On Sat, 29 Mar 2003 JBrown72073 at cs.com wrote:
> >*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?
You are putting your on finger on an important conflict, Jenny. The key phrase here is "insofar as oil is a strategic worry." We couldn't get cut off from domestically produced oil in time of war. So insofar as the domestic oil industry would be hurt by a consistent plan of action to increase worldwide supply and lower oil prices, their interests would be at odds with our strategic interests.
Of course that's if oil were a strategic good, which I'm arguing it's not. The passage you highlighted is one of my "even if it were, so what?" corrolaries.
Of course the conflict of interests between domestic oil producers and the interests of the country as a whole are nothing new. It's conventional wisdom that cheaper oil leads to greater economic growth, cet. par. And obviously the sectional interests of domestic producers are dead set against that.
Exactly the guys you want in charge of your government, huh?
However, once one has argued, as I have, that oil is not a strategic worry anymore, then it is perfectly open to argument that a strategy of driving oil prices as low as possible could be a bad idea for various reasons, e.g. environmentally. But that just makes the long term problem of increasing supply to meet demand easier -- we don't have to encourage it as much.
> Are not U.S. corporations large producers of oil?
The largest US oil corporations do most of their producing in other countries where the other country has the final ownership. A system in which the power of producers was steadily diminished would actually increase the market power of those companies over time. Like market makers, they'll make money if the price goes up or down. It's the domestic producers who would get crushed in a permanent low price environment.
It is perfectly possible theoretically to imagine an optimal price that balances the interests of these two groups economically or politically. Their struggles with each other have nothing to do with war an interest in war.
Of course, once you have a group that leads us into war, the contracts in Iraq (or Iran, etc.) will be privatization contracts in fact if not in name, since that is the only model the US has ever accepted for injecting capital into an industry. There is no chance we would ever loan money to a truly nationalized industry -- that violates everything that every part of the establishment believes in. And the small number of companies who get those contracts will of course have a hugely disproportionate interest in war. Especially if they are domestic oil producers who would have been facing doom without this sudden opportunity. It's funny how companies with no experience in the middle east suddenly end up there sometimes. Like Harken.
But that isn't a class interest issue. That's a corruption issue -- the ability of single companies to get huge returns from investments in political influence.
> 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?
No, I'm suggesting everyone, including critics, is still living in the strategic world of the cold war and under the oil misconceptions of the 70s. That's what allowed the case-hardened ideologues to get as far as they've gotten. They're against the end of the cold war *on principle.* And in this environment, that madness somehow came to seem like the vanguard of common sense.
Michael