Washington revisits Halford Mackinder

East Asian markets [was] in place, the U.S. Administration was in a strong position to take advantage of the fi nancial crisis to promote liberalization of trade, fi nance and institutional reforms through the IMF.’

The impact of the Asia crisis on the dollar was notable. The general manager of the Bank for International Settlements, Andrew Crockett, noted that while the east Asian countries had run a combined current account defi cit of $33 billion in 1996, as speculative hot money fl owed in, ‘1998–1999, the current account swung to a surplus of $87 billion.’ By 2002, it peaked at $200 billion. Most of that surplus returned to the United States in the form of Asian central bank purchases of U.S. Treasury debt, in effect fi nancing Washington policies. Japan’s Finance Ministry had made a futile effort to contain the Asia crisis by proposing a $30 billion Asian Monetary Fund. Washington made clear that it was not pleased. The idea was quickly dropped. Asia was to become yet another province of the dollar realm through the IMF. Treasury Secretary Rubin euphemistically termed it America’s ‘strong dollar policy.’2

WASHINGTON REVISITS HALFORD MACKINDER

Even as it was destroying the Japanese economic model during the 1990s and reshaping east Asia to suit its own interests, Washington placed the highest priority on the dismantling of the Soviet Union.

By the beginning of the 1990s, as the Berlin Wall came down and the Soviet Union with it, Washington faced no apparent rival for global hegemony. In the euphoria of the day, few expressed alarm or concern that one country held so much power over the planet. After all, it was democratic, and it was America. With no more threat of Soviet military action, NATO countries, above all the United States, could begin to shift their trillion dollar annual expenditure as a world military sector into civilian uses.

A new era of peaceful development, market reforms and capitalist prosperity was the dream of millions in the former communist states of the Warsaw Pact. Those dreams were short-lived. The U.S. establishment was preparing to secure global hegemony for America, as the sole superpower, all the while trying to lull the rest of the world into a sense of false complacency. Deception played a strategic role in Washington policy during the 1990s. The greatest deception, it soon became clear, was the impression that Washington was groping for ideas about where to go after the end of the Soviet threat.

The collapse of the Soviet Union was an event of signal importance in the history of the past century. Little understood was the cold calculation of policy makers in the Bush administration in the early 1990s regarding the future of Russia and its former satellite states. Russia was to be brought into the U.S. economic orbit through imposition of ‘market reforms.’

In effect, it was to be dollarized. How that was to work was complex and differentiated. The end effect, however, was to prop up the United States as the sole remaining superpower and the sole issuer of the world reserve currency, the dollar—with all the benefi ts that gave Washington. The instrument for Washington’s new Russian policy was to be the International Monetary Fund.

At the same time, Russia was to be systematically surrounded by a ring of U.S. and NATO military bases, and an eastward expansion of NATO which, when completed, would prevent any future strategic alliance between the Russian and Continental European powers that potentially might challenge America’s supremacy. The trick for Washington would be to persuade a nuclear-armed Moscow elite to accept such a complete dismantling of its power.

Washington policy was classic geopolitics, as outlined almost a century earlier by Sir Halford Mackinder. Mackinder had warned a British elite that an alliance of the major Eurasian powers of the time, including Germany, Russia and central Asian states, held the potential to become the dominant global power, since it would be geographically coherent and would possess all the necessary economic raw materials and a suffi cient population to challenge any rivals.

At the end of the First World War, Mackinder had stated, ‘Who rules Central Europe, commands the Heartland; Who rules the Heartland, commands the World Island; Who rules the World Island, commands the world.’ In other words, if the nations around Germany and France in Europe were to dominate the Russian-centered Eurasian ‘Heartland,’ as Mackinder termed it, that combination would hold the potential, the resources and the geographic advantage to dominate the entire world.

Washington establishment strategists such as Zbigniew Brzezinski, a former White House National Security Council head, who had held top national security posts under several administrations, worked with Henry Kissinger, and advised the fi rst Bush presidency, openly acknowledged the role of Mackinder’s geopolitical thinking on U.S. strategic policy. ‘It is imperative that no Eurasian challenger emerges capable of dominating Eurasia and thus of also challenging