Socialist Viewpoint

In Washington, the official concealment of the oil factor reveals its importance to U.S. rulers who back an attack on Iraq. The U.S. economy, now wobbling after booming last decade, in part needs more and cheaper oil for growth to resume. Under a market economy, growth is to profits what air is to people—essential. Enter Iraq. The nation of 23 million human beings has the world’s second-largest estimated crude oil reserves. Moreover, boosting Iraq’s oil production could also weaken OPEC’s power. It’s safe to assume that this, too, is a goal of U.S. rulers. Saudi Arabia is OPEC’s leading oil producer. Currently, some in Washington are less than thrilled with Saudi elites. For U.S. rulers, a tighter grip over Persian Gulf oil production could also serve to beat down the German-led European Union and Japan as the global economy stagnates. Likewise on the home front in a time of economic stagnation, a U.S. war against Iraq looms as a hammer to pound the U.S. working class into further political obedience.

In the U.S. newspaper of record, one pundit has a solution to U.S.-centered tensions in the Persian Gulf, the region that supplies the world with every fifth barrel of oil. “Ousting Saddam is necessary for promoting the spread of democracy in the Middle East, but it won’t be sufficient, it won’t stick, without the Mideast states kicking their oil dependency and without us kicking ours,” Thomas L. Friedman noted in the Oct. 20 New York Times. His advice sidesteps the class structure of democracy there and in the U.S. Moreover, Friedman assumed what requires explanation: The key role of rising oil consumption in the U.S.-led world economy based on endless expansion.

Across the Atlantic, Larry Elliott took a different view than Friedman’s on the political economy of oil. In The Guardian of Oct. 14, Elliot wrote Iraq only accounts for 3 percent of global production, but its neighbors account for a further 17 percent. According to the International Energy Agency, demand for oil is weakening in response to the global slowdown, but any hint that the west’s supply chain was being disrupted would lead to a hefty rise in the cost of crude.” During war, oil-price increases aren’t avoidable. The world oil market is fragile. Indeed, price and supply imbalances are very possible if/when the U.S. launches an Iraqi war.

Speaking of war and fragile markets, currency markets share similarities with those of oil. Consider the financial status of the dollar as the world’s main currency. The greenback is one tool that allows U.S. rulers to dominate the global system, perhaps more militarily than financially. Currently, over $1 billion of foreign funds flows each day into the U.S., allowing businesses and consumers to spend what they don’t earn on foreign oil, and more. Foreigners finance much of U.S. spending, attracted in part by the investment stability provided by the world’s largest military. Thus, the U.S. can repay its international debts with dollars. Other nations can’t, a big drawback in world affairs. Consider Latin American nations such as Argentina, Brazil and Venezuela that can’t use their currencies to repay foreign lenders. In the meantime, the hegemony of the dollar related to U.S. private indebtedness worries investors, who seek stability and hate financial fragility. However, currency markets, like oil markets, are inherently fragile and prone to disruptions during military actions. Case in point could be a fall in the high value of the dollar relative to the euro and yen if/when the U.S. attacks Iraq, seemingly what the Bush administration would want to avoid. A decline of the dollar could, in turn, weaken U.S. financial and political clout versus the EU and Japan. In brief, the financial and political stakes of a Gulf War II are high. The U.S. public, regaled by the White House and corporate media now painting Iraqi leader Hussein as a threat, is being distracted from this part of the war and peace story.

Then there’s the alternative to oil. Or to be more blunt, the lack thereof. In terms of energy resources for the world economy led by the U.S., there is no substitute. Oil is supreme. Without oil, there is no modern industrial economy. People living in the U.S., which consumes every fourth barrel of oil produced globally, aren’t supposed to think about this. But there it is. The political-economic implications of this material reality are huge for humanity. Accordingly, the Bush administration has its eyes on the oil prize. Some of the U.S. population may be less aware of what’s at stake here. On this count, the nation’s emerging anti-war movement could help lead the way in educating the public.

On that note of agitation and education, continuation of economic growth based on oil consumption is leading the world to the ecological brink of no return. Case in point is carbon dioxide emissions from ground transportation vehicles altering the climate. Evidence of this is widespread in the U.S., from droughts to floods and forest fires. Meanwhile, the warming of the planet continues, driven by the U.S. consuming 25 percent of the world’s oil. The Bush administration’s Climate Action Report, 2002 on global warming backs adaptation to this trend as a policy. Presumably, the U.S. public is on its own when it comes to this aspect of national security.

To be sure, a slowing of oil consumption would slow ecological damage. That by itself is a worthy aim. Yet under a market economy based on growth as an end in itself, there’s an unforeseen consequence here. Oil is the fuel for economic development. Without such growth, joblessness spreads. Consider the U.S. economy. The recession that officially began in March 2001 has weakened business’ demand for workers. At the same time, reduced U.S. business activity reduces oil consumption. And this trend also decreases people’s living standards, as their health care costs rise, and local and state governments cut back on social spending. The political-economic implications of these interrelated processes are enormous in the U.S., the world’s biggest economy. Its status as the main buyer of oil and much of what the world’s workers make generally has far-reaching effects, environmentally and financially.

What’s at stake for the U.S. public, namely those who oppose war against Iraq? Well, in my view analyzing a policy of war and oil gives the U.S. left a chance to recast quality of life issues that affect the nation’s work force (increasingly nonwhite and female). Along with oil, their labor-power sustains them and the system. And their untapped political power? It has and can once more turn the tide of policymakers who now dominate the U.S. political system of state power—government’s executive, judicial and legislative branches—serving private wealth. The rich white men who owned live human beings from the African continent and framed the nation’s Constitution designed the system this way. One of the framers was James Madison, who wrote that a democracy should protect the rich minority from the unrich majority. In the meantime as the U.S. left gets its political legs back after the attacks of Sept. 11, 2001, an opening is emerging to put forward a vision of an alternative form of democracy in contrast to the current one based on waste and war to benefit great wealth. Where is the law of nature that people must be over a barrel as they are now, caught between a rock (Iraq) and a hard place in a system careening out of control? Humans and Mother Nature are more than production costs on a balance sheet. Yes, a better world is possible. In the present as the past, the road to that future is the class struggle.

—Seth Sandronsky is an editor with Because People Matter, Sacramento’s progressive newspaper.

Email: [email protected]

Home Contents Subscribe Write us! [email protected]
	November 2002 • Vol 2, No. 10 • Is The World Over A Barrel? By Seth Sandronsky In Washington, the official concealment of the oil factor reveals its importance to U.S. rulers who back an attack on Iraq. The U.S. economy, now wobbling after booming last decade, in part needs more and cheaper oil for growth to resume. Under a market economy, growth is to profits what air is to people—essential. Enter Iraq. The nation of 23 million human beings has the world’s second-largest estimated crude oil reserves. Moreover, boosting Iraq’s oil production could also weaken OPEC’s power. It’s safe to assume that this, too, is a goal of U.S. rulers. Saudi Arabia is OPEC’s leading oil producer. Currently, some in Washington are less than thrilled with Saudi elites. For U.S. rulers, a tighter grip over Persian Gulf oil production could also serve to beat down the German-led European Union and Japan as the global economy stagnates. Likewise on the home front in a time of economic stagnation, a U.S. war against Iraq looms as a hammer to pound the U.S. working class into further political obedience. In the U.S. newspaper of record, one pundit has a solution to U.S.-centered tensions in the Persian Gulf, the region that supplies the world with every fifth barrel of oil. “Ousting Saddam is necessary for promoting the spread of democracy in the Middle East, but it won’t be sufficient, it won’t stick, without the Mideast states kicking their oil dependency and without us kicking ours,” Thomas L. Friedman noted in the Oct. 20 New York Times. His advice sidesteps the class structure of democracy there and in the U.S. Moreover, Friedman assumed what requires explanation: The key role of rising oil consumption in the U.S.-led world economy based on endless expansion. Across the Atlantic, Larry Elliott took a different view than Friedman’s on the political economy of oil. In The Guardian of Oct. 14, Elliot wrote Iraq only accounts for 3 percent of global production, but its neighbors account for a further 17 percent. According to the International Energy Agency, demand for oil is weakening in response to the global slowdown, but any hint that the west’s supply chain was being disrupted would lead to a hefty rise in the cost of crude.” During war, oil-price increases aren’t avoidable. The world oil market is fragile. Indeed, price and supply imbalances are very possible if/when the U.S. launches an Iraqi war. Speaking of war and fragile markets, currency markets share similarities with those of oil. Consider the financial status of the dollar as the world’s main currency. The greenback is one tool that allows U.S. rulers to dominate the global system, perhaps more militarily than financially. Currently, over $1 billion of foreign funds flows each day into the U.S., allowing businesses and consumers to spend what they don’t earn on foreign oil, and more. Foreigners finance much of U.S. spending, attracted in part by the investment stability provided by the world’s largest military. Thus, the U.S. can repay its international debts with dollars. Other nations can’t, a big drawback in world affairs. Consider Latin American nations such as Argentina, Brazil and Venezuela that can’t use their currencies to repay foreign lenders. In the meantime, the hegemony of the dollar related to U.S. private indebtedness worries investors, who seek stability and hate financial fragility. However, currency markets, like oil markets, are inherently fragile and prone to disruptions during military actions. Case in point could be a fall in the high value of the dollar relative to the euro and yen if/when the U.S. attacks Iraq, seemingly what the Bush administration would want to avoid. A decline of the dollar could, in turn, weaken U.S. financial and political clout versus the EU and Japan. In brief, the financial and political stakes of a Gulf War II are high. The U.S. public, regaled by the White House and corporate media now painting Iraqi leader Hussein as a threat, is being distracted from this part of the war and peace story. Then there’s the alternative to oil. Or to be more blunt, the lack thereof. In terms of energy resources for the world economy led by the U.S., there is no substitute. Oil is supreme. Without oil, there is no modern industrial economy. People living in the U.S., which consumes every fourth barrel of oil produced globally, aren’t supposed to think about this. But there it is. The political-economic implications of this material reality are huge for humanity. Accordingly, the Bush administration has its eyes on the oil prize. Some of the U.S. population may be less aware of what’s at stake here. On this count, the nation’s emerging anti-war movement could help lead the way in educating the public. On that note of agitation and education, continuation of economic growth based on oil consumption is leading the world to the ecological brink of no return. Case in point is carbon dioxide emissions from ground transportation vehicles altering the climate. Evidence of this is widespread in the U.S., from droughts to floods and forest fires. Meanwhile, the warming of the planet continues, driven by the U.S. consuming 25 percent of the world’s oil. The Bush administration’s Climate Action Report, 2002 on global warming backs adaptation to this trend as a policy. Presumably, the U.S. public is on its own when it comes to this aspect of national security. To be sure, a slowing of oil consumption would slow ecological damage. That by itself is a worthy aim. Yet under a market economy based on growth as an end in itself, there’s an unforeseen consequence here. Oil is the fuel for economic development. Without such growth, joblessness spreads. Consider the U.S. economy. The recession that officially began in March 2001 has weakened business’ demand for workers. At the same time, reduced U.S. business activity reduces oil consumption. And this trend also decreases people’s living standards, as their health care costs rise, and local and state governments cut back on social spending. The political-economic implications of these interrelated processes are enormous in the U.S., the world’s biggest economy. Its status as the main buyer of oil and much of what the world’s workers make generally has far-reaching effects, environmentally and financially. What’s at stake for the U.S. public, namely those who oppose war against Iraq? Well, in my view analyzing a policy of war and oil gives the U.S. left a chance to recast quality of life issues that affect the nation’s work force (increasingly nonwhite and female). Along with oil, their labor-power sustains them and the system. And their untapped political power? It has and can once more turn the tide of policymakers who now dominate the U.S. political system of state power—government’s executive, judicial and legislative branches—serving private wealth. The rich white men who owned live human beings from the African continent and framed the nation’s Constitution designed the system this way. One of the framers was James Madison, who wrote that a democracy should protect the rich minority from the unrich majority. In the meantime as the U.S. left gets its political legs back after the attacks of Sept. 11, 2001, an opening is emerging to put forward a vision of an alternative form of democracy in contrast to the current one based on waste and war to benefit great wealth. Where is the law of nature that people must be over a barrel as they are now, caught between a rock (Iraq) and a hard place in a system careening out of control? Humans and Mother Nature are more than production costs on a balance sheet. Yes, a better world is possible. In the present as the past, the road to that future is the class struggle. —Seth Sandronsky is an editor with Because People Matter, Sacramento’s progressive newspaper. Email: [email protected]

Top Contents Home Subscribe Write us [email protected]