The Role of the Industrial Revolution and Modern Warfare in Third World Colonization

History of the World Part 7 – The Age of Industry

BBC (2018)

Film Review

This second-to-last focuses on the role of the Western industrial revolution in facilitating wholesale colonization of the Third World: British opium wars launched against China to make the world safe for western industrial capitalism, the US Civil War, Japan’s war against their traditional Samurai class, and World War I.

In the middle of the episode, the filmmakers take a break from war to depict the brutal enslavement of the Congo (as his personal fiefdom) by Belgian King Leopold II and to re-enact the invention of the steam engine and railroad, as well as Leo Tolstoy’s efforts to educate and free his serfs.

Part 7 begins with the brutal opium wars the UK used to force China to open up to western trade. At the beginning of the 19th century, a massive British demand for tea was draining their treasury of the silver European countries had expropriated from South America. However because China refused to import western goods, the British had no legal way to get  this silver back.

They eventually fell back illegal opium smuggling to pry open the Chinese import market. The result was an estimated 17 million Chinese opium addicts by 1839. The emperor’s clampdown on smuggling led to a British declaration of war. China’s primitive wooden warships were no match for the gunships born of Britain’s industrial revolution. After two wars, the peace treaty the UK imposed ceded Hong Kong to British control and forced China to open all their markets to western trade.

Modern weaponry would also give the industrialized North a clear advantage over the agricultural South in a Civil War resulting that killed over 650,000.

When Japan refused to open their country to international trade, it was US warships that fired on their capitol in 1853. When Japan modernized their military with Western weapons and tens of thousands of new recruits, their elite Samurai class, solely responsible for centuries for the emperor’s protection, rebelled. In 1877 an army of 40,000 Samurai faced certain defeat against a modern military force with at least twice as many men and Western military hardware.

The segment about Leopold II’s personal conquest of the Congo (and its rich mineral and human resources) under the cover of a “humanitarian charity” is well worth watching. Likewise the one about German foreign minister Arthur Zimmermann’s efforts to form a military alliance with Mexico during World War I – to help them reclaim territory the US stole during the US-Mexican War (1846-1848).

Otherwise the openly anti-German propaganda in the final segment totally obscures the real origins of World War I, as revealed by recently declassified British and US documents. This is covered really well in James Corbett’s 2018 documentary The World War I Conspiracy:. The World War I Conspiracy

 

 

Al Jazeera’s Take on China

The China Complex: The Big Picture – Part 1

Al Jazeera (2019)

Film Review

This two-part documentary traces historical and cultural linkages to China’s current authoritarian style of government. It features commentary by a range of Chinese experts on whether China’s policy of “stability at all costs” is good or bad for the Chinese economy and people.

In my view the series’s key weakness of is its failure to examine the dilemma China faces in suppressing violent dissent (eg the Tibetan, Uygher and Hong Kong separatist movements) that is aided and abetted by foreign powers (mainly the CIA). There is a vague mention at the end of Part 2 about the foreign powers behind the Hong Kong protests putting China in a “lose-lose” situation (ie they potentially lose political control if they do nothing vs losing face internationally if they crack down on violent protestors).

The second major weakness is the documentary’s failure to explore the role of China’s unique monetary system in its unprecedented economic growth. At present it’s the only global power in which the government issues most of the nation’s money by spending it directly into the economy (aka sovereign money). In other countries, private banks create the vast majority of money in circulation when they issue loans.*

The most pro-China of the commentators attributes China’s economic miracle to their “stability at all cost” (ie repression of dissidents and “hooligans”). I don’t believe this is true. Freedom from the massive public and private debt that plague most industrialized nations has made for much more rapid (public and private) infrastructure development in China.

Aside from these weaknesses, the documentary provides valuable insight into Chinese history and culture, topics rarely taught in western schools. Part 1 covers the period from the inauguration of dynastic rule by Yu the Great in 2070 BC to the 1989 Tienanmen Square protest. Most westerners are unaware that China was a major international power from the 4th – 18th century AD, with a vast trading empire and cultural influence extending well beyond its borders. Its subjects enjoyed prosperity equal to that to that of Europe prior to their colonization by England and other European power.


*In the US, UK and New Zealand, for example, government only creates 2-3% of money in circulation. 97-98% is created out of thin air (as credit) when banks issue loans. Even governments borrow from banks to pay for spending that exceeds tax revenue (the main source of government debt). See The Battle for Public Control of Money

 

Hong Kong: Aged and Abandoned

Hong Kong: Aged and Abandoned

Al Jazeera (2016)

Film Review

This shocking Al Jazeera documentary concerns Hong Kong’s 500,000 elderly residents who live in abject poverty in a city with 65 billionaires.

At present, Hong Kong seniors can’t qualify to receive a pension unless their adult children sign a document affirming their inability to look after them. Many refuse to sign out of shame for their failure to provide for their parents.

Hong Kong elders who qualify for pensions find $100 a month totally inadequate to meet their basic needs. Thus they supplement their income by scavenging rubbish bins for cardboard and items they can hawk at street markets.

Many live in so-called “coffin homes” – in warehouses of large beds stacked on top of one another.

Snowden: The Book Behind the Film

snowden-files

The Snowden Files: The Inside Story of the World’s Most Wanted Man

By Luke Harding

Guardian Books (2014)

Book Review

The Snowden Files is the fast-paced thrilleresque account of whistleblower Edward Snowden’s dramatic escape from US capture in Hong Kong, following his leak of thousands of computer files documenting Orwellian NSA surveillance activites. Earlier this year, this book was remade as the motion picture Snowden.

Published in the UK, The Snowden Files provides substantial background on the NSA’s British counterpart GCHQ, whose spying on innocent civilians is even more egregious than the NSA’s, owing to the country’s weaker civil liberties protections. In fact, the NSA relies on GCHQ to engage in certain types of snooping (on Americans) that are expressly forbidden in the US.

When Guardian reporter Glenn Greenwald first broke the story that Internet giants Google, Facebook, Apple and Yahoo were secretly turning over vast amounts of customer data to the NSA, his editors were forced to release the story online from the Guardian’s New York office to avoid prosecution in Britain. Shortly after the story’s release, British police destroyed all the hard drives in the Guardian’s London office – in the belief they continued copies of NSA files Snowden had released.

I especially appreciated the book’s epilogue about Snowden’s life in Russia, as it dispels much of the western propaganda about his selling NSA secrets to Russia, his refusal to learn Russian (he speaks enough to do his own grocery shopping and is working to improve his fluency), and his (non-existent) job with a Russian tech company. At the time of publication, Snowden supported himself through savings and speaking fees.

Four other government whistleblowers (Coleen Rowley, Jesselyn Radack, Ray McGovern and Thomas Drake) visited Snowden in Moscow in 2013, and the book recounts their meeting.

The book’s major shortcoming is its embarrassing fact checking lapses – for example the assertion that Putin “invaded” Crimea in 2014. Most independent sources confirm that in 2014 the legislature of the Autonomous Republic Crimea held a referendum in which 95.5% voted to secede from Ukraine and join the Russian Federation. The referendum was triggered when a US-sponsored fascist coup seized the government in Kiev.

Chasing Edward Snowden

Chasing Edward Snowden

Anonymous (2016)

Film Review

Chasing Edward Snowden is an extremely well made documentary about NSA whistleblower Edward Snowden’s escape from Hong Kong to Moscow and the role played by Wikileaks and the Hong Kong government in facilitating his escape.

Prior to seeing the film, I was unaware Snowden (under US indictment for treason) had reached out for Wikileaks’ help nor that Putin initially turned down his asylum request when he refused to work for the FSB.

All this changed, when France, under US pressure, denied the Bolivian presidential jet access to French airspace. Acting on false rumors spread by Wikileaks, the US and France believed President Morales had smuggled Snowden onto his plane.

Because the French action contravened Geneva conventions, world opinion turned in Snowden’s favor, persuading Putin to reverse himself and grant his asylum petition.


*FSB is the Russian state security agency that replaced the KGB.

Kim Dotcom and America’s Diabolic Intellectual Property Laws

kim dotcom

The Secret Life of Kim Dotcom: Spies, Lies and the War for the Internet

By David Fisher

Paul Little Books (2013)

Book Review

Kim Dotcom, a recent German billionaire immigrant to New Zealand, continues to fight a US extradition order for alleged Internet piracy, money laundering and racketeering. Dotcom, who legally changed his name from Kim Schmitz in 2001, was first arrested January 20, 2012 – during a military-style assault by an elite anti-terrorist team on his Auckland home. It would be nearly four years, in late 2015, before the New Zealand government convened an extradition hearing. The court granted the request for extradition, which is currently under appeal.

The case has caused great embarrassment for New Zealand prime minister John Key. Not only did the Government Security Communications Bureau (GSCB) illegally spy on Dotcom primary to his arrest, but New Zealand courts ruled the arrest warrant and the government order to seize his assets were illegal.

Fisher provides an excellent summary of Dotcom’s financial empire and the legal and technological intricacies of the case against him. The book paints an ugly picture of a servile National government that seems to view New Zealand as a US colony and happily suspends the New Zealand Bill of Rights at the behest of the FBI and US corporate interests – in this case the Motion Picture Association of America (MPAA).

The case revolves around Megaupload, a service Dotcom created in 2004 (preceding Dropbox by three years) enabling Internet users to store and share large files. The MPAA cried foul when Megaupload users began sharing downloaded new release films.

Fisher (and the lawyers Dotcom consulted prior to starting Megaupload) maintain he is in total compliance with the US Digital Millennium Copywrite Act (DMCA). This law holds sharing websites (like YouTube) harmless for copyrighted materials posted by third parties, provided the sites remove them after being notified by copyright owners. Dotcom’s lawyers also contend that copyright violation isn’t an extraditable offense. This is why the US government has added additional charges of money laundering and racketeering.

Despite Dotcom’s status as a New Zealand resident, the US Department of Justice is claiming jurisdiction because all global email traffic passes through eastern Virginia. Dotcom (and Fisher) believe the FBI targeted the billionaire after he made a $50,000 donation to Wikileaks. Additionally, Fisher believes Dotcom may have influenced Edward Snowden’s decision to flee to Hong Kong. Dotcom started Megupload in Hong Kong prior to moving to New Zealand and still has major business ties there.

Dotcom’s appeal against the extradition order will likely extend into late 2017.

Facebook’s Billionaire Tax Refugee

depardieu

French actor Gerard Depardieu

In January, Forbes reported that Facebook’s billionaire co-founder Eduardo Severin had renounced his U.S. citizenship to move to Singapore, where the top tax rate is 20%. The article about millionaires and billionaires fleeing high western tax rates was triggered by French actor Gerard Depardieu’s renunciation of his French citizenship to move to Russia. He chose Russia based on its top tax rate of 13% on individuals and 20% on corporations (except for the oil and gas industry – see below). France had just enacted a 75% tax on millionaires to pay off the 1.7 trillion euros it owes to international banksters. Socialist president Francois Hollande sees taxing the rich as a better alternative than laying off public servants and cutting health care, education, and pensions like Greece, Spain, Portugal, and Italy.

Forbes clearly disagrees. Predictably the article represents the traditional neo-classical economic viewpoint – slashing public services is always a better alternative than increasing taxes on the rich. They also leave out the most important part of the story – namely why income taxes in Singapore and Russia are so low.

The real reason income is taxed at a low rate in Singapore and Russia is because both countries have adopted a modified Land Value Tax (LVT). An LVT is a tax on unimproved land, resources and the cultural commons (e.g. public airwaves). It was journalist Henry George who first proposed replacing taxes on income and capital with a single LVT in his 1879 international bestseller Progress and Poverty. See Progress and Poverty: the Suppressed Economics Classic.

Singapore’s Economic Miracle

Singapore, a flourishing city-state of 5.3 million people, faced massive unemployment and a major housing crisis when it first gained its independence from Malaysia in 1965. Its leaders immediately launched a modernization program funded by an LVT. Although Singapore no longer relies on a single tax, income taxes still remains extremely low with corporate rates between 8.5 and 17%.

Thanks to the LVT, Singapore recovered much more rapidly than western countries from the 2008 economic collapse. In 2011 a 12% increase in GDP enabled them to pay a dividend to all adult citizens of approximately $269 each (total $1.22 billion).

How Putin Saved Russia’s Moribund Economy

Russia’s LVT, introduced by President Vladimir Putin as part of a 2001 tax reform package, falls more heavily on mineral (e.g. oil and gas) extraction than unimproved land. Taxes on oil and gas revenues amount to approximately 45% of net sales (compared to 12 percent in the construction industry and 16.5 percent in the telecommunications industry). Property owners pay a tax ranging from 0.1 – 0.3% on land value (and a comparable rate on state-owned land that they lease).

Experience with LVT in other countries

Hong Kong (1985) – thanks to LVT, enjoys low taxes, low inflation, high investment and high salaries. Often voted the world’s best city for business and the freest for residents. According to Bloomberg’s they, too, paid a $700 dividend to all adult residents in 2011. Unfortunately since rejoining China, Hong Kong has been gradually replacing land and resource taxes with income tax. This has resulted in a return of land speculation and increasing income inequality. The Hong Kong real estate holdings of China’s multimillionaire president Xi Jinping are valued at more than $24.1 million.

Taiwan (1949) – following the Communist takeover of mainline China, Chinese nationalists under General Chiang Kai-shek fled to Formosa (Taiwan), a brutally poor feudal island controlled by a handful of rich farmers. Chiang Kai-Sheck, a follower of Sun Yat-Sen, the first Chinese president and  a great admirer of Henry George, introduced a LVT. When plantation owners found themselves paying as much in taxes as they were collection in rent, they sold off their excess land to peasant farmers. Taiwan went on to set world records with growth rates of 10% per annum.

Denmark (1957) – the small Georgist Justice Party won seats in parliament and a role in the ruling coalition. A year later, inflation had gone from 5% to under 1%; bank interest dropped from 6.25% to 5%. By 1960, 100,000 unemployed (out of a population of 5 million) had found jobs and received the highest average pay increase in Danish history. In the 1960s, a media backlash funded by wealthy bankers and corporations caused the Justice Party to lose its seats. Land taxes were decreased and income tax and sales tax (currently at 25%) drastically increased. Inflation quickly rose to 5% and by 1964 reached 8%. Land prices began to sky-rocket, increasing 19-fold from 1960 to 1981 increasing 19-fold.

Estonia (1990s).- enacted a 2% LVT following the break-up of the Soviet Union. It was much easier to collect than the income taxes enacted by other former Soviet republics, more successful than trying to collect from others, succeeding over 95% of the time. It’s largely the LVT that has enabled Estonia to become the electric car capitol of the world. In addition to installing 165 electric vehicle fast-charging stations country-wide, it provides a 50% subsidy for residents who purchase electric vehicles.

Other jurisdictions that opted for LVT:

  • Ethiopia 1990s
  • Saudi Arabia, Kuwait, UAR – resource-based LVT on oil and gas exports
  • Baja California (Mexico) 1990s
  • British Columbia (1912) – resource-based LVT on forestry
  • Vermont 1978
  • Kansas City 1930s
  • Pennsylvania – Pittsburgh and Scranton in 1975 and 18 other cities following suit in the 1990s. Housing costs and crime in both Pittsburgh and Scranton have trended the lowest in the US, despite the collapse of the steel industry. Both avoided the 2000-2007 real estate bubble and 2008 collapse. Foreclosure rates in Pittsburgh remain the lowest in the country.

Single tax colonies founded by Henry George’s American followers:

  • Free Acres (New Jersey) 1910
  • Arden (Delaware) 1900
  • Fairhope (Alabama) 1894

 

photo credit: igorjan via photopin cc