BOOKS/Pauline Warren

US Global Hegemony Started in Mexico

A well-understood past gives meaning to contemporary issues of power brokering among financial and industrial entities as CEOs redefine business ethics and US global hegemony expands its boundaries. In his thoroughly researched and documented book, Empire and Revolution: The Americans in Mexico Since the Civil War [University of California Press, 2002, 688 pp.], John Mason Hart analyzes and documents the origins of an Anglo-American elite that merged during and after the Civil War into what can accurately be identified as an oligarchy. Their first cooperative ventures after the Civil War were in railroad and real estate investments as the US expanded westward toward the Pacific Ocean and southward into Mexico.

This southern neighbor became the first recognized Third World nation with which the US became engaged and has been the most intimate trading and cultural associate of the US in the Third World. Hart demonstrates how the history of US interests in Mexico reveals all of the power brokers and financial and industrial entities that still fuel US global hegemony.

Hart integrates sources ranging from the US and Mexican national archives and sources from the Citi and Morgan banks, as well as numerous regional collections in order to explain the process of growing US power in Mexico. He begins with finance capital in New York, led by the leading capitalists in the US, assuming a predominant role in Mexico via arms, loans and supplies in the 1860s and its role in the overthrow of the democratically elected Mexican government and institution of a military dictatorship in 1876. That success was followed by the gaining of infrastructure concessions by capitalist consortiums led by the leaders of the National City (later Citi), Morgan and First National banks, New York Central, Pennsylvania and Atchison, Topeka, and Santa Fe railroads, and the Equitable Insurance Company. Accompanying the control of the Mexican transportation and communications infrastructure came the domination of Mexico's natural and strategic resources, oil, copper, and rubber.

As American influence spread, it encompassed other resources and industries as well. The major packing houses, Armour, Swift, Morris, and Cudahy, took over millions of acres of ranch land. The principal mining companies, Phelps Dodge, Anaconda, American Metals, and Guggenheim, acquired the bulk of Mexico's copper reserves while the American oil companies gained control of all but one of the major oil fields. That one was controlled by the British nobleman, Lord Cowdray, who was closely associated with the heads of the National City, Morgan and First National banks in New York.

By the end of the 19th century the core group in the American financial elite, sometimes known as the Robber Barons, had reached a new level of organization known as the Trio. This group, comprised of J.P. Morgan, James Stillman, and George Baker, the CEOs of the Morgan, National City, and First National banks, created the International Banking Corporation (IBC), the forerunner of the IMF, World Bank et al., in the 1900s to gather business intelligence and funnel American capital into the Third World. IBC coordinated US investments in Mexico and, after opening a Mexico City office in 1901, continued to expand to Santiago de Chile, Shanghai, Manila, and Beirut.

Meanwhile, the Trio was justifying the need for the IBC by participating in the industrial expansion of the British Empire. Everywhere the British went, Africa, Asia, and South America, they offered the Trio 15% of the action. Morgan, Baker and the Stillmans, in turn, integrated their financial syndicates with the British. Morgan included John D. Rockefeller and Andrew Carnegie in his group, while Stillman gained the participation of William Rockefeller, Cyrus McCormick and others.

Given the massive scale of financial integration between the Anglo-American elites, not to mention the cultural bonds between the two groups, the Trio led the way in purchasing the Panama Canal and selling it to the US government, intervening in the Mexican Revolution, and providing financial and arms support to the British between August of 1914 and the end of World War I. As they did so, the British paid their bills by setting off interests in the South Africa, Burma, Chile, Brazil and Argentina. Hart documents that by the end of the war the junior partners owned about 30% of the British assets in the areas of the Third World and the stage was set for the growing financial and military power of the American elites to be exercised throughout the world.

Hart then explains the various US strategies adopted between 1910 and 1980 in order to cope with Mexican nationalism. This experience would serve the American elites well in dealing with the wave of Third World nationalism that swept the globe in the wake of WWII. The creation of the British Commonwealth and the US-sponsored free trade movement evolved out of this experience.

In the contemporary world, Hart explains, the same interests, led by Morgan and Citi banks (the First National is a merged part of Citi), now control key parts of the Mexican economy including the ALFA Group in Mexico which enjoys duty free steel exports to the US markets while steel from competing nations is taxed.

Once again Mexico played the central role in US global strategies when NAFTA was adopted in 1994 as the model for future worldwide trade relations. The free flow of capital, advocated by the Trio, implemented initially by the IBC, and by the Federal Reserve Act of 1913 on behalf of which they lobbied has now become the new face of empire.

The organization of Empire and Revolution invites the reader's intellectual and imaginative engagement as the narrative deconstructs traditional discourse on American power structures and American involvement in Mexico and other Third World regions. This book answers many questions, but it raises new ones, including the meaning of American "democracy." It is a must read for all progressives and those concerned with the distorted representations offered by the corporate media of current domestic and foreign issues.

Pauline Warren is professor of English at Houston Community College.

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