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THE TWENTIETH-CENTURY ORIGINS OF A TWENTY-FIRST CENTURY PSEUDO-SCIENCE

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By Robert Vitalis

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The Montréal Review, February 2013

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 "America's Kingdom: Mythmaking on the Saudi Oil Frontier" by Robert Vitalis (Verso, 2009)

: : available at Amazon US, Amazon Canada, and Amazon EU : :

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"A devastating critique of the US-Saudi relationship."

-Tariq Ali, Guardian

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I.

I wrote America's Kingdom as an exercise in social criticism and a demonstration of what, according to one of the discipline's giants, Charles Lindblom, political science does best, namely "reporting" or "getting the facts straight." (1) Getting them straight in my case meant reverse engineering the mytho-history invented by the US oil giants that operated the Saudi Arabia in the 1940s and 1950s and that journalists and professors reproduced in their studies over the ensuing decades. This is the idea that the consortium known as the Arabian American Oil Company (ARAMCO), unlike the British-owned rivals in Iraq, Iran, and elsewhere, had dedicated itself to developing the kingdom, uplifting its workers, and preparing Saudis to take over the running of the industry. (2) As my book shows, nothing could be further from the truth. It also reminds us that the particular kind of domination that a US firm exercised over production decisions in the oilfields of Saudi Arabia's Eastern Province on the one hand and over workers in the oil camps on the other hand no longer exists. Despite the American investors' efforts to prevent such an outcome, ARAMCO itself is now a Saudi-owned company.

Much work still needs to be done however because what passes for knowledge today about the "geopolitics of oil" is about as far from verifiable reality as the stories that the company and its writers for hire used to tell. Some of these beliefs date back to the 1920s, in fact, when US oil firms first began to seek oil concessions in the Gulf, even before the Kingdom of Saudi Arabia had been founded. These were years of increasingly belligerent talk by western governments of the "need" to gain access to raw materials and protect domestic (including colonial) markets from investors with the wrong passports. The long and sober studies of William Smith Culbertson, a sometime Georgetown professor and vice chairman of the US Tariff Commission, for one, provided an antidote to the more sensationalist writings on oil and other rivalries. (3)

Culbertson coined the term the "new mercantilism" to describe the policies being pursued by the great powers of the era, including the US. The underlying, highly suspect assumption is that state power depends upon control of markets and raw materials, the protection of domestic resources, and national self-sufficiency. The new imperialism of the era was the result, according to Culbertson. True, the advanced races of the west, as they would say then, benefited through making more of the world's natural resources available to those who needed them. Yet such policies also produced their own peculiar psychology of security, fear, and suspicion. A second critic, Columbia University's Parker Moon, emphasized, like Culbertson, but with more depth and bite, the psychological dimensions of neo mercantilism. People can't help visualizing the oil fields that their countrymen operate abroad as additions to national wealth. "Who can doubt that.a mandate permeated with petroleum, is a prize worth winning...worth fighting for?" (4)

Moon's empirical challenge to these deep-rooted ideas has lost none of its force, and the real question is why do we hang on to what he calls a mid-Victorian mirage? First and most critically, he argued that raw materials recognize no national flag. They follow the laws of supply and demand, and of distance and transportation costs (which are negligible today in the case of oil). Nonetheless citizens imagine that raw materials from some colony or sphere of influence, say Iraq, are being consumed at home, and that any project to pump oil or produce phosphates is for the benefit of citizens of the country that subsidizes the venture politically. It is not the case because firms sell globally to the highest bidders rather than to those who look like or speak the same language as the owners.

Moon went on to undercut the fantasy that any state in the 20th century could achieve national self-sufficiency in raw materials via imperialism. He did this by measuring the dismal results of policies by France and its rivals over the preceding 50 years. We could extend his account by looking at the result of England's putative efforts to overcome the dependency on the US revealed by WWI-a primary source of the international tensions that Culbertson, Moon, and others were busy exploring in the mid 1920s. Yet in WWII American producers still supplied 6 billion barrels out of a total of 7 billion barrels consumed by the Allies in World War II. Nonetheless American officials came to define national needs for the future in terms of "complete command, economic and military" of foreign sources of supply, although a state department advisor admitted "[t]he question of whether and how the United States could be certain of retaining control of, and access to, Middle Eastern sources of supply under the circumstances of future emergency was not fully explored [!]." (5)

The point is-as another young, progressive era economic historian, Leland Jenks put it-the then new idea that "oil is power" is a costly delusion. (6) Control over production decisions via concession by the nationals of one's own country, even in the case of a majority government holding in British Petroleum, provides no strategic advantage. The otherwise irrationality of it is what led him to claim that it was really a covert form of support for the oil firms themselves in their commercial competition. Ownership is after all what constituted "control" over oil that all analysts see as the hallmark of the imperialist era. Ownership is what gave Standard Oil or other investors the ability to make production decisions over crude oil reserves-how much to pump say-and to direct crude and refined products to specific end users. Yet government agents had no mechanism for controlling the companies. Consider what the historian Stephen Randall says

American officials assumed that United States strategic influence in the region depended on the strength of the private sector, but American policy failed to provide the means to ensure control over the companies; yet, it was assumed that the companies provided a vehicle for the attainment of larger strategic and diplomatic objectives. (7)

II.

Many things of course have changed in the world oil industry since the 1920s. For one, that private Anglo-American company-based oil regime was transformed into something that more approximates a world market. OPEC producers took over control of reserves and production, and the western firms, which first resisted but ultimately acceded to if not abetted the transformation, became buyers rather than owners of resources. The companies now directly control-in the sense of making production decisions about and claiming the revenue streams of-only a small fraction of world reserves, that is, reserves that the firms can claim on their books. Instead, whether owned by American citizens or the Chinese government, they buy oil for their refineries through a combination of contracts, although these are now much less common than in the pre-1970s era, the spot market, and the oil futures market, where many investors trade so called paper oil in which there is no exchange of real product.

Neo mercantilism however is alive and well 100 years later, as we see in the press, speeches in Congress, and in the recent US presidential debates, where promises of an elusive "energy independence" echoed once more. Energy independence is a 1970s update of the 1920s national self-sufficiency, but has become even more meaningless in the ensuing decades. Price and supply volatility in the US cannot be insulated from the reality of what is now a single world market. (8) Refiners will continue to buy from abroad and domestic producers will continue to export their oil. Keep in mind, too, that the Pentagon no longer plans for protracted great power conflict across Eurasia, the contingency that ostensibly drove those old dreams of national self-sufficiency. Today, the US military, which has spent about as much on Persian Gulf operations in the last three decades as it spent on the Cold War and remains enmeshed nearby in its longest war ever, obtains all the oil it needs-on the same world market. (9)

Rather than distance themselves from and treat ideas about the exercise of power, allegedly, to enhance "access to oil" and "security" of oil supplies as one more set of "strategic rationales" akin to policymakers' beliefs about "credibility," "power vacuums," "weapons of mass destruction," the "domino theory" or "democracy promotion," scholars, including many critics of US foreign policy, believe in the objectives and efficacy of state power with regard to a seemingly singular "strategic good." For the academic neo-mercantilists, the expanded military presence from Colombia to Angola, the Gulf to the Caspian, serves as most visible proof of the US need, intent, and capacity to guarantee "its" own needs, diversify sources to reduce dependency on distant or unstable or unreliable areas of production, and protect these same sources from falling into the hands of enemies, future enemies, regional hegemons, and the like, because these actors would in turn threaten to end that access, strangle the economy, etc. Private American oil companies (but not French, British, Italian, Russian ones) are the other somewhat harder to steer instrument alongside the aircraft carriers and H-60 Blackhawks deployed to make the costs of dependency manageable. The danger is war over the world's alleged dwindling supplies.

Others imagine the expansive military presence as essentially a collective good supplied by the US to all oil consuming countries because it makes a more reliable and predictable (!) global market possible. "Access" is a shorthand for guardianship over the sea lanes and pipeline routes, providing a never accounted for measure of stability as Middle East oil travels to the refineries of New Jersey, California, the Caribbean, France, China, and Japan. Most who ascribe to this view offer it up as something unique to US character and liberal institutions, and about as far from a mode of domination as can be imagined. (10)

On the left, however, the same set of "facts" constitutes the main mechanism through which the US has exercised global supremacy in the past few decades. The "forward deployment of military power to guarantee the general openness of international markets to the mutual benefit of all leading capitalist states.is the core of US hegemony." (11) Few though are as reflective as Simon Bromley in keeping alive the old idea of the US state's "control" of oil in the 21st century, the light of which burns much less bright, since "control" now means exercising "a degree of influence second to none" (over what is not exactly clear: price? production targets? sales?). (12)

The same stylized facts about the world oil market go far to counter the many comic book accounts of contemporary world affairs, under the rubric of geopolitics, where hostile countries, Venezuelan populists, and radical Islamists hold the world's oil supply hostage or threaten a cut off of an increasingly dependent US economy's lifeblood (or an increasingly energy "secure" US economy manages to wall itself off from those who might "cut off supply.") (13) The reality is, embargoes don't and can't work, which is a good guess as to why we haven't seen a repeat of the infamous unleashing of the Arab oil weapon in 1973. Producers cannot target a specific country without shutting down production to all countries. And there is no oil state in history that has opted to keep all its oil in the ground rather than sell it for the goods, services, prisons, palaces, weapons, and so on that it buys. Were some sovereign state to attempt to block sales to one or more or all states, the short-term effect would be the same as in other kinds of supply disruptions-refinery fires, the closing down of a pipeline, the occupation of Kuwait, the closing of the Strait of Hormuz. Shippers would divert supplies to buyers in need in response to higher prices. As the great MIT economist Maury Adelman taught us, "in a global market filled with buyers and sellers, everyone has access." (14)

In the structural accounts of hegemony it is the global projection of US power that secures the post 1973 market, but this is a matter of faith rather than an empirical verifiable finding about the world in which we live. Thus imagine a world where in the absence of US military bases, rapid deployment forces, and the like there are increased disruption of supplies-during the time, say, it would have taken Saddam Hussein to seize Kuwait unopposed and add to his stock of reserves (for sale on the world market). Would adjustment costs for the US and all other purchasers exceed the costs of military protection allegedly to maintain the flow of oil? Each year since the 1980s the Pentagon spends billions more in the Gulf than US refiners pay for oil from the region. Military might is too blunt an instrument to use to engineer an identity of interests with any and all producer states let alone transform political orders, as witnessed in Iraq. The gamble that a military presence smoothes the worldwide delivery of oil at an acceptable price also leaves open how these market aiding forces are to be configured, whether or not to rescue Kuwait, keep forces in the Kingdom, turn instead to an over the horizon posture, and so forth. "Hegemony" is in the end about as blunt a form of explanation of recent US policies as military power is a means for reducing transactions costs in the world oil market.

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Robert Vitalis is a professor of political science at the University of Pennsylvania. The London Guardian named his America's Kingdom: Mythmaking on the Saudi Oil Frontier, a book of the year in 2006. His next book, The End of Empire in American International Relations, moves away from the Middle East to explore the unwritten history of the IR discipline in the US and the recovery of its critical "Howard School" tradition.

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1. Charles Lindblom, "Political Science in the 1940s and 1950s," in Thomas Bender and Carl E Schorske, American Academic Culture in Transformation (Princeton University Press, 1998), pp. 243-269: 257.

2. See for instance journalist Tom Lippman's introductory remarks at the Library of Congress, November 28, 2007, to commemorate the republication (notably, without the agreement of the writer's estate) of Wallace Stegner's Discovery! [1957], just one of the firm's many "public relations" projects. "Even from the beginning the Americans were there with the long range vision that they would work themselves out of their jobs."

3. William S Culbertson, "Raw Materials and Foodstuffs in the Commercial Policies of Nations, Annals of the American Academy of Political and Social Science 112 (1924), pp. 1-145; see as well Edward Mead Earle, "The New Mercantilism," Political Science Quarterly 40, 4 (1935), pp. 594-600.

4. Parker Moon, "Raw Materials and Imperialism," Proceedings of the Academy of Political Science in the City of New York, 12, 1 (1926), pp. 180-187.

5. Herbert Feis, "The Anglo-American Oil Agreement," Yale Law Journal, 55, 5 (August 1946), pp. 1174-1190: 1176. Feis had been an economic advisor to the State Department during the war. Famously, when the Truman administration got around to taking such matters seriously, notions of control gave way to plans for the destruction of Saudi Arabian oil facilities, kept secret from the Saudis, since controlling oil was judged to be impossible in the event of war with the Soviet Union. Forty years later, assessments of the upgraded US defense posture in the gulf still judged chances for routing the enemy slim were Soviet forces to occupy the oil fields, see Richard Halloran, "US Altering Strategy of Defense of Arabian Oilfields," New York Times, December 4, 1988, p. 32.

6. Leland Jenks, Review of The Oil Trusts and Anglo-American Relations by E. H. Davenport, Social Forces, 2, 5 (1924), pp. 761-763.

7. Stephen J. Randall, United States Foreign Oil Policy Since World War I: For Profits and Security, Second edition (Montreal: McGill-Queen's University Press, 2005), p. 251.

8. Yale economist Richard Nordhaus clarifies the point. "[V]irtually no important oil issue involves US dependency on foreign oil. Whether we consider pollution, macroeconomic impacts, price volatility, supply interruptions, or Middle East politics, our vulnerability depends upon the global market. It does not depend upon the fraction of our consumption that is imported." "Energy: Friend or Enemy?" New York Review of Books, October 27, 2011, p.31.

9. Roger Stern estimated US military operations in the Persian Gulf since the mid-1970s to cost about $7 trillion, a figure that did not include the 2003 Iraq War. "United States Cost of Military Force Projection in the Persian Gulf, 1976-2007, Energy Policy 38 (2010), pp. 2816-25. See the discussion too in Toby Jones, "America, Oil, and War in the Middle East," Journal of American History, 99, 1 (2012), pp. 208-218.

10. See for example G. John Ikenberry, 'Liberal Hegemony and the Future of American Postwar Order', in T. V. Paul and John Hall (eds), International Order and the Future of World Politics (Cambridge, 1999), pp. 123-144.

11. Simon Bromley, "The United States and the Control of World Oil," Government and Opposition 40, 2 (2005), pp. 225-255: 254-255.

13. Bromley, "United States," p. 228. The full quote is as follows. "The United States does indeed seek to control world oil, or at least to exercise a degree of influence second to none, but the form of that control is, in fact, very ambiguous and most importantly, very different to the kinds of exclusive control over raw materials traditionally associated with imperial powers." I would simply note that the imperial powers or statesmen themselves had no control over the raw materials that their firms pumped, refined, and shipped.

14. Tom Gjelten, "Energy Independence for US? Try Energy Security," National Public Radio, Morning Edition, October 25, 2012, quoting UC Davis's director for "energy and sustainability" and specialist in "oil geopolitics" Amy Jaffe, transcript accessible at

15. M. A. Adelman, "The Real Oil Problem," Regulation, Spring 2004, pp. 16-21: 21.

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