The move to make “better” hegemonic intervention IS the move to economic intervention

The debt crisis in Latin America threatened the solvency of major American banks. The United States intervened, both directly and via multilateral organizations in which the United States was a dominant force, to ensure that Latin American countries paid back their debts to US banks. The crisis also provided an occasion to further open up Latin American economies to US goods and capital. While the avowed goal of structural reform in Latin America was to promote development, it is more likely that US decision-makers understood, or at least had an inkling, that policies associated with the Washington Consensus would hurt economic growth in Latin America but still pushed them because they served American economic interests. As we have seen, the US intervention in Latin America during the 1980s was part of a long pattern of soft economic imperialism (discussed in earlier chapters under the rubric of informal empire) to forcibly open doors the world over to sustain and enhance American prosperity. Economic motives were also behind the US military intervention in Iraq, but in less obvious ways than in Latin America. Among the factors that make the Middle East of great strategic importance to the United States is the concentration of world’s oil resources in the region. Whether friends or foes control the production, distribution, and pricing of oil is, then, a matter of considerable US concern. As noted in chapter 5, the US was party to the overthrow of Muhammed Mossadegh in the 1950s in order to deny Iran national control over its own oil. The client status of the Saudi monarchy serves American regional interests well. Ever since the overthrow of the pro-American Shah, the US has sought to deny Iran a significant regional role. It even supported Saddam Hussein against Iran during the prolonged Iran-Iraq War of the 1980s. No one doubts that the US intervened to liberate Kuwait from Iraq in 1991 because Kuwait swims in oil. The motives behind the Second Iraq War—the focus of the present chapter—need to be understood within this historical and regional context. I argue that the United States went to war in Iraq the second time as a first step in a grander design to further incorporate the oil-rich Middle East within the American orbit. The fact that it may not work out that way does not take anything away from the original motives. Intervention in Iraq also fits a century-long pattern of hard military imperialism: the pattern began with the United States’ smashing Filipino nationalists at the turn of the twentieth century to control the Philippines as a stepping-stone to the giant China market; it continued in Vietnam as a way to stop the spread of communism and to maintain open economies in the region; and is now playing itself out in the oil-rich Middle East that the United States hopes to dominate. Judged from the standpoint of whether America’s imperial interventions bring it benefits, the evidence from the most recent period again suggests that the United States does economic imperialism better than military imperialism. The US efforts to deal with the Latin American debt crisis of the 1980s supports the first part of this conclusion. As we have seen, the United States used economic coercion to ensure cooperation by Latin American elites, who were willing to pass on the costs of policy reform to both the lower strata and the future generations of Latin America. The costs of American intervention to Americans were minimal, except for the loss of some international goodwill. In turn, the US government and US-dominated multilateral institutions helped to maintain the profits and solvency of major American banks. Latin American markets were opened up further to American goods and capital. By contrast, US-military intervention in Iraq has cost the Americans dearly and the rewards remain uncertain. Since the goals of US intervention were murky to begin with, it is difficult to assess whether any of them have been met or are likely to be met. If the goals had been minimal—namely, to get rid of a thuggish, possibly anti-American dictator with access to oil wealth—that much the Iraq War certainly achieved. However, much of this goal was already accomplished after the first Gulf War, after which Saddam was still in power but well contained, and even willing to allow foreign oil companies to invest in Iraqi oil. The grander goal of remaking Iraq in America’s image, and then going beyond to impose an American peace on the entire region, remains, at best, illusive, and more likely, with growing anti-Americanism and the spread of militancy, even more distant than before the second war. The impact of American interventions on developing countries—both economic and military—has been negative. As to economic imperialism, I document below that American efforts to ensure that banks were repaid their debts contributed to a lost decade of growth in Latin America. Beyond the lost decade, moreover, forced economic openness reinforced economic dependency of Latin American countries on their northern giant. The consequences are evident if one juxtaposes the experience of Asian countries during the same period (say, from 1980 to 2005), with that of Latin America. Asian countries pursued a more autonomous development path in which national states directed their respective economies. This pattern of development—the Asian financial crisis notwithstanding—produced high growth rates, modest inequalities, industrial development, and high value-added exports. By contrast, economic growth in Latin American countries remained sluggish, with sharp income inequalities. Most Latin American countries also continued to export commodities in exchange for manufactured goods. The negative impact of America’s war in Iraq is there for anyone to see. What makes a moral judgment a little complicated is the fact that Saddam Hussein was a despotic, ruthless dictator who killed many of his own citizens, probably close to a quarter million over a period of twenty-five years.2 By contrast, as noted, nearly a half million Iraqis died under American occupation between 2003 and 2011, the year most American troops left Iraq. Since then, US troops have had to return to deal with militancy. The Iraqi state remains weak and corruption and poverty remain endemic, even as oil extraction continues to grow.