There is of course more to the oil story than merely production and consumption. The US had managed to overcome the first oil shock with a combination of measures – diversification of import sources (nearly a third of American oil imports are now from Canada and Mexico), engineering bitter wars among OPEC members (Iran-Iraq war, for example), patronising client regimes within the OPEC (Saudi Arabia, for instance, which produces a third of the OPEC’s total output and has not just the biggest oil reserves but also significant spare production capacity) and last but not the least, exploiting the petrodollar phenomenon to the hilt. Two-thirds of world trade is dollar-denominated and the oil trade has been almost exclusively so. Billions of these petrodollars have found their way back to the US enabling the US to run a huge and permanent current account deficit. It has been noticed that the size of the current account deficit is almost as high as the annual military spending of the United States. In other words, it is on borrowed money that the US continues to flex its awesome military muscles and keep the oil-rich ‘rogue states’ in check. With the advent of the euro, a potential rival to the dollar was born and Iraq’s recent decision to sell its oil exclusively in euro had the potential to create a powerful petroeuro that could give the US a close run for each of its petrodollars. Iran, Saudi Arabia and Venezuela had all started dropping hints about a possible switch to the euro.
The war for oil is therefore as much a war for petrodollar and let us not forget that American imperialism is very much a dollar imperialism. The hegemony of the dollar plays a key role in sustaining the American project of global domination. Lenin and his contemporaries had noted the transition from export of commodities to export of capital as a characteristic feature of imperialism. But dialectically, just as competition led to monopolies and then to a more fierce competition among monopolies for still greater and more intense monopolisation, the export of capital has also undergone a dialectical negation. Thanks to the as yet unchallenged supremacy of the dollar, the US is able to suck in capital from all directions and has emerged as the biggest debtor country in the world. It is a debt the US hopes it will never have to repay as long as the dollar remains the world’s most ubiquitous and powerful international currency (‘a distinctly American internationalism that reflects the union of our values and our national interests’!). And if the strength of the dollar cannot be adequately backed by America’s increasingly stagnant economy, the US can always fall back on the world’s smartest military machine.
Indeed, the oil oligarchy that now rules America has also been most organically related to America’s ever expanding military-industrial complex. Vladimir Slipchenko, one of the world’s leading military analysts, says the testing of new weapons is a “main purpose” of the attack on Iraq. He reminds us that “In May 2001, in his first presidential address, Bush spoke about the need for preparation for future wars. He emphasised that the armed forces needed to be completely high-tech, capable of conducting hostilities by the no-contact method. After a series of live experiments – in Iraq in 1991, Yugoslavia, Afghanistan – many corporations achieved huge profits. Now the bottom line is $50-60 bn a year.” It is also reported that in August, the Bush administration will convene a secret meeting in Omaha, Nebraska, to discuss the construction of a new generation of nuclear weapons, including “mini nukes”, “bunker busters” and neutron bombs. Generals, government officials and nuclear scientists will also discuss the appropriate propaganda to convince the American public that the new weapons are necessary.
Oil, petrodollar, military-industrial complex and then megabuck ‘reconstruction’ orders … every logic and dynamic of US imperialism leads inexorably to war and more wars. And to be sure as US imperialism accelerates and intensifies its expansionist thrust, it also turns ever more repressive and reactionary in its domestic domain. The Bush-Blair war on Iraq is preceded by years of untrammelled economic neo-liberalism initiated under the Reagan-Thatcher alliance and is aimed as much at reshaping Iraq and the Middle-East as the domestic economics and politics in the US and the UK. In the US, political analysts and activists call it a merger of unbridled corporate power and an increasingly militarist state comparable to the original Mussolini model of fascism.
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Box 1
The Story of an ‘Aborted’ Oil War from Another Time
(The following example of an aborted oil war between the USA and Germany in the early years of the 20th century is excerpted from Lenin’s Imperialism, the Highest Stage of Capitalism, CW, Vol. 22, p. 248-50)
An instructive example (of the struggle for division and redivision of the world) is provided by the oil industry.
“The world oil market,” wrote Jeidels in 1905, “is even today still divided between two great financial groups — Rockefeller’s American Standard Oil Co., and Rothschild and Nobel, the controlling interests of the Russian oilfields in Baku. The two groups are closely connected. But for several years five enemies have been threatening their monopoly”: (1) the exhaustion of the American oilfields; (2) the competition of the firm of Mantashev of Baku; (3) the Austrian oilfields; (4) the Rumanian oilfields; (5) the overseas oilfields, particularly in the Dutch colonies (the extremely rich firms, Samuel, and Shell, also connected with British capital). The three last groups are connected with the big German banks, headed by the huge Deutsche Bank. These banks independently and systematically developed the oil industry in Rumania, for example, in order to have a foothold of their “own”. In 1907, the foreign capital invested in the Rumanian oil industry was estimated at 185 million francs, of which 74 million was German capital.
A struggle began for the “division of the world”, as, in fact, it is called in economic literature. On the one hand, the Rockefeller “oil trust” wanted to lay its hands on everything; it formed a “daughter company” right in Holland, and bought up oilfields in the Dutch Indies, in order to strike at its principal enemy, the Anglo-Dutch Shell trust. On the other hand, the Deutsche Bank and the other German banks aimed at “retaining” Rumania “for themselves” and at uniting her with Russia against Rockefeller. The latter possessed far more capital and an excellent system of oil transportation and distribution. The struggle had to end, and did end in 1907, with the utter defeat of the Deutsche Bank, which was confronted with the alternative: either to liquidate its “oil interests” and lose millions, or submit. It chose to submit, and concluded a very disadvantageous agreement with the “oil trust”. The Deutsche Bank agreed “not to attempt anything which might injure American interests”. Provision was made, however, for the annulment of the agreement in the event of Germany establishing a state oil monopoly.
Then the “comedy of oil” began. One of the German finance kings, von Gwinner, a director of the Deutsche Bank, through his private secretary, Stauss, launched a campaign for a state oil monopoly. The gigantic machine of the huge German bank and all its wide “connections” were set in motion. The press bubbled over with “patriotic” indignation against the “yoke” of the American trust, and, on March 15, 1911, the Reichstag, by an almost unanimous vote, adopted a motion asking the government to introduce a bill for the establishment of an oil monopoly. The government seized upon this “popular” idea, and the game of the Deutsche Bank, which hoped to cheat its American counterpart and improve its business by a state monopoly, appeared to have been won. The German oil magnates already saw visions of enormous profits, which would not be less than those of the Russian sugar refiners…. But, firstly, the big German banks quarrelled among themselves over the division of the spoils. The Disconto-Gesellschaft exposed the covetous aims of the Deutsche Bank; secondly, the government took fright at the prospect of a struggle with Rockefeller, for it was very doubtful whether Germany could be sure of obtaining oil from other sources (the Rumanian output was small); thirdly, just at that time the 1913 credits of a thousand million marks were voted for Germany’s war preparations. The oil monopoly project was postponed. The Rockefeller “oil trust” came out of the struggle, for the time being, victorious.
Box 2
A War a Year Keeps the Crisis Afar
(The following is a partial list of 130 US military interventions from 1890)
1890 – SOUTH DAKOTA: 300 Lakota Indians massacred at Wounded Knee.
1891: Troops/ Marines clash with nationalist rebels in CHILE and Black workers in HAITI
1893: Independent kingdom of HAWAII overthrown, annexed by troops.
1894 – NICARAGUA: Month-long occupation of Bluefields by troops.
1895 – PANAMA: Troops, naval/ Marines land in Colombian province.
1898-1910: PHILIPPINES, CUBA, PUERTO RICO,GUAM seized by troops and navy from Spain. 600,000 Filipinos were killed.
1903 – HONDURAS: Troops/ Marines intervene in revolution.
1903-04 – DOMINICAN REPUBLIC: Troops / U.S. interests protected in Revolution.
1906-09 – CUBA: Troops/ Marines land in democratic election.
1907 – NICARAGUA: Troops/ ‘Dollar Diplomacy’ protectorate set up.
1912-33 – NICARAGUA: Troops, bombing/ 20-year occupation, crushing guerrilla resistance.
1914-18 – MEXICO: Naval, troops/ Series of interventions against nationalists.
1914-34 – HAITI: Troops, bombing/ 19-year occupation after revolts.
1916-24 – DOMINICAN REPUBLIC: 8-year Marine occupation.
1917-33 – CUBA: Military occupation, economic protectorate.
1917-18 – WORLD WAR I: Fought Germany
1918-22 – RUSSIA: Five landings of Navy and troops to fight Bolsheviks.
1918-20 – PANAMA: Troops do ‘Police duty’ during unrest after elections.
1922 – TURKEY: Troops fought nationalists in Smyrna (Izmir).
1922-27 – CHINA: Naval, troops deployment during nationalist revolt.
1924-25: Troops suppress election strife twice in HONDURAS and general strike once in PANAMA
1927-34 – CHINA: Troops/ Marines stationed throughout the country.
1941-45 – WORLD WAR II: Fought Axis for 3 years; Dropped Nuclear Bombs for the first time on Hiroshima and Nagasaki.
1946-50: Nuclear muscle-flexing in IRAN, YUGOSLAVIA, URUGUAY, GERMANY, PUERTO RICO.
1947-49 – GREECE: Command operation/ U.S. directs extreme-right in civil war.
1951-53 – KOREA: U.S.& South Korea fight China & North Korea to stalemate.
1953 – IRAN: CIA overthrows democracy, installs Shah.
1954 – GUATEMALA: CIA directs exile invasion after new government nationalizes U.S. company lands.
1956 – EGYPT: 1956/ Nuclear, military threat in response to nationalisation of Suez Canal
1960-75 – VIETNAM: Fought South Vietnam revolt & North Vietnam; 1-2 million killed in longest U.S. war; atomic bomb threats in 1968 and 1969.
1961 – CUBA: CIA-directed exile invasion fails.
1962 – CUBA: Nuclear threat/ Naval Blockade during missile crisis; near-war with USSR.
1962 – LAOS: Military buildup during guerrilla war.
1964 – PANAMA: Troops shoot Panamanians for urging canal’s return.
1965 – INDONESIA: Million killed in CIA-assisted army coup.
1969-75 – CAMBODIA: Up to 2 million killed in decade of US bombing, and resulting starvation, and political chaos.
1973 – CHILE: on September 11,CIA-backed coup ousts elected Communist president and installs dictatorship that slaughters millions.
1981-90 – NICARAGUA: CIA directs exile (Contra) invasions, plants harbor mines against revolution.
1983-84 – GRENADA: Military invasion and bombing four years after revolution.
1986 – LIBYA: Bombing, naval/ Air strikes to topple nationalist government.
1987-88 – IRAN: US military intervenes with Navy and bombing on side of Iraq in war.
1989 – PHILIPPINES: Jets/ Air cover provided for government against coup.
1989-90 – PANAMA: Nationalist government ousted by 27,000 soldiers, leaders arrested, 2000+ killed in US invasion.
1990 – IRAQ: 200,000+killed in invasion of Iraq; large-scale destruction of Iraqi military.
1992-94 – SOMALIA: U.S.-led United Nations occupation during civil war; raids against one Mogadishu faction.
1992-94 – YUGOSLAVIA: Naval/ Nato blockade of Serbia and Montenegro.
1993-95 – BOSNIA: Downed jets, bombed Serbs.
1995 – CROATIA: Krajina Serb airfields attacked before
Croatian offensive.
1998 – SUDAN: Missiles attack on pharmaceutical plant alleged to be ‘terrorist’ nerve gas plant.
1998 – AFGHANISTAN: Attack on former CIA training camps used by Islamic fundamentalist groups alleged to have attacked embassies.
1998 – IRAQ: Four days of intensive air strikes after weapons inspectors allege Iraqi obstructions.
1999 – YUGOSLAVIA: Bombing, Missiles/ NATO air strikes after Serbia declines to withdraw from Kosovo. NATO occupation of Kosovo.
Among sources used, besides news reports, are the Congressional Record (23 June 1969), 180 landings by the US Marine Corps History Division, Ege & Makhijani in Counterspy (July-Aug. 1982), and Daniel Ellsberg in Protest & Survive. ‘Instances of Use of United States Forces Abroad, 1798-1993’ by Ellen C. Collier of the Library of Congress Congressional Research Service.
