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by Stan Goff

[Copyright 2002, From The Wilderness Publications, All Rights Reserved. May be copied, distributed, or posted on the Internet for non-profit purposes only.]

Aug. 27, 2002, 12:00 PDT (FTW) -- Most of the polemical resistance to the so-called "War on Terrorism" has thus far been based on ethics and morality. And the moral dimension of the war is important. But we must take a more critical look at this war, at what is motivating the war, and what are the likely outcomes. While we can mount moral resistance to the war, if we fail to critically engage the real causes of it, we cannot mount an effective political resistance, which has to be an effective response to the motive forces behind the war.

Here we will emphasize the dynamic between an American ruling class and its governing junta -- which has seized power and is in many ways out of control -- in an adverse historical circumstance that is not likely correctable, and cannot, therefore, guarantee the survival of U.S. imperialism. We have to study this dynamic concretely to understand it.

It is important at the outset not to think of big business (sometimes referred to as "capital") as broken into discrete sectors, each sector with its own static base and ideology. The concept of capital as broken into static sectors, while it may be useful for a short time to conduct a transient analysis, is fundamentally mechanical. Capital is a dynamic and cyclical process of accumulation via valorization1 and systemic reproduction. It has to stabilize and reproduce itself as a system, yet it also has to "grow." This simultaneous need for equilibrium and disequilibrium is one of the central paradoxes of imperialism. Total capital at any moment is a set sum of money, for the sake of argument, but it is in flux, changing forms throughout the production/reproduction process, first productive capital, then goods and services, then redistributed through interests and rents, then finance capital, etc.

Capital has a temporal nature. In this process, the system bosses, CEOs, etc., are like an acting troupe, the members of which keep changing roles. The notion that they are divided into sectors, then, is illusory, because no fraction of capital exists independently in any sector. A crisis of accumulation2 is not a discrete crisis limited to one "sector" of capital. It is general. And the higher the degree of international integration and rationalization of the capitalist class, especially in a technically complex interdependency, the more generalized are the accumulation crises. Anything affecting one "sector" necessarily affects all "sectors."

We cannot know every aspect of this dialectic, but we can focus on some key aspects of it, bearing in mind the limitations of this focus, that I think will shed some light on our situation. So I will focus on oil, on currency, and on the evolving role and dilemma of the U.S. military. While we can certainly acknowledge that currency and the military are constants in the abstract and not a sector of capital, oil at first blush appears to be a definite sector. But this, too, is illusory. Oil is not a separate sector, first for the reasons cited above, but also because oil is no mere commodity.

Oil is the form of a deeper cycle of material reality than that on which radical theorists concentrated in the abstract with relation to the commodity and the vast social architecture they unfold from that enigma. It is the embodiment of inescapable physical laws related to energy and matter, and those are the laws, in conjunction with the laws of social motion, that we are bumping up against, not just as a society but as a species. Oil is a form of super-concentrated energy, originating as solar energy that formed over hundreds of millions of years in unique biological and geological conditions that cannot be replicated. Our species has used over half of the recoverable oil in approximately 100 years.

World oil production is probably peaking right now3, even as population continues to increase and the demands of a crumbling world economic infrastructure continue apace. Two factors might provide a transient reprieve from this event. First, technological advances like 3-D seismic enhanced recovery, nuclear-magnetic resonance techniques, horizontal drilling, and so forth, and second, a worldwide depression, which would radically decrease demand.4 It is not difficult to imagine some of the long-term consequences of the end of cheap oil, even using the input-output models of the neo-Malthusians.5 (Thomas Malthus [1766-1834] was an English economist who became famous through his book, "Essay on Population." He claimed that population increased faster than the means of human subsistence. Facts contradict this, and show that a niche must be opened in order to be filled. The neo-Malthusians have altered Malthus' concept somewhat, by claiming that population will "overshoot" as means of subsistence, like arable land, water, and fossil fuels, are depleted. There appears to be some validity to this. But their model is based on simple input-output calculations that assume a human population trajectory based on a static list of variables, with no account for the characteristics of social systems. It implies, therefore, a kind of genetic determinism that can easily devolve into racism.)

But we must take into account the social relations of energy, and value-theory.6 It is not the finite physical limit of oil that matters right now. It matters what is finite in the context of what is economically essential. Does oil have any perfect substitutes? At this conjuncture, the answer is an unequivocal "no." What is the value of oil in terms of embodied socially-necessary labor-time? In other words, can the value of oil rise fast enough for the whole economy to be contained? The answer to that is an unequivocal "yes."

Oil has no perfect substitute. Neither solar cell, nor coal, nor plutonium can run trucks or airplanes. There are theoretical substitutes, but not one shows any promise in the near term of even being developed. It is the lifeblood of the entire global capitalist system, and has been for 100 years. If oil prices go beyond a very operational price of no return, so to speak, the economy will most certainly be contained, very likely to the point of collapse.7 Imagine the consequences today, for example, if oil prices jumped a mere 50 percent. But if best predictions are correct, and we are entering the era of post-peak production, a steady and accelerating increase in the price of oil is inevitable, and soon.

So capitalism itself, utterly dependent on this single finite substance, is faced with a very real and very threatening energy crisis. Progressive (as in gradual) change is now producing an abrupt step-change. We may not perceive it as such yet, because U.S. capitalists are very adept at commodifying the mass-intellect, and making its assertions appear both upright and noble, as we can see in the ubiquitous display of American flags.

Every oil shock since 1973 has corresponded to or promptly followed a war. To understand why, we have to account for the concrete and current structure of the world capitalist system.

The U.S. is now unarguably hegemonic. U.S. armed forces control every major sea lane, and it has ringed the world with military bases8. U.S. forces are the international police of the Gulf States, where, by the way, imperialist oil corporations extract the oil and pay rents to client regimes.

Those rents have to be sufficient to keep domestic populations from becoming restive, and to continually restore their capital base. A barrel of oil costing between $25 and $30 is enough to keep the principal Organization of Petroleum Exporting Countries (OPEC) states calm (as this is written, however, there is a dollar devaluation in progress), even as it strains those non-OPEC states whose recovery costs are higher than, say, Saudi Arabia or pre-invasion Iraq.9

The U.S. pays below a market price for oil for at least three reasons. One is that the U.S. has offered F-16 fighter jets, Stinger missiles, and so on to those client regimes, as well as capitalizing their oil extraction. Two is that the U.S. has through a number of stratagems since the early-1970s convinced those states to invest their profits in U.S. financial instruments.10 If the Saudis attempted to take action against the U.S. economy, for example, they would ruin themselves, since they have invested the majority of their assets in U.S. securities. Three is that the U.S. controls the air, land, and sea lanes and is willing to deploy devastating military power into the region. So the U.S. is having its oil subsidized, in a sense, paying less than market value, as a form of imperial tribute.

It is because oil is denominated in dollars -- which I can now call "petrodollars" -- since the U.S. dropped the gold standard and all its associated fixed currency exchange rates in 1971,11 that the U.S. has been able to dominate not only the developing world, but its key capitalist competitors. Other nations must pay their energy bills in (petro)dollars, at a higher rate than the U.S., and those dollars come right back to the homeland (via Saudi Arabia, et al) to invest in T-Bills and real estate.

In 1973 the Nixon Administration devalued the dollar, by then firmly fixed as the currency of international trade by virtue of being the petrodollar, and cleared its own debts to its European and Asian capitalist competitors.

American petrodollars were then cycled through American banks, which lent them to Latin Americans and Africans, still reeling from the last oil shock, who then required petrodollar loans to pay their own energy bills. Economic growth has stagnated and fallen back in Africa and Latin America ever since. This is the method by which the U.S. was able to shift the burden of its own post-Vietnam accumulation crisis onto others, and to shift the maintenance model of its hegemony from semi-fascist client regimes to "structural adjustment" debt peonage under nominally "democratic" governing bodies.

American imperialism is in the last instance petrodollar imperialism. As Latin America, Africa, and now Asia, slide over the abyss, Americans have doubled their car ownership.12 The rest of the world is, in this way, directly bearing the burden of our high cost of living.

So if this system begins to unravel, as it has begun to, and the American people see their standard of living take a sudden downturn, the U.S. political regime will face a far graver political crisis than the crisis of legitimacy that was opportunistically transcended by spinning Sept. 11.

Capital understands very clearly what is at stake, and it must take great pains to ensure that we do not understand it.

But the ruling class fails to grasp the implications of "value-theory," that is, the very laws that give capitalism its character. The global monopolization that is taking place right now is an attempt to escape from those laws. The very fact of the current super-heated monopolization is an indication that the competitive process is exhausted. Recent revelations about the "creative accounting" scandals of major transnationals are evidence of attempts to escape those laws through massive bunko scams.

The strategic devaluation and inauguration of the neoliberal regime in the early 1970s was already a response to a generalized crisis of profits, a crisis related to the organic composition of capital, and even the petrodollar was a retrenchment. That retrenchment may now also be exhausted.

World oil consumption right now is about 75 million barrels per day. By 2010, that is expected to increase to 100 million barrels per day.13 This oil is produced by two major groups, let's say, for the purpose of analysis -- OPEC and non-OPEC (NOPEC). OPEC is largely concentrated in the Persian Gulf region. NOPEC is the North Atlantic, North America, Mexico, China, Nigeria, and so forth. That doesn't tell the whole story, though. Gulf states' oil does not peak in production until 2012, and half the world's remaining easily extractable oil is there.14 World production is peaking right now. But world production is an average. NOPEC peaked several years ago, now being in permanent decline.

So, OPEC is getting stronger, and NOPEC is getting weaker.

Saudi Arabia, an OPEC nation, is the biggest pool, with Iraq next and the Caspian Sea region a theoretical third (but this is very much in doubt15). The U.S. has for years been trying to ensure domination of OPEC, and they have accomplished that to some degree by ensuring the corrupt Saudis and others through those aforementioned investments. Given that OPEC production is still rising and NOPEC is in permanent irreversible decline, OPEC is regaining dominance in the overall oil market. The point at which OPEC regains definitive domination of world markets is called by some the "crossover event."16

Best predictions are that the "crossover event" will happen around 201117. This is certainly understood by the current Bush Administration, which is heavily populated by members of the petroleum oligarchy.

Should forces hostile to U.S. imperialism (for whatever reason) gain control over the Gulf States and its oil, they would effectively control the lifeblood of the entire global economic system. U.S. hegemony would collapse in an historical instant. Compared to this scenario, Sept. 11 was a walk in the park. And the U.S. ruling class, especially the current petroligarchy administration, knows this.

Since world oil production begins to decline on average almost immediately, the U.S. as the biggest end user needs to figure out how to compensate for the losses being sustained in NOPEC production. Their solution, from what we can see now, may be to open the Caspian and accelerate extraction from the Gulf States, particularly Saudi Arabia and Iraq. But the most optimistic scenarios are that all three regions combined might put out an additional 15 million barrels per day. Given that our extrapolated appetite will go up 25 million barrels per day within nine years, provided there is no economic collapse that truncates demand, the U.S. remains in a dilemma.

Compounding that dilemma is the fact that simply getting that additional oil out of the ground and to market will require an investment of an additional $1 trillion in the region by someone.18

Who will bear the burden? Colonized peoples, of course, outside and inside the U.S. via the domination of the petrodollar.

This is almost certainly the plan of the Bush junta. The perennial problem, however, is the mass of people in those nations, who are often militantly radicalized by arrogant foreign plunderers. This puts the imperialists right back on the horns of a dilemma.

The escalation of Palestinian resistance to Zionism19 and the fascist-like response of the Israelis to that resistance, constitutes a threat to the stability of the U.S. client regimes in the region, as does the declining standard of living for the masses in all the Gulf States. These regimes are corrupt and autocratic, and themselves caught in this web of dilemmas. And it is upon them that the U.S. dollar depends, and upon the seignorage of the U.S. dollar that U.S. hegemony depends.

This energy crisis, then, is now combined with a worldwide overproduction crisis, felt even in the United States. And the current administration is opting for war, a very expensive war, for the purpose of extending and consolidating that hegemony, which will further strain the U.S. domestic economy. As this is written, 48 of the 50 states are experiencing severe budget shortages, and the federal government is threatened with default.

This is a desperate move by desperate people, and so it is a dangerous period we are in.

It is no wonder the capitalists of other regions are raising their eyebrows at the Bush Administration. They surely sense the potential consequences of this administration's wild hubris, its military adventurism, its arrogant abrogation of international treaties, its refusal to submit to international law, and its continued support for the Israeli occupation. Some of these capitalists understand that what is taking shape is the military occupation of the world's major oil fields, in the face of fierce resistance from the masses in those states, and they further understand that this is the best way to ensure permanent loss of access to this critical commodity for good.

The Europeans may be courting the Gulf States now, alarmed and angered by the Bush overtures to Russia (which in turn makes overtures to both the U.S. and European Union, like a coy lover choosing between suitors), and the "Bushfeld" junta's apparent attempt to restructure the geopolitical architecture to the detriment of European capital.

The U.S. Government is certainly anticipating this contingency with great anxiety. If the Saudis, for example, under the threat of domestic destabilization from ever more angry and militant masses and focused on the U.S.-Israeli nexus, decided out of self-preservation to punish the U.S., they might withdraw or liquidate all their U.S. dollar-denominated assets from the U.S. and invest them in euro-denominated assets. The only sticking point for them is the fact that U.S. companies perform the lion's share of extraction activities. Nonetheless, if they were to expel the U.S. (a dangerous move, but these are desperate times) and contract with other nations, it would be a devastating blow to the U.S. and have the added incentive of restricting supply and raising the price per barrel, raising domestic revenues to quiet their own restless populations. This nightmare scenario for the Bush de facto Administration is surely fueling their sense of urgency to emplace more and permanent military infrastructure in the region to prepare for this contingency.

As the U.S. commits diplomatic suicide in Palestine and destabilizes Saudi Arabia, there is backroom talk within the Bush Administration of military action against Saudi Arabia.

Arab and Central Asian resistance will be Islamist. The destruction of pan-Arab nationalism and Arab socialism by imperialist forces, often with Islamists as the instrument of that destruction, has left but this one force to give voice to the misery and degradation of the masses. Our moral (and even wishful) assessment of that does not change the fact that this is true. At this point, whether the U.S. supports or opposes the Islamists is irrelevant to Arab and Muslim masses. The U.S. is still supporting Israel, the source of their greatest degradation and humiliation.

The more general economic dislocations of the coming crisis, along with the necessity (from capital's perspective) of gaining control of the diminishing but vital resource, has led to a radical rethinking of military doctrine.

When I was working in Special Forces, we were part of a foreign policy doctrine called Internal Defense and Development (IDAD). That was old school. As I prepared to leave the Army, there was much emphasis, doctrinally and technologically, on something called Operations Other Than War (OOTW). The process of uneven development has begun to culminate in the concentrated urbanization of much of the world's population.

In the past, capital had the capacity to "absorb" these populations who came into the city based on loss of land or the lure of jobs. There was a level of unemployment and misery maintained to "keep them hungry" and compliant, and to buffer against worker demands. But with the rapid restructuring for today's "globalization," there is far less economic "expansion." Instead of the "proletarianization" of the masses, we are seeing in many cases their "lumpenization," as many people are integrated into various criminal enterprises. With the new reality in the world's cities, and the domestic development of various politics of resistance to "globalization," two military developments have emerged.

One is the ever-closer relationship and blurring of lines between military and police. The other is the technological development of sub-lethal weapons systems and highly sophisticated population control measures for both police and military -- globalized military policing.20 This is one key component in the mad doctrine of "full spectrum dominance" championed by the feverish Secretary of Defense Donald Rumsfeld.

We need only look at the Robocops that are now deployed in force for every demonstration and the reliance on tactical units for more and more "drug" arrests. Attorney General John Ashcroft is now preparing even further erosion of Posse Comitatus, the law that forbids the military from operating within the borders of the U.S. That erosion began with the growth of numerous liaisons between military and police. I myself participated in the army's training of the original FBI Hostage Rescue Team who have since become famous or infamous, as the case may be, and with both Los Angeles and Houston SWAT. The erosion also began with operations where the military actually augmented the Border Patrol inside the U.S. These contacts began in the early-1980s and have grown exponentially since.

The military doctrines being prepared for Pax Americana include doctrines for global urban civil war.

This dialectical relation between energy, currency, and the military is at least one key concrete condition for us to understand if we are to see into the mind of capital (big business and its political establishment) in this period of imperialism in crisis.

It appears that the "democratic" form of imperialism at this conjuncture is coming to a close, and the mailed fist of yet another form of fascism is a real possibility in the near term. There is no "democratic" way out of this accumulation crisis, and as this crisis floods back from the periphery to the core, capital's assault on the U.S. working class will be sharpened, as we are seeing with Bush's concerted attack against the debilitated American trade union movement. As in Argentina, when the inevitable tumble into severe economic polarization happens, those who count themselves "middle class" will be rapidly pauperized as the banking system closes its doors to appropriate their savings.

It is this inevitable attack on the living standards of average Americans that will either wake us to the folly of this manufactured patriotism and push us into resistance to this regime, or in the worst case, into atavistic racialism and fascism. Which it will be depends in some part on how effective some of us are at telling people in advance what they can expect...and why.

[Stan Goff retired from the U.S. Army in 1996, his last assignment being 3rd Special Forces Group. He entered military service January 1970, and his first assignment was as an infantryman with the 173rd Airborne Brigade in Vietnam. His service took him to seven more conflict areas after Vietnam, including Guatemala, Grenada, El Salvador, Peru, Colombia, Somalia, and Haiti. His assignments included 2nd Ranger Battalion, 1st Ranger Battalion, 75th Ranger Regiment, 1st Special Forces Operational Detachment-Delta, 7th Special Forces, the Jungle Operations Training Center, and the U.S. Military Academy at West Point.

He is the former Organizing Director for Democracy South and is now the Director of the North Carolina Network for Popular Democracy. He also works with the Southern Voting Rights Project of the Institute for Southern Studies. He authored a book about the 1994 U.S. military intervention in Haiti, called "Hideous Dream: A Soldier's Memoir of the U.S. Invasion of Haiti" (Soft Skull Press, 2000).]

1. Valorization: In this context, we are referring to the process whereby the value added to a commodity in the production process is partly appropriated by non-working owners as profit.
2. Accumulation crisis: Systemic economic distress to capital based on the tendency of the rate of profit to fall, overproduction, currency collapse, etc. All recessions are actual accumulation crises.
3. "An Analysis of U.S. and World Oil Production Patterns Using Hubbert-Style Curves," Albert A. Bartlett Department of Physics University of Colorado at Boulder, 80309-0390 Mathematical Geology, Vol. 32, No 1, 2000
4. "Distribution and evolution of ‘recovery factor,'" "Oil Reserves Conference," Paris, Nov. 11, 1997, International Energy Agency, Jean Laherrère, Associate consultant, Petroconsultants
5. "Energetic Limits to Growth," Jay Hanson, ENERGY Magazine, spring 1999
6. Value theory: The interpretation of economic activity based on the "labor theory of value" pioneered by Marx and Engels, which states that the exchange value of a commodity is fundamentally based on the abstract socially necessary labor time required to produce it. The goal of value-theory is to go beyond "supply and demand" accounts of economic behavior to an examination of the actual social relations between people that define a social system, including political relations.
7. "The Peak of World Oil Production and the Road to the Olduvai Gorge," Richard C. Duncan, Ph.D., Pardee Keynote Symposia, Geological Society of America Summit 2000, Reno, Nev., Nov. 13, 2000
8. "U.S. Military Bases and Empire," Monthly Review, Editors, March 2002
9. "Analysis of the IEO2001 Non-OPEC Supply Projections," Robert D. Blanchard, Northern Kentucky University, April 9, 2001
10. "The Globalization Gamble: The Dollar-Wall Street Regime and its Consequences," Peter Gowan, University of North London, Presented to the International Working Group on Value Theory 1999 mini-conference, March 12-14, 1999
11. Ibid.
12. "Making Better Transportation Choices," Molly O'Meara Sheehan, State of the World 2000, The Worldwatch Institute, 2000
13. Bartlett, op cit.
14. Duncan, op cit.
15. "Forget the Caspian Bonanza," Peter Beaumont and John Hooper, July 26, 1998, Observer (London)
16. "The World Petroleum Life Cycle", Richard C. Duncan and Walter Youngquist, Presented at the PTTC Workshop "OPEC Oil Pricing and Independent Oil Producers", Petroleum Technology Transfer Council, Petroleum Engineering Program, University of Southern California, Los Angeles, Oct. 22, 1998
17. Ibid.
18. Beaumont and Hooper, op cit.
19. Zionism: The movement founded by Theodore Herzl at the turn of the last century in response to the worldwide experience of anti-Semitism, based on the belief in a need for a Jewish state, which the movement determined would be in Palestine. Zionism is not synonymous with Judaism, and many Jews have opposed and still oppose Zionism. It has been based since early in its history on the explicit design to expropriate the land of others for the express purpose of a state controlled by a religiously-defined group, i.e., Jews. It is that design to base a Jewish-dominated state on the expropriated land of Palestinians that has led many to equate Zionism with racism. Being anti-Zionist is not synonymous with being anti-Semitic.
20. "The Militarization of Police," Frank Morales, Covert Action Quarterly, spring-summer 1999

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