Yes, the War Is a Grab for Oil
By Nat Weinstein
The whole world watches in disbelief as the Bush administration drives hell-bent toward the conquest of Iraq. The Democrats and Republicans, liberals and conservativesincluding the irresponsible right-wing radicals on the lunatic fringe of the Republican Party that are now in charge of the White Housedeny that oil is what theyre after. However, the whole world knows that Iraqi oil stands at the center of their war aims.
But lest there be any doubt about who must take responsibility for this war, it is essential to point out that the Bush regimes mad course toward war could not have gotten as far as it has without the full support of the American ruling capitalist class and its two political parties, Democrats and Republicans.
The smoking-gun-proof for this statement of fact is the failure of a single capitalist politician or news media editor to demand that the Constitutional requirement that only Congress can declare war be enforced forthwith! Moreover, it is also in the very best tradition of American democracy that the most consistent advocates of genuine democracy have historically advocated the right of the people to vote on war!
Thats why millions of people around the worldincluding across the length and breadth of the United Stateswill vote with their feet on the weekend of February 15-16 by marching against war in San Francisco and New York and in many other of Americas towns and cities.
Whats driving capitalist America to war
However, there is much more involved in the U.S. bipartisan governments mad rush to war on Iraq than the enormous increase in profits to be reaped for corporate America from the seizure of the worlds second largest proven reserves of oil.
Iraqs oil, of course, is a big prize. It holds more than 112 billion barrels of oil and its production-costs are amongst the worlds lowest. Iraq also holds 110 trillion cubic feet of natural gas, which will also come under Washingtons control.
But thats not enough to justify the enormous risks a war with Iraq entailsespecially in the face of massive opposition at home and abroad. Theres more, much more, driving U.S. foreign policy today than their grab for Iraq and Middle Eastern oil.
The most important factor powering the rush to war in a matter of weeks is the impending global economic collapse. It is a desperate gamble by Washington to forestall that collapse.
Any reasonably informed citizen knows that once in control of Iraqi oil, the U.S. would be in position to increase or decrease oil production and thus displace Saudi Arabia, which now plays a strategic role in regulating the production of oil in the region. The fact that the Saudi rulers have had such a strategic control over the worlds supply of oil, and therefore, more than a little control over its price, has long irked American capitalism and is its central motive for war.
Bush and company have decided to take over that strategic function and to put its ambitious plans into action before its too late to stop a global economic collapse. The fact is that while it will take time to actually resuscitate the sinking global economy, they hope that the glowing prospects of another economic spurt forward like the boom of the 1990s will be enough to get big capital investing again and a slow revival sent on its way.
The January 21 New York Times makes the point about Saudi Arabias strategic control over this essential commodity in an editorial titled, The Axis of Oil:
Like it or not, the Saudis retain as much leverage as they ever had over global energy markets. Their share of current output may have declined, but the Persian Gulf area still claims two-thirds of the worlds known reserves. And because it commands the bulk of the worlds spare capacity in the near term, Saudi Arabia acts as a central banker when it comes to oil, determining the markets liquidity.
The characterization of the Saudi role in the pricing of oil as that of a central banker, has more significance than meets the eye. It points to another factor, maybe the most decisive of all, that helps explain what is driving Washington toward the conquest of Iraq before the summer begins. That factor is the expectation that in addition to already being the worlds central banker in charge of the worlds access to capital, Wall Street would also be in charge of the worlds access to what has earned the nickname, Black Gold!
Obviously, the Saudi ruling class does not take kindly to the massive U.S.-led military force that is now being put in place for the conquest of Iraq. Thats partly because they fear the wrath of their own people, and partly because they know that the physical presence of a powerful American military force in the heart of the Middle East will put them even further under the thumb of their chief imperialist overlord in Washington and Wall Street.
The Saudi ruling class also knows that U.S. troops fully intend to stay on in Saudi Arabia, as well as in those countries that the U.S. has leaned on to provide air bases, barracks for troops that will be deployed against Iraq, and depots for the arms, ammunition and other materiel invading troops must be supplied with once the assault begins.
Whatever Washingtons real objectives might be, it is not human rights, freedom and democracy, as it so loudly proclaims. In the tinderbox that is the Middle East, the U.S. must do more than merely conquer Iraq. Washington will have to maintain a massive military force in the region to suppress the inevitable resistance of potentially revolutionary proportions of the Middle Easts outraged, super-exploited and oppressed masses.
Thats why an American general has already been named to govern Iraq until the Americans decide the country is ready to govern itselfwhich has been estimated to be anywhere from a couple of years to the indefinite future. And even if an indigenous government is installed, whenever that might be, it will be a government fashioned, financed and controlled by Washingtonand without an iota of popular support.
Consequently, such a puppet government would be totally incapable of defending itself from the righteous anger and opposition of the people in Iraq together with the entire Middle Easts near-revolutionary masses. And though no people is happy under the dictatorship of an indigenous tyrant like Saddam Hussein, rule by a foreign imperialist military dictatorship has always been considered by an oppressed people to be the greater evilby far.
In fact, by making Saddam Hussein the target of the colonial worlds foremost and most widely recognized evildoer, American imperialism has elevated the authority of Hussein, who the masses see as justly resisting the outrageous eleven-year persecution, murder and mayhem executed primarily by American imperialism on Iraq. A matter perhaps of greatest concern to the Arab masses is the primary role played by the United States 53 years ago in carving the settler-state of Zionist Israel out of Palestine. The Arab world also knows that it is Washington that has backed to the hilt with all the force at its disposal Israels 53-year-long savaging of the Palestinian people.
But why the rush to war, and in a matter of weeks? In addition to the economy seemingly at the brink of collapse, it has been widely reported that the Pentagon fears getting bogged down long enough for the hot desert weather to wear down its troops and prolong the war. Its widely recognized, too, that Washington is gambling that Iraqi resistance will be swiftly crushed and, they uneasily hope, with few American casualties.
Washington fears that if it doesnt attack early enough to finish off Iraqi resistance in a matter of months, the antiwar movement, already the most massive in history, will continue its phenomenal growth with unpredictable consequences. Moreover, something new has been added that can elevate the antiwar movement to a still higher level.
First, the four separate coalitions that have been organizing against the war here in the San Francisco Bay Area, Bay Area United Against War, International A.N.S.W.E.R, Not In Our Name and United for Peace and Justice have formed a joint committee with representatives from each coalition to organize the February 16 March and Rally under the slogan, Stop the War on Iraq! This is a giant step toward unifying all segments of the antiwar movement nationally and internationally.
Second, and no less important, while the rank and file of the American labor movement and the working class more generally has been fully represented among those protesting against the U.S. march to war from the outset, they have done so mainly as individuals or participants in antiwar groups and coalitions.
But in the last few months, the relatively few union leaders on the lower echelons of the AFL-CIO officialdom, who had endorsed the antiwar movement from the outset, have begun recruiting official endorsement by sister unions and have begun to organize against the war on a far higher level. Representatives of the national coalition of labor unions, U.S. Labor Against the War (USLAW), formed recently at a meeting in Chicago, have also joined a coalition building the Sunday, February 16 Stop the War on Iraq march in San Francisco.
Bay Area leaders of USLAW are organizing a massive labor contingent to march under their own official union banners in the February 16 Action. Already projected to be as much as twice the size of the more than 200,000 that marched against the war in this city on January 18, the intervention of a large official labor contingent will add a new and potentially more powerful dimension to the American antiwar movement.
The American ruling class, however, is in a trap of its own making. President Bushs repeated declarations of intent to go it alone if the UN fails to approve the U.S. attack leaves little room for retreat. Moreover, his insistence that he cannot wait for the UN inspectors to complete their search for weapons of mass destruction seems to have made an assault on Iraq within weeks inevitableunless, of course, Saddam Hussein surrenders.
Another factor worrying Washington is that the major powers dragging their feet against war on Iraq, include China, Russia, France and Germanythe first three being permanent members of the Security Council and thus each with veto power along with the United States and the United Kingdom. The four holdouts have other reasonsnot highly moral ones, to be surefor holding the United States back.
Another factor driving the war
Another factor driving Bush and company to war flows from the real meaning of Bushs declaration to the joint session of the two houses of Congress soon after September 11. I refer to his characterization of the War on Terrorism as being the first world war of the 21st Century. We are far from alone in interpreting the real meaning of that declaration of war: That it is only the first in an unending series of wars of conquest and repression everywhere.
Iraqi General Amir al-Saudi said essentially the same thingthough based on the outlook of an opponent of imperialism, but supporter of capitalismin an interview with the New York Times on January 25th. Iraq, he said, was being used as an example to other countries not to oppose the United States, and that he feared war was imminent no matter what we do. They have an agenda, which takes priority over anything elsehegemony.
The next day, the Times commented on the matter in an editorial titled, The Race to War. This editorial, by the nations newspaper of record, is the most authoritative voice of Wall Street and Washingtons position in critical support of Bushs foreign policy.
Mr. Bush has enough support among American voters to undertake the kind of clean, quickly successful military action his father directed in the Persian Gulf war of 1991. But every poll, every anecdotal reading of the American mood makes it clear that he has not sold the public on anything difficult or drawn out. Iraq is a large and complex Arab nation of 24 million people in the heart of the Middle East. Americas overwhelming advantage in firepower might not prevent a prolonged period of street-to-street fighting in Baghdad that would be murderous to Americans and Iraqis alike. A desperate Iraq might try to attack Israel, disable Saudi and Kuwaiti oil fields or even destroy its own oil industry before it fell into American hands. It might fire whatever chemical and biological weapons it has against American troops. These are risks that could be well worth taking, but the American public has not signed on for them. This nation should never begin a fight it is not prepared to carry out to the bitter end, no matter what the cost. [Emphasis added.]
The serious reader should stop and take notice that the Times is not only the voice of Wall Street and Washington it also speakson this question, at leastfor the Democratic Party, along with all those who call for time for the UN inspectors to do their work. All of whom, it must be noted, support every important rationalization advanced by the White House justifying its war on Iraq.
Why has the Bush administration, backed to the hilt by a near-unanimous Congress, decided to play such a risky and deadly game in Iraq in the face of the most massive global antiwar movement in historyincluding right here in the heart and citadel of world imperialism?
They cannot possibly be blind to the fact that the worlds working classes in the worlds imperialist centerswho are the only force that has the power to change the worldare making the connection between the aim of the U.S. to trade blood for oil and its negative impact on the living standards of those of us who must work for a living. Neither can U.S. rulers fail to see the process of radicalization unfolding among American workers and their unions, as well as among the people as a whole. The economic sacrifices the ruling classes in America and the world have been forced to impose on working people everywhere can only accelerate and deepen the process of mass radicalization. And, to be sure, as the Times editors have noted, the American public has not yet bought and, we would add, is unlikely to ever buy the war on Iraq and its terrible consequences.
The Bush administration pretends to be unfazed by the January 18th mass antiwar mobilizations in Washington and San Francisco that saw hundreds of thousands of marchers in each city on that day. In fact, each of these two demonstrations matched, if not surpassed, the largest antiwar demonstrations of the Vietnam War. Neither was there such a proliferation of simultaneous antiwar demonstrations in cities and towns across the country, then, as those that accompanied the actions in Washington and San Francisco last month. And the largest of those Vietnam antiwar demonstrations had not occurred until tens of thousands of Americas sons had been shipped home from that poor, suffering country in body bags.
The unique role of oil in the world today
But lets take a closer look at the role of oil in the world today to try to understand what Bush and company hope to gain from their seemingly mad rush to crush Iraq.
Oil is a commodity unlike any other. Its more than a source of energy that is more plentiful, accessible and efficacious than any other. The by-products of oil after the various fuels are extracted also are an indispensable raw material for the production of a multiplicity of products ranging from plastics, to dyes to chemicals to hundreds of other commodities.
The characterization by some of oil as black gold refers to its universal acceptance, most importantly between nations, by virtue of its liquidity (the ability or ease with which assets can be converted to cash).
To be sure, the quest for ample sources of this extraordinarily versatile raw material is meant primarily as a source of profits that goes far beyond any other raw material or fuel to power everything from cars, trucks, trains or planesand most important, turning the wheels of most of the worlds industries. Thus, in the world as it is today, oil is perhaps the closest thing to a universal equivalent like gold, silver and copper. That too has more significance than meets the eye.
Control over oil can also serve to sustain the tendency of the dollar against losing a major portion of its value that is an inevitable result of the Himalayan-sized, and rapidly growing American public and private debt. The only things sustaining the dollars value are the generalized fall in the values of the worlds currencies and the still widespread belief among the worlds capitalists that the U.S. economy is still the safest place to park their surplus capital.
But as we shall see, in a moment, this confidence in the stability of the worlds largest economy, can evaporate overnight. Already, the values of the worlds most powerful corporations arerapidly collapsing.
The latest casualty is multi-billionaire Ted Turners AOL Time Warner empire. It was reported on January 30 that the corporation was writing down its value to the tune of $45 billion. And that the new write-downs follow a previous $54 billion write-down taken last year for a total reduction of its assets, since AOLs fairly recent merger with Time Warner, of nearly $100 billion.
Why France and Germany say no, and why they may still say yes to war
Being on the inside track with Washington helps explain why British Prime Minister Tony Blair, undoubtedly assured of a major share in the spoils of war with Iraq, is today Americas closest ally and why France and Germanyfearful they can be excluded from any share of the bootyare not.
In fact, whether or not these and other reluctant U.S. allies will actually decide against the war depends on two conditions: the force of their peoples opposition to war. And whether or not they can negotiate a credible guarantee from Washington that they will not be excluded from access to a U.S. monopoly over Middle East oil.
War and its economic context, a crisis that wont stop
It should be obvious by now that the three-year-long crisis of overproduction that has been relentlessly constricting the global capitalist economy is driving U.S. domestic and foreign policy. The U.S. ruling class, and President George W. Bushwho is more its figurehead than its leaderknows that it must act swiftly to put in place what it believes are the preconditions for a solution of the crisis before global capitalism sinks below the event horizon of an economic black hole, from which an escape is impossible.
The latest evidence that the ruling circles on Wall Street and in Washington know that they are on the brink of disaster again comes from the horses mouth, as it were, in an article that appeared in the January 11 New York Times.
Jeffrey Garten, who is the dean of the Yale School of Management, authored a report, titled, A Worldwide Economic Stimulus Plan.
Gartens credentials go beyond his academic background. He is described as having served in economic and foreign policy positions in the Ford, Carter and Clinton administrations. He starts by setting capitalist Americas drive toward a war on Iraqand untold other nations and peoples in the years immediately aheadin the context of the deepening economic crisis:
The Bush administration is leaving no doubt that it intends to use the United States enormous military power, to make the world a safer place. But to succeed, Washington must develop a more robust global economic policy as well. Unless our military confrontations lead to something much better for the millions of people who will be hurt, we will have won the wars and lost the peace .
The world economy is in trouble: corporate investment and trade are slowing, factories are producing more than they can sell, and deflation is threatening many regions. The potential economic engines besides the United StatesGermany and Japanare stagnating. Big emerging markets, from Indonesia to Brazil, are in deep trouble.
Americas economy is the worlds most powerful by far, accounting for almost a third of global demand these days, but even if we grow at a healthy rate this year, the United States by itself cannot create a sustainable international economic recovery. Our own revival depends on the health of our companies, and that in turn depends in part on expanding foreign markets. [Emphasis added.]
Garten proceeds to list a range of problems that require sacrifices by Americas imperialist allies. Without these sacrifices, he argues, the global economy cannot be stabilized.
None of the steps he encourages Europe and Japan to take, however, are new. They include what amounts to a demand that the European Union match U.S. deficit spending, lower its relatively high interest rates, and most of all, since inflation on the continent is not nearly the threat that stagflation1 is, the European Union must end its growth-constricting policies.
Although not stated, what is meant by growth-constricting policies includes demands on Washingtons allies to impose so-called supply-side inflationary measures such as reducing taxes on the rich, raising the already high rate of taxation on workers and, last but not least, eliminate restrictive labor controls over wages, hours and overly generous social benefits. In other words, follow the example of the decades-long bipartisan U.S. domestic economic policy, which includes as its axis, the reduction of wages, hours, and benefits of workers wherever the long tentacles of American big business reaches.
Garten urges European and Japanese capitalists to raise the rate of profit in their countries by intensifying the rate of exploitation of their workers and otherwise reducing the costs of productionas has been the practice here in the United States since at least the beginning of the 1980s.
Butneed it be saidit is not a matter of European capitalisms will to comply with such demands. Rather it is the latters inability so far, to force such a sharp reduction on European workers living standards. That is, European, Japanese and South Korean capitalists have tried but have met with powerful strikes and mass mobilizations in the streets of Western Europe and Asia.
Moreover, even the British workers, whose militant traditions were dealt a heavy blow by Conservative Prime Minister Margaret Thatchers2 successful anti-labor offensive during her reign as Britains head of state from 1979 to 1990, have begun to fight back with strikes and a growing left-wing opposition to Labor Prime Minister Tony Blairs pro-capitalist economic and political policy and support to the U.S. war on Iraq.
The many-sided nature of capitalist economic crises
The Yale professor touches on many other sides of the complex character of the developing economic crisis. He points to another way in which the war can be won and the peace, lost. He refers to the acute need to reconstruct Iraq after the war is won. He estimates the cost as somewhere between $120 billion over 10 years, in the case of a very short war, to $1.2 trillion after a prolonged conflict
Garten goes on to suggest the need for something like the Marshall Plan, which financed the reconstruction of post-war Europe. He also says given the budget deficit at home, this will be no easy task. He says that the costs for such a grand scheme of rebuilding countries bombed out by American military forces will necessarily come either from foreign aid already promised to others, or from domestic programs.
Without saying so in so many words, Garten leaves little doubt about who among the American people will bear the main brunt of the burden of financing such nation building since taxing the rich and other such measures adversely affecting profits would serve to negate the material benefits to the U.S. capitalist economy of a conquest over Iraq.
He goes on to indicate a few other examples of how a measure intended to fix one side of the complex maze of conflicting forces of capitalist economy, inevitably reacts adversely upon one or another of its sides. He writes, for instance:
Another crisis could involve the dollar, which was down 15 percent against the euro in 2002. If our trade deficit continues to soar and foreigners get nervous, they could dump their dollars. It would help if Washington could persuade the European Central Bank to lower its interest rateswhich it should do anyway to stimulate economic growth on the continentand make the euro less attractive as an alternative to the dollar. Beyond that, Washington, Brussels and Tokyo will have to be prepared to coordinate purchases of the dollar if it goes into free fall.
As we can see, its possible, in theory, to spur a stagnant economy by lowering interest rates, making the cost of capital cheaper; and/or putting more cash into circulation, in an effort to artificially absorb unsold commodities and spur the halting economy.
But such measures amount to borrowing from Peter to pay Paul and cannot go on indefinitely. Sooner or later, in a monetary system no longer based on gold and silverbut rather on paper money whose values are measured only against each other, a free fall in the values of currencies is an inevitable and unstoppable result of this means of economic stabilization.
1 Stagflation, an economic condition marked by a continuing inflation together with a decline in business activity and an increase in unemployment.
2 Thatcher is described on Time magazines website as a champion of free minds and markets, [who] helped topple the welfare state and make the world safer for capitalism.