Neoliberalism, Creative Destruction and the Economic Reconstruction of Iraq, 2003-2010

Item Type Electronic Thesis; text

Authors Flannes, Matthew William

Publisher The University of Arizona.

Rights Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.

Download date 01/10/2021 02:20:49

Link to Item http://hdl.handle.net/10150/144372

NEOLIBERALISM, CREATIVE DESTRUCTION AND THE ECONOMIC RECONSTRUCTION OF IRAQ, 2003-2010

Matthew William Flannes

A Thesis Submitted to the Faculty of the

Department of Near Eastern Studies

In Partial Fulfillment of the Requirements

For the Degree of

Masters of Arts

In the Graduate College

THE UNIVERSITY OF ARIZONA

2011 2

STATEMENT BY AUTHOR

This thesis has been submitted in partial fulfillment of requirements for an advanced degree at The University of Arizona and is deposited in the University Library to be made available to borrowers under rules of the Library.

Brief quotations from this thesis are allowable without special permission, provided that accurate acknowledgment of source is made. Requests for permission for extended quotation from or reproduction of this manuscript in whole or in part may be granted by the copyright holder.

SIGNED: ______Matthew W. Flannes

APPROVAL BY THESIS DIRECTOR

This thesis has been approved on the date shown below:

______May 2, 2011_____ Leila O. Hudson Date Associate Professor of Near Eastern Studies

ACKNOWLEDGEMENTS

I would first like to thank the members of my thesis advisory committee: Dr. Leila Hudson, David Dunford and Dr. Maha Nassar. This thesis would not have been possible without your guidance throughout the past year. Your advice, patience and consistent availability helped me turn this project from a series of ideas into a finished product that I am proud to call my own. I would also like to thank the following friends and colleagues for your support, both of me personally and my work, throughout the past year: Dylan Baun, Colin Owens, Tia Maitra and Nicole Zaleski. You were all integral to this process, whether for your valuable recommendations and criticisms, or simply providing an ear to listen after a long night of researching and writing. I could not have been able to get through this process without you all. Finally, to my family: Mom, Dad and Jon. Without your love and support I would not be where I am today. You never stopped encouraging me to learn, explore and question. For this I am forever indebted to you.

TABLE OF CONTENTS

ABSTRACT……….………………………………………………………………………6

INTRODUCTION...... 7

CHAPTER ONE: POST-WAR ECONOMIC MODELS: THE CREATION OF WEALTH AND THE DESTRUCTION OF INEFFICIENCY……………….…………13

The Marshall Plan and the Role of the State in Nation (Re)building...... 15

Neoliberalism: Removing the Shackles of Statism………………………………...….23

Joseph Schumpeter and the Lure of Creative Destruction………….…………………29

CHAPTER TWO: IRAQ DURING THE BIPOLAR ORDER OF THE COLD WAR……………………………………………………….…37

US-Iraqi Relations Amidst the Cold War...... 38

The Iranian Revolution and its Enduring Economic and Political Shock Waves...... 42

The First War of the New World Order…………………………………………….…45

Containment: Cold War Historical Model in a Time of American Hegemony?...... 49

Sanctions: A Poor Example of US Power?...... 51

New Calls for the Overthrow of Saddam Emerge………………...…………………..54

George W. Bush Administration: A New Approach………………………..……...…56

CHAPTER THREE: POST-2003 IRAQ: THE FIRST CONVERGENCE OF NEOLIBERALISM AND CREATIVE DESTRUCTION?...... 59

September 11th and its Ideological Implications………………………………………60

Post-9/11 Planning of the Iraq War……………………...……………………………63

The Public Push for War and Nascent Plan for Post-Hostilities….…………………...66

Justifications, War and its Aftermath……………………………………………….…70

The Creative Destruction of Iraq: CPA Orders One and Two………….……………..75 5

TABLE OF CONTENTS-CONTINUED

Iraq’s Shock Therapy: the CPA and Neoliberal Economic Reforms...……………...…77

CHAPTER FOUR: THE LEGACY OF NEOLIBERALISM IN IRAQ AND BEYOND, 2004-2011………………………………………………………………………………..85

Iraqi and American Retreat From the Neoliberal CPA Orders………….…………….86

The Legacy of the CPA……………………………………………………………..…90

The Insurgency as a Response to Neoliberalism?...... 92

Contractors and the Privatization of War………………………………………..…….94

A New Way Forward: Counterinsurgency and the Resurgence of the State……….…98

Arab Response to Neoliberalism…...……………………………………………..…101

The Rebirth of History?...... 102

REFERENCES…..………..……………………………………………………………109

ABSTRACT

The Marshall Plan and post-2003 Iraq represent the two largest US-led, post-war reconstruction projects in history, yet the two cases embody the implementation of two nearly opposite political ideologies. Whereas proponents of the Marshall Plan emphasized the supremacy of the state in reconstruction, Bush administration officials felt that neoliberal market reforms, aided by the opportunistic nature of Schumpetarian creative destruction, were the only legitimate steps required in post-war Iraq. Such discrepancies were largely due to the changing role of the US in the international arena; by the end of the Cold War, Washington was able to take a unilateral approach abroad and more actively push for political and free market reforms. Yet the sectarian chaos that quickly engulfed Iraq and the economic rise of China have all but delegitimized neoliberalism and effectively reopened the issue of the role of the marketplace versus the state in the 21st century.

“Great powers do not just mind their own business.” ~Condoleezza Rice “Promoting the National Interest,” Foreign Policy, 2000 “We would rather roll up our sleeves and move heaven and earth to make a workable system of cooperative free enterprise triumph in Iraq in its hour of tremendous need.” ~Future of Iraq Project “History will judge the war against Iraq not by the brilliance of its military execution, but by the effectiveness of its post-hostilities activities.” ~Jay Garner “A Unified Mission Plan for Post-Hostilities Iraq”

Introduction

The economic reconstruction of Iraq following the collapse of the Ba‘athist regime in 2003 has been called the largest United States-led reconstruction effort since the Second World War.1 Indeed, in terms of capital investment, such an assertion would be apt. Between Fiscal Years 2003-2008, the United States provided $28.9 billion in total assistance for Iraq, whereas it is estimated that $29.3 billion was allocated for West

German assistance between 1945-1952 (adjusted for inflation).2

However, despite similar levels of financial support, these two examples of massive American-led reconstruction efforts were motivated by economic philosophies

1 Tim Jacoby. "Hegemony, Modernisation and Post-War Reconstruction." Global Society: Journal Of Interdisciplinary International Relations. 21, no. 4 (2007): 522. 2 Nina Serafino, Curt Tarnoff, and Dick K. Nanto. U.S. Occupation Assistance Iraq, Germany and Japan Compared. Washington, D.C.: Congressional Research Service, Library of Congress (2006). West Germany will be subsequently referred to as Germany for the remainder of this thesis unless differentiated from its eastern counterpart. 8

that were nearly diametrically opposed: officials guiding the Marshall Plan argued that the centralized powers of the state were the most effective in bringing Europe out of economic and political crisis in the post-war era by pushing back on the influences of communism through state-sponsored development and employment programs. On the other hand, neoconservative authors of the 2003 Iraq war believed that an overly burdensome public sector had stymied economic growth in Iraq for decades, and the sole mechanism needed to unleash the forces of productivity and wealth production in the oil- rich nation was a strong private sector, one that could only be achieved through neoliberal reforms.3 These reforms, and the opportunities they would provide for the

Iraqi economy and its foreign investors, were catalyzed by the phenomenon of

Schumpeterian creative destruction, typified by the looting that decimated Baghdad after the fall of Saddam Hussein, as well as the massive layoffs of Iraqis by the Coalition

Provisional Authority (CPA) as part of its policies of economic reform. Indeed, the lack of a concrete plan and adequate preparation for post-war reconstruction allowed for the implementation of the ideologies of creative destruction and neoliberalism, both of which thrive in cases of little state planning.

Whereas the architects of the Marshall Plan saw the free market as the desired end to economic and social reform, economic liberalization was seen as both the means and

3 Neoliberalism can loosely be defined as a set of economic principles and policies that promote the privatization, trade liberalization and the opening of markets through reforms that limit the role of the state in economic affairs. Neoconservatism, on the other hand, promotes the use of US power abroad in order to spread free markets and democratic political systems. While the two can be linked ideologically and politically, particularly as it pertains to neoliberal reforms promoted abroad through the use of US power, they are nonetheless distinct philosophies. 9

the end to eventual stability in Iraq. As US Presidential Envoy L. Paul Bremer wrote in

June 2003, “higher living standards -- and political freedom -- cannot emerge if economic freedom is denied... li rebuilding the Iraqi economy based on free-market principles is central to our efforts.”4

The philosophies that motivated the Iraqi reconstruction project, particularly neoliberalism, did not emerge in a vacuum, but were responses to the political and economic conditions in the United States in the decades after the end of World War II. In the wake of the Great Depression, conventional economic wisdom moved from classical economics, which relied on theories of price to determine economic fluctuations, to

Keynesianism, which placed a greater emphasis on the public sector as a generator of wealth. Yet with the ravaging effects of “stagflation” in the early 1970s, a new age of economists called for the reinvigoration of the private sector through the dismantling of state-owned enterprises and regulatory policies. Such “neoliberal” policies would largely guide US fiscal policy beginning with the Reagan administration, and became a strong pillar of its foreign policy goals, as encapsulated by the “Washington Consensus” of the

1990s.

Part of the success of the US in projecting such policies across the came from its position as the world’s remaining hegemonic power after the collapse of the Soviet Union in 1991. However, throughout most of the Cold War era, Washington was restrained in actively projecting its power and influence due to the nature of the bipolar international

4 E.J Dionne. "Iraqis Deserve Democratic Pragmatism." Alexander's Gas & Oil Connections. Published July 14, 2003. Accessed April 15, 2011. http://www.gasandoil.com/goc/news/ntm33262.htm. 10

system that existed between the US and the Soviet Union. This was particularly apparent in the US’s relationship with Iraq after the end of World War II, and the ways in which

Iraq’s relationship with the two superpowers was reflected in its economic model. In the immediate post-war era, particularly after the 1958 coup that deposed the Hashemite monarchy, Iraq built up a Soviet-leaning, socialist economy, dedicated to the construction of societal and economic infrastructure through a centralized command system. Yet, after tensions rose with Moscow in the late 1970s, Baghdad shifted closer towards the US and its western allies, a trend that was epitomized by the intersection of shared interests in the wake of the Iranian Revolution of 1979 and the ensuing Iran-Iraq War of 1980-

1988. This brought about a massive redistribution of Iraq’s resources, which were largely used to meet the economic demands of war.

With Iraq’s invasion of Kuwait in 1990, the Iraqi economy and Baghdad’s relationship with the Washington made a fateful turn that was only exacerbated exacerbated by the US’s new position as the world’s only superpower. Through the destruction of Iraq’s infrastructure during Operation Desert Storm and the economic sanctions program that followed, the Bush and Clinton administrations attempted to

“creatively destroy” the regime of Saddam Hussein in the hopes of building a new, pro-

US government in its place. These policies were part of a larger evolving strategy of containment, which aimed at restraining Iraq’s economic and military influence in the region, albeit through relatively indirect means. 11

Yet by the mid to late-1990s, it was clear that containment had failed to curb

Hussein’s authority, let alone remove him from power. In response, neoconservative pundits and authors argued for a stronger and more forceful US response to the supposed threat of Saddam Hussein to US interests. Containment was seen as both an inappropriate and unsuccessful use of American power. In its place, such conservatives argue for the forceful removal of the Ba‘athist regime, a position that was codified with the Iraq Liberation Act of 1998.

With the election of George W. Bush to the White House in 2000, and the attacks of September 11, 2001, neoconservative notions of the US’s position in the world and its use of power abroad became politically acceptable to the American public.

Administration officials argued that the US reserved the right to act preemptively and unilaterally in the face of potential and looming threats. Iraq was seen as such a threat as part of the larger “war on terror,” and military planning for an invasion began soon after

9/11. Economic reconstruction planning, on the other hand, did not begin until a matter of months prior to the March 2003 commencement of hostilities. This was largely based on false assumptions about the nature of the Iraqi response to the US invasion and subsequent reconstruction efforts.

In the absence of a detailed reconstruction plan, officials at the CPA relied on neoliberal ideologies to guide the post-hostilities phase of the US occupation. CPA orders called for the privatization of Iraqi state-owned enterprises, shielded American corporations from the Iraqi legal structure and fired hundreds of thousands of Ba‘ath 12

party members, soldiers and public workers. Massive unemployment, combined with sectarian grievances, helped to catalyze a growing insurgency that fed off the political vacuum of post-Saddam Iraq. Indeed, “the American attempt to neoliberalize Iraq was at the center of what became the resistance.”5 In the face of a civil war by 2006, the US turned to the drastically different strategy espoused by General David Petraeus, one that required a stronger Iraqi state to fight back against rampant instability and massive unemployment. And while the Iraqi government would eventually curb or reverse several of the economic orders of the CPA, it continued many neoliberal reforms, such as privatization, foreign investment and the dismantling of subsidies.

5 M. Schwartz. "Neo-Liberalism on Crack: Cities Under Siege in Iraq." City. 11, no. 1 (2007): 26. 13

CHAPTER ONE: POST-WAR ECONOMIC MODELS: THE CREATION OF

WEALTH AND THE DESTRUCTION OF INEFFICIENCY

Throughout the 20th century, economists and policy makers continually debated the issue of why certain societies succeed, and others failed, in producing and sustaining economic growth. Ideas ranged from the neoclassical emphasis on price competition to innovative theories of the 1980s, some of which underscored knowledge as a variable for growth.6 The constant challenges of continuous development were largely confounded by the unprecedentedly destructive nature of modern warfare. Indeed, the economic and societal realities left in the wake of World War II directly motivated the creation of development theory, which speculated as to how best to bring about desired societal change.7 Similar debates questioned the role (or lack thereof) of the state in the development or reconstruction of infrastructure and its capacity to do so in an increasingly globalized and privatized world. Three such theories, statism, neoliberalism and creative destruction were instrumental in these debates and the subsequent political movements they helped inspire, and are summarized below.

In the aftermath of the stock market crash of 1929 and ensuing Great Depression, economic thinkers began to reject the neoclassical model of economic equilibrium and market outcomes. Largely dominated by the writings of John Maynard Keynes, its theorists argued that, in instances of severe fiscal crisis, the state should actively

6 For more on the development of theories of growth throughout the 20th century, see Yergin and Stanislaw, 2002, Ezeala-Harrison, 1996 and Puttaswamaiah, 1999. 7 Marc Edelman and Angelique Haugerud. The Anthropology of Development and Globalization: From Classical Political Economy to Contemporary Neoliberalism. (Malden, Mass: Blackwell Pub, 2005), 110. 14

intervene in economic affairs.8 This approach would directly influence the policies of post-WWII economic planners, whose statist interpretations of Keynesianism allotted direct control over reconstruction efforts to government forces.

Economic neoliberalism, on the other hand, argued that the market, not government intervention, was the most effective and suitable tool for the creation of economic growth. Emerging largely as a response to Keynesianism, neoliberal economists, such as Milton Friedman of the University of Chicago, theorized that such governmental influence in the economy was immensely detrimental, and proposed privatizing many industries and markets that had fallen under control of the public sector after World War II. A central component of this philosophy was monetarism, which limited the state’s role in economic matters to the amount of money in supply in order to curb inflation. Such theories had deep and lasting influence on economic policies of

“developed” and “developing” nations beginning in the late 1970s, and would play a critical role in the economic reconstruction policies of post-2003 Iraq.

Finally, creative destruction, as theorized by Austrian economist Joseph

Schumpeter, posited that the destruction and eventual creation of companies, sectors and entire markets was the central driving force of capitalism. Although Schumpeter saw creative destruction as largely an economic theory, I argue that it is most relevant to this

8 Born in 1883, Keynes’ work revolutionized the economic discourse of the 20th century. Although most well known for his 1936 book General Theory of Employment, Interest and Money, which advocated for increased public spending and/or tax cutes in the face of widespread unemployment, Keynes also analyzed the causes of the business cycle, government financing during times of war, hyperinflation and reparations. 15

study when applied to the political realm, particularly as a reflection of the changing nature of the state throughout the second half of the 20th century.

Sequentially, these philosophies represent a paradigmatic change in the ideological motivation behind economic reconstruction. Whereas the Marshall Plan, motivated by the principles of statism, emphasized the powers and effectiveness of the state in the reconstruction of war-torn nations, the Iraq case, driven by neoliberalist principles and catalyzed by the nature of creative destruction, called for a state-driven destruction (on the basis of preemption), with a “natural” reconstruction of the economy through the powers of the unencumbered free market.

Finally, I would argue that a deep understanding of these concepts and case studies can help scholars and policy officials best understand the US-led Iraqi reconstruction project in a greater light, both historically and ideologically. I must stress that economic ideology philosophy does not exist in an academically isolated bubble, but has served as the central motivating force behind some of the most consequential military and political decisions of the century. To this end, economics must not be seen as an independent social science, but more so exists as a political ideology used to drive policy.

The Marshall Plan and the Role of the State in Nation (Re)building

It has been widely argued that modern models of economic reconstruction began in the wake of World War II. Specifically, the European and Japanese cases were

“America’s first experiences with the use of military force in the aftermath of a conflict 16

to underpin comparatively rapid and fundamental societal transformation.”9 While the

Japanese reconstruction effort cost the US $15.2 billion in total assistance between 1945 and 1952, I argue that the German project under the Marshall Plan offers the most relevant and illuminating point of comparison for a study on the Iraqi case and its long term ramifications.10

As the war came to an end in 1945, more than five years of allied bombing raids had decimated Germany’s most basic infrastructure. While British and American bombing campaigns had initially focused their efforts to military targets, by 1943, the scope of air raids had expanded to include industrial cities and civilian areas. Indeed, the carpet-bombing of German cities became a central component of the war for morale.11

As a result, basic governmental services and infrastructure were nearly nonexistent by the war’s end. On the day of Hitler’s death, only 10% of all German railways were operational, with coal production at barely one-tenth of its 1939 level. Nonetheless, these central components of infrastructure had soon been returned to prewar levels, primarily due to the fact that the industrial centers had remained largely unscathed from allied bombing. Due to heavy wartime investment, major sectors of Germany’s industrial

9 James F. Dobbins. "America's Role in Nation-Building: From Germany to Iraq." Survival. 45, no. 4 (2003): 87. 10 Serafino, Tarnoff and Nanto, U.S. Occupation Assistance, 1. As noted in the introduction, the Marshall Plan and the Iraq reconstruction projects consisted of similar levels of US government funding. The two cases are also worth comparing due to the divergent amounts of planning. While the principles and components of the Marshall Plan were clearly formulated by the allies, the post-2003 reconstruction policy in Iraq proceeded without a detailed plan, instead relying on the neoliberal ideologies of government officials. These discrepancies will be analyzed in greater detail in chapter 3. 11 For an analysis of the moral dimension of the allied bombing campaign, see Grayling, 2006; for an overview of the development of the British war campaign beginning in 1939, see Hastings, 1979; for insight into the final three years of the allied campaign, see Hansen, 2008. 17

equipment were also relatively new. By 1946, “93 percent of all German rail tracks had reopened and 800 bridges had been rebuilt.” Raw material and other shortages had eclipsed war damage by early 1947.12

Although essential German infrastructure was able to recover relatively quickly, the allies felt the need to limit the potential for German industrialization and development in order to minimize the chances for future war. Such policies were first addressed in the

Potsdam Agreements of 1945.13 Under the tenets of the agreement, the US, Russia and the United Kingdom agreed to reduce or destroy all sectors of the German economy with a plausible military application, such as shipbuilding and chemical production, “in order to eliminate Germany’s war potential.”14 This approach was largely motivated by

European fears of an economically and politically resurgent Germany, one that had returned from the ashes of World War I to inflict another bloody war upon its neighbors.

These principles were solidified in US policy under JCS Directive 1067, known as the “Morgenthau Plan,” named after Secretary of the Treasury Henry Morgenthau Jr., which stated that “the basic objectives in Germany should bring home to the Germans that Germany’s ruthless warfare and the fanatical Nazi resistance have destroyed the

German economy.”15 According to the Morgenthau Plan, heavy industry was to be lowed to 50% of 1938 levels, with car production at 10% and steel production at 25% of

12 Tony Judt. Postwar: A History of Europe Since 1945. (London: William Heinemann, 2005), 85. 13 "POLICIES & PRINCIPLES: Trouble in Germany." TIME.com. Published October 22, 1945. Accessed April 16, 2011. http://www.time.com/time/magazine/article/0,9171,778431,00.html. 14 "American Experience | Truman | Primary Sources." PBS: Public Broadcasting Service. Accessed April 16, 2011. http://www.pbs.org/wgbh/amex/truman/psources/ps_potsdam.html. 15 "GHDI - Document." German History in Documents and Images. Accessed April 16, 2011. http://germanhistorydocs.ghi-dc.org/sub_document.cfm?document_id=2297. 18

pre-war levels.16 Overall, the goal was to “transfer” German industry from the “heavy” to the “light.” Signed in May 1945 by President Truman, JCS 1067 would serve as the basis for US policy in Germany until June 1947.17

Yet the unraveling of policies aiming to de-industrialize Germany began in earnest with the September 1946 “Restatement of Policy on Germany” speech by

Secretary of State James Byrnes. In the speech, Byrnes essentially repudiated the tenets of the Morgenthau Plan and called for a massive shift in US policy.18 Newly appointed

Secretary of State George Marshall officially rescinded the directive in 1947 and replaced it with JCS 1779, which forced occupying forces to undertake “measures which will bring about the establishment of stable political and economic conditions in Germany.”19

Restrictions on German production and output therefore had to be removed “so that the country might once again make its crucial contribution to the European economy.”20

Marshall also reinstated 90% of those officials previously purged under de-Nazification orders in an attempt to maintain the central apparatus of the state.21 These policies of economic integration, coupled with unparalleled levels of reconstruction aid, aimed at turning Germany into a close trading partner and were codified as the European Recovery

16 Henry Christopher Wallich. Mainsprings of the German Revival. (New Haven: Yale University Press, 1955), 348 and "ECONOMICS: Cornerstone of Steel - TIME." TIME.com. Published January 21, 1946. Accessed April 16, 2011. http://www.time.com/time/magazine/article/0,9171,934360,00.html. 17 Ray Salvatore Jennings. The Road Ahead Lessons in Nation Building from Japan, Germany, and Afghanistan for Postwar Iraq. (Washington, DC: U.S. Institute of Peace, 2003), 15. http://purl.access.gpo.gov/GPO/LPS31531 18 John Gimbel. "On the Implementation of the Potsdam Agreement: An Essay on U.S. Postwar German Policy." Political Science Quarterly. 87, no. 2 (1972): 242. 19 "Yalta: Fact or Fate? A Brief Characterization." Institute for Historical Review. Accessed April 16, 2011. http://www.ihr.org/jhr/v03/v03p359_Wesserle.html. 20 Judt, Postwar, 98. 21 Jacoby, “Hegemony,” 524. 19

Program, or Marshall Plan. The Marshall Plan would become the case study for the fledging field of development theory in the coming decades, and serve as a symbol of the close relationship that existed between state and marketplace in the post-war decades.22

Although the level of US-led state intervention and aid reached unprecedented levels during the height of the Marshall plan, the antecedents of statism can be said to begin with the intellectual framework proposed by British economist John Maynard

Keynes. In his General Theory of Employment, Interest and Money, Keynes argued that an economy should be viewed as a whole, rather than a disparate collection of sectors and businesses, and could work most effectively through management by a central government. In essence, Keynes advocated for an activist role of the public sector in response to inefficient macroeconomic outcomes of private sector decision-making. The

General Theory, first published in 1936, was undoubtedly a product of its time: free market capitalism had come under intense fire in the wake of the Great Depression.

Keynes was determined to write a plausible defense of its essence while altering the macroeconomic policies of classical economics that had guided economists since the era of Adam Smith.23 Economists and policy officials who would shape the post-war policies beginning in 1945 could not escape the reach of Keynesianism. Indeed, Keynes

22 It must be noted that, in the late 1940s and early 1950s, “the state” referred to the United States and European donors. West Germany would not develop its own functioning free market system until the mid- 1950s. 23 "Commanding Heights: Home | on PBS." PBS: Public Broadcasting Service. Published 2002. Accessed April 16, 2011. http://www.pbs.org/wgbh/commandingheights/lo/index.html. 20

himself was appointed to a directorship of the Bank of England in 1941, a time when the country held the world’s fourth highest gross domestic product (GDP).24

This statist approach, as it applied to the Marshall Plan, was based on the belief that central government was the only force that could make a real and lasting economic change, particularly in the precarious instance of post-war Germany. Such a view arose from the established role of Keynesianism in post-war economic thought, as well as the belief by planners that “the advantages of wartime planning and government intervention could translate into sustained peacetime administration.”25 As a result, the free market or liberal reforms were entirely absent from the allied discussion table at the outset of post- war policy discussions. Writing in Foreign Affairs in 1947, Jacob Viner, who would later teach economics at the University of Chicago, recalled that, during the initial phase of reconstruction, “no person anywhere advocated free trade.”26 In the absence of Adam

Smith’s “invisible hand” guiding the marketplace, US government planners steered the direction of the German economy under the auspices of the Marshall Plan.

Begun in June 1947 as the primary program for delivering aid to the economies of

Western Europe, the Marshall Plan was a clear signal that the victors would not repeat the castigatory measures on Germany after World War I. In the wake of the 1919 Treaty of

Versailles, allied leaders had instituted deeply punitive measures against the Germans, including reparations and territorial concessions. Economic retribution in 1945 was

24 Mark Harrison. The Economics of World War II: Six Great Powers in International Comparison. (Cambridge: Cambridge University Press, 1998), 11. 25 Martin Schain. The Marshall Plan: Fifty Years After. (New York: Palgrave, 2001), 2. 26 Jacoby, “Hegemony,” 527. 21

understandable, but unless the Germans were “given some prospect for a better future, the outcome might be the same as before: a resentful, humiliated nation vulnerable to demagogy from Right or Left.”27 Therefore, in the words of George Marshall, the plan would work towards “the revival of a working economy so as to permit the emergence of political and social conditions in which free institutions and social conditions can exist.”28 In Marshall’s eyes, free markets were the intended consequence of such measures, but certainly not the means.29

In the absence of free market reforms, foreign governments pledged massive levels of cash injection to increase the attractiveness of Western Europe’s economies.

Each recipient of US funding would be required to match such aid with “counterpart” contributions from other nations, leading to an explosion of outside funding. Germany received over a quarter of its domestic capital through the Marshall Plan throughout the

1950s, leading to annual growth rates of approximately 8%. This was compounded by the “big push” approach, which relied on one sector to produce enough wealth in order to allow others to “take off,” thus creating a middle class with expendable income, as well as an attractive economy to outside investors.30

Although the Marshall Plan was intended to keep Europe from sliding back into war through the underwriting of economic development, the new ideological threat from

27 Judt, Postwar, 106. 28 "The "Marshall Plan" Speech at Harvard University, 5 June 1947." Organisation for Economic Co- operation and Development. Accessed April 16, 2011. http://www.oecd.org/document/10/0,3746,en_2649_201185_1876938_1_1_1_1,00.html. 29 This was in stark contrast with the post-war reconstruction of Iraq, where free markets were both the means and the ends to political and economic freedom and stability. For more, see chapter 3. 30 Jacoby, “Hegemony,” 528. 22

the east lingered in between the lines of every policy statement. It was clear to policy makers in Washington that, in addition to the task of reconstruction, the free market was also unable to push back against the influences of communism unilaterally. This conviction was exacerbated by the deteriorating situation of Germans in the immediate post-war years. By 1947 many Germans were living on less than 1,000 calories per day, only slightly higher than that of the ration of concentration camps.31 To General Lucius

Clay, US viceroy in Germany, “there is no choice between becoming a communist on

1,500 calories a day and a believer in democracy on 1,000 calories.”32 Therefore, a greater emphasis on the public sector and national-level organizations was seen as a significant tactic in the exclusion of communists from the European levers of power. The containment of communism has since been noted as the foremost US interest Marshall was hoping to maintain through his reconstruction plan.33

The Marshall Plan, as well as other similar cases of post-World War II economic reconstruction, has been seen as extremely successful from a historical perspective.

Economic measures were intimately coupled with the political, allowing for democratic transformations in both Japan and Germany. Indeed, Germany and Japan “converted

31 John Dietrich. The Morgenthau Plan: Soviet Influence on American Postwar Policy. (New York: Algora Pub, 2002), 108. 32 Jennings, The Road Ahead, 14. 33 Michael J. Hogan. The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952. (Cambridge [Cambridgeshire]: Cambridge University Press, 1987), 42. 23

from violent and intensely destructive enemies into prosperous friends, allies and peaceful competitors.”34

It must be noted, however, that the outcome of the Marshall Plan was strongly influenced by the preexisting conditions of the affected nations. The program’s success was undoubtedly aided by the fact that both nations were highly industrialized prior to the outbreak of the war, as well as the global economic dominance of the United States by

1945.35 Despite these contextual factors, it is clear that the combination of initial statist economic control followed by the adoption of political and free market reforms were central to the economic rehabilitation of Europe amidst the ashes of World War II.

Neoliberalism: Removing the Shackles of Statism

Keynesian dominance in economic circles continued throughout the 1950s and

60s, as various levels of government intervention became standard policy. President

Richard Nixon went so far as to say in 1971 that “we’re all Keynesians now.”36

However, by the mid-1970s, “stagflation,” or the simultaneous increase of inflation and unemployment, began to wreak economic havoc on the US and Europe, culminating in the greatest recession since the 1930s. Coupled with the partial abandonment of the

34 Erich Weede. "Capitalism, Democracy and Peace," 62. poli.vub.ac.be/publi/orderbooks/myth/05Weede.pdf. 35 During the post-war reconstruction phase, the United States held 50% of the world’s GDP, whereas by the 1990s the figure had dropped to 22%. (Dobbins, 16) 36 Steven Pearlstein. "Keynes on Steroids" The Washington Post. Published November 26, 2008. Accessed April 16, 2011. http://www.washingtonpost.com/wpdyn/content/article/2008/11/25/AR2008112502589.html. 24

Bretton Woods system and the 1973 oil crisis, neoclassical notions of monetarism and supply-side economics returned to the table of policy discussions.37

As the international economic system suffered throughout the 1970s, interventionist monetary and fiscal policy came under mounting criticism from economic theorists at the University of Chicago. Strongly influenced by Austrian school, the

Chicago school of economics argued for a more “libertarian” view of market activity with a minimized role of the state in the business sector, albeit a larger role than the preferred model of the Austrian school. 38 Such a philosophy has since been referred to as “neoliberalism,” and its doctrine has had long lasting ramifications on public policy since its wide diffusion in the 1970s. 39

At the heart of neoliberalist economics lay three central concepts: firstly, that because perfect information on past and present developments will never be achieved, any attempt to plan or form policies (particularly those of an economic nature) is destined to fail. Secondly, neoliberalism is based on the freedom of “individuals to seek to maximize their preferences.” This freedom is intrinsically tied to political freedoms.

Finally, the market is where these individuals congregate to adjust their preferences according to price indicators, despite the lack of perfect information. These philosophies

37 David Harvey. A Brief History of Neoliberalism. (Oxford: Oxford University Press, 2005), 12. 38 The Austrian school called for a pure free-market economics with an absolute minimal role for government, whereas the Chicago school saw a need for the state in the regulation of monetary policy, as well as the maintenance of a legal system to protect private property rights. 39 While “neoliberalism” is undeniably an oversimplification of diverse economic principles that has recently garnered pejorative associations, I refer to David Harvey’s definition of neoliberalism as a “theory of political economic practices proposing that human well-being can best be advanced by the maximization of entrepreneurial freedoms within an institutional framework characterized by private property rights, individual liberty, unencumbered markets, and free trade.” (Harvey, 2007) 25

are often institutionalized through privatization, decontrol of the financial sector and prices and trade liberalization.40 In essence, proponents of neoliberalism argued that

“development was blocked by [the] inflated public sectors” of the Keynesian era, and that deregulation of state-owned enterprises and the near total removal of government interference from the market were the only truly effective measures to ensure economic growth.41

One of the main ideological components of neoliberalism was the concept of monetarism, which contended that the sole role of the state is the control of the money supply in order to avoid inflation, therefore emphasizing monetary rather than fiscal policy.42 Such a position challenged Keynesian emphasis on creating demand through government intervention, positing that inflation is caused by the government printing excess money. As argued by University of Chicago economics professor Milton

Friedman, if the government keeps the money supply steady, market forces would be able to solve the problems of inflation, recession and unemployment.43 Monetarism would become highly influential in the economic policies of the 1980s, particularly when officials began instituting neoliberalist reforms in post-conflict settings.

40 Robert Looney. "The Neoliberal Model's Planned Role in Iraq's Economic Transition." The Middle East Journal. 57, no. 4 (2003): 572. 41 Marc Edelman and Angelique Haugerud. The Anthropology of Development and Globalization: From Classical Political Economy to Contemporary Neoliberalism. (Malden, Mass: Blackwell Pub, 2005), 113. 42 Harry G Johnson. "The Keynesian Revolution and the Monetarist Counter-Revolution." The American Economic Review. 61, no. 2 (1971): 12. 43 Milton Friedman and Anna (Jacobson) Schwartz. A Monetary History of the United States, 1867-1960. (Princeton: Princeton University Press, 1963). 26

An early example of neoliberalism reforms applied in such a setting, one that was closely tied to the nature of creative destruction, occurred in the wake of the 1973

Chilean coup against the government of leftist social democrat Salvador Allende. Under the advice of the “Chicago Boys,” coup leader Augusto Pinochet took steps to lower inflation, cut state spending and privatize state-owned enterprises. 44 The subsequent revival of the Chilean economy would serve as key evidence of the productive power of neoliberalist reforms to proponents, and would inspire similar ‘revolutions’ throughout the 1970s and 80s.45

Yet it was the United States under President Ronald Reagan and the United

Kingdom under Prime Minister Margaret Thatcher that saw some of the most drastic examples of neoliberal reforms. The ‘neoliberalist revolution’ of the 1980s led to massive tax cuts, the selling off of state industries and deregulation in both countries. 46

In effect, these reforms abandoned the Keynesian economic policies that had dominated developed nations since the end of World War II. Some historians have gone so far as to describe this transition as a paradigm shift from a model of the state developed in the 17th

44 As documented in Naomi Klein’s The Shock Doctrine, the term “Chicago Boys” refers to a group of Chileans who studied under Milton Friedman and Arnold Harberger at the University of Chicago in the early 1970s. While they had pushed for neoliberal reforms prior to the coup of 1973, Klein argues that the coup itself provided the “shock” that allowed such reforms to be pushed through without wide public rejection. Naomi Klein. The Shock Doctrine: The Rise of Disaster Capitalism. (New York: Metropolitan Books/Henry Holt, 2007), 77-81. 45 Harvey, Neoliberalism, 147. 46 Herbert Kitschelt. Continuity and Change in Contemporary Capitalism. (Cambridge, UK: Cambridge University Press, 1999), 371-397. 27

century, to “a world of diminished state sovereignty,” mostly manifested in the economic sphere.47

A desire to open up economies to the powers of free market trade was coupled with the notion that durable and lasting international peace could be achieved by the interdependence of global free trade. Many neoliberalist thinkers of the 1970s and 80s believed that protectionist policies of foreign nations led to a greater chance of international war by diminishing such interdependence.48 As 19th century French political economist Frédéric Bastiat claimed, “when goods cannot cross borders, armies will.”49 This idea ran concurrently with the desire to spread democracy, thus decreasing the chances of war in accordance with democratic peace theory.50

By the 1990s, the pervasiveness of neoliberalism had become cemented in the

“Washington Consensus,” which outlined policy prescriptions that “crisis wracked” developing nations should adopt under reform packages supported by Washington-based organizations such as the World Bank and the International Monetary Fund (IMF).51

Generally speaking, these reforms emphasized trade liberalization, deregulation and the privatization of state enterprises. Debt was also a major component of World Bank and

IMF reform packages, serving as the incentive for “restructuring packages” that provided

47 Daniel J. Elazar. "From Statism to Federalism: A Paradigm Shift." International Political Science Review / Revue Internationale De Science Politique. 17, no. 4 (1996): 417. 48 Weede, "Capitalism, Democracy and Peace," 68. 49 David Boaz. Libertarianism: A Primer. (New York: Free Press, 1997), 181. 50 Democratic peace theory holds that democracies rarely, or never, go to war with one another. (Mansfield and Snyder, 2005) 51 John Williamson. Latin American Adjustment: How Much Has Happened? (Washington, D.C.: Institute for International Economics, 1990), 102. 28

loans in return for institutional reorganization, which typically call for the implementation of “consensus” reforms. Basic principles of the “consensus” were drafted into the 1994 North American Free Trade Agreement, which encouraged the lowering of tariff barriers to imports.52

Despite the fact that the intended recipients of “Washington Consensus” reform packages were typically riddled with widespread crises, adherents to the doctrine were hesitant to apply such neoliberalist policies to the cases of economic reconstruction in post-conflict zones during the late 1990s and early 2000s.53 This is clearly evident in the reconstruction efforts of the war-torn former Yugoslavia, specifically the cases of Bosnia and Kosovo. In both examples, effective free markets were largely impossible to construct at the outset, leading to massive influxes of US assistance ($4.5 billion for

Bosnia between 1996-7, and $2 billion for Kosovo between 2000-1. External assistance accounted for 36% and 46% of GDP, respectively). Market reforms were goals of high priority to policy planners, yet they were initially overshadowed by the need to create a multiethnic and democratic polity.54

While foreign aid was a main component of western reconstruction efforts in the former Yugoslavia, its overall importance in the realm of post-conflict development had vastly diminished by the 1990s, relative to the post-WWII era. At the start of the

52 Gary Clyde Hufbauer and Jeffrey J. Schott. NAFTA Revisited: Achievements and Challenges. (Washington, DC: Institute for International Economics, 2005), 283. 53 M Pugh. "The Political Economy of Peacebuilding: A Critical Theory Perspective." International Journal Of Peace Studies. 10, no. 2 (2005): 23. 54 Dobbins, "America's Role in Nation-Building,” xv. 29

Marshall Plan in 1947, “US foreign aid as a percentage of GDP was nearly 3 percent, while by the late 1990s it was a mere 0.1 percent, the lowest of any major industrialized nation.”55 This reduction was an inadvertent result of the neoliberalist belief in the benefits of a diminished role for the state in economic affairs, as well as the relative decline in US economic dominance.

The early 1990s was also a time of a changing conception of the role of the state.

With the apparent “victory” of the US in the Cold War, and the predominance of neoliberal economics, the state moved from a role of directly stimulating growth to facilitating the liberalization of economic systems that would allow for “natural” economic growth to ensue. The “Washington Consensus” and heavy emphasis on monetarist principles are clear example of such a transformation, particularly when compared to the Keynesian policies of the post-war expansion that lasted until the early

1970s.

Joseph Schumpeter and the Lure of Creative Destruction

The philosophic transformation of the role of the state in the economy throughout the 20th century, as represented by the shift in conventional political wisdom from statism to neoliberalism, was mirrored by the development of the concept of creative destruction.

Although it emerged at a time of strong doubt in regards to the nature of the market to solve the economic crises of the day, creative destruction, as theorized by Austrian

55 Edelman and Haugerud, The Anthropology of Development and Globalization, 10. 30

economist Joseph Schumpeter, would later be adopted by the neoliberal economic reconstruction policies in Iraq after 2003.

However, the planners and politicians charged to rebuild the world in 1945 took a drastically different approach to the state’s role. Indeed, the reconstruction of Europe required such effort that many economic theorists who believed in the supremacy of the free market were doubtful of its singular ability to complete the task at hand. Writing in

1943, Schumpeter noted that “the all but general opinion seems to be that capitalist methods will be unequal to the task of reconstruction.”56 While Schumpeter accepted the political realties of the post-war world, he remained a staunch critic of Keynesianism, which he argued “rival[ed] Marx in undermining the pillars of capitalism.”57 As the allies pushed back against advances by Axis nations in Guadalcanal and Stalingrad in the fall of 1942, armed with pioneering new military technologies, Schumpeter published a transformative work that attempted to explain the role of innovation in the evolution and advancement of capitalist economies.58

Schumpeter had been a prolific writer prior to the release of Capitalism, Socialism and Democracy, yet most economic historians argue that this work remains his most enduring and influential. Capitalism, Socialism and Democracy explored three central themes: the ability of capitalism to create sustaining economic growth, an analysis of the

56 Seymour Edwin Harris. Postwar Economic Problems. (New York: McGraw-Hill Book Company, inc, 1943), 123. 57 Arthur Smithies. "Schumpeter and Keynes." The Review of Economics and Statistics. 33, no. 2 (1951): 163. 58 F. M. Scherer. "Schumpeter and Plausible Capitalism." Journal of Economic Literature. 30, no. 3 (1992): 1416. 31

factors that created such growth and his Marxist conjecture that capitalism would eventually succumb to its successes and lead to socialism.59 Schumpeter’s treatment of the concept of creative destruction is not only the most important conceptual takeaway from the book, insofar as he describes it as the reason why capitalism is the most efficient economic system, it also is the most revealing for this study. Schumpeter defined creative destruction as the following:

The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets… [This process] incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.60 Schumpeter was not the first to describe such a phenomenon, but his elaboration of the concept would have lasting effects on modern economics.61 At the heart of creative destruction lies the idea that “entrepreneurial innovation destroys the value of existing physical and human capital,” thus aiding in the process of economic production and reproduction.62 Therefore, in a nation that embraces the principles of creative destruction, jobs may be lost, industries marginalized and whole communities impoverished, yet society as a whole will

59 Ibid, 1416. 60 Joseph Alois Schumpeter and Richard Swedberg. Capitalism, Socialism, and Democracy. (London: Routledge, 1994), 83. 61 Many have noted (Reinert and Reinert, 2006) that the ideological bases for creative destruction come from such diverse sources as the cosmological process of eternal rebirth in Hinduism to the Friedrich Nietzsche’s alternate system of morality, and the necessity of rebirth and rejuvenation. Marx and Engels also describe the tendency of capitalism to constantly reinvent itself. Schumpeter’s work was also strongly influenced by German economist Werner Sombart, who first coined the term creative destruction. 62 David Greenway, M.F. Bleaney and Ian M.T. Stewart. Companion to Contemporary Economic Thought. (New York: Routledge), 1991. 32

emerge from a period of economic discord more affluent and productive.63 As a result, it is entrepreneurial innovation and competition, at the cost of certain sectors and markets, that allow for the sustainability of long-term economic growth and progress.64

While Schumpeter used the evolution of the U.S. steel market as a clear example of the nature of creative destruction, the development of transportation in the US provides an “ongoing example of creative destruction at work.”65 The arrival of steam-powered engines in the 19th century brought an explosion of railroad-based jobs and markets, both of which would take massive hits with the invention of the combustible engine and automobile. The proliferation of airplane technology, and the subsequent struggle of railroad companies to maintain a viable business, highlight the ongoing push and pull of creative destructive forces.

As it pertains to public policy, it can be said that Capitalism, Socialism and

Democracy brought the question of what “market structures were most favorable to technical change and hence economic growth” to the forefront of politico- economic discourse.66

Creative destruction and the Keynesian antecedents to economic statism under the Marshall Plan were based upon many similar economic philosophies.

63 W. Michael Cox and Richard Alm. “Creative Destruction.” The Concise Encyclopedia of Economics. (Liberty Fund Inc, 2008). 64 As it pertains to this study, creative destruction can also be seen as an ideology, one that emphasizes a lack of a plan by the state, be it in fiscal policy or post-war reconstruction, in order to allow for the realization of the free market in the appropriate creation or destruction of capital and assets. 65 Schumpeter, Capitalism, Socialism, and Democracy, 83 and Cox and Alm “Creative Destruction.” 66 Scherer, "Schumpeter and Plausible Capitalism," 1416. 33

Both warned of the dangers of protectionism, which would diminish the positive ramifications of creative destruction by inhibiting innovation and increasing the risks of war. The Marshall Plan brought US goods to European markets at unprecedented scales, while avoiding economic favoritism between previous allies and enemies.67 Both concepts also regarded political, economic and social crises as potential opportunities for economic reform. As historian Tony Judt has noted, “the sheer scale of the European calamity opened new opportunities” to reform or remove previous economic and political systems and their ideological underpinnings.68

Schumpeter’s work remained influential in the decades after his death in

1950, and made a particularly large comeback in the age of the “New Economy” of the 1990s, an era of affluence and elation that seemed to defy the laws of economic gravity. This was largely due to the concept’s malleability; whereas

Schumpeter originally envisioned large, monopolies as the sole driver of entrepreneurial innovation, modern supporters saw small “start ups” companies as the torchbearers of leapfrog innovation.69

Creative destruction would become closely intertwined with neoconservativism at this time, which combines support of economically liberal

67 Weede, "Capitalism, Democracy and Peace," 8. 68 Judt, Postwar, 63. 69 Arthur Diamond. “Schumpeter’s Creative Destruction: A Review of the Evidence.” Journal of Private Enterprise. 21.1 (2006), 122.

markets with representative democracy, and encourages the use of “soft” and

“hard” US power to bring such systems to foreign nations.70 Although many early neoconservatives were allied with the political left, supporting the statist policies of the New Deal, for example, by the 1970s influential writers such as

Irving Kristol and Norman Podhoretz had broken from their liberal peers and moved sharply to the right, pushing for a more active state in the realm of the promotion of “freedom” abroad.71 The rise of neconservativism, particularly during the Reagan administration, signaled the transformation of creative destruction from a purely internal economic trend to an externally instigated political force through the active advancement of democracy and free market capitalism in the “third world.” This phenomenon will be analyzed in greater detail in the following chapters.

By the early 2000s, Federal Reserve Chairman Alan Greenspan was heaping praises upon Schumpeter, whom he heralded as “the theoretician and prophet of the events.” Indeed, creative destruction seemed the perfect divination to describe the innovation and destruction of information and communication technology.72

70 For more on the development of the “neoconservative persuasion,” in the words of Irving Kristol, see Vaïsse, 2010, Ehrman, 1995 and Cooper, 2011. 71 Mark Gerson. The Neoconservative Vision: From the Cold War to the Culture Wars. (Lanham: Madison Books), 1996. One of the central components of neoconservative foreign policy, particularly during George W. Bush’s presidency, was preemption, also known as the “Bush Doctrine,” which reserves the right for the United States to depose regimes that could pose a threat to national security. This policy would starkly contrast with Cold War policies of containment, and both of which will be analyzed in greater detail in subsequent chapters. For more, see Colucci, 2008. 72 Hugo Reinert and Erik Reinert. “Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter.” Accessed April 17, 2010. http://www.othercanon.org/uploads/Nietzsche%20Creative%20Destruction%20in%20Economics%20f.doc 35

Washington’s adoration for creative destruction during the era of the “New Economy” emerged as neoliberalist notions of a largely unencumbered free market became institutionalized as sound economic policy, and I argue that the former strongly influenced the direction of the latter in the Iraqi reconstruction project.

This is evident in the evolution of creative destruction from a concept existing solely in the realm of capitalism, as first described by Schumpeter, to a political ideology, one guided by the neoconservative power of American foreign policy. As I will argue in subsequent chapters, this power was supported by conservative writers and thinkers yet not implemented until the Iraq war of 2003, when the US engaged in a preemptive war in order to uproot a preexisting politico-economic system (Arab socialist in this case) and

“naturally” let a capitalist one take hold in its place.

In total, Schumpetarian creative destruction embodies the economic and political opportunities that statist and neoliberalist theories hope to exploit in order to create economic growth. The movement of the political status quo from statism to neoliberalism also represents an inversion of the role of the state in matters of war and peace from one of reconstruction to preemptive destruction with the goal of the dissemination of political freedom and market freedoms.

The duality of statism and neoliberalism have been among the most important ideologies that motivated politicians and planners in their responses to the economic and military conflicts of the 20th century. Both were largely influenced by the economic, and subsequent political application of creative destruction, which demonstrates the changing 36

role of the state in the realm of reconstruction, from one of active participation of reconstruction, to that of the destruction and subsequent “clearing away” of old state vestiges in order to clear the way for the private free market.

Proponents of each theory argued for its respective ability to create or explain sustained economic growth. These convictions were subsequently applied to the realm of public policy, particularly in the opportune cases of post-conflict reconstruction, including post-war Germany and 1970s Chile. I argue that these three concepts directly influenced the thinking behind the US-led Iraqi reconstruction project of 2003, the largest such project since WWII. The transformation from statism to neoliberalism in the post- war period will now be analyzed, using the development of both Iraqi economic system and the US-Iraqi relationship during this time as examples of such a transformation.

CHAPTER TWO: IRAQ DURING THE BIPOLAR ORDER OF THE COLD WAR

In order to place the 2003 Iraq war and the subsequent economic reconstruction in a historical and political context, this chapter will analyze three distinct yet overlapping phases of the US-Iraqi relationship and Iraqi economic development. The first is the relationship as influenced by the Cold War between approximately 1945 and 1979, particularly during Iraq’s close economic and ideological ties with the Soviet Union.

Secondly, I will look at Iraq’s turn to the West during the late 1970s, as well as the relationship after the 1979 Iranian Revolution and Iraq’s subsequent transformation to a military economy during the Iran-Iraq war. Finally, this chapter will analyze the 1990-

1991 Gulf War and its effects on the Iraqi infrastructure and economy. This period will also be addressed through an analysis of the sanctions regime of the 1990s and early

2000s, as well as the debate within US policy circles over the effectiveness of such containment policies and the potential for the use of force against Iraq. Each phase represented a paradigmatic transformation of the Iraqi economy: from a socialist- inclined, industrial economy to one directed toward meeting military demand to, finally, a sanctions economy that was almost entirely dependent on outside support for survival.

Whereas the first two periods occurred during the bipolar era of the Cold War, the final period took place during a time of American unipolar hegemony. However, much of the tension that arose between proponents and detractors of containment during the mid to late 1990s resulted from discrepancies between the historical analogy which justified the policy and the era in which it was applied. While its strategic framework 38

was based on the bipolar Cold War era model of international relations, which emphasized the importance of alliances, international opinion and indirect means of projecting American influence, the implementation of dual containment existed during a time of American hegemony, where unilateral and preemptive action was deemed both plausible and necessary.

Finally, I argue that US policy towards Iraq, particularly after the Gulf War of

1990-1991, relied heavily on the creative destructive balance of attempting to tear down unfavorable vestiges of the regime through an array of containment policies, while supporting dissident groups, such as the Iraqi National Congress, as typified by the 1998

Iraq Liberation Act.73 These divergent approaches to the use of American power represented a sea change in the international arena, from the biploarity of the Cold War to the unipolar hegemonic rule of the United States after the collapse of the Soviet Union.

US-Iraqi Relations Amidst the Cold War

In the wake of the Second World War, the United States moved in to fill the openings left by European imperial powers that were badly damaged and in debt, including those with direct influence in the oil-rich Persian Gulf region.74 Many

73 An analysis of neoliberlism during this time would be inappropriate, due to the continuing rule of Saddam Hussein and his economic principles after the end of the Gulf War. Indeed, some (Ehrenberg, 2010) have argued that Saddam’s refusal to accept the “Washington Consensus” norms of the 1990s strongly influenced the US’s aggressive tone towards Baghdad at this time. For the sake of this thesis, containment will be defined as an attempt to limit the power and influence of a foreign nation through indirect means, such as the support of allied nations or the subversion of the target nation through economic and military embargos. (for an analysis of American post-war containment strategies, see Gaddis 2005) 74 For more on the US role in the Middle East after WWII, see Khalidi, 2009, Tyler, 2009 and Barrett, 2007. 39

historians have argued that this new position was cemented with the ratification of the

Baghdad Pact of 1955. Although not a formal member, the United States played a key role in the formation of the agreement, which pledged aid from the United Kingdom for

Iraq if the latter were attacked. The pact was adopted by Iraq, the UK, Iran, Pakistan and

Turkey, and was largely a response to Western fear of a Soviet takeover of the Middle

East. Indeed, the United States’ participation in the pact signaled its arrival as a major player in regional affairs.75

The US entrance into Middle Eastern affairs came at a time of drastic shifts in the international order. With the massive destruction of traditional European powers such as the UK, France and Germany, the United States and the Soviet Union entered to fill the political, economic and military gaps in the European theatre. Although they had both fought for the destruction of Nazi Germany during the war, the two nations became ideological adversaries in the initial post-war years, particularly after the partition of

Germany into two separate nations in 1949, thus creating a bipolar international system.

This new system only served to strengthen the US’s resolve to secure influence in the oil-rich Persian Gulf. Such oil reserves, which historically had provided more than

90% of Iraq’s foreign exchanges, drove the Iraqi economy in the immediate post-war era.

Despite a relatively strong emphasis on central planning, Baghdad’s economy was generally market-oriented during this time. However, by over emphasizing agriculture at the expense of industry and the service sector, a move that alienated the educated elite

75 Roby Carol Barrett. The Greater Middle East and the Cold War: US Foreign Policy Under Eisenhower and Kennedy. (London: I.B. Tauris, 2007), 87. 40

and working class, the regime may have contributed the climate of hostility that culminated in the revolution of 1958.76

With the 1958 Iraqi revolution that overthrew the monarchical system and all but ended the reach of direct British influence in the region, the United States became more active and concerned in Iraqi affairs. This new position was predominantly a response to the Soviet alliance with the Iraqi Communist Party, one of the largest in the Arab world.77

In the wake of the 1958 revolution, the Iraqi state began to play a larger role in economic affairs, a trend that was increased after the Ba‘athist ascent to power in 1968. Measures enacted during this time included a massive distribution of state owned land, limits on the ownership of such land and the nationalization of dozens of major industrial enterprises, banks and insurance companies.78 A full employment initiative was also established, ensuring a public sector job for each individual, regardless of market conditions.79 With rising oil revenues throughout this time, combined with the motivation of socialist ideologies, the state began investing greater sums of money into industry, agriculture and public housing.80

The 1968 Ba‘athist coup also brought with it a stronger Soviet-Iraqi relationship that permeated both economics and politics. Soviet interest in Iraq had grown after the

76 Jonathan E. Sanford. Iraq's Economy: Past, Present, Future. (Ft. Belvoir: Defense Technical Information Center, 2003). http://handle.dtic.mil/100.2/ADA476247. 77 Rashid Khalidi. Sowing Crisis the Cold War and American Dominance in the Middle East. (Boston: Beacon, 2009), 151. 78 Roger Owen and Şevket Pamuk. A History of Middle East Economies in the Twentieth Century. (Cambridge, Mass: Harvard UP, 1998), 167-8. 79 Looney, “The Neoliberal Model's Planned Role in Iraq's Economic Transition,” 4. 80 Owen and Pamuk, Middle East Economies, 165. 41

1958 revolution, which had deposed the Western-backed Hashemite dynasty for a left- leaning republic. The revolution demonstrated Iraq’s strategic importance in the region to

Moscow, as well as “its economic independence from the Western “imperialist” powers.”

This ideological affinity soon translated into material support, and by 1978, Soviet arms supplies to Iraq had increased to $3.6 billion annually, the largest for its Arab allies.81

Material aid from Moscow aligned with the ideological approaches Iraq was taking to its economy. In line with many paternalistic socialist principles espoused by early Ba‘athist ideology, the state employed central planning measures to manage its resources.82 Indeed, the Ba‘ath party’s survival was largely based on its ability to

“[create] institutions strong enough to control society and to crush all opposition.”83

Although private property and ownership was encouraged to a limited extent, the state intervened to provide support in sectors of historically weak private investment, such as industrial production.84 This model provided a relative measure of success for Iraq throughout the 1960s. Between 1960 and 1970, Iraq averaged more than 6% annual growth of GDP, as compared to an average of 4.3% in the “developed world.”85

81 Oles M. Smolansky and Bettie M. Smolansky. The USSR and Iraq: The Soviet Quest for Influence. (Durham, NC: Duke University Press, 1991), 13. 82 Sanford, Iraq's Economy, 5. 83 Owen and Pamuk, Middle East Economies, 166. 84 Abbas Alnasrawi. The Economy of Iraq: Oil, Wars, Destruction of Development and Prospects, 1950- 2010. (Westport, Conn: Greenwood Press, 1994), 61. 85 Jahangir Amuzegar. "Ideology and Economic Growth in the Middle East." The Middle East Journal. 28, no. 1 (1974): 5. However, there is an undeniable correlation between these figures and the massive oil reserves held in Iraq, which, according to recent geological and seismic data, account for the largest in the world. (see http://www.bbc.co.uk/news/business-11468209) 42

Rising oil revenue, catalyzed by the nationalization of the Iraqi Petroleum

Company in 1972 and the 1973 oil price explosion, allowed Baghdad to drastically increase infrastructure and defense spending throughout the 1970s.86 This occurred in tandem with the National Development Plan of 1970-1974, the culmination of decades of centralized economic planning. The plan aimed at developing agriculture, industry, transportation and communication through meticulously prepared investment strategies by Baghdad.87 In total, these factors helped lead to a continued period of massive economic growth for Iraq. Between 1970 and 1980, GDP shot up to an average of 11.7% annual growth.88 Such prosperity led to the expansion of the Iraqi welfare state and greatly increased educational opportunities and living standards for both the urban and rural populations.89

However, while the Iraqi economy was able to flourish throughout an era of relative peace, the fall of the Iranian Shah in 1979 created a turbulent environment that would set in motion nearly a decade of war and the transition from a socialist-inclined industrial economy to a predominantly military economy.

The Iranian Revolution and its Enduring Economic and Political Shock Waves

The 1979 Iranian Revolution drastically altered the balance of power in the

Middle East, removing one of Washington’s pivotal strategic pillars and implanting a

86 Abbas Alnasrawi. "Economic Consequences of the Iraq-Iran War." Third World Quarterly. 8, no. 3: (1986): 872. 87 Alnasrawi, The Economy of Iraq, 63. 88 UN. Statistical Office. National Accounts Statistics: Analysis of Main Aggregates. 1988-1989. (New York: UN, 1991), 126. 89 Owen and Pamuk, Middle East Economies, 170. 43

Shiite theocracy next to a secular pan-Arab republic. In reaction to the revolution, as well as to the 1979 Soviet invasion of Afghanistan, the US and Iraq strengthened their relationship out of mutual self-interest.90

Although the Iranian Revolution moved Iraq closer to the US, Baghdad had gradually leaned away from Soviet influence throughout the mid to late 1970s. Various sources of tension between Moscow and Baghdad, such as the oppression of Iraqi Kurds and Saddam Hussein’s suppression of the Iraqi Communist Party, leading to an eventual

Soviet arms embargo. In search of other sources of income, Hussein turned to Western powers to supply his regime. France and West Germany in particular began supplying

Iraq with weapons and nuclear resources, counteracting the effects of the cool relations with Moscow.91 As Rashid Khalidi has noted, Iraq’s relationship with Washington after

1968, “tended to be a function of the competition between superpowers.”92

Yet it was not until the founding of the Islamic Republic of Iran and Iraq’s subsequent invasion of Iran nearly 18 months later that Iraqi-US relations reached its apex. The Iran-Iraq war of 1980-1988, and ensuing US strategic reassessments, resulted in the removal of Iraq from the US state sponsors of terrorism list in March 1982.93 The new relationship also allowed Iraq to purchase modern weaponry and technology from

90 Khalidi, Sowing Crisis, 155. 91 Kenneth R. Timmerman. The Death Lobby: How the West Armed Iraq. (Boston: Houghton Mifflin, 1991), 39-49. 92 Khalidi, Sowing Crisis, 151. 93 Washington had put Iraq on its first list of state sponsor’s of terror list in December 1979, because it “continued to provide safehaven and support to a variety of Palestinian rejectionist groups,” as well as the Iranian Mujahedin-e-Khalq (MEK), according to the State Department. "Overview of State-Sponsored Terrorism." U.S. Department of State. Published April 30, 2001. Accessed April 23, 2011. http://www.state.gov/s/ct/rls/crt/2000/2441.htm. 44

western nations, as well as “immediate and accurate intelligence of Iranian military initiatives and positions.”94 By the mid-1980s, Iraq had re-established full diplomatic relations with the US.95

The Iran-Iraq war would be extremely destructive to Iraq’s economy and infrastructure, and directly affect the conditions and decisions that led to the 2003 war.

With the Iran-Iraq war of 1980-1988, the longest conventional war of the 20th century, and one that cost over $1.1 trillion in conduct and damage and approximately one million lives, Iraq was left with over $40 billion in debt.96 Approximately $30 billion of such debt was owed to neighboring Kuwait.97 Indeed, between 1980 and 1982, Arab states, mostly Saudi Arabia and Kuwait, were lending Iraq approximately $1 billion per month.98 Due the transformation of the Iraqi economy to one that placed supremacy on military demand, Baghdad was no longer able to fund its expenditures solely based on internal revenue generation.

The issue of debt was compounded by the militarization of Iraq’s economy throughout the 1980s at the expense of a robust civilian economy. By 1980, military

94 Khalidi, Sowing Crisis, 155 and Charles Tripp. A History of Iraq. (Cambridge: Cambridge University Press, 2002), 240. 95 While the US and Iraq became strategically aligned during the Iran-Iraq War, many historians have argued that Washington was also hoping to perpetuate the war in order to “bleed both countries white, [which would] result in large-scale destruction of their armies and infrastructure.” Sankaran Krishna. Globalization and Postcolonialism: Hegemony and Resistance in the Twenty-First Century. (Lanham, Md: Rowman & Littlefield, 2009), 143. 96 Dilip Hiro. The Longest War: The Iran-Iraq Military Conflict. (London: Grafton Books, 1989), 1-5. 97 David D. Caron. The Reconstruction of Iraq: Dealing with Debt. 2004. Others, (Freedman and Karsh, 1993) estimate the post-war Iraqi debt at $80 billion. 98 Kamran Mofid. The Economic Consequences of the Gulf War. (London: Routledge, 1989), 126. For more information on the historical and political background to the Iran-Iraq war, see Rajaee, 1993, Hiro, 1989 and Donovan, 2011. 45

spending had swelled to 39% of GDP, and would vacillate between one-half and two- thirds of GDP throughout the war. The war also led to a substantial decrease in Iraq’s oil output, from 3.4 million barrels per day (MBD) in August 1980 to 0.9 MBD in 1981.99

Although the Iraqi economy saw a spike in GDP with the “economic revolution” of 1987, which abandoned the full employment policies, debt had all but crippled economic growth by the ceasefire of 1988.100 In addition to Iraq’s grievances with the historical issues of Kuwaiti sovereignty and contention over oil drilling, the issue of debt cannot be minimized as a central motivating factor behind Saddam Hussein’s decision to invade Kuwait in August 1990.

The First War of the New World Order

America’s relationship with Baghdad turned decisively with the invasion of Iraqi forces into Kuwait on August 2, 1990. The US quickly amassed an international coalition that called for the withdrawal of Iraqi forces from Kuwait. This coalition soon became the forces behind “Operation Desert Shield,” whose mission was ostensibly to protect

Saudi Arabia and its allies.101 Washington its allies turned to the United Nations to solve the gulf crisis, setting a date of January 15, 1991 for Iraq to withdrawal its forces from

Kuwait. Two days later, the coalition began “Operation Desert Storm,” launching more

99 Alnasrawi, Abbas. "Iraq: Economic Sanctions and Consequences, 1990-2000." Third World Quarterly. 22, no. 2 (2001): 206. 100 Robert Looney. "A Return to Baathist Economics? Escaping Vicious Circles in Iraq." Strategic Insights 3, no. 7 (2004), 3. 101 See UN Security Council Resolutions 660 and 678 for more. 46

than 1,000 air raids within the first 24 hours.102 Iraqi forces were decimated by the allied campaigns. By the end of military operations on February 28, Iraq had lost 85% of its tanks, 50% of its armored personnel carriers and 90% of its artillery. And despite Norman

Schwarzkopf’s proclamation that “this is not a war against the Iraqi people,” the most precise Iraqi estimates of civilian casualties stood at 2,278 deaths and 5,965 wounded.103

American officials also strongly urged the Iraqi people to overthrow President

Saddam Hussein in the wake of Desert Storm, leading to uprisings throughout 1991.104

The Voice of Free Iraq, a CIA-run radio station, frequently broadcasted messages at this time calling for the people of Iraq to rise up against their dictator.105 Motivated by this encouragement and the belief that Western and Arab armies would come to their rescue, as well as the perception of the regime’s weakness, millions of Shi’a Muslims in the south and Kurds in the north rose up in revolt against Saddam Hussein. Tens of thousands of Iraqis were killed in the ensuing clashes, which also resulted in an immense refugee crisis involving approximately two million Iraqis.106

In the wake of “Operation Desert Storm,” Iraq’s infrastructure was nearly incapacitated. As a part of strategic air campaign, allied bombers targeted Iraq’s energy

102 Suzanne J. Murdico. The Gulf War. (New York: Rosen Pub. Group, 2004), 7. 103 Lawrence Freedman and Efraim Karsh. The Gulf Conflict, 1990-1991: Diplomacy and War in the New World Order. (Princeton, N.J.: Princeton University Press, 1993), 324-329. 104 Kenneth Katzman. Iraq Post-Saddam Governance and Security. [Washington, DC]: Congressional Research Service, Library of Congress, 2002. http://crs.gallerywatch.com/PHP_articledetails.gw?articleid=PHP:US:CRS:RL31339&type=CRS, 3. 105 Robert Fisk. The Great War for Civilization: The Conquest of the Middle East. (London: Fourth Estate, 2004), 646. 106 Middle East Watch (Organization). Endless Torment: The 1991 Uprising in Iraq and Its Aftermath. (New York: Middle East Watch, 1992), 38. 47

sources, such as oil refineries and electric power plants. After three days of strikes, for example, Iraq’s refined oil production was down to 50%, and after two weeks was completely halted. Although U.S. commanders ostensibly sought to avoid depriving the

Iraqi people of essential resources, it was also unclear to officials whether Iraq could recover to pre-war levels of electrical output.107 In total, the cost to Iraq from the war’s destruction has been estimated at $190 billion.108 Unlike the war his son would lead against Iraq twelve years later, President George H.W. Bush signaled that the US would not help in the reconstruction effort, saying soon after the end of combat operations that

“at this point, I don’t want to see one single dime of the United States’ taxpayers’ money go into the reconstruction of Iraq.”109 This position, combined with the deliberate decimation of Iraq’s infrastructure, represents the implementation of creative destruction on the state level, and also mirrors the motivating factors behind the Morgenthau Plan, the original US post-war reconstruction policy after WWII (see chapter 1).

The strategic bombing campaigns over Iraq between 1990-1991 and that of World

War II Germany represented drastically different levels of destruction. Indeed, the Gulf

War was significantly more damaging to Iraqi industrial and infrastructure sectors than the devastation brought upon the Germans during WWII. While the German people suffered greatly at the hands of allied bombing, its economic impact was smaller than

107 Freedman and Karsh, The Gulf Conflict, 321. 108 David Malone. The International Struggle Over Iraq: Politics in the UN Security Council 1980-2005. (Oxford: Oxford University Press, 2006), 75. 109 Sarah Graham-Brown. Sanctioning Saddam: the Politics of Intervention in Iraq. (London: I.B. Tauris in Association with MERIP, 1999), 18. 48

advocates had hoped.110 According to British government sources, allied bombing campaigns never brought down German industry by more than 10% annually between

1943 and 1945.111 What would later become West Germany lost only 6.5% of its machine tool equipment through war damage.112

These incongruities can largely be explained by the divergent targeting philosophies and technologies behind the respective bombing campaigns that resulted from the technological discrepancies of the two eras. Although American raids dropped nearly as many tons of bombs each day as were dropped on Germany and Japan during

WWII, the results were strikingly dissimilar.113 Problems of accuracy in WWII had made attacking infrastructure more resource consuming and ineffective. Yet new ‘smart’ bombs of the late 20th century could cut collateral damage through precision technologies.114 While German commanders were still able to able to direct military developments from Berlin five years into the war, “Iraq’s leader and his military command were already blind, deaf and mute in their paralyzed capital city” 48 hours after the commencement of allied bombing campaigns.115

110 Bombing led to approximately 305,000 civilian deaths during the war. Approximately 40% of German houses were destroyed, largely due to air campaigns, and a subsequent housing shortage would remain until the mid-1950s. (see Grayling, 2006) 111 Anthony C. Grayling. Among the Dead Cities The History and Moral Legacy of the WWII Bombing of Civilians in Germany and Japan. (New York: Walker & Co, 2007), 100. 112 Junt, Postwar, 83. 113 Fisk, The Great War for Civilization, 650. 114 However, unguided weaponry, or “dumb” bombs, with a reported accuracy of only 25%, accounted for 91.2% of dropped munitions. (see “Costs and Consequences of War in the Middle East”) 115 R. Normand and C. A. Jochnick. "The Legitimation of Violence: A Critical Analysis of the Gulf War." Harvard International Law Journal. 35, no. 2 (1994): 392. 49

It must also be noted that whereas the German military industrial complex had modernized the economy over more than five years of war, leading to a relatively quick economic recovery, Iraq’s economy had previously suffered greatly under nearly a decade of war with Iran, and would continue to stagnate under the weight of crippling economic sanctions.116

Containment: Cold War Historical Model in a Time of American Hegemony?

In the wake of the quick success of coalition forces in pushing Iraq back from

Kuwaiti territory, President Bush chose not to continue to Baghdad and remove Saddam

Hussein from power in order to limit the operation to the authorization granted by the UN

Security Council. In an interview with Time magazine in 1998, Bush and former

National Security Advisor Brent Scowcroft argued that the decision to leave Saddam in power was based on the conviction that such an extension of the mission would “have violated our guideline about not changing objectives in midstream, engaging in ‘mission creep’, and would have incurred incalculable human and political costs.”117

In the absence of a military overthrow, US policy shifted towards the containment of Hussein’s regime and its ability to besiege allies based on the argument that Iraq continued to threaten the region and US interests.118 Specifically, the Bush and Clinton

116 One third of Germany industrial equipment was less than five years old in 1945, compared to 9% in 1939. (Junt, 85) 117 George H.W. Bush and Brent Scowcroft. "Why We Didn't Invade Saddam." Time 2 Mar. 1998. 118 Joy Gordon. Invisible War: The United States and the Iraq Sanctions. (Cambridge, Mass: Harvard University Press, 2010), 1-19. Containment during this period must be understood under the Cold War paradigm, where the US was restricted from taking unilateral military action to pursue its interests due to the need to maintain alliances and avoid an armed conflict with the Soviet Union. 50

administrations hoped to implement the “dual containment” of Iraq and Iran “as a way of temporarily isolating the two chief opponents of American-sponsored regional order.”119

Although the ability to enforce containment through US hegemony, and, as a result, command the direction of UN actions, resulted from the end of the Cold War, US policy makers continued to rely on the historical analogy of nearly half a century of containing the Soviet Union.120

The implementation of containment was also a reflection of the state’s role in effecting change abroad, one that left the main structure of the Iraqi government in place while trying to undermine Hussein’s economic and political power and legitimacy. Such a role was a manifestation of the realities of the Cold War (and, in many ways, the international system since the foundation of state sovereignty with the Peace of

Westphalia in 1648.)121 Fear of Soviet retaliation, and the delicate balance between the pursuit of US interests and the avoidance of such retaliation, had largely guided US foreign policy between the end of World War II and the fall of the Berlin Wall in 1989.

This approach to the US international presence would remain intact even after the collapse of the Soviet Union, although the new global context sparked heated debates about the US’s role abroad. One integral element of containment, a manifestation of such an approach to international relations, was a strict economic sanction regime imposed on

119 Zbigniew Brzezinski, Brent Scowcroft and Richard Murphy. "Differentiated Containment.” Foreign Affairs. 76, no. 3 (1997): 22. 120 Opponents of containment, which pushed for the overthrow of the Hussein regime, likened their position to that of Eisenhower-era “rollback,” with Saddam existing as a similar “looming threat” as the USSR. (Ehrenberg, 2) 121 Indeed, since the founding of the United States in the 18th century, the international system had been dominated by an array of multipolar power balances, placing limits on foreign policy options. 51

Iraq by the UN soon after the end of Desert Storm, which remained in place until the

2003 invasion.

Sanctions: A Poor Example of US Power?

The sanctions regime placed upon Iraq from 1991 to 2003 must be understood in the context of the international order of the post-Cold War world. As Saddam Hussein’s forces were first crossing into the Kuwaiti deserts, the world was transfixed upon the drastic changes taking place in Europe: the Berlin Wall had fallen only nine months prior, and the United States was left unrivaled in the international arena. Such a scenario drove many to speak of a “New World Order,” a term reportedly coined by President Bush in

September 1990 to describe a global structure with the US as the sole hegemonic power.122 As a result, “previous limitations on foreign policy, such as an opposing block in the United Nations, military deterrence, and world public opinion, seemed less relevant.”123

Conservative scholars and journalists were quick to embrace such a position (if they had not done so already). In his influential 1989 article, “The End of History?” political economist Francis Fukuyama argued that, with the fall of the Soviet Union and the apparent victory of democracies and capitalism over communism, the world had arrived at the “endpoint of mankind’s ideological evolution and the universalization of

122 Freedman and Karsh, The Gulf Conflict, xxix. 123 John Ehrenberg. The Iraq Papers. (Oxford: Oxford University Press, 2010), xxiv. 52

Western liberal democracy as the final form of human government.”124 In a similar vein,

Washington Post columnist Charles Krauthammer argued in his 1991 article “The

Unipolar Moment,” that the post-Cold War world was one of American unencumbered dominance, demonstrated by the nature of the US success in the Gulf War, and that policy makers should seize the moment in order to establish American-led international order and stability.125 I argue that this outlook on international relations directly motivated the aggressive US approach to Iraqi sanctions and their resulting severity.126

First introduced through UN Security Council Resolution 661 on August 6, 1990, the sanctions towards Iraq were the first mandatory and comprehensive economic sanctions against a member state since the 1960s. Resolution 661 froze Iraqi financial assets abroad and banned all imports and exports, allowing in only medical supplies uninterruptedly, and “in humanitarian circumstances, foodstuffs.”127 In essence,

Resolution 661 shut Iraq off from the world economy. The program was expanded with

Resolution 687, which set the terms and requirements for lifting sanctions. These resolutions were followed by a “no fly zone” over parts of northern and southern Iraq, a series of cruise missile strikes across the country, and, by the late 1990s, an “Oil for

124 Adam Harmes. The Return of the State: Protestors, Power-Brokers, and the New Global Compromise. (Vancouver, B.C.: Douglas & McIntyre, 2004), 167. 125 Charles Krauthammer. "The Unipolar Moment." Foreign Affairs. 70, no. 1 (1991): 23-33. 126 The same position of international dominance that allowed for the implementation of such far reaching sanctions was also used by neoconservative authors as evidence for the inherent strategic failure of containment as an effective use of American hegemonic power. 127 Graham-Brown, Sanctioning Saddam, 56. 53

Food” program (a tacit acknowledgement of the humanitarian crisis resulting from the sanctions). 128

Soon after the implementation of Resolution 687, UN officials began to realize the scope of the damage to Iraqi society by the sanctions. By 1998, seven years into the sanctions regime, infant mortality had risen from the pre-Gulf War rate of 3.7% to 12%.

With fewer children able to attend school, the overall literacy rate among adults dropped from 80% to 58%.129 Inadequate medicine and food supplies, compounded by failing electrical and sewage treatment facilities, caused an increase of approximately 40,000 deaths per year of Iraqi children under the age of five, as well as 50,000 deaths annually of older Iraqis.130

The sanctions also devastated Iraq’s economic output and infrastructure, yet did little to loosen Saddam Hussein’s grip on power. According to a 1999 UNICEF report, sanctions had reduced Iraq’s gross national product (GNP) by 75%.131 By the mid-1990s, per capita GDP had dropped to lower than that of 1950. Sanctions also decimated the oil sector. By 1991, after more than 11 years of nearly constant war, production capacity had dropped to 0.6 MPD, compared to the 1979 figure of 3.5 MBD.132 Despite this damage to the Iraqi economy and infrastructure, Hussein’s continued to challenge US

128 Alnasrawi, "Economic Sanctions and Consequences," 212. For more information on the specific aspects of the sanctions, see Gordon, 2010, Cortright and Lopez, 2000 and Alnasrawi, 2002. 129 Campaign Against Sanctions on Iraq. Sanctions on Iraq: Background, Consequences, Strategies. Cambridge: Campaign Against Sanctions on Iraq, 2000. 130 John Mueller and Karl Mueller. "Sanctions of Mass Destruction." Foreign Affairs. 78, no. 3 (1999): 49. 131 Ehrenberg, The Iraq Papers, 2. GDP is the sum total of the product produced within the country’s borders while GNP is the total combined assets of its citizens. 132 Alnasrawi, "Economic Sanctions and Consequences," 214. 54

dominance in the region by maintaining an openly hostile stance towards Israel and serving as a counterweight to US dominance in the region.

New Calls for the Overthrow of Saddam Emerge

Throughout the mid-1990s, policies of containment began to face heightened criticism from academics and journalists. Conservative columnists had long castigated such policies as deeply ineffective in their ability to remove Saddam from power, as well as improper uses of US hegemonic power at the end of the Cold War. Although

President Bill Clinton had yielded to certain criticisms by launching cruise missile strikes on Iraq beginning in 1993, writers and government officials pushed for a more assertive

US response to what was deemed the growing Iraqi threat. By 1997, Paul Wolfowitz,

Undersecretary of Defense for Policy under George H.W. Bush, and soon to be Deputy

Secretary of Defense under George W. Bush, openly called for the overthrow of Saddam

Hussein in the pages of the Wall Street Journal.133

Demands for a reformulation of US policy also extended beyond the opinion pages and into the realm of beltway policy organizations. In January 1998, the Project for a New American Century, a neoconservative group that aimed “to promote American global leadership,” sent a private letter to President Clinton, asking him to assert a new

US policy towards Iraq in his upcoming State of the Union address by replacing

133 Paul Wolfowitz. "Rebuilding the Anti-Saddam Coalition." The Wall Street Journal 18 Nov. 1997. 55

containment with the more aggressive policy of regime change.134 The PNAC followed the letter with an Op-Ed in the New York Times four days later, which reiterated the call for a new Iraq policy and claimed that “the Clinton administration was unable to respond to a threat to US interests and security.”135

Rising from the ashes of a Republican electoral sweep during the 1994 midterm election, Clinton was faced with massive congressional pressure over the administration’s

Iraq policy, which culminated in the 1998 Iraq Liberation Act. With its passage, US stated policy turned to one of regime change for the first time, according to the bill’s text,

“in order to… support a transition to democracy in Iraq.”136 The legislation appropriated money for the Iraqi opposition and authorized various measures to undermine the Iraqi government, including support for democratic groups, such as the Iraqi National

Congress.137 Demonstrating the political opposition to containment, the bill passed unanimously in the Senate, and faced only 38 votes of opposition in the House of

Representatives.138

134 "Letter to President Clinton on Iraq." Project for the New American Century. Published January 26, 1998. Accessed April 17, 2011. http://www.newamericancentury.org/iraqclintonletter.htm. Many signatories to the letter would go on to serve in high levels of the second Bush administration, including Richard Armitage, Donald Rumsfeld, Paul Wolfowitz, Zalmay Khalilzad and Richard Pearle. 135 Ehrenberg, The Iraq Papers, 26. 136 United States. Cong. House. 1998 Iraq Liberation Act. 105th Congress. 2nd Sess. H 4655. Washington GPO: 1998. 137 Ehrenberg, The Iraq Papers, 29. 138 "Bill Summary & Status - 105th Congress (1997 - 1998) - H.R.4655 - Major Congressional Actions." THOMAS (Library of Congress). Accessed April 17, 2011. http://thomas.loc.gov/cgi- bin/bdquery/z?d105:HR04655:@@@R. 56

George W. Bush Administration: A New Approach

With the election of George W. Bush to the presidency in 2000, a new era of conservatism was ushered in. Many of the administration’s cabinet members came to

Washington with a divergent approach to that of the two previous presidents in regards to the US role in the post-Cold War era. Writing in Foreign Affairs in 2000 during the campaign, then-foreign policy advisor to candidate Bush, Condoleezza Rice set the stage for the move away from the “realist” approach to foreign policy and anticipated the administration’s “freedom” agenda.139

Rice also stressed the importance of linking political with economic reforms across the world, writing that “it is in America’s interest to strengthen the hand of those who seek economic integration because this will probably lead to sustained and organized pressures for political liberalization.”140 Therefore, economic and political reforms, particularly in the developing world, were not only “in America’s interest,” but were also seen as a unified package of reforms required by nations if they were to advance in the

21th century. Overall, neoconservative foreign policies of preemption and American hegemonic dominance would be intrinsically linked to economic neoliberalism throughout the presidency of George W. Bush. These two strands of thinking would converge with the 2003 Iraq war and its subsequent economic reconstruction.

139 Rice, Condoleezza. "Promoting the National Interest." Foreign Affairs. 79, no. 1 (2000): 45-62 and Ehrenberg, The Iraq Papers, 40. 140 Rice, “Promoting the National Interest,” 55. 57

Throughout the Cold War, the US relationship Iraq was symptomatic of the nature of a biploar international structure. During the first two decades after the fall of the

Hashemite monarchy in 1958, Iraq formed close economic and military bonds with the

Soviet Union that existed in tandem with the socialist, command economic policies implemented by Baghdad during this time. After a virtual break in relations with

Moscow during the mid 1970s, Baghdad positioned itself closer to the West, and continued to do so even more with the onset of the Iran-Iraq war in 1980.

US policy towards Iraq, particularly during the Gulf War of 1990-1991, and throughout the sanctions regime of the 1990s, relied on the destruction of the Iraqi infrastructure and its economy and the simultaneous support (or creation) of resistance groups and alternative options for the country’s future. While the destruction of war and years of sanctions and containment typified the destruction of Saddam Hussein’s economic and political legitimacy, “creation” was exemplified by the calls of support for the 1991 uprising, as well as the passage of the 1998 Iraq Liberation Act.

The move from the containment policies of the early 1990’s, largely the policy reflection of the Cold War’s political realities, to calls for a more active US presence abroad represented a paradigm shift in the nature of the state after the fall of the Berlin wall and the rise of US unipolar dominance in the international arena. During the initial aftermath of the disintegration of the USSR, the US policymakers continued to accept the limitations of containment, which respects the structure of the state due to the deterrent nature of bipolarity. However, by the mid 1990s, neoconservative writers argued that the 58

unique position of the US as the world’s sole remaining superpower required a more interventionist international presence.

With the election of George W. Bush to the presidency in 2000, a new administration came to power with a vastly different view of the US’s role in the world, and its ability to bring about change through the use of power. Such a viewpoint was palatable in the post-Cold War world and, in the aftermath of the September 11th attacks, the political results of such a predisposition (preemptive, unilateral war) became all but ensured. Therefore, neoliberalist economic reforms that the “Washington Consensus” had hoped to spread to the third world throughout the 1990s could seemingly be achieved through direct action, and the political implementation of Schumpeter’s creative destruction would be truly realized.

CHAPTER THREE: POST-2003 IRAQ: THE FIRST CONVERGENCE OF NEOLIBERALISM AND CREATIVE DESTRUCTION?

Between the end of WWII combat operations in 1945 and the onset of the Iraq war in

2003, the US had not led a combined effort of foreign invasion, occupation and reconstruction. And while the Bush administration allowed nearly a year-and-a-half to prepare for the invasion of Iraq, the final phase of economic reconstruction received little attention from pre-war planners. I argue that, in the place of a cohesive and detailed policy, neoliberalist predilections of Bush administration officials served as the essential motivating force behind the development of reconstruction policy from 2003-4. These predilictions were demonstrated by the wholesale privatization of state-owned enterprises

(SOEs), the opening of Iraq’s markets to foreign investment and the dismantling of remnants of the institutions of Saddam’s government, such as the Iraqi army and the

Ba‘ath party.

These ad hoc approaches to reconstruction were facilitated by the opportunities of creative destruction on the level of an entire nation, particularly in the context of the enhanced role for the state in international affairs in the wake of the end of the Cold War and the attacks of September 11, 2001. Whereas containment attempted to retain the general structure of Saddam Hussein’s Iraq while attempting to remove its economic and political innards, preemption and the Bush doctrine argued for a more active and unilateral US presence in the international arena. At its essence, these discrepancies underscored the different readings of history and the subsequent role of the US in the 21st century between the Bush administration and its two predecessors. 60

September 11th and its Ideological Implications

As described in the previous chapter, the election of George W. Bush in 2000 brought officials to the White House with drastically divergent positions on foreign policy from those of two previous administrations, particularly in regards to the use of

US power to secure interests abroad. This was clearly evident in the views on US policy towards Iraq. Whereas conventional wisdom within foreign policy circles throughout the early to mid-1990s had supported containing Hussein through economic sanctions and a no-fly zone, many of the strongest proponents of regime change now worked throughout

Bush’s cabinet.141

Arguing that the US must play an active role in the world in order to ensure an

American-led world order and peace, many of the neoconservatives of the new Bush administration felt that the biggest danger facing the world in the post-Cold War era was that the “United States might, out of laziness or stinginess, turn its back on its responsibility to keep the peace…as Europe had done in the 1930s.” Such isolationism would allow for a unique historical moment, where, for the first time, “a democracy with no intention of conquering and subjugating other countries” was the most powerful nation on earth, to pass without action.142

141 Members of George W. Bush’s war cabinet, including Dick Cheney, Richard Armitage, Condoleezza Rice and Paul Wolfowitz, referred to themselves early on as “the Vulcans,” “in honor of the Roman god of fire, the forge and metalwork.” (see Mann, 2004) 142 Justin Vaïsse. Neoconservatism: The Biography of a Movement. (Cambridge, Mass: Belknap Press of Harvard University Press, 2010), 233. 61

One of the main ideological tools promoted to sustain such a ‘peace through action’ was the concept of preemptive war, in which a “country strikes in the belief it is about to be attacked.” 143 Preemption was one of several principles that would be encapsulated in the “Bush Doctrine,” a loose collection of strategies formulated in the wake of 9/11 that called for the reversal of the defense spending cuts of the 1990s, confronting unfriendly regimes and retaining a readiness to act unilaterally in the international arena.144 Collectively, these policies asserted that “peace and stability require the United States to assert its primacy in world politics.”145

Although much of the Bush doctrine was formulated as a response to global terrorism, the issue remained off the radar throughout the first nine months of the Bush administration.146 As National Security Advisor Rice noted in the previously mentioned

“Promoting the National Interest,” issues such as China’s economic rise and rogue regimes like North Korea were the central issues of US national security.147 Indeed, Rice was scheduled to meet with the president on the morning of September 11, 2001 to

143 Henry Shue and David Rodin. Preemption: Military Action and Moral Justification. (Oxford: Oxford University Press, 2007), 40. While many have noted that the 2003 Iraq War was more a demonstration of preventative war, in that it aimed at preventing a threat from materializing, as opposed to preemptive war, where a threat is imminent, I will continue to use preemptive war for the sake of consistency. (see Shue and Rodin, 2007) 144 Ehrenberg, The Iraq Papers, 4. Many of the concepts of the Bush Doctrine, such as preemption and unilateral American dominance, were preceded by the “Wolfowitz Doctrine” of the early 1990s, as encapsulated in the “Defense Planning Guidance” document of 1992. (See Tyler, 1992) 145 Robert Jervis. "Understanding the Bush Doctrine." Political Science Quarterly. 118, no. 3 (2003): 365. 146 The Clinton administration had not viewed Saddam as an existential threat to US interests near the end of the second term, instead focusing efforts on the perceived growing threat of al Qaeda, particularly after the 1998 African embassy bombings and the 2000 USS Cole bombing. The majority of President Bush’s war cabinet took the opposite approach initially, emphasizing Iraq over al Qaeda. (see Clarke, 2004 for more) 147 Rice, “Promoting the National Interest,” 54. 62

discuss “the threats and problems of today and the day after, not the world of yesterday,” although the focus was largely on missile defense, not terrorism.148

However the entire political calculus of US foreign policy was shaken to the core with the attacks of 9/11. One of the key components of the ensuing “war on terror” was regime change. In the 2002 State of the Union address, President Bush outlined an “axis of evil” that the US must resist at all costs in order to preserve its interests. Deputy

Secretary of Defense Paul Wolfowitz also argued at this time that the US needed to respond to the attacks by potentially “ending states,” such as Iraq, that supported terrorism.149

The attacks of September 11, particularly in the international context of the post-

Cold War world, made the neoconservative arguments that had dated back to the mid to late-1990s more palatable. The unipolar world made the US less reliant on its allies, with a particular amount of hostility was directed towards Saudi Arabia, the birthplace of fifteen of the nineteen 9/11 hijackers. It was also clear to many that the previous policy of appeasing authoritarian leaders that opposed US interests was no longer viable. Iraq had remained hostile to international weapons inspectors throughout the late 1990s and showed no signs of acquiescing to US regional interests. 150 In total, these factors would

148 Wright, Robin. "Washingtonpost.com: Top Focus Before 9/11 Wasn't on Terrorism." The Washington Post. Printed April 1, 2004. Accessed April 17, 2011. http://www.washingtonpost.com/ac2/wpdyn/A40697-2004Mar31?language=printer. 149 Katzman, Post-Saddam Governance and Security, 6. 150 Ehrenberg, The Iraq Papers, xxxii. 63

allow for the unilateralist approach the Bush administration took towards overthrowing

Saddam Hussein.

Finally, it can be said that a crucial lesson of September 11 and the ensuing “war on terror,” was that violent extremism in the Middle East was not due to economic and societal underdevelopment, but was a result of the absence of democracy in the region.151

This lesson would have a drastic impact on the economic reconstruction policies that would follow the March 2003 invasion and occupation of Iraq.152

Post-9/11 Planning of the Iraq War

While it was soon clear to members of the administration that al Qaeda had perpetrated the attacks, and that an invasion of Afghanistan would be the appropriate response, Iraq was also alluded to as a potential target in the larger “war on terror.” Two days after the attacks on the World Trade Center and the Pentagon, Secretary of Defense

Donald Rumsfeld argued that US troops should be sent to Iraq following the defeat of the

Taliban in Afghanistan. Although his proposal was initially rejected, Bush began alluding to an extended campaign in the “war on terror.” Speaking on September 15,

2001, Bush claimed that “victory against terrorism will not take place in a single battle,

151 Vaïsse, Neoconservatism, 239. 152 This connection between the lessons of 9/11 and the invasion of Iraq in 2003 was largely based on the assumption that Baghdad was involved in al-Qaeda’s strikes on the World Trade Center and the Pentagon, one that has been disproven by numerous reports and studies. Yet Saddam Hussein’s regime was also included in the Bush administration’s “war on terror” out of Washington’s desire to remake the Middle East in accordance with American interests. 64

but in a series of decisive actions against terrorist organizations and those who harbor and support them.”153

Military planning for what would be known as “Operation Iraqi Freedom” began in earnest in November 2001, when President Bush instructed General Tommy Franks and Rumsfeld to prepare for the “decapitation” of the Iraqi government.154 Although much of the pretext for war with Iraq was based upon its imminent urgency, therefore necessitating preemptive war, Bush had concluded that it was “both necessary and desirable that Saddam should be ousted” by the summer of 2002, nearly a full year before the beginning of military operations.155

Despite the early war planning for Iraq, reconstruction policy remained sidelined and marginalized during the run-up to war. As Nora Bensahel of the RAND Corporation hypothesizes, this was largely due to two assumptions the administration made: first, that

Americans would be viewed as liberators upon their arrival, and therefore the local population would wholeheartedly invest in reconstruction efforts, and second, that the government would continue to function even after the removal of ministers and their top deputies.156 Administration officials also assumed that, if Saddam Hussein was the only

153 "President Addresses Nation in Radio Address." Welcome to the White House. Accessed April 17, 2011. http://georgewbush-whitehouse.archives.gov/news/releases/2001/09/20010915.html. 154 "The Iraq War -- Part I: The U.S. Prepares for Conflict, 2001." The George Washington University. Published September 22, 2010. Accessed April 17, 2011. http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB326/index.htm. 155 Richard Haass. War of Necessity: War of Choice : a Memoir of Two Iraq Wars. (New York: Simon & Schuster, 2009), 213. 156 Nora Bensahel. "Mission Not Accomplished: What Went Wrong with Iraqi Reconstruction." Journal of Strategic Studies. 29, no. 3 (2006): 456. As former Undersecretary of Defense for Policy Douglas Feith notes in his autobiography War and Decision, the administration had made certain contingency plans in 65

impediment to a democratic and economically liberalized Iraq, simply removing him would make it easy to transform region to the benefit of American interests.157 As a result, little emphasis was given to the formulation of a detailed reconstruction policy.158

Despite this lack of a coherent policy, Bush administration officials had long asserted that free enterprise was an essential prerequisite to democratic political reform.

In the 2002 document, “The National Security Strategy of the United States of America,”

National Security Advisor Condoleezza Rice argued that the end of the Cold War and

“the great struggles of the twentieth century between liberty and totalitarianism” demonstrated the supremacy of a “single sustainable model for national success,” one that embraces democracy, freedom and free enterprise.159 Clearly, to its proponents, the central lesson of the past century was that free markets and ballot boxes were the superior tools of an effective society, and that both would need to be implemented if a nation were to truly “succeed.”

The 2002 National Security Strategy also set the stage for many of the administration’s guiding foreign policy doctrines. The document, which laid out the possibility of the use of preemptive war, argued that “given the goals of rogue states and

case their assumptions about post-war Iraq did not come to fruition, including mass migration and environmental crises. However, no plans were made for the advent of an insurgency. In the word’s of Feith, “across the board, Administration officials thought that postwar reconstruction would take place post- that is, after- the war. That turned out to be a major error.” Douglas J Feith. War and Decision: Inside the Pentagon at the Dawn of the War on Terrorism. (New York, NY: Harper, 2008), 275-276. 157 Ehrenberg, The Iraq Papers, 163. 158 Others (see Klein, 2007), argue that the administration failed to adequately prepare for the post- hostilities phase of the war in order to break the Iraqi state, thus creating chaos and instability that would allow for the implementation of neoliberal reforms. 159 Ehrenberg, The Iraq Papers, 80. 66

terrorists, the United States can no longer rely on a reactive posture as we have in the past,” and must instead destroy any threat “before it reaches our borders.”160 The directive also repeatedly argued that the US would not respond solely to the attacks of

9/11, but would instead engage in a “war of ideas” with extremist Islam, with the former defending western political freedom and the latter striving to destroy them. This rigid ideological perspective also motivated the faith in the inherent morality of the free markets (as opposed to the morally bankrupt economic philosophies that had lost any remaining legitimacy with the fall of the Berlin wall), and would be instrumental in driving economic reconstruction policy in Iraq after the 2003 invasion.161

The Public Push for War and Nascent Plan for Post-Hostilities

In the months prior to the March 2003 invasion, administration officials made the public case for their plan regarding post-hostilities Iraq. Yet behind the scenes, it was clear that little preparation had been made for the day after Saddam Hussein’s fall, and what planning had been made ignored previous reconstruction conventions and research.

The Office of Reconstruction and Humanitarian Assistance (ORHA), which would be charged with leading reconstruction, was created only two months prior to the invasion, and was housed in the Department of Defense, therefore largely bypassing the State

Department’s experience and knowledge in the matter.

160 Lawrence Kaplan and William Kristol. The War Over Iraq: Saddam's Tyranny and America's Mission. (San Francisco, CA: Encounter Books, 2003), 79. 161 While the 2002 National Security Strategy represented a new US foreign policy for the 21st century, its emphasis on the battle of good vs. evil in many ways represented a return to the Truman Doctrine, which pitted the US and its free allies against the oppressive Soviet Union. 67

With the drums of war beating loudly in the public sphere by early 2003, administration officials brought their plan for a post-Saddam Iraq to wary members of

Congress. Speaking in front of the Senate Foreign Relations Committee in February,

2003, Undersecretary of Defense for Policy Douglas Feith outlined three general phrases: stability operations, the transfer of authority to the Iraqis and the drafting of a new democratic constitution. However, Feith provided few details for a specific plan, besides the repeated insistence that Iraq’s vast oil wealth would pay for reconstruction and the cost of government operations.162

As military plans for regime change in Iraq continued throughout late 2002 and early 2003, civilian planning for the post-war reconstruction phase remained largely in its infancy. With the signing of National Security Presidential Directive 24 on January 20,

2003, ORHA was established, marking the beginning of formal post-war reconstruction planning.163 ORHA was headed by retired Lieutenant General Jay Garner, who had worked with the Kurds in Northern Iraq after the Gulf War, and had more than thirty-five years of military experience.164

Unlike previous examples of post-war reconstruction, ORHA would be housed in the Department of Defense and report through General Tommy Franks, the head of

162 David L. Phillips. Losing Iraq: Inside the Postwar Reconstruction Fiasco. (New York: Westview Press, 2005), 123. 163 Gideon Rose. How Wars End: Why We Always Fight the Last Battle: a History of American Intervention from World War I to Afghanistan. (New York: Simon & Schuster, 2010), 244-5. The formation of ORHA on January 20, 2003 was only four days before General Franks gave formal war plans to President Bush. (Rose, 245) 164 Michael Kirk, Jim Gilmore, Will Lyman, Ben McCoy, and Steve Audette. Bush's war. [Arlington, Va.]: PBS Home Video, 2008. 68

United States Central Command (CENTCOM). Therefore, the reconstruction and humanitarian components of the operation would be unified with the security. This was an unprecedented move, as civilians in the State Department typically held control over humanitarian efforts.165

With ORHA housed at the Pentagon, Garner was unable to take advantage of vast amount of research that had been compiled into the State Department’s “Future of Iraq

Project.” An early and comprehensive analysis of post-Saddam Iraq, the project assembled more than 200 Iraqi exiles, whose recommendations were compiled into a 13- volume report. The Project called for many steps that would eventually be taken by the

CPA, including the “de-Ba‘athification” of “all facets of Iraqi life” and the declaration that “the economic system most appropriate for Iraq the day after the current regime is a profit-based system.”166

However, with the post-war reconstruction efforts under the jurisdiction of the

Department of Defense, the project was largely ignored by administration officials.167

This was in accordance with Secretary of Defense Donald Rumsfeld’s open hostility to a sustained project of “nation building,” a pejorative in neoconservative circles. Speaking one month before the opening of military operations in Iraq, Rumsfeld said of the

165 Phillips, Losing Iraq, 126. 166 "New State Department Releases on the ‘Future of Iraq’ Project." The George Washington University. Posted September 1, 2006. Accessed April 17, 2011. http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB198/index.htm. 167 "Documents - The Lost Year In Iraq | FRONTLINE." PBS: Public Broadcasting Service. Accessed April 17, 2011. http://www.pbs.org/wgbh/pages/frontline/yeariniraq/documents/. 69

ongoing US efforts in Afghanistan that “the objective is not to engage in what some call nation-building.”168

Working with little time and few resources, ORHA released “A United Mission

Plan for Post-hostilities Iraq” in April 2003. The document recommended

“internationalizing” the reconstruction process, setting up an interim government and establishing a joint civilian-military approach. It also refuted the idea that Iraq would be able to pay for its reconstruction through oil funds, and warned of violent unrest if reconstruction did not proceed quickly and effectively.169

Although most of these recommendations went unheeded, many of the central principles of what would become eventually become reconstruction policy were outlined in a State Department/USAID document from May 2003 entitled “Moving the Iraqi

Economy from Recovery to Sustainable Growth.” The document recommended many neoliberal reforms to Iraq’s economy, including the privatization of Iraq’s industries, a reformed tax and tariff system, the modernization of the Baghdad Stock Exchange and the creation of a legal framework compatible with private ownership.170 Taken as a

168 "Defense.gov Speech." The Official Home of the Department of Defense. Accessed April 17, 2011. http://www.defense.gov/speeches/speech.aspx?speechid=337. 169 "Documents - A United Mission Plan For Post-Hostilities Iraq - The Lost Year In Iraq | FRONTLINE." PBS: Public Broadcasting Service. Accessed April 17, 2011. http://www.pbs.org/wgbh/pages/frontline/yeariniraq/documents/orha.html. 170 Antonia Juhasz “Ambitions of Empire The Radical Reconstruction of Iraq's Economy." Published January 20, 2004. Accessed April 17, 2011. http://www.tyrannyofoil.org/article.php?id=52. 70

whole, these measures seemed to confirm the notion that Iraq would serve as a “blueprint for a neoliberal post-Saddam Hussein state.”171

Justifications, War and its Aftermath

While the war itself was relatively bloodless for American troops, reflecting the heavy importance placed on military planning, the chaos that ensued after the arrival of

US troops in Baghdad represented the “creative destruction” of the Saddam Hussein’s regime and the birth of the “New Iraq.” This occurred as the administration continued to promulgate economic justifications for the war itself, arguing that the dissemination of economic freedom in the Middle East was closely tied to American interests.

Preparation for war continued throughout late 2002 and early 2003. In October

2002, Congress approved $65 billion for Iraq, $62.6 billion of which was allocated for military operations, with the remainder for the Pentagon’s reconstruction effort.172 On

March 17, 2003, President Bush announced that Hussein and his family would have 48 hours to leave Iraq or face military strikes “at a time of our choosing.”173

Due to the careful planning by military officials over nearly 18 months, the invasion itself went much more smoothly than the Pentagon had feared, particularly due to the absence of a strong response from Iraqi forces. Concerns over decimated oil fields

171 Ehrenberg, The Iraq Papers, 296. 172 Philips, Losing Iraq, 125. 173 Todd S. Purdum. A Time of Our Choosing: America's War in Iraq. (New York: Times Books/Henry Holt, 2003), 286. 71

and mass floods of refugees turned out to be ill-founded.174 Yet with the collapse of the

Ba‘athist regime after the arrival of troops in Baghdad in April 2003, the city experienced a level of chaos and looting for which planners had not prepared. Nonetheless, Bush administration officials took a Schumpeterian outlook on the ongoing anarchy, seeing it as a necessary cleansing of the vestiges of the former regime. Speaking to reporters during the height of the pillaging of Baghdad, Secretary of Defense Donald Rumsfeld was infamously quoted as saying, “Stuff happens. Freedom is untidy and free people are free to make mistakes and commit crimes and do bad things.”175 Indeed, by early April, postcombat activities transitioned into Phase IV SASO (stability and support operations),

“with no plan from higher headquarters.”176 Such a lack of planning would cause seemingly irreparable devastation to the capital: Damage from looting across Baghdad destroyed 17 of the capital’s 23 ministry buildings and would eventually be calculated at several billions of dollars.177

While it has subsequently been asserted that the US military was unequipped and uninterested in policing the streets of Baghdad and firing upon looting Iraqis, I argue that such chaos and destruction was seen as an essential step in the formation of the “New

Iraq.” Indeed, in his autobiography, Known and Unknown, Rumsfeld referred to the looting as the cathartic release of “pent-up grievances against tyranny that had smothered

[Iraqis] and impoverished their country for thirty years” and compared it to similar

174 Rose, How Wars End, 237. 175 "CNN.com - Transcripts." CNN.com. Published December 15, 2006. Accessed April 17, 2011. http://transcripts.cnn.com/TRANSCRIPTS/0612/15/sitroom.01.html. 176 Rose, How Wars End, 247. 177 Phillips, Losing Iraq, 135. 72

instances of post combat chaos in Germany after the arrival of allied troops in 1945.178

Similar comments were echoed by Peter McPherson, Director of Economic Policy for

ORHA, who said, in reference to the looting and theft during the initial chaos in

Baghdad, “I thought the privatization that occurs sort of naturally when somebody took over their state vehicle, or began to drive a truck that the state used to own, was just fine.”179

The chaos that engulfed the streets of Baghdad also resulted from the perceived role of the US military in a post-conflict setting. Instead of providing the security necessary to allow political progress, “General [Tommy] Franks said that the Secretary of

Defense wanted [the military] to quickly leave and turn over post-hostilities to international organizations and nongovernmental organizations led by ORHA.”180

Although administration officials had originally pushed for the ousting of Saddam

Hussein based on his acquisition of weapons of mass destruction, economic factors permeated President Bush’s early rhetoric for the war’s justifications. Speaking six weeks after the beginning of combat operations, Bush reaffirmed that the US supported

“the advance of freedom in the Middle East, because it is our founding principle, and because it is in our national interest… Across the globe, free markets and trade have

178 Donald Rumsfeld. Known and Unknown: A Memoir. (New York: Sentinel, 2011), 476. 179 Rajiv Chandrasekaran. Imperial Life in the Emerald City: Inside Iraq's Green Zone. (New York: Alfred A. Knopf, 2006), 120. 180 Donald P. Wright and Timothy R. Reese. The United States Army in Operation Iraqi Freedom, May 2003-January 2005: On Point II: Transition to the New Campaign. (Fort Leavenworth, KS: Combat Studies Institute Press, 2008), 141. This was also the result of Rumsfeld vision for a modern US army, one that emphasized a small number of ground troops that would allow for a “light footprint.” See Buley, 2008 for more. 73

helped defeat poverty, and taught men and women the habits of liberty.”181 Bush’s insistence that free markets themselves led to such political results highlights the administration’s position, as previously outlined by Rice’s “National Security Strategy of the United States,” that neoliberal economic reforms are both the ends and the means to political and societal stability in post-conflict zones.

Indeed, the neoliberalization of Iraq was seen as of equal, if not greater, importance to Washington as a way to spur growth and protect US interests. While turning Iraq into a “beacon of democracy” would have pervasive consequences in the region, liberalizing its economy could help demonstrate to other nations (particularly those mired in the Arab socialist economic model) how to revitalize “even the most moribund economy,” thereby stemming youth unemployment and potentially terrorism, as a result.182

The war would also help the US gain “free access” to Iraqi oil, which were believed to hold the second largest known reserves in the world at the time.183 Through the privatization of Iraq’s oil industry, output could vastly increase and OPEC’s power would subsequently diminish. Such a move could also fend off the threat of “peak oil,”

181 "George W. Bush: Commencement Address at the University of South Carolina in Columbia, South Carolina." The American Presidency Project. Accessed April 17, 2011. Commencement Address at the University of South Carolina in Columbia, South. http://www.presidency.ucsb.edu/ws/index.php?pid=407#ixzz1JpAUoUYo. 182 Looney, “The Neoliberal Model's Planned Role in Iraq's Economic Transition,” 571. Critics of the handling of the war argue that the assertion that Iraq’s economic model could be described as “Arab Socialist” was based on an outdated understanding of Iraq’s situation, one based more on the 1970s than the 1990s and early 2000s, where the Iraqi economy had largely become a basket case after more than a decade of sanctions. Nonetheless, a strong opposition to “Arab Socialism” has been part of American policy in the Middle East since the end of World War II. See Little, 2004 for more. 183 "How Much Oil Does Iraq Have? - Brookings Institution." Brookings. Accessed April 17, 2011. http://www.brookings.edu/papers/2003/0512globalenvironment_luft.aspx. 74

or “the geological limitation of to the oil supply in the ground” by optimizing Iraq’s remaining reserves through the efficiencies of the free market.184

Yet none of these considerations could be realized unless post-hostilities Iraq was one of economically viable stability. After the fall of Baghdad in April 2003, ORHA morphed into the CPA, which funneled these economic philosophies into wide-reaching executive orders.185 With the transition from ORHA to the CPA, Garner was dismissed from his position as de-facto governor of Iraq. Soon after his firing, Garner told journalists he believed he was let go because he had wanted early elections and “rejected an imposed program of privatization.”186 Whatever the reason of his early departure,

Garner’s removal and the transition of power to the CPA began a process of neoliberal reforms and creative destruction policies that continue to affect Iraq to this day.

The Creative Destruction of Iraq: CPA Orders One and Two

The CPA began as a transitional governing body under the tutelage of the

Department of Defense. Headed by L. Paul Bremer, the CPA faced immense early challenges, particularly as a result of the extensive looting of Baghdad and smaller cities,

184 Kenneth S. Deffeyes. Hubbert's Peak: The Impending World Oil Shortage. (Princeton, N.J: Princeton University Press, 2009), ix. While this was never an explicit and publically-discussed justification, Vice President Cheney had warned of the looming danger of peak oil in 1999 as the CEO of Halliburton in a speech to the London Institute of Petroleum. 185 Indeed, many (including Ehrenberg, 2010) have claimed that Garner and ORHA were replaced by Bremer due to the former’s resistance towards immediate privatization of the economy, which he felt would slow economic growth. 186 "General Sacked by Bush Says He Wanted Early Elections." Home | Common Dreams. Accessed April 23, 2011. http://www.commondreams.org/headlines04/0318-01.htm. 75

as well as the subsequent dissolution of the Iraqi governing edifice.187 Despite these early setbacks, Bremer and the CPA remained steadfast to the neoliberalist reforms of privatization and the dismantling of state-owned agencies throughout its first months of existence.

Many of the most drastic first steps taken by US planners in Iraq came in the form of CPA orders. Two of the CPA’s most controversial orders were Bremer’s first as

Presidential Envoy and Administrator in Iraq: Orders number one and two respectively

“de-Ba‘athified” Iraqi society and disbanded the military.188 The de-Ba‘athification order

“deestablished” the party and dismissed all Iraqis in the top three levels in every government ministry and all affiliated institutions, instead of focusing on those who had committed atrocities. Overnight, nearly 120,000 Iraqis lost their jobs, including doctors and teachers. The dissolution of the army laid off nearly 400,000 officials from the

Ministry of Defense, all branches of the armed forces, intelligence agencies and paramilitary groups. Similar to the sweeping nature of the de-Ba‘athification order, no distinction was made between career military personnel and enlisted soldiers. Although

187 Bremer had previously served as Ambassador to the Netherlands and Ambassador-at-large for Terrorism under the Reagan administration. After retiring from the foreign service, Bremer became managing director at Kissinger and Associates, whose namesake had been active in the implementation of neoliberal reforms in Chile in the 1970s. 188 “Coalition Provisional Authority Order Number 1: De-Ba‘athification of Iraqi Society.” Accessed May 4, 2010. http://www.iraqcoalition.org/regulations/20030516_CPAORD_1_De- Ba_athification_of_Iraqi_Society_.pdf and “Coalition Provisional Authority Order Number 2: Dissolution of Entities.” Accessed May 4, 2010. http://www.iraqcoalition.org/regulations/20030823_CPAORD_2_Dissolution_of_Entities_with_Annex_A. pdf. 76

the order offered a “terminating payment,” thousands of former Iraqi soldiers soon began protesting regularly outside the offices of the CPA.189

The Arab response to CPA Orders 1 and 2 were immediate and strong, if divided.

Writer Sa‘adun al-Sa‘idi argued that de-Ba‘athification was not only illegal, but also

“punished the families” of former party members and “dumped them on the side of the road.”190 Yet others argued that the decision was essential in the post-Saddam era.

Writing in March, 2004, Salam Kuba‘ al-‘Atibi argued that de-Ba‘athification was “a necessity for the Arab community” and the effort to build a new Iraq.191 As for the disbandment of the army, Dr. Sa‘ad al-‘Abidi believed that the decision was inappropriate in the “unstable circumstances” at the time, and ignored the nearly 85 years of experience of the Iraqi military.192

Despite the vast and sweeping nature of orders one and two, they had long been part of the pre-war planning. Douglas Feith had presented a plan in conjunction with

ORHA head Jay Garner, which would “downsize” the army instead of dismantling it completely. However, after the apparent “self demobilization” of the Iraqi army, Bremer

189 Phillips, Losing Iraq, 147. 190 Sa‘adun al-Sa‘idi. "Mashru’iya al-ijtithath wa ijtithath al-mashru’iya." [Legitimacy of the Eradication and the Eradication of Legitimacy]. Published April 27, 2011. Accessed May 7, 2011. http://www.albasrah.net/ar_articles_2011/0411/sa3don_270411.htm. 191 Salam Kuba‘ al-‘Atibi. "Ijtithath hizb al-ba‘th darura mn daruriyat al-mujtama‘ al-‘arabi wa al-‘Iraq al-jadid." [Eradication of the Ba'ath Party is a Necessity for Arab Society and the New Iraq] Published April 28, 2004. Accessed May 7, 2011. http://www.ahewar.org/debat/show.art.asp?aid=17517. 192 al-‘Abidi, Sa‘ad. "Al-mu’asasa al-‘askariya al-‘Iraqiya al-waq‘i al-hali wa subul i‘adat al-bana’ wa al-tashih" [The Current Reality of the Iraqi Military Establishment and the Ways to Rebuild and Correct] Published June, 2006. Accessed May 7, 2011. http://alobaidy.net/study-limitedread.php?recordID=2. 77

believed that the formal dissolution of the army was “the only option we had.” Instead,

Bremer felt he “had to create an entirely new institution.”193

CPA Orders one and two can also be seen as clear examples of the implementation of policies motivated by creative destruction.194 While many pillars of the regime had melted away with the onslaught of American forces, the two orders formalized the final dismantling of a government that had held back Iraq’s economic and societal potential for decades. De-Ba’thification also served the neoliberal goals of the administration by seemingly eliminating opponents of the liberalization of Iraq’s economy from the Iraqi military and political scene.195

Iraq’s Shock Therapy: the CPA and Neoliberal Economic Reforms

In accordance with his desire to dismantle the political pillars of Saddam

Hussein’s regime, Bremer was adamant and vocal about his desire to see economic reforms serve as a fundamental component of US reconstruction policy. Speaking shortly after his arrival in Iraq in May 2003, Bremer remarked that,

A free economy and a free people go hand in hand. History tells us that substantial and broadly held resources, protected by private property

193 L. P. Bremer and Malcolm McConnell. My Year in Iraq: The Struggle to Build a Future of Hope. (New York: Simon & Schuster, 2006), 58. The Sunni population constituted the majority of those in high positions in the military, and would go on to lead the insurgency that began in early 2004. For more on the connection between CPA orders and the post-war insurgency, see chapter four. 194 Bush administration officials were clear that de-Ba‘athification held a largely creative-destructive goal of wiping clean the remnants of the Hussein regime and building a new state. According to My Year In Iraq, Feith argued, “We’ve got to show all the Iraqis that we’re serious about building a New Iraq. And that means that Saddam’s instruments of repression have no role in that new nation.” (Bremer, 39) 195 Phillips, Losing Iraq, 266. 78

rights, are the best protection of political freedom. Building such prosperity in Iraq will be a key measure of our success here.196 Bremer’s reference to Iraq’s “substantial and broadly held resources” can be seen as an allusion to the administration’s initial belief that Iraq would be able to pay for reconstruction efforts and pre-war debt through its oil reserves.197 Such a conviction served as an impetus for a greater emphasis on liberal market reforms to unleash the potential of Iraq’s petroleum reserves, in the place of centralized government action.

Therefore, it is clear that Bremer saw economic and political reforms as inherently intertwined, and took vast measures to achieve this end.

Many of the CPA’s orders dealt specifically with such economic reforms, underscoring the desire of the Bush administration to open Iraq up to market liberalization. Bremer had made it clear the American and Iraqi public that economic reforms were essential, telling the Washington Post that “my first priority is the Iraqi economy and to get people back to work. If we don’t get their economy right, no matter how fancy our political transformation, it won’t work.”198

Prior to the US invasion, Baghdad ran Iraq’s centrally planned economy by prohibiting foreign ownership of Iraqi business, controlling most large businesses as state-owned enterprises and imposing heavy tariffs to discourage foreign investment.

196 Scott Wilson. “Bremer Shifts Focus to New Iraqi Economy – U.S. Occupation Chief Cites Progress on Restoring Order.” The Los Angeles Times, May 27, 2003. 197 Caron, The Reconstruction of Iraq, 1. However, it soon became clear to the CPA that Iraq’s liability and reparations of $200 billion put the country in “no position to service its existing debt, let alone take on more,” according to Bremer’s testimony in front of the Senate Foreign Relations Committee, Sept. 2003. (Ibid, 1) 198 Chandrasekaran, Imperial Life in the Emerald City, 70. 79

Bremer’s orders changed all of this by instituting deep economic liberalization orders that were intended to extend beyond the formal dissolution of the CPA. An early step toward such liberalization involved the elimination of import duties. Whereas Hussein had charged as much as 200% on the importation of some luxury items, CPA Order 12 suspended all tariffs, thereby removing any advantage domestic producers had over foreign investors.199

The CPA also took several steps to modify the Iraqi tax code, banking system and currency. Order 37 implemented a flat tax through a marginal income rate of 15% from a previous 45%, despite the fact that “most Iraqis never bothered to pay their taxes.”200 In efforts to reform Iraq’s nearly defunct banking system, the CPA modeled their reforms on lessons learned from Eastern Europe’s post-communism economic transition. To this end, the CPA initiated programs to expand the availability of credit, worked with the IMF to establish rules for a modern banking sector and passed Order 38, which “allowed non-

Iraqi banks to operate in Iraq as either a subsidiary with up to 100 percent ownership or as a branch.” In order to help facilitate the transition to the “New Iraq” a currency swap was initiated, replacing “Saddam” dinars with Swiss-made dinars, which the CPA then attempted to stabilize “through a transparent market-based process.”201

Foreign direct investment (FDI) was a central component of the CPA’s efforts to stimulate the Iraqi economy through private sector development. This was encapsulated

199 Ibid, 124. 200 Ibid, 124. 201 James Dobbins. Occupying Iraq: A History of the Coalition Provisional Authority. (Santa Monica, CA: RAND Corp, 2009), 203-211. 80

in Order 39, which privatized all state-owned businesses and allowed for 100% of foreign ownership of businesses in all sectors except oil and mineral extraction.202 This decision seemed to ignore the massive issues of security in Iraq by assuming that multinational corporations would invest in a country battling back a growing insurgency.203

With 189 publically owned companies inherited by the CPA, many of which with low operation capacity and bloated numbers of employees, downsizing would be necessary. The transition of such state-owned enterprises (SOEs) called for 103,000 employees to be fired in 2004.204 Government subsidies, which took up approximately

50% of Iraq’s national budget, were also on the chopping block during the process of economic reforms.205

Both reforms, however, brought up the issue of the fragile balance between the implementation of neoliberalist reforms, which inherently lead to layoffs and forced retirement, and the need to avoid crippling levels of unemployment during a time of violent instability. Indeed, in spite of CPA efforts to curb unemployment, and the recognition that it could not rely simply on private sector job creation, “joblessness

[remained] a serious and persistent problem.”206

202 Juhasz, “Ambitions of Empire.” 203 Dobbins, Occupying Iraq, 213. 204 However, the Iraqi Governing Council halted the privatization of SOEs with Decision #90, “in order to conduct a measure study of the condition of these SOEs and to evaluate the social, economic and political obstacles linked to privatization.” The legacy of CPA economic orders will be analyzed in the following chapter. 205 Dobbins, Losing Iraq, 217-223. 206 Ibid, 232. 81

Despite the CPA’s push to privatize much of the Iraqi economy, oil remained a delicate political issue. In December, 2003, Bearingpoint Inc., a company contracted by the United States International Agency for International Development (USAID), recommended Production Sharing Agreements (PSAs), whereby states retain the legal ownership of their oilfields in all agreements, over full privatization. However, PSA’s had never been used by nationally owned oil companies, and an IAEA report released in

2004 argued that PSAs are only valid options when “oil reserves are small and oil is difficult to extract.” Since Iraq’s oil could be extracted relatively easily, this provided further evidence for US officials that the privatization of Iraq’s oil industry was the only suitable option.207

Overall, it can be said that many of the steps towards the economic liberalization of Iraq’s economy followed neoliberal theories such as privatization, the dismantling of tariffs and subsidies and the lowering of taxes would then draw in the attention of multinational firms, whose investments would create jobs and thus solve the problem of endemic unemployment.208 Such reforms reversed decades of “Arab socialist” economic policies, and signaled to the world Washington’s intentions for Iraq’s future as a bastion of free market liberalism. A 2003 Economist article entitled “Let’s all go to the Yard

Sale,” hypothesized that “if it all works out, Iraq will be a capitalist dream,” due to the

207 Ehrenberg, The Iraq Papers, 386. The outcome of these and other CPA policies will be analyzed in the following chapter. 208 Chandrasekaran, Imperial Life in the Emerald City, 117. 82

reforms as being representative of “the kind of wish-list that foreign investors and donor agencies dream of for developing markets.”209

However, with the growing strength of the Iraqi insurgency throughout the summer of 2003, culminating with the August bombings of the Jordanian embassy and

United Nations headquarters, Bremer’s hope to privatize the Iraqi economy was stalled indefinitely. The violence of that summer underscored the need to find a political settlement to America’s Iraq problem. Writing the in the Washington Post in October,

2003, Bremer outlined a seven step plan for “Iraq’s Path to Sovereignty,” which included the appointment of an interim “Governing Council,” the creation and ratification of a constitution, election of a government and subsequent dissolution of the CPA.210

However, the plan had not been cleared by Bremer’s superiors in Washington, who feared it indicated that the US planned to occupy Iraq for the foreseeable future.

Facing mounting pressure from Washington to begin the transition of power to an

Iraqi government, Bremer was summoned to Washington and told to abandon his previous plan and instead begin plans for a handover of sovereignty. Bremer’s Iraqi

Governing Council announced on November 15, 2003 that the US would hand over sovereignty by June 30 of the following year. In the words of Washington Post writer

209 Caitlin Fitzgerald. "Reassessing Neoliberal Economic Reform in Post Conflict Societies: Operation Iraqi Freedom." Critique: A Worldwide Journal of Politics, Fall (2009), 5. 210 Paul L. Bremer. "Iraq's Path to Sovereignty.” The Washington Post. Published September 3, 2008. Accessed April 17, 2011. http://www.washingtonpost.com/ac2/wpdyn/A39805-2003Sep7.

Rajiv Chandrasekaran, the announcement signaled “the end of the vast American neoconservative experimentation in Iraq.”211

The CPA was officially disbanded on June 28, 2004 with the official transfer of power to the newly appointed Iraqi Interim government. As a sign of the growing unrest and instability in the country, the transfer of power ceremony occurred two days prior to the previously scheduled date in order to avoid insurgent attacks.212

The attacks of September 11, 2001 had paved the way for the Iraq war by validating many claims made by neoconservatives throughout the 1990s in regards to the nature of the US presence abroad and its use of power. Administration officials argued in support of a preemptive attack on Saddam Hussein’s Iraq as part of the larger war on terror in order to spread both economic and political freedoms and secure American interests abroad. While military planning for the Iraq war began long before the first troops crossed the Kuwaiti border, post-war planning began only months before the commencement of combat operations and received few resources, largely due to the assumption that the “de-Ba‘athification” of Iraqi society would clear the way for a civil society to quickly stand and take the reign of governance from the Americans.

In the absence of a detailed post-war plan for Iraq, economic reconstruction was largely motivated by both neoliberal philosophy and a strong practical adherence to

Schumpeterian creative destruction. CPA orders one and two allowed for the clearing

211 Michael Kirk, Jim Gilmore, and Will Lyman. The Lost Year in Iraq. [Alexandria, Va.]: PBS Video, 2006. 212 Michael Kirk, Jim Gilmore, Will Lyman, Ben McCoy, and Steve Audette. Bush's War. Arlington, Va.: PBS Home Video, 2008. 84

away of the old vestiges of the Hussein regime, while subsequent orders pertaining to economic reforms built the framework for a drastically different Iraq, one that embraced the free market, encouraged massive foreign investment and privatized most centrally- owned sectors.

However, partially due to the vast and sweeping nature of the “creative destructive” CPA orders (one and two), security was never truly established in post-war

Iraq, making reconstruction and democratization nearly impossible. To some working for the CPA, “it felt like trying to build and furnish a house while parts of it were on fire.”213 These factors, as well as the legacy of the CPA’s economic liberalization of Iraq, will be analyzed in the following chapter.

213 Thomas E. Ricks. Fiasco: The American Military Adventure in Iraq. (New York: Penguin Press, 2006), 204. 85

CHAPTER FOUR: THE LEGACY OF NEOLIBERALISM IN IRAQ AND BEYOND, 2004-2011

With the handoff of sovereignty to the interim Iraqi government in June 2004, L.

Paul Bremer was replaced by Ambassador John Negroponte. In May 2004, President

Bush moved the responsibilities for managing Iraq from the Pentagon to the State

Department.214 Despite these changes and the “normalizing” of relations between the two countries, the US continued to provide direction regarding the future of the Iraq’s economy through “coercive measures exerted on political actors to ensure the consolidation of policies passed during the CPA era.”215 Yet, it was soon clear that the neoliberal vision for Iraq was beginning to falter in the face of a widespread insurgency.

With the “National Strategy for Victory in Iraq,” a 2005 document prepared by the

National Security Council, neoliberal ideology was largely marginalized, whereas

“reconstruction and an increase in security and state capacity were identified as major concerns.”216

The shift in policy espoused by this document was not an insolated development, but part of a larger shift by both the American and Iraqi governments away from the neoliberal emphasis on market-based reforms towards a stronger and more centralized

Iraqi state in order to subdue the insurgency and civil war that had engulfed the country by 2006. In the political vacuum of this chaos in the first two years after the disbandment

214 Bob Woodward. State of Denial. (New York: Simon & Schuster, 2006), 312. 215 S. Abboud. "Failures (and Successes?) of Neoliberal Economic Policy in Iraq." International Journal Of Contemporary Iraqi Studies. 2, no. 3 (2008): 437. 216 Toby Dodge. "The Ideological Roots of Failure: the Application of Kinetic Neo-Liberalism to Iraq." International Affairs. 86, no. 6 (2010): 1285. 86

of the CPA, the growing insurgency was able to apply free market principles to the chaos of war to finance their operations, particularly through the venture of kidnapping. This instability also created opportunities for an influx of private contractors to Iraq at an unprecedented level. Finally, the level of violence from the insurgency and civil war forced Washington to change its military policy to counterinsurgency based approach, which emphasized a strong Iraqi state, both politically and economically, in order to provide adequate security and employment opportunities for Iraqis. Yet this trend towards a more centralized Iraqi state was first preceded by a withdrawal by both

Baghdad and Washington away from the severity of the CPA’s neoliberal and creative destruction policies soon after the formation of the Iraqi Interim Government in June,

2004.

Iraqi and American Retreat From the Neoliberal CPA Orders

Indeed, the CPA scaled back the initial scope of its liberalization in the face of seemingly unknown realities during its yearlong existence. For example, while Bremer outlined a plan to privatize 40 government-owned industries in the summer of 2003, stating, “everyone knows we cannot wait until there is an elected government here to start economic reform,” he soon shelved the plan after asserting that these steps must be decided by Iraqi self-rule. Such a decision was largely motivated by concerns over future legal challenges to “any sell-off carried out by an occupying power.”217 By 2007, the

217 Steven R. Weisman. "Kurdish Region in Northern Iraq Will Get to Keep Special Status." Information Clearing House. January 5, 2004. Accessed April 17, 2011. http://www.informationclearinghouse.info/article5473.htm. Many have since argued that the CPA’s 87

Iraqi government began “rehabilitating” 21 public sector enterprises in the textile, pharmaceutical, cement and petrochemical sectors,” all of which had been the target of

CPA privatization efforts.218

It also soon became clear to officials at the State Department that the exclusion of

Iraqis from the reconstruction efforts was drastically harming the process. When the

CPA handed power to the Iraqi Interim Government in June 2004, only 15,000 Iraqis were employed in the reconstruction process, fewer than a third of the goal of 50,000, and

“less than one quarter of 1% of Iraq’s estimated total workforce of 7 million people.”219

In April 2005, the State Department announced it would focus on Iraqi subcontractors, as they “are somewhat less susceptible to insurgency attacks and are not burdened by the same heavy overhead expenses of foreign firms.” Emphasis was also shifted from large infrastructure projects to smaller, immediate term projects, which increased the number of Iraqis employed by the US (approximately 120,000 per week).220

The Iraqi government also began inviting back members of the Ba‘ath party in

2008 as a way to allay sectarian strife. The law allowed for the return of any former

Ba‘ath party official at the fifth rank of the party and below, and was enacted in hopes of luring back Sunnis who had been marginalized by the sweeping nature of CPA Order 1.

economic orders violated Articles 43 of the Hague Convention (II) of 1899 and (IV) of 1907 and article 64 of the 1949 Geneva Convention, which deal with the legality of actions taken by occupying powers. See Abboud, 2008 for more. 218 Abboud, “Neoliberal Economic Policy in Iraq,” 433. 219 Rajiv Chandrasekaran. "Mistakes Loom Large as Handover Nears (washingtonpost.com)." The Washington Post. Published June 20, 2004. Accessed April 23, 2011. http://www.washingtonpost.com/wpdyn/articles/A54294-2004Jun19.html. 220 Antonia Juhasz. The Bush Agenda: Invading the World, One Economy at a Time. (New York: ReganBooks, 2006), 239. 88

Ironically, it was the US government who strongly pushed the Iraqi parliament to pass the measure nearly five years after the original de-Ba‘athification order.221 Indeed, the ideologies of neoconservative authors of the war had run into the practical realities of reconstructing a war-torn society.222

The practical failure to implement the full privatization of the Iraqi economy also extended into the oil sector, which had initially been left out of Order 39, the privatization order.223 Due to the ongoing violence between 2004 and 2007, as well as the delicate nature of distributing oil funds along ethnic and sectarian lines, an oil bill was not approved by the Iraqi cabinet until February 2007. The bill distributed oil revenue to each of Iraq’s 18 provinces based upon the respective population, and also laid out means by which international companies could invest in the oil market.224 Yet at the time of this writing, the Iraqi government has yet to reach agreement on the bill, which has been stuck in parliament for four years. Undeterred, Baghdad continues to work with international oil corporations. Although the Iraqi government offered no-bid contracts to

Western oil companies in early 2008, the first offering of major oil contracts since the fall

221 "Iraq Eases Political Restrictions on Baath Party Members." NPR: National Public Radio. Published January 12, 2008. Accessed April 17, 2011. http://www.npr.org/templates/story/story.php?storyId=18047035. 222 While it took the US government five years to begin the reentry of Ba’athists into the Iraqi government, Secretary of State George Marshall reinstated more than 90% of former Nazis just over two years after the end of the war. See chapter 1 for more. 223 In many ways, the initial handling of the oil sector by the CPA demonstrated a hesitance to fully implement the creative destruction of Iraq’s economy. As widely reported during the looting of Baghdad, the Oil Ministry was the only building guarded by coalition troops. The reluctance to privatize the oil sector immediately after the fall of the Ba‘athist regime at that time also demonstrates the exceptions to the rule of neoliberal creative destruction. 224 "Iraq Increases Oil Reserves by 24%." BBC News. Accessed April 17, 2011. http://www.bbc.co.uk/news/business-11468209. 89

of Saddam Hussein in 2003, the deals were soon cancelled after delays.225 Yet in August,

2008, Iraq signed a 22 year contract with the Chinese government, its first major oil deal since 2003, one that was estimated to be worth $3 billion.226 Foreign contracts continued in June and December 2009, when Baghdad announced drilling contracts to British,

Malaysian, Indian and Chinese oil conglomerates for some of its largest reserve fields.227

Iraq’s oil production reached its highest level since 2001 in March 2011, at 2.69 million

BPD, particularly due to foreign investment and resulting increases in export figures, as well as oil deals between Baghdad and the Kurdistan Regional Government (KRG).228

Rejection of the severity of neoliberal reforms espoused by the CPA has by no means meant that the Iraqi government has subsequently shunned economic liberalization. In line with “Washington Consensus” liberalization reforms, Baghdad received $436.3 million in “post-conflict assistance” loans from the IMF in September

2004, ironically, according to the IMF, in order to tackle the issue of debt relief.229 In

225 Andrew E. Kramer and Campbell Robertson. "Iraq Cancels Six No-Bid Oil Contracts." The New York Times. Published September 10, 2008. Accessed April 14, 2011. http://www.nytimes.com/2008/09/11/world/middleeast/11iraq.html. Since the contracts were only to last for a year, negotiations surrounding the contracts dragged on to the point where the oil companies would have been unable to fulfill the work in that amount of time. 226 Erica Goode and Riyadh Mohammed. “Iraq Signs Oil Deal With China Worth Up to $3 Billion.” The New York Times. Published August 28, 2008. Accessed May 7, 2011. http://www.nytimes.com/2008/08/29/world/middleeast/29iraq.html. 227 "BP Group Wins Iraq Oil Contract." AJE - Al Jazeera English. Published June 30, 2009. Accessed April 23, 2011. http://english.aljazeera.net/news/middleeast/2009/06/200963093615637434.html. and "Oil Firms Awarded Iraq Contracts." AJE - Al Jazeera English. Published December 11, 2009. Accessed April 23, 2011. http://english.aljazeera.net/news/middleeast/2009/12/200912117243440687.html. 228 "Iraqi Oil Production Hits Highest Level Since 2001." Oil and Gas Insight. Published April, 2011. Accessed April 13, 2011. http://www.oilandgasinsight.com/file/101349/iraqi-oil-production-hits-highest- level-since-2001.html. 229 "Press Release: IMF Executive Board Approves US$436.3 Million In Emergency Post-Conflict Assistance to Iraq." IMF -- International Monetary Fund Home Page. Published September 29, 2004. Accessed April 13, 2011. http://www.imf.org/external/np/sec/pr/2004/pr04206.htm. 90

order to meet requirements for a second IMF loan of $685 million in December 2005,

Iraq cut oil subsidies, raising oil prices threefold.230

The Iraqi government was also moving toward the privatization of SOEs and the integration into the global economy. In 2009, Iraq’s Minister of Industry and Minerals announced Iraq’s first public-private partnerships and have pushed on lawmakers to pass legislation that would privatize many of the country’s 67 SOEs, which include 240 factories. Yet in the absence of full privatization, the government was able to offer

“product sharing deals” to foreign investors in the fertilizer, vehicle and steel markets.231

By March 2011, government officials and experts began discussing Iraq’s entry into the

World Trade Organiztation.232 Indeed, the Iraqi government has continued the privatization of many state-owned enterprises, albeit with the added factor of pressure by constituencies that the CPA never had to consider when implementing its economic policies.

The Legacy of the CPA

In late 2008, the Office of Special Inspector General for Iraq Reconstruction

(SIGIR), a taskforce established in 2004 to maintain oversight of reconstruction spending, compiled “Hard Lessons: The Iraq Reconstruction Experience,” a compilation

230 "Minister Goes in Iraq Oil Crisis." BBC News. Published December 30, 2005. Accessed April 13, 2011. http://news.bbc.co.uk/2/hi/middle_east/4569360.stm. 231 Mohammed Abbas. "Iraq Starts Privatization Drive, but Progress Slow." Reuters.com. Published July 28, 2009. Accessed April 24, 2011. http://www.reuters.com/article/2009/07/28/us-iraq-privitisation- interview-sb-idUSTRE56R2HV20090728. 232 "Baghdad Seminar to Discuss Possibility of Iraq's Membership in WTO." Zawya. Published April 2, 2011. Accessed April 13, 2011. http://www.zawya.com/story.cfm/sidZAWYA20110403064035. 91

of interviews, audits and investigations of those who had participated in the reconstruction efforts. The report underscored how the reconstruction effort did little more than rebuild the destruction inflicted upon Iraq during the invasion and post- liberation looting.

As the report indicates, results of reconstruction efforts to rebuild basic infrastructure capacity were mixed. While electricity output was, at best, 10% above levels during the rule of Saddam Hussein, oil production remained below pre-war levels at the time of the report’s release.233 These inconclusive results highlight what Stuart W.

Bowen Jr., SIGIR head, saw as the lack of preparation by the US for the post-hostilities phase of the war. “Beyond the security issue stands another compelling and unavoidable answer: the U.S. government was not adequately prepared to carry out the reconstruction mission it took on in mid-2003,” Bowen concluded.234

Despite these critiques, many top officials in the reconstruction process continue to support their decisions during the “lost year in Iraq.” Speaking in front of the Chilcot inquiry, a British government investigation into its role in the invasion of Iraq, Bremer denied his critics’ assertions that de-Ba‘athification had “collapsed the Iraqi government.” Instead, he claimed that former members of the army joined the

233 James Glanz and Christian Miller. "Official History Spotlights Iraq Rebuilding Blunders." The New York Times. Published December 13, 2008. Accessed April 17, 2011. http://www.nytimes.com/2008/12/14/world/middleeast/14reconstruct.html. 234 Hard Lessons: The Iraq Reconstruction Experience. Washington, DC: Special Inspector General, Iraq Reconstruction, 2009, iii. 92

insurgency “not because they had been denied an opportunity to serve their country again. It was because they wanted to install a Ba‘athist dictatorship.”235

The Insurgency as a Response to Neoliberalism?

While the long-term legacy of the CPA is still being fought over, its immediate affects over stability and economic progress were clear soon after the disbandment of the

CPA. Overall, it is clear that the chaos and the pervasiveness of the political vacuum beginning in 2004 created the market opportunities and political space for the formation of an insurgency throughout Iraq, fed by CPA orders that fired hundreds of thousands of armed, disgruntled Iraqis with few career options.

Indeed, figures on the number of unemployed Iraqis underscore the pervasiveness of the CPA’s orders, particularly in light of the influx of foreign workers soon after the end of combat operations. When one considers the average size of an Iraqi household, the firing of approximately 400,000 soldiers from CPA Order 2 directly affected the lives of 2.4 million people, or roughly 10% of Iraq’s population.236 And while approximately

65% of Iraqis were estimated to be unemployed around the advent of the insurgency in

235 Michael Holden. "Iraq War Badly Planned, Poorly Resourced: Bremer." Reuters.com. Published May 28, 2010. Accessed April 10, 2011. http://www.reuters.com/article/2010/05/28/us-britain-iraq-inquiry- idUSTRE64R2P620100528. Other administration officials continue to defend the post-war reconstruction policies. Rumsfeld, whose autobiography Known and Unknown was released in 2011, entitled a chapter on the war, in which he defended the legacy of his policies, “catastrophic success.” Although in his 2010 memoir, Decision Points, President Bush largely downplays any discussion of the post-war planning and admits that he regrets he did not respond more quickly when security began to deteriorate after the fall of Saddam Hussein, he continues to argue that the invasion and overthrow of Saddam Hussein was the right decision. 236 Phillips, Losing Iraq, 151. 93

mid-2003, thousands of foreign workers and contractors were flooding into occupied

Iraq.237

CPA orders, particularly the disbandment of the Ba‘ath party and the dissolution of the army, also removed institutions that had previously been dominated by the Sunni minority since the era of Ottoman rule. This heightened Sunni fears of marginalization and fed narratives of collective dishonor, thus increasing the possibility of revenge through armed retaliation aimed at the resistance. According to Sheikh Abu Bashir, a

Fallujah resident and former army officer, the dissolution of the army was a sign that US was “trying to damage Iraqi society. So everybody immediately joined the resistance.

[They] have to leave this country, even by force.”238

Secretary of State Donald Rumsfeld’s vision of a modern American army, one that stressed a lighter “footprint” and emphasized quick and overwhelming force, has similarly been argued to have led to the development of the insurgency. Without enough troops to effectively secure Iraq’s borders, waves of foreign fighters poured into the country after the fall of Saddam Hussein’s regime, adding a regional and international component to the struggle.239

237 James A. Tyner. The Business of War: Workers, Warriors and Hostages in Occupied Iraq. (Aldershot, England: Ashgate Pub, 2006), 79. 238 Ahmed Hashim. Insurgency and Counter-Insurgency in Iraq. (Ithaca: Cornell University Press, 2006), 99. Fallujah was the scene of some of the most intense fighting between US and insurgent forces, resulting in two major US-led battles in the city that have left most of the city damaged or destroyed. 239 Michael E. O'Hanlon. "Iraq Without a Plan." Hoover Institution. Published December 1, 2004. Accessed April 17, 2011. http://www.hoover.org/publications/policyreview/article/7655. 94

With the political and security vacuum that arose in the post-war period, participants in the growing insurgency also took advantage of the chaos to apply free market principles to war. Under this circumstance the growing insurgency began funding its operations through kidnappings and hostage taking, largely of foreign workers contracted by multinational corporations. Indeed, as Dr. James A. Tyner argues, “each abducted worker may be viewed as the personification of a militant neoliberalism.”240

While no direct evidence can causally implicate the policies of the CPA in the creation of the insurgency, Thomas Gross, retired US Air Force Colonel who worked with ORHA, provided a correlation between the two factors, saying in a recent interview that “72 hours after the [CPA order 2, the disbandment of the Iraqi army] was made, the first major attack from the airport road took place.” 241 Indeed, the decision to disband the army has since been called “one of the greatest errors in the history of US warfare,” since it “unnecessarily increased the rank of [the United States’] enemies.”242

Contractors and the Privatization of War

As a result of the growing insurgency, as well as Rumsfeld’s initial “light footprint” approach, private contractors in both the security and reconstruction realms

240 Tyner, The Business of War, 101. As Peter Bergen has argued, the adoption of free market principles by international insurgent and terrorist groups is now a recognized phenomenon. In place of the centralized structure of previous years, Bergen sees al-Qaeda now as more of a franchise, operating without a structured hierarchy from several locations throughout the Middle East and North Africa. For more, see: "Interviews." Lawrence Wright. Published February 14, 2004. Accessed April 23, 2011. http://www.lawrencewright.com/int-voa-feb04.html. 241 "Transcript | The Lost Year In Iraq | FRONTLINE | PBS." PBS: Public Broadcasting Service. Accessed April 17, 2011. http://www.pbs.org/wgbh/pages/frontline/yeariniraq/etc/script.html. 242 Phillips, Losing Iraq, 153. 95

became central components to US strategy. With the help of early CPA action, US-paid contractors soon became the second largest force in Iraq. However, partially due to their ambiguous legal status, contractors became embroiled in incidents involving Iraqi casualties, which soon led to the stripping of their legal immunity by the Iraqi government in 2007. Nonetheless, private contractors continue to play an important role in Iraq, and demonstrate one of the clearest examples of the implementation of neoliberal policies in the post-war period.

The influx of private contractors in Iraq was preceded by steps taken by the CPA to remove potential restrictions to their movement and action. Order 17, signed the day before dissolution of the CPA, gave immunity to foreign contractors from the Iraqi legal process. After the June 2004 handover of sovereignty from the CPA to the Iraqi Interim

Government, the order was amended to include stipulations to the previous language.

Contractors still held immunity from Iraq’s legal process, yet coalition forces could now legally prevent acts of serious misconduct by civilian contractors.243

As the herculean task of providing security and basic services for Iraqi and

American officials grew with the rising tide of the insurgency, private contracting groups began inserting more contractors into Iraq to fill the demand. Contractors have long existed as a necessary element in the theatre of war, yet the post-war invasion saw drastically higher levels of private investment, particularly compared to the 1991 Gulf

243 Christopher Kinsey. Private Contractors and the Reconstruction of Iraq: Transforming Military Logistics. (London: Routledge, 2009), 118. 96

War, where the ratio of contractor to soldier was approximately 1:100.244 Although their figures were similarly limited in scope in the immediate aftermath of the May 1, 2003

“end of combat operations,” private military contractors constituted the second largest contributors to coalition forces by December of that year, surpassing the total number of

UK forces.245 By July 2007, the number of US-paid private contractors in Iraq had exceeded that of American combat troops (180,000 Americans, foreigners and Iraqis working in Iraq under US contracts, as opposed to 160,000 US military).246 From 2003 to 2007, the US government allotted $85 billion for contracts in Iraq, which accounted for almost 20% of total US appropriations for activities in Iraq during the same period.247

Although private contractors became a predominant force in the US occupation in the immediate years following the 2004 disbandment of the CPA, contracting firms were instrumental from the beginning of combat operations in March 2003. Eight days after the fall of Baghdad, the United States Agency for International Development (USAID) awarded the first reconstruction contract, valued at $680 million, to Bechtel, the largest engineering company in the US.248 In August of that year, Blackwater was awarded a

$21 million no-bid contract to provide security for L. Paul Bremer and the CPA.249 By

244 Ibid, 34. 245 "The Privatization of War: $30 Billion Goes to Private Military; Fears Over 'Hired Guns' Policy." Home | Common Dreams. Published December 10, 2003. Accessed April 17, 2011. http://commondreams.org/cgi-bin/print.cgi?file=/headlines03/1210-13.htm. 246 Christian T. Miller. "Contractors Outnumber Troops in Iraq." The Los Angeles Times. Published July 4, 2007. Accessed April 17, 2011. http://articles.latimes.com/2007/jul/04/nation/na-private4.

247 Kinsey, Private Contractors, 49. 248 Mark Gongloff. "Bechtel Wins Iraq Contract." CNNMoney.com. Published April 17, 2003. Accessed April 23, 2011. http://money.cnn.com/2003/04/17/news/companies/bechtel/index.htm. 249 Anjali Kamat. "Blackwater USA: Building the ‘Largest Private Army in the World’" Democracy 97

June, 2004, the company had been awarded a $1 billion, five year contract with the State

Department for protection of governmental officials in Iraq.250

As part of the effort to increase efficiency, many contracting firms turned to foreign workers to fill positions in Iraq. Yet with inadequate oversight, abuse of foreigners by firms became an endemic issue throughout the country. Due to the massive scope of the contracts received my large firms, many chose to subcontract to smaller firms who in turn find workers mainly from South Asia to fill positions of menial labor.

Workers were lured to Iraq on false promises, receiving little to no pay and working in squalid conditions.251 For those who do receive pay, many “work longer hours than the

Iraqis and get paid less.”252

Despite strong conviction held by administration officials that massive contracts would be a more efficient use of American resources in Iraq, several contracting firms were found to have squandered or lost many of their resources, and met few of their goals. In 2007, SIGIR released a report claiming that Bechtel had met less than half of

Now! Published April 1, 2004. Accessed April 23, 2011. http://www.democracynow.org/2004/4/1/blackwater_usa_building_the_largest_private. Blackwater, now known as Xe, was founded in 1997 by Erik Prince and Al Clark, both former Navy SEALS in order to provide training to military and police. In explaining Blackwater’s purpose, Prince emphasized the importance of the private sector in bring efficiency to the security establishment, saying “we are trying to do for the national security apparatus what FedEx did for the Postal Service.” (Scahill, 439) Prince, who worked as an intern at the White House under George H.W. Bush, considers himself a libertarian, and is critical of government involvement in economic affairs, once saying “I'm a very free market guy. I'm not a huge believer that government provides a whole lot of solutions.” (Simons, 20). 250 "Victims of an Outsourced War." TIME.com. Published March 15, 2007. Accessed April 23, 2011. http://www.time.com/time/printout/0,8816,1599682,00.html. 251 "IRAQ: Foreign Workers Lured to Work in Iraq." GlobalSecurity.org. Published April 24, 2007. Accessed April 24, 2011. http://www.globalsecurity.org/wmd/library/news/iraq/2007/04/iraq-070424- irin02.htm. 252 "Trafficking Of Foreign Workers Flourishes In Iraq" NPR: National Public Radio. Published April 6, 2009. Accessed April 24, 2011. http://www.npr.org/templates/story/story.php?storyId=102705618. 98

the objectives it set as part of its $1.8 billion reconstruction contract, “while most of the rest were canceled, reduced in scope or never completed as designed.”253 Such examples highlight the vast problem of oversight by the US government of both individual contractors and their firms.

Such issues of oversight applied to the firms, as well as many of the armed contractors they hired to work in Iraq. Indeed, while the number of contractors drastically increased in the first years of the war, relevant legal reforms that would meet the subsequent challenge of oversight were not enacted. These issues became particularly relevant in the wake of the “Nisour Square” incident of September 2007, when

Blackwater contractors shot dead 17 Iraqi civilians, leading to the temporary revoking of

Blackwater’s license to operate in Iraq.254 In October 2007, facing massive public outcry in the wake of the Blackwater incident, the Iraqi cabinet voted to lift immunity for foreign private security companies operating in the country, effectively overturning the central tenets of CPA Order 17.255

A New Way Forward: Counterinsurgency and the Resurgence of the State

While private contracting still continues in some forms in Iraq today, endemic levels of sectarian violence in 2006 demonstrated to the US administration that the

253 James Glanz. "Bechtel Meets Goals on Fewer Than Half of Its Iraq Rebuilding Projects, U.S. Study Finds - New York Times." The New York Times. Published July 26, 2007. Accessed April 23, 2011. http://www.nytimes.com/2007/07/26/world/middleeast/26reconstruct.html. 254 Kinsey, Private Contractors, 60. In April 2011, a federal appeals court reopened the case against four former Blackwater guards in connection with the 2007 Nisour Square shootings. 255 Alissa Rubin. "Iraqi Cabinet Votes to End Security Firms’ Immunity." The New York Times. Published October 31, 2007. Accessed April 17, 2011. http://www.nytimes.com/2007/10/31/world/middleeast/31iraq.html. 99

policies of the previous three years were not working and that a new direction was needed.256 In March of that year, President Bush convened the Iraq Study Group, a bipartisan panel charged with assessing the deteriorating situation in Iraq and proposing new policies. In the resulting Baker-Hamilton Report, issued in December 2006, the panel underscored some encouraging signs in Iraq’s economy, such as stable and growing currency reserves, the reduction of subsidies and the import of cell phones, computers and other appliances. However, most indicators continued to show a stalled economy, inhibited by the ravaging effects of civil war and mismanagement. Inflation stood above

50% (approximately double 2005 levels), with unemployment hovering between 20-50%.

And for all the hopes of the CPA to create conditions welcoming to foreign investment, this accounted for less than 1% of GDP at this time.257

With the Congressional victories by Democrats in the midterm elections of 2006,

Secretary of Defense Donald Rumsfeld was replaced by Robert Gates, ushering in a new strategy for the Iraq war. By this time, it was clear to Bush administration officials that

“the US effort was heading for defeat” if policy changes were not implemented.258 In

January 2007, General David Petraeus was nominated as the head of multinational forces in Iraq. The previous year, Petraeus had rewritten the US Army counterinsurgency manual in order to apply classic counterinsurgency principles to the war in Iraq. In the

256 The civil war would reach its peak by October 2006, where 3709 civilians were killed in a single month. (see Dodge, 2010) 257 James A. Baker, Lee Hamilton, and Lawrence S. Eagleburger. The Iraq Study Group Report. (New York: Vintage Books, 2006), 22. 258 Thomas E. Ricks. The Gamble: General David Petraeus and the American Military Adventure in Iraq, 2006-2008. (New York: Penguin Press, 2009), 9. 100

updated manual, Petraeus held that 80% of any effective counterinsurgency effort is political, while also calling for a massive increase in troop presence in order to create secure conditions where political progress can flourish.259

This new counterinsurgency policy called for the strengthening of the Iraqi state, both politically and economically, which ran antithetical to neoliberal tenets. Indeed, “if the state is the main threat haunting neoliberalism, it is the main tool of COIN

[counterinsurgency] doctrine and the solution to the problems COIN identifies.”260

Specifically, Petraeus’ counterinsurgency doctrine recommended offering employment opportunities for Iraqis through the rapid dispensing of cash, as well as providing adequate security so as to allow the return of economic livelihood for the Iraqi population. In the words of the 2007 Counterinsurgency Field Manual, after relative security has been achieved, “dollars and ballots will have more important effects than bullets and bombs. This is the time when ‘money is ammunition.’”261

Many of these counterinsurgency strategies, as well as the “surge” of US forces in

2007 and the formation of Iraqi “Awakening Councils,” helped lift Iraq out of the levels of violence witnessed during the height of the civil war in 2006-2007 and provided room

259 Sarah Sewall. "He Wrote the Book. Can He Follow It?" The Washington Post. Published February 25, 2007. Accessed April 17, 2011. http://www.washingtonpost.com/wpdyn/content/article/2007/02/23/AR2007022301741.html. 260 Dodge, “Ideological Roots of Failure,” 1285. 261 United States. The U.S. Army/Marine Corps Counterinsurgency Field Manual: U.S. Army Field Manual No. 3-24: Marine Corps Warfighting Publication No. 3-33.5. (Chicago: University of Chicago Press, 2007), 49. 101

for economic growth.262 These trends have only continued in recent years. While Iraq was listed as second in the Failed States Index in 2007, it fell to seventh in 2010.263 By

2011, Citibank listed Iraq as one of its countries that “will win in the future,” with a current GDP per capita at $3,538, and an expected annual growth between 2010 and 2050 at 6.1%.264

Arab Response to Neoliberalism

Nonetheless, the neoliberal reforms pushed by the CPA undoubtedly sparked a discussion on the role of privatization in economic progress throughout the Arab world.

It is clear that, in comparison to many ideologically driven American officials implementing CPA policies, Arab scholars recognized the potential for both positive and negative ramifications when neoliberal reforms are enacted. In a 2007 article entitled

“The Iraqi Economy: Between the Role of the Required State and the Adoption of the

Mechanism of the Market,” Dr. Ahmad Bahid Taqi al-Hamidawi noted the benefits of a market-based economic system, such as an increase in productivity and the potential for innovation that stems from competition. Yet he also noted the drawbacks of unrestrained

262 Financial incentives were instrumental in the formation and continuation of the US-allied Sunni “Awakening Councils,” which provided local patrol groups to push back against increasingly attacks by al- Qaeda in Iraq. Initially, the groups were entirely funded by the US government, although by 2008, one third of the approximately 100,000 total Awakening Council members had been moved to the Iraqi government payroll, accounting for $15 million per month. For more, see "Baghdad to Pay Sunni Groups - Middle East." AJE - Al Jazeera English. Published October 3, 2008. Accessed April 23, 2011. http://english.aljazeera.net/news/middleeast/2008/10/200810151630737451.html. 263 "2010 Failed States Index - Interactive Map and Rankings." Foreign Policy. Accessed April 17, 2011. http://www.foreignpolicy.com/articles/2010/06/21/2010_failed_states_index_interactive_map_and_ranking s. 264 Joe Weisenthal. "3G Countries." Business Insider. Accessed April 10, 2011. http://www.businessinsider.com/willem-buiter-3g-countries-2011-2?slop=1. 102

capitalism, such as the accumulation of debt and the loss of social protection networks.265

For Iraqi researcher Falah Khalf al-Rabi’i, it was essential to build an economic system that effectively served the interests of the Iraqi people by creating wealth, not one whose purpose was “to make a profit based on the greedy exploitation of others.”266

Yet, by late 2010, some Iraqis felt that the pace of privatization was impedingly slow. In September of that year, Iraqi economic expert Fadil al-Musawi referred to privatization as the “only solution to the advancement of the industrial situation in the country,” and called upon the Ministry of Industry to privatize all of its subsidiaries.267

Iraqi scholars, as well as their Arab counterparts, saw the positive potential for privatization and liberalization. However, many also understood the potential damage such reforms can have on the societal fabric when not implemented with a nuanced understanding of the condition of the Iraqi economy.

The Rebirth of History?

With the American neoconservative experiment in Iraq sidetracked throughout the mid 2000s by a bloody civil war and mounting coalition casualties, developments elsewhere in the world began challenging the fundamental assumptions behind the

265 al-Hamidawi, Ahmad Bahid Taqi. "Al-Iqtisad al-‘Iraqi bayna dawar ad-dawla al-matlub wa i'timad ‘aliya as-suq" [The Iraqi Economy: Between the Role of the Required State and the Adoption of the Mechanism of the Market]. Published April 27, 2007. Accessed April 12, 2011. http://www.annabaa.org/nbanews/62/468.htm. 266 al-Rabi'i, Falah Khalf, "As-stratijiyya wa uslub al-khaskhasa al-mula’im lil-iqtisad al-‘Iraqi" [Strategy of the Method of Privatization and it's Appropriateness to the Iraqi Economy]. Published April 2, 2008. Accessed April 12, 2011. http://www.ahewar.org/debat/show.art.asp?aid=130146. 267 "Al-Iqtisad: al-khaskhasa al-hal al-wahid lil-nuhud bil-waqi' al-sina‘i fi’l balad" [Economy: Privatization is the Only Solution for the Advancement of the Industrial Situation in the Country]. Published September 23, 2010. Accessed April 12, 2011. http://www.aknews.com/ar/aknews/2/183223/?AKmobile=true. 103

invasion and subsequent reconstruction project. While Washington was largely free to press its “consensus” on developing nations in the immediate years after the Cold War, the economic rise of China has defied Francis Fukuyama’s argument that Western-style capitalism and democracy were the only paths to a successful and prosperous future.268

The “Beijing Consensus,” as it has been referred to, reserves a large role for the state in economic development, and creates a hybrid “state capitalism,” where Adam Smith’s

“invisible hand” is guided by Communist party officials.269 Despite reservations to its sustainability, such a “model” poses a formidable challenge to Washington. In August

2010, Beijing surpassed Japan as the world’s second largest economy. Economic experts estimate that China may surpass the United States as the world’s biggest economy as early as 2030.270 Indeed, such economic success may indicate the triumph of capitalism, but the failure of the rigid model of market absolutism espoused throughout the 1990s and early 2000s. Instead, capitalism has competed with other economic models in the international “marketplace of ideas,” allowing developing nations such as China and

India to apply certain components of free market capitalism to their respective economic model.

268 Francis Fukuyama. The End of History and the Last Man. (New York: Free Press, 1992). China’s economy, which relies on a combination of central planning and a robust private sector, has been expanding at approximately 9% since it began experimenting with liberalization reforms in the late 1970s. 269 While the “Washington Consensus” established an agreed upon list of reforms for target nations, the concept of a “Beijing Consensus” has remained more problematic to economists and policy officials, with some arguing that China’s economic policies are not ideologically unified to warrant a “consensus.” 270 David Barboza. "China Passes Japan as Second-Largest Economy." The New York Times. Published August 15, 2010. Accessed April 17, 2011. http://www.nytimes.com/2010/08/16/business/global/16yuan.html. 104

Neoliberal dominance was also challenged near the end of George W. Bush’s presidency in the wake of the 2008 global financial crisis. Many have argued that

Keynesian policies, which emphasize a robust role for the state in times of economic turmoil, returned to the forefront of fiscal policy discussions with the 2008 financial crisis.271 The subsequent Troubled Asset Relief Program and “Stimulus Act” of 2008 and

2009 demonstrate the degree to which government returned to the center stage of economic development.272 The return of such statist policies underscores the notion that debates over the role of state and market in the 21st century have not been resolved, but continue to rage on, particularly in the face of continual and rapid economic growth by

China.

Ironically, China’s arrival has also in many ways signaled the return of a bipolar international structure, potentially similar to that which the US faced for nearly 50 years during the Cold War. However, in the US-China relationship, confrontation may materialize over economic issues, rather than the Cold War’s ideological battles. While the US is world’s largest energy consumer, by 2020, Asian countries, led by China, will consume approximately 25% of the world’s energy, the same projected figure for the US

271 Sudeep Reddy. "The New Old Big Thing in Economics: J.M. Keynes." The Wall Street Journal. January 8, 2009. Published January 8, 2009. Accessed April 17, 2011. http://online.wsj.com/article/SB123137373330762769.html 272 Quinn Bowman. "Keynes' Economic Theories Re-emerge in Government Intervention Policies | Online NewsHour." PBS: Public Broadcasting Service. Published February 23, 2009. Accessed May 6, 2011. http://www.pbs.org/newshour/updates/business/jan-june09/keynes_02-23.html. 105

at that time.273 These realities may soon lead to further conflict over resources, conflict that could be fought in the sands of the Mesopotamian desert.

With the protests and uprisings of the “Arab Spring” of 2011, many of the neoconservatives who pushed for the invasion of Iraq have returned to the discussion table, pushing for a more active US response to meet the challenges posed by the democratic movements sweeping the region. Several of the original founders of the

Project for a New American Century (PNAC), including William Kristol and Robert

Kagan, as well as Dan Senor, the former chief spokesman for the CPA, regrouped to form the Foreign Policy Initiative (FPI) in 2009. FPI continued many of the same principles advocated by PNAC, such as the spreading of political and economic freedom and the avoidance of isolationism, a strong US military, and a “renewed commitment to

American leadership.” However, perhaps as a response to the fallout from US unilateral action in the Iraq war, FPI warned against reneging from international commitments and allies, who “helped us defeat fascism and communism in the 20th century, and the alliances we have forged more recently, including with the newly liberated citizens of

Iraq and Afghanistan.”274

Indeed, these “newly liberated” citizens may soon see the end of a direct US military presence in their country. With the US-Iraqi Status of Forces Agreement, US forces moved out of Iraqi cities in June 2009 and will leave the remainder of the country

273 William R. Clark. Petrodollar Warfare: Oil, Iraq and the Future of the Dollar. (Gabriola Island, B.C: New Society Publishers, 2005), 47. 274 "Mission Statement." Foreign Policy Initiative. Accessed April 14, 2011. http://www.foreignpolicyi.org/about. 106

by December 31, 2011. However statements by Secretary of Defense Gates indicate that a residual US force may remain in the country past that date at the consent of the Iraqi government.275 Nonetheless, the Iraq war has become one of America’s longest overseas wars, costing the United States approximately $3 trillion, according to economist Joseph

Stiglitz.276 Despite this, the future of Iraq and American involvement in the country remains ambiguous. In the words of Thomas E. Ricks from 2009, “the events for which the Iraq war will be remembered probably have not yet happened.”277

Yet enough time has passed since the since the 2003 invasion to be able to come to general conclusions about the approach to its post-hostilities reconstruction project and the economic philosophies that motivated it. The American experiment with neoliberalism in Iraq highlights one of the ideology’s deep contradictions. Whereas neoliberalism and those who support it are inherently distrustful of state power as threatening to the individual, neoliberal reforms require an active role of the state in order to “impose order on society and discipline errant individuals.”278 This contradiction is revealing in understanding the chaos that engulfed Iraq soon after its “liberation” in spring 2003. Although immediate and decisive action was taken on the part of the state in the massive layoffs that occurred with CPA Orders 1, 2 and 39, governmental

275 Elisabeth Bumiller. "Redefining the Role of the U.S. Military in Iraq." The New York Times. Published December 21, 2008. Accessed April 17, 2011. http://www.nytimes.com/2008/12/22/washington/22combat.html. 276 Joseph Stiglitz and Linda Bilmes. "The Three Trillion Dollar War." The Sunday Times. Published February 23, 2008. Accessed April 17, 2011. http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article3419840.ece. 277 Ricks, Gamble, 325. 278 Dodge, “Ideological Roots of Failure,” 1286. 107

institutions were not put in place to meet the economic and security challenges that arose soon after the “end of combat operations” in May 2003.

Due to the nature of these neoliberal policies, Iraqis were also never able to

“own” the process of reconstruction. Privatization of public institutions, the disbandment of the Ba‘ath party and the Iraqi military and the heavy reliance on foreign contractors all left the Iraqi public marginalized and without proper forums to express political or economic grievances. In the words of T.E. Lawrence, quoted frequently by Jay Garner,

“better the Arabs do it tolerably than that you do it perfectly. It is their war, and you are to help them, not to win it for them.”279

The failure of the US to secure Iraq after the fall of the Ba‘ath party, both from a military-political and economic sense, highlight the limitations of a reconstruction effort driven largely by ideology. While a strong adherence to ideological principles can serve as the guiding light in a massive and complex project such as the post-war rehabilitation of an ethnically-divided and economically destitute nation, Washington was tragically slow in altering its approach to Iraq after facts on the ground began to challenge preconceived notions of what constituted “successful” Iraq policy. Indeed, it took more than three years of chaos and bloodshed before the Bush administration openly acknowledged its policy had failed, demonstrated through the firing of Secretary of

Defense Donald Rumsfeld and the implementation of General David Petraeus’ counterinsurgency policy.

279 Ehrenberg, The Iraq Papers, 231. 108

Nonetheless, the violence and chaos that plagued Iraq by 2004 is by no means a sign that economic liberalization could not have worked for the country. Yet the pace with which such reforms were implemented, along with the military strategies that could not provide security for the CPA, meant that they were doomed to fail. Indeed, the assumption that the lessons of neoliberal success stories of the 20th century could easily be applied to a post-hostilities reconstruction context would prove to be a fatal one, both for hundreds of thousands of Iraqi civilians, as well as for the ideologies supported by the war’s architects.

Future planners and governmental officials must take the lessons of Iraq in order to avoid future similar disasters. If economic reforms are to implemented, the pace of such reforms must gradual to account for the “growing pains” that all societies will experience. It is also essential to include the local population in as much of the post-war reconstruction as possible. If they have no stake in the process, there will be little to no investment of time and resources, thereby all but guarantying its failure. Officials must also be acutely aware of sectarian, ethnic and other divisions in the host society. Any reconstruction efforts in a post-war phase, particularly in a country that was previously ruled with a dictatorial fist, is likely to break off into such segments in a bloody fashion.

Institutional and economic preparations must therefore be made to avoid such a scenario.

Finally, it is absolutely essential to relegate ample time to prepare for phase IV operations. Societies do not simply reconstruct themselves after decades of war and oppression, and beliefs to the contrary are both naïve and ideologically misguided. 109

REFERENCES Video Kirk, Michael, Jim Gilmore, and Will Lyman, Ben McCoy, and Steve Audette. Bush's War. [Arlington, Va.]: PBS Home Video, 2008. ------, Jim Gilmore, and Will Lyman. The Lost Year in Iraq. [Alexandria, Va.]: PBS Video, 2006.

Legislation

"Bill Summary & Status - 105th Congress (1997 - 1998) - H.R.4655 - Major Congressional Actions." THOMAS (Library of Congress). Accessed April 17, 2011. http://thomas.loc.gov/cgi-bin/bdquery/z?d105:HR04655:@@@R. United States. Cong. House. 1998 Iraq Liberation Act. 105th Congress. 2nd Sess. H 4655. Washington GPO: 1998.

Websites "2010 Failed States Index - Interactive Map and Rankings." Foreign Policy. Accessed April 17, 2011. http://www.foreignpolicy.com/articles/2010/06/21/2010_failed_states_index_inter active_map_and_rankings. "American Experience | Truman | Primary Sources." PBS: Public Broadcasting Service. Accessed April 16, 2011. http://www.pbs.org/wgbh/amex/truman/psources/ps_potsdam.html. "CNN.com - Transcripts." CNN.com. Published December 15, 2006. Accessed April 17, 2011. http://transcripts.cnn.com/TRANSCRIPTS/0612/15/sitroom.01.html.

“Coalition Provisional Authority Order Number 1: De-Ba‘athification of Iraqi Society.” Accessed May 4, 2010. http://www.iraqcoalition.org/regulations/20030516_CPAORD_1_De- Ba_athification_of_Iraqi_Society_.pdf. “Coalition Provisional Authority Order Number 2: Dissolution of Entities.” Accessed May 4, 2010. http://www.iraqcoalition.org/regulations/20030823_CPAORD_2_Dissolution_of_ Entities_with_Annex_A.pdf. 110

"Commanding Heights: Home | on PBS." PBS: Public Broadcasting Service. Accessed Published 2002. April 16, 2011. http://www.pbs.org/wgbh/commandingheights/lo/index.html. "Defense.gov Speech." The Official Home of the Department of Defense. Accessed April 17, 2011. http://www.defense.gov/speeches/speech.aspx?speechid=337. "Documents - The Lost Year In Iraq | FRONTLINE." PBS: Public Broadcasting Service. Accessed April 17, 2011. http://www.pbs.org/wgbh/pages/frontline/yeariniraq/documents/. "Documents - A United Mission Plan For Post-Hostilities Iraq - The Lost Year In Iraq | FRONTLINE." PBS: Public Broadcasting Service. Accessed April 17, 2011. http://www.pbs.org/wgbh/pages/frontline/yeariniraq/documents/orha.html. "The Iraq War -- Part I: The U.S. Prepares for Conflict, 2001." The George Washington University. Published September 22, 2010. Accessed April 17, 2011. http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB326/index.htm. "Interviews." Lawrence Wright. Published February 14, 2004. Accessed April 23, 2011. http://www.lawrencewright.com/int-voa-feb04.html. "George W. Bush: Commencement Address at the University of South Carolina in Columbia, South Carolina." The American Presidency Project. Accessed April 17, 2011. Commencement Address at the University of South Carolina in Columbia, South. http://www.presidency.ucsb.edu/ws/index.php?pid=407#ixzz1JpAUoUYo. "GHDI - Document." German History in Documents and Images. Accessed April 16, 2011. http://germanhistorydocs.ghi- dc.org/sub_document.cfm?document_id=2297. "Letter to President Clinton on Iraq." Project for the New American Century. Published January 26, 1998. Accessed April 17, 2011. http://www.newamericancentury.org/iraqclintonletter.htm. "The ‘Marshall Plan’ Speech at Harvard University, 5 June 1947." Organisation for Economic Co-operation and Development. Accessed April 16, 2011. http://www.oecd.org/document/10/0,3746,en_2649_201185_1876938_1_1_1_1,0 0.html. "Mission Statement." Foreign Policy Initiative. Accessed April 14, 2011. http://www.foreignpolicyi.org/about. "New State Department Releases on the ‘Future of Iraq’ Project." The George Washington University. Posted September 1, 2006. Accessed April 17, 2011. http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB198/index.htm. 111

"Overview of State-Sponsored Terrorism." U.S. Department of State. Published April 30, 2001. Accessed April 23, 2011. http://www.state.gov/s/ct/rls/crt/2000/2441.htm. "President Addresses Nation in Radio Address." The White House. Accessed April 17, 2011. http://georgewbushwhitehouse.archives.gov/news/releases/2001/09/20010915.ht ml "Press Release: IMF Executive Board Approves US$436.3 Million In Emergency Post- Conflict Assistance to Iraq." IMF -- International Monetary Fund Home Page. Published September 29, 2004. Accessed April 13, 2011. http://www.imf.org/external/np/sec/pr/2004/pr04206.htm.

"Yalta: Fact or Fate? A Brief Characterization." Institute for Historical Review. Accessed April 16, 2011. http://www.ihr.org/jhr/v03/v03p359_Wesserle.html.

Books Alnasrawi, Abbas. The Economy of Iraq: Oil, Wars, Destruction of Development and Prospects, 1950-2010. Westport, Conn: Greenwood Press, 1994. Barrett, Roby Carol. The Greater Middle East and the Cold War: US Foreign Policy Under Eisenhower and Kennedy. London: I.B. Tauris, 2007. Boaz, David. Libertarianism: A Primer. New York: Free Press, 1997. Bremer, L. Paul, and Malcolm McConnell. My Year in Iraq: The Struggle to Build a Future of Hope. New York: Simon & Schuster, 2006. Buley, Benjamin. The New American Way of War: Military Culture and the Political Utility of Force. London: Routledge, 2008. Internet resource. Bush, George W. Decision Points. New York, NY: Crown Publ, 2010. Campaign Against Sanctions on Iraq. Sanctions on Iraq: Background, Consequences, Strategies. Cambridge: Campaign Against Sanctions on Iraq, 2000. Chandrasekaran, Rajiv. Imperial Life in the Emerald City: Inside Iraq's Green Zone. New York: Alfred A. Knopf, 2006. Clark, William R. Petrodollar Warfare: Oil, Iraq and the Future of the Dollar. Gabriola Island, B.C: New Society Publishers, 2005. Clarke, Richard A. Against All Enemies: Inside America's War on Terror. New York: Free Press, 2004. 112

Colucci, Lamont. Crusading Realism: The Bush Doctrine and American Core Values After 9/11. Lanham, Md: University Press of America, 2008. Cooper, Danny. Neoconservatism and American Foreign Policy: A Critical Analysis. Milton Park, Abingdon, Oxon: Routledge, 2011. Cortright, David, and George A. Lopez. The Sanctions Decade: Assessing UN Strategies in the 1990s. Boulder, Colo: Lynne Rienner Publishers, 2000. Deffeyes, Kenneth S. Hubbert's Peak: The Impending World Oil Shortage. Princeton, N.J: Princeton University Press, 2009. Dietrich, John. The Morgenthau Plan: Soviet Influence on American Postwar Policy. New York: Algora Pub, 2002. Dobbins, James. Occupying Iraq: A History of the Coalition Provisional Authority. Santa Monica, CA: RAND Corp, 2009. Donovan, Jerome. The Iran-Iraq War: Antecedents and Conflict Escalation. Milton Park, Abingdon, Oxon: Routledge, 2011. Edelman, Marc, and Angelique Haugerud. The Anthropology of Development and Globalization: From Classical Political Economy to Contemporary Neoliberalism. Malden, Mass: Blackwell Pub, 2005. Ehrenberg, John. The Iraq Papers. Oxford: Oxford University Press, 2010. Ehrman, John. The Rise of Neoconservatism: Intellectuals and Foreign Affairs, 1945- 1994. New Haven: Yale University Press, 1995. Ezeala-Harrison, Fidelis. Economic Development: Theory and Policy Applications. Westport, Conn: Praeger, 1996. Feith, Douglas J. War and Decision: Inside the Pentagon at the Dawn of the War on Terrorism. New York, NY: Harper, 2008. Fisk, Robert. The Great War for Civilization: The Conquest of the Middle East. London: Fourth Estate, 2004. Florence, Ronald. Lawrence and Aaronsohn: T.E. Lawrence, Aaron Aaronsohn, and the Seeds of the Arab-Israeli Conflict. New York: Viking, 2007. Freedman, Lawrence, and Efraim Karsh. The Gulf Conflict, 1990-1991: Diplomacy and War in the New World Order. Princeton, N.J.: Princeton University Press, 1993. Friedman, Milton, and Anna (Jacobson) Schwartz. A Monetary History of the United States, 1867-1960. Princeton: Princeton University Press, 1963. 113

Fukuyama, Francis. The End of History and the Last Man. New York: Free Press, 1992. Gaddis, John Lewis. Strategies of Containment: A Critical Appraisal of American National Security Policy During the Cold War. New York: Oxford University Press, 2005. Gerson, Mark. The Neoconservative Vision: From the Cold War to the Culture Wars. Lanham: Madison Books, 1996. Gordon, Joy. Invisible War: The United States and the Iraq Sanctions. Cambridge, Mass: Harvard University Press, 2010. Graham-Brown, Sarah. Sanctioning Saddam: the Politics of Intervention in Iraq. London: I.B. Tauris in Association with MERIP, 1999. Grayling, Anthony C. Among the Dead Cities The History and Moral Legacy of the WWII Bombing of Civilians in Germany and Japan. New York: Walker & Co, 2007. Greenway, David, and M.F. Bleaney and Ian M.T. Stewart. Companion to Contemporary Economic Thought. New York: Routledge, 1991. Haass, Richard. War of Necessity: War of Choice : a Memoir of Two Iraq Wars. New York: Simon & Schuster, 2009. Hansen, Randall. Fire and Fury: The Allied Bombing of Germany, 1942-1945. New York: New American Library, 2008. Hard Lessons: The Iraq Reconstruction Experience. Washington, DC: Special Inspector General, Iraq Reconstruction, 2009. Harmes, Adam. The Return of the State: Protestors, Power-Brokers, and the New Global Compromise. Vancouver, B.C.: Douglas & McIntyre, 2004. Harris, Seymour Edwin. Postwar Economic Problems. New York: McGraw-Hill Book Company, inc, 1943. Harrison, Mark. The Economics of World War II: Six Great Powers in International Comparison. Cambridge: Cambridge University Press, 1998. Harvey, David. A Brief History of Neoliberalism. Oxford: Oxford University Press, 2005. Hashim, Ahmed. Insurgency and Counter-Insurgency in Iraq. Ithaca: Cornell University Press, 2006. Hastings, Max. Bomber Command. London: M. Joseph, 1979. 114

Hiro, Dilip. The Longest War: The Iran-Iraq Military Conflict. London: Grafton Books, 1989. Hogan, Michael J. The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952. Cambridge [Cambridgeshire]: Cambridge University Press, 1987. Hufbauer, Gary Clyde, and Jeffrey J. Schott. NAFTA Revisited: Achievements and Challenges. Washington, DC: Institute for International Economics, 2005. Humphreys, R. Stephen. Between Memory and Desire: the Middle East in a Troubled Age. Berkeley, CA: University of California, 1999. Judt, Tony. Postwar: A History of Europe Since 1945. London: William Heinemann, 2005. Juhasz, Antonia. The Bush Agenda: Invading the World, One Economy at a Time. New York: ReganBooks, 2006. Kaplan, Lawrence, and William Kristol. The War Over Iraq: Saddam's Tyranny and America's Mission. San Francisco, CA: Encounter Books, 2003. Khalidi, Rashid. Sowing Crisis: The Cold War and American Dominance in the Middle East. Boston: Beacon Press, 2009. Kinsey, Christopher. Private Contractors and the Reconstruction of Iraq: Transforming Military Logistics. London: Routledge, 2009. Kitschelt, Herbert. Continuity and Change in Contemporary Capitalism. Cambridge, UK: Cambridge University Press, 1999. Klein, Naomi. The Shock Doctrine: The Rise of Disaster Capitalism. New York: Metropolitan Books/Henry Holt, 2007. Krishna, Sankaran. Globalization and Postcolonialism: Hegemony and Resistance in the Twenty-First Century. Lanham, Md: Rowman & Littlefield, 2009. Leys, Colin. The Rise and Fall of Development Theory. London: James Currey, 1996. Little, Douglas. American Orientalism: The United States and the Middle East Since 1945. Chapel Hill: University of North Carolina Press, 2002. Malone, David. The International Struggle Over Iraq: Politics in the UN Security Council 1980-2005. Oxford: Oxford University Press, 2006. Mann, Jim. Rise of the Vulcans: The History of Bush's War Cabinet. New York: Viking, 2004. 115

Mansfield, Edward D, and Jack L. Snyder. Electing to Fight: Why Emerging Democracies Go to War. Cambridge, Mass: MIT Press, 2005. Middle East Watch (Organization). Endless Torment: The 1991 Uprising in Iraq and Its Aftermath. New York: Middle East Watch, 1992. Mofid, Kamran. The Economic Consequences of the Gulf War. London: Routledge, 1989. Murdico, Suzanne J. The Gulf War. New York: Rosen Pub. Group, 2004. Owen, Roger, and Şevket Pamuk. A History of Middle East Economies in the Twentieth Century. Cambridge, Mass: Harvard UP, 1998. Purdum, Todd S. A Time of Our Choosing: America's War in Iraq. New York: Times Books/Henry Holt, 2003. Puttaswamaiah, K. Growth of Economics in the Twentieth Century: Theories and Practices. Enfield, NH: Isle Pub. Co, 2009. Rajaee, Farhang. The Iran-Iraq War: The Politics of Aggression. Gainesville: University Press of Florida, 1993. Ricks, Thomas E. Fiasco: The American Military Adventure in Iraq. New York: Penguin Press, 2006. ------The Gamble: General David Petraeus and the American Military Adventure in Iraq, 2006-2008. New York: Penguin Press, 2009. Rose, Gideon. How Wars End: Why We Always Fight the Last Battle: a History of American Intervention from World War I to Afghanistan. New York: Simon & Schuster, 2010. Rumsfeld, Donald. Known and Unknown: A Memoir. New York: Sentinel, 2011. Scahill, Jeremy. Blackwater: The Rise of the World's Most Powerful Mercenary Army. New York: Nation Books, 2008. Schain, Martin. The Marshall Plan: Fifty Years After. New York: Palgrave, 2001. Schumpeter, Joseph Alois, and Richard Swedberg. Capitalism, Socialism, and Democracy. London: Routledge, 1994. Shue, Henry, and David Rodin. Preemption: Military Action and Moral Justification. Oxford: Oxford University Press, 2007. Simons, Suzanne. Master of War: Blackwater USA's Erik Prince and the Business of War. New York: Collins, 2009. 116

Smolansky, Oles M, and Bettie M. Smolansky. The USSR and Iraq: The Soviet Quest for Influence. Durham, NC: Duke University Press, 1991. Stanger, Allison. One Nation Under Contract: The Outsourcing of American Power and the Future of Foreign Policy. New Haven: Yale University Press, 2009. Timmerman, Kenneth R. The Death Lobby: How the West Armed Iraq. Boston: Houghton Mifflin, 1991. Tripp, Charles. A History of Iraq. NY: Cambridge UP, 2002. Tyner, James A. The Business of War: Workers, Warriors and Hostages in Occupied Iraq. Aldershot, England: Ashgate Pub, 2006. Tyler, Patrick. A World of Trouble: The White House and the Middle East--from the Cold War to the War on Terror. New York: Farrar, Straus and Giroux, 2009. UN. Statistical Office. National Accounts Statistics: Analysis of Main Aggregates. 1988- 1989. New York: UN, 1991. United States. The U.S. Army/Marine Corps Counterinsurgency Field Manual: U.S. Army Field Manual No. 3-24: Marine Corps Warfighting Publication No. 3-33.5. Chicago: University of Chicago Press, 2007. Vaïsse, Justin. Neoconservatism: The Biography of a Movement. Cambridge, Mass: Belknap Press of Harvard University Press, 2010. Wallich, Henry Christopher. Mainsprings of the German Revival. New Haven: Yale University Press, 1955. Williamson, John. Latin American Adjustment: How Much Has Happened? Washington, D.C.: Institute for International Economics, 1990. Woodward, Bob. State of Denial. New York: Simon & Schuster, 2006. Wright, Donald P., and Timothy R. Reese. The United States Army in Operation Iraqi Freedom, May 2003-January 2005: On Point II: Transition to the New Campaign. Fort Leavenworth, KS: Combat Studies Institute Press, 2008. Yergin, Daniel, and Joseph Stanislaw. The Commanding Heights: The Battle for the World Economy. New York: Simon & Schuster, 2002.

Journal and News Articles

Abbas, Mohammed. "Iraq Starts Privatization Drive, but Progress Slow." Reuters.com. Published July 28, 2009. Accessed April 24, 2011. 117

http://www.reuters.com/article/2009/07/28/us-iraq-privitisation-interview-sb- idUSTRE56R2HV20090728. Abboud, S. "Failures (and Successes?) of Neoliberal Economic Policy in Iraq." International Journal Of Contemporary Iraqi Studies. 2, no. 3 (2008): 425-442. al-‘Abidi, Sa‘ad. "Al-mu’asasa al-‘askariya al-‘Iraqiya al-waq‘i al-hali wa subul i‘adat al-bana’ wa al-tashih" [The Current Reality of the Iraqi Military Establishment and the Ways to Rebuild and Correct] Published June, 2006. Accessed May 7, 2011. http://alobaidy.net/study-limitedread.php?recordID=2. al-Hamidawi, Ahmad Bahid Taqi. "Al-Iqtisad al-‘Iraqi bayna dawar ad-dawla al-matlub wa i'timad ‘aliya as-suq" [The Iraqi Economy: Between the Role of the Required State and the Adoption of the Mechanism of the Market]. Published April 27, 2007. Accessed April 12, 2011. http://www.annabaa.org/nbanews/62/468.htm. "Al-Iqtisad: al-khaskhasa al-hal al-wahid lil-nuhud bil-waqi' al-sina‘i fi’l balad" [Economy: Privatization is the Only Solution for the Advancement of the Industrial Situation in the Country]. Published September 23, 2010. Accessed April 12, 2011. http://dev.akpn.net/ar/aknews/2/183223. Alnasrawi, Abbas. "Economic Consequences of the Iraq-Iran War." Third World Quarterly. 8, no. 3 (1986): 869-895. ------"Iraq: Economic Sanctions and Consequences, 1990-2000." Third World Quarterly. 22, no. 2 (2001): 205-218. al-Sa‘idi, Sa‘adun. "Mashru’iya al-ijtithath wa ijtithath al-mashru’iya" [Legitimacy of the Eradication and the Eradication of Legitimacy]. Published April 27, 2011. Accessed May 7, 2011. http://www.albasrah.net/ar_articles_2011/0411/sa3don_270411.htm. al-Rabi'i, Falah Khalf, "As-stratijiyya wa uslub al-khaskhasa al-mula’im lil-iqtisad al- ‘Iraqi" [Strategy of the Method of Privatization and it's Appropriateness to the Iraqi Economy]. Published April 2, 2008. Accessed April 12, 2011. http://www.ahewar.org/debat/show.art.asp?aid=130146. Amuzegar, Jahangir. "Ideology and Economic Growth in the Middle East." The Middle East Journal. 28, no. 1 (1974): 1-9. "Baghdad Seminar to Discuss Possibility of Iraq's Membership in WTO." Zawya. Published April 2, 2011. Accessed April 13, 2011. http://www.zawya.com/story.cfm/sidZAWYA20110403064035.

"Baghdad to Pay Sunni Groups." AJE - Al Jazeera English. Published October 3, 2008. Accessed April 23, 2011. http://english.aljazeera.net/news/middleeast/2008/10/200810151630737451.html. 118

Barboza, David. "China Passes Japan as Second-Largest Economy." The New York Times. Published August 15, 2010. Accessed April 17, 2011. http://www.nytimes.com/2010/08/16/business/global/16yuan.html.

Bensahel, Nora. "Mission Not Accomplished: What Went Wrong with Iraqi Reconstruction." Journal of Strategic Studies. 29, no. 3 (2006): 453-473. Bowman, Quinn. "Keynes' Economic Theories Re-emerge in Government Intervention Policies | Online NewsHour." PBS: Public Broadcasting Service. Published February 23, 2009. Accessed May 6, 2011. http://www.pbs.org/newshour/updates/business/jan-june09/keynes_02-23.html. "BP Group Wins Iraq Oil Contract." AJE - Al Jazeera English. Published June 30, 2009. Accessed April 23, 2011. http://english.aljazeera.net/news/middleeast/2009/06/200963093615637434.html. Bremer, Paul L. "Iraq's Path to Sovereignty.” The Washington Post. Published September 3, 2008. Accessed April 17, 2011. http://www.washingtonpost.com/ac2/wpdyn/A39805-2003Sep7. Brzezinski, Zbigniew, Brent Scowcroft, and Richard Murphy. "Differentiated Containment." Foreign Affairs. 76.3 (1997): 20-30. Bumiller, Elisabeth. "Redefining the Role of the U.S. Military in Iraq." The New York Times. Published December 21, 2008. Accessed April 17, 2011. http://www.nytimes.com/2008/12/22/washington/22combat.html. Bush, George H.W., and Brent Scowcroft. "Why We Didn't Invade Saddam." Time 2 Mar. 1998. Caron, David D. The Reconstruction of Iraq: Dealing with Debt. 2004. Chandrasekaran, Rajiv. "Mistakes Loom Large as Handover Nears." The Washington Post. Published June 20, 2004. Accessed April 23, 2011. http://www.washingtonpost.com/wp-dyn/articles/A54294-2004Jun19.html.

Cox, W. Michael and Richard Alm. “Creative Destruction.” The Concise Encyclopedia of Economics. Liberty Fund Inc, 2008. Diamond, Arthur. “Schumpeter’s Creative Destruction: A Review of the Evidence.” Journal of Private Enterprise. 21.1 (2006), 122-146. Dionne, E.J. "Iraqis Deserve Democratic Pragmatism." Alexander's Gas & Oil Connections. Published July 14, 2003. Accessed April 15, 2011. http://www.gasandoil.com/goc/news/ntm33262.htm. 119

Dobbins, James F. "America's Role in Nation-Building: From Germany to Iraq." Survival. 45, no. 4 (2003): 87-110. Dodge, Toby. "The Ideological Roots of Failure: the Application of Kinetic Neo- Liberalism to Iraq." International Affairs. 86, no. 6 (2010): 1269-1286. "ECONOMICS: Cornerstone of Steel - TIME." TIME.com. Published January 21, 1946. Accessed April 16, 2011. http://www.time.com/time/magazine/article/0,9171,934360,00.html. Elazar, Daniel J. "From Statism to Federalism: A Paradigm Shift." International Political Science Review / Revue Internationale De Science Politique. 17, no. 4 (1996): 417-429. Fitzgerald, Caitlin. "Reassessing Neoliberal Economic Reform in Post Conflict Societies: Operation Iraqi Freedom." Critique: A Worldwide Journal of Politics, Fall (2009). "General Sacked by Bush Says He Wanted Early Elections." Home | Common Dreams. Accessed April 23, 2011. http://www.commondreams.org/headlines04/0318- 01.htm. Gimbel, John. "On the Implementation of the Potsdam Agreement: An Essay on U.S. Postwar German Policy." Political Science Quarterly. 87, no. 2 (1972): 242-269. Goode, Erica and Riyadh Mohammed. “Iraq Signs Oil Deal With China Worth Up to $3 Billion.” The New York Times. Published August 28, 2008. Accessed May 7, 2011. http://www.nytimes.com/2008/08/29/world/middleeast/29iraq.html. Glanz, James. "Bechtel Meets Goals on Fewer Than Half of Its Iraq Rebuilding Projects, U.S. Study Finds." The New York Times. Published July 26, 2007. Accessed April 23, 2011. http://www.nytimes.com/2007/07/26/world/middleeast/26reconstruct.html. ------and Christian Miller. "Official History Spotlights Iraq Rebuilding Blunders." The New York Times. Published December 13, 2008. Accessed April 17, 2011. http://www.nytimes.com/2008/12/14/world/middleeast/14reconstruct.html. Gongloff, Mark. "Bechtel Wins Iraq Contract." CNNMoney.com. Published April 17, 2003. Accessed April 23, 2011. http://money.cnn.com/2003/04/17/news/companies/bechtel/index.htm. Holden, Michael. "Iraq War Badly Planned, Poorly Resourced: Bremer." Reuters.com. Published May 28, 2010. Accessed April 10, 2011. http://www.reuters.com/article/2010/05/28/us-britain-iraq-inquiry- idUSTRE64R2P620100528. 120

"How Much Oil Does Iraq Have? - Brookings Institution." Brookings. Published May 13, 2003. Accessed April 17, 2011. http://www.brookings.edu/papers/2003/0512globalenvironment_luft.aspx. Howard, Lawrence E. “Lessons Learned From DeNazification and De-Ba‘athification.” Accessed May 6, 2010. http://www.dtic.mil/cgi- bin/GetTRDoc?Location=U2&doc=GetTRDoc.pdf&AD=ADA469098. "Iraq Eases Political Restrictions on Baath Party Members." NPR: National Public Radio. Published January 12, 2008. Accessed April 17, 2011. http://www.npr.org/templates/story/story.php?storyId=18047035. "IRAQ: Foreign Workers Lured to Work in Iraq." GlobalSecurity.org. Published April 24, 2007. Accessed April 24, 2011. http://www.globalsecurity.org/wmd/library/news/iraq/2007/04/iraq-070424- irin02.htm. "Iraq Increases Oil Reserves by 24%." BBC News. Published October 4, 2010. Accessed April 17, 2011. http://www.bbc.co.uk/news/business-11468209.

"Iraqi Oil Production Hits Highest Level Since 2001." Oil and Gas Insight. Published April, 2011. Accessed April 13, 2011. http://www.oilandgasinsight.com/file/101349/iraqi-oil-production-hits-highest- level-since-2001.html. Jacoby, T. "Hegemony, Modernisation and Post-War Reconstruction." Global Society: Journal Of Interdisciplinary International Relations. 21, no. 4 (2007): 521-537. Jennings, Ray Salvatore. The Road Ahead Lessons in Nation Building from Japan, Germany, and Afghanistan for Postwar Iraq. Washington, DC: U.S. Institute of Peace, 2003. http://purl.access.gpo.gov/GPO/LPS31531. Jervis, Robert. "Understanding the Bush Doctrine." Political Science Quarterly. 118, no. 3 (2003): 365-388. Johnson, Harry G. "The Keynesian Revolution and the Monetarist Counter- Revolution." The American Economic Review. 61, no. 2 (1971): 1-14. Juhasz, Antonia “Ambitions of Empire The Radical Reconstruction of Iraq's Economy." Published January 20, 2004. Accessed April 17, 2011. http://www.tyrannyofoil.org/article.php?id=52. Kamat, Anjali. "Blackwater USA: Building the ‘Largest Private Army in the World’" Democracy Now! Published April 1, 2004. Accessed April 23, 2011. http://www.democracynow.org/2004/4/1/blackwater_usa_building_the_largest_pr ivate. 121

Katzman, Kenneth. Iraq Post-Saddam Governance and Security. [Washington, DC]: Congressional Research Service, Library of Congress, 2002. http://crs.gallerywatch.com/PHP_articledetails.gw?articleid=PHP:US:CRS:RL3 1339&type=CRS. Kramer, Andrew E., and Campbell Robertson. "Iraq Cancels Six No-Bid Oil Contracts" The New York Times. Published September 10, 2008. Accessed April 14, 2011. http://www.nytimes.com/2008/09/11/world/middleeast/11iraq.html.

Krauthammer, Charles. "The Unipolar Moment." Foreign Affairs 70.1 (1990/1991). Kuba‘ al-‘Atibi, Salam. "Ijtithath hizb al-ba‘th darura min daruriyat al-mujtama‘ al- ‘arabi wa al-‘Iraq al-jadid." [Eradication of the Ba'ath Party is a Necessity for Arab Society and the New Iraq] Published April 28, 2004. Accessed May 7, 2011. http://www.ahewar.org/debat/show.art.asp?aid=17517. Looney, Robert. "Economic Consequences of Conflict: The Rise of Iraq's Informal Economy." Journal of Economic Issues. 40, no. 4 (2006): 991. ------"The Neoliberal Model's Planned Role in Iraq's Economic Transition." The Middle East Journal. 57, no. 4 (2003): 568-586. ------"A Return to Baathist Economics? Escaping Vicious Circles in Iraq." Strategic Insights 3, no. 7 (2004). Miller, Christian T. "Contractors Outnumber Troops in Iraq." The Los Angeles Times. Published July 4, 2007. Accessed April 17, 2011. http://articles.latimes.com/2007/jul/04/nation/na-private4. "Minister Goes in Iraq Oil Crisis." BBC News. Published December 30, 2005. Accessed April 13, 2011. http://news.bbc.co.uk/2/hi/middle_east/4569360.stm.

Mueller, John, and Karl Mueller. "Sanctions of Mass Destruction." Foreign Affairs. 78, no. 3 (1999): 43-53. Normand, R., and C. A. Jochnick. 1994. "The Legitimation of Violence: A Critical Analysis of the Gulf War." Harvard International Law Journal. 35, no. 2: 345. O'Hanlon, Michael E. "Iraq Without a Plan." Hoover Institution. Published December 1, 2004. Accessed April 17, 2011. http://www.hoover.org/publications/policyreview/article/7655. "Oil Firms Awarded Iraq Contracts." AJE - Al Jazeera English. Published December 11, 2009. Accessed April 23, 2011. http://english.aljazeera.net/news/middleeast/2009/12/200912117243440687.html. 122

Pearlstein, Steven. "Keynes on Steroids" The Washington Post. Published November 26, 2008. Accessed April 16, 2011. http://www.washingtonpost.com/wpdyn/content/article/2008/11/25/AR2008112502589.html. "POLICIES & PRINCIPLES: Trouble in Germany." TIME.com. Published October 22, 1945. Accessed April 16, 2011. http://www.time.com/time/magazine/article/0,9171,778431,00.html. "The Privatization of War: $30 Billion Goes to Private Military; Fears Over 'Hired Guns' Policy." Common Dreams. Published December 10, 2003. Accessed April 17, 2011. http://commondreams.org/cgi-bin/print.cgi?file=/headlines03/1210-13.htm. Pugh, M. "The Political Economy of Peacebuilding: A Critical Theory Perspective." International Journal Of Peace Studies. 10, no. 2 (2005): 23-42. Reddy, Sudeep. "The New Old Big Thing in Economics: J.M. Keynes." The Wall Street Journal. January 8, 2009. Published January 8, 2009. Accessed April 17, 2011. http://online.wsj.com/article/SB123137373330762769.html Reinert, Hugo and Erik Reinert. “Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter.” Accessed April 17, 2010. http://www.othercanon.org/uploads/Nietzsche%20Creative%20Destruction%2 0in%20Economics%20f.doc Rice, Condoleezza. "Promoting the National Interest." Foreign Affairs. 79, no. 1 (2000): 45-62. Rubin, Alissa. "Iraqi Cabinet Votes to End Security Firms’ Immunity." The New York Times. Published October 31, 2007. Accessed April 17, 2011. http://www.nytimes.com/2007/10/31/world/middleeast/31iraq.html. Sanford, Jonathan E. Iraq's Economy: Past, Present, Future. Ft. Belvoir: Defense Technical Information Center (2003). http://handle.dtic.mil/100.2/ADA476247. Scherer, F. M. "Schumpeter and Plausible Capitalism." Journal of Economic Literature. 30, no. 3 (1992): 1416-1433. Schwartz, M. "Neo-Liberalism on Crack: Cities Under Siege in Iraq." City. 11, no. 1 (2007): 21-69. Serafino, Nina, Curt Tarnoff, and Dick K. Nanto. U.S. Occupation Assistance Iraq, Germany and Japan Compared. Washington, D.C.: Congressional Research Service, Library of Congress, 2006. Sewall, Sarah. "He Wrote the Book. Can He Follow It?" The Washington Post. Published February 25, 2007. Accessed April 17, 2011. 123

http://www.washingtonpost.com/wpdyn/content/article/2007/02/23/AR20070223 01741.html. Smithies, Arthur. "Schumpeter and Keynes." The Review of Economics and Statistics. 33, no. 2 (1951): 163-169. Stiglitz, Joseph, and Linda Bilmes. "The Three Trillion Dollar War." The Sunday Times. Published February 23, 2008. Accessed April 17, 2011. http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article3 419840.ece. "Trafficking Of Foreign Workers Flourishes In Iraq" NPR: National Public Radio. Published April 6, 2009. Accessed April 24, 2011. http://www.npr.org/templates/6/story.php?storyId=102705618. Tyler, Patrick E. "U.S. Strategy Calls for Insuring No Rivals Develop." The New York Times 8 Mar. 1992. "Victims of an Outsourced War." TIME.com. Published March 15, 2007. Accessed April 23, 2011. http://www.time.com/time/printout/0,8816,1599682,00.html. Weede, Erich. "Capitalism, Democracy and Peace." Web. poli.vub.ac.be/publi/orderbooks/myth/05Weede.pdf. Weisenthal, Joe. "3G Countries." Business Insider. Accessed April 10, 2011. http://www.businessinsider.com/willem-buiter-3g-countries-2011-2?slop=1. Weisman, Steven R. "Kurdish Region in Northern Iraq Will Get to Keep Special Status." Information Clearing House. Published January 5, 2004. Accessed April 17, 2011. http://www.informationclearinghouse.info/article5473.htm. Wilson, Scott. "Bremer Shifts Focus to New Iraqi Economy - U.S. Occupation Chief Cites Progress on Restoring Order." The Los Angeles Times, May 27, 2003.

Wolfowitz, Paul. "Rebuilding the Anti-Saddam Coalition." The Wall Street Journal 18 Nov. 1997. Wright, Robin. "Top Focus Before 9/11 Wasn't on Terrorism." The Washington Post. Printed April 1, 2004. Accessed April 17, 2011. http://www.washingtonpost.com/ac2/wp-dyn/A40697- 2004Mar31?language=printer.