Free trade in goods was encour-aged under a system of fixed exchange rates anchored by the USdollar’s convertibility into gold at a fixed price.

To ensure domestic peace and tranquillity, somesort of class compromise between capital and labour had to beconstructed. The thinking at the time is perhaps best representedby an influential text by two eminent social scientists, Robert Dahland Charles Lindblom, published in 1953. Both capitalism andcommunism in their raw forms had failed, they argued. The onlyway ahead was to construct the right blend of state, market, anddemocratic institutions to guarantee peace, inclusion, well-being,and stability.

The policies of importsubstitution (fostering national industries by subsidies or tariffprotections) that had dominated Latin American attempts at eco-nomic development had fallen into disrepute, particularly in Chile,where they had never worked that well.

What the US evidentlysought to impose by main force on Iraq was a state apparatuswhose fundamental mission was to facilitate conditions for profit-able capital accumulation on the part of both domestic and foreigncapital. I call this kind of state apparatus a neoliberal state.

Thelabour market, on the other hand, was to be strictly regulated.Strikes were effectively forbidden in key sectors and the right tounionize restricted.

Only oil wasexempt (presumably because of its special status as revenue pro-ducer to pay for the war and its geopolitical significance).

To what destination, then, are the Iraqi peopleexpected to ride the horse of freedom donated to them by force ofarms?The Bush administration’s answer to this question was spelledout on 19 September 2003, when Paul Bremer, head of the Coali-tion Provisional Authority, promulgated four orders that included‘the full privatization of public enterprises, full ownership rightsby foreign firms of Iraqi businesses, full repatriation of foreignprofits . . . the opening of Iraq’s banks to foreign control, nationaltreatment for foreign companies and . . . the elimination of nearlyall trade barriers’.

The process of neoliberalization has, however, entailed much‘creative destruction’, not only of prior institutional frameworksand powers (even challenging traditional forms of state sover-eignty)

Neoliberalism is in the first instance a theory of political eco-nomic practices that proposes that human well-being can best beadvanced by liberating individual entrepreneurial freedoms andskills within an institutional framework characterized by strongprivate property rights, free markets, and free trade. The role ofthe state is to create and preserve an institutional frameworkappropriate to such practices. The state has to guarantee, forexample, the quality and integrity of money. It must also set upthose military, defence, police, and legal structures and functionsrequired to secure private property rights and to guarantee, byforce if need be, the proper functioning of markets. Furthermore,if markets do not exist (in areas such as land, water, education,health care, social security, or environmental pollution) then theymust be created, by state action if necessary. But beyond thesetasks the state should not venture. State interventions in markets(once created) must be kept to a bare minimum because, accordingto the theory, the state cannot possibly possess enough informationto second-guess market signals (prices) and because powerfulinterest groups will inevitably distort and bias state interventions(particularly in democracies) for their own benefit.

Governor Ross Sterling of Texas would have understood the situation perfectly. There were key differences, however, between the American invasion of Iraq and Sterling's 1931 takeover of the oilfields of East Texas. Sterling's operation came cheap: just 1,200 National Guardsmen were needed to control the region's oilfields.

In 2015, ISIL was estimated to have an annual budget of more than US$1 billion and a force of more than 30,000 fighters.