Osama bin Laden is winning the war against the United States

Sorry to say, Osama bin Laden is winning the war.

Let us imagine for a moment that some 75 years hence we are sitting in a college freshman class studying modern economic history. Just as the kids today are compelled to puzzle their minds over the manifold contributory causes of the Great Depression, our future scholars have been set the task of figuring out what factors were involved, and to what degree, in creating the Great Collapse of 2008-9.

Different scholars, no doubt, will have attributed different weight to the various factors. There will be consensus that the abolition of Glass-Steagall in 1999 was a very bad idea. Similarly bad, all will say, was the relaxation of regulatory regimes governing banks, mortgage lending and securities trading. Academics will likewise agree that the creation of credit default swaps was yet another very bad idea, echoing the words of a financial wizard of the time, now long forgotten, who described them as financial weapons of mass destruction (W.M.D. not being an element of the future’s vocabulary, this archaism goes right over the heads of our students). Controversy however persists, in a small degree, between scholars over what weight is to be attributed to errors of policy from the Federal Reserve and the U.S. Government as causes of the Great Collapse.

Many future scholars claim that in the wake of the attack on the United States on September 11, 2001, two major errors were committed. Alan Greenspan, then Chairman of the Federal Reserve, reduced interest rates and kept monetary policy too relaxed and the price of credit too cheap for too long. The US Government, on the other hand, instead of placing its civilian economy on a war footing, urged its citizens to shop until they dropped” (another archaism) and, in addition, undertook two costly wars, in Afghanistan and Iraq, all the while running up huge deficits. Proponents of this school will draw the conclusion that the reaction to the attack by Osama bin Laden was what accelerated and exaggerated the Collapse, acting as a kind of catalyst to the underlying instability of an excessively liberal financial system. According to this way of thinking, the Collapse represented a kind of victory in the war between Osama bin Laden and the United States, with Alan Greenspan and then President George W. Bush playing the role of unwitting facilitators, if not collaborators.

Advocates of this school of thought will argue that Osama bin Laden did not set out to destroy just a couple of buildings that fateful day in 2001. What he hoped to accomplish was the collapse of the international capitalistic system. And just as it took several hours before the buildings collapsed on September 11 as the fireballs raged, so it took several years before the edifices of global capitalism began to teeter and then rapidly disintegrate. Perhaps, they will argue, Osama bin Laden did not mentally calculate every step between the initial blow at the World Trade Center and the collapse of the international economy; it is simply that he had an instinctive understanding and grasp of the degree of fragility of confidence that sustained the trade, investment and credit flows of the global economy, and he had an open contempt for the myopia, venality and greed of the business leaders, politicians and “statesmen” of the “Free World”, the purported guardians of stability of the world order.

Even before the Great Collapse became evident, it could be claimed that Osama bin Laden had been winning the war. Despite enormous expenditures of treasure and manpower and the efforts of the most powerful military, national security and intelligence machineries on the planet, involving more than a million men and women, the U.S. and its allies were no closer to capturing him on September 12, 2008 than they had been seven years earlier. Indeed his continued freedom could be interpreted as an act of defiance and contempt against the very values of the global capitalist order. Despite a price of $50 million on his head, not one of his associates had thought to sell out their leader. Moreover, bin Laden had won the acquiescence of the United States to his demand that they withdraw their military presence from Saudi Arabia in 2003.

It was, however, the destabilization of European and Middle Eastern societies and especially the Arab client states in and around the Arabian peninsular that Osama bin Laden had in his sights with the attack on the United States. By weakening and disrupting US economic and financial power in these regions and by creating havoc in their economies, he hoped to upend the political order that sustained – as he saw it – the subjugation of Muslims and precluded the creation of a single authentically Islamic political and cultural order from Andalusia (Spain) in the west, encompassing the entirety of Northern Africa in the South, and stretching to Iraq and the Central Asian states beyond in the east. The Arab client states that relied on US military and economic aid for their survival were, of course, particularly vulnerable. Indeed, US military power was sufficiently circumscribed by economic collapse at home and around the world to render infeasible intervention in the various insurrections that spread through Europe and the Middle East and North Africa at the end of 2009.

The subsequent global political instability, and the rise and fall of states in the wake of the Great Collapse, will be, of course, topics for another college course for our students of the future.