The internal dynamics of its capitalism driven primarily by petrodollar and weapons-dollar industries and the need to beat its European rivals in the race for global domination propel the United States inexorably towards war.
THE war on Iraq and its occupation by the Anglo-American axis is now as likely as ever, just more imminent. Here, we shall first detail the further deepening of the anti-war upsurge, which now runs all the way from the Pope to the United Nations (U.N.) weapons inspectors in Iraq, and from the largest labour confederations in Europe and the United States to the governments of France, Germany, China and Russia. We shall then comment briefly on the remarkable unity of the U.S. ruling class behind the Far-Right cabal of the Bush administration.
This unity itself can be explained by the fact that the coming war is not only a Far-Right offensive within the power structure of the U.S. but indeed vital for continued economic dominance of the U.S. over the rest of the world, not only by controlling the strategic oil and gas resources around the world but also, equally importantly, by re-furbishing the dollar-sterling currency complex against the challenge mounted by the euro, the new currency of the European Union (E.U.). The hegemony of the dollar has been challenged, for the first time since the Second World War.
Then, in the forthcoming issue of Frontline, we shall return to the war plans, the likely hurdles and possible failures that the U.S. may face on the ground, and the likely outcomes, at least in the short term.
The anti-war upsurge (Frontline, March 14) continues, in the wake of the February 15 demonstrations, which had brought out 15 million people, in 2,000 cities of the world, to demonstrations and marches against the war. The Pope has written a personal letter to Bush - the born-again Christian President of the U.S. who never tires of invoking God on his side - pleading with him not to make war, and he has asked one billion Catholics of the world to join him on Ash Wednesday in a prayer for peace. In an extraordinary move, which the Turkish press called "an earthquake," the Turkish Parliament rejected the government's bill that sought to allow the U.S. to station 62,000 troops on Turkish soil. The Parliament thus acted in defiance of the Turkish Prime Minister and the overseeing military leaders alike, but in solidarity with the 94 per cent of the people opposed to the war and with the 100,000 who were demonstrating at that very time just a mile away from the Parliament building.
IN Britain, 120 Labour Members of Parliament rose in revolt against their own Prime Minister, Tony Blair. In the U.S. itself, AFL-CIO, the largest labour federation which had staunchly supported the U.S. war in Vietnam, passed an anti-war resolution, saying that Bush had failed to make the case for war and that the issue of Iraq's purported Weapons of Mass Destruction (WMD) was a calculated diversion from the dire economic situation that the working people of the U.S. were facing. Three of the four major newspapers in the U.S. - Los Angeles Times and The Boston Globe more explicitly, The New York Times somewhat grudgingly - have been opposing the war and systematically publishing leaks from inside the Bush administration which undermine the positions of the administration. It was indeed The New York Times which said editorially after the February 15 demonstrations that the world now had two superpowers, with the U.S. on one side, and world public opinion on the other. Even the U.S. Chief of Staff has testified in congressional hearings that an occupation of Iraq might require as much as 400,000 troops for 10 years, thus implying that the war was unwinnable.
His testimony incensed the Pentagon hawks so much that Deputy Secretary of Defence Paul Wolfowitz, who has dodged military service all his life, went out of his way to say that a military general had no right to present estimates contrary to those put forward by the general's bosses at the Pentagon.
Recent polls show that anti-war sentiment has deepened across Europe, and leading newspapers are predicting that the outbreak of war will bring about an onrush of public protest which will be incomparably bigger than even the February 15 demonstrations and will include mass civil disobedience, work stoppages of all kinds, strikes and so on, which are being prepared already by the network of organisers who had coordinated the global protests of February 15. The European Trade Union Confederation's (ETUC) Executive Committee met in Athens on March 6 and 7 and confirmed the opposition of the trade unions to the war and to appeal for work stoppages everywhere in Europe on March 14 at midday.
A foretaste of what is to come if war were to actually break out can be had in the movement in Italy which is currently busy stopping trains carrying war materials from U.S. bases on Italian soil to the ports where American ships are docked. Such actions are likely to become far more numerous, much more widespread, and, in some cases, inevitably, violent as well.
MEANWHILE, a special session of countries of the Non-Aligned Movement (NAM), the summit of the Arab League, and the Organisation of Islamic Conference (OIC) passed unanimous resolutions rejecting the option of war, while the Secretariat of the Organisation of Petroleum Exporting Countries (OPEC) has been predicting utter chaos in the oil markets in the event of war. Canadian Prime Minister Jean Chretien, a close and loyal ally of the U.S., has said that Resolution 1441 of the Security Council speaks only of inspections and disarmament of Iraq, but neither of war nor of "regime change". He said that bringing about a "regime change" through war on another sovereign member of the United Nations is "a dangerous idea", bound to lead to instability across the world. Three of the five Permanent Members of the Security Council - France explicitly, Russia and China implicitly - have threatened to use their veto powers against any resolution either condoning war or even including a deadline for Iraq to abide by. They, along with Germany which sits on the Security Council but without a veto, argue forcefully that Iraq has shown sufficient degree of cooperation, and that inspections necessarily require many months of work, so that any such resolution would be unwarranted; France's threat to use its veto of course represents a joint Franco-German position. Indeed, many countries, led by France in this argument, have suggested that once the Security Council has come to be involved so extensively in the matter of inspections and disarmament, any unilateral action by the U.S. (or the Anglo-American axis) will fatally undermine the U.N., leaving the world with no institution through which international law could be upheld collectively.
In the midst of all this have come the most recent reports of the chief U.N. inspectors in Iraq, to a Ministerial Session of the Security Council on March 7, which made mincemeat of the arguments the U.S. has been peddling. Even before appearing at the Security Council and directly in response to Bush who had said on the eve of the meeting that the U.S. shall be pushing for a resolution authorising war, Hans Blix, the chief U.N. weapons inspector and head of United Nations Monitoring, Verification and Inspection Commission (Unmovic) in Iraq, said that the cooperation on the part of Iraq was "active, even proactive" and inspections should be given more time. Within the Security Council, he took up directly the U.S. position that a resolution for war was needed because Iraq had not complied with Resolution 1441 demanding "immediate, unconditional and active cooperation". Blix conceded that Iraq's cooperation was not "immediate" but then went on to say that so far as "unconditional" was concerned, Iraq had sought to put conditions initially but then had accepted every condition that the inspectors had put forward. As for "active cooperation", he repeated his words of a few days ago. Iraq's cooperation had been "active, even proactive". Hans Blix even spoke of "Iraq initiatives" in making possible "professional, no-notice inspections all over Iraq" and "substantial measure of disarmament". Despite this "proactive cooperation" on Iraq's part and "inspections all over Iraq", and even with the use of most advanced radar technology, no underground facilities of chemical and biological weapons had been found - thus directly rebutting a claim the U.S. has made repeatedly. In other words, there was no evidence that Iraq was in "material breach" of Resolution 1441, as Bush and Blair have been claiming. Two of his concluding remarks were even more significant. In implicitly challenging the U.S. which has been claiming that it knows that such facilities exist, Blix said that countries which have the means to assemble such information should present that evidence to the inspectors. And, responding to the Anglo-American proposal that a notice of just a few days be given to Iraq and then, if it does not fully comply, the attack could begin, Blix said: "Disarmament, and at any rate verification, cannot be instant. It will not take years, nor weeks, but months." In short, he upheld the Franco-German-Russian-Chinese position: inspections were working but should be given considerably more time, because the scope and technical nature of the work was such that it could not be done in days or even weeks.
Mohamed El Baradei, Director-General of the International Atomic Energy Agency and the Chief U.N. inspector in Iraq on the nuclear issue, followed Blix and flatly declared that there was no evidence that Iraq has revived its nuclear weapons programme. He said that the documents on which the U.S. had based its claim that Iraq had been secretly purchasing uranium from Niger, presumably for producing nuclear weapons, had been examined by international experts and were found to be fraudulent. He then proceeded to refute each of the allegations the U.S. has put forward, without naming the U.S. of course. Unlike Blix, El Baradei did not concede a single claim of the U.S.
Seeing that the whole case that the Anglo-American axis had put forward was unravelling under the weight of the inspectors' reports, U.S. Secretary of State Colin Powell made a petulant speech, upbraiding the inspectors, but left the substantive matter of the proposed ultimatum to the histrionics of the British Foreign Secretary Jack Straw, a former Trotskyist who has turned into an abject servant of the empire. He is the man who said in a press conference last week that Europe must cooperate with the U.S. because the U.S. would otherwise wreck international institutions such as the U.N. and the International Monetary Fund. If Europe does not cooperate, he said, it "will reap the whirlwind".
Straw was in fact quite right, in a paradoxical sort of way, on two counts. First, as France has argued most notably, we can salvage the fundamental architecture of the U.N. and the international law associated with it if only the much lesser powers occasionally ignore its resolutions but the U.N. will have been shown to be utterly ineffective if the U.S., the supreme global power, ignores its will even while the mechanisms for peace put in place by the Security Council with full knowledge and initial cooperation of the U.S. are indeed working. Second, more crucially, the coming war is not only against Iraq but also the first war the U.S. is fighting for its interests in opposition to the interests of the E.U. The British view is that Europe should surrender and accept U.S. supremacy for the foreseeable future; the Franco-German position is that this is the time to challenge that supremacy because (a) if the Americans win this war easily, the euro shall remain a second-rate currency for the foreseeable future, and (b) chances are that the U.S. shall not score a quick victory but will enter a quagmire, which will give the E.U. the prospect of future gains not just in relations with Iraq but with OPEC as a whole. In one of its many aspects this is a war between the euro, the currency of the E.U., and the dollar-sterling nexus, the currencies of the two great empires of the past and present, that is, the Anglo-American axis. With the Soviet bloc eliminated, the inter-imperialist rivalry of yesteryear is returning, in a different shape of course.
THE power structure within the U.S., is in fact highly favourable to the war-mongers. We have written at great length in our previous articles in Frontline on the nature of the Far-Right, quasi-fascist group that wields power in Washington these days, in the White House as well as the Pentagon. Second, there is the lamentable role of the Democratic Party, the supposedly liberal opposition party, which has utterly failed to organise any sort of opposition to - indeed, even any debate on - the impending war, on false pretences of patriotism, which requires that all parties fall behind the government in matters of war. This is the mirror-image of what happens in India where the Congress, as well as most the other Opposition parties, simply fall behind the Bharatiya Janata Party as soon as issues of national security, terrorism and so on are invoked.
Then, there is the U.S. Congress, which is controlled by the Zionist lobby, the Christian fundamentalists, the petrodollar and weapon-dollar industries, and corporate corruption; Enron, for example, was the largest contributor to Bush's election campaign and there is not a single congressional district (in Indian terms, an electoral constituency for the Lok Sabha) which does not have a factory tied up with defence procurement. What General Eisenhower, the right-wing U.S. President of the 1950s, said in his farewell speech is true today a thousand times over; there is no industrial complex in the U.S. which is not also a military-industrial complex. In overt and covert ways, the U.S. spends roughly half its budget on the military, an amount roughly equal to what the next 25 countries spend on their combined military budgets. This is certainly connected with the mania for world conquest but it also means that there is nothing as lucrative in the U.S. as the business of war and that the dominant sections of the U.S. bourgeoisie tend to be directly connected with war materials procurements.
The internal dynamics of U.S. capitalism drives the U.S. toward war as much as does the imperialist drive for global domination.
THIS war economy, in its internal as well as external aspects, intersects then with the petrodollar economy. Bush himself as well as key members of his administration are directly involved in the oil corporations (Frontline, March 14, 2003). Every member of this administration would gain substantially, individual by individual, from any expansion of U.S. control over the world's oil resources. Beyond that, there is the actual character of the oil economy as a whole, which has essentially three aspects: (a) actual resources and their possession, control and their actual utilisation; (b) control over volumes of supply and directions of trade, that is, where the pipelines go and where the oil then ends up; and (c) the currency in which oil trade, by far the biggest trade in the world, is carried out, and in which, therefore, the accumulation of wealth generated by this trade takes place. Each of these aspects is worthy of some explanation.
First, the volume of resources and consumption patterns. Seventy per cent of the world's known oil resources are in West Asia. However, the Caspian Sea Basin is becoming increasingly attractive, with estimates of oil resources there fluctuating widely, between 35 billion and 300 billion barrels; the upper end of this estimate would mean that the region has more reserves than Saudi Arabia and half as much as the entire West Asian region. By contrast, the U.S. itself accounts for two to three per cent of the resources but, with only five per cent of the world's population, it also accounts for a quarter of the world's oil consumption, half of which is imported. Caspian oil has a special place in these calculations because, whereas oil is state property in West Asia where U.S. oil corporations have been hired essentially as contractors, oil resources in the Caspian region are still private property and can be owned directly by U.S. corporations. However, it also has two major drawbacks. First, the resources are very undeveloped, even largely uncharted, and the oil is hard to extract; estimates for developing the requisite infrastructure and extraction facilities go up to $60 billion, a sum that even the richest corporations find forbidding.
Second, and even more significantly, it is yet to be legally determined as to what share of this oil belongs to which of the new statelets bordering the sea. This situation is further complicated by the fact that Iran can refer to treaties with the Soviet Union which specified the Caspian Sea as a "joint lake" between the two countries; it can thus lay claim to a substantial portion of this oil, and the successor regimes in the region must negotiate with Iran in accordance with international law.
Iraq occupies a special place in this calculus of resources. Its known reserves account for some 16 per cent of the world's total, second only to Saudi Arabia and vastly greater than the currently known reserves of the Caspian region. Secondly, decay of the oil industry in Iraq over the past two decades is such that it is currently producing roughly two million barrels a day as compared to eight million by Saudi Arabia, which means that its reserves have been preserved much better even as its capacity to produce oil has declined (Iraqi oil industry has not had new computers installed since 1979, for example). Thirdly, U.S. oil corporations have been barred from this resource-rich country for well over a decade and shall not be allowed in unless there is a "regime change". Fourthly, there are strong rumours that after the occupation of Iraq is completed the U.S. will seek to privatise Iraqi oil, either under its own military administration or through the puppet regime it will then install; the willingness of particular clients to do this job may determine as to which ones get elevated to run the changed regime.
Then, there is the question of pipelines, which substantially determine which way the oil flows and who immediately benefits from it. For example, the Caspian Basin during the Soviet period had pipelines going only toward Russia, and part of the U.S. design there is to change the direction of this flow. The U.S. would like to build pipelines through Afghanistan toward the Arabian Sea, keeping Russia as well as Europe out of these supply routes, but the problem is that Afghanistan is landlocked and the pipelines in this direction must then pass through Iran (the shortest route) or Pakistan, neither of which the U.S. currently finds reliable. Hence the possibility of intensification of the so-called "war on terrorism" in Pakistan and the mad plans for "regime change" in Iraq. In the interim, the U.S. prefers the building of a system of oil-and-gas lines starting through Kazakhstan and Turkemenistan, then running under the Caspian Sea to Baku in Azerbaijan, then through Georgia and Turkey to the Mediterranean sea. This would keep Russia out but would facilitate supplies to Europe.
The main point in any case is that the direction of pipelines is of great geo-political importance. For example, under a different dispensation of global power, pipelines could conceivably be constructed from the Caspian Basin to the Chinese province of Xinjiang which China would like to develop industrially. Those same pipelines could conceivably be extended across China to take oil and gas to its coastal regions and then, beyond that, to Japan. The construction of such pipelines would be very expensive but, as a result, China and Japan could be substantially free of U.S. domination over their supplies. The U.S. would never allow that because such possibilities feed into one of its two worst nightmares, namely that Chinese and Japanese interests would converge and, together, they would lead a vast zone of industrialised countries of East and Southeast Asia in a bloc that could outdo the U.S. itself within a foreseeable future.
THE other, and most immediate, nightmare for the U.S. is that the E.U. shall fast emerge as a rival bloc. That, however, can only happen if Europe itself can emerge from under the dominance of the dollar which is currently the primary, virtually exclusive, reserve currency for the entire world.
That, in turn, cannot happen unless the euro becomes the primary currency for the world's largest trade, namely oil trade. A lot of dollars which are not petrodollars nevertheless gain their value and centrality in the world from petrodollars. The cardinal sin of Saddam Hussein is neither production of weapons of mass destruction nor promotion of terrorism but that, exasperated by 10 years of American-imposed U.N. sanctions and Anglo-American bombings of large parts of his country, he made Iraq, on November 6, 2000, the first oil-producing country to shift from the dollar to the euro as the currency for trade in oil and hence the primary currency for its foreign trade in general, showing to the other OPEC countries that they could break the dollar dominance by shifting to euro or at least diversifying their reserve currencies. At the time Iraq made the shift, the euro was worth 82 cents to a U.S. dollar; today it stands at $1.5 - gaining by 17 per cent. Iraq's decision was a key element in making the euro a competitive currency for the first time. If the other oil-producing countries were to shift accordingly, the U.S. economy would collapse.
This is how it works: since the dollar is the world's reserve currency, every country which is forced to import dollars, which means that it must sell its goods and services to the U.S., which can just go on printing more and more dollars, thus getting its imports at little cost.
That's how the U.S. can go on running its economy on huge deficits without any adverse effect of the deficits on its own economy. Oil being the largest single import for most countries, they need increasing amounts of dollars for their purchases. In turn, the oil-producing countries accumulate immense amounts of dollars which then go back to - mostly U.S.-based - banks and become what we call petrodollars. If oil trade were to shift to the euro, there would be a glut of dollars in the world which will have to be exchanged for the euro, at declining prices for the dollar. These value-depleted dollars would then have to be honoured by the U.S. Federal Reserve; the more dollars are thus cashed, the lower their value shall be. The U.S. would no longer be able to run its economy on deficits as it has been doing for decades; indeed, as the world's biggest debtor nation and one whose own currency was now in much less demand, the U.S. would have to start paying some of its debts, without any capacity to just go on printing more dollars. Meanwhile, America's productive capacity and urban infrastructures are in advanced stage of decay, and its States and cities are as much in debt as is Federal government itself, not to speak of the citizenry at large, which is wedded now to a credit card economy. The U.S. may well face a crash. It must therefore make sure that the oil-producing countries do not shift to the euro, even if that requires occupying some of them and continually threatening the rest. What happens, for example, if Hugo Chavez of Venezuela makes the same decision as Saddam Hussein and shifts to the euro? This currency war - that is, this first stage of a renewed inter-imperialist rivalry which abated so decisively after the Second World War - is as much an element in the contemplated war against Iraq and the "regime change" there as is the question of capturing its oil resources.
What we are witnessing, in fact, is the first stage in the unravelling of the whole system that had been put together by the advanced capitalist countries some fifty years ago. When France warns that the unilateral will of the U.S. to go into this war will ruin the U.N., we are reminded of how the Nazi excesses had spelled the doom of the League of Nations. The heightened inter-imperialist rivalry, indicated by this currency war, illustrates how the disappearance of the Soviet Union has served not to bring greater stability to imperialism but to accentuate the inner conflicts of the system; retrospectively, in fact, one can see all the more clearly that it was only the existence of communist states that had brought the advanced capitalist countries into a stable alliance, which cannot outlast the removal of those states. Meanwhile, as the U.S. conquers Afghanistan and then discards it to a rubbish heap, as it now prepares to make war on Iraq's people and their resources, and as it issues warnings of making war against another half a dozen countries to bring about "regime change" in all of them, the U.S. itself begins to look like - more than anything else - a Fourth Reich.
This analysis of the economic imperative underlying the coming war also helps explain two other factors. We can now see, first, why the U.S. is so determined to make war even in opposition to a global coalition of anti-war forces so huge as to have no precedent in past history. At the same time, it also helps explain the otherwise seemingly senseless and knavish behaviour of Blair & Co. One can understand the ideological basis for the Italian and Spanish governments supporting Bush; like the U.S., Italy and Spain are also ruled by the Far-Right. But why a Labour Prime Minister in Britain? It is the structural intimacy between the dollar and the sterling which explains the personal intimacy between Blair and Bush, as well as the rivalry between the Anglo-American and the Franco-German blocs. It's all about money.
COMMents
COMMents
SHARE