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luzulaOkay, here's the promised attempt at a summary of Timothy Mitchell's Carbon Democracy, a very interesting book about energy, economics and politics.
Chapter 1: Machines of Democracy:
Coal-mining began on a large scale in Britain when coal-driven water pumps allowed more efficient coal mining (because mines fill up with water). This also required iron and railways and waterways for transport. From there, energy supply increased exponentially. Previous energy sources were weak and dispersed, leading to a similarly dispersed (agricultural) society; with concentrated energy sources, urbanization got going.
Increased industrial production required increased input of raw materials such as cotton, which drove colonization. Such raw materials could not be got in the required quantities by trade, thus it was got by force (slavery etc). (As an aside, I love this sentence: In places where the agrarian population could not be removed en masse - India and Egypt were the main examples - Europeans and their local allies pioneered a method of localized dispossession known as private land ownership.)
The workers involved in mining and transporting coal were numerous, worked fairly autonomously, and had a lot of power to disrupt the large energy flows through strikes and sabotage. This gave them a key role in forcing the government to accept democratic demands. Mitchell says that it's not that poor people hadn't wanted a more egalitarian society before, it's that it was hard to get the tools to make it happen. So coal produced democracy in some places and colonial domination in others.
After WWII the western industrial countries began to reorganize the relation of labor to energy. In 1945 there was a nation-wide oil worker's strike in the US, and the government sent in the military to stop it. The companies were forced to recognize the unions, but the unions were forced to accept "industrial management", where workers would get increased pay by accepting methods for increased productivity. This model was exported to Europe with the Marshall plan, which aimed to get the countries of Europe to first integrate their coal industries, which weakened union power since you could get coal from other countries, and second, switch from coal to oil. Oil would have to come from the Middle East, which was cheaper than American oil, but it was sold at American prices to protect the American oil producers and international oil companies. So to afford it, oil was paid for by Marshall Plan funds, cementing the dollar as the basis of the global financial system.
Oil workers also tried to control the energy flows (in fact the Russian revolution of 1905 began as an oil workers' strike which spread--and which was defeated because of the use of a racially stratified labor regime). But oil worker had in general a harder time than with coal. Since oil is pumped up and can be transported in pipelines, you can use a much smaller labor force. You don't need stokers when you burn it, and you can export/import it by ship and get other sources if one source is blocked. It is often produced in remote locations where labor is brought in, often from different places so they will be racially divided.
International oil companies were very concerned to prevent the overabundance of oil, to keep the prices up. They did this by 1) convincing governments (especially the US and Britain) that it was in their national interest to help the companies maneuver to restrict oil production in other countries, and 2) constructing very energy-consuming lifestyles in the US to keep demand up.
The Prize from Fairyland:
Oil was discovered in the Middle East in the beginning of the 20th century. According to Mitchell, traditional histories often misrepresent this history, assuming that the oil companies wanted to develop this resource. Instead, he says, rival companies wanted to control the resource while delaying the development and did so for several decades, to keep oil prices up. Oil companies were not strong enough to do this by themselves and so had to convince politicians in the US, Britain, Germany and France that it was in their imperial interests to help the companies.
Consent of the Governed:
After WWI, forces both in the colonies, within e g Britain (Labour), and in newly communist Russia wanted a more equitable division of power and resources in the world. The response was to transform overt colonial rule to "self-determination", which was a system in which colonized countries would be self-administered, but only by white minority settlers. "Consent of the governed" would be obtained by making deals with local leaders. Traces of the attempts to put international economic relations under democratic control can still be seen in the ILO (International Labour Office) which was created as part of the League of Nations, but was marginalized from the start.
Mechanisms of Goodwill:
More details on the British empire's manipulation in the Middle East. One example is how they encouraged Jewish immigration into Palestine so that they could then have an excuse to stay in order to protect the Jews. Other minorities were "protected" in other areas (although they ignored minorites that weren't useful, such as the genocide against Armenians). In the '30's and '40's Iraq finally got the oil companies to start pumping up oil. In 1948 there was a communist uprising in Iraq, and strikes and blockades against the oil infrastructure, which were defeated by the company and the military. The US and Britain organized coups in various countries that tried to sieze control of the oil.
Fuel Economy:
In the interwar period, the international gold standard collapsed. The Bretton Woods system after WWII was designed to replace that and to hinder currency speculation. This worked for two decades. The dollar was nominally tied to the US gold reserves (because European countries had sent all their gold to the US to pay for wartime supplies), but actually it soon outstripped that and what kept the dollar value up was that everybody had to pay in dollars to get oil. Other countries had to save up dollars and when they used to them to pay for oil, their value was lower because of inflation--this was basically like a tax the US got from all other countries.
Also, the author argues that only around the time of WWII did the concept of "the economy" emerge, that people didn't use the word like that before. The 19th-century economist William Stanley Jevons had calculated how long Britain's coal would last, putting resource economy into focus. In the first decades of the 20th century, rival schools of economists battled over whether the subject of economics should be resources and energy, or whether it should be money and prices. The second school won. The economy was something that could grow without limit, without getting physically bigger, and the underlying unstated reason for this was the ever-increasing amounts of oil used.
Sabotage:
During the 1960's governments in the Middle East grew stronger and more able to challenge the oil companies, first by taxing them more, and then developing their own oil industries and booting out the companies. As they got wealthy from oil, they could finance social reforms without creating actual egalitarian conditions. In countries without oil, popular pressure often led to land reform, which cut off the rent incomes of the wealthy. They then had to earn wealth from manufacturing, making them vulnerable to industrial action.
Meanwhile, in Europe, industrial action no longer focused on coal, but on sabotage in factories and most of all against transport (shipping, docking, railways). This worked pretty well until the introduction of the shipping container, first used by the US military to transport military equipment to Vietnam, after which shippers stopped in Japan to pick up goods on the way home. Containers eliminated much of the skilled labor of dockers so that industrial action became harder, and with cheap oil, it also accelerated the outsourcing of production to countries with lower wages.
As oil exports from the Middle East increased, the US had to adress the balance of payments so that dollars didn't just flow one way. It did this by selling weapons to the Middle East, which coincidentally also helped US arms companies which needed new customers. At the same time, the US helped to fan the flames of various regional conflicts (the Iran-Iraq war, Israel-Palestine, Afghanistan) in order to justify further weapons sales and also to weaken local powers that refused to accept its authority.
The Crisis that Never Happened
What caused the 1973-74 oil crisis? It was perceived in the West as a general energy crisis where all forms of energy became more expensive and more scarce. It was not a simple supply-and-demand situation. One cause of it was that six Arab countries came together to put pressure on the US to stop blocking a solution of the Israel-Palestine conflict, by cutting 5% of oil exports every month. Another cause of it was that the international oil companies, which had now lost control in the Middle East, wanted to expand into the Alaskan oil fields. But these were much more expensive to exploit, so to do that they needed a high oil price. They didn't just need a high oil price, they needed high prices for all kinds of energy, otherwise people would stop buying oil and start buying gas or coal or nuclear power. So the oil companies bought into these other energy sources in order to sit on them and lower production. This is what made it into a more general "energy crisis".
McJihad
This chapter is about the ties between oil, the US, and Islamist political movements. The Middle-Eastern countries which have been most closely allied with the US are also countries which are ruled by Islamist politics (e g Saudi Arabia, the Taliban in Afghanistan). Saudi Arabia for a long time had a pivotal role because of its large production capacity, which could be used to lower/raise the price of oil and thus discipline other producers. Mitchell argues that there is an uneasy symbiosis between capitalism and islamism, which arose when overt colonialism was no longer an option for control. Ibn Saud who conquered and founded the country relied on an Islamist movement to carry him to power, but he was also funded by first the British and then the Americans. The religious leaders tolerated the foreign oil company because it funded them with oil money. In the fifties, demands for democracy were crushed by both forces together. Oil money and CIA agents also helped spread Islamist movements in other Middle Eastern countries. But there was also tension--young Islamist activists protested against foreign presence in the country and government corruption; they were largely exported by the government to fight communism in Afghanistan.
Mitchell then goes into the US invasion of Iraq in 2003, and briefly into the Arab Spring, arguing that in Egypt the government could no longer afford to "bribe" the people into accepting neoliberal austerity programs and privatization, because in 2010 Egypt became a net importer of oil (because of declining oil fields and growing domestic demand).
Conclusion: no more counting on oil
We are past peak oil, and climate change is upon us. Mitchell asks why there's political organizing around the latter, but not so much around adapting society to the former (although the far right does use resource scarcity to fan xenophobia). Measuring how much oil is left is deliberately imprecise, since companies don't want it to be known. They didn't want climate science to get off the ground either, but it survived numerous attempts at sabotage from US authorities (it's not just Trump).
Afterword to the second edition
The fracking boom happened after the book was published; it was made possible by the high oil prices and by capital seeking new investments after the housing bubble crash. This is just a temporary diversion (although of course very destructive of the environment). There's still lots of coal in the ground, though, and the world's largest corporations are dependent on counting it as a financial asset.
Conclusion: "...one cannot predict democratic possibilites directly from the design of socio-technical systems – as the internet itself demonstrates, with its capacity for open communication always threatened by the monopolistic commercial powers of the largest software, computer and internet businesses. The point, rather, is that in battles over the shape of future energy systems the possibilities for democracy are at stake."
Chapter 1: Machines of Democracy:
Coal-mining began on a large scale in Britain when coal-driven water pumps allowed more efficient coal mining (because mines fill up with water). This also required iron and railways and waterways for transport. From there, energy supply increased exponentially. Previous energy sources were weak and dispersed, leading to a similarly dispersed (agricultural) society; with concentrated energy sources, urbanization got going.
Increased industrial production required increased input of raw materials such as cotton, which drove colonization. Such raw materials could not be got in the required quantities by trade, thus it was got by force (slavery etc). (As an aside, I love this sentence: In places where the agrarian population could not be removed en masse - India and Egypt were the main examples - Europeans and their local allies pioneered a method of localized dispossession known as private land ownership.)
The workers involved in mining and transporting coal were numerous, worked fairly autonomously, and had a lot of power to disrupt the large energy flows through strikes and sabotage. This gave them a key role in forcing the government to accept democratic demands. Mitchell says that it's not that poor people hadn't wanted a more egalitarian society before, it's that it was hard to get the tools to make it happen. So coal produced democracy in some places and colonial domination in others.
After WWII the western industrial countries began to reorganize the relation of labor to energy. In 1945 there was a nation-wide oil worker's strike in the US, and the government sent in the military to stop it. The companies were forced to recognize the unions, but the unions were forced to accept "industrial management", where workers would get increased pay by accepting methods for increased productivity. This model was exported to Europe with the Marshall plan, which aimed to get the countries of Europe to first integrate their coal industries, which weakened union power since you could get coal from other countries, and second, switch from coal to oil. Oil would have to come from the Middle East, which was cheaper than American oil, but it was sold at American prices to protect the American oil producers and international oil companies. So to afford it, oil was paid for by Marshall Plan funds, cementing the dollar as the basis of the global financial system.
Oil workers also tried to control the energy flows (in fact the Russian revolution of 1905 began as an oil workers' strike which spread--and which was defeated because of the use of a racially stratified labor regime). But oil worker had in general a harder time than with coal. Since oil is pumped up and can be transported in pipelines, you can use a much smaller labor force. You don't need stokers when you burn it, and you can export/import it by ship and get other sources if one source is blocked. It is often produced in remote locations where labor is brought in, often from different places so they will be racially divided.
International oil companies were very concerned to prevent the overabundance of oil, to keep the prices up. They did this by 1) convincing governments (especially the US and Britain) that it was in their national interest to help the companies maneuver to restrict oil production in other countries, and 2) constructing very energy-consuming lifestyles in the US to keep demand up.
The Prize from Fairyland:
Oil was discovered in the Middle East in the beginning of the 20th century. According to Mitchell, traditional histories often misrepresent this history, assuming that the oil companies wanted to develop this resource. Instead, he says, rival companies wanted to control the resource while delaying the development and did so for several decades, to keep oil prices up. Oil companies were not strong enough to do this by themselves and so had to convince politicians in the US, Britain, Germany and France that it was in their imperial interests to help the companies.
Consent of the Governed:
After WWI, forces both in the colonies, within e g Britain (Labour), and in newly communist Russia wanted a more equitable division of power and resources in the world. The response was to transform overt colonial rule to "self-determination", which was a system in which colonized countries would be self-administered, but only by white minority settlers. "Consent of the governed" would be obtained by making deals with local leaders. Traces of the attempts to put international economic relations under democratic control can still be seen in the ILO (International Labour Office) which was created as part of the League of Nations, but was marginalized from the start.
Mechanisms of Goodwill:
More details on the British empire's manipulation in the Middle East. One example is how they encouraged Jewish immigration into Palestine so that they could then have an excuse to stay in order to protect the Jews. Other minorities were "protected" in other areas (although they ignored minorites that weren't useful, such as the genocide against Armenians). In the '30's and '40's Iraq finally got the oil companies to start pumping up oil. In 1948 there was a communist uprising in Iraq, and strikes and blockades against the oil infrastructure, which were defeated by the company and the military. The US and Britain organized coups in various countries that tried to sieze control of the oil.
Fuel Economy:
In the interwar period, the international gold standard collapsed. The Bretton Woods system after WWII was designed to replace that and to hinder currency speculation. This worked for two decades. The dollar was nominally tied to the US gold reserves (because European countries had sent all their gold to the US to pay for wartime supplies), but actually it soon outstripped that and what kept the dollar value up was that everybody had to pay in dollars to get oil. Other countries had to save up dollars and when they used to them to pay for oil, their value was lower because of inflation--this was basically like a tax the US got from all other countries.
Also, the author argues that only around the time of WWII did the concept of "the economy" emerge, that people didn't use the word like that before. The 19th-century economist William Stanley Jevons had calculated how long Britain's coal would last, putting resource economy into focus. In the first decades of the 20th century, rival schools of economists battled over whether the subject of economics should be resources and energy, or whether it should be money and prices. The second school won. The economy was something that could grow without limit, without getting physically bigger, and the underlying unstated reason for this was the ever-increasing amounts of oil used.
Sabotage:
During the 1960's governments in the Middle East grew stronger and more able to challenge the oil companies, first by taxing them more, and then developing their own oil industries and booting out the companies. As they got wealthy from oil, they could finance social reforms without creating actual egalitarian conditions. In countries without oil, popular pressure often led to land reform, which cut off the rent incomes of the wealthy. They then had to earn wealth from manufacturing, making them vulnerable to industrial action.
Meanwhile, in Europe, industrial action no longer focused on coal, but on sabotage in factories and most of all against transport (shipping, docking, railways). This worked pretty well until the introduction of the shipping container, first used by the US military to transport military equipment to Vietnam, after which shippers stopped in Japan to pick up goods on the way home. Containers eliminated much of the skilled labor of dockers so that industrial action became harder, and with cheap oil, it also accelerated the outsourcing of production to countries with lower wages.
As oil exports from the Middle East increased, the US had to adress the balance of payments so that dollars didn't just flow one way. It did this by selling weapons to the Middle East, which coincidentally also helped US arms companies which needed new customers. At the same time, the US helped to fan the flames of various regional conflicts (the Iran-Iraq war, Israel-Palestine, Afghanistan) in order to justify further weapons sales and also to weaken local powers that refused to accept its authority.
The Crisis that Never Happened
What caused the 1973-74 oil crisis? It was perceived in the West as a general energy crisis where all forms of energy became more expensive and more scarce. It was not a simple supply-and-demand situation. One cause of it was that six Arab countries came together to put pressure on the US to stop blocking a solution of the Israel-Palestine conflict, by cutting 5% of oil exports every month. Another cause of it was that the international oil companies, which had now lost control in the Middle East, wanted to expand into the Alaskan oil fields. But these were much more expensive to exploit, so to do that they needed a high oil price. They didn't just need a high oil price, they needed high prices for all kinds of energy, otherwise people would stop buying oil and start buying gas or coal or nuclear power. So the oil companies bought into these other energy sources in order to sit on them and lower production. This is what made it into a more general "energy crisis".
McJihad
This chapter is about the ties between oil, the US, and Islamist political movements. The Middle-Eastern countries which have been most closely allied with the US are also countries which are ruled by Islamist politics (e g Saudi Arabia, the Taliban in Afghanistan). Saudi Arabia for a long time had a pivotal role because of its large production capacity, which could be used to lower/raise the price of oil and thus discipline other producers. Mitchell argues that there is an uneasy symbiosis between capitalism and islamism, which arose when overt colonialism was no longer an option for control. Ibn Saud who conquered and founded the country relied on an Islamist movement to carry him to power, but he was also funded by first the British and then the Americans. The religious leaders tolerated the foreign oil company because it funded them with oil money. In the fifties, demands for democracy were crushed by both forces together. Oil money and CIA agents also helped spread Islamist movements in other Middle Eastern countries. But there was also tension--young Islamist activists protested against foreign presence in the country and government corruption; they were largely exported by the government to fight communism in Afghanistan.
Mitchell then goes into the US invasion of Iraq in 2003, and briefly into the Arab Spring, arguing that in Egypt the government could no longer afford to "bribe" the people into accepting neoliberal austerity programs and privatization, because in 2010 Egypt became a net importer of oil (because of declining oil fields and growing domestic demand).
Conclusion: no more counting on oil
We are past peak oil, and climate change is upon us. Mitchell asks why there's political organizing around the latter, but not so much around adapting society to the former (although the far right does use resource scarcity to fan xenophobia). Measuring how much oil is left is deliberately imprecise, since companies don't want it to be known. They didn't want climate science to get off the ground either, but it survived numerous attempts at sabotage from US authorities (it's not just Trump).
Afterword to the second edition
The fracking boom happened after the book was published; it was made possible by the high oil prices and by capital seeking new investments after the housing bubble crash. This is just a temporary diversion (although of course very destructive of the environment). There's still lots of coal in the ground, though, and the world's largest corporations are dependent on counting it as a financial asset.
Conclusion: "...one cannot predict democratic possibilites directly from the design of socio-technical systems – as the internet itself demonstrates, with its capacity for open communication always threatened by the monopolistic commercial powers of the largest software, computer and internet businesses. The point, rather, is that in battles over the shape of future energy systems the possibilities for democracy are at stake."
(no subject)
Date: 2018-07-12 12:17 pm (UTC)Thank you; I love these big picture analyses.
So the Bretton Woods system lasted until the seventies? Has it just kind of been lurching along in name only since since? Or is that end date when Nixon gave the final kabosh to any sort of gold standard?
Dollars being the reserve currency for the world is still a very big thing.
(no subject)
Date: 2018-07-13 08:13 am (UTC)My understanding is that the Bretton Woods system ended when the gold standard was abandoned, but I could of course be wrong.
(no subject)
Date: 2018-07-13 12:17 pm (UTC)(no subject)
Date: 2018-07-13 12:34 pm (UTC)