Louis Proyect: The Unrepentant Marxist

May 11, 2018

The World Debt Crisis

Filed under: Brian A. Mitchell,imperialism/globalization — louisproyect @ 4:13 pm


(A guest post by Brian A. Mitchell)

Some 40,000 children will die tonight in this tremendously rich and abundant world. They will die for lack of the most basic necessities such as food, clean water, health and education. Since the beginning of capitalism, how is it that the poorest peoples of this world still owe a debt of trillions of dollars to the richest? Isn’t that absolutely ridiculous when you think about it? To say nothing of murderous.

But keeping the world in debt is a deliberate policy of the rich imperialist world. Tremendous profits are made by keeping all the poor countries in debt indefinitely. The total world debt in 2017 runs to some trillions of dollars. Of course it can never be paid, but that is not the point. The point is to gain massive profits by keeping these poor countries in debt permanently. If the rich world governments’ financial institutions and banks miraculously cancelled the debt, it would immediately start to accrue because of the grossly unequal trade relations between the rich and the poor world and new debts.

What is the view of the rich world?

Who Owes Whom? Who Aids Whom? Unequal Trade, Poverty And The World Debt Crisis.


“Don’t forget, there are two hundred million of us in a world of three billion. They want what we’ve got, and we’re not going to give it to them!”

(US President Johnson.)

“Before people can do anything they have got to eat. And if you are looking for a way to get people to lean on you and to be dependent on you, in terms of their cooperation with you, it seems to me that food dependence would be terrific.”

(US Senator Hubert Humphrey, 1957.)

“There are two ways of conquering a foreign nation. One is to gain control of its people by force of arms; the other is to gain control of its economy by financial means.”

(US Secretary of State John Foster Dulles, in the 1950s.)

“By the use of economic aid we succeeded in getting access to Iranian oil and we are now well established in the economy of that country. The strengthening of our economic position in Iran has enabled us to acquire control over her foreign policy and in particular to make her join the Bagdad Pact. At the present time the Shah would not dare even to make any changes in his cabinet without consulting our Ambassador… to step up both our political price and our military demands. …economic relations with these countries would ultimately allow us to take over key positions in the native economy.”

(From a letter from US Council on Foreign Relations member billionaire Nelson Rockefeller to President Eisenhower, January 1956.)

“Whenever the Western powers are determined to get a given vote through either the [UN] Security Council … or the General Assembly … governments are warned. If they do not behave they will not get debt relief, World Bank capital projects, easier IMF [International Monetary fund] adjustment conditionalities or urgently needed hard currency IMF credit to pay oil bills. Reduction or cut-off in bilateral aid is an additional threat.”

(Erskine Childers, adviser to UN Secretary General.)

About three hundred and fifty mostly US major monopolies and their foreign subsidiaries now own or control much of the world’s economic output. At least ten US transnational monopolies each has more dollar assets than, say, Britain or Japan; some of them, like Standard Oil or General Motors – many times over. Now consider the fact that Third World debts to the West – some $900 billion at 1985 figures – amount to thousands of times the dollar assets of each of these ten US monopolies and you will have some grasp of the nature of imperialism. It means that the advanced capitalist countries own the poor countries and their economic output in perpetuum.

What plans does the US have for all of us in this world?


“The Plan is for the United States to rule the world. … it is ultimately a story of domination. It calls for the United States to maintain its overwhelming superiority and prevent new rivals from rising up to challenge it on the world stage. It calls for dominion over friends and enemies alike. It says not that the United States must be more powerful, or most powerful, but that it must be absolutely powerful.”

(US Vice President Dick Cheney, June 2002.)

This is economic warfare, more permanently devastating than cluster bombs or cruise missiles.

By the 1970s the “underdeveloped” countries’ foreign debts already ran to some $5 billion. It is now in the trillions. The cost of servicing these ‘debts’ was some $54 thousand million a year, interest which “grew” at the rate of 21% in the 1970s alone. By 2016 it was many times that figure.

In the Philippines in 1972, 1 peso was worth 15 US cents, in 1985 it was less than 5 cents. Its foreign debt in 1985 was 11 times it was in 1972: from $2.3 billion to $25 billion. In 1960 a ton of coffee could buy 37.3 tons of fertiliser, in 1982 it could buy only 15.8 tons – less than half, with the same amount of coffee as in 1960. In 1959, 6 tons of jute could buy a truck, in 1982 it took 26 tons of jute to buy the same truck.

In the 1980s, Brazil had the biggest overall debt. But Panama, with a population of two million and a foreign debt to the mega-rich transnationals of $4.5 billion, had the largest per-capita debt in the world. This meant that each child in Panama was born owing foreign rich world banks some $2,250, an amount the average Panamanian could never earn in a lifetime, which was the 45 years average or less for such poor countries. In 1984 Mexico was using 72% of its oil just to pay the interest on its debt, which continues to increase year by year.


According to 1986 US Food and Agricultural Organisation figures, over 42,000,000, people, half of them children, die every year from hunger or hunger related illnesses. These peoples are not at war with the imperialist nations. Their crime is that they have ‘traded’ with the US, British, West European, Japanese and other capitalist transnational monopolies.
“Our so-called foreign aid program, which is not really foreign aid because it isn’t to foreigners but aid to us, is an indispensable factor in carrying out our foreign policy.”

(US Secretary of State John Foster Dulles, in a rare moment of honesty, October 25 1956.)

“We get a five to one return on investment in Africa… We’re not aiding Africa by sending them aid. Africa’s aiding us.”

(US Representative to the United Nations Andrew Young, February 1995.)

“Wherever possible we should try to shape our aid programme to fit more appropriately the pattern of our trade and investment interests in different countries.”

(British Foreign Office, January 26 1968.)

Other types of loans or aid are, for example. so-called green or agricultural dollars, which are “invested” in highly profitable agri-business – agricultural and food contracts, with the subsidiaries of rich countries’ corporations who often own not only much of the agricultural land, but often the transport, packaging, processing and shipping of food resources in the poor countries.

Whatever the rich world’s relations with these countries, whether it is in trade, aid or loans, the rich nations profit enormously and the poor continue to suffer poverty, hunger and death.


“This is a huge, colossal battle against imperialism, because what we are proposing is that the enormous, unpayable debt of the Third World be repudiated… it isn’t $700 billion; it’s more like $900 billion, and, in 20 years we’ll have to pay $3 trillion, that is, $3 million million. They want to take $3 trillion from this hungry, starving to death world in 20 years, … This is the battle for the lives and future of 4 billion poor and hungry people. … You practically have to kill the people to force them to make the sacrifices required to pay that debt.”

(Fidel Castro, to Latin American Federation of Journalists, July 6 1985.)

“The huge effort of the past two years resulted in an export surplus of a billion dollars a month. Yet this money served only to pay the interest on the debt. … When we borrowed, interest rates were 4 per cent; they’re 8 per cent now and at one point they even went as high as 21 per cent. …these loans were contracted by the military, mostly for military ends – $40 billion were swallowed by six nuclear plants, none of which is working today. The people are now expected to pay off these debts in low salaries and hunger. But we have already reimbursed the debt, considering the interest paid. We must stop giving the blood and the misery of our people to pay the First World.”

(Archbishop of Sao Paulo Brazil, Cardinal Paulo Arns, 1985.)

Millions of children in this “free market” world of capitalism wake up every day of their short lives with no clean water to drink, nothing to eat and no school to go to. And when they get ill, through the lack of clean water, food and education, there is no hospital for them, no doctor or medicines to make them well, and they die in their millions every year.

Always a leading spokesman for the too many poor nations of this world, Fidel Castro asks:

“What sort of world will we hand over to our children? What sort of life lies ahead for those five billion mouths that we will have to feed in our underdeveloped world, those five billion bodies that have to be clothed, shod and sheltered, those five billion minds that will strive for knowledge, those five billion human beings that will struggle for a decent life, worthy of the human condition. What will their quality of life be like? The Executive Director of UNICEF has said that in 1981 the life of a child would be worth less than $100. If such a sum were judiciously spent on every one of the five hundred million poorest children of the world, it would cover basic health assistance, elementary education, care during pregnancy and dietary improvement, and would ensure hygienic conditions and a water supply. In practice it has turned out too high a price for the world community. That is why, in 1981, every two seconds a child paid that price with its life.”

(Fidel Castro, Speech at the 7th Non Aligned Summit, New Delhi, 1983.)

At the Latin American and Caribbean foreign debt conference of 1985 in Havana, Carlos Serrate of Bolivia remarked:
“Either we free ourselves of the foreign debt burden, acquired without benefit to us or solution to our problems, or we doom three-quarters of humankind to a future without hope… millions of human beings who, along with a right to be born, have an obligation to pay… This means the debt is devouring humankind, devouring peoples and nation states that no matter what they do… find the debt grows and is, therefore, absolutely unpayable.”

(Carlos Serrate, Bolivian delegate, Latin American and Caribbean foreign debt conference, Havana, Cuba, 1985)

It is global finance capital, in the guise of self proclaimed ‘benign’ financial institutions such as the World Bank, the Bank of International Settlements, the International Monetary Fund, the World Trade Organisation and the Trilateral Commission, all of which are owned and controlled by the US except the BIS, and the wealthy G-whatever group of countries, all of which have the combined economic and therefore political power which continues to devastate the poor countries comprising some 80 percent of humanity who suffer constant poverty, starvation and death.

But there’s the United Nations to ensure fairness isn’t there?

The United Nations, dominated and controlled as it is by the rich world, especially the US, is but a paper tiger which despite its fine words, policies and directives, has almost no political or economic power.

“The Department of State desired that the United Nations prove utterly ineffective in whatever measures it undertook. This task was given to me, and I carried it forward with no inconsiderable success.”

(US Ambassador to the UN, Senator Daniel Moynihan.)

“There is no such thing as the United Nations. There is an international community that can be led by the only real power left in the world, and that is the US, when it suits our interests and when we can get others to go along …”

(US Ambassador to the UN John Bolton.)

“When large scale or high risk operations are contemplated and American engagement is necessary, we will be unlikely to accept UN leadership. Rather we will ordinarily rely on our own resources or those of a regional alliance – such as NATO – or an appropriate coalition – such as that assembled during Operation Desert Storm.”

(US Ambassador to the UN and Secretary of State Madeleine Albright)

“It would be some time before I fully realized that the United States sees little need for diplomacy. Power is enough.”

(Former United Nations Secretary General Boutros Boutros-Ghali.)

“A world government can intervene militarily in the internal affairs of any nation when it disapproves of their activities.”

(UN Secretary General Kofi Annan.)

“One hundred nations in the UN have not agreed with us on just about everything that’s come before them where we’re involved, and it didn’t upset my breakfast at all.”

(US President Reagan, New York Times, November 4 1983.)

“America’s foreign policy is now being run by the International Monetary Fund. When the President decides to go to war, he no longer needs a declaration of war from congress.”

(US Secretary of Labour Robert Reich, January 7 1999.)

“What the Trilateral Commission intends is to create a worldwide economic power superior to the political governments of the nation states involved. As managers and creators of the system, they will rule the future.”

(U.S. Senator Barry Goldwater, 1964, in his book “With No Apologies.”)

Another World Bank “gift” is toxic waste:

The worst kind of ‘economic logic’ of the US occurred in one of the world’s most serious disasters. Due to severe safety inefficiencies, in December 1984, the US owned Union Carbide chemical plant in Bhopal, India smothered the whole area with poisonous gas, causing some 15,000 deaths, including very many children and residents in the area, also many thousands of immediate and long term disablements and permanent illnesses, trees and animals in the wider areas also died.

“I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that.”

(Chief US economist for the World Bank Lawrence Summers, December 1991.)

The US Has Always Seen Latin America and the Caribbean As Its Own Back Yard.

When we buy a banana, orange or other fruit, we usually buy it from one of two major US owned transnational fruit companies or their foreign subsidiaries. Typical companies are United Fruit of America and General Fruit of America. These companies and their often disguised foreign subsidiaries frequently own or control most of the fruit production, but also the land, railroads, ports, banking and finance and major infrastructure of the Latin and Central American and Caribbean regions, much of Asia, Southeast Asia, Africa and much of the Middle East.


“I am against any interference in the internal affairs of the Latin American countries. But under certain conditions I consider exceptions possible.”

(US Secretary of State Henry Kissinger.)

These ‘exceptions’ seem to occur quite frequently. Just a few are listed here:

In 1916 the US landed troops in the Dominican Republic and occupied till 1924. And in 1965 the US overthrew a progressive government there. US troops occupied Cuba in 1898-1902, 1906-1909, and 1917-1923. The 1901 Cuban constitution, written by the US, gave the US the right of intervention. After earlier interventions, the US further practised this “right” at Playa Giron (the Bay of Pigs) against Fidel Castro in 1961, and was defeated.

The US still has an illegal base on Cuban soil at Guantanamo. In 1914 the US landed marines in Haiti and occupied till 1934. In 1954 the US overthrew the progressive government of Jacobo Arbenz in Guatemala, reversed its social policies of land reform and agriculture. US troops occupied Nicaragua in 1912-1925, and 1926-1933 when they set up Somoza’s National Guard which murdered Augusto Sandino (hence the Sandinistas).

The US crushed a popular uprising in Puerto Rico in 1950. The US also overthrew the popular government of Prime Minister Mohammad Mossadegh in Iran in the 1950s, when it attempted nationalisations of oil and land. In the 1960s the US and Britain overthrew the progressive and popular government of Cheddi Jagan in Guiana. The US overthrew the popular and democratically elected government of Salvador Allende in Chile in 1973 and installed the dictatorship of Pinochet, which immediately murdered many thousands and reversed popular policies. And the above incomplete list was added to by the US invasion and continuing occupation of Grenada in 1983.


“Intervention is justified as a policy of the United States whenever its citizens and capital is at stake.”

(US Secretary of State Elihu Root, 1908.)

“Intervention is justified wherever it becomes necessary to guarantee the United States’ capital and markets.”

(US President Taft, 1912.)

“We do control the destinies of Central America… Until now Central America has always understood that governments which we recognise and support stay in power, while those we do not recognise and support fail.”

(US Under Secretary of State Robert Olds, 1927.)

“I don’t see why we need to stand by and watch a nation go communist due to the irresponsibility of its own people. The issues are much too important for the Chilean voters to be left to decide for themselves.”

(US Secretary of State Henry Kissinger, referring to Chile under popular elected leader Salvador Allende.)

Two such Latin American examples are outlined briefly below.

Cheap Fruit From Nicaragua.

With US connivance and full support, the popular Nicaraguan leader Augusto Sandino was murdered in 1934 by the National Guard of US preferred dictator Anastasio Somoza Garcia (“Tacho”), a former employee of the US Rockefeller Foundation.


“That guy may be a son of a bitch, but he’s our son of a bitch.”

(US President Roosevelt, on an earlier Nicaraguan dictator Anastasio Somoza.)

In 1956, with further US support, another dictator Luis Somoza was put in power. Anastasio II “Tachito”
(Little Tacho) became head of the National Guard and became President in 1967.

“Now that’s the kind of anti-communist we like to see down there.”

(US President Nixon, on another Nicaraguan dictator Luis Somoza, British television documentary, November 15 1983.)

The popular Sandinista revolution and support for the FSLN obtained power in Managua in 1979 and was spreading to the rest of the country with socialist policies such as, land distribution and cooperative farming, health, education and literacy. The influence of Cuba and Nicaragua spreading to other Latin American countries such as El Salvador frightened the US out of its wits.

“The United States could never permit another Nicaragua, even if preventing it meant employing the most reprehensible means.”

(Zbigniew Brzezinski, June 1980.)

The CIA perpetrated the mining of the Nicaraguan port of Corinto. And with the power of its armaments and media support for opposition groups instigated a take-over by the Chamorra government of middle class business, property and land owners.

Cheap Fruit From Guatemala.

One way or another, if the peoples of these countries dare to take over what is rightfully theirs, the US will soon intervene to get it back for US owners and shareholders. At one time Guatemala was virtually controlled by the US United Fruit Company. Now other US transnational companies have moved in.

President Jacobo Arbenz, elected in 1952 with 72 percent of the votes (that’s a bigger majority than any British Parliament or the US government), instituted land reform which involved taking over land owned by the US United Fruit company, with compensation at a valuation United Fruit itself had made for tax purposes: $600,000. United Fruit rejected this and the US Government on behalf of United Fruit claimed $16,000,000 from Guatemala. The US invaded Guatemala in 1954 and Arbenz was overthrown and land was restored to the United Fruit company. Dulles called it “a new and glorious chapter to the already great tradition of the American States.” Justification for the invasion, as usual, was “international communism.”

A year before the invasion Eisenhower had said:

“Any nation’s right to a form of government and economic system of its own choosing is inalienable… Any nation’s attempt to dictate to other nations their form of government is indefensible.”

(US President Eisenhower, April 16 1953.)

The day after the invasion the Guatemalan Government urged the UN Security Council to be convened to deal with the events, but was turned down by the President of the Security Council Henry Cabot Lodge – who I’ll introduce you to below.

Nobody’s saying it was and inside job, but Walter Bedell Smith, Director of the CIA before Dulles, became President of the United Fruit corporation after Arbenz was overthrown; Secretary of State John Dulles had been legal advisor to the United Fruit corporation; his brother, CIA Director Allen Dulles was President of the United Fruit corporation; Assistant Secretary of State for Inter-American Affairs John Moors Cabot was a large shareholder of United Fruit; and that already mentioned unbiased US statesman, Henry Cabot Lodge, US Ambassador to UN and President of UN Security Council was on the board of directors of United Fruit.

Cheap Tin and Tungsten From Vietnam.

Vietnam asks:

“…I saw the helicopters… Americans moving towards our village… we sat there huddled together… American appeared at the entrance… fired point blank at grandmother Toan. She sank slowly to the floor… grenade… I crawled out… bodies of my sister, little brother, uncle Duc, cousin Thu and her baby… Americans… mutilated bodies with bayonets… baby in convulsions… I hid… heard uncle Huong’s voice… I asked him “is anyone else alive?” “No little one, everyone’s killed.” Please, tell me why were they all killed?”

(Twelve year old Vo Thi Lien, sole survivor of the US Son My massacre
(My Lai on US military maps) March 16 1969.)

US President Eisenhower had already answered Vo Thi’s question when she was only four years old:
“Let us suppose we lose Indochina. The tin and tungsten that we so greatly value from that area would cease coming. We are voting for the cheapest way that we can to prevent the occurrence of something that would be of a most terrible significance to the United States of America, our security, our power and ability to get certain things we need from the riches of the Indochinese territory and from Southeast Asia.”

(US President Eisenhower, justifying US aid to France’s war against Vietnam, Aug 4 1953.)

“It is rich in many raw materials such as tin, oil, rubber and iron ore… This area has great strategic value.”

(US Secretary of State Dulles referring to Vietnam, March 29 1954.)

“One of the world’s richest areas is open to the winner of Indo-China. That’s behind the growing US concern… tin, rubber, rice, key strategic raw materials are what the war is really about. The US sees it as a place to hold – at any cost.”

(US News and World Report, April 4 1954.)

“Geographically, Vietnam stands at the hub of a vast area of the world… He who holds or has influence in Vietnam can affect the future of the Philippines and Formosa [now Taiwan] to the East, Thailand and Burma with their huge rice surpluses to the West, and Malaysia and Indonesia with their rubber, ore and tin to the South… large store-houses of wealth and population can be influenced and undermined.”

(Former US Ambassador to South Vietnam, Henry Cabot Lodge, Boston Sunday Globe, Feb 28 1965.)

The US war against Vietnam was another war of capitalist domination of the world’s cheap labour and raw materials. The overt fighting has ceased, but the war in terms of economic cost will continue for many generations, such as chemical poisoning of the land and fisheries by the US Dioxin defoliant and children and farmers still being killed by explosives in the soil.

To date, not one cent of the $3.25 billion 1973 Paris Agreement agreed by the US has been paid to Vietnam. Four years later, in 1977, Vietnam had to start paying some $145 million of US aid debts of the former US puppet government of South Vietnam demanded by the World Bank, the International Monetary Fund, and other US global financial institutions.
“Well, the damage was mutual… We owe them nothing.”

(US President Carter, on Vietnam, 1978.)

“United States policy is exactly to squeeze Vietnam… If Vietnam suffers economic hardships, I think that is just great.”

(US National Security Council representative Roger Sullivan,, April 1980.)

But We Give Them Aid, We Gave Them… Built Them…

Most people seem to think that Western so-called ‘aid’ is free. Every dollar of this ‘aid’ invested in the 1970s in ‘underdeveloped’ countries returned some 4.2 dollars to multinational corporations in this ‘charitable’ capitalist world. In Red Nose Week 1999, for every pound so generously donated, some £4.8 came back to Britain from those poor countries in profits and debts.

Crucial to any useful understanding of poverty is to understand that capital, to continue to make profits for its owners, must continually grab ever larger amounts of ever cheaper labour and raw materials from the poor countries, which should be using their raw materials for themselves, if there’s any left.

We who are also unwitting victims, who nevertheless share in the benefits of such a system; will solve no problems by feeling guilty and giving charity. The hungry people do not require that of us. What they require of us is control of a government that will control this ridiculously wealthy socio-economic system which perpetrates this economic crime, this system which exploits and makes mere appendages of capital of us all.


  1. Can you provide a citation for the Cheney quote? Not a rhetorical question, as I disagree entirely with Cheney’s worldview, but just curious.

    Comment by Chris Swenson — May 16, 2018 @ 4:45 pm

  2. This wasn’t accurate. It was actually those written in an article about Cheney in Harper’s Magazine.


    Comment by louisproyect — May 16, 2018 @ 7:49 pm

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