I am not subbed to pen-l, and just saw fred's reply. i'll put my reply on ope-l and cc a message to michael. Basically Fred does not agree with Cyrus Bina when the latter writes "The real U.S. incentive, however, can be explained in terms of the channeling of massive Saudi oil revenues toward the U.S. regional (Middle East) as well as global strategic objectives." Fred writes: I agree that petrodollars are crucial to US hegemony, and thanks for the reminder of this important point. _______ Fred, those petrodollars were important in staving off the falling US profit rate in the 70s and 80s. While as you have importantly shown the US has been able to rely on market forces for a stimulative inflow of capital in recent years, Spiro shows how the US had to in effect use state coercion to ensure that oil remained priced in dollars and that petrodollars were recycled in accordance with US objectives in the 70s and 80s. The internatinal operation of the imperialist state in staving off the US profit rate has not been recognized by you before. ____________ Fred writes: But the actual oil itself is essential for the very existence of the US economy (as least in its current form). _________ Yes, and as Marx emphasized, the value of raw material forms an ever growing component of the value of the commodity product...which does mean that low price of raw materials are important for the industrial economies. But it is far from clear the US state has always pushed for low prices. In fact Spiro provides evidence of how the US opted out of coalitions to put pressure on OPEC; the Nixon doctrine required a high price of oil so that client regimes could engage in orgies of military spending. ________ Fred writes: If the supplies of Middle Eastern oil were cut off, then the US economy could not continue for very long as it normally does. __________ but why would a radical arab islamicist regime cut off supply--it would need revenue to carry out its self proclaimed revolutionary objectives. without oil revenue, how would food be purchased--the arab world has suffered from the worst kind of dependent development. a radical regime may even increase the supply of oil. And it is the US that has worked to cut off or at least control the voluminous Iraqi supply of oil. Has Iran cut off its supply of oil since the overthrow of the Shah? as for price, according to bina--if I have understood him--the internationalization of the oil industry is such today that even control of Saudi Arabia is not sufficient to determine prices at the global level. So I do not think there is a threat of a radical Arab regime in Saudi Arabia hiking the price of oil. worries about supply and price seem to me to be secondary to the problem of channeling massive the revenue from dollar denominated oil, as bina has argued. this is also clear from spiro's account as well. __________ Fred writes: This was the lesson of the Arab oil boycott of 1973-74 and the ensueing recession. __________ According to Spiro, the rise in the price of oil then was mostly a result of OPEC members turning to independents and circumventing the Seven Sisters who had successfully conspired in suppressing the purchasing price of crude only to make super profits at the pump. The recession was a result of the seven sisters attempting to maintain their super-profits. To the extent that there was an attempt to choke off the supply of oil, this was a result of Arab-Israeli tensions: US military presence there actually exacerbates the threat of a supply cut-off. ____________ Fred writes: From which followed the "Kissinger Doctrine" and the "Carter Doctrine", according to which US troops should be stationed in the Middle East and should be deployed as necessary to guarantee the outflow of oil. __________ You make it sound as if the US was doing the world a service in guaranteeing the flow of oil...i think you are playing on fears here that without US millitary occupation OPEC would choke the world to death. ________ Fred writes: Which in turn has led to so much resentment and conflict. ___________ You are not clear as to what has caused resentment and conflict. Simply the US presence at the holy sites. But then why does Osama bin Laden rail...with much popular support...about the US robbery of oil wealt as well? Why did the terrorists attack a major economic symbol? US troops are not in Saudi Arabia to ensure the flow of oil--that's the story the US tells the world; the troops are there to ensure that the House of Saud continues to rob the Arabs for the benefit of American capital. __________ Fred writes: The US military forces are in the Middle East to enforce the ouflow of oil to US refineries and markets, not to enforce the flow of petrodollars through US banks. Troops are not necessary for the latter. _________ I don't know why you say this. I think you underestimate the popular resentment against the outflow of wealth to the US. Rakesh
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