes to mind, of course, is that the colonists began by destroying the native population they encountered, and this was linked to a religious fundamentalist belief in their own goodness and greatness. I mean, the fundamentalists who came here, the pilgrim fathers, had a way of thinking that wasn’t basically different from that of the Wahabis or Osama bin Laden. In fact, there are lots of similarities between Protestant fundamentalism and Wahabi fundamentalism, and you see that in how they treat women, all the campaigns.

O.S: The Salem Witch Trials?

T.A: Exactly. You know, women are possessed by the devil. Beat it out of them. So that was the origin. Then you have slavery, the basis for much of the wealth generated inside the United States. Then you have the violent expansion of the empire, which is something Cormac McCarthy describes very well in one of his finest novels, Blood Meridian. Then you have the Civil War, which we are told is about the liberation of slaves, and which is partially to do with that, but which is essentially an attempt to unify the United States by force. So all this created the modern United States as we know it. And from the First World War onward the United States grew in size and influence, and became a dominant power, which after the Cold War has become an ultra-imperialism, unchallenged, unchallengeable militarily, very strong, without rivals. This is the first time in human history that an empire has been without any rivals. The Romans sometimes used to think that they were, but that’s because they weren’t totally aware of the strength of the Persians or even the Chinese. They thought in terms of the Mediterranean world, not globally. So, this is the first time that this has happened. And it made the leaders of this empire extremely complacent, who took the consent of their people for granted.

~~On History -- Tariq Ali In conversation with Oliver Stone