Blogs > Liberty and Power > Iraq: "Privatization," or "Crony Corporatism?"

Jun 29, 2004 5:09 am

Iraq: "Privatization," or "Crony Corporatism?"

A excellent example of the squandered aid effort in Iraq which I discussed here yesterday can be found in today's New York Times op-ed column by Paul Krugman, "Who Lost Iraq?."

While Paul Bremer screamed about the need for"Privatization," key positions went to relatives and cronies of the Bush administration with little or no expertise in the fields in question, and massive, often no-bid contracts went to those corporations close to operatives like the Vice President, Dick Cheney.

Imperialism seldom changes its real face, however much cosmetics are applied. Anyone exploring American adventures in national building such as in the Philippines at the turn of the century or Vietnam later, will find the same pattern, also present in many of our aid programs around the world.

For those with a little Spanish, Latinos in the 1960s used to laugh at JFK's"Alliance for Progress," by saying it with emphasis on the word"para,""La Alianza Para El Progreso!" -- The Alliance"Stops" Progress.

Now the search goes on, minus Chalabi, for some Iraqi cronies who will do our bidding in exchange for a share of the"state building" loot, such as taxes and oil revenues. While the Marxist/Leninist explanation of Imperialism missed the mark badly in assessing that phenomenon, I always liked their use of the term"Compradors," to describe the stooges, or middlemen, that Imperialism used to attempt to legitimatize Western Imperialism in China and elsewhere.

Ironically, American policy makers often criticized"our" Compradors such as Fulgencio Batista for modestly opposing a few American actions. Some Americans couldn't comprehend that to have any legitimacy at all with their own people, our Compradors had to show a little nationalistic solidarity.

In the Philippines, our military administrators in the Bureau of Insular Affairs (BIA2), not to be confused with the Bureau of Indian Affairs (BIA1), which administered Imperialism on our Indian tribes in the U.S., and who really ran the Philippines, often understood this Comprador relationship better than civilian administrators such as the Governor-General, William Howard Taft. The BIA records in the National Archives offer ample evidence of this Comprador relationship and of efforts to explain it to people like Taft. Of course, many in BIA2, had received their training in BIA1, just as some of our commanders in the Philippine Insurgency had learned their counterinsurgency tactics against the Indians on the Great Plains. The command,"The Indians must be punished," issued by a General in Kansas in 1864, is not all that different from the cry in the Philippines in 1898, of"Civilize 'em with a Krag [rifle]!"

For a more extended discussion, see my essay on Taft in John V. Denson, ed., Reassessing the Presidency: The Rise of the Executive State and the Decline of Freedom, or the edited audio-tape of same, both available from the Mises Institute, at

Such growing Imperial bureaucracies going back into the 19th century offer a refutation to the silly notion that the US is a"reluctant,""ambivalent," johnny-come-lately to the Empire Game, which has somehow been"thrust upon us." Now our new Ambassador, John Negroponte, replaces Bremer. Given Negroponte's experience in American Imperialism in Latin America, does anyone question who will be running the show and why he was appointed to do so?

When a young Henry Stimson was going out to run the Philippines, he wrote his fellow Yale man, William Howard Taft, asking how he should comport himself. Taft, replied,"as a Proconsul." I don't think anyone will need to tell Negroponte that is his role in Iraq.

What is often missed in describing this Corporatist, financial cronyism, is the intellectual cronyism which accompanies it. Some writers appear to argue that intellectuals, such as Niall Ferguson's recent books on Empire, suggested that alternative to the politicians and policy makers. That is nonsense!

The Caesars had their Imperial Toadies, or Court Intellectuals, but Roman Imperialism both preceded them and would have gone forward without them. The Caesars also had their equivalents of today's think-tanks and Chairs in universities, and that was part of the reward for"intellectual cronyism"; the effort to legitimatize Imperialism.

American universities today are, of course, deeply a part of the Empire Game, but that will have to wait as the subject for a future discussion.

The most honest warning about the consequences of intellectual cronyism that I know of was issued by the great Progressive writer, Walter Weyl, one of the founders of The New Republic when his fellow founder, with Walter Lippman, Herbert Croly went off to, as Croly imagined it, influence Woodrow Wilson. Weyl predicted that Wilson would use Croly for his own ends, and that is what happened. Today's would-be Court Intellectuals might benefit from that tale.

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More Comments:

William Marina - 6/29/2004

Dear Orson,
Much depends on how you define Imperialism.
The General's command led to the Sand Creek/Chivington's Massacre.
Bill Marina

Orson Olson - 6/29/2004

Relevant to your 1864 "Indians must be punished" quotation, I'm researching Simon Fraser University economist Douglas Allen's argument (wherein he does not actually use the term Imperialism), that US land distribution - through the Hometsead Act - achieved imperialist ends.

Thus far I have found no good evidence for it despite the irresitable logic of state power.