<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=iso-8859-1">
<META content="MSHTML 6.00.2600.0" name=GENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY bgColor=#ffffff>
<DIV><FONT face=Arial><FONT color=#002864><FONT face=Verdana size=1><A
href="http://www.mises.org/fullstory.asp?control=1134">http://www.mises.org/fullstory.asp?control=1134</A></FONT></FONT></FONT></DIV>
<DIV><FONT face=Arial><FONT color=#002864><FONT face=Verdana
size=1></FONT></FONT></FONT> </DIV>
<DIV><FONT face=Arial size=2><FONT size=5><FONT color=#002864><FONT
face=Verdana><STRONG>Does Oil Require Blood?</STRONG>
</FONT></FONT></FONT></DIV>
<P>
<P align=center><FONT face=Verdana color=#002864 size=5></FONT></P>
<P align=left><FONT size=4>By Llewellyn H. Rockwell<SPAN
class=573320614-08012003>,</SPAN> Jr.</FONT></P>
<P><FONT size=2>[Posted January 8, 2003] </FONT></P>
<P><FONT size=2>It's obvious Iraq doesn't want war and the Bush administration
does. The administration claims war would be a preemptive strike, but more
honest commentators freely admit, as does Thomas Friedman of the <I>New York
Times</I>, that oil plays a huge role in the continuing drama, even the decisive
role/ </FONT></P>
<P><FONT size=2>"Any war we launch in Iraq will certainly be—in part—about oil.
To deny that is laughable." What's more, he says in a twise on a
predictable left-liberal trope, "I have no problem with a war for oil—if we
accompany it with a real program for energy conservation." </FONT></P>
<P><FONT size=2>It was the <I>New York Times</I> that recently carried two
large articles on Iraq’s oil resources in its prominent "Week in Review"
section, one of which contained a map of reserves. The reporter noted, "112
billion barrels of proven reserves is also something nobody can overlook.…Iraq’s
‘ability to generate oil’ is always somewhere on the table, even if not in so
many words."</FONT></P>
<P><FONT size=2>Or consider the MSNBC story, "Iraqi Oil, American Bonanza?"
which says, "Iraq’s vast oil reserves remain a powerful prize for global oil
companies…. Such a massive rebuilding effort represents a huge opportunity for
the companies chosen to tackle it…. It’s unlikely that American firms will be
left empty-handed if the U.S. follows through on threats of military
action."</FONT></P>
<P><FONT size=2>What does oil have to do with the Bush administration? The MSNBC
reporter gives the reader that information too: "</FONT><A name=""><FONT
size=2>American oil companies are also hoping to benefit from the industry’s
unusually strong ties to the White House. President Bush, himself the former
head of a Texas oil company, has pursued a national energy policy that relies on
aggressively expanding new sources of oil. Vice President Cheney is the former
CEO of oil services giant Halliburton. National security adviser Condoleezza
Rice is a former director of Chevron.</FONT></A><FONT size=2>"</FONT></P>
<P><B><FONT size=2>War and Economics</FONT></B></P>
<P><FONT size=2>The connection between the war on Iraq and the desire for oil
raises an important ideological consideration. Millions of college students are
taught the Leninist idea that capitalist economies are inherently imperialistic.
This is supposedly because exploitation exhausts capital values in the domestic
economy, and hence capital owners must relentlessly seek to replenish their
funds through grabbing foreign resources. In this view, war avoids the final
crisis of capitalism. </FONT></P>
<P><FONT size=2>College students might be forgiven for thinking there is some
basis for this in the real world. In American history up to the present day, the
onset of war tends to track the onset of economic doldrums. Recall that it was
then-Secretary of State James Baker who said the first Iraqi war was all about
"jobs, jobs, jobs." The line between the owners of capital and the warfare state
has never been that clean in American history, and it has arguably never been as
conspicuously blurred as it is today. </FONT></P>
<P><FONT size=2>The view that sustaining capitalism requires aggressive war is
usually said to originate with V.I. Lenin as a way of rescuing Marxism from a
serious problem: capitalism was not collapsing in the
19<SUP>th</SUP> century. It was growing more robust, and workers were
getting richer—facts that weighed heavily against the Marxist historical
trajectory. The Leninist answer to the puzzle was that capitalism was surviving
only thanks to its military aggression. The prosperity of the West originated in
blood. </FONT></P>
<P><FONT size=2>But Lenin was not the originator of the theory. The capitalists
beat him to it. As Murray N. Rothbard explains in his <I><A
href="http://www.mises.org/store/product1.asp??SID=2&Product_ID=117">History
of Money and Banking in the United States</A></I>, the idea began with a group
of Republican Party theoreticians during the late Gilded Age, who were concerned
that the falling rate of profits would cripple capitalism and that the only
salvation was a forced opening of foreign markets to U.S. exports. These were
the brain-trusters of Theodore Roosevelt, who heralded U.S. aggression against
Spain in 1898.</FONT></P>
<P><FONT size=2>The same year, economist Charles Conant published "The Economic
Basis of Imperialism" in the <I>North American Review</I> in 1898. He
argued that there is too much savings in advanced countries, too much
production, and not enough consumption, and this was crowding out profitable
investment opportunities for the largest corporations. The best way to find new
consumers and resources, he said, is to go abroad, using force, if necessary, to
open up markets. Further, the U.S. industrial trusts then dominant on the
landscape could be useful in promoting and waging war. This would cartelize
American industry and increase profits. Hence, said Conant, "concentration of
power, in order to permit prompt and efficient action, will be an almost
essential factor in the struggle for world empire."</FONT></P>
<P><FONT size=2>While Lenin found imperialism for profit morally wrong, Conant
found it praiseworthy, an inspiring plan of action. Indeed, many of his
contemporaries also did. Boston’s <I>U.S. Investor</I> argued that war is
necessary to keep capital at work. An "enlarged field for its product must be
discovered," and the best source "is to be found among the semi-civilized and
barbarian races." </FONT></P>
<P><FONT size=2>By the turn of the century, this view had largely caught on in
the economics profession, with even the eminent theorist John Bates Clark of
Columbia praising imperialism for providing American business "with an even
larger and more permanent profit."</FONT></P>
<P><FONT size=2>Today the same creed is captured in the pithy if chilling mantra
of Friedman: "The hidden hand of the market will never work without a hidden
fist." Lenin couldn't have said it better. Joseph Nye of Harvard fleshes out the
point: "To ignore the role of military security in an era of economic and
information growth is like forgetting the importance of oxygen to our
breathing."</FONT></P>
<P><FONT size=2>Historian Robert Kagan is even more brutally clear: "Good ideas
and technologies also need a strong power that promotes those ideas by example
and protects those ideas by winning on the battlefield." </FONT></P>
<P><FONT size=2>So there you have it: if you want to use a cell phone, you have
to be willing to send your son to die for the U.S. imperium in a war against
Iraq. And if you lose your son in battle, know that this was necessary in order
to shore up U.S. domination of the world economy. This is the creed of the
global social democrats who champion both military and economic
globalization.</FONT></P>
<P><FONT size=2>With the communists and capitalists agreeing that war and
prosperity are mutually dependent, how is a believer in peace and freedom to
respond? While war can result in profit for a few, it is not the case that the
entire system of a free economy depends on such wartime profiteering. Indeed,
war comes at the expense of alternative uses of resources. To the extent that
people are taxed to pay for armaments, property is diverted from its most
valuable uses to purposes of destruction.</FONT></P>
<P><B><FONT size=2>Commerce Is Peaceful</FONT></B></P>
<P><FONT size=2>Indeed, the idea that commerce and war are allies is a complete
perversion of the old liberal tradition. The first theorists of commerce from
the 16<SUP>th</SUP> through the 18<SUP>th</SUP> centuries saw that a most
meritorious aspect of commerce is its link to freedom and peace, that commerce
made it possible for people to co-operate rather than fight. It made armaments
and war less necessary, not more. </FONT></P>
<P><FONT size=2>What about the need to open foreign markets? The expansion of
markets and the division of labor is always a wonderful thing. The more people
involved in the overarching business of economic life, the greater the prospects
for wealth creation. But force is hardly the best means to promote the
co-operative and peaceful activity of trade, anymore than it is a good idea to
steal your neighbor’s mower to improve lawncare on your block. Bitterness and
acrimony are never good business, to say nothing of death and
destruction.</FONT></P>
<P><FONT size=2>In any case, the problem in Iraq is not that Iraq is somehow
withholding its oil from the market. For ten years, and even before the first
war on Iraq, its oil supplies have been available to the world. In one of the
great ironies of modern war history, the first Bush administration waged war, it
said, to keep Iraq from withholding its oil resources from world markets. The
U.S. then proceeded to enforce a decade of sanctions that withheld most of
Iraq’s oil reserves from the market. </FONT></P>
<P><B><FONT size=2>The Solution</FONT></B></P>
<P><FONT size=2>We are not permitted to say this, but the solution to Iraq is at
hand. Repeal sanctions and resume trade with Iraq. Oil prices would fall
dramatically. Hatred of the U.S. would abate. The plight of Iraq could no longer
be Exhibit A for terrorist recruitment drives. The only downside is that U.S.
companies connected to the Bush administration would not be the owners of the
oil fields but instead would have to compete with other
producers. </FONT></P>
<P><FONT size=2>The idea of free enterprise is that everyone gets a chance, and
no single industry or group of producers enjoys special privileges. Through
competition and co-operation, but never violence, the living standards of
everyone rise, and we all enjoy more of the life we want to live. It is not hard
to understand, except in the corridors of the Bush administration, where
theorists have linked arms with Leninists in the belief that war is always good,
and always necessary, for business.</FONT></P>
<DIV>
<HR align=left width="33%" SIZE=1>
</DIV>
<P><FONT size=2>Llewellyn H. Rockwell, Jr. is president of the Mises Institute
and editor of <A href="http://www.lewrockwell.com/"
target=_blank>LewRockwell.com</A>. Send him <A
href="mailto:rockwell@mises.org">MAIL</A>, and see his Mises.org <A
href="http://www.mises.org/articles.asp?mode=a&author=Rockwell,%20Jr."
target=_blank>Daily Articles Archive</A>. A version of this article ran in
the <A href="http://www.amconmag.com/">American Conservative</A>.</P>
<DIV align=center><FONT size=2><FONT size=2>
<DIV align=right><SPAN class=567591613-06062002><STRONG><A
href="http://www.mises.org//fullstory.asp?printFriendly=Yes&control=1134">[Print
Friendly Page]</A></STRONG></SPAN></DIV>
<DIV align=center> </DIV>
<DIV align=center><FONT size=2><FONT size=2><A
href="http://www.mises.org/elist.asp" target=_blank><STRONG>Subscribe to Mises
Email List Services</STRONG></A></DIV>
<P align=center><A href="https://www.mises.org/donate.asp"
target=_blank><STRONG>Join the Mises Institute</STRONG></A><STRONG> </STRONG><A
href="http://www.mises.org/store" target=_blank><STRONG>Mises.org
Store</STRONG></A><FONT size=2></P>
<P align=center><A href="http://www.mises.org/" target=_blank><FONT
size=1><STRONG>Home</STRONG></FONT></A><FONT size=1><STRONG> |
</STRONG></FONT><A href="http://www.mises.org/about.asp" target=_blank><FONT
size=1><STRONG>About</STRONG></FONT></A><FONT size=1><STRONG> |
</STRONG></FONT><A href="http://www.mises.org/elist.asp" target=_blank><FONT
size=1><STRONG>Email List</STRONG></FONT></A><FONT size=1><STRONG> |
</STRONG></FONT><A href="http://www.google.com/u/Mises" target=_blank><FONT
size=1><STRONG>Search</STRONG></FONT></A><FONT size=1><STRONG> |
</STRONG></FONT><A href="http://www.mises.org/contact.asp" target=_blank><FONT
size=1><STRONG>Contact Us</STRONG></FONT></A><FONT size=1><STRONG> |
</STRONG></FONT><A href="http://www.mises.org/journals.asp" target=_blank><FONT
size=1><STRONG>Periodicals</STRONG></FONT></A><FONT size=1><STRONG> |
</STRONG></FONT><A href="http://www.mises.org/articles.asp" target=_blank><FONT
size=1><STRONG>Articles</STRONG></FONT></A><FONT size=1><STRONG> | </STRONG><A
href="http://www.mises.org/fun.asp" target=_blank><STRONG>Games &
Fun</STRONG></A></FONT><BR><A href="http://www.mises.org/news.asp"
target=_blank><FONT size=1><STRONG>News</STRONG></FONT></A><FONT size=1><STRONG>
| </STRONG></FONT><A href="http://www.mises.org/scholar.asp" target=_blank><FONT
size=1><STRONG>Resources</STRONG></FONT></A><FONT size=1><STRONG> |
</STRONG></FONT><A href="http://www.mises.org/catalog.asp" target=_blank><FONT
size=1><STRONG>Catalog</STRONG></FONT></A><STRONG><FONT size=1> </FONT><FONT
size=1>| </FONT></STRONG><A href="https://www.mises.org/donate.asp"
target=_blank><FONT size=1><STRONG>Contributions</STRONG></FONT></A><FONT
size=1><STRONG> | </STRONG><A href="http://www.mises.org/calendar.asp"
target=_blank><STRONG><FONT size=1>Freedom</FONT>
Calendar</STRONG></A></FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></P></DIV><!-- begin bl.html.trailer -->
<P><FONT face=Arial size=2></FONT><!-- end bl.html.trailer --></P></BODY></HTML>