Brad

jeffrey sommers jsommers at latnet.lv
Thu Aug 27 00:37:21 PDT 1998


Brad,

The relationship between strategic concerns, political goals, and plunder is complex. Of course trade between advanced nations in high-values added goods makes the trade in raw materials going north appear small. Like the Soviet farmer with his small garden plot which produced something like 97% of all "value," the great majority of caloric value produced on the collective farms was only "valued" at 3% of all food costs. In a sense, commodity prices are like (but not as extreme) that overwhelming majority of caloric value produced on Soviet kolkhozes, but that in economic terms were only valued at 3% of agriculture. From an economist's perspective this made most Soviet food caloric output undervalued, yet of course essential to the maintenance of the system. By very different means, the world system over the past 500 years has worked to ensure that the essential primary products necessary for development, remain undervalued. There is no mystery here, there are plenty of quotes from prominent policy makers over at least the past 100 years, who have stated as much. The fact that their "value" remains low compared to high value added goods comprising most of the trade between rich nations does not mean that the undervalued trade/plunder was not essential to the construction and maintenance of the world system.

Moreover, each nation-state (or colony) cannot be treated as some hermetically sealed unit where direct economic exploitation is the only motivation for a first world nation(s) to dominate it. The "rules of the game" thesis applies nicely to Vietnam. In the 1960s the greatest danger to the world system (sorry to get Wallerteinian on you) was the possibility of many nations following Vietnam's lead, and thus threatening to remove raw materials and markets from that system. We can, of course, argue about what the results of that process would have been had it not been successfully repressed; perhaps crushing acorns rather than development?

Very few people I encountered on the left ever made the argument that the war on Vietnam was about oil. For the purposes of debate it's convenient for you to mention it, but there were very few people who contended this was the primary motivation for the US intervention in Vietnam. Of course that oil thesis put forth by Kolko doesn't appear quite as silly now in light of of off-shore oil being discovered there. You might want to revisit this Brad.

Regarding Dr. Strangelove, sorry, I mean Kissenger, and his comment regarding raising oil prices and the Shah. I think you'll need to marshal considerably more evidence than this to even hint that the imperialist nations' foreign policy has not been motivated by maintaining a world system that keeps undervalued raw materials "in play," and that ensures markets for goods remain open. If Kissinger had argued that primary product prices from the developing world should be trebled generally, he would have found it difficult to get a job teaching at 3rd tier state U., rather than be a Harvard man and later sycophant to Nixon. In fact, you would have to counter the arguments made regularly in such US government published journals at the Bulletin of the Pan American Union, begun in the year of the US occupation of Hawaii and produced into World War II, whose pages are filled with top business and government officials making Wallerstein's arguments for him. Amusingly, these business and government leaders recognized what many academics are incapable of; that while most economic activity in the US is not directly related to imperial plunder, the investments of certain important individuals were very large, and they were the people that mattered and had the ear of government. Just one of many examples of this kind of relationship between economic elites and the direct production of US foreign policy existed with the New York City investor Roger Farnham. US total investments in Haiti were small at the turn of the century, but the investments of certain powerful individuals were very large. Consequently, people like Farnham had access to the highest levels of the Woodrow Wilson administration and Farnham was allowed to make policy in Haiti from a US naval vessel parked off of Porte au Prince. Later on, US military generals, such as Smedley Butler in the 1930s, revealed this relationship between US business interests and US foreign policy. In the autumn of his career Butler reflected back on his work in the Caribbean and Central America as being a dutiful thug for the bankers (he used language similar to this, I'm in Riga currently and don't have the well known quote in front of me).

Regards,

Jeff Sommers

There was a time during the 1960s when people thought that the continental shelf immediately offshore from Vietnam must be filled with oil--because

U.S. stubbornness in Vietnam was inconceivable unless someone stood to profit immensely from the defeat of Ho Chi Minh.

Yet that oil was never found (although some may be someday in territory now effectively claimed by China). And were it to be found, the Vietnamese government would (judging by its behavior toward Nike) give Chevron more

advantageous terms from extracting it than perhaps any other government on earth.

I think that most of the time U.S. foreign policy elites have no clue about what the long-run national interest (or the long run interest of the American bourgeoisie) is: recall that Kissinger's reaction to the Shah of Iran's pushing for a tripling of world oil prices in 1973 was that it would make his life easier--the Shah would be able to buy the weapons Kissinger wanted to give him to serve as a proxy opponent on the Soviet Union's southern border...

Brad DeLong



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