How Britain Controls the Global Narrative

Why does the British government build a splendid new home for the British Broadcasting Corporation (BBC) when it is imposing painful cuts in all other areas of public expenditure?

Why does the BBC need a “World News Room” with more reporters worldwide than CNN and far more than India, China and Africa combined?

Why continue to have full-fledged services in Arabic, Urdu, Hindi and Swahili?

The answer is the same to all the questions: it is critically important for British power to impose its narrative on world affairs, and the BBC, a widely effective instrument of propaganda since the heyday of Empire, plays a key role.

Why bother when the Empire is dead and gone?

That’s the beauty of controlling the narrative: the Empire is neither dead nor gone; in fact, it is more powerful today than ever.

As the formal structures of colonial rule came down in the second half of the 20th Century, Britain created a string of “tax havens” around the world, globalizing a system long dominated by its own Jersey Islands and Switzerland. There are some 70 tax havens now, most of them in small island territories like the Cayman Islands, Bermuda and Mauritius, and they operate with the City (financial center) of London as a global hub to launder and invest the world’s black money. Partial estimates put its assets at about $30 trillion, double the size of the American economy, and the annual flow of laundered money at $2 trillion, about the same as Indian GDP.

This system handles the proceeds of criminal activity ranging from tax evasion and official corruption to the trafficking of prostitutes and drugs. According to the latest report from the Washington-based NGO Global Financial Integrity, it drained an estimated $6 trillion from poor countries over the last decade, more than ten times what they received as “development aid.”

The system also victimizes affluent countries, including the United States and Germany; their super-rich use it to evade billions in personal and corporate taxes.

Unlike developing countries, the affluent ones have been trying to deal with the problem by pressuring and penalizing major international banks that are part of the system, albeit with little success. US authorities last year imposed a fine of nearly $2 billion on HSBC, Britain’s (and Europe’s) largest bank without causing a blip in the company’s share price: investors have known about its most lucrative line of business since drug traffickers founded it in the 19th Century. 

It is a measure of Britain’s control of the global narrative that mainstream media report all this sotto voce and explain none of it. Prime Minister David Cameron’s recent talk of a referendum that will open the door to British withdrawal from the EU is in response to intensifying pressure from Germany to rein in London’s role in money laundering, but it would take a Sherlock Holmes to detect that in the reportage.

The announcement on 7 February that the Bank of England, in an unprecedented departure from iron-cast tradition, will appoint a Canadian as Governor, has also gone without any media excursions and alarums. Obviously, it reflects tremendous pressure from Washington, and even though television cameras have recorded Cameron’s state of clipped cold rage, no reporter has bothered to say why.

How can Britain dominate the global narrative when there are so many other independent media organizations?

Two factors allow it.

One is that the super-rich in all countries are heavily invested in the global black market, and they either own mass media at the national level or control them indirectly.

The other is that much of the “elite” media in developing countries, including India, serve British interests. The links that make them British proxies are widely known. The staff of BBC’s Arabic Service resigned en masse to establish Al Jazeera, and the Sheik who financed the move is a firm British ally; he now runs the most influential media organization in the Arab world. The most influential of Arabic print media operate from London.

In India, as I have noted in previous blogs, the British handpicked the families that run The Times of India and India Today media groups; their patriarchs were financial operators who thrived under colonial rule. NDTV and even The Hindu despite its strong nationalist credentials, also have a pronounced pro-British slant that points to ties deeper than natural affinity. The content of many other English-language publications, especially Outlook and OPEN among the glossies, justifies suspicion their basic journalistic integrity lies suborned.

The mass media are only one aspect of Britain’s control of the global narrative. Another powerful tool has been the United Nations, of which it makes more intelligent and nuanced use than any other member State. In fact, others are usually oblivious to what London is doing.

For example, developing countries did not react last year when Secretary-General Ban Ki-moon appointed the British Prime Minister to a 3-member panel that will advise on what should replace the Millennium Development Goals (MDGs) that have been the benchmark for the 2000 to 2015 period.

Mr. Cameron has no experience that would fit him for that role, and as noted above, he is the defender of a system that drains wealth from poor countries. His appointment makes sense only as a preemptive move to ensure that the post-2015 development agenda will not broaden the focus of attention from purely domestic standards to the debilitating international environment over which Britain presides.

The United Nations has also proved useful in keeping inconvenient statistics out of public view. The information Global Financial Integrity reports is difficult to ignore but UN agencies manage to do it routinely and with no explanation.

A third method Britain has used to keep control of the global narrative is proxy conflict within developing countries.

In India we have had bitter experience of that tactic during the colonial era and after, but that is only one aspect of the picture. The larger canvas has been the manipulation of the entire Muslim world.

History books record clearly the steps by which Britain took control of the Islamic narrative but contemporary analysts studiously ignore what happened. The process involved four major steps.

One was the creation of the Kingdom of Saudi Arabia. British support raised a caravan robber operating out of Kuwait to power in Riyadh and expanded his domain to the holy places of Islam, bringing them under the control of an extremist sect, the Wahhabi, that mainstream Muslims had considered “haraam.”

Step Two was support for the Muslim Brotherhood, a violent secret society founded in 1932 that took root first in the British controlled Canal Zone of Egypt, in a mosque built with British money. Since then, it has provided the leadership of every major “Islamic terror” organization in the world.

Step Three  was the creation of the "Palestine problem," a series of amazing treacheries that established an enduring conflict by pitting a desperate and traumatized Zionism against the rising but equally wounded sense of Arab nationalism.

And Step Four was the religious polarization and division of India to create Pakistan as a proxy. To control Pakistan itself, a serving British officer set up the Directorate of Inter-Services Intelligence (ISI), the spy agency that is the real center of power in that country.

Those four steps, supported by the romanticizing of Arabia's medieval past, pushed the narrative of Islam into a reactionary and violent mode that has made it difficult if not impossible for progressive forces to survive. The current course of events in Afghanistan, Pakistan, Egypt, Libya and Mali exemplify that reality.

On a relevant personal note: a few weeks ago I was invited by Oxfam, the British charity, to a meeting to discuss the post-MDG agenda. The theme was inequality as it affected Muslims in India. When I informed the organizer of my intention to raise the issue of British mischief in dividing Indians along religious lines the invitation was revoked. The takeaway from that experience is the significant involvement of supposedly liberal British civil society in controlling the Muslim narrative.

Britain has been far less successful in gaining control of the Hindu narrative but that might change if fascist elements use religion to gain political ascendancy; my next post will deal with that danger.

China: Impending Disaster or Hope of the World?

China has the world’s oldest written record of national governance.

Unfortunately, its leaders also have the longest record of inability to learn from the past.

Consider the abuse of intellectuals.

It began with Shi Huangdi, the First Emperor who united the warring kingdoms at the north-eastern edge of what is now China. He had 800 Confucian scholars buried alive. Those he did not kill he drove into exile. Their books he burned.

Fast forward more than two millennia to the last of the monarchic dynasties, the Manchu: it too burned books, jailed intellectuals, tortured and executed them.

The dynasty Mao Zedong established in 1949 has burned more books and tortured/oppressed/murdered more intellectuals than all others over two millennia.

Three decades of Westernizing post-Mao “reforms” have not ended that record of oppression. Intellectuals who dare to oppose the regime are still being buried alive (in prisons instead of graves), tortured, killed on the sly and driven out of the country.

The rulers of China have been unable to see in all their long history that dissent has a valuable role in society, that those who combine intellect, integrity and courage are the treasures of their race.

Another issue on which experience has made no dent on the attitudes of Chinese rulers is national security.

From early days the Han people, who constitute about 90 percent of the Chinese population, have spent enormous treasure and labor to build walls to keep out marauding Mongol nomads. The walls never stopped the invasions but successive generations continued to build them until there was a single enormous structure stretching some 1500 kilometers. That did not stop the Mongols either; in the 17th Century they not only conquered the whole Han heartland but continued far beyond it to Taiwan in the south and Tibet in the west. (Tibet was made to pay tribute, which it did for less than 50 years; on that flimsy ground Mao claimed sovereignty over a land Beijing had never ruled directly.)

Despite the overwhelming evidence that walls do not ensure security China’s rulers still continue to build them: today they have the Great Chinese Firewall to keep out the Internet and the Worldwide Web.

Another critically important lesson repeatedly borne in by experience is that Chinese society needs a procedure for orderly political change; but it has not made a dent in the thinking of the country’s ruling elites. Fearful of the alien, idolizing the imagined gold standard of Confucian stability, every Chinese dynasty has ruled until unseated with brutal violence.

The country’s response to Western dominance and oppression was typically unreflective. Unlike India, where there has been a continuing effort to understand the nature of the Western challenge and meet it through imitation, adaptation, reform and peaceful opposition, China has never understood that it must mobilize its own genius. The mandarins of the Manchu dynasty hoped to transplant Europe's superior technology into an unchanged Chinese society; they considered social reform both unnecessary and dangerous. When that failed, Mao Zedong went to the opposite extreme and tried to rebuild Chinese society according to the ideology of a long dead German ideologue.

That long record of boneheaded elite attitudes to change played out again last week as China’s Communist Party transferred power to a new set of leaders. After a year of murky horse-trading, paranoia and intrigue, amidst the lurid fall from grace of Bo Xilai, the top “Leftist” contender for a share of power, Xi Jinping, replaced Hu Jintao as the head of the Party’s apex Standing Committee.

Despite strident calls for political reform from the departing Hu the new composition of the Standing Committee was solidly stick-in-the-mud. Four of its members, including Xi, are privileged “Princelings,” sons of Mao’s close cohort. One is a propagandist who helped shape the Great Chinese Firewall. Another brings to governance an economics degree from North Korea. A third is best known for not acknowledging an outbreak of SARS that killed thousands. Another worthy, considered a reformer, led the campaign to hide the spread of HIV infection to a million people by official blood banks.

This sorry team is now in charge of a country increasingly incensed by the corruption and arrogant anti-people policies of a Party that has little popular support. Land grabs by government functionaries, imposition of poisonous industries on populous areas, the impunity of corrupt officials and rampant abuse of power have provoked even the stoic steel of China’s people to mounting protest. The number of “mass incidents” (as the regime terms public protests) has increased rapidly in recent years; in 2010 there were 180,000. China Daily, an official paper, has reported that environmental protests are increasing 29 percent yearly.

To prevent any of this outrage from becoming visible during the carefully stage-managed political transition the Beijing regime went to great lengths. Stores were ordered to put away kitchen knives. Ping pong balls that could be imprinted with anti-Party slogans also became hard to buy. Cab drivers were told to remove the roll-down handles of rear windows to prevent passengers from throwing out protest pamphlets. Access to the Internet slowed glacially in Beijing. Hundreds of foreign reporters who congregated in Beijing for the event found themselves in a strange limbo, prevented from asking questions at many Press conferences and often left with no official guidance about events. A thousand of them who gathered to witness the formal introduction of the new Standing Committee were kept waiting in a long corridor until the whole function was over. Multiple security cordons stalled access to the official celebrations in Tiananmen Square; ordinary Chinese were told to go back home and watch on television.

President Hu Jintao in his farewell speeches identified corruption as the primary danger to the State and Party but did not say how exactly they should be addressed. There is little chance of effective action for things are too far gone, and the entire system now facilitates corruption. The Banking sector is an example. Interest rates are kept much lower than the real cost of credit, ostensibly to promote domestic consumption; but all it has done is allow those with privileged access, including bank staff, to take out cheap loans and either lend out the money themselves at market rates or speculate in real estate. The result is an entirely unregulated alternative banking system that undermines the formal sector; it has inflated apartment prices far beyond the reach of most ordinary Chinese and millions of units now lie unoccupied.

Undetermined billions of Yuan embezzled from public institutions are also being used by corrupt officials for real estate speculation, so any sharp fall in prices will throw many local governments into crisis and wreck pension funds and insurance companies. The rapidly slowing economy is making the mess increasingly difficult to hide.

The new Standing Committee has few options to revive the economy. The banks have gone through two rounds of massive recapitalization to optically reduce their holdings of non-performing loans, and no one knows what their real situation is. China’s massive foreign reserves could be used to further shore up its banks but that would ignite an unwelcome level of inflation. Chinese manufacturers are suffering from a deadly combination of recession in their main foreign markets and growing labour militancy. Millions of migrant workers without residential permits in major cities are facing unemployment and have no social security. Educated unemployed youth are now again a major problem after years of booming economic growth, and there is intense competition among over-qualified candidates for low level but secure government jobs.

Foreign investment continues to be high (over $100 billion in 2012), but is down from last year. The continued high level of investment, both foreign and domestic, is not a positive factor when it is too high a proportion of GDP and at a time of falling manufacturing and exports; the result is inescapably inflationary. A broad effort to increase domestic consumption by increasing the minimum wage has also been inflationary and any large-scale government spending now, no matter what the aim, could send the cost of living into an irretrievable danger zone.

China has faced hard economic crises before. Mao initiated the Great Leap in an effort to cope with one. It caused a famine that killed between 30 and 46 million Chinese. There was no breakdown in political order then because the People’s Liberation Army, which serves the CPC not the nation, was firmly under Mao’s control. That control is long gone. Hu reportedly faced overt discontent at some meetings of the Military Commission, and the Party leadership now cannot take the PLA for granted. Reports say there is talk within the officer cadre of the need to “nationalize” the PLA – i.e. remove it from the authority of the Party and put it under the umbrella of the State. A move in that direction would be a political coup and signify the end of the current regime in all but name.

Complicating the picture within China is the grossly warped economic relationship the country has developed with the world since the 1997 “two systems one country” deal for the return of Hong Kong after its 99 year development under the British. With that deal China’s leaders bought into the empire of corruption Britain has built as its formal imperial structures were dismantled. Having Hong Kong as a sluice for the proceeds of corruption has gutted the Chinese regime in a weird replay of what happened in the 19th Century as Britain foisted the opium trade on the country. According to Washington-based Global Financial Integrity the country has lost an estimated $3.7 trillion in outflows to the global black market since 2001. That staggering figure indicates more than economic loss; it means key players in the Chinese power structure are in league with the most unscrupulous and manipulative of foreign interests.

The level of their cooperation can perhaps be seen in the murky downfall of Bo Xilai, a “Princeling” whose vocal campaign against corruption had made him a popular candidate for inclusion in the Standing Committee. The timing of his fall and its cause – the murder of a “British businessman” who was both an MI6 operative and a money-launderer – suggest a set up. Was the murder provoked by a blatant effort to cheat Bo and his wife of their foreign holdings? What led the local Police Chief (now given amnesty) to advertise the murder internationally by fleeing for asylum to the American consulate in Chengdu?

Such questions will surely be exercising the minds of the 25 members of political Bureau to which Xi’s 7-member Standing Committee reports. Unlike its apex body the Bureau is not dominated by conservatives and it could rehabilitate Bo Xilai much as it did Deng Xiaoping, who Mao tried to discredit and destroy. We can read that possibility into the unexplained decision to select only seven of the nine members of the Standing Committee. If Bo’s supposed show-trial exonerates him the cat would be among the pigeons, especially if he is inducted into the Standing Committee along with another reform candidate who was excluded. Xi himself could easily swing into the reform camp, for he has shown himself to be pragmatist. (It is possible his mysterious two-week disappearance from public view in September was spent reassuring last-minute doubters in the conservative camp and ensuring that he could take over chairmanship of the Military Commission at the same time as the top Party job.)

No matter how these circumstances play out, the anti-reform cast of the Standing Committee might be short-lived, for five members will reach the mandatory retirement age of 70 in the next few years; it is unlikely that 86-year old former president Jiang Zemin, who marshaled the conservatives this time around, will be able to decide on replacements. However, such prognostications could be immaterial, for the Chinese economy faces a disastrous prospect. If it suffers a crash the effects will be global and could easily tip the region, and indeed, the world, into war.

If ever there was a time for Chinese leaders to internalize the lessons of their national history it is now. Those lessons are clear. Security lies not in walls but in promoting the creativity and genius of their own valiant people. Dissent is not a weakness but an invaluable good in any society. The strength of a nation is not in the oppression of the weak but in their happiness and wellbeing. The corruption and criminality of the outside world are indeed dangerous but they are counterbalanced by a great fund of goodwill that China can mobilize if it changes policies founded in arrogance and dishonesty.

The normal run of State policies will not allow such a change in mindset; it will require a fundamental reassessment of the country’s existential situation and a decision to change it. Fortunately, the rich spiritual tradition of Chinese Buddhism offers the basis for such a change. To suggest that the regime allow the revival of that tradition might seem unrealistic but it is no more than a reversal of the ugly change that Mao Zedong engineered. It would transform the scene within the country and recast all problems in a hopeful light. It could save not just China but the world from disaster.

Bo Xilai, China and Media Hypocrisy

The story of Chinese "princeling" Bo Xilai, his "Jackie Kennedy wife" Gu Kailai, and murdered "British businessman" Neil Heywood is a textbook case of mass media hypocrisy in covering international affairs.

Consider for example the Letter from China headlined "Corruption Nation: Why Bo Xilai Matters" in the latest New Yorker, and last week's investigative piece by Bloomberg on Gu's four sisters who "controlled a web of businesses from Beijing to Hong Kong to the Caribbean worth at least $126 million.”

In both articles, as in the general flow of news agency reporting of the matter, the focus is firmly on Chinese corruption. The cesspool  represented by Neil Heywood, who Reuters reported was "poisoned after he threatened to expose a plan by a Chinese leader’s wife to move money abroad,” remains firmly in the shadows.

Heywood was no ordinary "British businessman." He was a fixer for the global black market centered on and run from The City, London's financial center. His main job seems to have been helping corrupt Chinese officials move hot money into safe havens abroad. On the side he reported to MI6, Britain's nefarious spy agency (a link he advertised in a pathetically juvenile manner by incorporating 007 on his car license plate).

Why is China "corruption nation" and not Britain?

The New Yorker piece sins by omission; the Bloomberg article engages in active distortion. Noting the use of offshore tax havens by Gua's sisters, it says that is "not unusual: P.O. boxes in jurisdictions such as the Cayman Islands and British Virgin Islands can serve as the address for thousands of companies. While the majority of tax haven-based companies are set up for legitimate reasons, offshore jurisdictions have been linked to multiple frauds and corruption cases...".

The Bloomberg authors do not say what "legitimate reasons" are served by accounts and shell companies with untraceable owners in off-shore tax havens (of which there are now over 70, most of them in tiny former British colonies). I can see none; those who use tax havens want to avoid taxes, evade legal responsibility, and stash the proceeds of crime.

Illicit outflows from China are the largest of any country in the world. Sarah Freitas notes in her blog at Washington-based Global Financial Integrity that the country lost $2.74 trillion over the past decade. Partial estimates from a number of sources including the IMF and the World Bank indicate that global black market assets amount to over $30 trillion.

Assets in the trillions of dollars cannot be managed by hoods carrying around suitcases filled with high denomination currency notes. Major financial institutions are involved, and they operate in a coherent system that drains an estimated $1 trillion from developing countries every year. 

Mainstream media have been incurious about such numbers, and especially in the mechanisms used to move and manage the money. The growth of a global black market that Britain developed as its Empire dwindled in the 1960s is perhaps the most uncovered international story of our time.  

The corruption represented by that enterprise is not just victimless "white collar" crime. The global black market sustains terrorist organizations, drug traffickers, civil wars, coups against elected governments, trafficking of women and children for the sex trade, and a host of other organized criminal activities. It feeds the huge speculative "hedge funds" that have driven oil prices beyond $100 a barrel during a global recession. It kills democracies.  

To bring the current situation into political focus it is necessary to see it as a second British Empire, one that employs drug mafias and "Islamic terrorists" instead of conquering armies and rewards its primary agents -- bankers -- not with titles and tiaras but with munificent "bonuses" even as their above-ground organizations wallow in public funds to avoid bankruptcy.

Public outrage about those bonuses is often reported in the mass media, but strangely, there has never been an investigation into the rationale for them. The halfhearted excuse that the bonuses are necessary to ensure the integrity of those who deal with billion dollar flows is not valid; there are thickets of safeguard procedures and special oversight and audit arrangements to impose honesty.

As we move into a period of individual connectivity rich with democratic promise it is critically important for people everywhere to recognize that corruption at the national level is sustained by a global system run by a violent and unprincipled elite. Unless we dismantle that system the world will continue to be in a state of perennial violent disorder.