Commonwealth of LibertyBoard

International Association Football Federation | Fédération internationale de football association

FIFA World Cup 1966 | Qualification

MATCH DAY 19

-----------------------

AFC/OFC Round 2

Group A:

Korea 2-0 Saudi Arabia
Japan 5-3 Indonesia

Group B:

Arab Federation 1-3 Australia
Iran 0-1 India

-----------------------

CAF Round 2

Group A:

Sudan 3-2 Tunisia
Morocco 0-0 Ghana

Group B:

South Africa 0-1 United Arab Republic
Zaire 3-2 Ivory Coast

-----------------------

CONCACAF/CONMEBOL

Costa Rica 0-0 Canada
United States 1-1 Dominican Republic
Andes 3-0 El Salvador
Guatemala 3-1 Nicaragua
Honduras 2-1 Panama
Cuba 2-1 Haiti
Colombia 0-2 Brazil
Mexico 0-1 Argentina

SHOWA 41 | JANUARY 1966
御苑の煎茶


SENCHA IN THE IMPERIAL GARDEN

 T H E   C H R Y S A N T H E M U M ¹ 

 オー・スネイル 富士山に登ろう でも、ゆっくり、ゆっくり 

O Snail; Climb Mount Fuji But slowly, slowly!

TOKYO, IMPERIAL PALACE — NOON
_{THE LAND OF THE RISING SUN, Nippon-Nihon}

| Wasting no time, Prime Minister EISAKU SATO, surrounded by three security guards, quickly walked towards the car. Reason: SATO was going to a meeting with the Emperor. But there is something different about this, normally meetings are held in a private room in the Imperial Palace where Emperor HIROHITO meets with Japan’s head of government, now the meeting will be held in the beautiful, tree-lined Imperial Garden. Japanese green tea will be served at the meeting, as well as some traditional Japanese dishes. It was Empress NAGAKO who suggested making the Imperial Garden a place where the Emperor and Prime Minister could have private meetings. One of the palace officials interrupted the Emperor’s reading to inform him of the Prime Minister’s arrival. HIROHITO got up, put the book back on the shelf, and went to the garden. Alongside his bodyguards, SATO was informed that the meeting location had been moved to the garden, so alone, SATO walked to the garden. Standing in front of the Emperor, Sato bowed. |

| HIROHITO, _{THE EMPEROR} | “Where would you like to start, Mr. Prime Minister? Internal or foreign affairs?”
どこから始めていきたいですか、総理。 内政か外交か？

| EISAKU SATO, _{THE PRIME MINISTER} | “Foreign affairs, Your Majesty.”
外交問題、陛下。

| HIROHITO, _{THE EMPEROR} | “The headlines were full of praise for the progress made in improving relations with Korea. You must be proud, right?”
見出しは韓国との関係改善における進展を称賛するものでいっぱいだった。 きっと誇りに思いますよね？

| While the two were talking, the palace maids appeared carrying a tray containing tea and some snacks. The Emperor sat down on a chair and the Prime Minister did the same. |

| EISAKU SATO, _{THE PRIME MINISTER} | “Yes, but despite our progress in Korea, some Korean politicians were harshly against it.”
はい、しかし、韓国における我々の進歩にもかかわらず、一部の韓国の政治家はこれに厳しく反対しました。

| HIROHITO, _{THE EMPEROR} | “Well, I hope they don’t harm Korea-Japan relations.”
まあ、日韓関係に悪影響が及ばないことを祈ります。

| EISAKU SATO, _{THE PRIME MINISTER} | “Park Chung-hee has shown himself to be a reliable ally of Japan, it would be a shame if these anti-Japanese politicians took power in the future.”
朴正煕は日本にとって信頼できる同盟国であることを示してきたが、こうした反日政治家が将来政権を握ったら残念だ。

| Before continuing the conversation, the Emperor took a sip of Japanese green tea (the most popular tea in Japan: Sencha). After taking a sip of tea, the Prime Minister changed the topic of conversation to internal affairs. |

| EISAKU SATO, _{THE PRIME MINISTER} | “As Your Majesty knows, Japan’s economy has grown rapidly in recent years and, to address this, the government has imposed measures to reduce this growth.”
陛下もご承知のとおり、日本経済は近年急速に成長しており、これに対処するために政府はこの成長を抑制する措置を講じてきました。

| HIROHITO, _{THE EMPEROR} | “Oh yes, I’ve heard about that, it caused discomfort among businesspeople.”
そうそう、それについては聞いたことがありますが、ビジネスマンの間で不快感を引き起こしました。

| EISAKU SATO, _{THE PRIME MINISTER} | “Sacrifices must be made if we want to achieve our goals.”
目標を達成したいなら、犠牲を払わなければなりません。

| HIROHITO, _{THE EMPEROR} | “I agree, Mr. Prime Minister.”
私も同感です、総理。

| They both took a brief break to continue drinking tea and then continued to talk. A few minutes later the Emperor and the Prime Minister got up from their seats and decided to take a walk through the Imperial garden. SATO was enchanted by the beauty of the garden and even heard the birds singing. At the end of the meeting, SATO bowed respectfully to the Emperor and left the garden. Reason for the Prime Minister’s rush: meeting with union leaders. |

_{¹ A Series: THE CHRYSANTHEMUM, Even before the engagement was announced, Empress Nagako was firmly opposed to the marriage of her son, Imperial Prince Akihito, to the daughter of a wealthy industrialist, Michiko Shōda.}

^{PREVIOUS CHAPTERS —
NOV ‘65 | Prince Aya of Japan
APR ‘59 | The Royal Wedding
OCT ‘58 | The Empress and the Future Empress}

International Association Football Federation | Fédération internationale de football association

FIFA World Cup 1966 | Qualification

MATCH DAY 21

-----------------------

AFC/OFC Round 2

Group A:

Kurdistan 0-2 Japan
Saudi Arabia 2-0 Indonesia

Group B:

China PR 2-2 Iran
Australia 4-0 India

-----------------------

CAF Round 2

Group A:

Nigeria 2-0 Morocco
Tunisia 2-3 Ghana

Group B:

Rif 0-1 Zaire
United Arab Republic 2-0 Ivory Coast

-----------------------

CONCACAF/CONMEBOL

Andes 2-1 Panama
Haiti 1-3 El Salvador
United States 1-1 Nicaragua
Cuba 4-0 Dominican Republic
Guatemala 1-2 Canada
Honduras 1-1 Brazil
Costa Rica 0-2 Argentina
Colombia 1-0 Mexico

THE LION OF AFRICA I

| "If we are to be victorious in our pursuit of democracy and liberalism, we must do everything and anything to pursue it. The tactics of morality and humanity should be ripped up and the rules of war, terror and destruction shall rain upon Nigeria for years to come. Our pursuit of democracy shall be no lesser than the communist's pursuit of revolution". |
_{Nnamdi Azikiwe, Deputy Prime Minister and Second In Command of the NDF}

___________________

The Lion of Africa faced a grave prospect. The NDF's most recent advances northwards had succeeded and were growing ever closer towards a potential victory. The long and winding path to victory and democracy in Nigeria seemed in touching distance to the senior members of the NDF. But to the foot soldiers of the NRF of NDF, the civilians in cities were caught up in the onslaught and farming communities entered starvation. Victory over the NRF, Northern Militia, Boko Haram and inevitably, the Republic of Biafra, was to be a long and brutal road, and it was about to get a lot harder. Following the ousting of long-standing Chairman Ijeawele and the replacement of a 15-man military council, comprised of both military advisors and generals. But the leading figure of the council, named the President of the War Council, quickly began to consolidate the NRF's position. Centralising its military command to the single city of Abuja, replacing the semi-autonomous Regional Military Command Centres (RMCC) with a singular United Command Centre, a balancing of supply, which while reducing supplies to military posts, could restore a broken civilian economy. While this plan would likely see more success in the long term, he would now look over to the rival PLAN. Very much a more de-centralised grouping of militant communes, he sought to discuss a partnership between the New NRF and the PLAN (People's Liberation Army of Nigeria), led by Azubuike Chinaza, who foremen was third-in-command of the NRF under the much more united and stable leadership of Chairman Ijeawele. Discussions would go onto December, and on the 7th of December, the 1965 Liberation Agreement was signed between Johnson Aguiyi-Ironsi and General Azubuike Chinaza of the PLAN, with the creation of a unified United Liberation Movement of Nigeria (ULMN).

Elsewhere in Nigeria, the NDF's successful offensive and consolidation of its newly-acquired territory had been a great success, and General Balewa now sites his cause towards the City of Abuja, the capital of the now ULMN, and while change doesn't happen overnight, with the merge of the PLAN and NRF remaining in a grey zone of centralisation, it seemed like the perfect chance for further gains. But economic stagnation and political infighting, the two main problems which faced not only the NDF but most factions aside from the Northern Nationalist Front. The NDF first had seen little growth in the civilian economy, and with supply drying up, it seemed almost like the NDF was heading in the same economic direction as the communists northwards. However, perhaps the biggest problem was political infighting, as the group was made up predominantly of two factions - nationalists and liberals. The nationalists, which had emerged during Nigerian Independence under the leadership of Nnamdi Azikiwe and General Balewa, had shifted to become a Northern Nationalist group and were seen as the least pragmatic of the two. The liberals were very much shifted into becoming liked by most of the leadership but were politically the weakest in terms of strength in regional governance and historically very young. Sprung out of more secular nationalism in 1962 and 1963, it was quickly taken over by General Balewa, with the clear example of the working partnership between the successionist Republic of Biafra, opposed by the Northern Nationalists. Infighting not only means decsions over military offensives and political structures are delayed, but forced comprise, but never helps both rivalling agendas, even in the place of war and conflict.

But a growing problem across Nigeria was Boko Haram. A minor faction within the complex concession of the Nigerian Civil War, they had quickly become a movement of Islamic fundamentalism within the region of the Borno State. Ordinally having only been popular among small pockets of the region, Boko Haram, following the establishment of a Chad-backed puppet state, had become much more popular, mostly amongst disillusioned tribal groups or militant communes who had previously either been a local group or under the umbrella group of the United Northern Nationalist Front (UUNF) and Boko Haram's membership and military capitalists had doubled in a matter of a few days, now prepped to challenge the establishment of the very state. While the group lack the numbers or the political support to mount a serious challenge to the Chad Army, Boko Haram has shifted to a much more aggressive style of guerrilla warfare, looking to plague, disrupt and delay the new puppet's state continuation.

The civil war rages. Anarchy remains victorious. Bloodshed continues. Has anything really changed?

International Association Football Federation | Fédération internationale de football association

FIFA World Cup 1966 | Qualification

MATCH DAY 23

-----------------------

Group A:

Korea 1-1 Indonesia
Kurdistan 0-0 Saudi Arabia

Group B:

Arab Federation 2-2 India
China PR 0-2 Australia

-----------------------

CAF Round 2

Group A:

Sudan 1-0 Ghana
Nigeria 2-2 Tunisia

Group B:

South Africa 1-1 Ivory Coast
Rif 0-3 United Arab Republic

-----------------------

CONCACAF/CONMEBOL

Domincan Republic 0-2 Nicaragua
Cuba 0-0 El Salvador
Haiti 1-1 Panama
United States 2-3 Canada
Andes 3-4 Brazil
Guatemala 0-4 Argentina
Honduras 0-1 Mexico
Costa Rica 0-1 Colombia

★ ＵＮＩＴＥＤ ＡＲＡＢ ＲＥＰＵＢＬＩＣ ★

"Within the Arab circle there is a role wandering aimlessly in search of a hero. 
For some reason it seems to me that this role is beckoning to us-to move, to 
take up its lines, put on its costumes and give it life"

_________________

_{ＷＩＮＤＳ ＯＦ ＣＨＡＮＧＥ:}
_{ᴀ ꜱᴇʀɪᴇꜱ ᴇxᴘʟᴏʀɪɴɢ ᴛʜᴇ ᴄʜᴀɴɢɪɴɢ ʟɪʙʏᴀ}

_{^{JAN 1966 - LIBYAN ARAB REPUBLIC}}

The Arab General Petroleum Corporation has been slowly gaining more and more hidden influence in the Libyan region, posters and signs of the company, ranging from advertisements to job listings, have been slowly taking over spaces in Tripoli, Benghazi, Tobruk, and others. New schools have sprung up that are owned by subsidiaries of ArabCo, worker housing has been built by the company to ensure worker comfort, direct and indirect jobs has allowed for social mobility for hundreds of Libyans in all fields of the industry. ArabCo has become not only just an important company, but an engine of dynamic growth.

A large part of this can be attributed to the support and backing of the Ente Nazionale Idrocarburi, or more commonly referred to as Eni, who owns 50% of the companies shares and has provided most of the expertise and competence needed to exploit Libya's oil to its best potential. Indeed, Eni's founder Enrico Mattei and Gamal Abdel Nasser have even begun to share a personal friendship which has characterized the growth of Eni's special relationship with the United Arab Republic's government, allowing it a monopoly and even political support in an area that is commonly hostile to outsiders.

It is here near Khoms that this special relationship has reached one of its zenith, as a landmark deal saw a large area of land sold out for the Eni company for real estate development. This land would be used for the construction of an ambitious resort city project, aimed at providing employment for the local Italian population, provide housing and resorts for Italian workers temporary settling in Libya, and also be a general resort city that would bring in economic benefits for the company. A joint consortium led by ArabCo, the Arab Contractors (a large real estate and construction behemoth, which is also the second largest state-owned company after ArabCo) and other local partners pledged to invest over 3.2 million dollars to achieving this ambitious project.

Villas, and homes built with modernity and style in mind, resorts that take advantage of the quiet and warm Mediterranean water, hotels that provide the best accommodation and experience, all planned in this monument to cooperation built on the foundations of this special relationship between the two entities.

On the construction site, the portrait of President Nasser is visible, however this portrait is not of him alone, but him with Enrico Mattei in their first ever meeting, an ode to the almost decade of positive development and growth that they have built together. The black gold has fueled many of the United Arab Republic's ambitions for independence, it has allowed her to develop its energy needs without relying on foreign imports, it has financed its attempts to provide the people of the U.A.R the best quality of life possible, and it has fueled the revolutionary fever which has been used to inspire revolutions in Yemen and other Arab states.

The fate of oil and the United Arab Republic, ArabCo and Eni, Nasser and Mattei, are all tied together, when one prospers, all prospers, and it is for this reason that both consider each other incredibly important.

Inonu’s Choice and Ataturk’s Successor

Winter was the worst time of year. Even on the shores of Izmir in the Mediterranean, the cold air didn’t let up. Regardless, Ismet Inonu enjoyed returning home. After months of being in the capital, he had made it a habit to catch a plane from the capital to Izmir. It was a way for him to unwind and relax, something he had needed more and more as the years passed. At 81, Inonu felt like he had lived a lifetime and the constant pain in his joints and the endless cold was a constant reminder. He was no longer the energetic and idealistic right-hand man of Mustafa Kemal. Now, he was the crumbling pillar keeping everything Ataturk had built up.

Announcing his retirement from CHP leadership had felt like lifting a weight off his shoulders. Like he had been holding the gates keeping back a great flood, only to open them once the water currents had receded. Still, even when he didn’t regret his decision he still questioned if it had been the right choice. Inonu was well-aware of the factions present within the CHP. Ultranationalists, who sought to a tight grip on the state and recover Turkey’s lost lands, Centrists who supported the current course, and the Reformists who wished to overhaul Kemalism and the Republic itself. All factions respected him and followed his leadership, but he knew the moment he stepped away or, the moment his time on this Earth was up, there would be war.

Many within the CHP were willing to tear the country apart if it meant implementing true Kemalism. The Grey Wolves, in particular, were the most concerning group. A ‘secret society’ of the most extreme elements of the Ultranationalist faction. Even the hardheaded nationalist Alparslan Turkes kept his distance from the group. It was a certainty Turkey would be led astray and perhaps even destroyed if the Grey Wolves were to take control of the state apparatus. The defeat in Cyprus would pale in comparison to the destruction that would be wrought upon the nation.

Inonu intended to use his influence one more time. To steer the country in the right direction. Whomever was appointed leader of the CHP would become the next President and lead Turkey into an uncertain future. One Inonu feared, especially after recent events.

Leaving the balcony after taking some fresh air, Inonu returned to his office. He sat down, his hips protesting before they finally settled once he had gotten comfortable. Opening a drawer at the top of the desk, he pulled out a little notebook he had begun to use over the past decade or two. He had begun to forget things. Events, tasks, itineraries, even the days of the week were difficult to keep track of. Thankfully, Inonu had made a habit of writing a lot of this down. Of marking a calendar whenever the days passed. And on occasion, accept the help of a younger aide.

‘Inonu’s Little Red Book’, some people called it, no doubt in reference to the handheld book which contained excerpts of Mao Zedong’s writings. He carried it everywhere and often wrote important details in it. Perhaps the most detailed sections were those on individuals Inonu believed would make a worthy successor. The issue of succession and party leadership had been something he had been thinking about for years. Preparing for his inevitable retirement, Inonu wanted to make sure that whoever followed him as Leader of the CHP wouldn’t lead the country to ruin. However he had also taken into account their influence within the party. Even his own influence wouldn’t be enough to support a nobody.

The first, and Inonu’s preferred candidate, was the leader of the Reformist faction, Bülent Ecevit. An adherent to ‘left-Kemalism’, he shared many of Inonu’s socialist and left-wing sympathies. Ecevit had been inspired greatly by the social democratic movements of Europe and hoped to emulate these in Turkey. His foreign policy was also of Inonu’s preference. Caution, strict adherence to NATO and relative neutrality when it came to the control of the Bosphorus Strait.

Overall, Ecevit seemed like the most obvious candidate, but Inonu had doubts. For one, Ecevit shared power within the faction with one Türkân Akyol, who led a subsection of the Reformists considered even more radical. Should Ecevit rise to the Presidency, there was no doubt in Inonu’s mind that Akyol would become Prime Minister. And second, should that occur, the CHP could splinter with the Centrists and Ultranationalists forming their own parties in protest. A possible nightmare scenario that would undoubtedly plunge the country into chaos.

His second choice was one who appeared to be the best option from a pragmatic standpoint. Nihat Erim, the Speaker of the Grand National Assembly, was the longtime leader of the Centrists after Celal Bayar became Prime Minister. A pragmatist and loyal Kemalist, Erim didn’t lean neither left nor right and took decisions based on the best interests of the Turkish Republic. On paper, anyway. Erim was a shrewd and quiet man who would likely continue Inonu’s own policies for the sake of national stability. He also had the influence to maintain that stability, having deep connections within the party structure and numerous favors owed within the Assembly. Erim was perhaps the best leader Turkey could have at a moment like this. Of course, there were downsides.

Erim was a rigid and committed Centrist, unyieldingly supporting the status quo would not only reject demands from the Ultranationalists and the Reformists but also seek some sort of middle ground which would not only empower other parties, but also push the Centrists one way or the other. While Inonu was certain that Erim would be able to maintain stability, it wouldn’t last long. Eventually, someone would have to give and he feared it would only result in the exact thing he was trying to prevent. Inonu was also concerned about Erim’s close confidant Adnan Menderes. Menderes was an ambitious man who had risen to power by appealing to conservative Centrists or ‘right-Kemalists’. He was their leader in all but name and Inonu knew that he would likely succeed Erim. Should Menderes reach the Presidency, Inonu was certain that the Reformists would flee the CHP, crippling the party’s support in the cities and suburbs.

Lastly, Inonu considered the leader of the Ultranationalist faction, Alparslan Türkeş. A former military man and committed nationalist, Turkes was the face of the CHP’s right-wing. He was a staunch and strict believer of Kemal’s teachings and also sought the ‘restoration of the Turkish Republic’ by expanding the nation’s influence and military power, with the ultimate goal of retaking some of Turkey’s lost territories. While Turkes shares the irredentist ambitions of the Grey Wolves, he has also shown patience and logic in his dealings. Turkes was no brute, and that was perhaps for the best.

Still, while reasonable compared to extremists there are still major risks. Turkes will definitely lead Turkey on a path to war with Greece while at the same time alienating the Reformists through his uncompromising view of Kemalism. While some Centrists will definitely remain, the CHP will nevertheless be weakened assuming Turkes remains stubborn in his beliefs. Furthermore, Inonu also feared the influence of the military upon Turkes. While constitutionally the defenders of the Republic, their power had been substantially diminished by Inonu himself who saw them as a destabilizing force that would hinder Turkey rather than help it… or protect its values.

Inonu spent many hours reading and pondering. This was a choice that couldn’t be made lightly and couldn’t be retracted. He still had time to think. Consider. Perhaps even sleep on it. Whatever Inonu decided, whoever he chose would lead Turkey into the future whether for good or for ill. Amid all the uncertainty, Inonu knew one thing for certain: He wouldn’t live to see the repercussions of his choice.

International Association Football Federation | Fédération internationale de football association

FIFA World Cup 1966 | Qualification

MATCH DAY 25-27

-----------------------

CONCACAF/CONEMBOL

M-25

Cuba 3-0 Nicaragua
El Salvador 0-1 Panama
Dominican Republic 0-4 Canada
Haiti 4-3 Brazil
United States 0-1 Argentina
Andes 2-0 Mexico
Guatemala 2-0 Colombia
Honduras 1-1 Costa Rica

M-26

Costa Rica 0-0 Guatemala
Honduras 2-1 Cuba
Colombia 1-1 Andes
Mexico 2-0 United States
Argentina 4-0 Haiti
Brazil 2-1 Dominican Republic
Canada 1-0 El Salvador
Panama 0-2 Nicaragua

M-27

El Salvador 0-4 Brazil
Nicaragua 0-0 Canada
Cuba 0-1 Panama
Dominican Republic 3-2 Argentina
Haiti 0-1 Mexico
United States 0-2 Colombia
Andes 3-0 Costa Rica
Guatemala 1-2 Honduras

_{3 JANUARY | 1966}

_{SINAI DESERT}

 ꜱᴛʀɪᴋᴇ ꜱᴍᴀʀᴛ, ɴᴏᴛ ʜᴀʀᴅ  

_{| The Palestinian Liberation Army, the official armed wing of the Palestinian Liberation Front, in reality mainly a loose collection of paramilitary groups associated with certain factions, had been up until this point ineffective and prone to large amounts of losses compared to the damage it deals on the enemy. Thus, the transformation of the PLA into an actual fighting force, capable of achieving the goals of the Palestinian revolution. However the reason is not purely in a military sense, a strong fighting force allows the P.L.F to retain its independence from Arab states, and politically protect the leadership from attempts of foreign meddling. |}

_{| To begin the process of restructuring and training, a three-man council has been formed, led by Yasser Arafat, and containing Khalil al-Wazir and Abu Ali Mustafa. All of the three man have had extensive military experience, and were the most senior amongst the militarist leadership of the P.L.F. To reform the forces, it was decided that the process will be divided into two. One is ideological training, to ensure that the PLA is not merely an army but an ideologically motivated, highly loyal, and principled guerilla force. Second was the actual military training and reform, focused on improving the capabilities of the PLA. |}

_{| For the former, ideological training was used to reenforce loyalty and discipline. Drawing on many sources, such as Mao's Little Red Book, Che Guavara's writings, and others. A highly nationalist, leftist, and militarist ideology emerged, emphasizing the connection to the Palestinian land and peasantry, and the importance of freeing the Palestinian people from exploitation in all of its forms, including the exploitation of capital. Short books and writings by the propaganda division of the P.L.F was distributed to hundreds of fighters, and lessons were devised specifically to instill this ideology in the combatants. |}

_{| The military side proved to be the more difficult equation. Egyptian advisors had trained the P.L.F on actual fighting and military tactics, however the U.A.R was based on a soviet, conventional warfare tactics, something that wouldn't suite the PLA. For this issue, the PLA instead turned towards studying anti-apartheid activists in Africa, and the warfare components of Mao Zedong's writings. Both of whom valuable lessons were learned in dealing with a technologically advanced, and larger enemy. |}

_{| Another thing that was emphasized was anti-tank warfare. It has become clear that tanks represent some of Israel's biggest strengths, and recent acquisition of soviet anti-tank weaponry have proven effective, if underutilized, with only one armoured casualty so far during skirmishes. With this in mind, a new importance was placed on these weapons, with hopes that it will pay off during actual warfare. |}

_{| On the political sphere, the three commanders tasked with reforming the military forces have gained increased prestige and political influence, though not enough to unseat Habash yet. Nonetheless, it seems that the PLA will play an important role in years to come. |}

T H E   S L O V E N E   R E P U B L I C   •   S L O V E N S K A   R E P U B L I K A

FIRE, SALTWATER AND PEROXIDE: 1965’S ADVANCEMENTS AND SETBACKS IN SLOVENIAN INDUSTRY

^{MANUFACTURING UNDER A PINK SKY
DECEMBER 1965}

Several striking scenes from Slovenian industry graced the front pages of national publications in 1965: flustered arms magnate Janež Krajnc dodging the press after a fire consumed a small Zlatorog manufacturing plant; cheery tweed-suited executives cutting the ribbons of new chemical and metallurgical plants; sharply dressed businessmen bearing pins entwining the Egyptian and Slovenian flags; and lab-workers in flowing white coats pointing to scientific instruments and indicators. For the observer, it was an eventful year indeed.

Janež Krajnc was in the papers for good reason. Unbeknownst to the general public, an embittered Zairean government—taking advantage of a Sloveno-Zairean plant in the country, Irena Struna—had set fire to a Zlatorog arms-manufacturing facility in the Carniolian town of Tržič after she used her connections to personally uncover evidence that unmarked weapons were being built there and finalized for export to less-than-scrupulous buyers around the world. To not damage Sloveno-Zairean ties by revealing their intelligence’s presence, the Zaireans opted to burn the plant covertly rather than alert the Republic’s government to it, planting evidence of Yugoslavian infiltration. Given the recent Yugoslavian sabotage of the minor dam at Uvala Ribnjak, this apparent truth was accepted with little investigation and a routine note of condemnation was delivered to a Yugoslavian border post. As for Zlatorog itself—their production of ghost weapons would be stalled considerably in 1966, and Krajnc would no doubt slip into paranoia. Fortunately for him, however, stockpiles of finished unmarked weapons were stored in a disparate warehouse in neighboring Pristava and were being prepared for a forthcoming contract.

Numbering among the new plants opened in Slovenia in 1965 were a zinc smelter established in Celje and a lead smelter built just north of Sveti Vid (formerly Šentvid), a suburb of Ljubljana. A Pregelj chemical facility at Trbovlje which had been planned to begin operations in the autumn of 1965 delayed its opening to the summer 1966. Though the numbers could not match the post-war boom, economic expansion continued apace, fueled by baby-boom population increases in adults now coming of age. However, it was not only blue-collar pools that grew. The University of Ljubljana recorded a startling jump in admittances in the mid-1960s, as did the Universities of Gradec, Trst and Mažadan: good signals for an economy increasingly reliant on educated engineers and other scientifically inclined college graduates. A point of pride in that regard came when Slovenia—drifting considerably eastward in comparison to its NATO counterparts—saw success in its collaboration with the United Arab Republic on the HA-300. Preparations were now optimistically in progress for a third prototype to take flight in January.

With respect to exclusively scientific developments, 1965 saw two key breakthroughs emerge in the chemical field. Slovenia’s chemical industry—both pharmaceutical and industrial—was its most uniquely robust sector, with several past governments leveraging it to create a unique economic role for Slovenia in a competitive European and global economy. After constructing rockets fueled by hydrogen peroxide and developing a chemo-electric fuel cell also requiring the substance, further strides were sought and finally made in its stabilization for long-term storage; the Slovenian Chemistry Institute claimed in the summer of 1965 to have synthesized a mixture, the details of which were not disclosed, that could stabilize hydrogen peroxide longer than any existing competitor. They also announced the discovery of useful refinements to a novel method of producing elemental chlorine through the use of hydrogen peroxide in extracting the element from salt water. Altogether, it was an optimistic year for a country that had even staked Marshall Plan funds on the production of hydrogen peroxide.

Thus closed 1965 in Slovenian industry. The Slovenian Chemical Industry Association saw out the year with a winter banquet that featured a rare attendance of the recently re-elected President Božidar Jakac, who usually shunned business functions. Here, though, the President could scarcely doubt the productive power of Slovenia’s economically patriotic chemical magnates and the good that their endeavors foretokened for the security of Slovenia’s workers.

JANUARY 1966
_{Keynesian Giant}

 E C O N O M I C S ¹

ACROSS Paramountica — BOSWASH CORRIDOR
_{Centeralized along Boston to New York to Washington}

United States | Keynesian Giant | JAN '66

by The United States of Paramountica

⌂ Pax Americana

	E C O N O M I C S Paramountica — COUNTRYWIDE

JANUARY 1966 The Washingtonian Keynespeak. When JOHN MAYNARD KEYNES wrote those words in 1935's the General Theory of Employment, Interest, and Money — he was concluding his most influential book and felt he had established a theory that would move and change the affairs of men. Almost two decades after his passing, his beliefs continue to have a significant impact on free markets around the globe, particularly in the richest and most expansionist country, the United States. Keynesian concepts have been employed by the officials in Washington who design the country's economic policies, not only to prevent the destructive cycles of the prewar era but also to achieve amazingly stable prices and phenomenal economic growth. They expertly implemented Keynes's theories in 1965, along with several of their own inventions, to help the country experience its fifth and best year of the largest, longest-lasting, and most widely dispersed prosperity in recorded history — The United States grew faster than any other large country, expanding by 5% in real terms. The predictions for 1965, even the most sanguine ones, proved to be too low. The gross national product increased by $14 billion beyond the President's economists' projections, from $628 billion to $672 billion. The other new records were for capital spending (16%), auto manufacturing (22%), steel output (6%), personal income (7%), and corporate profits (21%). Viewing the United States as having somehow unlocked the key to continuous, stable, noninflationary growth, officials from other nations on both sides of the Iron Curtain made overt attempts to imitate its achievements. In essence, the economic managers in Washington reached these heights by adhering to the basic thesis of Keynes: the contemporary capitalist system can be made to operate at peak efficiency through government involvement and influence, rather than automatically functioning at that level. Keynes was the first to provide a compelling argument for the government's right and obligation to employ its authority to raise output, wages, and employment. Furthermore, he maintained that the government may accomplish this without impairing liberty or suppressing rivalry. He said that it may accomplish measured prosperity through the manipulation of three key instruments: budgetary, credit, and tax policy. Their application would increase private investment, expenditure, and output. When KEYNES initially started promoting his beliefs, a lot of people thought they were strange or even subversive, and KEYNES was just a left-wing mischievous. Currently, KEYNES and his theories are so generally accepted that they serve as both the benchmark for economic management in Washington and the new orthodoxy in academic circles, despite the fact that they still cause anxiety in some quarters. They have caused the government to become more involved in the economy of the country than it has ever been during a period of overall calm. "We can't prevent every little wiggle in the economic cycle, but we can now prevent a major slide.” — CHARLES L. SCHULTZE, White House /Director of Budget Naturally, a slip is not what the U.S. In 1965, the government's economic managers were concerned because they were following a very expansionist course of action. They implemented a second phase of a two-phase income tax cut, freeing up $11.5 billion for consumer spending and $3 billion for corporate investment. They also implemented a long-overdue cut in excise taxes, which will save $1.5 billion this year and an additional $1.5 billion in the year that starts on January 1. They increased total federal spending to a record high of $121 billion and ran a deficit of more than $5 billion, leveraging the Keynesian theory that an economy is likely to flourish best when the government pumps in more money than it takes out. At the conclusion of the year, Chairman William McChesney Martin of the Federal Reserve Board, who is proudly independent, led through an increase in interest rates, adhering to the traditional anti-inflationary prescription. However, in the meantime, the Federal Reserve Board kept money cheaper and easier than in any other big nation. Keynesian public programs are generally successful because the private sector of the economy drives their implementation. Businesses were encouraged to grow by the government, but individual entrepreneurs choose whether, when, and where to do so. Millions of regular Americans made the crucial decisions over how and how much to spend, despite Washington providing a stimulus for consumers to spend. Despite all of its benefits from Lord Keynes' theories, the American economy remains the most private and free-enterprising in the world. KEYNES would undoubtedly prefer it to remain that way if he were still living. The men who practice what Carlyle called "the dismal science" have gained new prominence and luster as a result of the recent successes of Keynes's theories — Economists have left their ivory towers and are now firmly positioned at the elbow of nearly every significant figure in government and business, where they are increasingly expected to predict, plan, and make decisions. In Washington, activist economists like GARDNER ACKLEY, ARTHUR OKUN, and OTTO ECKSTEIN — all members of the President's Council of Economic Advisers—as well as the former chairman Walter Heller—as well as Paul Samuelson of M.I.T., Yale's JAMES TOBIN, and SEYMOUR HARRIS of the University of California, San Diego (UCSD) — have brought Keynes' theories into the White House — Initially, Keynesianism was embraced by U.S. economists, and later on, the public and business community as well. Not only is Keynesianism effective, but Lyndon Johnson's ability to make it appealing has won over businessmen who had previously opposed government intervention in the economy. They have accepted the notion that government intervention is necessary to prevent recessions and inflation, and they no longer believe that deficit spending is immoral. Perhaps most importantly, they no longer believe that the government will ever fully pay off its debt, any more than General Motors or IBM find it prudent to settle their long-term debts; rather than expecting payment, creditors would prefer to continue collecting interest. ACKLEY and the other council members will have to provide President JOHNSON with a firm economic forecast for the coming year, as well as advice on what policies to pursue. Their choices will be especially important because the U.S. economy is now entering a new phase. Production is pushing the country's capacity to the breaking point, and the war in Vietnam is driving up federal spending and demand. The challenge facing economists is to find a delicate balance between stimulating growth and averting crippling inflation. In doing so, they will be heavily influenced by the legacy of KEYNES. As a young science, only two centuries old, economics was addressed in its second half by KEYNES himself, who was more successful than his predecessors in seeing the field through to the end. Great theorists before him had attempted to take a broad view of economic forces, but they lacked the statistical tools of the 20th century to do the job, and they tended to concentrate on certain specializations: ADAM SMITH on the marketplace, MALTHUS on population, RICARDO on rent and land, MARX on labor and wages. These specializations are now called "microeconomics"; KEYNES was the precursor of what is now known as “macroeconomics"— from the Greek makros, for large or extended — and he concluded that the best way to look at the economy was to measure all the different forces tugging at it, including production and price.

Though the full bloom of Keynes's gospel has only lately blossomed, a school of fervent apostles has been preaching it in the United States for more than a generation; the first great Keynesian teacher, Alvin Hansen of Harvard, taught it to hundreds of economists, many of whom hold prominent positions today; Hansen's brightest pupil was Paul Samuelson, who went on to write a Keynesian-angled college textbook on economics that has sold two million copies and influenced the minds of count less educators and learners. Although KEYNES was first disliked by FRANKLIN ROOSEVELT— “I didn't understand one word that man was saying," the president sniffed after KEYNES lectured at the White House in 1934 — some of ROOSEVELT’s economists eventually started using Keynesian language and reasoning to justify massive deficits; during World War II, Washington planners formulated their policies of deficit spending using Keynesian ideas — Surprisingly, it was DWIGHT EISENHOWER's not-so-Keynesian economists who most effectively demonstrated the efficacy of Keynes's antirecession prescriptions; to fight the slumps of 1953–54 and 1957–58, they turned to prodigious spending and huge deficits. Congress adopted the Keynesian course in 1946 when it passed the Employment Act, establishing Government responsibility to achieve ‘maximum employment, production and purchasing power.’ The act also created the Council of Economic Advisers, which for the first time brought professional economic thinking into close and constant contact with the President . . . Nevertheless, Keynesianism experienced its greatest breakthrough under JOHN F. KENNEDY, who, as ARTHUR SCHLESINGER "was unquestionably the first Keynesian President." KENNEDY's economists, under the direction of Chief Economic Adviser WALTER HELLER, oversaw the emergence of the New Economics as a workable policy and set out to add a new dimension to Keynesianism, using his theories as a basis for both correcting the 1960 recession, which arrived prematurely only two years after the 1957–1958 recession, and stimulating an expanding economy to even faster growth. Kennedy was intrigued by the "growth gap" theory, initially presented to him by Yale Economist ARTHUR OKUN — now a member of the Council of Economic Advisers — who contended that even though the U.S. in particular, he advocated for tax reductions, a move that KEYNES had supported as early as 1933. The Kennedy Administration liberalized depreciation allowances and offered businessmen a 7% tax kickback on purchases of new equipment to stimulate capital investment. KENNEDY also ran on a platform of reducing the overall tax rate to encourage more investment and personal consumption, calling that idea "straight Keynes and Heller." Revolving around John Mayard Keynes. After being persuaded by the Keynesian economists surrounding him, Lyndon JOHNSON rushed the tax cut through Congress, despite his initial concerns about the wisdom of large deficits and the need for it. The quick success of the income-tax cuts prompted Congress to try a variant this year, which is the reduction of excise taxes on items like cars, jewelry, and furs — — In 1965, JOHNSON vigorously wielded the wage-price guide-lines" to hold wages and prices down. He also threatened to dump the government's commodity stockpiles from producers of aluminum, copper, and wheat, forcing them to back down from price hikes. Today, JOHNSON is not only practicing Keynesian economics, but is pursuing policies of pressure and persuasion that far exceed anything KEYNES could have imagined. Finally, JOHNSON battled the country's persistent balance-of-payments deficit with the so-called "voluntary" controls on spending and lending abroad. Since these policies primarily restrict capital movements, wages, and prices in certain sectors of the economy while leaving others unrestricted, some Keynesians argue that they contravene Keynes's theory. Additionally, albeit not entirely with conviction—business is, after all, booming—and the government is, on top of that, a huge customer with unrestricted retaliatory powers—businessmen grumble about what they refer to as "government by guidelines" or "the managed economy." Many other countries are moving away from strict central controls over their economy and toward the more laissez-faire American system, while the United States has been embracing the idea of increasing government participation within the confines of private sector. The ruling Laubor Party in Great Britain GB has become almost entirely capitalistic and abandoned any idea of nationalizing industry this year. The Socialists in New Provenance have also done this for a long time in an attempt, to unseat the laissez-faire-thinking Christian Democrats.

In ’65, traditionally Socialist Norden elected a conservative government for the first time in thirty years — At this moment, the United States is as close as it has ever been in peacetime to achieving Keynes's beloved aim of full employment of its resources. In ’65, the unemployment rate dropped from 4.8% to 4.2%, an eight-year low. Industry sectors including shipbuilding, construction, and aerospace are starting to feel the effects of a labor shortage, especially among trained workers. At a ten-year high of 91% of capacity, manufacturers are working, but automobiles, aluminum, and several other fundamental industries are just scraping by at 100%. Contrary to common opinion, industrialists dislike running so high because, as many businesses have recently been forced to do, it requires them to start up some of their older, less efficient machines. The effects of this quick expansion are starting to emerge in the economy. In ’65, labor expenditures increased more quickly than productivity for the first time in five years: 4.2% vs. 2.5%. The year before saw a 1.8% increase in consumer prices and a 1.3% increase in wholesale prices—the first increase of any type since 1959. The country's impressive track record of price stability is already in jeopardy because of this. At the current productivity level, the economy cannot maintain its current growth rate without significant price pressure — The Vietnam War will be the primary element influencing 1966's economic policy. If there isn't a sudden ceasefire, defense spending will increase by at least $7 billion, placing a heavy burden on the country's productive potential and raising the threat of inflation — Vietnam and the inflationary danger present Washington's economic planners with an immediate dilemma: should they pursue greater stability or greater growth? In order to lower unemployment to 3%, Labor Secretary WILLARD WIRTZ contends that the government should keep promoting economic growth even at the cost of modest inflation. The advisers to Treasury Secretary HENRY FOWLERcontend just as forcefully that in order to control inflation and restore balance to the country's international payments, the government should tighten up on credit and spending policies — GARDNER ACKLEY, the president's senior economic strategist, is a quiet, capable, and Keynesian guy whose advice will mean most to The PRESIDENT and who will be making the critical decisions in the coming weeks. The United States can afford to increase its overall federal spending by $8.5 billion without significantly raising inflationary pressure, as prosperity will provide the government an additional $8.5 billion in tax receipts in the upcoming fiscal year. The economists can wield their other Keynesian weapons to combat inflation if expenditure balloons much higher. Despite emphasizing stimulation over restraint, KEYNES also emphasized that his theories could be reversed to restore equilibrium to an overextended economy. "It should be made entirely clear that KEYNES is a two-way street. In many ways we're entering a more fascinating era than the one I faced. Essentially the job is to maintain stability without resorting to obnoxious controls as we did in World War II and Korea.” — WALTER HELLER, White House Economist The PRESIDENT's experts would suggest one or more restrictive measures if demand heats up too much, most likely in this order: domestic spending reductions, tighter monetary policy, higher income tax withholding rates (from 14% to 20%), and finally, temporary tax hikes. General and deflationary controls on pricing, salaries, profits, materials, mortgages, and installment credit are the steps that businessmen fear the most, and they would only be implemented as a last choice in extreme cases. For the primary reason that defense spending is unlikely to account for more than 8.5% of the GNP as opposed to 13% during the Korean War, The PRESIDENT will almost certainly not turn to controls . . . Due to this year's wise policy pursuits by the government and business, the problem will be easier to handle next year. The Labor Department estimates that the rapacious capital spending of businessmen — they have spent $190 billion on new machinery and factories over the last five years — will pay off in 1966 with a 3% increase in productivity. This, together with the fact that the Medicare plan will increase social security taxes by $5.5 billion year as of January 1, will help to slow down inflation. According to government experts, wholesale prices will rise by 3% and consumer prices by roughly 2.5%. These increases are not expected to be severe enough to call for drastic corrective action — Government and non-government economists alike are far more optimistic now than they were a year ago. Not only is the economy operating at about peak velocity, but there are also few weak points and no significant excesses. Orders are rising faster than production, wages are rising faster than prices, and corporate profits are now rising faster than the stock market — despite the Dow-Jones average having jumped more than 400 points since mid-62 and closing at an all-time high of 966 last week — In 1966, businesspeople intend to raise capital spending by 15%; steel and automakers anticipate exceeding this year's production records. ACKLEY and his associates predict that the GDP will increase by a further 5% in real terms in 1966, reaching $715 billion, maybe even more. The fact that the U.S. economy is improving is more significant than smashing records. Under Lyndon Johnson's profit-driven administration, government planners have learned how critical it is to support private enterprise investment in order to generate demand, jobs, and money. The PRESIDENT is aware that the United States' ascent to the moon, the Vietnam War, and his Great Society initiatives all depend on a robust economy — In order to achieve that goal, he speaks with hundreds of businesspeople on a daily basis and welcomes many of them to the Oval Room to hear their thoughts, more than any other President since Herbert Hoover. The United States has a government that is simultaneously committed to growth, pro-business, and Keynesian economic principles under the JOHNSON Administration — — If there are any economic issues facing the country, they are related to high employment, high growth, and high hopes. Entering what seems to be the sixth year in a row of economic growth, the United States' economic experts cheerfully acknowledge that they have nearly reached the edge of their expertise.

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_{An outlook from the start of '66 on '65 — The predictions for 1965, even the most sanguine ones, proved to be too low. The gross national product increased by $14 billion beyond the President's economists' projections, from $628 billion to $672 billion — In essence, the economic managers in Washington reached these heights by adhering to the basic thesis of Keynes: the contemporary capitalist system can be made to operate at peak efficiency through government involvement and influence, rather than automatically functioning at that level. Keynes was the first to provide a compelling argument for the government's right and obligation to employ its authority to raise output, wages, and employment.}
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_{¹ ECONOMICS, all matters and manner related to the American economy.}