A New American Century? Iraq and the hidden euro-dollar wars

[Guest guest]

by F. William Engdahl

 

Despite the apparent swift U.S. military success in Iraq, the U.S. dollar has yet to benefit as safe haven currency. This is an unexpected development, as many currency traders had expected the dollar to strengthen on the news of a U.S. win. Capital is flowing out of the dollar, largely into the Euro. Many are beginning to ask whether the objective situation of the U.S. economy is far worse than the stock market would suggest. The future of the dollar is far from a minor issue of interest only to banks or currency traders. It stands at the heart of Pax Americana, or as it is called, The American Century, the system of arrangements on which America's role in the world rests.

 

Yet, even as the dollar is steadily dropping against the Euro after the end of fighting in Iraq, Washington appears to be deliberately worsening the dollar fall in public comments. What is taking place is a power game of the highest geopolitical significance, the most fateful perhaps, since the emergence of the United States in 1945 as the world's leading economic power.

 

The coalition of interests which converged on war against Iraq as a strategic necessity for the United States, included not only the vocal and highly visible neo-conservative hawks around Defense Secretary Rumsfeld and his deputy, Paul Wolfowitz. It also included powerful permanent interests, on whose global role American economic influence depends, such as the influential energy sector around Halliburton, Exxon Mobil, Chevron Texaco and other giant multinationals. It also included the huge American defense industry interests around Boeing, Lockheed-Martin, Raytheon, Northrup-Grumman and others. The issue for these giant defense and energy conglomerates is not a few fat contracts from the Pentagon to rebuild Iraqi oil facilities and line the pockets of Dick Cheney or others. It is a game for the very continuance of American power in the coming decades of the new century. That is not to say that profits are [not] made in the process, but it is purely a byproduct of the global strategic issue.

 

In this power game, least understood is the role of preserving the dollar as the world reserve currency, as a major driving factor contributing to Washington's power calculus over Iraq in the past months. American domination in the world ultimately rests on two pillars -- its overwhelming military superiority, especially on the seas; and its control of world economic flows through the role of the dollar as the world's reserve currency. More and more it is clear that the Iraq war was more about preserving the second pillar -- the dollar role -- than the first, the military. In the dollar role, oil is a strategic factor.

 

American Century: the three phases

 

If we look back over the period since the end of World War II, we can identify several distinct phases of evolution of the American role in the world. The first phase, which began in the immediate postwar period 1945-1948 and the onset of Cold War, could be called the Bretton Woods Gold Exchange system.

 

Under the Bretton Woods system in the immediate aftermath of the World War, the order was relatively tranquil. The United States had emerged from the War clearly as the one sole superpower, with a strong industrial base and the largest gold reserves of any nation. The initial task was to rebuild Western Europe and to create a NATO Atlantic alliance against the Soviet Union. The role of the dollar was directly tied to that of gold. So long as America enjoyed the largest gold reserves, and the U.S. economy was far the most productive and efficient producer, the entire Bretton Woods currency structure from French Franc to British Pound Sterling and German Mark was stable. Dollar credits were extended along with Marshall Plan assistance and credits to finance the rebuilding of war-torn Europe. American companies, among them oil multinationals, gained nicely from dominating the trade at the onset of the 1950's. Washington even encouraged creation of the Treaty of Rome in 1958 in order to boost European economic stbility and create larger U.S. export markets in the bargain. For the most part, this initial phase of what Time magazine publisher Henry Luce called 'The American Century', in terms of economic gains, was relatively 'benign' for both the U.S. and Europe. The United States still had the economic flexibility to move.

 

This was the era of American liberal foreign policy. The United States was the hegemonic power in the Western community of nations. As it commanded overwhelming gold and economic resources compared with Western Europe or Japan and South Korea, the United States could well afford to be open in its trade relations to European and Japanese exports. The tradeoff was European and Japanese support for the role of the United Sates during the Cold War. American leadership was based during the 1950's and early 1960's less on direct coercion and more on arriving at consensus, whether in GATT trade rounds or other issues. Organizations of elites, such as the Bilderberg meetings, were organized to share the evolving consensus between Europe and the United States.

 

This first, more benign phase of the American Century came to an end by the early 1970's.

 

The Bretton Woods Gold Exchange began to break down, as Europe got on its feet economically and began to become a strong exporter by the mid-1960's. This growing economic strength in Western Europe coincided with soaring U.S. public deficits as Johnson escalated the tragic war in Vietnam. All during the 1960's, France's de Gaulle began to take its dollar export earnings and demand gold from the U.S. Federal Reserve, legal under Bretton Woods at that time. By November 1967 the drain of gold from U.S. and Bank of England vaults had become critical. The weak link in the Bretton Woods Gold Exchange arrangement was Britain, the 'sick man of Europe'. The link broke as Sterling was devalued in 1967. That merely accelerated the pressure on the U.S. dollar, as French and other central banks increased their call for U.S. gold in exchange for their dollar reserves. They calculated with the soaring war deficits from Vietnam, it was only a matter of months before the United States itself would be forced to devalue againstgold, so better to get their gold out at a high price.

 

By May 1971 the drain of U.S. Federal Reserve gold had become alarming, and even the Bank of England joined the French in demanding U.S. gold for their dollars. That was the point where rather than risk a collapse of the gold reserves of the United States, the Nixon Administration opted to abandon gold entirely, going to a system of floating currencies in August 1971. The break with gold opened the door to an entirely new phase of the American Century. In this new phase, control over monetary policy was, in effect, privatized, with large international banks such as Citibank, Chase Manhattan or Barclays Bank assuming the role that central banks had in a gold system, but entirely without gold. 'Market forces' now could determine the dollar. And they did with a vengeance.

 

The free floating of the dollar, combined with the 1973 rise in OPEC oil prices by 400% after the Yom Kippur War, created the basis for a second phase of the American Century, the Petrodollar phase.

 

Recycling petrodollars

 

Beginning the mid-1970's the American Century system of global economic dominance underwent a dramatic change. An Anglo-American oil shock suddenly created enormous demand for the floating dollar. Oil importing countries from Germany to Argentina to Japan, all were faced with how to export in dollars to pay their expensive new oil import bills. OPEC oil countries were flooded with new oil dollars. A major share of these oil dollars came to London and New York banks where a new process was instituted. Henry Kissinger termed it, 'recycling petrodollars'. The recycling strategy was discussed already in May 1971 at the Bilderberger meeting in Saltsjoebaden, Sweden. It was presented by American members of Bilderberg, as detailed in the book Mit der Ölwaffe zur Weltmacht.[1]

 

OPEC suddenly was choking on dollars it could not use. U.S. and UK banks took the OPEC dollars and relent them as Eurodollar bonds or loans, to countries of the Third World desperate to borrow dollars to finance oil imports. The buildup of these petrodollar debts by the late 1970's laid the basis for the Third World debt crisis in the 1980's. Hundreds of billions of dollars were recycled between OPEC, the London and New York banks and back to Third World borrowing countries.

 

By August 1982 the chain finally broke and Mexico announced it would likely default on repaying Eurodollar loans. The Third World debt crisis began when Paul Volcker and the U.S. Federal Reserve had unilaterally hiked U.S. interest rates in late 1979 to try to save the failing dollar. After three years of record high U.S. interest rates, the dollar was 'saved', but the entire developing sector was choking economically under usurious U.S. interest rates on their petrodollar loans. To enforce debt repayment to the London and New York banks, the banks brought the IMF in to act as 'debt policeman'. Public spending for health, education, welfare was slashed on IMF orders to ensure the banks got timely debt service on their petrodollars.

 

The Petrodollar hegemony phase was an attempt by the United States establishment to slow down its geopolitical decline as the hegemonic center of the postwar system. The IMF 'Washington Consensus' was developed to enforce draconian debt collection on Third World countries, to force them to repay dollar debts, prevent any economic independence from the nations of the South, and keep the U.S. banks and the dollar afloat. The Trilateral Commission was created by David Rockefeller and others in 1973 in order to take account of the recent emergence of Japan as an industrial giant and try to bring Japan into the system. Japan, as a major industrial nation, was a major importer of oil. Japanese trade surpluses from export of cars and other goods was used to buy oil in dollars. The remaining surplus was invested in U.S. Treasury bonds to earn interest. The G-7 was founded to keep Japan and Western Europe inside the U.S. dollar system. From time to time into the 1980's various voices in Japan would call for three currncies -- dollar, German mark and yen -- to share the world reserve role. It never happened. The dollar remained dominant.

 

From a narrow standpoint, the Petrodollar phase of hegemony seemed to work. Underneath, it was based on ever-worsening economic decline in living standards across the world, as IMF policies destroyed national economic growth and broke open markets for globalizing multinationals seeking cheap production outsourcing in the 1980's and especially into the 1990's.

 

Yet, even in the Petrodollar phase, American foreign economic policy and military policy was dominated by the voices of the traditional liberal consensus. American power depended on negotiating periodic new arrangements in trade or other issues with its allies in Europe, Japan and East Asia.

 

A Petro-euro rival?

 

The end of the Cold War and the emergence of a new Single Europe and the European Monetary Union in the early 1990's, began to present an entirely new challenge to the American Century. It took some years, more than a decade after the 1991 Gulf War, for this new challenge to emerge full-blown. The present Iraq war is only intelligible as a major battle in the new, third phase of securing American dominance. This phase has already been called, 'democratic imperialism', a favorite term of Max Boot and other neo-conservatives. As Iraq events suggest, it is not likely to be very democratic, but definitely likely to be imperialist.

 

Unlike the earlier periods after 1945, in the new era, the U.S. freedom to grant concessions to other members of the G-7 is gone. Now raw power is the only vehicle to maintain American long-term dominance. The best expression of this argument comes from the neo-conservative hawks around Paul Wolfowitz, Richard Perle, William Kristol and others.

 

The point to stress, however, is that the neo-conservatives enjoy such influence since September 11 because a majority in the U.S. power establishment finds their views useful to advance a new aggressive U.S. role in the world.

 

Rather than work out areas of agreement with European partners, Washington increasingly sees Euroland as the major strategic threat to American hegemony, especially 'Old Europe' of Germany and France. Just as Britain in decline after 1870 resorted to increasingly desperate imperial wars in South Africa and elsewhere, so the United States is using its military might to try to advance what it no longer can by economic means. Here the dollar is the Achilles heel.

 

With creation of the Euro over the past five years, an entirely new element has been added to the global system, one which defines what we can call a third phase of the American Century. This phase, in which the latest Iraq war plays a major role, threatens to bring a new, malignant or imperial phase to replace the earlier phases of American hegemony. The neo-conservatives are open about their imperial agenda, while more traditional U.S. policy voices try to deny it. The economic reality faced by the dollar at the start of the new Century, defines this new phase in an ominous way.

 

There is a qualitative difference emerging between the two initial phases of the American Century -- that of 1945-1973, and of 1973-1999 -- and the new emerging phase of continued domination in the wake of the 9.11 attacks and the Iraq War. Post-1945 American power before now was predominately that of a hegemon. While a hegemon is the dominant power, in an unequal distribution of power, its power is not generated by coercion alone, but also by consent among its allied powers. This is because the hegemon is compelled to perform certain services to the allies such as military security or regulating world markets for the benefit of the larger group, itself included. An imperial power has no such obligations to allies, and not the freedom for such, only the raw dictates of how to hold on to its declining power -- what some call 'imperial overstretch'. This is the world which neo-conservative hawks around Rumsfeld and Cheney are suggesting America has to dominate, with a policy of pre-emptive war.

 

A hidden war between the dollar and the new Euro currency for global hegemony is at the heart of this new phase.

 

To understand the importance of this unspoken battle for currency hegemony, we first must understand that since the emergence of the United States as the dominant global superpower after 1945, U.S. hegemony has rested on two unchallengeable pillars. First, the overwhelming U.S. military superiority over all other rivals. The United States today spends on defense more than three times the total for the entire European Union, some $ 396 billion versus $118 billion last year, and more than the next 15 largest nations combined. Washington plans an added $ 2.1 trillion over the coming five years on defense. No nation or group of nations can come close in defense spending. China is at least 30 years away from becoming a serious military threat. No one is serious about taking on U.S. military might.

 

The second pillar of American dominance in the world is the dominant role of the U.S. dollar as reserve currency. Until the advent of the Euro in late 1999, there was no potential challenge to this dollar hegemony in world trade. The Petrodollar has been at the heart of the dollar hegemony since the 1970's. The dollar hegemony is strategic to the future of American global predominance, in many respects as important if not more so, than the overwhelming military power.

 

 

 

Dollar fiat money

 

The crucial shift took place when Nixon took the dollar off a fixed gold reserve to float against other currencies. This removed the restraints on printing new dollars. The limit was only how many dollars the rest of the world would take.

 

By their firm agreement with Saudi Arabia, as the largest OPEC oil producer, Washington guaranteed that the world's largest commodity, oil, the essential for every nation's economy, the basis of all transport and much of the industrial economy, could only be purchased in world markets in dollars. The deal had been fixed in June 1974 by Secretary of State Henry Kissinger, establishing the U.S.-Saudi Arabian Joint Commission on Economic Cooperation. The U.S. Treasury and the New York Federal Reserve would 'allow' the Saudi central bank, SAMA, to buy U.S. Treasury bonds with Saudi petrodollars. In 1975 OPEC officially agreed to sell its oil only for dollars. A secret U.S. military agreement to arm Saudi Arabia was the quid pro quo.

 

Until November 2000, no OPEC country dared violate the dollar price rule. So long as the dollar was the strongest currency, there was little reason to as well. But November was when French and other Euroland members finally convinced Saddam Hussein to defy the United States by selling Iraq's oil-for-food not in dollars, 'the enemy currency' as Iraq named it, but only in euros. The euros were on deposit in a special UN account of the leading French bank, BNP Paribas. Radio Liberty of the U.S. State Department ran a short wire on the news and the story was quickly hushed.[2]

 

This little-noted Iraq move to defy the dollar in favor of the euro, in itself, was insignificant. Yet, if it were to spread, especially at a point the dollar was already weakening, it could create a panic selloff of dollars by foreign central banks and OPEC oil producers. In the months before the latest Iraq war, hints in this direction were heard from Russia, Iran, Indonesia and even Venezuela. An Iranian OPEC official, Javad Yarjani, delivered a detailed analysis of how OPEC at some future point might sell its oil to the EU for euros not dollars. He spoke in April, 2002 in Oviedo Spain at the invitation of the EU. All indications are that the Iraq war was seized on as the easiest way to deliver a deadly pre-emptive warning to OPEC and others, not to flirt with abandoning the Petro-dollar system in favor of one based on the euro.

 

Informed banking circles in the City of London and elsewhere in Europe privately confirm the significance of that little-noted Iraq move from petro-dollar to petro-euro. 'The Iraq move was a declaration of war against the dollar', one senior London banker told me recently. 'As soon as it was clear that Britain and the U.S. had taken Iraq, a great sigh of relief was heard in London City banks. They said privately, "now we don't have to worry about that damn euro threat"'.

 

Why would something so small be such a strategic threat to London and New York, or to the United States that an American President would apparently risk fifty years of alliance relations globally, and more to make a military attack whose justification could not even be proved to the world?

 

The answer is the unique role of the petro-dollar to underpin American economic hegemony.

 

How does it work? So long as almost 70% of world trade is done in dollars, the dollar is the currency which central banks accumulate as reserves. But central banks, whether China or Japan or Brazil or Russia, do not simply stack dollars in their vaults. Currencies have one advantage over gold. A central bank can use it to buy the state bonds of the issuer, the United States. Most countries around the world are forced to control trade deficits or face currency collapse. Not the United States. This is because of the dollar reserve currency role. And the underpinning of the reserve role is the petrodollar. Every nation needs to get dollars to import oil, some more than others. This means their trade targets dollar countries, above all the U.S.

 

Because oil is an essential commodity for every nation, the petrodollar system, which exists to the present, demands the buildup of huge trade surpluses in order to accumulate dollar surpluses. This is the case for every country but one -- the United States which controls the dollar and prints it at will or fiat. Because today the majority of all international trade is done in dollars, countries must go abroad to get the means of payment they cannot themselves issue. The entire global trade structure today works around this dynamic, from Russia to China, from Brazil to South Korea and Japan. Everyone aims to maximize dollar surpluses from their export trade.

 

To keep this process going, the United States has agreed to be 'importer of last resort' because its entire monetary hegemony depends on this dollar recycling.

 

The central banks of Japan, China, South Korea, Russia and the rest all buy U.S. Treasury securities with their dollars. That in turn allows the United States to have a stable dollar, far lower interest rates, and run a $ 500 billion annual balance of payments deficit with the rest of the world. The Federal Reserve controls the dollar printing presses, and the world needs its dollars. It is as simple as that.

 

The U.S. foreign debt threat

 

But, not so simple perhaps. This is a highly unstable system, as U.S. trade deficits and net debt or liabilities to foreign accounts are now well over 22% of GDP as of 2000, and climbing rapidly. The net foreign indebtedness of the United States -- public as well as private -- is beginning to explode ominously. In the past three years since the U.S. stock collapse and the re-emergence of budget deficits in Washington, the net debt position, according to a recent study by the Pestel Institute in Hanover, has almost doubled. In 1999, the peak of the dot.com bubble fury, U.S. net debt to foreigners was some $ 1.4 trillions. By the end of this year, it will exceed an estimated $ 3.7 trillion! Before 1989, the United States had been a net creditor, gaining more from its foreign investments than it paid to them in interest on Treasury bonds or other U.S. assets. Since the end of the Cold War, the United States has become a net foreign debtor nation to the tune of $3.7 trillion! This is not what Hilmar Kopper could all 'peanuts'.

 

It does not require much foresight to see the strategic threat of these deficits to the role of the United States. With an annual current account (mainly trade) deficit of some $500 billion, some 5% of GDP, the United States must import or attract at least $1.4 billion every day, to avoid a dollar collapse and keep its interest rates low enough to support the debt-burdened corporate economy. That net debt is getting worse at a dramatic pace. Were France, Germany, Russia and a number of OPEC oil countries to now shift even a small portion of their dollar reserves into euro to buy bonds of Germany or France or the like, the United States would face a strategic crisis beyond any of the postwar period. To pre-empt this threat, was one of the most strategic hidden reasons for the decision to go for 'regime change' as it is known, in Iraq. It is as simple and as cold as this. The future of America's sole superpower status depended on pre-empting the threat emerging from Eurasia and Euroland especially. Iraq was andis a chess piece in a far larger strategic game, one for the highest stakes.

 

The euro threatens the hegemony of the US

 

When the euro was launched at the end of the last decade, leading EU government figures, bankers from Deutsche Bank's Norbert Walter, and French President Chirac went to major holders of dollar reserves -- China, Japan, Russia -- and tried to convince them to shift out of dollars at least a part of their reserves, and into euros. However, that clashed with the need to devalue the too-high euro, so German exports could stabilize Euroland growth. A falling euro was the case until 2002.

 

Then, with the debacle of the U.S. dot.com bubble bursting, the Enron and Worldcom finance scandals, and the recession in the U.S., the dollar began to lose its attraction for foreign investors. The euro gained steadily until the end of 2002. Then, as France and Germany prepared their secret diplomatic strategy to block war in the UN Security Council, rumors surfaced that the central banks of Russia and China had quietly began to dump dollars and buy euros. The result was a dollar free-fall on the eve of war. The stage was set should Washington lose the Iraq war, or it turn into a long, bloody debacle.

 

But Washington, leading New York banks and the higher echelons of the U.S. establishment clearly knew what was at stake. Iraq was not about ordinary chemical or even nuclear weapons of mass destruction. The 'weapon of mass destruction' was the threat that others would follow Iraq and shift to euros out of dollars, creating mass destruction of the United States' hegemonic economic role in the world. As one economist termed it, an end to the dollar reserve role would be a 'catastrophe' for the United States. Interest rates of the Federal Reserve would have to be pushed higher than in 1979 when Paul Volcker raised rates above 17% to try to stop the collapse of the dollar then. Few realize that 1979 dollar crisis was also a direct result of moves by Germany, and France, under Schmidt and Giscard, to defend Europe together with Saudi Arabia and others who began selling U.S. Treasury bonds to protest Carter Administration policy. It is also worth recalling that after the Volcker dollar rescue, the Reagan Administraion, backed by many of today's neo-conservative hawks, began a huge U.S. military defense spending to challenge the Soviet Union.

 

Eurasia versus the Anglo-American Island Power

 

This fight over petro-dollars versus petro-euros, which started in Iraq, is by no means over, despite the apparent victory of the United States in Iraq. The euro was created by French geopolitical strategists for establishing a multipolar world after the collapse of the Soviet Union. The aim was to balance the overwhelming dominance of the U.S. in world affairs. Significantly, French strategists rely on a British geopolitical strategist to develop their rival power alternative to the U.S., namely Sir Halford Mackinder.

 

This past February, a French intelligence-connected newsletter, Intelligence Online, wrote a piece, 'The Strategy Behind Paris-Berlin-Moscow Tie'. Referring to the UN Security Council bloc of France-Germany-Russia to try to prevent the U.S.-British war moves in Iraq, the Paris report notes the recent efforts of European and other powers to create a counterpower to that of the United States. Referring to the new ties of France with Germany and more recently with Putin, they note, 'a new logic, and even dynamic seems to have emerged. An alliance between Paris, Moscow and Berlin running from the Atlantic to Asia could foreshadow a limit to U.S. power. For the first time since the beginning of the 20th Century, the notion of a world heartland -- the nightmare of British strategists -- has crept back into international relations.'[3]

 

Mackinder, father of British geopolitics, wrote in his remarkable paper, 'The Geographical Pivot of History' that the control of the Eurasian heartland, from Normandy France to Vladivostock, was the only possible threat to oppose the naval supremacy of Britain. British diplomacy until 1914 was based on preventing any such Eurasian threat, that time around the expansion policy of the German Kaiser eastwards with the Baghdad Railway and the Tirpitz German Navy buildup. World War I was the result. Referring to the ongoing efforts of the British and later Americans to prevent a Eurasian combination as rival, the Paris intelligence report stressed, 'That strategic approach (i.e. to create Eurasian heartland unity) lies at the origin of all clashes between Continental powers and maritime powers (UK, U.S. and Japan) ... It is Washington's supremacy over the seas that, even now, dictates London's unshakeable support for the U.S. and the alliance between Tony Blair and Bush.'

 

Another well-connected French journal, Reseau Voltaire.net, wrote on the eve of the Iraq war that the dollar was 'The Achilles heel of the USA'.[4] That is an understatement to put it mildly.

 

Iraq was planned long before

 

This emerging threat from a French-led Euro policy with Iraq and other countries, led some leading circles in the U.S. policy establishment to begin thinking of pre-empting threats to the Petro-dollar system well before Bush was even President. While Perle, Wolfowitz and other leading neo-conservatives played a leading role in developing a strategy to preserve the faltering system, a new consensus was shaping which included major elements of traditional Cold War establishment around figures like Rumsfeld and Cheney.

 

In September 2000, during the campaign, a small Washington think-tank, the Project for a New American Century, released a major policy study: 'Rebuilding America's Defenses: Strategies, Forces and Resources for a New Century'. The report is useful in many areas to better understand present Administration policy. On Iraq, it states, 'The United States has sought for decades to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.'

 

This PNAC paper is the essential basis for the September 2002 Presidential White Paper, 'The National Security Strategy of the United States of America'. The PNAC's paper supports a 'blueprint for maintaining global U.S. pre-eminence, precluding the rise of a great power rival, and shaping the international security order in line with American principles and interests. The American Grand Strategy must be pursued as far into the future as possible.' Further, the U.S. must, 'discourage advanced industrial nations from challenging our leadership or even aspiring to a larger regional or global role.'

 

The PNAC membership in 2000 reads like a roster of the Bush Administration today. It included Cheney, his wife Lynne Cheney, neo-conservative Cheney aide, Lewis Libby; Donald Rumsfeld; Rumsfeld Deputy Secretary Paul Wolfowitz. It also included NSC Middle East head, Elliott Abrams; John Bolton of the State Department; Richard Perle, and William Kristol. As well, former Lockheed-Martin vice president, Bruce Jackson, and ex-CIA head James Woolsey were on board, along with Norman Podhoretz, another founding neo-con. Woolsey and Podhoretz speak openly of being in 'World War IV'.

 

It is becoming increasingly clear to many that the war in Iraq is about preserving a bankrupt American Century model of global dominance. It is also clear that Iraq is not the end. What is not yet clear and must be openly debated around the world, is how to replace the failed Petro-dollar order with a just new system for global economic prosperity and security.

 

Now, as Iraq threatens to explode in internal chaos, it is important to rethink the entire postwar monetary order anew. The present French-German-Russian alliance to create a counterweight to the United States requires not merely a French-led version of the Petro-dollar system, some Petro-euro system, that continues the bankrupt American Century, only with a French accent, and euros replacing dollars. That would only continue to destroy living standards across the world, adding to human waste and soaring unemployment in industrial as well as developing nations. We must entirely rethink what began briefly with some economists during the 1998 Asia crisis, the basis of a new monetary system which supports human development, and does not destroy it.

 

 

---------------------------

 

References:

1 Engdahl, F. William, Mit der Ölwaffe zur Weltmacht, edition steinherz, Wiesbaden, 2002. Chapter 9-10 detail the creation and impact of the Petrodollar recycling and the secret 1973 Saltsjoebaden meeting in preparing the oil shock.

 

2 Radio Liberty/RFE press release, Charles Recknagel, 'Iraq: Baghdad moves to Euro', November 1, 2000. The wire was picked up for about 48 hours by CNN and other media and promptly vanished from the headlines. Since William Clark's article, 'The real but unspoken reasons for the upcoming Iraq war' appeared in the Internet on February 2, 2003, a lively online discussion of the oil-euro factor has taken place, but outside occasional references in the London Guardian press, little in mainstream media has been said of this strategic background factor in the Washington decision to go against Iraq.

 

3 Intelligence Online, no.447: 20/02/2003. 'The Strategy Behind Paris-Berlin-Moscow Tie'. Intelligence Online Editor, Guillaume Dasquie, is a French specialist on strategic intelligence and has worked for French intelligence services on the bin Laden case and other investigations. His reference to French Eurasian geopolitics clearly reflects high-level French thinking.

 

4 Reseau voltaire.net, 'Suprematie du dollar: Le Talon d'Achille des USA', appeared April 4, 2003. It details a French analysis of the vulnerability of the dollar system on the eve of Iraq war.

 

 

 

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[Guest guest]

US Hidden Agenda: Restore CIA's Afghan Drug Trade

 

 

by MICHEL CHOSSUDOVSKY

In the wake of the 2001 US bombing of Afghanistan, the British government of Tony Blair was entrusted by the G-8 Group of leading industrial nations to carry out a drug eradication program, which would, in theory, allow Afghan farmers to switch out of poppy cultivation into alternative crops. The British were working out of Kabul in close liaison with the US DEA's "Operation Containment".

 

The UK sponsored crop eradication program is an obvious smokescreen. Since October 2001, opium poppy cultivation has skyrocketed.

The presence of occupation forces in Afghanistan did not result in the eradication of poppy cultivation. Quite the opposite.

 

The Taliban prohibition had indeed caused "the beginning of a heroin shortage in Europe by the end of 2001", as acknowledged by the UNODC.

 

Heroin is a multibillion dollar business supported by powerful interests. One of the "hidden" objectives of the war was precisely to restore the CIA sponsored drug trade to its historical levels and exert direct control over the drug routes.

Immediately following the October 2001 invasion, opium markets were restored. Opium prices spiraled.

 

By early 2002, the opium price (in dollars/kg) was almost 10 times higher than in 2000.

 

In 2001, under the Taliban opiate production stood at 185 tons, increasing to 3400 tons in 2002 under the US sponsored puppet regime of President Hamid Karzai.

 

While highlighting Karzai's patriotic struggle against the Taliban, the media fails to mention that Karzai collaborated with the Taliban. He had also been on the payroll of a major US oil company, UNOCAL. In fact, since the mid-1990s, Hamid Karzai had acted as a consultant and lobbyist for UNOCAL in negotiations with the Taliban. According to the Saudi newspaper Al-Watan:

 

"Karzai has been a Central Intelligence Agency covert operator since the 1980s. He collaborated with the CIA in funneling U.S. aid to the Taliban as of 1994 when the Americans had secretly and through the Pakistanis [specifically the ISI] supported the Taliban's assumption of power." (quoted in Karen Talbot, U.S. Energy Giant Unocal Appoints Interim Government in Kabul, Global Outlook, No. 1, Spring 2002. p. 70. See also BBC Monitoring Service, 15 December 2001)

 

HISTORY OF THE GOLDEN CRESCENT DRUG TRADE

 

It is worth recalling the history of the Golden Crescent drug trade, which is intimately related to the CIA's covert operations in the region since the onslaught of the Soviet-Afghan war and its aftermath.

 

Prior to the Soviet-Afghan war (1979-1989), opium production in Afghanistan and Pakistan was directed to small regional markets. There was no local production of heroin. (Alfred McCoy, Drug Fallout: the CIA's Forty Year Complicity in the Narcotics Trade. The Progressive, 1 August 1997).

 

The Afghan narcotics economy was a carefully designed project of the CIA supported by US foreign policy. As revealed in the Iran-Contra and Bank of Commerce and Credit International (BCCI) scandals, CIA covert operations in support of the Afghan Mujahideen had been funded through the laundering of drug money. "Dirty money" was recycled --through a number of banking institutions (in the Middle East) as well as through anonymous CIA shell companies--, into "covert money," used to finance various insurgent groups during the Soviet-Afghan war, and its aftermath:

 

"Because the US wanted to supply the Mujahideen rebels in Afghanistan with stinger missiles and other military hardware it needed the full cooperation of Pakistan. By the mid-1980s, the CIA operation in Islamabad was one of the largest US intelligence stations in the World. `If BCCI is such an embarrassment to the US that forthright investigations are not being pursued it has a lot to do with the blind eye the US turned to the heroin trafficking in Pakistan', said a US intelligence officer. ("The Dirtiest Bank of All," Time, July 29, 1991, p. 22.)

 

Researcher Alfred McCoy's study confirms that within two years of the onslaught of the CIA's covert operation in Afghanistan in 1979,

 

"the Pakistan-Afghanistan borderlands became the world's top heroin producer, supplying 60 per cent of U.S. demand. In Pakistan, the heroin-addict population went from near zero in 1979 to 1.2 million by 1985, a much steeper rise than in any other nation."

 

"CIA assets again controlled this heroin trade. As the Mujahideen guerrillas seized territory inside Afghanistan, they ordered peasants to plant opium as a revolutionary tax. Across the border in Pakistan, Afghan leaders and local syndicates under the protection of Pakistan Intelligence operated hundreds of heroin laboratories. During this decade of wide-open drug-dealing, the U.S. Drug Enforcement Agency in Islamabad failed to instigate major seizures or arrests.

 

U.S. officials had refused to investigate charges of heroin dealing by its Afghan allies because U.S. narcotics policy in Afghanistan has been subordinated to the war against Soviet influence there.

 

In 1995, the former CIA director of the Afghan operation, Charles Cogan, admitted the CIA had indeed sacrificed the drug war to fight the Cold War. 'Our main mission was to do as much damage as possible to the Soviets. We didn't really have the resources or the time to devote to an investigation of the drug trade,' I don't think that we need to apologize for this. Every situation has its fallout. There was fallout in terms of drugs, yes. But the main objective was accomplished. The Soviets left Afghanistan.'"(McCoy, op cit)

 

The role of the CIA, which is amply documented, is not mentioned in official UNODC publications, which focus on internal social and political factors. Needless to say, the historical roots of the opium trade have been grossly distorted.

 

(See UNODC http://www.unodc.org/pdf/publications/afg_opium_economy_www.pdf

 

According to the UNODC, Afghanistan’s opium production has increased, more than 15-fold since 1979. In the wake of the Soviet-Afghan war, the growth of narcotics economy has continued unabated. The Taliban, which were supported by the US, were initially instrumental in the further growth of opiate production until the 2000 opium ban.

 

(See UNODC http://www.unodc.org/pdf/publications/afg_opium_economy_www.pdf

 

This recycling of drug money was used to finance the post-Cold War insurgencies in Central Asia and the Balkans including Al Qaeda. (For details, see Michel Chossudovsky, War and Globalization, The Truth behind September 11, Global Outlook, 2002, http://globalresearch.ca/globaloutlook/truth911.html )

 

NARCOTICS: SECOND TO OIL AND THE ARMS TRADE

 

The revenues generated from the CIA sponsored Afghan drug trade are sizeable. The Afghan trade in opiates constitutes a large share of the worldwide annual turnover of narcotics, which was estimated by the United Nations to be of the order of $400-500 billion. (Douglas Keh, Drug Money in a Changing World, Technical document No. 4, 1998, Vienna UNDCP, p. 4. See also United Nations Drug Control Program, Report of the International Narcotics Control Board for 1999, E/INCB/1999/1 United Nations, Vienna 1999, p. 49-51, and Richard Lapper, UN Fears Growth of Heroin Trade, Financial Times, 24 February 2000). At the time (1994), the global trade in drugs was of the same order of magnitude as the global trade in oil.

 

The IMF estimated global money laundering to be between 590 billion and 1.5 trillion dollars a year, representing 2-5 percent of global GDP. (Asian Banker, 15 August 2003). A large share of global money laundering as estimated by the IMF is linked to the trade in narcotics.

 

Based on recent figures (2003), drug trafficking constitutes "the third biggest global commodity in cash terms after oil and the arms trade." (The Independent, 29 February 2004).

 

Moreover, the above figures including those on money laundering, confirm that the bulk of the revenues associated with the global trade in narcotics are not appropriated by terrorist groups and warlords, as suggested by the UNODC report.

 

There are powerful business and financial interests behind narcotics. From this standpoint, geopolitical and military control over the drug routes is as strategic as oil and oil pipelines.

 

However, what distinguishes narcotics from legal commodity trade is that narcotics constitutes a major source of wealth formation not only for organised crime but also for the US intelligence apparatus, which increasingly constitutes a powerful actor in the spheres of finance and banking.

 

In turn, the CIA, which protects the drug trade, has developed complex business and undercover links to major criminal syndicates involved in the drug trade.

 

In other words, intelligence agencies and powerful business syndicates allied with organized crime, are competing for the strategic control over the heroin routes. The multi-billion dollar revenues of narcotics are deposited in the Western banking system. Most of the large international banks together with their affiliates in the offshore banking havens launder large amounts of narco-dollars.

 

This trade can only prosper if the main actors involved in narcotics have "political friends in high places." Legal and illegal undertakings are increasingly intertwined, the dividing line between "businesspeople" and criminals is blurred. In turn, the relationship among criminals, politicians and members of the intelligence establishment has tainted the structures of the state and the role of its institutions.

 

Where does the money go? Who benefits from the Afghan opium trade?

 

This trade is characterized by a complex web of intermediaries. There are various stages of the drug trade, several interlocked markets, from the impoverished poppy farmer in Afghanistan to the wholesale and retail heroin markets in Western countries. In other words, there is a "hierarchy of prices" for opiates.

 

This hierarchy of prices is acknowledged by the US administration:

 

"Afghan heroin sells on the international narcotics market for 100 times the price farmers get for their opium right out of the field".(US State Department quoted by the Voice of America (VOA), 27 February 2004).

 

According to the UNODC, opium in Afghanistan generated in 2003 "an income of one billion US dollars for farmers and US$ 1.3 billion for traffickers, equivalent to over half of its national income.”

 

Consistent with these UNODC estimates, the average price for fresh opium was $350 a kg. (2002); the 2002 production was 3400 tons. (http://www.poppies.org/news/104267739031389.shtml ).

 

The UNDOC estimate, based on local farmgate and wholesale prices constitutes, however, a very small percentage of the total turnover of the multibillion dollar Afghan drug trade. The UNODC, estimates "the total annual turn-over of international trade" in Afghan opiates at US$ 30 billion. An examination of the wholesale and retail prices for heroin in the Western countries suggests, however, that the total revenues generated, including those at the retail level, are substantially higher.

 

WHOLESALE PRICES OF HEROIN IN WESTERN COUNTRIES

 

It is estimated that one kilo of opium produces approximately 100 grams of (pure) heroin. The US DEA confirms that "SWA [south West Asia meaning Afghanistan] heroin in New York City was selling in the late 1990s for $85,000 to $190,000 per kilogram wholesale with a 75 percent purity ratio (National Drug Intelligence Center, http://www.usdoj.gov/ndic/pubs/648/ny_econ.htm ).

 

According to the US Drug Enforcement Administration (DEA) "the price of SEA [south East Asian] heroin ranges from $70,000 to $100,000 per unit (700 grams) and the purity of SEA heroin ranges from 85 to 90 percent" (ibid). The SEA unit of 700 gr (85-90 % purity) translates into a wholesale price per kg. for pure heroin ranging between $115,000 and $163,000.

 

The DEA figures quoted above, while reflecting the situation in the 1990s, are broadly consistent with recent British figures. According to a report published in the Guardian (11 August 2002), the wholesale price of (pure) heroin in London (UK) was of the order of 50,000 pounds sterling, approximately $80,000 (2002).

 

RETAIL PRICES US

 

"The NYPD notes that retail heroin prices are down and purity is relatively high. Heroin previously sold for about $90 per gram but now sells for $65 to $70 per gram or less. Anecdotal information from the NYPD indicates that purity for a bag of heroin commonly ranges from 50 to 80 percent but can be as low as 30 percent. Information as of June 2000 indicates that bundles (10 bags) purchased by Dominican buyers from Dominican sellers in larger quantities (about 150 bundles) sold for as little as $40 each, or $55 each in Central Park. DEA reports that an ounce of heroin usually sells for $2,500 to $5,000, a gram for $70 to $95, a bundle for $80 to $90, and a bag for $10. The DMP reports that the average heroin purity at the street level in 1999 was about 62 percent." (National Drug Intelligence Center, http://www.usdoj.gov/ndic/pubs/648/ny_econ.htm ).

 

The NYPD and DEA retail price figures seem consistent. The DEA price of $70-$95, with a purity of 62 percent translates into $112 to $153 per gram of pure heroin. The NYPD figures are roughly similar with perhaps lower estimates for purity.

 

It should be noted that when heroin is purchased in very small quantities, the retail price tends to be much higher. In the US, purchase is often by "the bag"; the typical bag according to Rocheleau and Boyum contains 25 milligrams of pure heroin.

(http://www.whitehousedrugpolicy.gov/publications/drugfact/american_users_spend/appc.html )

 

A $10 dollar bag in NYC (according to the DEA figure quoted above) would convert into a price of $400 per gram, each bag containing 0.025gr. of pure heroin. (op cit). In other words, for very small purchases marketed by street pushers, the retail margin tends to be significantly higher. In the case of the $10 bag purchase, it is roughly 3 to 4 times the corresponding retail price per gram.($112-$153)

 

UK

 

In Britain, the retail street price per gram of heroin, according to British Police sources, "has fallen from £74 in 1997 to £61 [in 2004]." [i.e. from approximately $133 to $110, based on the 2004 rate of exchange] (Independent, 3 March 2004). In some cities it was as low as £30-40 per gram with a low level of purity. (AAP News, 3 March 2004). According to Drugscope (http://www.drugscope.org.uk/ ), the average price for a gram of heroin in Britain is between £40 and £90 ($72- $162 per gram) (The report does not mention the purity). The street price of heroin was £60 per gram in April 2002 according to the National Criminal Intelligence Service.

 

http://www.drugscope.org.uk/druginfo/drugsearch/ds_results.asp?file=%5Cwip%5C11%5C1%5C1%5Cheroin_opiates.html

 

THE HIERARCHY OF PRICES

 

We are dealing with a hierarchy of prices, from the farmgate price in the producing country, upwards, to the final retail street price. The latter is often 80-100 times the price paid to the farmer.

 

In other words, the opiate product transits through several markets from the producing country to the transshipment country(ies), to the consuming countries. In the latter, there are wide margins between "the landing price" at the point of entry, demanded by the drug cartels and the wholesale prices and the retail street prices, protected by Western organized crime.

 

THE GLOBAL PROCEEDS OF THE AFGHAN NARCOTICS TRADE

 

In Afghanistan, the reported production of 3600 tons of opium in 2003 would allow for the production of approximately 360,000 kg of pure heroin. Gross revenues accruing to Afghan farmers are roughly estimated by the UNODC to be of the order of $1 billion, with 1.3 billion accruing to local traffickers.

 

When sold in Western markets at a heroin wholesale price of the order of $100,000 a kg (with a 70 percent purity ratio), the global wholesale proceeds (corresponding to 3600 tons of Afghan opium) would be of the order of 51.4 billion dollars. The latter constitutes a conservative estimate based on the various figures for wholesale prices in the previous section).

 

The total proceeds of the Afghan narcotics trade (in terms of total value added) is estimated using the final heroin retail price. In other words, the retail value of the trade is ultimately the criterion for measuring the importance of the drug trade in terms of revenue generation and wealth formation.

 

A meaningful estimate of the retail value, however, is almost impossible to ascertain due to the fact that retail prices vary considerably within urban areas, from one city to another and between consuming countries, not to mention variations in purity and quality (see above).

 

The evidence on retail margins, namely the difference between wholesale and retail values in the consuming countries, nonetheless, suggests that a large share of the total (money) proceeds of the drug trade are generated at the retail level.

 

In other words, a significant portion of the proceeds of the drug trade accrues to criminal and business syndicates in Western countries involved in the local wholesale and retail narcotics markets. And the various criminal gangs involved in retail trade are invariably protected by the "corporate" crime syndicates.

 

90 percent of heroin consumed in the UK is from Afghanistan. Using the British retail price figure from UK police sources of $110 a gram (with an assumed 50 percent purity level), the total retail value of the Afghan narcotics trade in 2003 (3600 tons of opium) would be the order of 79.2 billion dollars. The latter should be considered as a simulation rather than estimate.

 

Under this assumption (simulation), a billion dollars gross revenue to the farmers in Afghanistan (2003) would generate global narcotics earnings, --accruing at various stages and in various markets-- of the order of 79.2 billion dollars. These global proceeds accrue to business syndicates, intelligence agencies, organized crime, financial institutions, wholesalers, retailers, etc. involved directly or indirectly in the drug trade.

 

In turn, the proceeds of this lucrative trade are deposited in Western banks, which constitute an essential mechanism in the laundering of dirty money.

 

A very small percentage accrues to farmers and traders in the producing country. Bear in mind that the net income accruing to Afghan farmers is but a fraction of the estimated 1 billion dollar amount. The latter does not include payments of farm inputs, interest on loans to money lenders, political protection, etc. (See also UNODC, The Opium Economy in Afghanistan, http://www.unodc.org/pdf/publications/afg_opium_economy_www.pdf , Vienna, 2003, p. 7-8)

 

THE SHARE OF AFGHAN HEROIN IN THE GLOBAL DRUG MARKET

 

Afghanistan produces over 70 percent of the global supply of heroin and heroin represents a sizeable fraction of the global narcotics market, estimated by the UN to be of the order of $400-500 billion.

 

There are no reliable estimates on the distribution of the global narcotics trade between the main categories: Cocaine, Opium/Heroin, Cannabis, Amphetamine Type Stimulants (ATS), Other Drugs.

 

THE LAUNDERING OF DRUG MONEY

 

The proceeds of the drug trade are deposited in the banking system. Drug money is laundered in the numerous offshore banking havens in Switzerland, Luxembourg, the British Channel Islands, the Cayman Islands and some 50 other locations around the globe.

 

It is here that the criminal syndicates involved in the drug trade and the representatives of the world's largest commercial banks interact. Dirty money is deposited in these offshore havens, which are controlled by the major Western commercial banks.

 

The latter have a vested interest in maintaining and sustaining the drug trade. (For further details, see Michel Chossudovsky, The Crimes of Business and the Business of Crimes, Covert Action Quarterly, Fall 1996)

 

Once the money has been laundered, it can be recycled into bona fide investments not only in real estate, hotels, etc, but also in other areas such as the services economy and manufacturing. Dirty and covert money is also funneled into various financial instruments including the trade in derivatives, primary commodities, stocks, and government bonds.

 

CONCLUDING REMARKS: THE CRIMINALIZATION OF US FOREIGN POLICY

 

US foreign policy supports the workings of a thriving criminal economy in which the demarcation between organized capital and organized crime has become increasingly blurred.

 

The heroin business is not "filling the coffers of the Taliban" as claimed by US government and the international community: quite the opposite! The proceeds of this illegal trade are the source of wealth formation, largely reaped by powerful business/criminal interests within the Western countries. These interests are sustained by US foreign policy.

 

Decision-making in the US State Department, the CIA and the Pentagon is instrumental in supporting this highly profitable multibillion dollar trade, third in commodity value after oil and the arms trade.

 

The Afghan drug economy is "protected".

 

The heroin trade was part of the war agenda. What this war has achieved is to restore a compliant narco-State, headed by a US appointed puppet.

 

The powerful financial interests behind narcotics are supported by the militarisation of the world's major drug triangles (and transshipment routes), including the Golden Crescent and the Andean region of South America (under the so-called Andean Initiative).

 

 

Table 1

 

Opium Poppy Cultivation in Afghanistan

 

 

 

Year Cultivation in hectares Production (tons)

 

1994 71,470 3,400

 

1995 53,759 2,300

 

1996 56,824 2,200

 

1997 58,416 2,800

 

1998 63,674 2,700

 

1999 90,983 4,600

 

2000 82,172 3,300

 

2001 7,606 185

 

2002 74 000 3400

 

2003 80 000 3600

 

 

 

Source: UNDCP, Afghanistan, Opium Poppy Survey, 2001, UNOCD, Opium Poppy Survey, 2002. http://www.unodc.org/pdf/afg/afg_opium_survey_2002.pdf

 

See also Press Release: http://www.unodc.org/unodc/press_release_2004-03-31_1.html , and 2003 Survey: http://www.unodc.org/pdf/afg/afghanistan_opium_survey_2003.pdf

 

The URL of this article is: http://globalresearch.ca/articles/CHO404A.html

 

* * *

 

 

Michel Chossudovsky is the author of WAR AND GLOBALISATION, THE TRUTH BEHIND SEPTEMBER 11, Global Outlook, 2002,

For details click:http://globalresearch.ca/globaloutlook/truth911.html

 

In this timely study, Michel Chossudovsky blows away the smokescreen, put up by the mainstream media, that 9-11 was an "intelligence failure". Through meticulous research, the author uncovers a military-intelligence ploy behind the September 11 attacks, and the coverup and complicity of key members of the Bush Administration.

 

According to Chossudovsky, the so-called "war on terrorism" is a complete fabrication based on the illusion that one man, Osama bin Laden, outwitted the $30 billion-a-year American intelligence apparatus.

 

The "war on terrorism" is a war of conquest. Globalisation is the final march to the "New World Order", dominated by Wall Street and the U.S. military-industrial complex.

 

September 11, 2001 was the moment the Bush Administration had been waiting for, the so-called "useful crisis" which provided a pretext for waging a war without borders.

 

The hidden agenda consists in extending the frontiers of the American Empire right around the world to facilitate complete U.S. corporate control outside the U.S. and a police state on the inside.

 

Chossudovsky peels back the layers of rhetoric to reveal a huge hoax — a complex web of deceit aimed at tricking the American people and the rest of the world into accepting a military solution which threatens the future of humanity.

 

 

* * *

 

The Centre for Research on Globalization (CRG) at www.globalresearch.ca grants permission to cross-post original Global Research (Canada) articles in their entirety, or any portions thereof, on community internet sites, as long as the text & title of the article are not modified. The source must be acknowledged as follows: Centre for Research on Globalization (CRG) at www.globalresearch.ca. For cross-postings, kindly use the active URL hyperlink address of the original CRG article. The author's copyright note must be displayed. (For articles from other news sources, check with the original copyright holder, where applicable.). For publication of Global Research (Canada) articles in print or other forms including commercial internet sites, contact: editor@globalresearch.ca .

 

© Copyright M CHOSSUDOVSKY, GLOBAL RESEARCH 2004.

 

Chossudovksy's book on 911 --

http://globalresearch.ca/globaloutlook/truth911.html

 

 

WASHINGTON'S HIDDEN AGENDA : RESTORE THE DRUG TRADETHE SPOILS OF WAR: AFGHANISTAN'S MULTIBILLION DOLLAR HEROIN TRADE

 

BY MICHEL CHOSSUDOVSKY

 

www.globalresearch.ca 5 April 2004

[Guest guest]

CRIME, THE WORLD’S BIGGEST FREE ENTERPRISE

 

Thick as thieves

 

---------------------------

By allowing capital to flow unchecked from one end of the world to the other, globalisation and abandon of sovereignty have together fostered the explosive growth of an outlaw financial market. Indeed the engine of capitalist expansion is now oiled by the profits of serious crime. From time to time something is done to give the impression of waging war on the rapidly expanding banking and tax havens. If governments really wanted to, they could right this overnight. But though there are calls for zero tolerance of petty crime and unemployment, nothing is being done about the big money crimes.

by Christian de Brie

 

--

 

 

Financial crime is becoming less visible, periodically coming to light in one country or another in the guise of scandals involving companies, banks, political parties, leaders, cartels, mafias. This flood of illicit transactions - offences under national law or international agreements - has come to be portrayed just as accidental malfunctions of free market economics and democracy that can be put right by something called "good governance". But the reality is quite different. It is a coherent system closely linked to the expansion of modern capitalism and based on an association of three partners: governments, transnational corporations and mafias. Business is business: financial crime is first and foremost a market, thriving and structured, ruled by supply and demand.

 

Big business complicity and political laisser faire is the only way that large-scale organised crime can launder and recycle the fabulous proceeds of its activities. And the transnationals need the support of governments and the neutrality of the regulatory authorities in order to consolidate their positions, increase their profits, withstand or crush the competition, pull off the "deal of the century" and finance their illicit operations. Politicians are directly involved and their ability to intervene depends on the backing and the funding that keep them in power. This collusion of interests is an essential part of the world economy, the oil that keeps the wheels of capitalism turning.

 

Three factors have combined to improve the workings of capitalism. The end of the 1980s saw the complete liberalisation of capital movements, taking them beyond national or international control. Then the revolution in communications technology accelerated the expansion of financial transactions. Finally, tax havens, that planetary archipelago of centres specialising in the tolerance of financial crime, became more "reliable".

 

Revolution, said Mao Zedong, is not a dinner party. Neither is competition. It has little to do with the tournaments of gallant knights celebrated by the troubadours of the free market, where by the grace of God the best always wins - the best product or the best service at the best price. As in feudal combat, if you want to win the economic war, anything goes - and the dirtier the better. The arsenal is well supplied with weapons: restrictive practices, cartels, abuse of dominant position, dumping, forced sales, insider dealing and speculation, takeovers and dismembering of competitors, fraudulent balance sheets, rigging of accounts and transfer prices, the use of offshore subsidiaries and shell companies to avoid and evade tax, embezzlement of public funds, bogus contracts, corruption and backhanders, unjust enrichment and abuse of corporate assets, surveillance and spying, blackmail and betrayal, disregard for regulations on employment rights and trade union freedoms, health and safety, social security, pollution and the environment (1). Not to mention what goes on in the world’s growing number of free zones, including those in Europe and in France, where the ordinary rule of law does not apply, especially in social, tax and financial matters (2).

 

Such goings on can be found in all major sectors and on all markets: arms, oil, public works, civil aviation, air, rail and sea transport, telecommunications, banking and insurance, chemicals and food, to name but a few. They result in massive misappropriations of funds which disappear from the transnationals’ bona fide accounts only to resurface in some tax haven. An incredible plunder, the full extent of which will never be known.

 

All this would be impossible without the power of the state and international and regional organisations, especially their ability to keep restrictive regulations to a minimum, to abolish or override such rules as do exist, to paralyse inquiries and investigations or put them off indefinitely, and to reduce or grant amnesty from any penalties. In exchange, they offer to "fund democracy" by financing parties’ election campaigns, promoting the most promising political personalities and senior officials; they have them followed and closely watched by armies of lobbyists who can be found close to every decision-making authority and whose brief is to help them "make the right choices", to corrupt them (3).

 

On occasion they have no compunction about using the services of professional organised crime. In most of their subsidiaries and offshore suppliers in the southern hemisphere, workers have to contend with thugs hired by the bosses, blackleg trade unions, strike-breakers, private police and death squads. In Japan, recalcitrant shareholders are watched by yakusas at general meetings. Or they take out "contracts" on intermediaries that have become too much of a nuisance or on over-inquisitive investigators: numerous businessmen, bankers, politicians, judges, lawyers and journalists have "committed suicide" drinking a cyanide-laced cappuccino, hanged themselves or fallen from a tenth floor window with their hands tied behind their backs, shot themselves twice in the head, drowned fully clothed in a puddle or in the bath, slipped under a bus or into a vat of concrete or acid, fallen naked from their yachts into the sea under their bodyguard’s very eyes, disappeared on a flight or car journey.

 

More than anything else, banks and big business are keen to get their hands on the proceeds - laundered - of organised crime. Apart from the traditional activities of drugs, racketeering, kidnappings, gambling, procuring (women and children), smuggling (alcohol, tobacco, medicines), armed robbery, counterfeiting and bogus invoicing, tax evasion and misappropriation of public funds, new markets are also flourishing. These include smuggling illegal labour and refugees, computer piracy, trafficking in works of art and antiquities, in stolen cars and parts, in protected species and human organs, forgery, trafficking in arms, toxic waste and nuclear products, etc.

 

Every country has its criminal underworld. The biggest organisations and the ones that have been active the longest can be found in the hubs of capitalism: the United States (Cosa Nostra), Europe (the Sicilian mafia) and Asia (the Chinese triads and Japanese yakusas). Others have also emerged over the last few decades, such as the Colombian cartels in Latin America and the Russian mafias. Hundreds of rival groups share the national and international crime markets. They enter into alliances and subcontracting agreements, tending to break up into small, flexible, mobile units specialising in a market sector or a profitable niche.

 

The annual profits from drug trafficking (cannabis, cocaine, heroin) are estimated at $300-500bn (not to mention the rapidly mushrooming synthetic drugs), that is 8% to 10% of world trade (4). Computer piracy has a turnover in excess of $200bn, counterfeit goods $100bn, European Community budget fraud $10-15bn, animal smuggling $20bn, etc. In all, and counting only activities with a transnational dimension, including the white slave trade, the world’s gross criminal product totals far above $1,000bn a year, nearly 20% of world trade.

 

Even allowing for overheads (production and suppliers, intermediaries and corruption, investment expenditure, management costs, losses from seizures and crackdowns) amounting to roughly 50% of turnover, that still leaves annual profits of $500bn. Over ten years that makes $5,000bn, more than three times the foreign currency reserves of all the central banks (5), one quarter of the capitalisation of the world’s top five stock markets and ten times that of Paris (6).

 

All that remains is for this fantastic wealth to be managed, impossible as it is to dispose of in small denomination notes (7). It is enough to set the world’s financial brains spinning. But these are the people whose help the criminal organisations need if they are to launder all this money and recycle it through legal channels. They are willing to pay the price, and they do. The cost is about one third, $150bn shared between banking networks and intermediaries: lawyers, brokers and trust managers. The upshot is that over $350bn are laundered and reinvested annually, that is $1bn a day.

 

No sector of activity comes anywhere near these figures and none can match that capacity, representing as it does between one half and two thirds of direct foreign investment (DFI) (8). Close watchers of the markets and of globalisation which they understand perfectly, the multinational criminal organisations have no time for savings banks. They go for the highest gains: hedge funds, inflating the bubble of financial speculation, emerging markets, property, new technologies. At the same time, they secure for themselves a solid return from the finest of industry and commerce. In permanent partnership with the transnationals in which they invest and the banks that manage their investments, they are the oil in the wheels of the extraordinary expansion of modern capitalism. And they still have enough money left over to maintain their lifestyle and help to fund and corrupt the political parties and leaders that are best placed to preserve the system that serves them so well.

 

That is precisely the service that the third partner, political power and bureaucracy, renders in exchange for the financial assistance that allows it to stay in place, to recover from every setback and to get richer in the process. It gives the illusion of a permanent struggle, constantly stepped up and internationally coordinated, by governments, police and judiciary against financial crime (bribery, trafficking, laundering) while not affecting the system’s operation. Changing everything so that everything stays the same. The failure of over 30 years of international war against drug trafficking is testimony to the formula’s "success". The same fate awaits the fight against money laundering and corruption, ostentatiously relaunched by the G7 at the Arch Summit, Paris, in 1989 and, in addition to the member countries, involving the United Nations, the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), the Bank for International Settlements (BIS) and the European Union.

 

Specialist organisations have been set up (9) and international conventions signed and ratified for the prevention of corruption on international markets (10) and for police cooperation and mutual judicial assistance (11), while conferences and studies, commissions of inquiry and reports have multiplied. All this has been accompanied by the most strongly worded declarations and promises from those in authority, but the system of financial crime has not been the least bit shaken. It is poised to win by attrition the battle that the best are bent on waging against it; the weariness overtaking police and judges engaged on the exemplary Operation Clean Hands in Italy is evidence of this. So is the lack of response to the alarm (the "Geneva Appeal") sounded by seven specialist European judges at the end of 1996 (12).

 

There is no question of doing away with tax havens, those places of refuge for financial crime, only of encouraging them to adopt codes of good conduct. This would be as effective as asking the mafia to provide security vans, with a moral obligation to submit its vehicles to a MOT. Nor is there any question of setting up any form of permanent international cooperation, or even a European judicial area, only of considering discussing it. Yet it takes 18 months for a request for judicial assistance to make the round trip between Paris and Geneva.

 

Better still, under the aegis of international financial crime’s number one partner, the US, we are seeing a rationalisation, or rather, Americanisation, of corruption techniques, seeking to replace the somewhat archaic practices of palm-greasing and secret (or open) "commission" payments by lobbying, which is more effective and presentable. It is a service industry in which the Americans have a considerable lead over their competitors, not only in know-how, but also in the vast financial and logistical resources they are able to make available to their multinationals; these include the secret services of the world’s most powerful state apparatus, which, with the cold war over, have moved into economic warfare.

 

This is evidenced by the media success of the publication of an annual league table of bribe paying and taking countries drawn up by Transparency International, a lobbying association and CIA correspondent funded by governments and corporations, especially American ones, that are experts in the matter. These include Lockheed, Boeing, IBM, General Motors, Exxon, General Electric and Texaco (13). The only objective of the anti-corruption campaigns taken up by international organisations (World Bank, IMF, OECD) is the "good governance" of a financial crime that is now an integral part of market globalisation under the leadership of the American democracy, the most corrupt on the planet.

 

The headlong rush for profits and capital accumulation by any means is reflected in the widespread robbery of the fruits of men’s labour and of common wealth and the moral corruption of the ruling classes. The robber barons are giving way to the pillaging princes.

 

 

--

 

 

* Globalisation Observatory

 

(1) Znet Commentary, a Canadian site, offers a ranking of the top 100 criminal firms. - http://www.corporatepredators.org/top100.html

 

(2) On free zones, see Le Monde diplomatique, English edition, March 1998.

 

(3) Over 40,000 lobbyists in Washington, thousands in Brussels, hundreds at the WTO.

 

(4) $5,250bn in 1998.

 

(5) The central banks’ official reserves totalled $1,636bn at the end of 1998 (source: 1999 Report of the Bank for International Settlements).

 

(6) New York (New York Stock Exchange and Nasdaq), Tokyo, Chicago and London total $20,000bn (source: International Federation of Stock Exchanges).

 

(7) $1bn in $100 bills stacked up would be 1,000m high.

 

(8) $650bn in 1998, $450bn in 1997 (source: 1998 Report of the United Nations Conference on Trade and Development - Unctad).

 

(9) In particular the Financial Action Task Force (FATF), which works with banks to prevent financial crime and has been churning out recommendations for ten years.

 

(10) The most recent concerns the OECD convention on combating bribery of foreign public officials.

 

(11) The European Council meeting in Tempere, Finland, in October 1999 decided to strengthen Europol’s powers and to create Eurojust as a test bed for a future European public prosecutor’s office.

 

(12) See Denis Robert, La Justice ou le Chaos, Stock, Paris, 1996.

 

(13) Le Canard enchaîné, 3 November 1999.

[krsna 3]

God is funny sexy cool, why be uncool and uptight in the name of god ? so much uptightness these days, reminds me of that Dana Carvey sketch from SNL, remember the church lady ?

 

Reading things so many "devotees" post leaves me gagging, i'm not talkin 'bout here, i'm talkin about other places where everyone takes themselves soooooooooooooooooooooooooo

SERIOUSLY ???

 

Nobody expects the spanish inquisition, but among various factions and non factions of devotees seems like you can't swing a dead cat without hittin one

 

 

apparently you can be the biggest douchebag in the universe, but if you follow 4 regs you are bona-fide, and you can be the greatest coolest most generous person in the history of the universe but if you eat some m & m's, take some ganja or touch and snuggle up and kiss kiss a girl, then you've "FALLEN DOWN ????

 

And your not worthy of being seen as a spiritual person ?

 

Then God abandons your realization and you're a fraud ? because you ate some candy ? because you were given physical comfort and love ?

 

has the whole devotee world gone completely insane ?

 

Do you really think God is going to abandon you because you enjoy some pleasure, and that god is on your side wholeheartedly simply because you live like a monk ?

 

No, but it seems those who have pretensions of being serious and bona fide blah blah blah, have left planet earth and are floating somewhere in the heavenly realm, slinging mud at everyone and anyone who aint JUST LIKE THEM i.e seriously morbidly serious about themselves and their own psuedo phony perfectedness.

 

weren't there prostitutes there to greet Krsna and Balarama ?

 

Is real spirituality equivalent to renunciation ?

The Mayavadis are great renunciates .

 

Mahaprabhu brought renunciation into his line solely to impress those who are impressed by such things, if you become one of those people, who are impressed with renunciation, then you miss the point of it within Gaudiya Vaishnavism, it is only to impress people who think that it is a sign of spirituality, guess what ? it isn't.

 

If Iskcon was to smarten up they would end sanyassa ( Prabhupada said as much ), and end the the whole 4 reg thing, as i have shown in my article on chakra (Varnashrama and the exodus from Iskcon) Prabhupada wanted to end the way Iskcon was operating as a renunciates society, either smarten up Iskcon or things are going to go from bad to worse, count on it.

 

Iskcon needs to change from emphasizing renunciation and the ancillary effects of idolizing or denigrating those who are or aren't, they need to change that as Iskcon consciousness and turn it into Krsna consciousness, Vraja consciousness, living in Iskcon should be like living in Vedic society, this is what Prabhupada wanted, instead Iskcon is a monks affair for the most part, even the married people are expected to be like monks, THIS IS NOT VEDIC SOCIETY PEOPLE.

 

Iskcon should be about sharing Vedic lifestyle, instead it is about a kind of faux vedic gestapo enforced big brother is watching you..JOKE.

 

but if you like iskcon the way it is, thinking that it is what spiritual life is all about, then why does it suck so hard ? why is real vedic society not like Iskcon, are there gestapos enforcing the rule of monastic renunciation in vedic society ?

 

nope, life is a party there, Iskcon should be one big party, instead it is one big bummer, i'm talkin to you mr. and mrs. know-it-all, guess what ? you don't.

 

and all of you who think renunciation is the measure of the man, get over it.

 

[theist 1]

 

and end the the whole 4 reg thing,

 

 

This is a big time mistake. Not well thought out. The 4 regs are there to help clear the sisya from fueling unwanted desires and further implicating himself in karmic reactions.

 

The reaction that comes from killing animals or food for instance. Trying to light a fire while pouring water on it is not very bright.

 

Rather than trying to remake the acarya's instructions in our own image better to mold our lifestyles in a way that conforms to his instructions. Haven't been willing or able to do that so well in this life? Join the club.

 

Gita 12th chapter. If you can't do that then at least do this etc.

 

Find you honest place and act from there Krsna will help us grow from any stage.

 

"Act in times that are with thee

and progress ye shall call"

 

The 4 regs. are not in themselves the goal of course. But can you show me a genuine yoga system without rules that control sense activity.

 

There is always Osho.

 

Disciple means coming under the discipline of the master, willingly. Take that away and what are we left with?

[krsna 3]

No free-for-alls in the KC movement.

[Guest guest]

 

This is a big time mistake. Not well thought out. The 4 regs are there to help clear the sisya from fueling unwanted desires and further implicating himself in karmic reactions.

 

The reaction that comes from killing animals or food for instance. Trying to light a fire while pouring water on it is not very bright.

 

Rather than trying to remake the acarya's instructions in our own image better to mold our lifestyles in a way that conforms to his instructions. Haven't been willing or able to do that so well in this life? Join the club.

 

 

I think you need to read the article here

 

Prabhupada is commenting on how Iskcon needed to change from demanding everyone be required to act as brahmanas.

 

this is my point, the requirement of the 4 regs for someone to work within Iskcon was what Prabhupada wanted to change.

 

Not that the 4 regs are not recommended, but that they shouldn't be required.

 

Is vedic society requiring everyone to strictly follow 4 regs ?

 

No, Prabhupada wanted to establish Varnashrama as a microcosm of vedic society , that is impossible under the current system, if you read what He says you will see that He specifically mentions that there are so many "falldowns" [leaving Iskcon] due to the across the board attempt to force everyone to the highest standard, He says clearly that needs to end.

 

So those are the acaryas instructions, and His point is well made as we can see with the revolving door that is Iskcon, it has shrunk instead of grown, they have a few better buildings in india, but everywhere else it has shrunk considerably.

 

This is reversable if we folow the orders of the acarya, instead of speculating using our own whims.

[Guest guest]

that was me. gimme a break with the chocolate thing, enough allready.

 

and theistji, you miss the point entirely, it isn't about meateating, that isn't the problem is it ? so dont try and confuse the issue with a non issue.

 

The idea of enforcement and all the attending demeaning actions taken against VAISNAVAS who don't follow strictly is a GREAT OFFENSE/APARADHA, if you think it isn't and that you can treat a devotee like dirt for any reason at all, just see how it is working, any problems with your spiritual life ? with Iskcon ?

[theist 1]

"and end the whole 4 reg. thing" wasn't very clear. I agree. I remeber a tape where Prabhupada is almost imploring that "Iskcon must not be like that" refering to preaching the 4 regs. instead of just attracting people to chant.

 

4 regs are individually helpful but certainly not the message or some requirement that needs to be adopted before one can engage.

 

Just for the record I take small amounts of caffein in tea or coffee just to try and climb out of the mode of ignorance on occasion, often in fact. But just a little too much and my brain starts racing and I become over whelmed with useless thoughts.

 

I am on a low platform but I can't wait until I become pious before I engage. that could take eons and I want some benefit NOW. /images/graemlins/smile.gif

 

Thanks for the link shiva i'll have to read it later though.

 

I can't believe the chocolate debate is still raging on. Well into its third decade now I think.

 

I avoid it because of the milk myself which i think is a more important issue.

[Guest guest]

Yeah the chocolate thing is being used to condemn Hrdayananda Swami, along with his listening to some music, as if that is some great sinful activity that somehow makes Him unqualified to be respected ??

 

The same for Satsvarupa Goswami and others , there is a type of mentality that due to being enforced and maintained within Iskcon is now being used to attack Iskcon devotees, call it karma if you like.

 

This needs to end or Iskcon's enemies will continue looking for every little thing they can find and use that to broadcast these "falldowns" around the world in order to create even more enmity.

 

 

 

 

[theist 1]

You know if the only fault you can find with someone is that they eat chocolate, well to me that is a backhanded way of calling someone a saint.

 

One problem (of many) with this gossipy mentality on the 4 regs. is that if someone who has been following and preaching on the issue suddenly starts having problems who can he confide in?

 

For fear of rejection he may keep it in and keep up the facade until it overwhelms him. Who can trust someone with their own struggles if that person makes a habit out of criticizing all others for their apparant falldowns.

 

The 4 regs. and other rules and regs. are there to help us cultivate love for Krsna. They are not meant as a substitute for love of God. "I don't want to love Krsna but I follow the 4 regs." This is just a description of another empty life.

 

Detachment naturally follows knowledge and a developed higher taste.

[Guest guest]

The point Prabhupada makes is that Iskcon shouldn't artificially try and enforce everyone to act like a brahmana, He says that Iskcon was doing just that but it needed to end, the only requirement is hearing and chanting and associating with vaisnavas, as He said you shouldn't try and go against your nature, in Vedic Varnashrama society it is not that everyone is pukka brahmana, there are ksatriyas whose nature is different then brahmana, there is vaisya who also is not the same nature as brahmana, and there is sudra or artisan/works with his hands who also is not of the brahmana nature.

 

He tells us that Iskcon must end demanding everyone act as brahmana, Vaisnava is above brahmana , still everyone has their nature and to try and enforce the highest brahmana standards on ksatriyas, vaisyas, or sudras will fail miserably, as we have seen.

[Kulapavana 0]

yes, that is much needed in our Movement. unfortunately, very few of the leaders see that. maybe they are not the brahmanas they think they are? or maybe there is some other motive.

 

in general, very few devotees even want to consider their own varna. mostly because they know they are not brahmanas. unless one is willing to openly declare their own varna, all their talk about varnashrama dharma is purely artificial and has no potency. in this age of Kali truthfulness is the last leg of dharma. without it you have NOTHING.

[theist 1]

Kulapavana, It is hard to see in this jumbled up society. I find i have some traits of several varnas, but none seem dominant or well defined. So i don't even consider it much. Maybe its best to find something simple to occupy oneself and be satisfied.

[Govindaram 1]

 

Hare Krsna

 

What exactly are the concessions made with Regard to four regultive principles concerning Varna?

 

Brahmanas we know already, I myself am not sure what Varna I am in. Haribol.

[krsna 3]

Was a mighty good article homespun on your favorite ISKCON keyboard.

 

You got many a good idea for how things should be coming from you experience in and around the movement.

Alot of it makes sense in that it points at the fanatacism that has gripprd the KC movement.

 

You do justice at dismantaling the false pretext on which all this hypocritical posturing is taking place-the pseudo vairagis.

 

Keep it coming,I think you've got a lot of fans on the net for your ability to shake down their comfortable sensibilities.

 

Haribol

[Kulapavana 0]

once you study the varnas in detail (Mahabharata in full edition is an excellent read) it is very easy to figure out. yes, we are mixed to a degree, but one varna usually dominates. you need to primarily look at these factors:

 

- your basic nature: what you like and dislike (simple example: brahmanas like books, kshatriyas like weapons, vaishyas like money and opulent things, sudras like tools, musical instruments, food and wine)

 

- your occupation: current and ideal (dream job)

 

- your parents and grandparents (their varnas or at least life long occupations)

 

- which of the 4 regs are a problem for you (brahmanas have no problems, kshatriyas have problems with illicit sex, vaishyas have problem with illicit sex, gambling and meat eating, sudras have problems with all the rules)

 

ultimately, if you study and still cant figure out your varna, you are neither brahmana nor kshatriya, as they have little difficulty sorting it out. and you can ask a brahmana or a kshatriya person who knows you a little for their opinion.

 

I hope it helps a bit.

[Kulapavana 0]

vedic system regulates ALL varnas to some degree. that is what makes people truly civilized and noble (Aryan). only certain forms of illicit sex, meat eating, gambling or intoxication are allowed in the Aryan society. ALL varnas strive to live their lives following these 4 regs as much as they can because they are the golden standard.

 

as to concessions, for example kshatriyas may drink some liquor but not to the point of drunkennes. they may seek company of a courtesan, but never approach another man's wife or a daughter. so it is still very much a regulated life, but the set of rules is a little different. a drunk sudra is not a cause of a public alarm, just pity for their ignorance.

[Guest guest]

Vedic society does not enforce regulative principles, they are voluntary.

 

Any kind of regulative personal renunciative behavior is voluntary and those who don't follow strictly are not stigmatized or excluded from society as is the case in Iskcon.

 

Prabhupada wanted to show the standard for Vedic society in Iskcon.

 

A.--"Satsvarupa: When Ramananda Raya brought Varnasrama up, Lord Caitanya said it was not possible in this age to introduce this.

 

Prabhupada: He did not say not possible. Iha bahya. Caitanya Mahaprabhu was interested only on the spiritual platform. He had no idea of material side. He rejected material side.

 

Satsvarupa: But don't we do that also?

 

Prabhupada: No. Our position is different. We are trying to implement Krsna consciousness in everything. Caitanya Mahaprabhu personally took sannyasa. He rejected completely material. Niskincana. But we are not going to be niskincana. We are trying to cement the troubled position of the world. That is also in the prescription of Bhagavad-gita. We are not rejecting the whole society. Our duty is that we shall arrange the external affairs also so nicely that one day they will come to the spiritual platform very easily, paving the way. We are preaching. Therefore we must pave the situation in such a way that gradually they will be promoted to the spiritual plane.

 

 

Hari-Sauri: But in Caitanya Mahaprabhu's practical preaching He only induced them to chant.

 

Prabhupada: Chanting will go on. That is not stopped. But at the same time the varnasrama-dharma must be established to make the way easy.

 

Satsvarupa: We tell them go on with your job but chant also.

 

Prabhupada: Yes. Caitanya Mahaprabhu recommended, sthane sthitah. Therefore varnasrama-dharma is required. Simply show-bottle will not do. So the varnasrama-dharma should be introduced all over the world, and..."

 

---------------------------

 

B.--"Hari-Sauri: So we'd have to completely revise the whole system that we have now.

 

Prabhupada: No. Whatever we have, that is all right. But we see by experience that they're falling down. Why falling down? Because he was not fit for the position, therefore he has fallen. Better remain in his position and become perfect. Why artificially bring them? There is no need. Krsna says. Bring that Bhagavad-gita. Sve sve karmany abhiratah?

 

Hari-Sauri: sve sve karmany ab hiratah samsiddhim labhate narah sva-karma-niratah siddhim yatha vindati tac chrnu By following his qualities of work, every man can become perfect. Now please hear from Me how this can be done."

 

Prabhupada: Yes. He is sudra, clerk. As a sudra, he can get the perfection. Why he should artificially become a brahmana and sannyasi and fall down? This has to be checked.

 

Hari-Sauri: So in Mayapura here now we have that situation, that so many...

 

Prabhupada: Everywhere, wherever, Mayapura or anywhere. Question is that here it is clearly said, sve sve karmany abhiratah. Brahmana has his duty, ksatriya has his duty, vaisya has his duty, sudra has his duty. And if he performs his duty nicely, then he also becomes perfect. So why artificially he should be called a brahmana? Let them do, according to sastra, the work of sudra, or vaisya. He'll become perfect. Perfection is not checked. But why artificially he should be made a brahmana or he should be made a sannyasi and fall down and b ecome a ludicrous? That is the point. Better let him live in his position and become perfect. That's good. That looks very nice. And that is possible. That is possible. Lord Visnu can be worshiped if you perfectly follow the rules and regulation of four varnas and four asramas. Here it is also said, sve sve karmani. You work as a perfect brahmana or a perfect ksatriya, perfect sudra; you get perfection. The perfection is available in your natural life. Why should artificially you become unnatural and fall down and become ludicrous ?"

 

---------------------------

 

 

C.--"Satsvarupa: So we can ideally organize ourselves and then for the rest of the people all we can do is hope that they'll follow it.

 

Prabhupada: Yes. In order to serve the mass of people, to bring them to the ideal position, we should try to introduce this varnasrama, not that we are going to be candidates of varnasrama. It is not our business. But to teach them how the world will be in peaceful position we have to introduce. "

 

 

============================================================

 

So...What is Prabhupada saying ?

 

A. Iskcon is not doing what Mahaprabhua did, He was not interested in this world, Iskcon is going to set the example of Vedic society or Varnashrama.

 

B.Iskcon doesn't need to change the way it operates, it does need to stop forcing people to be renounced, the result is people falldown. [He meant leave] and go back to material life.[serving ones self as opposed to serving the mission of the spiritual master and Mahaprabhu]

 

C.Varnashrama is what Prabhupada wanted as the next phase for Iskcon, this is for the benefit of society, by setting the example of Vedic society Iskcon will fullfil Prabhupadas order.

 

 

"Here it is also said, sve sve karmani. You work as a perfect brahmana or a perfect ksatriya, perfect sudra; you get perfection.THE PERFECTION IS AVAILABLE IN YOUR NATURAL LIFE. WHY SHOULD ARTIFICIALLY YOU BECOME UNNATURAL AND FALL DOWN AND BECOME LUDICROUS ?"