[lbo-talk] Seymour Drescher and the Decline of the West Indian planters

SA s11131978 at gmail.com
Sat Sep 25 18:03:01 PDT 2010


On 9/25/2010 7:09 PM, Marv Gandall wrote:


> MG: In any case, oil is oil, whether Kuwaiti or Iraqi or Saudi Arabian, and you're correct in assuming that it was, at bottom, security of access to that oil which prompted the first Gulf War.
>> SA: What does this mean, "security of access"? You mean security that Iraq would continue to sell its oil? What else would it do with the oil? Or do you mean security of price? In which case, what was the desired price of oil, high or low? Presumably giving one OPEC country a lock on a bigger share of world oil would result in higher prices. So the US wanted to prevent higher prices? But the major oil companies make more money when oil prices are high. In the 70s, OPEC quadrupled the price of oil and it threw the world economy into convulsions. You know who was behind that? The Shah of Iran and the Saudi Monarchy. They were rewarded with massive weapons sales. So I'm confused; it's hard to figure out exactly what theory you're insisting I sign on to. You seem much more interested in incanting the magic word "oil" than in explaining what exactly it has to do with anything.
> MG: But the Shah and the Saudi monarchy remained staunch US allies, guaranteeing access to their oil, adjusting production quotas at critical junctures against cartel members promoting more aggressive pricing, recycling petrodollars into US financial assets, goods, and services, and favouring US oil exploration and oil servicing companies with their business. The US, like any imperialist power, installed and supported despotic monarchies and military dictatorships in the Middle East and elsewhere in order to ensure that wealth of the world's resources would be shared between a small number of pro-Western ruling families and US multinational corporations, rather than redistributed downwards to the populations of these states or diverted to commercial competitors from France, Russia, and, more recently, China. The US has always reacted strongly to movements and regimes in the Middle East and elsewhere, whether Islamist or secular nationalist, who have resisted US and Western
> imperialist control of their economies and have sought instead to redirect their resource wealth into endogenous economic and social development.

You claim the US wanted access to Iraqi oil. Yet obviously Saddam Hussein was always happy to grant the US access to its oil, for a price, just like any other oil producer.

You claim the US wants control over price. I pointed out that the Shah was a close US ally, yet was among the main *instigators* of OPEC's aggressive pricing in the 70s. You respond by simply deadpanning - wrongly - that the Shah acted against aggressive OPEC pricers, which he didn't.

You argue that Iraq was different from Saudi Arabia and the Shah because the latter, being US allies, recycled petrodollars into Western banks and purchases from Western multinationals. Well, where do you think Iraq put its oil surpluses? Under Saddam Hussein's mattress? Who do you think built the Iraqi telephone, sewage, and electricity systems? Not European companies? Did Iraq build its own fleet of ministerial automobiles or did it buy them from Mercedes Benz? After the windfall of the 1979 oil shock, Saddam went on a weapons buying spree for his war with Iran. Who sold him the weapons?

Here is a mathematical truism: 100% of an oil producer's earnings from foreign oil sales go either to purchases from foreign companies or to petrodollar recycling. There is no "radical" or "socialist" exception to this truism. You talk about "endogenous" development, but what does it mean? Autarchic development? A poor oil producing country can't be autarchic, it has to sell its oil abroad. When it does so, it has to send the earnings either to foreign banks or foreign companies. There's no way around this.

You write these stentorian passages about how "The US has always done thus and such" that sound a lot like Chomsky, but I'm not always sure you've really thought about what they mean.

SA



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