Political Economy of International Crisis

Economics 357L

Section V


During the 1970s (and perhaps somewhat in the early 1990s), in ways quite similar to the increase of food prices in the developed countries, the energy crisis played a central role in the inflationary strategy of attacking the real wage and in the process of industrial restructuring through which business sought to regain control over work and productivity.

The initial lectures in this section will deal with the vanalysis of the social meaning of energy for workers and for business and the conflicts between the two groups. This discussion will include the question of entropy and the relationship of the problems of thermodynamics to capitalist social relations.

The subsequent lectures will deal with the history of the energy crisis and its role within the overall socio-economic crisis. This will include a discussion of the relationship between the energy crisis and social relations in the industrial countries as well as a consideration of the relationship between the energy crisis and growing social unrest in the energy exporting countries.

Theoretically as well as concretely, the energy crisis is closely related to the food crisis, in as much as the latter is, in part, a crisis of the energy needs of human beings. The energy crisis is also, in ways to be discussed in Part VI, closely related to the international debt crisis -partly because much of the debt, which subsequently fell into defacto default, was acquired to finance the importation of higher priced oil (and food). Therefore this Part V should be studied in close relation to Parts IV (food) and VI(debt).


Barry Commoner, The Poverty of Power: Energy and the Economic Crisis, Alfred A. Knopf, New York, 1976, Chapter 2: "Thermodynamics, The Science of Energy." Available through ERes.

This chapter from Commoner's book is a simple introduction, by a scientist, to the subject of thermodynamics. Here you will find a discussion of fundamental concepts such as: work (force exerted through distance), the First Law of Thermodynamics (energy can be neither created nor destroyed), the Second Law of Thermodynamics (the universe is constantly, irreversibly becoming less ordered), and entropy (a measure of the unavailability of energy for work, of disorder). Commoner was basically concerned with questions of efficiency in energy utilization, especially in maximizing work. His description of the Second Law revealed his basic orientation: The Second Law "explains how work -which is the only value that energy has for us- is gotten out of the flow of energy from one place to another." p. 5. His summing-up towards the end of the second chapter pretty much defines his position vis à vis the environmental-energy movment he was interested in influencing: "The First Law gives us the meaning of measuring amounts of energy, regardless of their form or their availability to do work. It enables us to count up our stores of energy, the amounts represented by a tank of gasoline or by the huyge beds of coal in the Western states. Using these measures, we have begun to worry about budgeting the use of these stores. We have begun to think about "conserving" energy -saving so many BTU (British Thermal Units) of energy by home installation and so many by driving at fifty-five miles per hour. But the Second Law tells us that it is not energy which needs to be conserved, because in fact energy is never consumed. What does need to be conserved is a certain quality that is associated with energy, but which it may possess in differing degrees. This quality -the available work that can be obtained from the energy- is not conserved; it is irretrievably lost whenever energy is used to produce work. The science encompassed in the Second Law, if we would use it, is specifically designed to show how we can maximize the amount of work, the power, the value, that can be gotten out of using a given amount of energy. It is not the First Law, but the Second that ought to govern the campaign to conserve energy." pp. 28-28.

Amory Lovins & Hunter Lovins, "Fools Gold in Alaska," Foreign Affairs, July/August 2001, [pdf version].

*George Caffentzis, "The Work/Energy Crisis And The Apocalypse", [1981] [pdf version] , reprinted in Midnight Notes Collective, Midnight Oil: Work, Energy, War, 1973-1992, Boston: Autonomedia, 1992. Available through ERes.
This radical analysis of the energy crisis, written by an ex-editor of the journal Zerowork, includes both a political economic analysis of the overall character of the crisis and a specific discussion of the relation of the energy crisis to the crisis of capitalist command over labor. Here, unlike Commoner's discussion, entropy is seen as a positive phenomena --the increasing unavailability of peoples' energy to business for work. The history of thermodynamics is briefly located in the rise of capitalism and a class analysis is presented for the role of energy in capitalism. From this point of departure there is an attempt to draw conclusions as to both capitalist needs --e.g. to sort out low entropy from high entropy workers, and to get rid of the latter-- and working class needs to gain more control over the utilization of its own energy. p. 20.

B. Crises in the U.S. Coal and Nuclear Power Industries

*William Cleaver, "Wildcats in the Appalachian Coal Fields," Zerowork #1, 1975. [pdf version] Reprinted in Midnight Notes Collective, Midnight Oil: Work, Energy, War, 1973- 1992, Boston: Autonomedia, 1992, pp. 169-183.

Background analysis of the crisis of managerial control in the coal industry which the nuclear industry and oil were supposed to outflank. This article traces the development of labor- social relations in the Eastern coal fields through the post-WWII period to the wide spread wildcats that threw the industry into crisis in the late 1960s. Of particular note in this article are: 1. the relationship between the control over labor and the control over coal, i.e., non-human energy, 2., the related breakdowns of the producitivity deals and the ability of the union to control labor, and 3. the close connections between conflicts at the point of production (in the mines) and those in the community. The "coal fields" understood broadly constitute a microcosm of the "social factory". Compare this discussion with that of Robert Stobaugh and Daniel Yergin below.

*Harlan County: a film.
To complement and better understand the above article on the wildcats, you should watch this documentary film about the 1973 coal miners' strike in Harlan County, Kentucky. The film is dramatic and unforgetable. It is also available in both the FAC and Tarlton Law Libraries on the UT campus.
Harlan County. / New York / 1990(1976)
VIDCASS 5918 Audio Visual Library FAC 341
Harlan County. / Harlan County U.S.A. / New York, NY (153 Wa / 1996
LAW VIDEO- CASSETTE HD 5325 M63 1973 H378 1996 Law Library Media Center

*Midnight Notes, Strange Victories: The Anti-Nuclear Movement In The US and Europe, 1979. Part 1, Part 2. Reprinted in Midnight Notes Collective, Midnight Oil: Work, Energy, War, 1973-1992, Boston: Autonomedia, 1992, pp. 193- 214. Summary Available through ERes.

This article presents a class analysis of the anti-nuke movement, that is to say an assessment of the social background of those who were active and an evaluation of the connection between that background and the structure, activities and limitations of the movement.

*Margarita Garza, "Chapter 3: The Rise of the Antinuclear Power Movement: 1957 to 1989," from The Antinuclear Power Movement and the Crisis of the U.S. Nuclear Power Industry, 1953 to 1989, Ph.D. Dissertation, University of Texas at Austin, May 1990.

One chapter from a disseration that shows how the nuclear power industry was constructed by the state and utilities and then undermined by popular struggles. Chapter 1: The Crisis of the Nuclear Power Industry, Chapter 2: The Rise of the Nuclear Industry, Chapter 4. The Fall of the Nuclear Industry, Chapter 5, Class Analysis of the Antinuclear Movement. This treatment of the anti-nuclear power movement builds on and extends that begun by Midnight Notes in Strange Victories.

C. The First Energy Shock

1. Western Views

Walter J. Levy, "Oil Power," Foreign Affairs, July 1971.
An early reaction to the new surge of OPEC demands in 1970-71 that only glimpses oil company/oil producing country common interests and calls for energy development in consuming countries. p. 50.

James E. Akins, "The Oil Crisis: This time the Wolf is Here," Foreign Affairs, April 1973.
Official statement on U.S. analysis and actions by the director of the Office of Fuels and Energy, Department of State. Akins reviews changes of 1969-73 (pre-war) and defends State Department actions on price changes and recycling cooperation with Europe. p. 94.

*V. H. Oppenheim, "Why Oil Prices Go Up: The Past: We Pushed Them," Foreign Policy, No. 25, Winter 1976- 77. Available through ERes.

Very important article on how U. S. government policy supported the rise in the price of oil in order to undercut Europe, benefit the U. S. and stabilize the Persian Gulf. As opposed to the usual view propagated by the mass media and the White House, this article begins: "Since 1971, the United States has encouraged Middle East oil-producing states to raise the price of oil and keep it up."

Oppenheim traces the history: In December 1970 "OPEC anounced that, for the first time, it would seek a world wide price increase." The oil companies responded collectively and called for negotiations. "Had the U.S. government held the line, most observers fell that the 1971 OPEC demands could have been tuirned away. But the U.S. State Department was not willing to insist (as the companies did) that single set of negotiations cover the Persian Gulf and the Mediterranean . . . without prior notification to the companies, a split was announced in the talks in Teheran by a special U.S. envory, then-Under Secretary of State John Irwin, accompanied there by James Akins, a key State Department man on oil [interviewed by Oppenheim, on the record, for this article]. . . . the real lesson of the split in negotiations with OPEC was that higher prices were not terribly worrisome to representatives of the State Department. . . . the whole subject of what the negotiations were about began to focus not on holding the price line but on ensuring security of supply."

Oppenheim then goes on to quote extensively from an article by an advisor to the Libyan government on how the U.S. actions undercut Europe with higher prices, i.e., undercut European competitiveness which had contributed, as we have seen, to US trade problems. Europe was more vulnerable because it imported virtually all of its oil -which the US did not. Oppenheim continues: "In fact, the prediction of -and advocacy of- higher oil prices became a common feature of statements from the Nixon administration" and goes on to give examples. Then, in 1972, Akins gave a speech at the Eight Petroleum Congress of the League of Arab States in which he told "his listeners that oil prices could be 'expected to go up sharply due to lack of short-term alternatives to Arab oil'" -which was interpreted by them as a US go-ahead on oil price increases. [Note the similarity with April Glaspie's comments to Saddam Hussein about $25 oil in the summer of 1990.]

By this time the oil companies were profiting greatly by the higher prices and the National Petroleum Council published "a voluminous series of studies calling for a doubling of US oil and gas prices by 1985" to spur production and limit import dependence." Akins went on to be nominated as Ambassador to Saudi Arabia and his testimony made clear the US was not opposed to price increases. "The United States, in fact, was preoccupied with luring into the United States for investment the now swollen (and soon to be more swollen) OPEC spare cash. [which would become "recycled petrodollars" to finance investment and ultimately the debt crisis] To prove the point, Oppenheim cites the 1973 annual report of the White House Council on International Economic Policy which "noted that the United States stood to gain from higher oil prices and the resulting surplus of OPEC's investible funds . . The United States is likely to receive a large share of those funds." All this, BEFORE, the Arab- Isreali conflict and the oil embargo! Moreover, in support of the contention that the US was doing this, at least in part, to undercut the Europeans, Oppenheim shows how the US refused "to go along with a series of initiatives proposed in various open and secret groups meeting in Paris at the OECD" which were trying to work out oil sharing arrangements in the event of an embargo.

Finally, Kissinger's National Security Council "ruled out" any US military intervention in the case of a new Middle East war. When war did come, Kissinger continued to secretly support Saudi Arabia and OPEC price increases and promised foreign aid and US investment -in the midst of the embargo.

By early 1974, the administration was "openly committed to raising U.S. oil prices in order to achieve 'independence'". When chief of the Federal Energy Administration, John Sawhill, tried to counter the price increases he was blocked by higher-ups in the Nixon administration and fired in Ford's. Akins later testified that Kissinger, in 1975, was telling the Shah to go ahead with further price rises.

In his conclusions, Oppenheim cites Akins in suport of the view that the US was trying to undercut Europe and Japan; he notes the desire for recycled petrodollars; he notes US support for higher prices supported regimes of region which the US depended on for local control and stability; he minimizes the influence of the oil companies (mostly pointing to some differences) and blasts the erroneous predictions of the effects of price increases: US did not become more independent of foreign oil, companies explored more, but mostly abroad, US production did not rise appreciably, and arguments that more highly priced oil would stimulate the development of alternatives were ill founded -e.g., oil companies also own all our coal and wouldn't shift production from one to the other just because coal became relatively cheaper, they run their business by the bottom line not for national cost minimization.

G. A. Pollack, "The Economic Consequences of the Energy Crisis, " Foreign Affairs, April 1974.

Exxon economist. Early analysis of trade, investment and money imbalances after the quadrupling of oil prices. Overview of recycling mechanisms and recognition that the real problem will be whether increased world savings can be invested. (see his section IV) p. 137

J. C. Campbell, et.al., Energy: The Imperative For A Trilateral Approach, Trilateral Papers No. 5, Trilateral Commission, 1974.

The first Trilateral Commission report on energy prepared December 1973 to June 1974. The report calls for acceptance of reduction in standards of living, conservation, Trilateral regional cooperation, emergency sharing scheme, financial cooperation, sharing of technology and peaceful coexistence with the producing countries. Aimed in part against consumption, ("extravagance in personal consumption is no essential attribute of a free society; indeed to trim unnecessary fat may have social as well as economic benefits" p. 111 "The real challenge of the energy problem is not a struggle with outside adversaries, as in most great crises of the past, but within and among our respective societies. Our peoples need a wartime psychology to fight this war against ourselves. [With Trilat President Jimmy Carter this would become an effort to make the energy crisis "the moral equivalent of war".] They should be prepared to tighten their belts and to share sacrifices among themselves --because it will be a long, uphill struggle." p. 121) in part against the dangers of international competition between nation states ("Solidarity of the consuming countries remains essential, as the alternative to a ruinous scramble for competitive advantage," p. 117 "The energy crisis has propelled the industrial nations into a situation to which other factors were also bringing them though more slowly: a situation in which they have to set th elines of basic policy together or succumb to chaotic national competition and a destruction of the fundaments of a rational world order." p. 121).

S. Okita, "Natural Resource Dependency and Japanese Foreign Policy," Foreign Affairs, July 1974.

Overview of Japan's dependence on oil and other resources, the impossibility of changing this and the consequent Japanese diplomatic posture of not making enemies who might threaten supply lines. For more on Japan see Trilateral Commission reports which evaluate position of each area. Also compare with Japan's later role in the Gulf War.

Walter J. Levy, "World Oil Cooperation," Foreign Affairs, July 1974.

Calls for 1) cooperation among importers, 2) understanding exporters, 3) program of energy austerity, 4) eventual price reduction. Reflects both fear of competitive actions and trade restrictions and desire for long term planning. Similar to Trilat's report during the preparation of which Levy was consulted.

H. Simonet, "Energy and the Future of Europe," Foreign Affairs, April 1975.

Outline of the problem of united European strategy and relations with the US in the energy field. Also brief rundown on degree of European dependence on OPEC oil and differences with the U.S. Naive or diplomatic on his interpretation of US policy.

2. Motivations Within OPEC

Jahangir Amuzegar, "The Oil Story: Facts, Fiction and Fair Play," Foreign Affairs, July 1973.

Major Iranian spokesman argues justice of OPEC moves and wisdom of cooperation between OPEC and the West. p. 123

Stephen Krasner, "The Great Oil Sheikdown," Foreign Policy, No. 13, Winter 1973-74, pp. 123-138.

Krasner agrees with Adelman on the importance of the role of international oil companies, but he argues US politics are such that the companies can not be undermined. He also argues US policy is against price decreases because of likely political instability that would result in OPEC countries -- a rare recognition of underlying popular pressure on OPEC governments. "It is not likely that the monarchies of Iran, Kuwait, Abu Dhabi, and Saudi Arabia would survive if petroleum prices fell; nor is it clear that instability in areas now controlled by more radical regimes -such as Libya- would necessarily favor the interests of the United States." p. 131. "Mohammed is better than Marx. The former suggests suspicion of all infidels; the latter condemns only some. The possibility of political turmoil leading to the establishment of Communist regime cannot be ignored." p. 132.

*T. H. Moran, "Why Oil Prices Go Up: The Future: OPEC Wants Them" Foreign Policy, No. 25, Winter 1976-77. Available through ERes.

Another important article. This time for the way in which it shows that central to the motivations of oil price increases was the need of the ruling elites in the OPEC countries for resources to deal with domestic social unrest. OPEC needed higher prices in the future, Moran shows, because so much of its existing surpluses were being drained off to finance social peace rather than industrial development, which were what the Shah and his neighoring rulers wanted to use them for. OPEC, eg., the Shah's, desire for money for economic development, industrialization and military modernization have been widely recognized. Less so was the need for money for "domestic stability". Moran traces the situation in Iran, Saudi Arabia and Iraq and shows how the costs of programs needed to limit internal dissent, such as food subsidies, housing and urban services (as well as industrial investment and military costs) have grown much faster than forseen, and where the market had been looked to for help and failed (e.g., middle and low cost housing in Iran) the needs will be much greater in the future. All of this is a glimpse -through the numbers of fiscal crisis- of the social tensions seething in the background of the policy decisions made by OPEC countries. These OPEC governmets "want" higher prices, not just because they are greedy but because they are under pressure to meet popular demands -either through concessions (e.g., food subsidies) or repression (e.g., SAVAK, the Iranian secret police). Both cost more money than expected. So the internal, domestic pressures for oil price increases continued in the mid and late 1970s. All this, of course, amounted to a warning, for those acute enough to notice (and they were damned few), the social pressures which would explode in the Iranian revolution in 1978!

B. Varon and K. Takeachi, "Developing Countries and Non-Fuel Minerals," Foreign Affairs, April 1974. and Zuhyr Mikdashi, "Collusion Could Work," and S. D. Krasner, "Oil Is the Exception," and C. Fred Bergsten, "The Threat is Real". Both in Foreign Policy, No. 14, Spring 1974 section on "One, Two, Many OPECs ..."

These articles constitute part of a debate that emerged as to whether Third World countries could duplicate the OPEC cartel for other, non-oil minerals. Some say yes, some say no. In fact there was no wave of such cartel formation as was initially feared.

D. Multisided Debate

A. B. Lovins, "Energy Strategy: The Road Not Taken?" Foreign Affairs, October 1976. Available through ERes.

Outline of the "soft technology' alternatives to the usual energy programatic of increased oil, coal and nuclear power. Shows huge gains in conservation via partial technological changes and the virtues of solar, wind, etc. These virtues also show the dangers to business of loss of control even though Lovins is trying to sell his ideas to the elite. p. 168

Dan Luria and Lee Price, "Solar Energy, Jobs and Labor: Some Analytical Issues,"

A critique of the equation: soft energy means more jobs equals better path. Luria and Price, two economists working for the UAW, argue that in the long run we should be looking for less labor, for more energy. p. 200

D. A. Rustow, "US Saudi Relations and the Oil Crisis of the 1980s," Foreign Affairs, April 1977.

Analysis of Mideast alignments and conflicts and US role. Emphasizes possible shortages of oil and calls for conservation, coal and nuclear development.

Frank Church, "The Impotence of Oil Companies," and Geoffery Chandler, "The Innocence of Oil Companies," Foreign Policy, No. 27, Summer 1977.

A debate on the degree of responsibility of the oil companies in the crisis.

John C. Campbell, "Oil Power in the Middle East," Foreign Affairs, October, 1977.

R. S. Pindyck, "OPEC's Threat to the West," Foreign Policy, No. 30, Spring 1978.

S. Fred Singer, Limits to Arab Oil Power," Foreign Policy, No. 30, Spring 1978.

E. The Second Oil Shock

Walter J. Levy, "The Years the Locuts Hath Eaten: Oil Policy and OPEC Development Prospects," Foreign Affairs, Winter 1978/79. Available through ERes.

Argues that growing difficulties in realizing development plans, social pressures, and slow development of new energy sources will lead OPEC to push prices up. Allocation will become more critical, need for revenue greater. Calls for high prices, more Western energy conservation and cooperation with OPEC ... and acceptance of slow growth, i.e., crisis. p. 244

James A. Bill, "Iran and the Crisis of '78" Foreign Affairs, Winter 1978/79.

An analysis of the growing middle class opposition to the Shah that would help overthrow him and a critique of US policy as uninformed and in conflict with long term interests. Bill was a professor at UT.

L. Turner and J. Bedore, "The Trade Politics of Middle Eastern Industrialization," Foreign Affairs, 57(2) Winter 1978/79.

Analysis of the difficulties to be faced by Saudi and Iranian petrochemical industrialization in breaking into Western European markets already plagued by overcapacity and protectionist demands. Calls for further European restructuring to make penetration possible.

Robert Stobaugh and Daniel Yergin, "After the Second Shock: Pragmatic Energy Strategies," Foreign Affairs, Spring 1979.

Important article giving results of Harvard Business School 6-year study. Concludes that natural and political limits on oil, coal and nuclear power make conservation and solar energy the most important ways to improve the US energy situation and avoid growing dependence on OPEC oil. (Compare to Lovins) Virtually admits defeat in control of coal miners, environmentalists and anti-nuclear activists. It would seem those struggles are pushing the elite in the direction we, not they, want to go. p. 263

"OPEC: The Cartel's Deadly New Sting," BusinessWeek, April 9, 1979.

Analysis of the immediate and likely results of the 9% price hike plus free surcharges that came in the wake of the Iranian oil production/shipment cut-off. Also look at increased chances for global recession and US policy.

Denis Healey, "Oil, Money and Recession," Foreign Affairs, 58(2) Winter 1979/80.

R. Stobaugh and D. Yergin, "Energy: An Emergency Telescoped," Foreign Affairs, 58(3) 1980.

Walter J. Levy, "Oil and the Decline of the West," Foreign Affairs, 58(5) 1980.

S. Fred Singer and Stephen Stanas, "An End to OPEC," Foreign Policy, No. 45, Winter 1981/82.

Harry Cleaver, "Remarks: Energy in the 1980s," Address to a Conference at the Graduate School of Business, University of Texas, Austin, Spring 1983?

Text of a debate with business representatives over the nature of the energy crisis.

F. The Third Energy Shock: The Price Fall

"Oil Prices Hit the Skids," BusinessWeek, August 13, 1984. p. 311

Sarah Miller, "What's Causing Anarchy in the Oil Market," BusinessWeek, September 10, 1984. p. 315

"OPEC, Meet Adam Smith," BusinessWeek, October 29, 1984. p. 316

"OPEC's Loss is The Economy's Gain," BusinessWeek, November 5, 1984. p. 319

"OPEC's Leaky Spigot is Flooding the Oil Market," BusinessWeek, December 10, 1984. p. 323

"OPEC Drills a Dry Hole," BusinessWeek, January 28, 1985. p. 325

Christopher Flavin, World Oil: Coping with The Dangers of Success, World Watch Paper 66, July 1985.

Edward L. Morse, "After the Fall: The Politics of Oil," Foreign Affairs, Vol. 64, No. 4, Spring 1986.

*George Caffentzis, "Rambo on the Barbary Shore," Midnight Notes #9, May 1988.Summary Reprinted in Midnight Notes Collective, Midnight Oil: Work, Energy, War, 1973- 1992, Boston: Autonomedia, 1992, pp. 283-301.

Interesting article which seeks to explain American-Libyan relations in terms of oil politics and other aspects of the global crisis rather than the usually pictured conflict over "terrorism." The article was written in response to the U.S. bombing of Libya. Caffentzis traces the military hostility of the U.S. to a shift from agreement to conflict between Libya over oil price policy as the U.S. changed from supporting high price oil to insisting on low price oil.

F. Chernobyl and the Crisis of Soviet Energy Policy

Martin Spence, "Soviet Power: Nuclear Energy in the USSR," Capital and Class, No. 21, 1983.

Edward Hewett, Energy, Economics and Foreign Policy in the Soviet Union. Brookings.

Bill Keller, "Soviets Scrap A New Atomic Plant In Face of Protest Over Chernobyl," The New York Times, January 28, 1988.

Hossein G. Askari, "Saudis and Soviets: Oil's Odd Couple," New York Times March 18, 1990.

G. The Gulf War: The Fourth Energy Shock

1. U.S. Domestic Economic Background

Michael Meeropol, "Zero-Inflation: Prescription for Recession," Challenge, Vol. 33, No. 1, January-February 1990, pp. 53-57. "Zero Inflation May Not be All its Cracked Up to Be," Business Week, June 25, 1990, pp. 48, 51.

Long before Saddam Hussain sent his armies into Kuwait, the Federal Reserve Board was tightening money supplies, raising interest rates and guiding the American economy into depression. These two articles explain how its five-year 'anti- inflationary' campaign (zero inflation by 1995) -continuations from the anti-inflationary, anti-wage policies of the Reagan period- were and would work to generate depression.

Energy Information Administration, Annual Energy Outlook: Long Term Projections, January 1990.

See especially sections on world oil prices (expected to rise) and US production prospects (expected to decline) and future imports (expected to rise).

2. Persian Gulf Background

"Chronology of Conflict in and Around the Persian Gulf Oil Fields," -available from Cleaver, hardcopy (9pp) or Macintosh MSWord file (28k).

*Joe Stork and Ann M. Lesch, "Why War? Background to Crisis," Middle East Report, November-December 1990, pp. 11-18. Included in 3rd packet on the Crisis of Diplomacy. Available through ERes

Sketch of regional historical background to the Persian Gulf War: the colonial heritage, imperialism and oil, the social character of Kuwait, the political dynamics of Iraq and the events and conflicts that led to war.

*Joe Stork and Martha Wenger, "The U.S. in the Persian Gulf: >From Rapid Deployment to Massive Deployment," Middle East Report, January-February 1991, pp. 22-26. Please Note the box on "further resources on the Persian Gulf Crisis" at the end of this article. Included in 2nd packet on the Crisis of Diplomacy. Available through ERes

Outline of the build up in U.S. military intervention in the Gulf area before the Iraqi invasion of Kuwait. Sketch of history of efforts to directly or indirectly manage the region and protect American and Western control over oil. Information provided makes clear how rapid build-up after August 2, 1990 was made possible by previous construction and positioning of military capability with just such intervention in mind.

Yahya Sadowski, "Revolution, Reform or Regression? Arab Political Options in the 1990 Gulf Crisis," The Brookings Review, Vol. 9, No. 1, Winter 1990-1991, pp. 17-21.

Overview of breakdown of Middle Eastern Arab order leading into the Persian Gulf War, a discussion of the pre- invasion projects of Kuwait, of the socio-economic crisis in Jordan, and of Iraq's economic problems, all of which point to continuing future instability in the area regardless of the outcome of the war.

3. Political Economic Analysis of the Persian Gulf War and Oil Policy

"Iraqi Strategy Turns OPEC Toward Higher Prices", Petroleum Intelligence Weekly, July 30, 1990, p. 1, 44.

This issue of an industry "insider" publication, which came out before the Iraqi invasion of Kuwait, reports on Iraq's success in forcing Kuwait and the UAE to cut back production and raise prices. It's account suggests industry satisfaction with Iraq's new role as policeman of OPEC and with the prospect of higher oil prices. "The latest OPEC meeting marks a clear turning point in how the producer group manages itself and the oil market. Iraq's shift to a 'big stick' strategy, besides inducing output discipline, seems to have stopped in its tracks any quota jockeying that might have emerged . . . Baghdad's willingness to use force to advance its oil policy goals stands in sharp contrast to Saudi Arabia's past leadership, which was ultimately based on decreasingly effective threats to flood oil markets. Iraq's strategy is likely to result in higher and less volatile oil prices than Riyadh's past approach . . . Iraq's more aggressive tack worked because it was credible, because virtually all producers wanted higher prices and because the Saudis had been negotiating quietly to forge a workable compromise . . . Despite qualms over Saddam's 'might makes right' approach, most members grudgingly or not support higher prices now, since their revenue needs are outstripping income . . . the deal being worked out appears bullish for oil markets."

Helga Graham, "Exposed: Washington's Role in Saddam's Oil Plot," London Observer, October 21, 1990.

In this poorly written but fascinating story, Graham provides evidence of US complicity with Iraq's desires to raise oil prices prior to the invasion of Kuwait. "one of America's top Middle East experts -a former ambassador still used by the Bush Administration for foreign policy missions- held a discreet meeting with an Iraqi Minister in New York in January. The Minister, one of Saddam's closest associates, was told that Iraq should engineer higher oil prices to get it out of its economic fix . . . As a result of this meeting, a Washington think tank [Washington Center for Strategic and International Studies] then proposed that Iraq push for an oil price of $25 a barrel and that it should take the initiative in forcing the increase on its fellow OPEC members . . . Details of the [WCSIS] report have been kept secret, but a reflection of it appears in an interview with Henry Schuler, the centre's energy security director on 1 March to the Arab Oil and Gas Journal . . . Schuler advocates an aggressive oil price policy for Arab oil producers . . . Arab oil producers could get $24 or $25 a barrel without consumers searching for alternative sources." etc. She goes on to quote from Iraqi recordings of discussions with American diplomats, including April Glaspie which suggest American agreement on $25 a barrel.

Fouad Ajami, "The Summer of Arab Discontent," Foreign Affairs, Winter 1990-1991, pp. 1-20.

Johns Hopkins professor and CBS commentator, Ajami sketches, for the influential readers of Foreign Affairs, the background to the conflicts within which Iraq’s takeover of Kuwait occurred. He points out the widespread and deep Arab resentments of the oil states’ wealth (backed by Western supporters) but argues that after Iraq is contained "a buffer must be established between the dynastic states of the gulf and the Iraqi predators . . . that buffer will have to be provided by American power, or by a multinational force centered around an essentially American core."

*H. Cleaver, The Political Economics of the Gulf War , (pamphlet)January 1991. (A version of this piece was published in the Polemist, December 1990 and in Austin Peace and Justice Coallition Newsletter, January 1991.) Included in 3rd packet on the Crisis of Diplomacy.

Article sketching the political and political economic issues at stake in Bush’s drive to intervention and war in the Gulf.

Phyllis Bennis and Michel Moushabeck (eds.) Beyond the Storm: A Gulf Crisis Reader, New York: Olive Branch Press, 1991.

This is an extremely useful collection of materials that includes a detailed chronology and several key documents, including the Glaspie-Hussein Transcript where Hussein speaks of a $25/barrel oil price and Glaspie responds "We have many Americans who would like to see the price go above $25 because they come from oil-producing states." [Such as George Bush.] It also contains the infamous Glaspie to Hussein "But we have no opinion on the Arab-Arab conflicts like your border disagreement with Kuwait" (p. 395).

On the U.S. diplomatic management of the war through the United Nations see chapter 9: Phyllis Bennis, "False Consensus: George Bush's United Nations", pp. 112-125.

*Midnight Notes, articles 1-7 in Midnight Notes, Midnight Oil: Work, Energy, War, 1973-1992, Boston: Autonomedia, 1992. "Oil Guns and Money" Part 1, Part 2, Some Photographs I was not Able to Take" (Available through ERes.), Silvia Federici, "Development and Underdevelopment in Nigeria" (Available through ERes.) , "Recolonizing the Oil Fields", Ihonvbere, "Resistance and Hidden Forms of Protest Amongst the Petroleum Proletariat in Nigeria," Summary of "To Saudi with Love".

This is the biggest chunk of reading in this section. A useful exercise is to compare and contrast the analysis in Midnight Oil with that in the other articles, especially the pamphlet I wrote against the Gulf War.

4. The Persian Gulf and North Atlantic Energy Policy

Christopher Flavin, "Beyond the Gulf Crisis: An Energy Strategy for the 90s" Challenge, Vol. 33, No. 6, November- December 1990, pp. 4-10. Or, Christopher Flavin, "Conquering US Oil Dependence," World Watch, Vol. 4, No. 1, January-February 1991, pp. 28-35, for a variation on the same argument.

V.P. of Worldwatch Institute sketches recent history of Reagan-Bush destruction of alternative energy programs, points out conservation makes far more sense than trying to produce more oil [the essence of Bush's National Energy Strategy statement -released after this article was written] and calls for re-investment in alternative energy sources and in conservation.

Harvey Wasserman, "Nuclear Power's Desperate Comeback," Nuclear Times, Winter 1990-1991, pp. 3-4.

Wasserman traces how the nuclear power industry, largely defeated by the environmental movement in the 1970s, is trying to use the Persian Gulf crisis to win concessions and opportunities that would make it profitable again -mostly by concelling the constraints imposed on the industry in the 1970s. He also points out how renewable energy sources are already cheaper (as well as safer) than nukes.

Edward Renshaw, "Paying for Oil Security," Challenge, Vol. 33, No. 6, November-December 1990, pp. 11-16.

Renshaw calls for increased taxes on gasoline to pay for the Gulf War and induce cut-backs in US oil consumption, via fewer miles driven and shifts toward more fuel efficient transportation. Although he calls for taxes which "shift most of the cost to motorists so as not to weaken the international competitiveness of the US petrochemical industry (p. 15), he recognizes the regressive nature of such taxes and that they "will be harder on the poor than on the rich" and so also calls for such off-setting measures as an increase in the earned income tax credits currently available to low-income families.

EEC, "Analysis of the Potential Economic Consequences for the EC of the Iraq/Kuwait Crisis," European Economy, No. 46, December 1990.

European Economic Community analysis of likely impact of increased oil prices on European economy. Takes into account the past experience of oil price increases after 1973 and 1978 as well as subsequent improvements in efficiency, reductions in import dependency and recent appreciation of the ECU against the US dollar [the depreciation of which has been accelerated by the FED's monetary easing, as interest rates came down in the Fall of 1990 and Spring of 1991 interest seeking investment money has tended to pull out of the US and increase the supply of dollars - see previous discussion in packet on international monetary crisis]. The main policy recommendations call for macro policy coordination, continued anti-inflationary policies and especially avoidance of nominal wage increases to offset price rises. Such avoidance would "preserve profitability and would minimize the negative impact on the level of investment." p. 120

Daphne Wysham, "Power Ploy: How the Oil, Nuclear and Coal Industries Hijacked the National Energy Strategy and Led Us to War," Greenpeace Magazine, March/April 1991, pp. 9-12.

Brief overview of the genesis, gutting and final results of the National Energy Strategy recommendations issued in the Spring of 1991 by the White House.

Edward L. Morse, "The Coming Oil Revolution," Foreign Affairs, Vol. 69, No. 5, Winter 1990-1991, pp. 36-56.

Morse, publisher of the Petroleum Intelligence Weekly, argues that supply will be squeezed and oil prices will rise in the 1990s (independently of the Persian Gulf War) and new institutional arrangements are necessary to prevent bad management. In particular he sees increasingly tight relations between the private and governmental sectors and calls for greater international cooperation to regulate conflicts and markets. He critiques Bush's handling of oil policy in the Fall of 1990 and continuation of Reagan's dismantling of energy policies in the 1980s. Calls for more government spending on R&D (especially natural gas for autos) and increased gasoline taxes and efficiency standards to reduce consumption.

Joseph J. Romm and Amory B. Lovins, "Fueling a Competitive Economy," Foreign Affairs, Winter 1992/1993. Available through ERes.

A comprehensive plan to produce an "industrial ecosystem" and revive America's competitiveness from the Rocky Mountain Institute. Romm and Lovins attack Reagan-Bush supply-side policies (more energy now) and argue for using energy efficiency to prime the economic pump, an different (non-military) industrial policy to guide investments and environmental technology to "create a cottage industry for the 21st Century." For example: "Even before Iraq invaded Kuwait, U.S. forces earmarked for gulf deployment were costing taxpayers around $50 billion a year -nearly $100 per barrel of oil imported from the Persian Gulf . . . In the wake of the Gulf War the Bush administration proposed a National Energy Strategy that, by its own projection, would further increase dependence on Middle Eastern oil . . . That strategy also substituted the Bush administrations favorite technologies for market choices, expanding already lavish subsidies to uneconomic options such as nuclear power and 'clean coal' that would squander capital and perpetuate laggard U.S. competitiveness." They argue, like Commoner and others, for more fuel efficiency, e.g., new 'ultralite' autos, feebates, technical changes to reduce electricity, increased alternative energy source use, e.g., passive solar heating, solar heat for industry, biofuels, windpower. "By contrast nuclear power remains uncompetitive when compared to both efficiency and renewables." Current costs of nuke power ignore both decommissioning costs, environmental costs and federal subsidies (1984 = $15 billion, "nearly twice the value of the nuclear power generated"). What to do "The United States needs to adopt the same kind of comprehensive long-term strategy for creating high paying jobs as its major trading partners. . . The first step . . a new energy policy to promote greater efficiency among U.S. businesses . . The second step is thus to expand the list of civilian technologies funded by NIST to include the kinds of 'flexible' manufacturing technologies currently employed by the Japanese, which aloow for rapid production and product innovation . . The third step is to assist the diffusion of these new technologies to small businesses. . . The fourth step is to invest in worker training. . . A fifth step is increased funding for civilian infrastructure. . . An ultimae goal for the nation should be an 'industrial ecosystem.' This means an industrial process that minimizes both inputs of energy and materials and outputs of waste products and pollutants: manufacturing byproducts are designed to be sold or reused. A proper economic strategy would ensure that new manaufacturing would only increase America's environmental quality."


Michael T. Klare, "The New Geography of Conflict," Foreign Affairs, May - June 2001.

Amory B. Lovins and L. Hunter Lovins, "Fool's Gold in Alaska," Foreign Affairs, July - August 2001. Available through ERes.

Ken Silverstein, "No War for Oil! Is teh United States really after Afghanistan's resources? Not a chance," The American Prospect, August 12, 2002.


1. Sources of Information

Crisis in Iraq Webpage. Mainstream US News Sources: New York Times, Wall Street Journal, CNN.com

Major Alternative News Sources: Russian Site #1, Russian Site #2, Indymedia, you can also access a large number of particular Indymedia sites such as the one at San Francisco, Al Jazeerah - a major source of news from Arab media, Arab News - from Saudia Arabia.

2. Media and the War: Critical Views

FAIR (Fairness & Accuracy in Reporting) Commentaries on news reporting on the war in Iraq.

Al Jazeerah on the difference between itself and CNN.

J.Donnelly & A.Barnard, "Differing TV Images Feed Arab, US Views", Boston Globe, March 3, 2003.

LaborStart, "International Federation of Journalists Say Attacks on Journalists are Crimes of War and Must be Punished," April 8, 2003. Available through ERes.

4. The Bush Jr. Administration, Background and Claims: Saddam, WMD & Terrorism

The National Security Strategy of the United States of America, September 2002. A National Strategy to Combat Weapons of Mass Destruction, December 2002.

Excerpts from 2003 State of the Union Speech, January 28, 2003.

Lawrence Kaplan & William Kristol, The War Over Iraq: Saddam's Tyranny and America's Mission, San Francisco: Encounter Books, 2003. Chapters Seven to Nine. Available through ERes.

M.Dobbs, "US Had Key Role in Iraq Buildup: Trade in Chemical Arms Allowed Despite Their Use on Iranians, Kurds", Washington Post, December 30, 2002.

Institute for Policy Studies Report, Crude Vision: How Oil Interests Obscured Government Focus on Chemical Weapons Use by Saddam Hussein, March 2003. Available through ERes. Press Release: Rumsfeld Ignored Weapons of Mass Destruction in Pursuit of Oil Pipeline, March 24, 2003. Another report outlining essentials of IPS Report: Dave Lindorff, "Crude History Lesson: Is the War about oil after all?", In These Times, March 27, 2003.

Richard Oppel, "Bechtel Has Ties in Washington, and to Iraq," New York Times, April 17, 2003. Available through ERes.

Doug Ireland, a review of: Peter Mantius, Shell Game: A True Story of Banking, Spies, Lies, Politics - and the Arming of Saddam Hussein, The Nation, June 10, 1996. Available through ERes.

Joost Hilterman, "America Didn't mind Poison Gas," International Herald Tribune, January 17, 2003. Available through ERes.

Steven Pelletiere, "A War Crime or an Act of War?", New York Times, January 31, 2003. Available through ERes.

Carnegie Endowment Collection of Materials on UN Inspections

John B. Kiesling, A US Diplomat's Letter of Resignation, New York Times, February 27, 2003.

5. Oil War?

Nelson Mandela, All Bush Wants is Iraqi Oil, IOL.com, South Africa, January 30, 2003.

Global Policy Forum Web Site on Iraqi Oil.

Baker Institute, "Strategic Energy Policy: Challenges for the 21st Century," 2001. For an Executive Summary follow the links to Publications/Studies.

Neil MacKay, "Official: US Oil at the Heart of Iraq Crisis," Sunday Herald (Scotland), October 6, 2002.

Michael Renner, "Bood & Oil: Alternatives to War with Iraq", World Watch Institute, November 22, 2002.

6. War for Empire?

The Editors, "US Imperial Ambitions and Iraq" Monthly Review, Vol. 54, No. 7, 2002.

Antonio Negri, "The Order of War", Global Magazine(Italy), November 2002.

7. The Costs of War

William Nordhaus, "The Economic Consequences of a War with Iraq," Yale University, November 2002.

Mark Stoker, "The Cost of Militry Intervention in Iraq," International Institute for Strategic Studies, no date given.

Letter from 1,000 War Veterans to George Bush, March 10, 2003.

Liam McDougall, "The Looting of Babylon: Western Inaction has led to the pillaging of priceless cultural treasures," The Sunday Herald, April 20, 2003.

"Aid Groups Warn of Disaster in Iraq", The Observer(UK), December 22, 2002.

J. GULF WAR III?: Invasion of Iran and/or Permanent War

Michael Klare, "Oil Wars," Tom Dispatch.com, October 7, 2004.
Michael T. Klare is a professor of peace and world security studies at Hampshire College. This article is based on his new book, Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency (Metropolitan / Henry Holt). Klare's research has long been focused on the relationship between U.S. foreign policy and natural resources and he has been a sometime contributor to journals such as Foreign Policy.

Seymour M. Hersh, "The Coming Wars: What the Pentagon Can Now Do in Secret," The New Yorker, January 24-31, 2005.

Michael Klare, "The Permanent Energy Crisis," TomDispatch.com, February 9, 2005.

Michael Klare, "Mapping the Oil Motive," TomPaine.com, March 18, 2005.

Michael Klare, "Oil, Geopolitics, and the Coming War with Iran," TomDispatch.com, April 11, 2005.

Michael Klare, "The Intensifying Global Struggle for Energy," TomDispatch.com, May 9, 2005.

Michael Klare, "The Iran War Buildup," The Nation, July 21, 2005.

Seymour M. Hersh, "The Iran Plans," The New Yorker, April 17, 2006.


M. A. Adelman, "Is the Oil Shortage Real?" Foreign Policy, No. 9, Winter 1972/73.

An attack on the myth of an energy shortage, Adelman shows that there is only overpricing managed by the oil companies and argues for reversing US policy in order to undermine the companies, thus the cartel and thus prices.

J. C. Campbell, et.al, Energy: A Strategy for International Action, Trilangle Papers No. 6, Trilateral Commission, December 1974.

Second Trilat energy report. Mainly reiteration and elaboration of the first with an attack on the lack of progress (only IEA and emergency sharing system had been accomplished). Demand for global planning instead of ruinous international competition.

A. B. Lovins, Soft Energy Paths: Toward A Durable Peace, Harper Colophon Books, New York, 1977.

Ray Reece, The Sun Betrayed: A Report on the Corporate Seizure of US Solar Energy Developments, South End Press, Boston, 1977.

A. B. Lovins and L. H. Lovins, Energy/War: Breaking The Nuclear Link, Friends of the Earth, San Francisco, 1980.

Petter Nore and Terisa Turner (eds), Oil and Class Struggle, Zed Press, London, 1980.

A collection of radical analyses of the energy crisis which includes discussions of Libya, Iran, Iraq, Nigeria, Venezuela and Canada as well as more general treatments of the role of oil in capitalism and in imperialism.