Louis Proyect: The Unrepentant Marxist

March 27, 2018

Not about oil?

Filed under: imperialism/globalization,oil — louisproyect @ 7:10 pm

(A guest post by Brian A. Mitchell)

Not About Oil? They Must Be Joking – Just One of the World’s Many Resources that the History of Interventions, Occupations, and Wars Are Always About.

What many of the world’s wars and interventions are all about. One of the world’s most valuable resources controlled by a wealthy few; from British control of Middle East oil before the Second World War to US control of global oil resources after the war.

“We must become the owners, or at any rate the controllers at the source, of at least a proportion of the oil which we require.”

(British Royal Commission, agreeing with Winston Churchill’s policy towards Iraq, 1913.)

“He who owns oil will own the world… who has oil has empire.”

(Henry Berenger, Commissioner General for Oil Products, France, during WWI.)

“In oil Baku is incomparable… Baku is greater than any other oil city in the world. If oil is king, Baku is its throne.”

(British journal The Near East, on Britain’s invasion of the Soviet Union along with 14 other countries in the Wars of Intervention after the Bolshevik revolution of 1917.)

“These International bankers and Rockefeller-Standard Oil interests control the majority of newspapers and use the columns of these papers to club into submission or drive out of public office officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government”

(US President Theodore Roosevelt, New York Times, March 27 1918.)

“if we appear to be reactionary in Mesopotamia, there is always the risk that Faisal will encourage the Americans to take over both, and it should be borne in mind that the Standard Oil company is very anxious to take over Iraq.”

(Sir Arthur Hirtzel, Head of the British government’s India Office Political Department, 1919.)

“The pioneering spirit should now lead American capital and American engineering to seek new sources of petroleum supplies in foreign fields for the benefit of the America of tomorrow. Nor can this be done without popular support inspired by general appreciation of oil as our servant, a servant that works 24 hours a day and 7 days a week”.

(National Geographic magazine February 1920.)

“The real menace of our republic is this invisible government which like a giant octopus sprawls its slimy length over city, state and nation. Like the octopus of real life, it operates under cover of a self created screen… At the head of this octopus are the Rockefeller Standard Oil interests and a small group of powerful banking houses generally referred to as international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes. They practically control both political parties.”

(New York City Mayor John Hylan, 1922.)

“I helped make Mexico and especially Tampico safe for American oil interests in 1914. … In China in 1927 I helped see to it that the Standard Oil went its way unmolested.

(Testimony of General Smedley Butler, US Marine Corps, to the McCormack Dickstein Committee. 1935.)

“Hitler’s deputy Hess’s mission to Britain was to suggest:”a profitable agreement in the form of an alliance against Russia as a result of which Germany was to receive the Ukraine and the Caucasus oil regions… .”

(The Times Oct 5 1942.)

“The oil of Saudi Arabia constitutes one of the world’s greatest prizes.”

(US Secretary of State Cordell Hull, 1943.)

“The oil in this region is the greatest single prize in all history.”

(US oil geologist and director of the American Petroleum Institute Everette Degolyer, 1944.)

“Our petroleum policy toward the United Kingdom is predicated upon a mutual recognition of a very extensive joint interest and upon a control, at least for the moment, of the great bulk of the free petroleum resources of the world … it is the view of the United States government that US-UK agreement upon a broad, forward looking pattern for the development and utilisation of petroleum resources under the control of nationals of the two countries is of the highest strategic and commercial importance.”

(US government memo of June 1945.)

“[Middle East oil is] a stupendous source of strategic power, and one of the greatest material prizes in world history.”

(US State Department, 1945.)

“We need to promote internal political stability and in particular to influence individuals so that public opinion does not become so hostile to our oil companies that their commercial operation becomes impossible.”

(British Prime Minister Harold Macmillan, in a note to a government cabinet, October 1945.)

“As the largest producer, the largest source of capital, and the biggest contributor to the global mechanism, we must set the pace and assume the responsibility of the majority stockholder in this corporation known as the world… Nor is this for a given term of office. This is a permanent obligation.”

(Secretary-Treasurer of US Standard Oil Company, Leo Welch, 1946.)

“Behind the conflict in the Near East is OIL. Britain owns rich wells in Iraq … Socialists … [must] … condemn the Oil Imperialism of Britain and America and demand the pooling of all the oil resources of the world according to the needs of the peoples.”

(British Lord Fenner Brockway, 1947.)

“Our strategic and security interests throughout the world will be best safeguarded by the establishment in suitable spots of ‘Police Stations’, fully equipped to deal with emergencies within a large radius. Kuwait is one such spot from which Iraq, South Persia, Saudi Arabia and the Persian Gulf could be controlled. It will be worthwhile to go to considerable trouble and expense to establish and man a ‘Police Station’ there.”

(British Foreign Office memo, 1947.)

“Now the Pacific has become an Anglo-Saxon lake, and our line of defence runs through the chain of islands fringing the coast of Asia.”

(US General MacArthur, Daily Mail March 2 1949. [Areas which have massive oil resources.])

“Persian [Iran] oil is of vital importance to our economy. … We regard it as essential to do everything possible to prevent the Persians from getting away with a breach of their contractual obligations. [To give the British massive advantages in their oil supplies.]”

(British Foreign Secretary Herbert Morrison, 1950s.)

“The most significant example in practice of what I mean was the Iranian experiment with which, as you will remember, I was directly concerned. By the use of economic aid we succeeded in getting access to Iranian oil and we are now well established in the economy of that country. The strengthening of our economic position in Iran has enabled us to acquire control over her foreign policy and in particular to make her join the Bagdad Pact. At the present time the Shah would not dare even to make any changes in his cabinet without consulting our Ambassador.”

(Letter from US Council on Foreign Relations member billionaire Nelson Rockefeller to President Eisenhower, January 1956.)

“We must at all costs maintain control of this oil.”

(British Foreign Secretary Selwyn Lloyd, to US Secretary of State Allen Dulles, January 1956.)

“Our interest lies in keeping Kuwait independent and separate, if we possibly can, in line with the idea of maintaining the four principle oil producing areas under separate political control.”

(Head of the eastern department of the British Foreign Office Derek Riches, August 8 1958. [Classic divide and rule again. The British separated Kuwait from Iraq in 1913.])

“Iran is the only source of Middle Eastern oil which is not under the control of an Arab government, and present production could be considerably increased in an emergency. This strengthens the West’s hand viv-a-vis the Arab oil producing countries.”

(British Joint Intelligence Committee, 1961.)

“It [Saudi Arabia] has no moral code of laws and its criminal justice is is of mediaeval barbarity… Corruption is widespread. The country sits on top of some of the richest oil resources in the world…”

(British Ambassador Colin Crowe, to Foreign Secretary Alec Douglas-Home, June 20 1963.)

“Aden is essential for our vital oil and strategic interests.”

(British commander in the Middle East Air Marshal Charles Ellsworthy, mid 1960s.)

“The economic health and well-being of the United States, Western Europe, Japan depend upon continued access to the oil from the Persian area.”

(US President Carter, Department of State Bulletin, April 1978.)

“The US deliberately constructed out of the ruins of the war an international monetary order based on the dollar… With its nuclear and armed forces, the US stood ready to guarantee this open economic system against threats from the Soviet Union on the outside and enemies that might close off certain markets and needed resources such as oil on the inside. As both banker and cop, the US was the guarantor of the postwar global economy.”

(Business Week March 12 1979.)

“Western industrialised societies are largely dependent on the oil resources of the Middle East region and a threat to access to that oil would constitute a grave threat to the vital national interests. This must be dealt with; and that does not exclude the use of force if necessary.”

(US Secretary of State Alexander Haig, March 11 1981.)

“As outlined in the paper, the strategy for Southwest Asia, including the Persian Gulf, directs American forces to be ready to force their way in if necessary, and not to wait for an invitation from a friendly government, which has been the publicly stated policy.”

(US Defense Dept, New York Times May 30 1982.)

“In the future, we are more likely to be involved in Iraq-type things, Panama-type things, Grenada-type things… Our position should be the protection of the oilfields. Now whether Kuwait gets put back, that’s subsidiary stuff.”

(Chairman of US Armed Services Committee Les Aspin, 1990.)

“Mideast oil is the West’s lifeblood. It fuels us today, and being 77 percent of the Free World’s proven oil reserves, it is going to fuel us when the rest of the world has run dry. … It is estimated that within 20 or 40 years the U.S. will have virtually depleted its economically available oil reserves, while the Persian Gulf region will still have at least 100 years of proven oil reserves.”

(US General Schwarzkopf, February 8 1990.)

“It’s been a leading, driving doctrine of U.S. foreign policy since the 1940s that the vast and unparalleled energy resources of the Gulf region will be effectively dominated by the Unites States and its clients, and, crucially, that no independent, indigenous force will be permitted to have a substantial influence on the administration of oil production and price.”

(US political scientist and academic Noam Chomsky, September 11 1990.)

“Shell’s operations are impossible unless ruthless military operations are undertaken for smooth economic activities to commence.”

(Ken Saro-Wiwa, from a secret Nigerian military memo, May 1994. He was executed in 1995.)

“If they turn on the radars we’re going to blow up their goddamn SAMs [missiles]. They know we own their country [Iraq]. We own their airspace… We dictate the way they live and talk. And that’s what’s great about America right now. It’s a good thing, especially when there’s a lot of oil out there we need.”

(US Brigadier General William Looney, June 24 1996, Washington Post, August 30 1999.)

“So where is the oil going to come from? … The Middle East, with two-thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies,”

(US Vice President Richard Cheney, CEO of oil company Halliburton, 1999.)

“Colombia is now the third largest recipient of U.S. military aid after Israel and Egypt. Direct U.S. military intervention looms on the horizon for this region
(Venezuela, Colombia, Ecuador, Peru), which exports more oil to the U.S. than the entire Middle East.”

(CovertAction Quarterly magazine, 1999.)

“US aid is to improve U.S.-Kazakh military cooperation while establishing a U.S.-interoperable base along the oil-rich Caspian.”

(US State Department Report, 2002.)

“In oil’s name, the United States is immersed in a new kind of colonialism, for the resources that lie under foreign feet. They couldn’t care less about the people. Therein lies an even greater tragedy.”

(U.S. Dept. of State, Congressional Budget Justifications: Foreign Operations, 2003.)

“… we’ve got to win a real war, which involves using a lot of troops and building a nation, and that’s at the core of the president’s strategy for rebuilding the Middle East.

(William Kristol, chairman of the PNAC
(Project for the New American Century), 2004.)

“Whoever controls oil controls much more than oil.”

(US Senator John McCain, June 17 2008.)

“Our aim is not simply to appropriate oil in one way or another
(say in easily accessible Nigeria or Venezuela) but to crush OPEC. Therefore we have to use direct force in order to get hold of large and concentrated oil deposits which can be opened up rapidly so as to put an end to the artificial oil shortage and thus to lower the price… Since this is the ultimate and there is only one target possible: Saudi Arabia… Fortunately, these are not only rich oilfields but they are also concentrated in a very small area, a fraction of the Saudi Arabian territory… While Vietnam was full of trees and brave people and our national interest was almost invisible, what we have here is no trees, very few people and a clear objective.”

(Adviser to US Defence Department Professor Miles Ignotas.)

“The mistake of the West was to put the Sauds on the throne of Saudi Arabia and give them control of the world’s oil fortune, which they then used to propagate Wahhabi Islam.”

(British novelist Salman Rushdie.)

“We do not have any defence treaties with Kuwait, and there are no special defence or security commitments to Kuwait.”

(Margaret Tutweiller, US State Department, deliberately enticing the Iraqi invasion of Kuwait, which was a few days later.)

“Venezuela has the biggest oil reserves in the world. And the biggest gas reserves in this hemisphere, the eighth in the world. Venezuela was a U.S. oil colony. All of our oil was going up to the north, and the gas was being used by the U.S. and not by us. Now we are diversifying. Our oil is helping the poor. … If the United States was mad enough to attack Iran or aggress Venezuela again the price of a barrel of oil could reach $150 or evan $200.”

(Venezuelan socialist President Hugo Chavez.)

“And finally, this notion that the United States is getting ready to attack Iran is simply ridiculous. And having said that, all options are on the table.”

(US President George Bush.)

“[Genocide] certainly is a valid word in my view, when you have a situation where we see thousands of deaths per month, a possible total of I million to 1.5 million over the last nine years. If that is not genocide, then I don’t know quite what is.”

(UN humanitarian coordinator Denis Halliday on US sanctions on Iraq.)

“Natural resources and inanimate energy… are increasingly regarded as affected with public interest… Certainly they were left by God or geology to mankind and not to the Standard Oil Company of California. If this is not sound moral doctrine, I do not know what is.”

(US writer Stuart Chase.)

“The use of solar energy has not been opened up because the oil industry does not own the sun.”

(US activist and author Ralph Nader.)

“The good Lord didn’t see fit to put oil and gas only where there are democratically elected regimes friendly to the United States. Occasionally we have to operate in places where, all considered, one would not normally choose to go. But we go where the business is.”

(US Vice President Dick Cheney.)

“It is clear our nation is reliant upon big foreign oil.”

(US President George Bush.)

“Now you have people in Washington who have no interest in the country at all. They’re interested in their companies, their corporations grabbing Caspian oil.”

(US writer Gore Vidal.)

“Bahrain lies at the epicenter of Gulf security and any violent upheaval in Bahrain would have enormous geopolitical consequences. Global economic stability depends on the uninterrupted export of crude oil from the Gulf to markets around the world, a job that historically has been assigned to the U.S. Fifth Fleet.”

(King of Bahrain Hamad bin Isa Al Khalifa, whose billionaire family have ruled Bahrain since 1780.)

“From the 1920s into the 1940s, Britain’s standard of living was supported by oil from Iran. British cars, trucks, and buses ran on cheap Iranian oil. Factories throughout Britain were fueled by oil from Iran. The Royal Navy, which projected British power all over the world, powered its ships with Iranian oil.”

(US journalist and author Stephen Kinzer.)

“Control over the production and distribution of oil is the decisive factor in defining who rules whom in the Middle East.”

(US critic and author Christopher Hitchens.)

“The invasion of Iraq was a bandit act, an act of blatant state terrorism, demonstrating absolute contempt for the concept of international law.”

(English playwright Harold Pinter.)

“If you go into the Ecuadorian Amazon and you stick your hand in the ground, what you get is oil sludge. The oil companies continue doing whatever they please.”

(Equadoran President Rafael Correa.)

“In Iraq, [American administration] said Saddam Hussein had weapons of mass destruction endangering mankind. With this pretext, the U.S. intervened militarily, and all they did is take control over oil fields, and oil wells.”

(Bolivian socialist President Evo Morales.)

“My point is that it’s incorrect to say that the Iraq policy isn’t working. It is working. It is doing what they want. They have got control of the oil and they are exporting it, and they have stripped a government that was 90% state owned and they are privatizing it.

(US political economist, social scientist and author Michael Parenti.)

“…an oil policy with origins in the US State Department is on course to be adopted in Iraq… with no public debate and at enormous potential cost… allocates the majority of Iraq’s oilfields, accounting for at least 64% of the country’s oil reserves, for development by multinational oil companies.”

(In other words, mostly US companies. The Rip Off of Iraq’s Oil Wealth, British Non Government Organisation, Platform, 2005. Quoted in William Blum “America’s Deadliest Export. Democracy. The Truth About US Foreign Policy and Everything else.”)

“…an oil policy with origins in the US State Department is on course to be adopted in Iraq… with no public debate and at enormous potential cost… allocates the majority of Iraq’s oilfields, accounting for at least 64% of the country’s oil reserves, for development by multinational oil companies.”

(In other words, mostly US companies. The Rip Off of Iraq’s Oil Wealth, British Non Government Organisation, Platform, 2005. Quoted in William Blum “America’s Deadliest Export. Democracy. The Truth About US Foreign Policy and Everything else.”)

Brian was born in the bombed out wartime East End of London and developed an interest in political books early on. He worked in various technical fields for 20 years, all of which thoroughly bored him. He entered academic life (History and Classical Economics) and became an independent journalist, worked for the ANC (secret at the time) until the end of apartheid, and was a trade union representative in a large hospital. He is now retired and still works (when able) as an independent journalist.


February 21, 2016

Rafael Correa and the Chessintern

Filed under: China,indigenous,Latin America,oil — louisproyect @ 9:55 pm

As most people probably understand, political analysis about a particular government leader is often largely driven by where they stand in the geopolitical chess game—most of all by the grandmasters who play it, namely the “anti-imperialist” left that is as single-minded ideologically as earlier generations of Kremlin apologists if not more so.

In my experience, Stansfield Smith is the Boris Spassky of this milieu. The tops at awfulness with no competition on the horizon. Back when he was on Marxmail, he never posted anything except talking points in line with the Pepe Escobar/Mike Whitney/Eric Draitser Chessintern.

To belong to the Chessintern, you have to master a few basic openings such as the need to defend every foreign policy initiative of the Kremlin or China and then to smear anybody who ends up on the other side of the chessboard as tools of the CIA or the NED.

Back in 2010, when Smith was still a Marxmail subscriber, he did everything he could to tarnish indigenous activists in Ecuador organized in CONAIE (Confederation of Indigenous Nationalities of Ecuador) as tools of imperialism. That year there was a coup attempt in Ecuador that CONAIE supported. Rather than dealing with indigenous unhappiness with Correa, as I tried to do in an article on the Miskito rebellion in Sandinista Nicaragua, Smith approached the whole thing as a conspiracy in which NED payoffs to the Indians was the key factor. You don’t need Marxism to understand such conflicts, just Hal Holbrook’s line in “All the President’s Men”: “follow the money.”

Interestingly enough, the Chessintern-friendly CounterPunch ran a number of articles that year that refused to demonize the Indians. The late Roger Burbach called attention to a law that allowed for the privatization of water and that placed “no real restraints on the ravaging of rivers and aquifers by the mining companies.” Ben Dangl stated that Correa had been marginalizing the indigenous movements of Ecuador while Laura Carlsen seemed to have offered the most balanced approach: “Although Correa has required companies to pay a larger share of profits to the government as mentioned above, he promoted the extractive model of national development that encroaches on indigenous lands and rights and has led to massive environmental destruction.”

The same divisions exist in Ecuador today with indigenous people continuing to feel vitimized, especially when it comes to the exploration for oil in their territories. If you’ve seen “Crude”, you know how much damage oil companies can do to Ecuador’s water and soil. With the film’s  focus on the attempt of peasants to sue Texaco and Chevron’s for damages, it is not difficult to imagine that Indians would have the same kind of grievances even if the government was part of the Bolivarian revolutionary movement and that oil drilling in Indian country was being done in partnership with a Chinese oil company. That is, unless you were Stansfield Smith.

With a title like “Propaganda as ‘News’: Ecuador Sells Out Indigenous Tribes and the Environment to China”, you pretty much know what to expect. Whatever the question (Syria, Ukraine, Tibet, Xinjiang), you trawl the Internet for any links between some protest movement and the NED, the CIA or some Soros-funded NGO and that’s all you need to know. Case closed.

Foolish me. I tried to transcend Chessintern thinking when I wrote about the Miskito revolt:

The best presentation of the Miskito case comes from Charles R. Hale, an American anthropologist who was a Sandinista supporter. The more time he spent with Miskito people, the more he came to realize that the government in Managua had misunderstood their legitimate demands. His book “Resistance and Contradiction: Miskito Indians and the Nicaraguan State, 1894-1987” is essential reading.

Hale explains that Miskito unrest had preceded the Sandinista victory. The same economic forces that precipitated the revolution against Somoza were shaking up the Atlantic Coast. Large-scale commercial exploitation of the land for cattle-ranching and cotton production caused displaced peasants to arrive in the cities with dim economic prospects. When the earthquake hit Managua, these prospects completely disappeared and armed struggle seemed like the only reasonable path.

These peasants also moved eastward, putting pressure on communally owned Miskito land. The UN and the Alliance for Progress sponsored some large-scale projects in partnership with Somoza that the Miskitos resented, including the construction of a deep-water port. The construction interfered with traditional fishing activities. The Miskitos faced challenges on all front.

But mostly the Miskitos felt left out of the economic development that was taking place all around them. The Somoza family had pumped millions of dollars into nearly 200 industrial fishing boats on the Atlantic Coast. Commercial fishing accounted for 4 percent of foreign currency earnings in 1977, but nothing substantial flowed into Miskito improvement. The “trickle down” theory was as false in Nicaragua as it was in Reagan’s America. Capital to finance the expansion came from Cuban exiles in Miami and North American banks. All the stepped up economic activity was of no benefit to the Miskitos, who regarded the Spanish-speaking businessmen as little more than invaders. After the commercial fishers had taken the last lobster and shrimp out of the water, they would have gone on their merry way.

Essentially this is the same kind of clash in Ecuador today.

Smith’s article is an assault on Amazon Watch, an NGO that was supposedly the source of an article titled “Ecuador to Sell a Third of Its Amazon Rainforest to Chinese Oil Companies” that has made the rounds on the Internet. In Smith’s eyes, the article was “an invention” since to this date no land has actually been sold. He also believes that even if China began buying up land for drilling, the targeted area is practically the size of a postage stamp:

And, for comparison, the Alberta tar sands oil fields are 1,500 times the size of the small area Ecuador opened up for oil exploration in the Yasuni. In comparison, too, last May Obama approved oil drilling in the Artic Sea, where 20 billion barrels of oil and 90 trillion cubic feet of natural gas are now more available due to the melting of Arctic ice sheets.

I am not exactly sure how much drilling there will be in Yasuni National Park once the extractive juggernaut gets a full head of steam but it is bigger than the state of Connecticut. This does not even speak to the damage that will be done to a priceless natural habitat that Correa pledged to preserve after becoming president.

To wrap up his case against the indigenous peoples, Smith draws a contrast between their “corporate-backed funders” such as the Charles Stewart Mott Foundation and China, which “provides loans at low interest rates, does not intervene in the internal affairs of other countries, respects other countries’ paths of economic and political development, and encourages South-South cooperation as a counter to Western hegemony.” I got a chuckle out of this since the organization I was involved with in the 1980s that trained Nicaraguans how to use high technology tried to get some donations from Mott. The executive director Michael Urmann, who died in 2012, told me about after going up to see Mott in his penthouse he was forced to listen to this knucklehead lecture him about world politics for an hour. That was bad enough but when no money came out of the visit, he was fit to be tied. Our attitude toward Mott, the Ford Foundation or any of a number of liberal charities was if they gave us money, it was their contradiction, not ours. Since both of us were sixties radicals (he was a Maoist), that is the way we looked at it. I have no idea what Smith was doing in the sixties but his inability to think in these terms suggests not very much.

But in terms of Smith’s ebullient description of Chinese beneficence, inquiring minds would naturally have to look a bit closer at the economic data to determine whether China is interested in helping the poor, especially since strikes and protests there set records in 2015. Worker militancy has led to increased wages in recent years, hence leading to a devaluation of the yuan to make Chinese exports competitive with other Asian countries that pay even lower wages.

All this has consequences for Ecuador. With a devalued yuan, which Ecuador uses, exports to China produce less revenue. When you take into account that the price of its main export—oil—has dropped precipitously in the last year or so, the consequences are drastic. Less money is available for social spending, the cornerstone of the oil-lubricated Bolivarian revolution. There is also the pain of increased prices on imported goods, including food and medicine. In other words, Ecuador is going through the same painful adjustment as other export-dependent Latin American countries and there is little that China or any other BRICS country can do to alleviate matters. We are dealing with a general crisis of capitalism, something that seems to escape the ideological framework of the Chessinturn. They have a classless notion of “development” that posits alignment with the BRICS as a kind of magic elixir that will vanquish poverty. Someone should remind these people that capitalism is a crisis-ridden system that has long outlived its usefulness even when it is practiced by someone who gave Julian Assange safe haven. We are for giving him safe haven but we are also for giving Ecuador’s Indians safe haven.

Finally, let me recommend what is probably the best left critique of Rafael Correa, an article by Marc Becker that appeared in the September-October 2009 Against the Current. Just to establish Becker’s bona fides, he is a major Mariategui scholar and considered to be a rock solid anti-imperialist. He even had the audacity to write an article putting the Shining Path in a relatively good light.

Titled “Ecuador: Left Turn?”, Becker’s article is quite even-handed. It refers to Correa as defending the idea that “socialism is both more just and efficient than capitalism” and promising to stand up for indigenous rights. However, the deeds don’t quite match the words as Becker points out:

Despite Correa’s attempts to mimic Chávez’s strategies, his policies are not nearly as radical as those of his counterpart. Of the many lefts that now rule over Latin America, Correa represents a moderate and ambiguous position closer to that of Lula in Brazil or the Concertación in Chile rather than Chávez’s radical populism in Venezuela or Morales’ Indigenous socialism in Bolivia.

The danger for popular movements is a populist threat with Correa exploiting the language of the left but fundamentally ruling from the right. It is in this context that a mobilized and engaged social movement, which historically in the Ecuadorian case means an Indigenous movement, remains important as a check on a personalistic and populist government. If Correa follows through on any of the hopeful promises of his government, it will be due to this pressure from below and to the left.

Correa continues to enjoy an unusually large amount of popular support in a region which recently has greeted its presidents with a high degree of good will only to have the populace quickly turn on its leaders who inevitably rule against their class interests. Chávez (and, to a certain extent, Evo Morales in Bolivia) have bucked this trend by retaining strong popular support despite oligarchical attempts to undermine their governments.

Correa is a charismatic leader, but in the Ecuadorian setting charisma does not secure longevity. José María Velasco Ibarra, Ecuador’s classic caudillo and populist, was president five times, but was removed from four of those when he failed to follow through on his promises to the poor. In recent history, Abdalá Bucaram was perhaps the most charismatic leader, but he lasted only seven months in power after winning the 1996 elections. Charisma alone does not assure political stability.

In the wake of Ecuador quickly running through ten chief executives in 10 years, Correa appears positioned to remain in power for 10 years if he can maintain his current coalition to win reelection in 2013. Correa has also said that it will take 80 years for his “citizens’ revolution” to change the country.

In quickly moving Ecuador from being one of Latin America’s most unstable countries to maintaining a strong hold over executive power, Correa appears to have been able to mimic Chávez’s governing style. Whose interests this power serves, and particularly whether it will be used to improve the lives of historically marginalized subalterns, remains an open question.

Needless to say, the drop in the price of oil since 2009, when this article was written, renders the question of enjoying an “unusually large amount of popular support” rather moot.

June 15, 2015

Is it really 1914 all over again?

Filed under: cults,imperialism/globalization,oil,Russia — louisproyect @ 10:10 pm

This is the probably going to be the last reply to cult leader David North whose WSWS.org website warned readers that nuclear war was imminent because a Pentagon official named Robert Scher told Congress that the USA could “could go about and actually attack that missile where it is in Russia”, referring to any weapon that was in violation of the Intermediate-range Nuclear Forces (INF) Treaty signed by the USA and the USSR in 1987. For North, the crux of the matter was establishing that the word “attack” came out of Scher’s mouth when it was not audible in the Youtube clip.

I never had any big issues with that word one way or the other since my analysis that was based on the objective economic conditions differed radically from that of the Socialist Equality Party and any number of groups or websites constantly warning about WWIII. (A search of WSWS.org reveals 3,350 articles containing the phrase “nuclear war” going back to 1998 when one titled “Risking a Nuclear War” about India and Pakistan can be found.)

The Armageddon brigade includes Global Research that reposted the WSWS.org article and the libertarian Antiwar.com website of Justin Raimondo, who like many others in the Rand Paul wing of the Republican Party lines up with the ultraleft on this matter as has been the case ever since the rightwing internationally has thrown in its lot with the Kremlin. Frankly, it is very difficult to distinguish between what Golden Dawn and North’s cult have said about Ukraine.

For Raimondo, David North, and other assorted hysterics along this ultraleft-libertarian-fascist axis, the danger of nuclear war exists because Washington is out of control and ready to make reckless decisions that will result in the deployment of nuclear missiles that will effectively end life on earth. Raimondo put this this way:

Yes, that’s how crazy the warlords of Washington are: in their demented calculus, nuclear war is just another “option.”

North said about the same thing in a July 2014 article titled “Are You Ready for Nuclear War” that had all the urgency of a Pentecostal tract urging believers to prepare for Armageddon. He likened it to events that took place a century earlier:

A hundred years ago this week, World War I was launched by small cabals of ministers, monarchs, and business interests throughout Europe, whose decision to risk everything on victory in war led to deaths numbering in the tens of millions. Today, similar forces are setting into motion a drive to a conflagration that could lead to the destruction of the planet.

Of course, it is possible to stoke the fears of the naïve reader when you summon up images of a sneak attack on Russia taking place in the next month or so as if the USA might follow Japan’s example from December 7th 1941.

That being said, one might feel a bit anxious if you interpreted Scher’s comments as a departure from American policy. As I stated (and still believe), the imperialist strategy is based on Mutually Assured Destruction. All nuclear powers consider their arms to be of a defensive nature since a first use would trigger a literal Armageddon that would rob the ruling classes of their privileges and status. It would be a suicidal act only conceivable in a scenario in which the stakes were enormous, such as the Cuban missile crisis that occurred during the depths of the Cold War but as I will point out later, the same conditions do not exist today.

But, more importantly, is the threat of a first strike something new? Did Scher introduce a new and much more dangerous element in American arms policy? A cursory search of Nexis reveals that a “first strike” has been part of imperialist calculations for the longest time.

While we associate such madness with the Reagan administration, Democrats have embraced it as well. In fact it goes back to Jimmy Carter, the “wimp” who Reagan replaced. The NY Times reported on August 6, 1980:

The Carter Administration has adopted a new strategy for nuclear war that gives priority to attacking military targets in the Soviet Union rather than to destroying cities and industrial complexes, Government officials said today.

The revised policy, the officials said, requires American forces to be able to undertake precise, limited nuclear strikes against military facilities in the Soviet Union, including missile bases and troop concentrations. They said it also calls for the United States to develop the capacity to threaten Soviet political leaders in their underground shelters in time of war.

In a nutshell, all Robert Scher was doing is reaffirming nuclear war policy that has existed for the past 35 years.

It continues with Bill Clinton. On November 24, 1998 the NY Times reported:

As NATO defines the new strategy it will unveil on its 50th anniversary next year, Germany’s new Government of Social Democrats and Greens has irked the United States by tentatively suggesting that NATO should renounce the possible first use of nuclear weapons.

The United States is firmly opposed to any change in the doctrine allowing first use of nuclear weapons, arguing that it proved an effective deterrent during the cold war and remains one today against new threats like chemical weapons.

Four years later it should not come as a big surprise that George W. Bush was totally committed to a “first use” policy as the Sydney Morning Herald reported on March 12, 2002:

A secret Pentagon report which reveals plans for a “first-strike” nuclear arsenal reverses decades of American military thinking which effectively defined nuclear warheads as weapons of last resort. It also indicates just how far the Bush Administration is prepared to go to entrench America’s role as the self-appointed global policeman that its military power affords. So dangerous are nuclear weapons to the very continuance of life on Earth that their existence has long been justified because of their power to “deter”, not to defeat. The “Nuclear Posture Review”, however, details plans to integrate nuclear and conventional weapons, develop “bunker-busting” nuclear warheads, and specifically target seven nations. Iraq, Iran, Libya and Syria are listed with Russia, China and North Korea as possible nuclear targets.The complex moral, political and strategic questions raised in each of these cases might not trouble the United States, but it will surely unsettle even its closest allies.

One would not expect Obama, a big fan of the Reagan presidency, to retreat from a “first use” policy. The Wall Street Journal reported on April 6, 2010:

The Obama administration will release a new national nuclear-weapons strategy Tuesday that makes only modest changes to U.S. nuclear forces, leaving intact the longstanding U.S. threat to use nuclear weapons first, even against non-nuclear nations.

But the new policy will narrow potential U.S. nuclear targets, and for the first time makes explicit the goal of making deterrence of a nuclear strike the “sole objective” of U.S. nuclear weapons, a senior Obama administration official said Monday.

So if you are going to single out Robert Scher for war mongering, you at least need to understand that he was simply telling the Congressmen what they (and our ultraleftist friends) should have already known. Based on the analysis of David North and Justin Raimondo, we have been on the eve of destruction going on for at least 35 years and counting.

Now it just might be a coincidence but the warnings about WWIII tend to crop up whenever some former colony of the USSR gets on the wrong side of the Kremlin. Back in 2008 when Georgia and Russia were at war over the future of Abkhazia and South Ossetia, you could read exactly the same sorts of articles from the Armageddon brigade. Global Research invoked 1914 just as WSWS.org did in the above-cited article:

So far, each step in the Caucasus drama has put the conflict on a yet higher plane of danger. The next step will no longer be just about the Caucasus, or even Europe. In 1914 it was the “Guns of August” that initiated the Great War. This time the Guns of August 2008 could be the detonator of World War III and a nuclear holocaust of unspeakable horror.

Nobody talks about South Ossetia or Abkhazia today because Russia was able to achieve its goals without any big obstacles put in its path by NATO. Global Research insisted that “Ossetia has been an important strategic base near the Turkish and Iranian frontiers since the days of the czars” as if the geopolitical imperatives of the late 19th century remain intact.

Of course, if you were serious about the threat of imperialist war, you might want to take the trouble to analyze the world economy as Lenin did when he wrote “Imperialism, the highest stage of Capitalism”. If you are going to invoke 1914, there is after all an expectation that you can make the case that there are irreconcilable conflicts between the West and Russia that can only be resolved by a new world war.

I would only warn you that if you are looking for such an analysis on the WSWS.org website, you will be wasting your time. The tab “World Economy” will point you to articles about “How the richest one percent controls nearly half of global wealth”, etc. but nothing remotely resembling the sort of analysis Lenin carried out. I should add that there’s nothing wrong with writing denunciations of rich people but you don’t really need WSWS.org for that. Huffington Post does as good a job, if not better.

If you are serious about the conflict between the West and Russia having assumed the dimensions of 1914 (or 1940), you are obligated to back up your analysis with data. It would have to examine FDI flows in Eastern Europe and Russia and other economic trends that would lead to the conclusion that war is inevitable. If you want to understand why Japan launched a “first strike” against the US navy in Pearl Harbor, you might want to consult chapter four of Michael Zezima’s Saving Private Power: the hidden history of ‘The Good War’, where he writes:

The build-up to Pearl Harbor began two decades prior to the attack when, in 1922, the U.S., Britain, and Japan agreed that the Japanese navy would not be allowed more than 60 percent of the capital ship tonnage of the other two powers. As resentment grew within Japan over this decidedly inequitable agreement, that same year the United States Supreme Court declared Japanese immigrants ineligible for American citizenship. This decision was followed a year later by the Supreme Court upholding a California and Washington ruling denying Japanese the right to own property. A third judicial strike was dealt in 1924 with the Exclusion Act which virtually banned all Asian immigration. Finally, in 1930, when the London Naval Treaty denied Japan naval hegemony in its own waters, the groundwork for war (and “surprise attacks”) had been laid.

Upon realizing that Japan textiles were outproducing Lancashire mills, the British Empire (including India, Australia, Burma, etc.) raised the tariff on Japanese exports by 25 percent.

Within a few years, the Dutch followed suit in Indonesia and the West Indies, with the U.S. (in Cuba and the Philippines) not far behind. This led to the Japanese (correctly) claiming encirclement by the “ABCD” (American, British, Chinese, and Dutch) powers.

Such moves, combined with Japan’s expanding colonial designs, says Kenneth C. Davis, made “a clash between Japan and the United States and the other Western nations over control of the economy and resources of the Far East and Pacific…bound to happen.”

Is anything like this taking place between the USA and Russia? If so, it would probably come as surprise to the most powerful oil executives in the world. This is from the Kremlin, straight out of the horse’s mouth so to speak:

Screen shot 2015-06-15 at 5.49.26 PM

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Shaking hands with the CEO of Exxon-Mobil

President of Russia Vladimir Putin: Good afternoon, friends and colleagues,

I am very happy to welcome you to the St Petersburg International Economic Forum. Without a doubt, energy has always been one of the key strategic sectors in the world economy and very much remains so today.

The first steps in this direction are already being taken. Rosneft and ExxonMobil have created a research and development centre for Arctic technologies. I will take this opportunity to also congratulate the winners of the Global Energy Prize awarded today. This year, it was awarded to Japanese scientist Akira Yoshino and Russian researcher Vladimir Fortov. I must note that basic research in the field of energy is what lays the foundation for the future of energy security in our nation and the world overall.

Today, several new documents were signed at this forum on partnerships between Rosneft and international oil and gas companies ExxonMobil, Statoil and Eni (I am happy to see our old friends here today and to greet them), as well as an agreement on technological partnership with General Electric and agreements on the principles of supplying LNG.

This is basically a new era in cooperation the essence of which, as regards our interaction with strategic partners, is to move away from just importing raw materials to establishing full-fledged cooperation in production and technology.

This was a speech given just two years ago. It is a good place to start if you are trying to understand whether we are 5 minutes away from nuclear Armageddon. The conflict in Ukraine, just as was the case in Georgia, raises tensions and leads to saber-rattling.

If you are serious about removing the threat of nuclear war, you have to create a world in which the Russian oligarchs and their pals at Exxon-Mobil do not have the power to exploit the working class and use violence to achieve their ends. Oil companies use their influence over governments in places like Saudi Arabia and Nigeria to make war on their own people and those in bordering territories, as Yemen would indicate.

Russia is just as capable of wreaking havoc on defenseless people as its support for the genocidal policies in Chechnya and Syria would point out. In order to have a world in which social justice and peace prevail, we have to build an international movement that is based on class struggle politics but that rejects the sectarianism that hobbles progress toward that end.

While I doubt that anybody who takes these goals seriously would waste their time joining a bizarre, conspiracy-minded cult-sect like the Social Equality Party, there is a need to understand how they operate and why they ultimately lead to political and personal ruin. My suggestion to David North and company is to continue writing articles that rail against economic inequality since someone here or there might need reminding of that. But for those of us trying to build revolutionary parties based on the kind of rigorous economic analysis that distinguished Lenin or Trotsky, another path awaits us.

June 24, 2014

Addendum to “Is Russia Imperialist” — what to make of state ownership of Gazprom

Filed under: corruption,oil,Russia,state capitalism — louisproyect @ 7:12 pm

In Roger Annis’s article there is a problematic reference to state ownership that I want to address:

It’s the state, not finance capital, which plays the overriding, directing role in Russia’s economy. The state happens to own much of the vaunted oil and gas industries; so too in finance and much of manufacturing. The CIA Factbook explains some of the consequences thusly: “The protection of property rights is still weak and the private sector remains subject to heavy state interference.

But before attending to that, there are a couple of other matters requiring attention. Annis claimed that since Russia’s GDP per capita is only about half of South Korea’s, it ruled out the possibility that it can be imperialist. I am not sure whether that statistic can in and of itself be used to establish a nation’s place in the capitalist food chain since Ireland ranks higher than Germany.

Consider the example of Czarist Russia, a nation that was both imperialist and underdeveloped according to Leon Trotsky, a thinker who had some influence on Annis in his youth. According to Vitali A. Meliantsev, a Russia economist, the GDP per capita in Russia on the eve of WWI was a third that of the West (page 13 of a paper linked here). Per capita GDP in Russia ran between 18-22 % that of the United States. Despite this, Lenin had no problem referring to Russia as imperialist in 1917, just before the Bolsheviks seized power.

The other thing that strikes the eye to anybody familiar with Ukrainian history is the image at the top of Annis’s article:

It has the caption “People’s Friendship Arch: This steel rainbow was erected in 1983 to commemorate the unification of Ukraine and Russia in 1653 and is meant to symbolize friendship and mutual respect between the two nations.”

I wonder if Annis has any inkling of what that “unification” means to Ukrainian nationalists. Ukraine and Czarist Russia signed an agreement in the town of Pereislav not on the basis of “mutual respect” but mostly on the basis of Ukraine’s need to find a military ally against Polish domination. Throughout the 16th and 17th centuries Ukrainian Cossacks were locked in battles against the Poles, finally making an alliance with the Crimean Tatars in the 1650s that only achieved a stalemate. Led by Bohdan Khmelnytsky, the Cossacks viewed the Czar as a lesser evil.

Paul Robert Magosci sums up the treaty in his “History of Ukraine” as follows:

Aside from the debates among legal scholars and historians, Pereiaslav and its reputed architect, Bohdan Khmel’nyts’kyi, have taken on a symbolic force in the story of Ukraine’s relationship with Russia and have become the focus of either praise or blame. For instance, in the nineteenth century the Ukrainian national bard, Taras Shevchenko, designated Khmel’nyts’kyi the person responsible for his people’s ‘enslavement’ under Russia. The government of Tsar Alexander III (reigned 1881-1894), however, erected in the center of historic Kiev a large equestrian statue of Khmel’nyts’kyi, his outstreched arm pointing northward as an indication of Ukraine’s supposed desire to be linked with Russia. After World War II, the Pereiaslav myth was resurrected, this time by Soviet ideologists, who, on the occasion of the 300th anniversary of the agreement in 1954, transformed the event into the ultimate symbol of Ukraine’s ‘reunification’ with Russia, from whom it had been forcibly separated by foreign occupation since the fall of Kievan Rus’.

Whatever writers subsequently have speculated about Pereiaslav, one thing is certain: after 1654, the tsardom of Muscovy — which within seventy-five years would be transformed into the Russian Empire — considered Malorossiia (Little Russia, i.e., Ukraine) its legal patrimony. Since the tsar considered Little Russia part of his Kievan Rus’ inheritance, whatever rights or liberties he granted the Cossacks at Pereiaslav were gifts he could take back whenever he wished.

From what I have seen from Roger Annis to this point, I am afraid that his intentions of using this photo was to help propagate the Pereiaslav myth favored by Soviet ideologues.

Let’s now take a look at Annis’s observation that “The state happens to own much of the vaunted oil and gas industries”, which is obviously a reference to Gazprom. One is not quite sure what state ownership has to do with whether a nation is imperialist or not, especially in light of Lenin’s references to German state-capitalism. In his 1921 article “Tax in Kind”, Lenin makes the case for state-capitalism but under the control of the working class:

To make things even clearer, let us first of all take the most concrete example of state capitalism. Everybody knows what this example is. It is Germany. Here we have “the last word” in modern large-scale capitalist engineering and planned organisationsubordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist, Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content—a Soviet state, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism.

However, it would seem that Lenin was referring more to state control than state ownership. After all, wasn’t it the case that monopoly capitalism is pretty much based on a kind of planning done in conjunction with the state? I reject Tony Cliff’s use of the term to describe the USSR but it seems useful as a way of understanding the “military-industrial complex” referred to by President Eisenhower.

What I think is more important is the usefulness of a phrase like “The state happens to own much of the vaunted oil and gas industries”. It is safe to say that I own the Macbook that I am typing this article with but is there the same relationship between the state and Gazprom?

According to Wikipedia, the largest shareholder in Gazprom as of the end of 2006 was Gazprombank at 41.235%, a chunk of stock that would ensure corporate control. You, of course, would wonder what was going on when Gazprombank, a subsidiary of Gazprom, is the largest shareholder. That is like saying that BP Bank (if there was such a thing) owned the biggest bloc of shares in BP.

Since the Wikipedia article contains no new information after 2006, you have to do a bit of digging around. A Financial Times article from November 30, 2011 brings things relatively up to date:

When Gazprom transferred control in 2007 of Gazprombank, its banking arm and the country’s third biggest lender, to Gazfond, the gas giant’s $6bn pension fund, the deal was seen as so incremental that the investor community barely noticed.

But Gazfond was closely linked to Bank Rossiya – which owned Lider Asset Management, the company that managed Gazfond’s assets and held most of the latter’s stake in Gazprombank as a nominee shareholder.

Keeping up with me? Gazprom spawned Gazprombank, which became the largest shareholder in Gazprom. But then Gazfond took over Gazprombank that was partnered with Bank Rossiya, which owned Lider Asset. Is your head spinning at this point? Try a little Dramamine.

While it is obviously difficult to penetrate through the interlocking directorships and ownerships of all these corporate entities, one thing is clear. Gazprom exists to make a group of men wealthy beyond comprehension. The NY Times reported on March 1 2012:

Arkady R. Rotenberg, a former judo coach, is now a billionaire industrialist, having made a fortune selling pipe to the state-owned gas monopoly, Gazprom.

Yuri V. Kovalchuk owned a minority stake in a small bank in St. Petersburg that in recent years won control of a number of Gazprom subsidiaries. He is now worth $1.5 billion.

Gennady N. Timchenko, once the little-known sales manager of a local oil refinery, is now one of the world’s richest men, co-owner of a commodity trading company that moves about $70 billion of crude oil a year, much of it through major contracts with Rosneft, the Russian national oil company.

What these men share, besides staggering wealth and roots in St. Petersburg, is a connection to Prime Minister Vladimir V. Putin, who is poised to win a new six-year term as president in elections on Sunday. The three billionaires are members of a close circle of friends, relatives, associates, colleagues from the security services and longtime advisers who have grown fabulously wealthy during Mr. Putin’s 12 years as Russia’s paramount leader.

Critics say these relationships are evidence of deeply entrenched corruption, which they view as essentially government-sanctioned theft invariably connected to Russia’s abundant natural resources: gas, oil, minerals. This has become a persistent grievance of demonstrators who have staged four large street protests since December and are promising more after the election.

“The basic point is that these guys have benefited and made their fortunes through deals which involved state-controlled companies, which were operating under the direct control of government and the president,” said Vladimir S. Milov, a former deputy energy minister and now political opposition leader who has written several reports alleging corruption. “Certain personal close friends of Putin who were people of relatively moderate means before Putin came to power all of a sudden turned out to be billionaires.”

Those street protesters that Kagarlitsky derided as effete liberal yuppies had it right. What you are seeing is government-sanctioned theft. This was alluded to, after a fashion, in the CIA Handbook that Annis cited: “the private sector remains subject to heavy state interference.” For Annis, “heavy state interference” must smack of St. Petersburg 1917 when in fact it has more in common with crony capitalism everywhere in the world, starting with those Middle East and North African countries that so often get included in the “anti-imperialist” bloc.

On December 23, 2011 Reuters published “Special Report: The Gaddafi oil papers” that will give you a strong sense of why the Kremlin and the toppled dictator found such an affinity:


In a separate report published in 2010, Ben Amer’s ministry said almost five million barrels of oil worth around half a billion dollars had disappeared from a particular field in 2008.

That report said its investigation was triggered by information from Beshti. Ghanem, the oil minister and head of the NOC [the state-owed National Oil Company]  at the time, said he did not know about the missing oil; he depended on departmental heads for information and the NOC could not control the activities of its subsidiaries. He believes Beshti was motivated by a personal grudge.

“When you are in charge of 45,000 people you are going to make enemies,” Ghanem said, adding that in Libya’s current climate, witch hunts are inevitable as individuals struggle for power. “People will come up with rubbish stories just to tarnish others for personal revenge.”

The 2010 report also found millions of dollars in payments for oil had been erratic and difficult to trace. This was partly because multiple bank accounts had been opened in the NOC’s name. On top of that, deals had been cut by individuals without authorization.

“The Director of the Crude Oil Department used to sell instant shipments on his own and without referring to … even his own superior officer,” the report says. The crude oil manager at the time, Khaled Nashnoush, is also the signatory of at least one of the allegedly backdated contracts. He could not be reached for comment, and no one at the NOC could say where he is now.

Ghanem said it would be unreasonable to expect him to monitor the activities of all individuals. “Otherwise what is the point of having a head of department?”

May 5, 2014

Obiang’s enablers

Filed under: Africa,corruption,oil — louisproyect @ 9:48 pm

President Barack Obama, President Teodoro Obiang of Equatorial Guinea, and their First Ladies

From Wikipedia:


In July 2003, state-operated radio declared Obiang “the country’s god” and had “all power over men and things.” It added that the president was “in permanent contact with the Almighty” and “can decide to kill without anyone calling him to account and without going to hell.” He personally made similar comments in 1993. Macías had also proclaimed himself a god.[14]

Obiang has encouraged his cult of personality by ensuring that public speeches end in well-wishing for himself rather than for the republic. Many important buildings have a presidential lodge, many towns and cities have streets commemorating Obiang’s coup against Macías, and many people wear clothes with his face printed on them.[15][16]

Like his predecessor and other African dictators such as Idi Amin and Mobutu Sese Seko, Obiang has assigned to himself several creative titles. Among them are “gentleman of the great island of Bioko, Annobón and Río Muni.”[17] He also refers to himself as El Jefe (the boss).[18]

In 2008, American journalist Peter Maass identified Obiang as Africa’s worst dictator, worse than Robert Mugabe of Zimbabwe.[19]

Since the downfall of Muammar Gaddafi in October 2011, Obiang has been the world’s longest-ruling non-royal head of state.

In an October 2012 interview on CNN, Christiane Amanpour asked Obiang whether he would step down at the end of the current term (2009–2016) since he has been reelected at least four times in his over thirty years’ reign. In a Gaddafi-like reply, Obiang categorically refused to step down at the end of the term despite the limits set on presidential service in the 2011 constitution.[20]


Abuses under Obiang have included “unlawful killings by security forces; government-sanctioned kidnappings; systematic torture of prisoners and detainees by security forces; life threatening conditions in prisons and detention facilities; impunity; arbitrary arrest, detention, and incommunicado detention.”[21]


Forbes magazine has said that Obiang, with a net worth of US$600 million, is one of the world’s wealthiest heads of state.[22] Official sources have complained that Forbes is wrongly counting state property as personal property.[23]

In 2003, Obiang told his citizenry that he felt compelled to take full control of the national treasury in order to prevent civil servants from being tempted to engage in corrupt practices. To avoid this corruption, Obiang deposited more than half a billion dollars into accounts controlled by Obiang and his family at Riggs Bank in Washington, D.C., leading a U.S. federal court to fine the bank $16 million.[24] Later scrutiny by a United States Senate investigation in 2004 found that the Washington-based Riggs Bank took $300 million on behalf of Obiang from Exxon Mobil and Amerada Hess.[25]

In 2008, the country became a candidate of the Extractive Industries Transparency Initiative – an international project meant to promote openness about government oil revenues – but never qualified and missed an April 2010 deadline.[25] Transparency International includes Equatorial Guinea as one of its twelve most-corrupt states.[25][26]

Beginning in 2007 Obiang, along with several other African state leaders, came under investigation for corruption and fraud in the use of funds. He was suspected of using public funds to finance his private mansions and luxuries, both for himself and his family. He and his son, in particular, owned several properties and supercars in France. In addition, several complaints were filed in US courts against Obiang’s son. Their attorney’s stressed that the funds appropriated by both Obiang’s were done so entirely legally under Equatoguinean laws, although they may not agree with international standards.[27]

From the Militant newspaper, a socialist newsweekly published in the interests of working people:

N.Y. conference discusses
Equatorial Guinea today
(feature article)

HEMPSTEAD, New York—A three-day international conference at Hofstra University on Long Island was a forum for discussion and debate on a wide range of topics about Equatorial Guinea—its history, economic development, languages, natural resources, literature and art, biodiversity, and ethnic composition and conflicts. The event, held here April 2-4, was titled “Between Three Continents: Rethinking Equatorial Guinea on the 40th Anniversary of Its Independence from Spain.”

Equatorial Guinea, a Central African country of about 1 million inhabitants, gained its independence from Spanish colonial rule in October 1968. For 11 years the people of Equatorial Guinea faced a brutal dictatorship under the first president, Francisco Macías, who in 1979 was overthrown by young Guinean military officers led by Teodoro Obiang Nguema, the current president. Since the mid-1990s the exploitation of the country’s newly discovered oil and natural gas reserves has turned it into the third-largest oil producer in sub-Saharan Africa.

In what was one of the least economically developed nations in Africa, the government is today using some of the revenues from the labor of those who work in the oil fields to begin to create the nationwide infrastructure necessary for industrial development—such as paved roads, electrification, cellular phone networks, safe water distribution, primary health care, and the national university. Equatorial Guinea remains marked by the contradictions between this rapid transformation of production and the legacy of millennia of economic activity based on hunting, fishing, and subsistence agriculture, distorted by subjugation to slave traders and colonial domination.


August 16, 2012

The Blackfoot Indian versus fracking

Filed under: energy,indigenous,oil — louisproyect @ 3:26 pm

Today’s NY Times has an article on the divisions among the Blackfoot people in Browning, Montana over fracking.

It is an increasingly common sight for tribes across the West and Plains: Tourist spending has gone slack since the recession hit. American Indian casino revenues are stagnating just as tribal gambling faces new competition from online gambling and waves of new casinos. Oil and fracking are new lifelines.

One drilling rig on the Blackfeet reservation generated 49 jobs for tribal members — a substantial feat in a place where unemployment is as high as 70 percent. But as others watched the rigs rise, they wondered whether the tribe was making an irrevocable mistake.

“These are our mountains,” said Cheryl Little Dog, a recently elected member of the Blackfeet Tribal Business Council, the reservation’s governing body. “I look at what we have, and I think, why ruin it over an oil rig?”

Oil exploration here began in the 1920s, largely on the plains along the eastern edge of the reservation, but it died off in the early 1980s. Over the last four years, though, new fracking technologies and rising oil prices have lured the drillers back, and farther and farther west, to the mountains that border Glacier National Park.

Oil companies have leased out the drilling rights for a million of the reservation’s 1.5 million acres, land held by the tribe, according to the Bureau of Indian Affairs. They have drilled 30 exploratory wells this year alone, and are already engaged in fracking many of them, pumping a slurry of water, sand and chemicals to crack open underground rock beds to pry out the oil.

“It’ll change the lives of a lot of people,” said Grinnell Day Chief, the tribe’s oil and gas manager. “It’ll be a boost to everybody. There’s talk of a hotel coming up.”

Read full article

Facebook group for Blackfeet anti-fracking coalition

As it turns out, this is an Indian reservation I visited in the late 90s through connections I had made with Jim Craven, an economics professor of Blackfoot descent who was subscribed to PEN-L at the time. About three years after that trip I returned to the Blackfoot reservation in Alberta, Canada just north of Browning to participate in a tribunal on residential school abuse that Jim Craven had organized. Through my trips out west and through research on the Blackfoot I managed to learn quite a bit about their struggle and eventually wrote an article on “The Blackfoot and the Barbarian” that pretty much exemplifies my approach to indigenous issues as a Mariátegui disciple.

(I should mention that I have used the word Blackfoot rather than Blackfeet over the years mainly because of Jim Craven’s insistence that the latter term is racist. Frankly, I am not so sure whether the distinction is as important to the tribe as it was to Jim but as is generally the case I am happy to respect the views of a member of an oppressed nationality when it comes to matters such as this.)

In 1998 I wrote an article titled “Energy Tribes” that addresses the economic contradictions that led to fracking on the Browning reservation. I am reproducing it below in order to provide some insights into what is called commonly called environmental racism and that is felt particularly hard by indigenous peoples in the Americas.

Energy Tribes

One of the crowning ironies of the history of this racist, capitalist country is that Indian reservations today hold enormous quantities of coal, oil, gas and uranium. If the 19th century architects of genocide had been able to predict this startling outcome, they probably would have simply killed every last Indian in order to put a lock on future profits. The struggle for Indian control of these resources has turned out to be one of the sharpest struggles of the past 25 years.

What is the magnitude of these reserves? “Breaking the Iron Bonds,” by Marjane Ambler (U. of Kansas, 1990), lays out the numbers for the year 1974:

The Interior Department said thirty-three reservations had as much as 200 billion tons of coal, which represented as much as 30 percent of all the coal west of the Mississippi. Federal estimates of uranium holdings ranged from 16 percent to 37 percent of the nation’s total. The department said forty Indian reservations held reserves of 4.2 billion barrels of oil and 17.5 trillion cubic feet of gas–3 percent of the nation’s known reserves. Most of these minerals still lay underground; so even if the tribes had been politically able to operate as a cartel, they could not have influenced energy fuel prices. Nevertheless, they represented the largest mineral owners in the country outside the federal government and the railroads.

These reserves became the subject of intense interest in the early 1970s during the so-called energy crisis. Almost overnight, tribes who eked out a living as ranchers or farmers were receiving bids from some of the biggest and most avaricious companies in America. Two American Indians emerged as champions of tribal rights against the marauders. They sought to accurately measure the amount of energy reserves. They also had to figure out how to defend the development needs of the tribes against the interests of corporations who were merely out to make a quick profit. In other words, all corporations.

One of these was the Comanche LaDonna Harris, who was instrumental in the formation of Council of Energy Resource Tribes (CERT) in 1975, a coalition to protect Indian interests. Not coincidentally, she was Barry Commoner’s vice-presidential running mate on the Citizens Party ticket in 1980. Such was the racism of the radical movement that when her name used to come up that year, they referred to her as “Just some Indian woman.” That was enough to satisfy the curiosity of a brain-dead leftist movement that could not appreciate the importance of ecologists and American Indians coalescing. There is evidence that it still doesn’t.

Harris had founded Americans for Indian Opportunity (AIO) in order to promote tribal self-government. Concerned about disadvantageous contracts with energy companies, she hired 3 interns from Dartmouth University to review federal records. The results were earthshaking. Nobody had ever realized the magnitude of the potential wealth. She presented Federal Energy Administration (FEA) chief Frank Zerb with the evidence in the summer of 1975 and read him the riot act. “You can’t have an energy policy without Indians; collectively, they’re the biggest private owners of energy in the country.”

Another key figure was Chuck Thomas, a Cherokee who worked as an oil-field inspector for the U.S. Geological Survey (USGS). If Harris was instrumental in putting a spotlight on the existence of huge energy reserves, Thomas was critical in raising tribal awareness about the need to tightly control them. He figured out something was amiss on June 13, 1980 when he caught an oil truck leaving the Wind River Reservation without a permit. This led to a full-scale investigation and upgrade of the inspection and accounting system on the energy-rich reservations. Thomas was the right person to help put new training procedures into place. Before going to work for the USGS, he had worked in the oil fields for fifteen years as a roustabout and roughneck. He was plain-spoken about his qualifications. “I’m not a man of long words and big politics…I have a worm’s eye view of it (oil thefts) because I was the man in the field.” He had blunt advice for Indian youth who were interning with him: “Be suspicious and trust nothing or nobody.”

CERT played an important role in defending tribal interests during the energy boom years. The revenues that came from royalty payments from big corporations, while not eliminating Indian poverty, did play a role in tribal development. One of the most tangible results was the creation of the Blackfeet Tribal bank, the beneficiary of Jim Craven’s consultation services. The Blackfeet tribe derived 90 percent of its total income in 1985 from oil and gas royalties and taxes.

The emergence of a cartel-like formation like CERT scared the tribes’ enemies out of its wits. During the mid-1970s OPEC was the bogeyman of many Americans, rich and not-so-rich. The notion that Americans would have to pay top dollar for petroleum was shocking. It was one thing for Americans to have a monopoly on computer software, automobiles, weapons, medicine, etc., but it was another thing for the rest of the world to assert itself in this manner. All nations were equal, but some nations were more equal than others.

The Denver Post fretted over the emergence of CERT in a 1979 editorial:

Supposedly we are to pony up cheerfully so the noose of escalating energy prices can be tightened around our necks… The people who manipulate Indian policies are indulging in much nonsense…Admittedly, justice has not always been dispensed equitably. But is the sufferance of our national government–dedicated to tribal advancement [??!!]–that gives the tribes leeway to act with more independence than other Americans.

But limits there are. Imagine what would happen if some adviser persuaded a tribal group to sign a treaty with Libya which Colonel Quaddafy was to ship Russian missiles to the reservation to guarantee the tribe’s integrity.

These fears, which were largely a psychological projection of rapacious American capitalists on their victims, were heightened when CERT hired Ahmed Kooros as its chief economist. Kooros had served as Iran’s deputy minister of economics and oil under both the Shah and Khomeini.

The parallel with OPEC nations was of course overdrawn. The true relationship between the U.S. and the energy tribes was not unlike that which exists between it and oil-producing countries like Nigeria and Angola that have non-industrialized, financially weak economies. The possibility for exploitation is much greater. The producers do get royalties, but it comes at a price. The big corporations leave the underdeveloped countries in a state of ecological ruin while draining the life-blood of the nation. The relationship is like Dracula’s to his victims. Dracula might treat somebody to a good meal but afterwards the guest became a blood-pudding dessert.

The most dramatic instance of the social and environmental costs of energy development was the break in a tailing dam at the United Nuclear Corporation’s Church Rock, New Mexico uranium mill on July 16, 1979. (Tailings are the residue of uranium mining.) One hundred million tons of radioactive water spilled into the Rio Puerco River on the Navajo reservation and it took on a sickly yellow hue, like battery acid. Animals that stepped into the river developed sores on their legs and died almost immediately. For the next year Navajos could neither eat nor sell mutton, an economic mainstay of the tribe. For the next decade the Indians and other people living near the river could not use local water supplies for drinking or stock watering. Despite all the publicity surrounding 3-Mile Island, this was the worst nuclear plant accident in American history.

Another noteworthy example of the destructiveness of unregulated energy development is what happened at the Upper Missouri River Basin in the 1980s. The tribes of the Northern Plains felt the need to defend their long-term interests against some powerful energy corporations that were planning a huge coal gasification plant in Wyoming. The companies needed water from nearby states where Indians had ownership of the potential supply. The plant and ancillary energy development operations would require huge amounts of water. The only source was the nearby Yellowstone River, as important to the Northern Plains tribes as the Rio Puerco was to the Navajos.

The federal government was all for the diversion of water to the Wyoming mega-project. A formal request had come from the following companies: Peabody Coal, Gulf Oil, AMAX, Shell Oil, Exxon, Kerr-McGee, Western Energy Corporation, Consolidated Coal, ARCO, Conoco, Mobil and WESCO. How could the US turn down a request from such companies? After all, they bribe both parties to carry out their wishes.

Arrayed against the government and energy companies was a coalition of ranchers, environmentalists and Indians. Potential royalty payment to the tribes was not enough to placate them. Their relationship to the land and water, which had pastoral and spiritual dimensions, could not easily be priced. This in essence is the source of the conflict between the tribes and capitalist America, just as it is in other parts of the world. Last week 10,000 villagers occupied the construction site of a dam on the Narmada river in India. It would destroy their livelihood as well as strip the river of the sacred quality it held in their lives. The main beneficiaries of the dam would be wealthy farmers.

A final example will illustrate not only the conflicts between the corporations and the tribes, but within different tribes themselves. The power of the dollar is enormous. A big corporation will not be above pitting one group of Indians against another when it is seeking to advance its bottom line. Capitalists have been dividing and conquering for centuries. Since they are such a tiny percentage of the population, they are always seeking ways to weaken their potential victims.

I am referring here to the conflict between the Hopi and Navajo tribes over development in the Black Mesa region of New Mexico. This is an extremely complex problem that pits the development needs of the Hopi tribe against Navajo sheepherders. There are enormous profits at stake as the Peabody Coal Company has targeted this area for extensive development of coal and other energy resources. I will not even begin to try to arbitrate the rival claims of the two tribes, but refer to the Black Mesa Web Page for testimony from both sides in the dispute.

In a 1993 complaint to Secretary of the Interior Bruce Babbitt, the Navajos complained about the slurry line that transports approximately 5 million tons of coal each year from Black Mesa to Laughlin, Nevada. It was “the only instance in American history where coal has been transported with groundwater that represents the only source of drinking water for an Indian Tribe.” Since the Peabody Coal Company uses over a billion gallons of pristine drinking water from the Navajo-Aquifer, it is no surprise that a drought afflicted both the Hopi and Navajo reservations in 1996. Development comes at a cost.

As long as tribes insist on putting their own interests above other tribes, the capitalist will come out ahead. The capitalist has trained himself to do this. Cecil Rhodes perfected this art in Africa and was able to safeguard the interests of the mining companies while trampling on the rights of the tribal peoples. A recent PBS biography of the arch-imperialist showed how he did it You promise one tribe one thing as long as it will make war against the other. When the tribe is victorious and hands the spoils of war over to the British colonists, they simply find another tribe to enlist in their sordid fight.

There is absolutely no question that a higher level of American Indian unity is necessary to protect the economic and ecological rights of one and all. This is easier said than done because the tribes have histories that go back for hundreds of years. Some experts analyze the conflicts between Hopi and Navajo as having existed long before the appearance of Peabody. Their resolution would seem to be one of the most urgent tasks facing Indian peoples.

Economic necessity is driving Indian nationalism, a progressive force. The emergence of CERT shows that Indians can coalesce nationally when their interests as a people coincide. Despite a downturn in the energy sector of the economy through the 1980s and 90s, there is little question that it will reemerge with a vengeance. There are several factors that lie behind this.

First of all, energy companies have a double standard when it comes to pollution. They view Indian reservations and Third World countries as less deserving of the sort of protections that white American neighborhoods enjoy. The term for this is “environmental racism.” This is in part a reflection of the tendency of mainstream environmental organizations to fight harder for their own constituencies, which are largely white and middle-class. An oil spill in the ocean near Santa Monica aroused the affluent swimmers and surfers to action. A uranium spill in New Mexico hardly registers on mass consciousness, even when it is greater than what occurred at 3-Mile Island.

Energy companies have less latitude in white, middle-class or even working-class neighborhoods, so they go overseas to make the kind of profits they need to satisfy Wall Street. Chevron Oil had to clean up its act in the waters off Santa Monica, but throws caution to the wind in Nigeria. Nigeria, like large sections of New Mexico, is an environmental disaster. When poor people object to pollution, their “benefactors” argue that they have to make a choice between clean air and water, and jobs. The term for this is “greenmail.” Opposed to greenmail is the demand that all development take place under the strictest environmental guidelines. People must come before profits.

Another important consideration has to do with the potential importance of uranium mining in the near future. Concerns over global warming have spurred new interest in alternatives to oil and gas, greenhouse emission producing fuels. The more sensible approach would be to explore solar and wind energy, but nuclear power companies have been pressing their case. Their lobbyists were very active at the recent Kyoto Global Warming conference. East Asia is a potential market for their poisons. The Chinese and other Asian governments are planning to build 70 nuclear power plants in the next 25 years. A large portion of the fuel will certainly come from the Indian reservations, where more than 1/3 of potential reserves exists. The capitalist would love to mine uranium without caution in such places and sell it to Asian governments whose willingness to poison for profits equals their own.

The choice is not between poverty and pollution, although this is what the big corporations would have us believe. Development can take place without destroying rivers and soil in the process. Mining and oil-drilling can take place in a relatively safe manner, as long as certain guidelines are in place. The decision to mine or to drill for oil must first of all be made by the tribal peoples who will suffer the consequences both good and bad. Once they make this democratic decision, the oil, coal or uranium companies must respect the surrounding ecology.

How can the numerically small and impoverished Indian tribes force huge corporations like Peabody Coal or Exxon Oil to respect their economic and ecological demands? The answer is that they first must find ways to merge their tribal interests into a larger Indian collective. The American Indian nation would not abolish the local traditions of the tribe; it would simply present a united fist to those who would exploit it.

Closely related to this task is the need to internationalize the struggle. The American Indians on their own are a tiny percentage of the United States. However, they are part of an immense struggle that is going on world- wide against the same exact corporations who are attempting to foul their air, soil and water in the pursuit of profits. The Indians of the Amazon rainforest, the aborigines of Australia, New Guinea and New Zealand, the Odongi people in Nigeria are all in similar fights. There are signs that this type of internationalism is already beginning to take shape. North American Indians have offered solidarity to the peoples of Chiapas, who are defending themselves against a capitalist system that has more and more of a global character.

NAFTA and similar agreements accelerate the economic onslaught that has taking place within the borders of the United States, but displaces them into regions where protection of human rights are weaker. When a corporation faces a determined coalition of ranchers, environmentalists, trade unions and tribes within our borders, it has no recourse except to go places where the cops or army can openly repress such a coalition. This is what happens in Mexico, Guatemala and Brazil where the popular movement must deal with death squads and lesser forms of intimidation.

There is no other way to defend oneself from a marauding, profit-hungry, globe-trotting capitalist system except through international solidarity. The collapse of the East Asian economies makes the promise of prosperity through low wages and polluting industry even more hollow than it ever was. The only beneficiaries of low wages and pollution are the shareholders of the corporations who expect maximum profits. To satisfy these shareholders is to risk death from the poisons that the corporations spew in their name, since cutthroat competition will simply allow the investor to shift his money to a more profitable and anti-human corporation.

In my next post I will discuss American Indian beliefs about ecology, which are essential to understanding a way out of the madness of a capitalist system run amok.

(sources for this post include Marjane Ambler’s book and the Short History of Big Mountain – Black Mesa Web Site at http://www.aics.org/BM/bm.html)

December 4, 2011

Malefactors of great wealth in three new films

Filed under: capitalist pig,Film,financial crisis,oil — louisproyect @ 10:41 pm

Regular readers of my film reviews know that I do not tend to hype a film. Except for a comment like “a must see”, I generally prefer understatement. That being said, I strongly urge New Yorkers to go see the documentary “The Big Fix” that opened on Friday at the AMC Loews Village Theater. Co-directed by Josh Tickell and Rebecca Harrell Tickell, a husband and wife team, it is a searing investigation of BP’s ongoing trashing of the Gulf of Mexico that has largely gone unreported since the supposed capping of the Deepwater Horizon well and the cleaning up of the Gulf.

As someone who generally keeps up with environmentalist issues, I sat watching a press screener with my mouth agape at the horrors perpetrated by an out-of-control oil company and their paid servants in Congress. No other film have I seen in the past five years or so has left me with the feeling that the people running the country—both in government and in corporate boardrooms—are no different than the mafia. In fact we might be better off if the mafia was running the country since these gangsters at least have a feudal sense of noblesse oblige.

Josh Tickell is a Cajun, a descendant of French settlers in Louisiana, who grew up to become a film maker rather than a musician, cook, or oil field worker that are the typical jobs that members of this ethnic group take on. But despite his achievements as a documentary filmmaker, his heart is obviously with the working people of Louisiana, who are being screwed royally by BP.

The film begins with a historical survey of Louisiana that establishes its status as a kind of internal colony of the U.S. With the stranglehold of oil companies on the state’s political machinery, those in the “99 percent” have much more in common with the people of Iran under the Shah than they do with most Americans. As the film points out, British Petroleum was a key player in Iran until the 1979 revolution and now views Louisiana as just another source of superprofits, whatever happens to the environment and the local population being utterly immaterial.

There is some fascinating archival footage of Governor Huey Long, who was dubbed a “fascist” when I was a high school student. “The Big Fix” makes a convincing case that Long only became demonized when he demanded that oil companies doing business in Louisiana pay their fair share of taxes.

The Tickells decided to go down to Louisiana to make a film after becoming convinced that BP was involved in a cover-up. The film combines their own cloak-and-dagger filming of the company’s deceitful practices as well as interviews with economists and scientists who make the case that the Gulf of Mexico is practically dead now, despite BP’s nauseating commercials about people coming down to enjoy the seafood and the beaches.

The gist of their investigation reveals that the waters appear clean because BP has been spraying enormous amounts of Corexit, a chemical dispersant used widely by Exxon and BP after one of their disasters. The purpose of Corexit is to reduce oil slicks into tiny droplets that sink beneath the surface of the water, thus making it appear as if it is clean. However, small fish ingest the chemical and are then eaten by others higher up on the food chain. As one long-time fisherman in the area told the Tickells, dolphins can be seen coughing as they rise to the surface of the water.

Whole coughing dolphins is an image that is hard to shake from your mind, what is even harder to shake is the sight of ulcerated skin that is fairly endemic to people living near the waters. So pervasive are the toxic chemicals used in the “clean up” that Rebecca Tickell became permanently affected herself and will probably never enjoy a complete recovery from various illnesses, including the lingering effects of chemically-induced pneumonia.

The final moments of the film are devoted to an exploration of how BP gets away with its criminal activity, which involves many of the same themes raised by the Occupy Wall Street movement. It pays millions of dollars to Democrats and Republicans alike in order to get them to serve as lackeys. What is even more disheartening is to see how compromised the university system is in Louisiana. Typical is Ed Stapleton, a professor emeritus at LSU who was initially alarmed by the impact of the BP spill but after the company lavished 10 million dollars on the school he became a fixture on shows like David Letterman giving jocular remarks on how clean the waters were. The only parallel is watching some of the nuclear industry functionaries in Japan announcing to their countrymen that there was nothing to worry about.

“The Big Fix” is the real deal. It does not spare any politician or corporate functionary and goes after Obama with the kind of fury that I have not seen in any documentary since this rotten tool of corporate America took office. The film relies on Chris Hedges to help make their case and he is in fine fettle. Don’t miss this one. It will remind you why you became a socialist and if you are still a liberal, it will turn you into a fire-breathing revolutionary.

Like most people on the left, I regarded the fight between Mikhail Khodorkovsy, the president of Yukos Oil and the richest man in Russia, and Vladimir Putin as a pissing contest between two skunks.

Although the documentary titled “Khodorkovsky” that opened on Friday at the Film Forum is not intended to persuade anybody that the oligarch had any redeeming social value, it does make a pretty convincing case that he was victimized mostly because he stood up to Putin. When Putin told him to stay out of politics, Khodorkovsky did not back down. For his efforts, he was sent to prison for six years for widely regarded as trumped up charges on tax evasion and just recently had another six years tacked on.

Khodorkovsky’s father was Jewish, his mother was not. He was a member of the Communist Party youth group when the USSR was still intact and learned how to make money hustling in its ranks by acting as a kind of social director. Using his Komsomol connections, Khodorkovsky set up the bank Menatep when Gorbachev was still in charge.

The money he made running Menatep allowed him to bid successfully for the state-owned oil company that would become Yukos. Unlike other oligarchs, he shunned the lavish lifestyle and had no use for gangster entourages that became endemic in the early years of the post-Soviet Union.

The documentary was directed by Cyril Tuschi, a German who adopts a somewhat detached and bemused attitude throughout the film suitable for his ambivalence toward Khodorkovsky. It is not clear to me that Tuschi had much interest in the broader questions of post-Communist society, the contradictions of capitalism, or anything else that matters to my usual readers. He seems to be motivated to tell an interesting story about a rather dubious figure and does a reasonably good job.

Mentioned only fleetingly in the film was Khodorkovsky’s attempts in 2003 to form partnerships with Western oil companies, something that Putin regarded as inimical to Russian interests. At the time, some leftists gave critical support to Putin as a kind of “anti-imperialist”. While not using this term, Vladimir Popov did make the case in the March-April 2007 New Left Review for Putin as a kind of imperfect defender of Russian interests in acting against the oligarchs.

I appreciated Tony Wood’s response to Popov’s article that appeared in a subsequent issue:

The reassertion of state control over strategic companies and sectors has been seen as a sign of stealth nationalization—the state using its administrative powers to crush Khodorkovsky’s Yukos and, more recently, even muscle aside multinational companies such as Shell. Western establishment analysts have diagnosed these developments as a case of ‘resource nationalism’, likening Putin’s actions to those of Chávez or Morales, while the latest leitmotif of Russian political discourse has been the idea of ‘sovereign democracy’—essentially referring to Russia’s ability and determination to pursue an independent course, no longer reliant on loans or approbation from the West.

Neither of these concepts is an adequate measure of the orientation and outlook of Russia’s contemporary elite. As noted above, the Putin administration has not actively redistributed oil wealth to those dispossessed by the ‘reforms’ of the 1990s; indeed, its tax regime seeks precisely to benefit the wealthy still further, while the monetization of benefits and increased charges for utilities penalize the poor. Though the poverty rate is declining and wages rising, any significant drop in oil prices will likely reverse these trends, which will once again have the most severe impact on the lowest income strata. The decision to spend the oil windfall on euros and dollars, meanwhile, is ostensibly motivated by a desire to keep inflation in check; but in a context of continued infrastructural dysfunction, such prudence is a form of deferred suicide, starving the nation of the public goods that would secure its survival in the longer term.

Turning from documentary to fiction, I can recommend “Margin Call”, now playing in theaters all across the U.S. as the best dramatization of the 2008” subprime meltdown whose effects are still being felt.

By contrast, Oliver Stone’s follow-up to Wall Street is incoherent trash and the HBO mixture of fiction and documentary titled “Too Big to Fail”, starring William Hurt as Henry Paulson, is best described as a whitewash of bankster malfeasance. With a screenplay by N.Y. Times reporter Andrew Ross Sorkin, who was stupid enough to write a column about taking a phone call from one of these types of scumbags asking whether he had anything to worry about with the OWS movement, this is a story about the public-mindedness of Paulson and company who saved the country from going under. It was hard to take this seriously when the HBO movie aired. It is even harder now in light of a Bloomberg News report:

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

Directed by J.C. Chandor (his first film), “Margin Call” takes place in a 24 hour span as a financial analyst—an MIT graduate with an engineering degree–discovers that his firm’s collateralized mortgage holdings were likely to bankrupt the company given the direction of the market.

The CEO, played to a tee by Jeremy Irons, orders the traders to dump the subprime holdings on unsuspecting customers no matter the long-term consequences. Playing his second in command, Kevin Spacey bridles at this proposal and only accedes under pressure. This was the only thing in the film that did not quite ring true. If you get to be second in command at a place like this, clearly modeled after Goldman-Sachs, you sold your soul to the devil long before becoming that powerful.

The movie has a crackling electricity and very fine dialog rendered in a realistic manner. Throughout the entire film, there is no attempt to offer up a back-story or anything that would make the characters sympathetic. The net effect is like looking at an aquarium full of piranhas and hoping that the glass doesn’t break.

That being said, none of the characters in the film is “evil” in the sense that Gordon Gekko was in “Wall Street”. They are simply doing their job. That is actually what makes the film so powerful. It is not interested in exposing crooks but in putting the financial system under a microscope. That, after all, is what Karl Marx had in mind when he began writing Capital.

November 16, 2010

Guest post: the economy is not coming back

Filed under: financial crisis,oil,swans — louisproyect @ 1:53 am
The Economy Is Not Coming Back 

Part III: The Reasons it Shouldn’t

by Gilles d’Aymery

Fundraising Drive: If rants appeal to you, dear readers, then turn your attention to MSNBC, Fox News, Antiwar.com, other news aggregators, and the myriad noisy outputs that emphasize either the status quo or some reactionary future. If not, and you wish to keep thinking about real matters like, say, working to change the socioeconomic system, and you consider that culture is an intrisic component of society, then Swans is directed to you. If a few original thoughts (and original work not found anywhere else) are your call, then Swans is for you. Understand the difference. Whether a donation of $5, $75, or $100, they all are welcome, but again — if our approach is worthy of your interest — you need to up the ante. $180 in the past cycle were much appreciated. Still it won’t be enough to keep Swans going in its current form. Please, friends and comrades, help us. We need another $1,700+ to keep providing you with real content. Do Donate now!

Many thanks to Brandon Haleamau, Dimitri Oram, and Philip Fornaci for their generous contributions.

Read the first part of this essay, “A Short History of the Maelstrom.”
Read the second part of this essay, “The Reasons it Won’t [come back].”

“This meeting is part of the world’s efforts to address a very simple fact — we are destroying life on Earth.”

—Achim Steiner, head of the U.N. Environment Program, Nagoya, Japan, October 18, 2010

“We are nearing a tipping point, or the point of no return for biodiversity loss. Unless proactive steps are taken for biodiversity, there is a risk that we will surpass that point in the next 10 years.”

—Ryu Matsumoto, Japanese Environment Minister, Nagoya, Japan, October 18, 2010 (1)

(Swans – November 15, 2010) The first part of this long essay presented an abridged history of the road to the current deep socioeconomic crisis that some observers had predicted, even though no one could pinpoint the exact timing of the implosion. The second part submitted that there are objective factors that explain why the economy is not going “to come back” any time soon. But, more importantly, profound and intensifying environmental and ecological crises militate in favor of not having the economy revert to the shape and form it had. Some of these crises are the object of this third part. In short, to return to business as usual will lead to collective suicide, which Mother Nature will trigger in the not so distant future.

According to the WWF (2) 2010 Living Planet Report, “human demand outstrips nature’s supply.” “In 2007,” the report states, “humanity’s Footprint exceeded the Earth’s biocapacity by 50%.” The Global Footprint Network (GFN) has calculated that on August 21, 2010, the world reached Earth Overshoot Day — that is, “the day of the year in which human demand on the biosphere exceeds what it can regenerate.” As GFN president Mathis Wackernagel stated: “If you spent your entire annual income in nine months, you would probably be extremely concerned. The situation is no less dire when it comes to our ecological budget. Climate change, biodiversity loss, deforestation, water and food shortages are all clear signs: We can no longer finance our consumption on credit. Nature is foreclosing.” Though these environmental organizations are promoting policies that are essentially based on demographic and increasingly economic Malthusianism — independent researcher Michael Barker has written in-depth analyses, particularly in regard to the WWF, in these pages (3) — they do acknowledge the gravity of the situation. As the WWF report states, “An overshoot of 50% means it would take 1.5 years for the Earth to regenerate the renewable resources that people used in 2007 and absorb CO2 waste. … CO2 and other greenhouse gas emissions from human activities are far more than ecosystems can absorb.” In other words, the world, or to be more precise, some parts of the world, over-produces and over-consumes natural resources that are being depleted at an exponential rate. That’s the main reason for not having US (and other rich nations’) households “spend again at pre-crisis levels.” (4) The socioeconomic paradigm built on capital accumulation, perpetual material growth, and financial profits for the infinitesimal few must be not just overhauled but buried, and replaced by an equitable new arrangement that takes into account all natural ecosystems.

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November 7, 2010

Clifford Krauss: propagandist par excellence

Filed under: media,oil — louisproyect @ 6:48 pm

Clifford Krauss

After having seen the powerful documentary Gasland that shows the impact of “fracking” on households across the United States, including flammable tap water and cancer clusters that are the inevitable outcome of natural gas drilling byproducts, I have begun to pay closer attention to news coverage, including my hometown papers in Upstate NY where energy companies are attempting to buy support from impoverished land owners.

So with that in mind, I read the article “When a Rig Moves In Next Door” by Clifford Krauss and Tom Zeller Jr. in the Business section of today’s NY Times with keen interest. As is so often the case with the newspaper of record, it has to maintain the illusion of objectivity, so necessary for its market niche: college-educated professionals who vote Democrat, watch PBS, listen to NPR, drive a Lexus, and donate money to the ACLU or mainstream environmentalist organizations. It simply would not suffice for Krauss and Zeller Jr. to write the sort of thing that you would hear from Rupert Murdoch hirelings, even if it amounts to the same thing more or less.

The article reports on the riches gas drilling has bestowed on Louisiana:

By the 2000s, De Soto, with a population of about 28,000, was one of the poorest parishes in the state.

Then came the shale.

“People went to bed one night poor and woke up the next day rich, enabled to buy a Cadillac and pay cash,” said Mayor Curtis McCoy of Mansfield, the parish seat. “It’s kind of like the show ‘The Beverly Hillbillies.’ ”

Farmers who once lived check to check are now extremely comfortable, if not downright wealthy. New cars, recreational vehicles and trailers are parked in nearly every driveway. Vinyl siding has been applied to weather-beaten cottages and clapboard houses.

But to make sure that he maintains the aura of objectivity, Krauss reports on the negative consequences as well:

The Haynesville area has not been spared from drilling accidents, experiencing several over the last two years that might make residents howl in some other parts of the country.

Nearly 150 homes had to be evacuated in the neighboring Caddo Parish in April, when drillers of an Exco Resources well struck a shallow pocket of gas, causing a blowout. Exco says methane was already in the drinking water, and suggests that further study is needed to determine whether some gas came from the well.

Careful readers will note, I’m sure, that he is sure to turn a negative into a positive: “further study is needed to determine whether some gas came from the well.” You almost need to study Hegel to master all the contradictions contained in the article.

I especially enjoyed his reporting on how some environmentalists are for gas drilling despite the inflammatory water faucets and cancer clusters:

Some environmentalists support fracking and other means of extracting natural gas because gas emits a fraction of the carbon of either oil or coal. They also prefer it because it could replace coal as the nation’s principal source of electricity and provide a lower-carbon bridge before renewable energy sources can be developed on a larger scale.

You don’t have to be working at FAIR to ask the question which environmentalists. Back in junior high school, our social studies teacher explained what good reporting is all about. It has to address the questions of who, what, when, where and why. The NY Times is fully capable of answering these questions when it is in the interests of the class it speaks for, just as it is capable of fudging them when it is not. I was not surprised to discover that a google search on “environmentalists support fracking” only turned up links to Krauss and Zeller’s article. Maybe they are the environmentalists they are talking about, since both contribute to Green, a Blog about Energy and the Environment at the NYT.

In the course of finding out more about Clifford Krauss, I discovered that he is someone who has been responsible for shoddy reporting in an entirely different arena. Along with Simon Forero, Krauss was writing articles about Hugo Chavez that were compliant with American foreign policy imperatives. In an article “High Stakes: Chávez Plays the Oil Card” from April 10, 2007, Krauss informed his readers:

We are on a collision course with Chávez over oil,” said Michael J. Economides, an oil consultant in Houston who wrote an influential essay comparing Mr. Chávez’s populist appeal in Latin America with the pan-Arabism of Col. Muammar el-Qaddafi of Libya two decades ago. “Chávez poses a much bigger threat to America’s energy security than Saddam Hussein ever did.”

Needless to say, Krauss did not bother to cite anybody like Mark Weisbrot or Eva Gollinger.

Along with Forero, he has also been presenting Chevron’s case in Ecuador most assiduously: Chevron Offers Evidence of Bribery Scheme in Ecuador Lawsuit.

So one can only surmise that as a watchdog of American energy corporations’ vital interests in Latin America, it was only natural for him to adopt the same fighting stance in places like Louisiana or Pennsylvania.

But it is in Sandinista Nicaragua where Clifford Krauss sharpened his propaganda skills working for the Wall Street Journal prior to landing a job at the Times. On May 18, 1987 Krauss wrote a piece for the WSJ with the unwieldy title Central Issue: If the Contras Collapse, U.S. Faces Bigger Task In Containing Marxism — Officials Fear an Adventurism By Nicaragua Sandinistas Similar to That of Castro — The Likely Refugee Problem. It pretty much dispenses with any pretensions toward impartiality that would be necessary for the NY Times readers and presents an analysis that might have been written by a State Department flack:

No one knows the future of Nicaragua. The image of a triumphant, militaristic, Marxist-Leninist Nicaragua torments antiCommunists. Others think the Sandinistas will broaden civil and economic liberties once the Contra pressure is released. Some observers speculate that Managua will face serious internal political pressures from the Nicaraguan public and from within the Sandinista party itself once the war fades and domestic crackdowns are no longer justifiable. The Sandinistas’ future may be profoundly affected by whatever commitment the Soviet Union makes in Nicaragua, and by the moves Washington makes.

“We don’t have a wall to stop Sandinista ideology or subversives,” complains William Hall Rivera, the Honduran president’s chief of staff. “It won’t be a fight over land, but over minds.” He adds: “We’ll need a Marshall Plan.”

In the early 1960s, President Kennedy faced an arguably comparable situation. Fidel Castro quickly consolidated his revolution in Cuba, defeated a U.S.-organized counterrevolutionary force and attempted to export his ideology to the Dominican Republic, Colombia, Venezuela and Bolivia. His adventurism failed, partly because Washington pushed Alliance for Progress social programs and military training in Latin America, but mostly because of indigenous anti-communism in the hemisphere.

Krauss is an Edward J. Murrow Fellow at the Council of Foreign Relations (CFR), a policy review body filled to the rafters with inside-the-beltway pundits and NY Times reporters. Whatever qualms I might have about Murrow’s own connections to power, he had the guts to take on McCarthy at a time when Krauss would have likely been raising a ruckus over atom spies.

In an interview he gave to the CFR, Krauss answered the question about the most important story he covered in his career:

No question, the most impactful story I ever covered were the wars in Central America during the late 1970s and 1980s. The fall of Somoza, the Sandinista revolution and Contra counter-revolution, and the revolutions and U.S. policy in El Salvador and Guatemala were dramatic events that brought an otherwise remote part of the world into focus for Americans and the world. It was a challenging story for many of us young reporters because we carried lessons and baggage from the Vietnam era.  Some were pertinent to this story, while others were not, and we had to sort it out. The Cold War loomed large, of course, with Cuban and even Soviet bloc involvement. But there were also crying human needs and suffering that needed to be addressed, and revolutionaries not particularly sympathetic to American interests (to put it mildly)  sometimes appeared  to be the only ones eager to address them. In the end, good reporting was needed to break through the simplistic perceptions of both left and right. I was attracted to Central America at first because of my own Vietnam experience as a high school and college student, and I left with a much more nuanced view of the world.  As for Central America, it’s still a mess, but the foreign correspondents are essentially gone.

You’ll note his self-justification thatIn the end, good reporting was needed to break through the simplistic perceptions of both left and right.” And the older but wiser bullshit about a “more nuanced view of the world”. Such formulations reflect the “sensible” way that American ideologists see themselves, from Krauss’s thumb-sucking apologetics for gas-drilling corporations to Jon Stewart’s idiotic rally. As a way of maintaining the status quo, there is no better tactic for persuading the affluent middle class that its interests are the same as the people who own the NYT or Comedy Central (Time-Warner actually). But when the status quo amounts to job loss, foreclosure, deteriorating water and air, pension uncertainties and ever-escalating health costs, that status quo will begin to appear more and more inadequate. That will most certainly begin to persuade the formerly complacent that radical change is not only desirable but necessary.

August 12, 2010

Steven Seagal raps it down

Filed under: oil — louisproyect @ 10:00 pm
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