Turning points in 20th century history
Gunpowder monopoly ends
Towards the end of 19th century, newly discovered nitrate deposits (sodium nitrate) in the Atacama desert of Chile came onto world markets. Chile’s nitrates were a crucial intermediate for gunpowder.
Chile’s nitrates broke the British monopoly over the trade in Indian saltpetre for the first time in modern history. French domestic production of saltpetre, barely enough for their own needs, could not challenge Indian saltpetre output that the British monopolized.
Indian saltpetre (potassium nitrate) could be simply refined and used directly in gunpowder – unlike Chilean nitrates. Also Chilean nitrates were limited natural deposits, whereas Indian saltpetre was produced on an industrial scale, accounting for some 70% of global production.
Germans quickly secured supplies of Chilean nitrates. A few years into the WWI, Germans brought the Haber-Bosch process from the laboratory stage to industrial production. The Haber-Bosch process for production of ammonia, gave Germans industrial capacity to produce gunpowder.
Causes for WW1
With this industrial capacity for gunpowder in place, Germany and Turkey, both non-colonial, industrialized powers challenged colonial powers, Britain and France, for access to world markets.
The breakup of the Islamic Turkish Ottoman Empire was long seen (1890-1920) as an outcome essential for continued Anglo-French hegemony.
Funding WWI
Against Britain and France, the then dominant world powers, with extensive colonies, were Germany, the Austro-Hungarian Empire and the Ottoman Empire out of Turkey. Once WWI started, US funded both Britain and France. The US plied the Anglo-French alliance with extensive supplies and credit.
Emergence of USA
While millions died in European trenches, the USA bided its time. With mud, blood and disease taking a heavy toll, Britain, France, Germany, Turkey and Russia were soon exhausted and prostrate into a stalemate by the end of 1916. As the fate of WWI hung in balance, USA finally joined the Anglo-French side to gain a share of spoils.

A soldier evacuated from the battlefront on a stretcher during WW1 - Image courtesy - bbc.co.uk. Click for larger image.
Financially unaffected, industrially strong, militarily effective, the US emerged on the world stage.
Post-WW1
Soon after WWI, as Anglo-French colonies and markets started opening up, US products gained new customers. Indians started buying Chevrolets, Buicks, Packards in small numbers. Victrolas started playing music in India – and on India. Michelin’s radial tyres from France became a byword in India for long-life. Indian natural rubber started going to Italy’s Pirelli and France’s Michelin.
Impoverishment of India
But Britain, a victorious nation was deep in debt – to USA and Colonial India. US emerged as the largest creditor nation. To settle these wartime debts, debtor Britain and creditor USA worked out a debt-repayment ‘mechanism’. Nothing but financial jugglery, this mechanism slashed the amount due to Colonial India and actually transferred the debt-burden of WW1 onto the backs of Indian peasant.
To settle this debt, Britain took recourse to gold from India. To give impetus to this transaction US supplied Britain with silver – then in abundant supply, in the form of US silver currency coins. This silver was ‘sold’ to Britain at double the market price – under the guise of the Pittman Act. Britain paid its wartime debt to India with this silver – at this inflated Pittman Act price. Abundant silver coins were stuck by the Colonial Raj, which are still available across India in large quantities.
To settle loans taken from USA to fight WW1, Britain extracted scarce gold from India. While payments for Indian exports were made in overpriced silver, the Indian peasant was forced to pay for imports and taxes in under-priced gold.
Starving Indian woman with swollen ankles & feet because she suffers from dropsy as young daughter stands by with swollen belly from hunger during famine crisis. (Photographer - Margaret Bourke-White; Date taken-1946; picture courtesy - life.com). Click for larger image.
Due to this overpriced silver-under-priced gold combination, a surge in gold outflows started from India. Soon the US banking system was flush with liquidity.
Great Depression
Expecting the closed markets of Anglo-French colonies to open up, US economy expanded trade relations and industrial capacity. This expansion in trade and production of industrial goods was funded partly on the back of inflows of gold from India through Britain.
Finally though, protective barriers did not come down substantially enough – creating industrial over-capacity and excess liquidity in USA. Seeing ‘irresponsible’ bankers, waste ‘hard-earned’ gold on ill-planned trade expansion and production capacities, the US Federal Reserve clamped down on liquidity.
Great Depression followed. To ‘save’ gold-reserves, Roosevelt went further and nationalized gold.
Crime in the 20th century
In turn, Roosevelt’s gold nationalization, sparked a global crime tsunami. Only after the easing of restrictions on gold ownership by 1990, did the crime tsunami subside. The axis of this tsunami of crime was gold smuggling into India and narcotics trans-shipment through India.
A tsunami that engulfed all major economies of the world.
WW2
Unresolved issues of WW1 triggered WW2. Germany hemmed in from all sides by British client-states, unable to find markets for its industrial production, reacted.
Germany, allied with Japan and Italy, proposed creation of larger ‘home’ markets. This was to be done by ‘expanding’ their own borders – to include neighboring countries. As first steps, on 3 October 1935 Italy invaded Abyssinia, now Ethiopia, Germany on 11-12 March, 1938, swallowed Austria; and Japan occupied Manchuria.
The basic assumptions of all the European powers, Japan and the USA were the same. The Confucian-Platonic ideal of superior, wise rulers who ruled over ‘inferior’ peoples.
These militant powers shared the same disregard for human life. Britain wreaked havoc by creating The Great Bengal Famine. Some 40-50 lakh (4-5 millions) Indians died. Hitler rained the Holocaust on the Jews. Some 50-60 lakh (5-6 million) Jews died.
Same difference.
Three faces of stagnation
Production capacity of non-OECD world was destroyed by years of colonialism, WW1 and WW2. Economic conditions after WW2 improved due to relative peace and as countries of the world started rebuilding their economies in the last 60 years (1950-2010).
The last 60 years has seen significant increase in industrial capacity of non-OECD nations. US extended supplier’s credit – using the US dollar, the favored currency of the Bretton Woods system.
A significant portion of economic expansion of OECD economies during 1950-1980 happened as production capacity of the world was rebuilt. The same capacities that were destroyed by colonialism, WW1 and WW2 – especially during 1850-1950 period.
WW3?
This creation of production capacity in non-OECD countries means economic stagnation and loss of political power for a few decades across OECD. With greater production capacity in the hands of non-OECD producers, production capacity in OECD-USA must shrink.
Or a WW3 will be ‘needed’ to destroy the production systems of the poorest countries – to ‘save’ the West-OECD.

Creating false agenda's has become a full time job in the West with specialist think-tanks, media organisations and PR firms. (cartoon courtesy - http://polyp.org.uk). Click for larger image.
Red herrings
To get around this ‘problem’ of stagnation, the West has created artificial ‘crisis’ situations.
- Population Explosion
- Global Warming and climate change
- Civil Wars in Africa
- Islamic Demonization
- Terrorism
- Financial meltdowns
Complicating the current situation is the US currency mechanism, called USCAP (by 2ndlook) which favors selected US allies with advantageous exchange rates. China, Asian Tigers, Japan and NATO-Europe have gained significantly from the USCAP program.
The most notable loss due to trade distortion has been Africa’s.
Power Corrupts
During the 20th century, the world had to contend with an intolerable situation. The Anglo-Saxon Bloc (America, Australia, Britain and Canada) accounted for 80% of gold production (between 1200-1800 tons per annum) and controlled 80% of global gold reserves (around 100,000 tons circa 1920) also. Not even Chengez Khan had that kind of control over global economy.
Dawn of a new century
Things change.
At the beginning of 21st century, gold reserves in the hands of all the nation-States, are at a historic low. All the Governments in the world own less than 20%, i.e. 30,000 tons from global gold reserves of 150,000 tonnes.
Another 5 years of aggressive gold buying by global consumers will see this down to possibly 15%-17%. This will severely limit the ability of any State to wage a prolonged war.
A collapse of the currency systems in the world is imminent – in the next 5-15 years. Gold may give super-normal returns in the face of such an event.
Desert Bloc – beginning of the end?
The 20th century possibly saw the Desert Bloc reach its high-point. The world fully understands the bankruptcy of the Desert Bloc – and it may take some time for the effects of Desert Bloc propaganda to wear off.
Celebrations may, however, be premature. The alternate to Desert Bloc politics – भारत-तंत्र Bharat-tantra is yet to regain traction.
Related Articles
- U.S. losing its grip on world (timesunion.com)
- Anglo-Indians: Some corner of a foreign field (economist.com)
- India Now and Then (3quarksdaily.com)
- Profile: Thomas Babington Macaulay a giant of the British Empire (telegraph.co.uk)
- New revelations in ammonia synthesis (scienceblog.com)
- Why trapped miners “unwilling to die in darkness” (cnn.com)
- Recycling animal and human dung is the key to sustainable farming (energybulletin.net)
- Science History of the Renaissance Period (brighthub.com)
Country Model Of The West
The Myth Of Western Technology
In the last 50 years, after WW2, the rise of Japan, Korea and China in manufacturing and technology and the Indian software success, have taken away the sheen from the myth of Western technological prowess. Post colonial revisions in history are eroding the euro-centric version of biased history.
Failed Westernisations
For some time, the easy way out seemed to be ‘copycat’ westernisation. One of the first ‘copycat’ states was China. China, led by Sun Yat Sen, (original name Sun Wen and started calling himself Yat-sen; Chinese call him Sun Zhongshan), was the first major power which tried going down the western path. The Japanese invasion of Manchuria sounded the death knell of the Chinese Republic and Monarchy.
China – Mao & Sun
Sun Yat Sen decided to westernise and make China into a Republican democracy. Chinese were made to cut their queue – pleated hair braids. This diktat was enforced in 20 days time. Sun Yatsen and later Mao Ze Dong made the Chinese change their dress styles too. The effect of this westernisation – an enduring sense of being followers. The Chinese add a western name to their Chinese one – Michael Tang, Bruce Lee, Jerry Yang, Tommy Tang, Tommy Chi.
In Hong Kong and Macao, white tourists are royalty. Chinese companies routinely parade White, Western investors – and the Chinese investors follow. Western marriage ceremony, Chinese couples think, is very romantic. The Christian Church wedding is common in China.
Not that Indians are too far behind – consider Steve Sanghi, Paul Parmar, or the best of them all, Bobby Jindal.
Ataturk’s Turkey
Turkey – led by Mustafa Kemal Ataturk was the next ‘copycat’ attempt at westernisation. After WW1, the victorious allied powers dismantled the Ottoman Empire. Turkey was reduced to a rump state.
Mustafa Kemal Atatürk was ‘installed’ by Western powers. Thereafter, Turkey has lurched from crisis to another. Post WW2, it has mostly been ruled by military dictatorships. From an arbiter in Europe, it has become a supplicant, begging for entry into EU. Instead of the queue in China – it was beards in Turkey. Atatürk enforced a new dress code on the hapless Turks – and the traditional fez was banned. Stop wearing the fez or else …
Russia – Westernising Since Peter The Great
Peter the Great, (of the Naryshkin family) co-ruler of Russia, (along with Ivan of the Miloslavsky family) ruled from 1682-1725. For more than 40 years, his agenda was to create Russia in the Western mould. His travels to Germany, Britain, Sweden (before becoming a Tsar) shaped this agenda.
One of the first things he did after becoming a Tsar was to ask his boyars (Russian nobility) to shave their beards! Catherine The Great continued this during her reign from 1762-1796. For the next 125 years, Russia vacillated between a medieval country and modern western country.
Now, the imprisoned oil tycoon Mikhail Khodorkovsky takes pains to show how Russia is a western nation and should be democracy. Khodorkovsky, who at one time nursed political ambition, says, “…I’m convinced that Russia is a European country, it’s a country with democratic traditions …”
The Anglo-Saxon Country Business Model
These Turkish and Chinese failures down the western garden path is to mistake the trees for the forest. There are five major features of the Anglo-Saxon country model which these countries did not copy. Not that I am recommending that they be copied.
The Use Of Corporations
The use of the British East India Company was an eye opener for the rest of the West. After Vasco da Gama’s discovery of trade route to India (for Europeans) round Africa, the British were the first of the block – with the English East India Company formed in the 1600.
The Dutch started soon after with the Vereenigde Oostindische Compagnie (Dutch East India Co.) in 1602. The Danish Opperhoved initially started in 1616 and was reborn in 1732, as Asiatisk Kompagni. The Portuguese organised themselves as chartered company in 1628. The French came with the French East India Co. in 1664. The Swedes joined the rat race in 1731 with Svenska Ostindiska Companiet. The Italians came in as the Genoa East India companies. The Hanseatic League had its own operations.
In North America, the Hudson Bay Company (Compagnie de la Baie d’Hudson in French) was given a Royal Charter in 1670 by Charles II. It practically owned Canada when the Dominion of Canada was formed – and is the oldest surviving company in North America. It monopoly ended only in 1870 – a few years after the Indian Independence War of 1857.
Anglo-American Oil Company (subsidiary of Standard Oil) of Iran plotted the the assassination of Iran’s Prime Minister Haj Ali Razmara and the overthrow of the Mohammed Mossadegh regime. Thereafter, it was the puppet regime of Shah Of Iran which terrorised Iran for 30 years that paved the way for return of Ayatollah Khomeini – and Iran’s regression to medieval times. And who was leading this campaign – Kermit Roosevelt (Teddy Roosevelt’s grandson).
In South America
In 1997, the CIA de-classified papers which admitted it planned and executed the coup in Guatemala – something that was known all along. This was done to protect the interests of the United Fruit Company – which owned large tracts of agricultural land in South America, used South American labour and shipped out fruit to America. Guatemalan farmers were run out of the market.
When Guatemala proposed land reforms so that Guatemalans could prosper in Guatemala, the Government of Jacobo Arbenz was overthrown. By the way, the term Banana republics came into being from the frequent intervention of the US into South American countries – and then ridiculing these countries for instability. To obtain US Governmental intervention, the United Fruit Company engaged services of Edward Louis Bernays (Sigmund Freud’s nephew) as PR front man.
The last 100 years saw the use of these companies as a means to economic dominance. ITT was used in South America for installing and removing dictators
“… ITT papers published by Jack Anderson in March 1972, and in the hearings on these papers conducted by the Senate Foreign Relations Committee a year later. This material establishes that offers of financial aid aimed at stopping Allende were made by ITT president Harold S. Geneen to the CIA in July 1970 and to Henry Kissinger’s office in September” (Foreign Affairs; January 1974).
Had Richard Nixon and Henry Kissinger not responded to International Telephone & Telegraph and Pepsi-Cola by overthrowing Salvador Allende, Chile “would have found a less violent, more constitutional way out of its conundrum.” writes Stephen Kinzer in his book Overthrow: America’s Century of Regime Change From Hawaii to Iraq.
To gain control of the Panama Canal Company, the operator of the Panama Canal, US engineered the secession of Panama from Colombia. With a puppet Government in place, The Hay-Bunau-Varilla Treaty allowed the U.S. to build the Panama Canal. Subsequent interventions to advance Western oil interests in Colombia and the Canal interests in Panama have reduced Governmental authority in these countries. Drug cartels, kidnapping and ransom now control the economy of these countries.
Nearer home, of course, the next ruler of Pakistan (military or otherwise) is decided by US – at least for now.
The Cornering Of Gold Supplies
For the last 150 years, the ABC countries (America, Australia, Britain, Canada) comprising the Anglo-Saxon bloc (countries, colonies and companies) have controlled 90% of the world’s gold production. Till (a large part of) India was a British Colony, they also controlled more than 50% of the above-the-ground gold reserves. This gave them absolute liberty to print depreciating currency and flood the world pieces of paper(called dollars and pounds), manipulate the world financial system and keep other populations poor and backward.
Enslavement & Annihilation Of The Natives
They could capture gold supplies by the annihilation of native populations in America and Canada (‘Red Indians’ are tourist attractions now), killed the aborigines in Australia (and apologise now).
Till the middle of 19th century, raw slavery continued. By mid 19th century new forms of slavery was introduced – indentured labour, share cropping, etc. They re-invented slavery (in the 20th century again) and renamed it as apartheid which made native populations into slaves. They could, of course, truthfully claim that great Anglo-Saxon frontiersmen discovered gold and settled empty continents – in ‘hostile conditions’.
The Creation Of Client Sates
Japan, Korea, Indonesia, Pakistan, Afghanistan, Iraq, Kuwait, most of South America – have been reduced to the situation of client states. The basic position is Uncle Sam knows best – or else! These states have become production centres for the USA, cheap labour will be given an ‘opportunity’ to serve the ‘master’ states.
All these states also have significant military presence of the Anglo-Saxon Bloc which is a matter of concern for India.
Elephants in the room
Western models, which have evolved through the prism of slavery, colonialism, genocide, concentration of power are an end-of-life model. To use end-of-life products may seem like a low cost solution in the short run. The bigger issue in most cases is the lock-in effect that these legacy systems impose on the ‘buyers’ – e.g. Singapore.
The western model of (natural and people) exploitation has runs its course – for instance, in India even salt was made into a high-tax commodity. It is a dead-end model. Parts of this model, have been used successfully by other countries – Japan with its keiretsus and Koreans with their chaebol. But obviously, this is a model that the West is an expert in – and what others copy, the West has finished with. Copycat models allow the west to predict the next steps easily and taken competitive actions with certainty. The answer for others is to create another country model. The only country which has tried this is India.
The Alternate Model
Bharat-tantra, the Indic political system that depends on local justice, low-policing, non-state free-coinage /gold-as-currency, absence of religion, property rights for all, low-tax systems, free-labour (as opposed to slave labour), enterprise instead of employment, wealth-and-property distribution instead of concentration, is the model that has a future – and a record of past success.
India, where non-State reform has played a very major role in crime, policing (JP’s dacoit reform), land reform (Vinoba Bhave’s Bhoodan movement), political change (JP’s Sampoorna Kranti movement). After the economic buffer from Bombay High oil discovery in 1974, the Indian State has certainly, steadily shed various aspects of its colonial legacy. More importantly, India did not go through the slavery-colonialism-capitalism route at all.
It has instead inching towards a republican, (largely) market-driven, democratic, declining role of State, multi-ethnic-religion-linguistic political model which is unique in modern history. What India needs to do is to one decrease the colonial inheritances further. Deliberate amnesia by historians, has obscured Bharat-tantra. India is today slotted as a socialist country – where as it has been reducing the features of a socialist State.
The underestimated and undermined political leadership in India, has worked at renewing the Indian model – which is non-exploitative, stable and can bring equity and growth. It is this model that before others, India (and Indians) should believe in – and beat a modern path for the world to follow.
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