Carbon democracy

Abstract

States that depend upon oil revenues appear to be less democratic than other states. Yet oil presents a much larger problem for democracy: faced with the threats of oil depletion and catastrophic climate change, the democratic machineries that emerged to govern the age of carbon energy seem to be unable to address the processes that may end it. This article explores these multiple dimensions of carbon democracy, by examining the intersecting histories of coal, oil and democracy in the twentieth century. Following closely the methods by which fossil fuels were produced, distributed and converted into other forms of socio-technical organization, financial circulation and political power, the article traces ways in which the concentration and control of energy flows could open up democratic possibilities or close them down; how connections were engineered in the post-war period between the flow of oil and the flows of international finance, on which democratic stability was thought to depend; how these same circulations made possible the emergence of the economy and its unlimited growth as the main object of democratic politics; and how the relations among forms of energy, finance, economic knowledge, democracy and violence were transformed in the 1967–74 oil–dollar Middle East crises.

Keywords:

• democracy
• oil
• coal
• Middle East

Acknowledgements

I am grateful for the help received from Robert Vitalis, Munir Fakher Eldin, Katayoun Shafiee, Andrew Barry, three anonymous referees for Economy and Society and seminar participants at Rutgers, Cornell, Princeton, Binghamton, NYU, SOAS, the University of Illinois at Urbana-Champaign and the University of California, Berkeley, where parts of this work were presented.

Notes

1. Ross (2001) demonstrates a negative correlation between oil exports as a percentage of GDP and degree of democracy, as estimated in the Polity dataset compiled by Keith Jaggers and Ted Robert Gurr (1995). The data are derived from an evaluation of the institutional procedures by which the candidate for chief executive is selected, elected and held accountable. The narrowness of this conception of democracy, the unreliability of its measurement and the assumption that diverse institutional arrangements can be compared and ranked as differing degrees of a universal principle of democracy are among the many problems presented by the data. Ross is unable to establish reasons for the statistical relationship between oil exports and Polity data ranking.

2. The problem of the rentier state was first formulated in Hussein Mahdavy (1970); subsequent contributions on the Middle East include Isam al-Khafaji (2004), Hazem Beblawi and Giacomo Luciani (1987) and Ghassan Salamé (1994). For other regions, see Karl (1997), Rosser (2007), Wantchekon (2002) and Yates (1996). Among economists, the problem of natural resources is posed in terms of obstacles to economic growth rather than democracy (Sachs and Warner, 1995). Goldberg, Wibbels & Mvukiyehe (2008) examine the impact of oil and other mineral wealth on American politics, showing that in states like Texas and Louisiana oil appears to cause lower rates of growth and make it less likely that opposition groups win elections.

3. An important exception to this tendency to ignore the materiality of oil in discussions of the rentier state is Fernando Coronil (1997), where the problem is connected to a wider erasure of nature in understanding the formation of wealth. See also Michael Watt's discussion (2004) of ‘the oil complex’ and the ‘governable spaces’ it requires and Robert Vitalis's examination (2006) of the labour regime and image-making that organized the production of oil in Saudi Arabia.

4. See Aleklett and Campbell (2003), Deffeyes (2005), Hubbert (1956) and Robelius (2007); on the history of peak oil estimates, see Bowden (1985) and Dennis (1985).

5. Research by James Hansen and his colleagues (2007) on palaeoclimate data suggests that feedback loops in the melting of ice can cause a rapid acceleration in the loss of ice cover, forcing much more extreme climate change with potentially cataclysmic consequences. These findings make even the dire warnings from the IPCC look absurdly optimistic. See also Hansen et al. (2008).

6. On the sociology of translation, and ‘obligatory passage points’, see Callon (1986). See also Mitchell (2002b, ch. 1).

7. Podobnik (2006, p. 5) calculates that coal replaced wood and other biomass materials as the main source of the world's commercial energy as early as the 1880s. But until well into the twentieth century the bulk of this fossil energy was consumed by just a handful of countries.

8. The use of coal (as well as peat, another fossil fuel) was already known in antiquity. But its use was generally restricted to the localities where it was found, and to particular trades that required large quantities of process heat, such as limestone burning and metal-smithing. Shortages of wood, especially in Britain, led to a gradual rise in the use of coal as a general substitute for wood from the sixteenth century (Sieferle, 2001, pp. 78–89).

9. Until recently it was assumed that coal reserves would long outlast oil, with plentiful supplies for hundreds of years. Recent studies suggest that estimates of coal reserves are even less reliable than those for oil, that production in the US, the country with the largest reserves, has already peaked and begun to decline and that global production may peak as early as 2025 (Zittel & Schindler, 2007). See also Iain Boal's warnings about risks of Malthusianism in discussions of oil depletion (Boal & Martinez, 2006).

10. Pollard (1981) documents the link between coal-producing regions (rather than states) and industrial development in Europe. See also Haberl (2006).

11. As Hobsbawm (1989–88) points out, democratization came slowly. In most countries with systems of representative rule, property qualifications and registration procedures restricted the electorate to between 30 and 40 per cent of adult males. Voting rights for the majority of men, and for women, were won only in the twentieth century. For the restrictions in the British case, see Blewett (1965, pp. 27–56).

12. Britain also developed coal resources in the colonies – Natal and the Transvaal, parts of Queensland and New South Wales, and West Bengal. Coal production was also developed on a large scale in the Donets Basin in Russia, in the Illinois and Rocky Mountain basins in the United States, and in China.

13. The strike rate per 1000 employees for coal-mining and for all industries was, respectively, 134 and 72 (1881–6), 241 and 73.3 (1887–99), 215 and 66.4 (1894–1900) and 208 and 86.9 (1901–5) (Edwards, 1981, p. 106).

14. On the central role of the left in creating democracy in Europe, see Eley (2002). Coal was also associated with labour militancy beyond the main centres of the industrialized world. Quataert (2006) notes the repeated strikes among the workers of the Zonguldak coalfield on the Black Sea coast of Ottoman Anatolia. In Egypt, a strike by the coal-heavers at Port Said, the world's largest coaling station, in April 1882 is recorded as the first collective action by indigenous workers in the country. See Beinin and Lockman (1987, pp. 23, 27–31). However, without the linkages that connected coal to centres of industrial production within the country, these actions could not paralyse local energy systems and gain the political force they enjoyed in northern Europe and the United States.

15. Other discussions of relative autonomy of coal-miners and its loss under mechanization include Dix (1988) and Tilly and Tilly (1998, pp. 43–51).

16. ‘Labor's cause in Europe: the Kaiser's conference and the English strike’, New York Times, 16 March 1890, p. 1.

17. In one of world's worst pit disasters, a gas explosion destroyed the Courrières mine on 10 March 1906, leaving 1100 dead (Neville, 1978).

18. Silver (2003, fig. 3.3, p. 98), shows that strikes were concentrated in these industries rather than in manufacturing.

19. Georges Sorel (1914 [1908]) offered another contemporary reflection on the new power of the general strike.

20. See Chernow (1998, pp. 581–90) and ‘William Lyon Mackenzie King’, Dictionary of Canadian Biography Online, retrieved 2 June 2008 from http://www.biographi.ca.

21. Prior to the development of North Sea oil in the 1970s, the only significant oilfields in Europe were in the Carpathian basin extending from southern Poland to Rumania. See Frank (2007).

22. See also Forrestal (1951, Vol. 7–8, 2 May 1947), Citino (2000, 2006) and Block (1977).

23. Stalin's words, from a 1926 speech to railway workers, are cited in Suny (1972, p. 373).

24. As oil is extracted the pressure in the reservoir drops. Pumps may then be used to bring more oil to the surface or to increase the reservoir pressure by driving water or gas into secondary wells.

25. The main exception was high-quality steam coal from South Wales, essential for the navy and fast liners, which was shipped to British coaling stations around the world (Jevons, 1915, p. 684). Historically, long-distance coal shipments from Britain could be used as ballast or make-weight and benefited from low rates for back-carriage (Jevons, 1865, p. 227).

26. Charles P. Kindleberger, an economist with the Office of Strategic Services in 1942–4, recalled that, at the outbreak of the Second World War, ‘coal was regarded as something that didn't move across big bodies of water. It was shipped to British coaling stations but you wouldn't expect international transoceanic trade as a regular thing. And yet when the war came along, and we needed to get coal to Europe we started to move coal out….They were loading it in clam shell buckets on to barges in Puget Sound to go to Europe, a landing in Texas, Portland, Maine, everywhere’ (McKinzie, 1973, pp. 108–9). After the Second World War, Japan built a steel industry based on coal and ore shipped from Australia.

27. In 2005, 86 per cent of world coal production was consumed within the country of production (IEA, 2005).

28. The figure refers to ton-miles of crude oil and oil products. In 1970 coal accounted for less than 5 per cent of seaborne trade.

29. The Torrey Canyon, an oil tanker owned by a Bermuda-based subsidiary of the Union Oil Company of California, registered in Liberia, chartered to BP, built in 1959 and rebuilt in 1966 in a Japanese shipyard to increase her size from 66,000 to 119,000 deadweight tons, ran aground off the coast of Cornwall in March 1967. The tanker had set sail without knowing its final destination, and lacked detailed navigation charts for the coast of south-west England. The damage to the coastline and to wildlife was exacerbated by the lack of methods to handle large oil spills. The British government tried to set fire to the oil by having air defence forces bomb it with napalm, creating further damage and inadvertently revealing their possession of the controversial weapon and the inaccuracy of the bombers (more than a quarter of the bombs missed their target) (Sheail, 2007; Cabinet Office, 1967).

30. Other raw materials presented similar problems of regulating global production to prevent competition. None of them, however, were as cheap to produce and transport as oil, or usable in such vast quantities, so they did not generate a need on the same scale for techniques for the production of scarcity.

31. Critical accounts of US international oil policy tend to accept ‘national security’ as the concept with which to frame the history of oil, exposing its true meaning either in terms of the logic of capitalist expansion that confronts an inevitable scarcity of resources, as in Klare (2001, 2008), or in terms of the need for an imperial power to secure the conditions for capitalist expansion, as in (Bromley, 1991, 2005). Explaining oil in terms of the logics of capitalist expansion leads such accounts to overlook the socio-technical work that must be done to turn the multiple struggles over oil into the singular narrative of the unfolding and stabilizing of the logic of capital. On the ability of the US oil majors to frame their programme in terms of ‘national security’, and the reproduction of this perspective in scholarship, see Vitalis (2006).

32. Forrestal made the same argument at a Cabinet meeting on 16 January 1948 (1951, p. 2026).

33. On the history of American attitudes towards energy, see Nye (1999).

34. Much more could be said about the role of the major oil companies and car manufacturers in helping to produce and popularize ways of living based on very high levels of energy consumption. This is not a question of balancing the history of oil production and distribution with an analysis of its consumption, so much as understanding that production involved both producing energy and producing forms of life that were increasingly dependent on that energy.

35. On the British–Zionist collaboration in defending the pipeline, see David Ben-Gurion, ‘Our friend: what Wingate did for us’, Jewish Observer and Middle East Review, 27 September 1963, pp. 15–16, reprinted in Khalidi (1971, pp. 382–7), and Leonard Mosely, Gideon goes to war (London: Arthur Barker, 1955), chapter 4, excerpted as ‘Orde Wingate and Moshe Dayan’, in Khalidi (1971, pp. 375–82).

36. The four corporations, then known as Standard Oil of New Jersey (Exxon), Standard Oil of California (Chevron), The Texas Company (Texaco) and Socony-Vacuum (Mobil), were (from 1947) the joint owners of Aramco, the company with exclusive rights to Saudi oil.

37. Testimony of Samuel Mikunis (Secretary of the Communist Party of Palestine), to UN Special Committee on Palestine, Public Hearing, Held at the YMCA Building, Jerusalem, Palestine, 13 July 1947, UN General Assembly, A/364/Add.2 PV. Retrieved 1 June 2008 from http://domino.un.org/UNISPAL.NSF/fd807e46661e3689852570d00069e918/77d468d8893712ce85256e83005fbc53, Previously a movement of both Palestinian Arabs and Jewish settlers, in 1943 the Palestine Communist Party had split into Arab and Jewish movements, but the Jewish factions, including the one led by Mikunis, continued until late 1947 to oppose the Zionist plan for a Jewish state in favour of Arab–Jewish cooperation (Lockman, 1996, pp. 303–51).

38. Na'im Amiouni [Amyuni], ‘A short history of our pre-war and post-war economic problems’, 3 July 1946, cited in Gendzier (2006, p. 48).

39. See also Vassiliev (2000).

40. See also United States Senate (1976) and Mitchell (2002b, pp. 148–9).

41. British Petroleum, the major shareholder in the Iraq Petroleum Company, had rejected Iraq's earlier proposal that IPC relinquish 60 per cent of its concession area (which covered the entire country) and give Iraq ownership of 20 per cent of the company. Following Iraq's decision to take back all non-producing parts of the concession, BP decided, in the words of the company historian, ‘to wait out Qasim, hoping for a change of government’ (Bamberg, 2000, p. 167).

42. For an explanation of the currency mechanism, see Zupnick (1955: 71–84). Egypt agreed to leave the sterling area in July 1947, hoping to convert its sterling balances, accumulated in London during the Second World War, into dollars. Shortly after, however, Britain broke the terms of the agreement by suspending the convertibility of Egypt's sterling balances (Leith-Ross, 1952, pp. 29–37).

43. Standard economic histories typically ignore the question of oil. For example, Eichengreen (2004) makes no mention of it.

44. See, for example, Dwyer (1949). Dwyer was Assistant Chief, Petroleum Branch, Economic Cooperation Administration (the US government agency that administered the Marshall Plan).

45. Harry Dexter White (1942) argued for an ‘international essential raw material development corporation’ whose function would be ‘increasing the world supply of essential raw materials and assuring member countries of an adequate supply at reasonable prices’.

46. ‘In 1955, a paper prepared for the Working Party on the Treatment of Oil in the Balance of Payments, the Treasury and the Ministry of Fuel and Power wrote: “The international ramifications of the oil industry (including its tanker operations) are so large and so complex as almost to constitute oil a currency in itself. Its size and complexity, and the fact that the fullest statistics are those relating to currency movements, and that any other basis of treatment would mean very substantial corrections in a Balance of Payments account, are, in our view, sufficient reasons for treating oil differently from other trade.”’ (Galpern, 2002, pp. xix–xx, citing ‘Paper for the Working Party on the Treatment of Oil in the Balance of Payments’, Note by the Treasury and Ministry of Fuel and Power, T.O. (55) 2, 28 January 1955, T 277/506).

47. On the peak of British coal production in the 1920s, see Bardi (2007) citing Kirby (1977) and Neuman (1934).

48. Jevons's son, H. Stanley Jevons, returned to the question of the exhaustion of coal reserves in Jevons (1915). He revised his father's estimate of the date of the possible exhaustion of British coal mines from one hundred years to ‘less than two hundred years’ (ibid., pp. 756–7).

49. Originally a lecture delivered on 21 April 1936. The coal question is quoted on p. 517.

50. ‘Fifty years ago this summer [in 1955] a little book was published in London. It was entitled The Free Convertibility of Sterling and was authored by an experienced financial journalist George Winder. In the front, Antony Fisher wrote as director of the Institute of Economic Affairs, “It [the book] is of vital concern to all those who are interested in their own freedom and the freedom of their country”. Henry Hazlitt gave the book a brilliant review in Newsweek on July 25th 1955 and all 2,000 sold out. One can make a very good case for saying this was the start of the free market public policy institute movement that today encircles the world. That little book did so well that Fisher was emboldened to approach a young economist named Ralph Harris. Harris in turn saw a chance to do good by challenging the post World War II Keynesian consensus’ (Blundell, 2005, p. 6).

51. The price of oil fell from $31 dollars a barrel in 1920 to $9 in 1970 (in 2006 prices). The average price per decade also declined, from $18 per barrel in the 1920s, to $15 per barrel in the 1930s and 1940s, $14 per barrel in the 1950s and $12 per barrel in the 1960s (BP, 2007).

52. Block (1977, pp. 164–202) makes no mention of the oil dimension of the crisis.

53. In 1961 Iraq had reduced the concession area of the foreign-owned Iraq Petroleum Company to the fields currently in production, in the Kirkuk region in the north. In 1969 Iraq had signed an agreement with the Soviet Union to help develop oil production in the south and to build a pipeline to a new refinery on the Persian Gulf. When production from the new field began in April 1972, IPC cut its production at Kirkuk by 50 per cent. The government nationalized IPC in June (Bamberg, 2000, pp. 163–71; Tripp, 2007, p. 200). Algeria had taken 51 per cent control of its French-owned oil industry in February 1971, and Libya began to nationalize foreign-owned oil production in December 1971. Syria had nationalized its small oil industry in 1964.

54. Podobnik (2006) discusses this question of the differing expertise relating to coal and oil.

55. In the 1950s about 95 per cent of US arms exports were financed by government aid; by the 1990s the figure was about 30 per cent (Nitzan & Bichler, 2002, p. 216).

56. Subsequent developments are discussed in Mitchell (2002a).