Sunday, March 20, 2011

The Changing Nature of Warfare: From a Military to an Economic Basis

A Special OperationPart II

The Existence of a High Cabal or Power Elite

Ratcliffe: You write in the Freedom magazine articles [which became the initial "raw material" for the 1992 JFK book] about this High Cabal (others have called them the Power Elite or the Cryptocracy): this group that people like Buckminster Fuller and Winston Churchill have referred to as very real and influential existing largely behind the scenes. We were discussing the other day the significance of the philosophy that derived from knowing that the world was finite, with the explorations of Magellan, who wanted to keep going west to see what he would find -- and how such knowledge formed institutions like the Haileybury College and then the British East India Trade Company. Can you reiterate that marvelous description -- your sense of this changing world view once it was known that the world was no longer flat, that it was a closed unit.

Prouty: There is no shortage of experienced writers who, for various reasons, allude repeatedly to, I like Churchill's term best, a "High Cabal." This is attributed to Churchill by Lord Denning in his very good book, A Family Affair. Lord Denning corresponds to our Chief Justice of the Supreme Court, the senior law officer in the United Kingdom. In the book he recounts a story about World War II and the heavy bombardment in England and in Europe. Denning states that his brother, who was an officer with British Naval Intelligence, was working on duty late at night in an underground subterranean area that was between Ten Downing Street and an underground shelter where Churchill used to stay during bombing attacks. The Navy, being as alert as ever, stocked this area where Commander Denning was working, with a few high-quality bottles of brandy.

When, on many occasions, Churchill would walk through their office, the Commander would invite the Prime Minister to sit down and have a brandy. One particular night, after there had been a heavy bombardment on London, and they knew that Rotterdam was under attack, Churchill was sitting there sipping his brandy and he said, almost as if speaking to himself, "You know, an all-out battle on land, and heavy battles in the sea, and this total bombardment over Rotterdam and over London, the High Cabal is operating here". And he referred to this being the wishes of the High Cabal. Now unfortunately, Lord Denning doesn't go any further with the reminiscences of his brother. But maybe they didn't go any further. Maybe Churchill just said that much.

I was at the Cairo Conference, where Churchill was. I was in his group; I was close enough to directly witness some of what was going on. I flew the British staff officers back and forth from where some of them stayed in Palestine during the Cairo Conference and talked with them a lot about the progress of the conference. Later I was at the Teheran Conference, where Churchill was. I lived across the street from Churchill when he was convalescing. (After these conferences he had a case of pneumonia in Marrakesh, Morocco.) Now I can't say that Churchill was any intimate of mine, but I was close enough to observe people that worked with him, and the military people who worked for him. I talked with them a lot. And we had the feeling that Churchill, certainly, is a senior person (as was Roosevelt, as was Stalin) in the world, but that there seems to be a level that maybe he listens to. Maybe this is what Denning was referring to -- because Churchill describes a High Cabal.

He's not the only one. Buckminster Fuller, a rare individual, has spent more time, at the invitation of Congress, before Congressional hearings than any other individual, with the probable exception of Admiral Rickover, advising Congress on different issues relating to the government. But interestingly enough, he has spent more time in the Kremlin as an advisor to the Soviets than he has in our own Congress. He worked with President Kubitschek in setting up the new Brazil. A rare individual. A man who knows the world and knows the leaders of the world. He writes about a "power elite," and that the apparent leaders, as we see them throughout the world, are certainly national leaders, but they're not the top echelon, the High Cabal.

In history you will find that the Chinese, as far back as 2,000 years ago, speak of a High Cabal that they call the "Gentry" -- and that the Chinese seem to have accepted that as a fact of life. Even though they had their emperors and their monarchs and leaders, they realized there's an echelon above that which directs some of the events that other people know nothing about. It's Fuller who hits the nail on the head. He says that the secret of the High Cabal is -- of course, it's control of power, but it is also the understanding that their most valuable asset is anonymity: that nobody can identify them. In that sense, you begin to talk, you begin to think: maybe they're just like angels or like ghosts, people say they're there, but, are they really?

I don't think it's that. In fact, I think that perhaps what people think of in terms of ghosts or angels, may be the reality that there is an echelon within our world, a small structure, that does really determine how things go. And I wouldn't argue the point. Because in my own experience in more than 80 countries -- and I have talked directly to presidents of countries and people on their level -- I have this feeling that they're taking their instructions from some other place. Now that may be personal, but I notice it in the writings of others as well.

Magellan's Circumnavigation of the Globe:
The Philosophy That Derived
From Knowing the World Was Finite

You wonder what is the source or the origin of this. I don't know how long we want to say mankind has been on Earth, but let's say 30 or 40 thousand years -- maybe longer in certain manifestations, but we'll settle for that. Over this 30 or 40 thousand years, society has lived on an Earth that wasn't flat, wasn't round, all it was was an expanse. Because there weren't enough people to fill it up at any given location. They had no problem with space. They didn't even think about the word "property," in the sense of real property, real estate. They simply lived there.

If hostility grew between two communes, two villages, one or the other would be forced to move a little bit. There's always some more space over there. And they weren't bothered with our retroactive view of that: that they had a flat-land approach and that we know the world is round and therefore they were pretty stupid. It wasn't that. It's just that they had another place to go. If they had to graze cattle, they'd move a little further. And if, on one of these moves, they ran into some other people they had never met before, then they accepted there were other people on Earth. But they were all on the same expanse. They didn't know whether the expanse was flat or curved or what it was.

They did know that it came to a shoreline, that there were oceans. And they were prone to follow shorelines, as the South Asians did thousands of years ago as they progressed north across Bering Straits (which at that time was a land bridge), down through North America, and even into Central America. If you dig in the mummies' tombs, in the burial grounds of Peru, you will find that on their huacos -- the ancient bowls and jars that they made -- are figures of people who have slant eyes, Oriental eyes. That meant, when a person was making the jar, she made the jar in the image of the people that she knew -- with slanted eyes. They didn't know there were any other people.

But, in all of this civilizing of mankind over these 30 or 40 thousand years, there occurred finally an event that changed the entire prospect of their history. And we can't always say, "Well, they didn't have written history." Evidence from China is that their written history goes way back -- far, far back -- much more so than we think. But that's not all of it. History forms each generation as they remember the important things it distills. In the voyages around the world, navigators -- especially, we think, in the area of the islands of the South Pacific and around Indonesia and that area -- the navigators began to be able to find their way across the Pacific to other islands, to other lands, and then back again.

The leading, most important people in those countries in those days were the navigators, because they could come and go, they could find their way. They knew the stars, is what it amounted to; they understood the winds. And gradually these navigators began to say that, perhaps we could go further around the world and keep going. This became a prospect -- something they could do -- like we think we can put a man on Mars and we know we can do it.

In Portugal one of these navigators was named Magellan. He got in trouble somehow with his own government, or else he couldn't be supported by his own government and he went over to Spain. The Spanish king decided he would support Magellan's expedition in which he wanted to start out going to the west and keep going to the west -- which seemed like a good idea -- he wanted to try it anyway. Others had gone to the west, like Columbus, and they hit shore and turned around and came back, so that we found "India," but he had only gone part way. But the people didn't have the idea in those days that they could keep going except going in a flat way, and when they hit land they figured they'd been there. They didn't think of the Earth in terms of a sphere. It's quite important.

So, not only did the royalty of Spain agree to finance Magellan's voyage (it was several ships), but, interestingly enough, the bankers of Antwerp, in Belgium, poured money into this because they could see it as a means of taking over new lands, new wealth, gold, tin, silver, and all those spices and other trade goods. So they financed his trip, and three ships took off.

Years later, in the same harbor back in Spain, one single ship named the Victoria returned. When the Victoria landed and they told how Magellan was killed while they were in the Philippines, they also reported that they had discovered new territories, all the way along their voyage. That they had gone west all the time and had completely circumnavigated the earth which must therefore be a round globe. There's one fact about a sphere that everybody knows: its surface is finite. If you have a basketball you can measure to the nth degree how much surface area it has. And if you have an 8,000-mile-diameter globe you can measure to the degree how much surface it has.

This majestic realization changed the mind of man as a group, more than any other single event that happened in the 40,000 years we've been here. Because from that moment on, these bankers in Antwerp, and their associates, and the kings and queens of Europe, began to realize: If this earth is a sphere, it is then finite. And if it's finite, there's only so much land, there's only so much tin, so much gold, so much spice. And they looked at the world as something that belonged to them -- if they got there first.

The Development of the East India Companies
and "Proprietary" Colonies

This started a significant train of thought in the educated, financial, politically powerful groups of the world, particularly the European world. It was expressed most easily in the terms of the East India Company development. They had the British East India Company, the Dutch East India Company, there was a Spanish East India Company -- I think there were eight of them -- and, interestingly enough, there was a Russian East India Company. I forget what they called it, but the Russians explored the coast of Alaska and California. The Russians, in conjunction with shippers from Boston in the China trade, carried out a sea otter business (in the fur of sea otters) from California back to Canton, China, and on into Europe. It was one of the most valuable, one of the most profitable, sea ventures of the time.

So all of these countries were doing this together. They all immediately set out to explore the world, to inventory it and to own it. The leaders in this were the British. And the British East India Company became dominant in this worldwide exploration. They achieved this dominance by their view that anything they discovered was theirs, and that the king could commission them to set up a proprietary colony -- wherever they discovered land -- a British proprietary colony. Now what that meant was, they could introduce their religion to the colony and their armies to the colony -- and then do business in the colony. But the word "colony" was not exactly accurate, because they used everything from total slaughter of the people they ran into to total friendship, depending on how they got along with those people.

But their idea was whatever part of the world they went to was theirs. Property for the other guy was zero and property for them was total. As I said previously, in an earlier day the navigators were the senior elite people in the country. The elite people now became surveyors. If we think of history in that period, we ask ourselves: What was George Washington's business here in the United States? He was a trained surveyor. He worked for Lord Fairfax and other landowners solely because the king had granted them a charter, from London, to come to North America and take over land between one fix on the beach and another. Then have men like George Washington, with their surveying instruments, just draw lines heading for the west, not knowing where the Pacific Ocean was but going in that direction.

The concept that everything in the world belonged to the East India Company (or, to the King of England, or the King of Holland, or the King of Germany) was really a strange development, arising from the realization that the Earth was spherical and therefore finite and that they must acquire property. Mankind was beginning to develop the concept of the ownership of property.

This continued for a century or more until it became an enormously big business. These East India Companies were dominating countries like India, even countries like China. They were dominating North America, and so on, as they moved around the world. The British again led the others in training people for these jobs. They created a college, called Haileybury College, where they not only trained the people in the financial aspects of all this business work all over the world, but in military -- special military, you might say. They weren't trained to be world conquerors in the Alexander the Great or Julius Caesar mold; they were trained to run a constabulary, to control these countries they took over, and to help their business partners (in the East India Company) carry out their business enterprises in those countries.

In addition to that, they trained missionaries. Because they soon realized that, in the rest of the world there was, from their point of view, no religion: they were all just pagans. This reminds me of the Vietnam days -- that any Vietnamese was a mere gook. Well here these people all over the world were mere pagans. And of course, you can't live in a world with pagans. You have to bring your missionaries and convert them to Christianity.

So this became a role. And they used to go into these "proprietary colonies" with their missionary leaders first and try to peacefully set up, their arrangements for living with these people, for converting these people, and actually taking over their land and taking over their businesses. But if the missionary half of their business didn't work by itself (because they were overwhelming these people anyway with their strength and their power and their money and their imports), then they would bring in their military. So, one way or the other, they just took over land all over the world, took over business, took over people.

Inventorying Earth: Haileybury College
and the Roles of Malthus and Darwin

In the process, their masters (the top people, the governor of the East India Company) realized that what they were really after was to learn what the assets of the entire Earth were. And in a most interesting development, they set up an economic studies department in the Haileybury College. Economics is not an old profession (not an old science, as some people want to call it). For Head of the Economics Department they installed a man named Thomas Malthus. The interesting fact was that Malthus was given the job of inventorying Earth -- an absolutely incomprehensible job when you figure that this happened at the turn of the century, about 1800 (1800, 1805, somewhere in there). The East India Company had been started around 1600. So for two centuries they'd been doing this work, preparing themselves for this business. They had become an extremely lucrative company. But now they were getting serious: they wanted to inventory Earth. And Malthus was given that job.

As he progressed in this study, Malthus came up with his theory that the world was going to come to an end because mankind was increasing at a geometric rate and food was increasing at an arithmetic rate, and that mankind would overwhelm the production of food quantities not too far in the future. That was a necessary theory for these people in this East India Company because, as they inventoried Earth, it made it an incentive for them to have the food, to have the resources for themselves but not for the other people. It began to create almost what we have in the Cold War today: an "us or them" mentality. The more friction there is in an "us or them" situation, the more motivation there is on your side to get the job done, including armies, missionaries, and all the rest of the powerful tools we have.

This moved along for another 30 or 40 years, and among the men that Malthus sent out to help inventory Earth was Charles Darwin. Darwin went all over Latin America and beyond, studying birds, butterflies, and everything he found and then he came back. He began to report that there are all sorts of life growing in and on this Earth. And he came back with picture books of all the different birds he found, the fish that he found, and a great deal else, from all over the world. Then he began to organize these species of the world.

As he began to tell this to his colleagues in the East India Company and at Haileybury, they began to get formulate the question of what, after all, is the origin of species? Where do they come from, and what keeps them going, and how do we get one species here and another one there? We know that Darwin wrote this book called The Origin of Species. The interesting point is that he was rather reluctant to write this book. He was a true professional. He saw his business in certain terms, but he knew he hadn't proved anything about the origin of species; he didn't want to call it Origin of Species. In fact if I remember, it's about page 53 before he gets into that part of his book. But it's an interesting point. He did proclaim that, among all the species, or among the internal groupings within the species, those that were fittest survived and those that weren't presumably didn't survive. It was an interesting observation that he came up with.

Looking at the situation of the East India Company, these two men played an important role -- a very important role for them in their day and for us 150-200 years later. The first conclusion was that mankind is increasing too fast and food is going to give out. Second, in the event there is this conflict and that we can't all live, the fittest are going to survive. If you put the two together and think about it, what it means is if you have the better army, the better business, more power, and your people can conquer the others -- even to the point of genocide -- that's perfectly all right. Because they're going to die anyway and, because they died, they certainly weren't the fittest, we're the fittest. What it did was to begin to inculcate in the minds of these leaders, these top leaders and these extremely wealthy people, that there's nothing wrong with genocide. Furthermore, they had their own missionaries right along with them to show that all this is perfectly all right: this was the plan, this was the way the world was made.

It's startling to see what conclusions were drawn from the realization that the Earth is spherical, therefore finite; that it needed to be inventoried, that certain powers needed to control all of the property of Earth. As we progress through the years, we're talking about days that aren't too far behind us. In all the thirty to forty thousand years of mankind, we're only talking about that narrow little space between 1600 and 2000 -- 400 years. And since new ideas spread very slowly, the first 200 of those 400 years really don't count for much. Those were the years when they were exploring, finding the Earth they didn't even know existed, getting used to the fact that you could go to the west coast of California from England, and so on -- that there was a route, that you could make the trip. That took about 200 years.

By the time they got that organized, then they got themselves involved in the Napoleonic Wars of Europe, much of which had to do with this business of conquering Earth, inventorying Earth. And you're not too far from World War I, and you're not too far from World War II. In other words, what I'm saying is: this cycle is not over. We haven't finished the inventory of Earth, we haven't finished who owns what.

But we have defined the idea of property. Property now, right down to the last inch -- the middle of Tokyo, a square foot of ground is selling for thousands of dollars. There are sections of this that are quite interesting. I read in the newspaper not too long ago that some property in Africa had been taken from native groups and they decided to give some of it back. And the section of that property was called the Jesuit Square. As I recall what I read (and I wish I had the figures here), I think the Jesuit Square is about 15,000 square miles. In other words, as these missionaries moved ahead in this inventory process and just assumed ownership of this land, they were taking over so much land that 15,000 square miles was just a square. Like, what do we call a square mile? -- 640 acres is a square mile, a one-mile square, isn't it?

This figure is the same figure that was used when the Spanish East India Company began to go into what we now call New Mexico, Arizona, and Southern California. In the old land titles it still speaks of Jesuit Square. This was a formal application of the missionary role on into these so-called unexplored countries. Everything was from the point of view of Europe. The fact that there were hundreds of thousands of people living somewhere was not acknowledged. It was called "unexplored." They simply ignored the fact those people were there; it wasn't explored by British. Like the discovery of America. We keep saying Columbus discovered America -- and the British explorers came, and so on to the Pilgrims coming to America. My god, America was overrun with people! But the Europeans discovered America. That's part of the overwhelming significance of this discovery that the Earth was a sphere.

At present we are living in what might be called the apex of this big curve. It certainly isn't over. We're still operating under the principles of Haileybury College -- Malthus and Darwin -- even though both of them are ridiculous. It's been proved today that our ability to produce food is 70 times greater per farmer than it was in the time of Malthus. It's been proved that Darwin never did discover the origin of the species -- no scientist has ever described the origin of any species. But those two doctrines were implanted by the East India Company's mind-control techniques so thoroughly that we still believe them.

It was in 1862 that Lord Oliphant came back from his job as the ambassador to the Ottoman Empire in Turkey, imbued with the spirit that something happens to men's minds in seances. In England he then created the British Society of Psychic Research, which soon took over most of the higher positions in the British government. In fact Lord Balfour, for over 30 years, was either the head of the British Society of Psychic Research or one of his relatives or close associates was. And it's the American wing of the British Society of Psychic Research which created Stanford University and the University of Indiana among others. For instance, Leland Stanford, the great railroad man on the West Coast, claims that he was in a seance talking to his dead son when his dead son told him to create a major university on the West Coast, and there we have Stanford University.

That's something of a humorous little story until you put it in this context. That these enormously powerful leaders, stemming from the East India Company, got into this psychic research arena and even began to impress upon the society of the United States, South Africa -- other parts of the world -- their own beliefs in the power of seances and in the power of mind control.

So to wind this up with a little anecdote: the governor of the East India Company in Bombay, India, was a man named Elihu Yale -- Eli Yale. Yale heard that a small college in New England, specifically in Connecticut, was having trouble getting started. He donated something like $10,000 (which was a lot of money in those days) to help found the college. And we have Yale University (comparable to Harvard) as a result of a gift from the East India Company, from Yale in Bombay, India. In his offices in Bombay (which still exist), on the wall there is the flag of the British East India Company. That flag has seven red bars and six white bars. In the corner it has a blue square, and in that square (or rectangle) is the emblem of the East India Company.

When the Bostonians attacked the ship Dartmouth and threw the tea in Boston Harbor at the Boston Tea Party, they took the flag down off the Dartmouth. It was the East India flag with the red and white stripes and the blue rectangle. They saved it as a memento of that battle. When George Washington went to Boston to assume command of the armies of the rebellion against England, he asked Betsy Ross to take the emblem off the flag and to put stars in its place. All Betsy Ross did that night was not create a flag. She simply snipped out the East India emblem and put in 13 little white stars. And the American flag is the East India flag. So when you hear people of what you might call "ancestral backgrounds" in this country demanding that we pledge allegiance to the flag, you may sometimes wonder if in their seances they don't see the East India flag, instead of the American flag, as the driving force.

They certainly did in the case of Cecil Rhodes, who became the controller of all of the South African area, and a multimillionaire in his day. It was Cecil Rhodes who decided to send emissaries of his own to this country so that he could be sure that the teachings of the East India Company, and of Haileybury College, and of Malthus and Darwin, would be properly inculcated into the minds of Americans, by selecting Rhodes scholars year after year, and having them go to British colleges where they could then come back into our society and become leaders of the events.

All you have to do is look at the historical record to see that Cecil Rhodes's plans were carried out very well. Cecil Rhodes, again, was motivated by the same East India Company philosophy that since the world was a sphere, you had to get property. If you could get the property you would then own the world. And that is their driving force.

Ratcliffe: Pursuing one more step -- and wrapping this all up in the next hour -- your last discussions on the British East India trade company and their way of influencing thought exerted a central influence on the way people thought about things and continue to think about things.

Two Books: The End of Economic Man
and The Road To Teheran

We were talking about some books the other day and I'd like to touch on two that seem particularly relevant. One you mentioned is by Peter Drucker called The End of Economic Man, written in the early thirties but not published until 1938 or '39. Since then he has become synonymous with the idea of management and capitalistic economics. Could you talk a bit about that?

Prouty: This is very interesting because most of us know Peter Drucker as an advisor and consultant to the biggest businesses in this country. He's synonymous with big business, with free enterprise, with multinational corporations and he just has a new book out and the New York Times scrupulously reviews many of the books he has written and overlooks entirely his first book which is The End of Economic Man.

Peter Drucker I believe is an Austrian, schooled in Germany and Austria, who grew up in the years during the growth of the Nazi Party in Germany, and I believe -- I'm not absolutely sure -- but I believe his family was Jewish. During that era, as a student in their major universities, he began to put together his idea that this Nazism that was growing under Hitler would destroy forever economic man. And his family left Germany and Austria, as many did, and went to England where he published this book, The End of Economic Man.

His premise has been made by others as well, but I don't think any have stated it as clearly as he has: that what the Germans were doing was taking the German society of post World War I (when most people wanted no more war) and the Germany of the Weimar Republic -- reasonably democratic in terms of Germany anyway -- and this Nazism began to turn the German people into various classes of society most resembling a military structure, captains, majors, colonels, generals and so on. So that everything in Germany was being militarized -- boy scouts were militarized, girl scouts were militarized, everything was militarized, and it was all being done with the money and the approval of the very powerful and wealthy people.

He goes into this in great detail. I can't recommend the book highly enough. Everybody should read it because he not only says this is what destroyed Germany, but that it's replication in any other country, England or the United States, would destroy those countries. I think anyone who reads The End of Economic Man today is going to think Peter Drucker was writing about the last decade of the United States as though next year was going to be the beginning of American Nazism or the equal of it. The two things fit hand in glove, but his book was written in 1939 not 1989. Difference in years notwithstanding, no one should omit that book. It's most important and so many things we are doing today appear to be running along that same current. We have war on poverty, we have war in the streets, we have war against AIDS, we have battles of this, we have everybody carrying automatic weapons up and down the streets -- that's what he was talking about. So read the book.

Ratcliffe: Militarize even the war on drugs which seems to threaten so much of our --

Prouty: Everything is a war, not just a program to try to promote an anti-drug mind-set -- everything is a war, as though war was exactly the way we ought to organize druggists and policemen and school teachers as majors and colonels and generals. And the students ought to all wear uniforms. This is what it was all about but I shouldn't talk too much about this because Drucker says this so well I want you to read Drucker's words and not my copy of his words. He describes it best; it becomes frightening when you read the book, there is only one way to think about it.

Ratcliffe: The other book we discussed was something written by Foster Rhea Dulles, another one of the Dulles brothers.

Prouty: No, this is a mystery to me. I have a very good book about the Dulles family that speaks about everybody in the current Dulles family that we know of: John Foster, Allen Dulles, his sister Eleanor, their father and mother and her family and all that sort of thing. This man Foster Rhea Dulles is not mentioned anywhere and I have cross-referenced through every book I can locate, including Who's Who and Writers in America, and I don't find Foster Rhea Dulles. Even as a pseudonym, a nom de plume type of identity, I don't find that.

But the book is remarkable because it is entitled The Road To Teheran. It was written in either '45 or '46 and Teheran is the Teheran Conference of December '43. In this writer's mind he starts with American history back in the Revolutionary War, shows how closely Americans and Russians were related. For instance, John Quincy Adams was our ambassador, or at least our designate, to the court of Catherine the Great and Alexander back in Russia. They travelled to Leningrad, or Petrograd then, and their objectives were to open trade between United States and the Soviet Union and we did have an elaborate trade system. The shipping interests of Boston were widespread -- one of the most important trade routes they had was to the Soviet Union, or to then Russia, old Mother Russia.

Dulles follows this through in a very interesting section in the book regarding the fact that the Russians had moved across the Bering Straits into Alaska (only along the coast, they had no interest apparently in Alaska at that time), down the coast of Western Canada as it is now, and down into what is today California. On the coast of California you can still see old Russian buildings preserved in some of the Park areas. He points out that the Russians who had come to those places were doing exactly as Jacob Astor's people were: they were hunting for fur and they were becoming as wealthy in their area as Jacob Astor was here in the United States as a great fur trader. The fur they traded in was the sea otter.

Interestingly the Russians who went down the California coast went there by dog sled and walking, and their trade was carried out by the shipping firms all the way from Boston. The ships would travel from Boston to the California coast, pick up the sea otter skins by the boat load and move them into the markets, some in Asia and mostly in Europe. He puts in the book that in one ship load they would make between $300,000 and $400,000 profit. Of course three or four hundred thousand dollars in the 1700's is the same as tens of millions of dollars today.

The interesting point was that the Americans and the Russians were working in complete harmony. There was no contest between them. The Russians lived on the west coast, Americans lived and hunted on the west coast, and they were for all intents and purposes friendly.

The point here is that our history with the Russians has been friendly for years. He brings this history back into Civil War, when the Russians refused -- no first of all during the Revolutionary War when the Russians refused to help the British. They would not provide Cossacks (their cavalry) to help the British against the Americans. Which means they were friendly to America. In the Civil War, the same thing. They would not play a role. In fact, the Russians tried to provide equipment to American ships to support the Union forces in the Civil War. Then up to modern times he has some interesting views of our relationship with Russia initially during the Bolshevik revolution which was then overthrown when Lenin began to take power.

The views as he presents them as history don't exactly coincide with this strong Communist bias that we've had. But remember he writes this in the forties when the Soviets were our allies during the war. As he carries this up to the Teheran Conference he more or less draws the conclusion that the agreements at Teheran were natural agreements -- that America and Russia had more frequently been allies or friends or business associates than adversaries. And he leaves the book at 1944, the war ended in 1945, and we had the anti-communist brainwashing era in the late forties, but that's after his book.

So this is a very necessary book for people who want to understand the relationship between our two countries as we come into the present era and begin to understand each other more closely. It's not the equivalent of the book called The Great Conspiracy written by Alfred Kahn but it is as important. I think The Great Conspiracy in 1946, with a rousing introduction by Senator Pepper, is an even better explanation of American and Russian interests with an unusual understanding of the intrigues from England and Germany that were involved in the Bolshevik Revolution and the fighting after that, even to the days after World War I when we had American troops in Vladivostok and events like that and what it was all about.

If we don't read books like The Great Conspiracy or The Road to Teheran , it is very difficult to understand this whole era of anti-communism which was more or less impressed upon the American people. There was no evidence that this was really the state of affairs except it is the traditional situation that any group in power in any nation has to have an enemy. For reasons that are not clearly understood, immediately after World War II it was decided that we had to have an enemy and that communism was it. Since the enemy was communism Russia and China without any other definition, became the enemy. And we've been brainwashed since. That may be changing today or it may not be changing, but I think it is because we also realize that military-type war is probably outdated now on account of nuclear weapons and that warfare from here on will be economic warfare. It will be just as tough, it will kill just as many people, it will cost just as much money, but it will be economic warfare.

The Changing Nature of Warfare:
From a Military to an Economic Basis

Ratcliffe: A question occurred to me the other day regarding this sense of yours about the change of warfare. As you indicated, you feel the military industrial complexes' influence and pervasiveness will lessen as the new economic warfare intensifies. Particularly in the area of energy as it's currently going now, as well as in the area of food where you feel will become prevalent. What do you think will happen with respect to the organization currently in place that you define as the Secret Team that seems to operate in the industry of military production and trade.

Prouty: I think we have seen an absolutely perfect example of what we're talking about in what is called Arab oil embargo. In the decade leading up to 1973, the price of a barrel of oil that was more or less worldwide had been $1.70. If you wanted to buy a 100,000 barrels of oil you paid 100,000 times a $1.70. And you got the oil. At that price oil was profitable and the oil companies were making enormous profits. The producers like Saudi Arabia and Iraq and Iran and Russia were making profits with their oil. And then all of a sudden they decided they were going to increase the price of oil and by "they" I mean the High Cabal, the people in great money.

It's nothing but a money deal, its nothing but a war, a war like that fought in Vietnam -- it's for money, there's nothing else. We didn't gain a thing except we spent between $250 -- $500 billion dollars fighting a war in Vietnam.

And overnight, the price of oil went up. There was a battle between the Israelis and the Arabs. The story goes that the Arabs as a result of that war declared an embargo on a shipment of oil from the Middle East to the rest of the world and that made the shortage of gasoline in the streets and we could not get gasoline at our favorite gas pumps and we had to pay more and more and more.

We should look back at that carefully. The Arab-Israeli war was not conclusive. The Arabs gained on the first few days way into Israeli territory and then a couple of weeks later the Israelis came back and went quite a way into the Egyptian territory and then the war just ended. It was inconclusive. But all of a sudden the Arabs, according to the press, signalled an embargo on oil. Now that's the most ridiculous thing in the world because the only income these Arabs have is the sale of oil, and furthermore the oil that they produce comes from the ground all by itself under pressure from the earth. They don't have to pump it, they had no great big problem with supplying oil.

As a matter of fact I can show you copies of the Congressional Record in which oil experts from the Middle East reported that exactly at this time of the Arab oil embargo, the storage tanks at the Arab facilities whether it was Kuwait, or Iraq, or Saudi Arabia were overloaded and bursting with oil waiting for ships to come.

A few years later I was asked as a representative of American Railroad System to attend a conference in London at the Chartered Institute of Transport. Among the seminar groups that I met with there was one on petroleum transportation. A gentleman came into that room and lectured to only 8 of us who had come to that class -- I was very glad I went to it -- and one of the Englishmen in the room nudged me as the speaker was coming into the room and said, do you know this gentleman? I said no. He said, this man is a multi-billionaire ship owner.

It occurred to me and has since then, why would a multi-billionaire (in pounds by the way, more than dollars), want to come into a room with 8 people and lecture on petroleum transportation? Though of course a very good reason was that it was all being recorded and would be printed in a book later and so his words would become part of the record and he was very proud of what he had been doing.

What he told us was the same thing as these people reporting to the Congress: that there was no shortage of oil. That what happened was a very well planned system was applied through the tanker industry, and they arbitrarily and absolutely controlled the movement of oil by not picking it up, until the price was right.

Now in 1973, the Middle East produced and sold 15 billion dollars worth of oil. By 1980, the same Middle East produced and sold 300 billion dollars worth of oil. The quantity of oil they produced was not much different. The cost of producing it was not much different. But the sale price was 15 billion dollars in '73 and 7 years later it was 300 billion dollars. I think anyone can understand that for $285 billion profit it's worth doing almost anything in this world today. And that accounts for the Arab oil embargo, the shortage at the fuel pumps, and the fact that we Americans are paying $1.30 a gallon for gas when we used to pay 29 cents a gallon for gas.

This kind of control is the new form of warfare. Now petroleum is not an absolute necessity of life. Energy is, and petroleum is a major factor in energy, but it is close enough to being a necessity so that this shortage of oil, this control of oil, really hurt people all over the world. And especially in the leading nations like ours because overnight they increased one of the major expenses we have in the cost of running an automobile. So this kind of war has as its battlefield the streets of America, the streets of Paris, the streets of London, where our automobiles are; where our trains run; where our airplanes fly.

It is a completely different battle for enormous profits and the control that those profits produce. Because once the price of oil goes up, the price of coal goes up, the price of natural gas goes up, the price of food goes up, and everything else. The cost of trucking becomes higher, and most of our food is moved by trucks. So that when the price of oil went up from 30 cents a gallon up to $1.50 a gallon, all the rest of the price levels went up on the tide of oil. All escalated with the price of oil. And the cost of just plain living, day by day, escalated with the price of oil, and that price of oil was controlled by superpowers -- superpowers control those industries. The catalytic force in that was something as simple as the shipping industry. There is no way to get around the shipping industry.

This was also being explained at these meetings in London. That traditionally, oil from Iraq, the old oil fields of Kirkuk and Mosul, had travelled through a huge system of pipelines that went from Iraq, through Jordan, and to the port of Haifa in what was then Palestine. When the country of Israel was formed, one of the first things the Israelis did, for reasons that are not recorded, is close the pipeline terminus at Haifa. And Iraqi oil could not leave Iraq for the Mediterranean coast and for Europe. Most Iraqi oil is sold and consumed in Europe.

There are 8 other pipelines that extend from Iraq to the Mediterranean. They go to the Port of Sidon in Lebanon, and other ports northward all the way up to Syrian ports. We have seen those pipelines made dry by the Israeli attack on Lebanon. And we wonder why Israel should even bother to attack Lebanon, why Syria should be attacking Lebanon, and why poor old neutral Lebanon, which is nothing but the market garden basket of Europe, is brought to its knees by a perpetual war until we realize that war causes the pipelines from the Middle East to Europe to go dry. This forces the oil onto the ships and under the controls that have been devised by the shipping cartels. This is a fact of life. This is happening right now today.

The fighting in Lebanon is to keep the pipelines dry. The fighting between the Arabs and the Israelis is to keep the oil pipelines dry. Its not religious, it's not political, the Arabs have no choice. The Israelis receive 2-1/2 -- 3 billion dollars aid money from us a year, which is perhaps payment for their assistance. The Egyptians receive 2-1/2 -- 3 billion dollars from us -- the most foreign aid money we pay to any countries in the world, are to Israel and to Egypt. How does Egypt earn its money? It meters the Suez canal to oil and no oil goes through the Suez canal. So the movement of oil causes the tide of prices to rise all over the world, and part of the device is to keep the pipelines of the Middle East dry.

During the Iraq-Iran war, the Iraqis even attempted to build a pipeline through Turkey. They were forced so much to export oil, that they were exporting, I believe, almost a million barrels of oil a day by truck through Turkey. Now, that's not profitable. That adds a terrible cost to oil. They couldn't get it down the river through Abadan because their Persian Gulf ports had been destroyed. The Iranians couldn't get oil out of Iran, their ports had been destroyed. They were bargaining with Turkey to run a pipeline across Turkey out of Iran, and again billions of dollars being spent on that pipeline, which raises the price of oil beyond its economic levels. So the war between Iraq and Iran was simply to create a shortage of oil from those two countries which would create a higher price because of the lesser amount of oil available around the world.

It's this kind of economic control of a major commodity, oil, that is the new type of warfare between nations on earth and we are going to see more of this because it produces such enormous profits. When the Middle East was making $300 billion in 1980 on the oil it exported, that represented about 40% of the world's total, meaning the rest of the world was getting maybe $400 billion for se

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