[OPE-L:8486] George Caffentzis. "Not Just Blood for Oil: The Political Economy of the War on Iraq"

From: gerald_a_levy (gerald_a_levy@msn.com)
Date: Wed Feb 19 2003 - 13:31:22 EST

In a separate message, George indicated that his talk "is 'anti-copyright,'
i.e. it can be reproduced by anyone who does not copyright it".  This
is the first time it has been published on the Internet.  Note the
"Theoretical  Interlude" in Level 2 of the paper.

Solidarity, Jerry

----- Original Message -----
From: <GCAFFENTZ@aol.com
Sent: Wednesday, February 19, 2003 10:59 AM
Subject: Re: paper for OPE-L

Dear Jerry,
  I too enjoyed last night. The audience was in general well informed and
followed the argument. You are right, I do know many on your very fine list.
I enclose the talk (without footnotes and other scholarly apparatus) and I
look forward to comments/criticisms/etc.

 All the best,
 george Caffentzis
Not Just Blood for Oil:
The Political Economy of the War on Iraq

 a talk given by George Caffentzis
at ABC No Rio (NYC) on February 18, 2003

 Send comments/criticisms to caffentz@usm.maine.edu

     After Saturday's gigantic world-wide show of popular will, the anti-war
movement can claim to have put a new player in the field beside the
miserable  protagonists of the Iraq/US war: Bush and Hussein. This figure
is the refuser  of a war with a banner on which a shibboleth is written:
"No Blood for Oil."   Who is this person? What does the banner mean?
What will we do on the basis  of it?
     In this discussion I want to make some elementary reflections on this
shibboleth and see what future the protester is pointing to. I will do this
by reading the slogan on four different levels, each more general than the
previous one.

 Level 1. No Blood for Oil, literally
     We should not be reductive nor jump to conclusions, but there is plenty
of evidence to show that the Bush Administration is planning war as a way
to  plunder the oil fields of Iraq.
     It is widely known that Iraq's presently known oil reserve of more than
a  100 billion barrels is the second largest on the planet and that "the
undiscovered oil in the Middle East [including Iraq] is very likely the
largest untapped supply in the world." As a retired petroleum geologist
unequivocally answered when asked about whether Iraq or Iran had more
untapped oil: "[I]t's Iraq. We plugged and abandoned any well that wouldn't
make 5.000 barrels a day. Threw'em back in the water." Iraq's oil reserve
is  worth potentially more than three trillion dollars at current prices.
Moreover, Iraqi oil is very inexpensive to produce and is one of the
world's  "sweetest," i.e., it produces fewer pollutants on combustion.
   At the moment however, even though the US government and corporations
import 2.3% of their total oil from Iraq (US News and World Report,
February  17, 2003: 36), US based oil companies cannot directly profit from
oil production there. In fact, the Saddam Hussein regime has made a number
of important agreements with French, Russian and Chinese oil firms assuring
them of very attractive deals in oil production once the sanctions are
ended.  The British and US firms, however, have been given clear notice that
they will  not be welcome in a post-sanctions era, if Saddam Hussein and/or
the Ba'ath Party remains in power.
     Therefore, the only way for the US (and British) oil companies to gain
profitable direct access to Iraqi oil is through a war that would violently
and irrevocably end the Hussein/Ba'ath Party rule and bring in a new
government that could cancel the deals with the French, Russian and Chinese
companies. That is why the first objective of the US military is to secure
the oil fields in an invasion of Iraq. Further, the US government assumes
that its troops will occupy the country for many years and will have a
general as a military governor, in the style of Douglas MacArthur in
post-WWII Japan. This governor will be paying for the occupation with the
sales of Iraqi oil.
    Anyone familiar with the oil industry-connected backgrounds of key
figures in the Bush Administration, starting with George Bush himself,
should not be surprised by this plan of plunder that the "No War for Oil"
slogan reveals and protests. The US oil corporations (including Haliburton,
VP Chaney's former company) would definitely find the opportunities of
"rebuilding" the Iraqi oil industry destroyed by US bombs and/or Hussein's
"scorched oil" tactics a bonanza.
    Such a blatant plan of theft and plunder can only be accomplished by
military means. The consequences for the Iraqi people will be devastating,
even if the invasion is relatively swift. For the subsequent struggles
among Iraqis and against the US occupiers will be bloody indeed.
    The slogan "No Blood for Oil" on this level rejects the obvious
gangster behavior the Bush Administration (and the Blair echo) with brevity
and justice. S/he who affirms it wants to stop this act of brigandage pure
and simple and treats Bush's and Blair's "high-minded" (and poorly crafted)
rationalizations for invasion as crude, shameful parodies of justice.
Surely,  s/he will brand any oil company that profits from such an adventure
a  criminal and boycott its tainted products.

Level 2: No Blood for Privatization of Oil Resources
    Though plunder is definitely part of the Bush Administration's plan
there are other more global issues suggested by the slogan. For the US has
been the leader in imposing neoliberal/globalization policies around the
planet. Thousands of nationalized companies and agencies have been
privatized due to structural adjustment programs imposed by the World Bank
and IMF while many forms of "restraints to trade" (including "price fixing"
cartels) have been abolished by the international trade agreements now
coordinated by the WTO. The US government, not surprisingly, is the
dominant partner in the World Bank, the IMF and the WTO.
    One commodity after another has been "neoliberalized," but oil has
escaped this fate. Most of the nationalizations of oil companies took place
between 1969 and 1973, but it has been almost impossible for these
companies to be privatized, even though the national telecoms and airlines
were put on the auction block in many of these same countries (e.g.,
    Similarly, though there has been an attempt to destroy international
price fixing cartels in most commodities via treaties like the one that
created the WTO, oil and OPEC has been exempted from the rules of the
neoliberal global regime. This is unusual since oil is the commodity that
is both most basic (i.e., being involved in the production of most other
commodities) and the most traded (i.e., the highest value of international
sales) while OPEC is the most blatant price fixing cartel in the world.
    This exemption of oil and OPEC from neoliberal standards has been at
the heart of the Republican Party critique of the Clinton's energy policies.
Thus in the waning days of the Clinton era, there was a Congressional
Hearing on "OPEC's Policies: A Threat to the U.S. Economy" chaired by
Benjamin Gilman (R-NY) who charged that Clinton remained "remarkably
passive in the face of OPEC's continued assault on our free market system
and our antitrust norms."
    With the Bush Administration's rise to power, OPEC is increasingly seen
as a hostile entity--especially after 9/11--which must be subverted and
either replaced or abolished.
    This hostility is intensified by realizing who are the main political
figures in OPEC now (aside from Iraq's Ba'ath regime): in Iran there are
the desperate Islamic clerics, in Saudi Arabia there is a ruling class that
is divided between globalization and Islamic fundamentalism, in Venezuela
there is the populist government of Chavez, in Ecuador there is a government
that was nearly seized in a rebellion by the indigenous, in Libya there is
Ghaddafi (need more be said?), in Algeria there is a government that just
narrowly repressed (and collaborated with) an Islamist revolutionary
movement, in Nigeria and Indonesia there are "democratic" governments with
questionable legitimacy that could collapse at any moment. There is simply
too much class struggle in an area of high tech production (oil production)
that these leaders and governments were not able to control.
    This list of OPEC leaders constitutes a "rouges" gallery from the point
of view of the thousands of capitalists who send a tremendous portion of
"their" surplus to OPEC governments via their purchases of oil and gas.
With such a composition, OPEC is hardly an institution to energize a
neoliberal world.
    Of course, OPEC was not always a political or economic problem. In the
1960s and in the early 1970s OPEC was a relatively pliable organization
while nationalization and monopolistic pricing were still acceptable
elements of  the Keynesian political economy of the day. Iran was under the
Shah, the Ba'athists had just lost their Nasserite zeal, Ghaddafi's fate was
still undeveloped, Venezuela was a tame neo-colony, Indonesia was under the
communist-killer Suharto, Nigeria was under the control of General Gowan,
and the Saudi Arabian monarchy's Islamic fundamentalism was considered a
quaint facade under which the movement of billions of "petro-dollars" could
be recycled back into the U.S.-European economies.
    But that was then and this is now. From the Bush Administration's
viewpoint OPEC needs to be either destroyed or transformed in order to lay
the foundation of a neoliberal world that would be able to truly control of
energy resources of the planet. The Bush administration is putting as much
pressure as possible on OPEC's members. In April of 2002 there was a
U.S.-supported coup d'etat in Venezuela against the Chavez government, the
 leading price hawk in OPEC. It failed. In August 2002 it was Saudi Arabia's
 turn. The RAND corporation issued a report claiming that the Saudi Arabian
 monarchy was the "real enemy" in the Middle East and should be threatened
 with invasion if it did not stop supporting anti-U.S. and anti-Israeli
 groups. But that verbal threat was nullified by the Bush Administration in
 the controversy that followed.
     All in all, the Iraqi government is clearly the weak link in OPEC. It
lost two wars it instigated. It is legally in thrall to a harsh reparations
regime, it cannot control its own air space, and it cannot even import
freely  but must have UN accountants approve of every item it wants to
buy on the  open market. Ideologically and economically it is prostrate.
      But a US-sponsored Iraqi government committed to neoliberal policies
would definitely be in a position to undermine OPEC from within or, if it
departs, from without.
    Such a transformation would make it possible to begin a massive
 investment in the energy industry that might be an alternative to the
 spectacular failure of the high-tech sector that has dissolved hundreds of
 billions of dollars.


    Theoretical Interlude: We should realize that oil is not just like any
other commodity for a number of reasons. It is a basic commodity. Its price
changes affect the prices of almost all other commodities and hence average
wages and profits. Also, its production process has a high organic
composition, i.e., it involves large amount of machines and equipment and
relatively little direct labor. Finally, it has a rent component in its
cost. All of these elements together make of oil a special commodity from
the point of view of political economy and for our movement. Let us review
    Basic commodity. Surely, any group which can make decisions to change
the price of oil can influence the rest of the capitalist system in a way
similar to the way that those who decide on interest rates can. They
ultimately have a power much more general and diffused that it immediately
appears. The many economic models since 1973 that have shown how whole
economies have been "put into recession" because of oil price hikes
(whatever  one makes of their scientific value) express this connection.
The fact that  NY, Washington and London looks at the composition of the
OPEC leaders and sees Islamic terrorists and nationalist revolutionaries
clearly shows how the  economic character of the commodity implies
political consequences.
    Transferred value. Most commodities do not sell at their values,
otherwise highly demanded commodities like oil would not be produced, since
their almost labor-less production would not generate enough surplus value
directly. Consequently, some value from branches of production with lower
organic composition (e.g., textiles) must be transferred through the market
and competition into the higher organically composed branches like the oil
industry. This means that oil is a commodity that is the object of the
collective interest of the capitalists around the planet. Any attempt to
run such an industry that would be detrimental to the general capitalist
interest will face opposition from a vast assembly of individual capitalists
around the world. (As Kissenger said in the early 1970s: "Oil is too
important  to leave it to the Arabs.") Thus there is a tendency for these
enterprises to be closely monitored (and regulated) within nation states
and, more irregularly,  internationally. All this to simply say that it is
not only the US oil companies that are vitally interested in the fate of the
oil reserves of Iraq, there are behind them are many other corporations
whose profits will  depend upon that fate as well.
    Indeed, there is such a collective (almost communal) capitalist concern
for such industries that they can easily be the object of political action.
Sometimes this action can be peaceful. The oil industry in the US is a good
example (it was the initial target of the "anti-trust" movement) as is the
software industry (see the Microsoft case). But sometimes this action can
be violent and prompt war (from the British attack on the Ottoman Empire in
WWI  to the Gulf War in 1991.)
     Rent. Rent is one of the categories of political economy that is
clearly relevant to the oil industry. There is differential rent due to the
fact  that not all underground oil is the same. Some is "sweet" some is not,
some is deep, some is not, some is on land, some is not, some requires a lot
of technology to find, some does not. Clearly, if the price of oil is the
roughly the same, then the owner of the territory where the oil has
positive characteristics can charge rent (and expect to be paid it). Indeed,
there is probably some "Absolute Rent" that is paid simply as tribute to the
regime of private property even when a company is producing in the worst
oil areas.  All  this rental value comes from the transferred value
discussed above. Again,  there is a collective interest in its part of the
cost of oil.
    Indeed, there has been a capitalist critique of "rent-seeking"
throughout the history of political economy. Rent is the epitome of
unproductive  income, presumably. This critique still goes on today in the
text-books and among the ideologues of Keynesianism and neoliberalism.
However, for all the critique of the rentier, rent still is a decisive form
of  income in capitalist society, as any New Yorker will attest to! But the
productivist ideology that  has its roots in Locke's defense of English
colonialism in the late seventeenth century is always waiting on the horizon
to be brought in to justify attacks on the rights of the rentier. If the
rentier, though his/her   right of exclusion, disrupts the productive
development of a  profitable industry, then there is a right of the more
productive to lay claim to the right of exclusion. Therefore war is on the
wings of all rental claims.

     Given the exceptional political economic character of the oil
commodity,  it is not surprising that this gift of hundreds of millions of
years of the  meeting of organic life and the heat of the earth's core
should  generate so much violence in a capitalist world. The protester's
sign now is  saying: no blood should be spilt to preserve the energy
system envisioned by Bush and Co. It must be scrapped before we are
all bloodied for oil. Some  new way of distributing the earthly commons
must be devised, the present  and future pricing/profit system that will
lead to one war after another cannot be allowed to continue.

Level 3: No Blood for Neoliberalism
    One of the main diplomatic failures of the Bush Administration has been
to give the impression that this new "world domination" strategy is a
product  of a spontaneous Nietzschean will to power. Their claim that the
urgency of   the Iraq invasion and take-over is due to some imminent threat
to national  security posed by Hussein's weapons of mass destruction has
been rejected even by many of their most loyal defenders. There is an
emergency  the Bush  Administration is responding to, but it is not a
military one...it is political-economic one.
    The neoliberal system of capitalist accumulation (what we in the US
call  "globalization") that replaced the Keynesian one in the late 1970s has
been in deep crisis since 1997 and the Bush Administration must respond to
this crisis or it too will be thrown out by its masters, (if not by its
subjects!)  I need not inform you of the story that now conventionally
begins in  Thailand  in July 1997 with the collapse of the "bhat." This was
not  the first financial crisis of the neoliberal model (there was the
Mexican crisis of  1995 we should remember), but the Thai crisis began
a series of events that have led to today's situation. Nor need I trace this
series for you through the dramatic collapse of the stock market bubbles
throughout the planet leading to destruction of trillions of dollars of
values (paper though they were), the stagnation in Europe and Japan,
and even the decline of profitability in US capitalism. This constitutes the
first major crisis of neoliberalism.
    The Bush Administration's answer to this crisis is war. How can this
What does war have to do with this political-economic crisis? Of course,
there are many past reasons for such a correlation and they are not to be
slighted. For example, war is a classic devise of ideological and juridical
control of a population dissatisfied with an unrelenting economic crisis
(after all, Chief Justice Rehnquist has recently reminded us that "In War
the Laws are Silent"). As another example there is "war Keynesianism," i.e.,
the use of war expenditures to stimulate demand for capital and consumer
goods in order to jolt the system out of a far from full employment
These could be reasons for the Bush Administration's answer to the crisis,
but they do not deal with the fact that the crisis of neoliberalism is
global and that  the US government is now "responsible" for the survival of
neoliberalism/globalization as a whole.
    The main problem with neoliberal/globalization is that for it to "work"
the system must be global and the participant nations and corporations must
follow the rules of trade even when they are going against their immediate
self-interest. In a time of crisis, however, there is a great temptation
for many participants to drop out of or bend the rules of the game,
especially if  they perceive themselves to be chronic losers. What country
is going to keep the recalcitrants (both old--those who refused to be part
of the  game--and new-those who dropped out) from proliferating? Up
until the post 1997 crisis most of the heavy work of control was done by
the IMF and World Bank through the power of money, but since then it is
becoming clear that there are countries that will not be controlled by
structural  adjustment  programs.
    The most obvious case is Argentina, but there are other, quieter drop
outs in Africa and South America. The most illustrious recalcitrants are
the Bush-baptized "axis of evil" nations, Iraq (one of the last of the
national socialist states), Iran (one of the last fundamentalist states
after the demise of the Taliban) and North Korea (one of the last of the
communist states), but there are many other Islamic, national socialist and
communist governments that have not transformed their economies into
neoliberal form. This list will undoubtedly grow unless there is a check, in
the form of a world police officer that will increase the costs of an exit.
    There needs to be for neoliberalism of today the equivalent of the role
Britain played for the liberal capitalist system of the 19th century in
order for it to function properly. Clinton and his colleagues believed that
the UN could eventually be used by the US government as such a force. The
Bush  Administration disagrees. According to Bush, the US will have to act
in its own name to enforce the rules of the neoliberal order (even though
many of  its adherents are unwilling to do so) and that action must at times
be military. In the end, it is only with the construction of a terrifying
Leviathan that the crisis of neoliberalism will be overcome and regime of
free trade and total commodification will finally be established for its
    The invasion of Iraq (the "oil" of the slogan) is a step in this
construction process which is seen by Bush and Co. as a sacrifice of US
human and capital resources for the greater capitalist good. The internal
debate in  the UN is part of a complex negotiation process that ultimately
is meant to determine the conditions of US interventions, not their
elimination.  That is  why the protester's sign does not say, "No Blood for
Oil...unless the UN says  so!"
    The Bush project might be possible, if there promised to be but a few
recalcitrants to and migrants from the neoliberal order. However, if the
antiglobalization movement is right, this is not likely. For neoliberalism
does not seem to be able to deliver on the "sustained growth" that rises
all ships even in its halcyon days. On the contrary, it does not even raise
the 20% of the "ships" it had claimed to do in its inception. This means
that many ruling classes and even more working classes around the planet are
going shopping at Porte Alegre to look for another system.
    There will be neoliberal wars aplenty in the years to come if the US
wishes to play the British Empire of the 21st century. For what started out
as tragedy ending in WWI, will be repeated, not as farce, but as
  Thus the slogan, "No Blood for Oil," is a rejection of the series of wars
that are being planned by the Bush Administration for the years ahead,
aimed at terrorizing the recalcitrants of the neoliberal order into

 Level 4: No Blood for Profit, Period
    The protester's sign's slogan has been interpreted on three different
levels so far: first, as a refusal to spill blood for the plunder of an
individual nation's oil resources; second, as a refusal to spill blood in
order to impose privatization and "free market" practices on the oil
industry internationally; third, as a refusal to spill blood to preserve the
rules of the neoliberal global regime. On the final level, I want to think
about  "No Blood for Oil" as a revolutionary slogan similar perhaps to
the "Land,  Peace and Bread" of the Russian Revolution, i.e., a concrete
demand that at  first  sight seems quite moderate and practical, but due
to the context it becomes revolutionary. After all, having "revolution" on
one's banners does not make  them revolutionary!
    The slogan is neither anticapitalist nor against war per se. It commits
one to be against a war for oil, but not necessarily against war for other
things. Nor is it absolutely anticapitalist, for the sign is conditional.
It seems to be saying, I reject the spilling of blood in order to continue
with the commodification of and profit making off "oil" (or indeed any other
vital stuff). Human blood is beyond the worth of any commodity and a system
that can only run on this higher exchange is a corrupt and obnoxious
Molloch.  The slogan seems to be offering an alternative, if "oil" can be
commodified and sold at a profit without the expenditure of blood, then
let it continue. A  tame, non-aggressive capitalism is an acceptable one.
The slogan seems to be challenging the "world leaders" at the UN to come
up with such a capitalism.  Some indeed are trying, as some non-Bolsheviks
tried to implement the demands of "Land, Peace and Bread" but failed.
    Capitalism in any of its forms--neoliberal, Keynesian, liberal or
mercantile--cannot meet the challenge of the slogan. It must produce war
and blood, since it cannot satisfy the minimal demands of the human race as
a  whole, much less its terrestrial environment. We have five hundred years
of  experience to support that claim. Consequently, since the condition can
not  be satisfied, the slogan's advocates will not part with their own or
others'  blood, period.
    Indeed, if we combine the slogans of the antiglobalization
movement--"Another World is Possible"--with that of the antiwar
movement--"No  Blood for Oil"--the political arithmetic gives us, "Another
World is Necessary." We must reason with this arithmetic and commit to in
the  coming days, weeks, months and years to be sure that the invasion of
Iraq,  if it comes, does not demoralize us, but merely confirms the logic of
our path.

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