The Specter of Our Time: Oil, War, and Global Polity

The Specter of Our Time:
Oil, War, and Global Polity
Professor Cyrus Bina
Columbia University Seminar on
Globalization, Labor, and Popular Struggles #671
Faculty House, Columbia University, New York
Monday, September 30, 2013: 7:15 PM – 9:00 PM
The Evolution of Petroleum: An Overview
Early Cartelization Era (pre-1928)
The Achnacarry Agreement (1928): Full Control
The International Petroleum Cartel (1928)
Colonial Oil Concessions: The ME’s Middle Name
The Rise of Independents: Challenge to Full Control
Oil, Colonialism, and Nationalism
The So-called 50-50 Profit Sharing
Oil and the Overthrow (1953 CIA Coup)
Formation of OPEC (1960) and an Inner Fracture
The 1973-74 Oil Crisis: Defeat of Monopoly by Competition
The Collapse of International Petroleum Cartel (1972)
Decartelization, Spot & Futures Markets, Globalization (1970s)
International Petroleum Cartel (1928-72)
The Achnacarry Agreement
• MAINTAINING the market shares of members – ‘As Is’ ;
• PROVIDING Facilities belonging to members must be made
available, but not less than the actual cost to the owner;
• ADDING new facilities only as actually needed to supply
increased demand;
• MAINTAINING for each producing area the financial advantage
of its geographical location;
• DRAWING supplies from the nearest producing area;
• PREVENTING any surplus production in a given geographical
area from upsetting the price structure in any other area;
• OBSERVING of these principles would benefit not only the
industry but consumers as well.
Periodization of Petroleum
I. The Era of Colonial Oil Concession
– Vastness of Area under Concession, often Whole
– Lengthy Interval in Excess of Fifty or Sixty Years;
– Handful of United, Interlocking National Cartels;
– Display Little Payment on Oil Royalty;
– Uniformity of Feature and Homogeneity of Royalty
– Little Change in Terms or Length of Concession.
– Extra Judicial Practice in Settling the Disputes.
Periodization of Petroleum cont.
II. Transition Period Toward Decartelization
– Nationalist Awakening and Colonial Barriers;
– 50-50 Profit Sharing in Calculation of Oil Royalties;
– 1951 Nationalization of Oil in Iran Under Mossadegh;
– 1953 CIA Coup d'état Against Premier Mossadegh;
– 1954 Denationalization of Oil in Iran;
– 1960 Formation of OPEC in Response to Price Cut;
– Rise of Independent Oil Companies.
Periodization of Petroleum cont.
III. Globalization of Oil
• Decartelization and Competitive Globalization of oil;
• 1972 Collapse of International Petroleum Cartel (IPC);
• Objectification of Highest Cost Oil Producer (US Oil) as
Center of Gravity of Long-Term Price;
• Spot (Futures) Markets and Abolition of ‘Posted Prices’;
• Arbitrary ‘Royalty’ Gave Way to Differential Oil Rents;
• Parodies of ‘Security’, ‘Dependency’, ‘Physical Access’,
Need for ‘Oil War’, and ‘Energy Independence’;
• Birth of Global oil, Hoax of ‘National Security’ and Cut off
of US Foreign Policy from Umbilical Cord.
Transformation of Global Power
Hegemony and Hegemonic Leadership
Hegemony and Nature of Leadership
Drawing on Antonio Gramsci’s View
Spontaneously Consensual
Internally Arisen
Historically Sanctioned
Holistically Undivided
Structurally Synthetic
Institutionally Mediation
Hegemony arises from mutuality of system as the
whole—NOT separate property of the hegemon.
Postwar Pax Americana (1945-1979)
Hegemonic Economic Institutions
The Bretton Woods Monetary System (1944-1971)
Direct Dial with God Gold – Dollars: the Messenger
International Monetary Fund (IMF)
World Bank and Affiliated Channels and Institutions
Marshall Plan for the Postwar Reconstruction
General Agreement of Tariffs and Trade (GATT)
Agency for International Development (AID)
Universal Land Reform Programs in the ‘Third World’
Unfolding Spread of Capital and Capitalist Relations
Incubator for Transnationalization of Social Capital
Postwar Pax Americana cont.
• Iron Curtain Speech (March 5, 1946) – Going for Jugular
• Soviet Atomic Bomb – the ‘Monkey wrench’
• Three-Prong US Cold War Strategy of Containment:
– Containment of the Soviet Union
– Containment of Nationalist & Democratic Movements,
thus ruining the roots democracy in the ‘Third World’
– Containment of US Progressive Political Movements,
including Labor Unions, Etc.
• Strategy of Détente vis-à-vis the Soviet Union
Globalization and Downfall of Pax
“What is done cannot be undone.”
• Eurodollars and Unraveling of the Bretton Woods
System (August 1971)
• US Balance of Payments Suddenly Turns Red
• International Monetary Fund Wobbling and Limping
• World Bank Becomes a Relic of the Past
• The 1973-74 Oil Crisis Leads to Globalization of Oil
• Multinational Capital Sheds Its Nationality
• Transnational Social Capital is Born
• US ‘Plants Closing’: Mop-up Operation of the 1980s
• Economic Crises Are Now Interdependent & Global
Globalization and Downfall of Pax
Americana cont.
• With the 1972 Collapse of International Petroleum Cartel,
‘Postwar Petroleum Order’ Comes to an End
• With Revolutions in Iran and Nicaragua, The ‘Third World’
Client Sub-System Virtually Ends in 1979
• The European Community Turns to European Union
• Euro is Born and US Dollar is No Longer Lonely!
• Globalization Germinates Amid the Outmoded Polity
• Globalization is NOT ‘Americanization’ as Economy and
Polity are Now Marching to a Different Drummer
• Hegemony is NOT Domination By Force
• American Hegemony is Contradiction in Terms
Rightwing Theory and Leftwing
“The United States has gone to war now [in the early 1990s], and the American
people presume this will lead to a secure oil supply. As a society, we have made a
choice to secure access to oil by military means. The alternative is to become
independent to a large degree of what that secure access (Challenge, 1991).”
—James Schlesinger, Economist with a Harvard Ph.D. and First US Secretary of Energy
A September 2013 E-mail Received from one of my dearest leftist friends at URPE:
“Cyrus, you have a lot of interesting things to say, but in this invitation you are
once again being rather insulting to the Left! Why would a leftist listen to you if
you are calling us all stupid? I have said this before -- while these wars are more
than oil wars, oil is certainly an important part of them, and of US imperialism in
general. Calling a war an ‘oil war’ I believe opens people eyes to broader
dimensions of US foreign policy. It's a slogan. A slogan is supposed to arouse
interest, not explain the world. Just because there is a world oil market, doesn't
mean that political influence has no effect on future access, how the industry is
developed, whether a country can actually produce oil or whether it is blown to
smithereens, and where the profits go. It seems to me that a market is a
temporary arrangement, which changed in the past and can change again.”
Oil: The Mismeasure of “Blood”?
“Oil is not an object but a trajectory, indeed a constellation of
exigencies, events, actions and reactions, disputes and
refutations, disparity and deviation, and, above all, contradiction
and conflict across historical time and social relations fused and
conjoined.... This is the story of old colonialism bleached in
neocolonialism … and carried over and conveyed by the
schizophrenic rubric of Pax Americana, before becoming history
in past tense. This was the end of a history and the beginning of
a new one. [Thus, the end of history did not turn up] in the
intended fashion of Fukuyama’s jovial ruse. The irony of history
… would make the ‘last man’ the very last US president in charge
of the now defunct Pax Americana.” Oil, War, and Global Polity (Bina 2013)
Toward A Multipolar Global Polity
Globalization of Oil is a Critical Lenz for:
– Assessing the Rise and Fall of American Hegemony
– Appreciating of Capitalist Competition in Presence of Integration
– Understanding of OPEC and Its Today’s Role
– Grasping that Speaking of the Middle East ‘Oil Dependency’ is a Babble
– Accepting that ‘Energy Independence’ is a Wishful Thinking
– Realizing that If ‘Fracking’ Displaces the Old US Domestic Fields, Long-Term
Global Price of Oil is Still Determined Within the US Oil Region
Globalization is the Negation of American Hegemony
Hegemony Belonged to the Defunct Pax Americana (1945-1979)
Pax Americana Collapsed By Internal Forces
The Real Cause of the War is the US Reaction of to Its Lost Hegemony
By Military Domination, US Will Dig a Deeper Hole for Its Further Decline

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