Why Oil Is Not A Strategic Good

[JBrown72073 at cs.com]

Michael Pollak writes:
>And yet, possessed by the zombie idea of a strategic good, we have spent
>the 90s doing exactly the opposite.  We have done everything in our power
>to restrict supply.  We have restricted investment into both Iran and
>Iraq, both of whom could be producing 2 or 3 times what they are producing
>today. We have put every effort into preventing Caspian oil from getting
>to market by the shortest, cheapest and fastest routes, which run through
>Russia and Iran.  And yet even with all that, oil prices were still in
>collapse during most of the 90s and Opec was helpless to stop it.  Had
>we encouraged the market to follow its natural course, this would have
>continued true for the foreseeable future.  Which anyone could see by look
>at the last century and a half.  Historically, the problem with the oil
>market since its beginnings in kerosene has always been glut.
>
>*But that's only a problem when you're a producer.* When you're a
>consumer, that's a great thing.  And insofar as oil is a strategic worry,
>we're a consumer.

Hi Michael.  I'm not being deliberately dense--feel free to challenge me on 
that--but I just don't get this.  Who's 'we' here?  The U.S. military?  U.S. 
manufacturers? Commercial banks? SUV owners?  Are not U.S. corporations large 
producers of oil?  It seems to me that rather than a mistaken ideology that 
they just can't seem to shake, the reason some sectors want to restrict 
supply would fit into a much simpler mold: to keep oil prices from dropping 
in conditions where supply exceeds paying demand.  This includes encouraging 
Iraq to attack Kuwait for undercutting prices by producing way over 
quota--which cost Iraq lots.  Iraq of course had its own additional reasons, 
the Iran war debt, the slant drilling.  You say this was not successful, and 
prices dropped anyway soon after the war, but the motives you ascribe to 
these policymakers also lead them to failure on various levels.

I mean, I'd like to not think that this war is all about keeping profit rates 
from falling by restricting the production of a needed resource (by contrast, 
attacking a country to take its resources seems almost charming) but I still 
haven't heard a convincing argument otherwise.

Are you suggesting that the exec. comm. of the bourgeoisie would act in a 
reasoned, measured, even peaceable way if it weren't for these ideologues who 
got case-hardened in the '70s?

Jenny Brown