Sunday, September 12, 2004

Crude Rhetoric

I find it amazing that in a time of soaring gas prices that I still am arguing over whether the 2003 Iraq War was fought over oil. It’s time to set the record straight about the purported role of oil in world politics. The reasons for this are more than academic. The “blood for oil” mantra is not only logically dubious but also distract us from the real need to reform American foreign policy and intelligence gathering. As long as we continue believing that the war was fought solely or even principally out of greed, we will be unable to address these problems. This essay will have three parts. First, the blood for oil thesis will be expounded. Second, the thesis’ incongruence with the facts will be displayed. Third, and more philosophically the internal contradictions of this line of argumentation will be pointed out. Fourth, this rhetoric’s corrosive effect on policy making will be explained.
The blood for oil thesis is particularly attractive to those on the far left because it bundles three of their favorite bêtes noires namely: war, capitalism, and pollution. Collectively these evils amount to what some like to term imperialism (this is actually an etymologically abusive use of the term but I will go no further on the subject for now). The reasoning is relatively straightforward. The health of the U.S. economy depends on the reliable supply of cheap oil. While the U.S. is one of the world’s ten largest producers of oil, it still needs to import 58% of its oil. It may come as a surprise to many to know that the number one supplier of this imported oil is Canada, which pumps 1.708 million barrels a day to the U.S., three times more than the quantity that came from Iraq before the war. However, proven reserves at home and in Canada are finite. Because the welfare of the nation has come to depend so heavily on oil, successive Democratic and Republican administrations have seen its ready supply as an issue of strategic concern. Indeed the Carter Doctrine, first expounded in 1980, explicitly stated that no one state should control the access and traffic to the Persian Gulf. The strategic importance of oil also explains the U.S.’s uncomfortably close relationship with Saudi Arabia, whose human rights record and militant religiosity are otherwise antithetical to American interests and values. Because America seeks to gain more leverage on the Kingdom of Saud regarding its support of radical Islam and terrorism (remember that 15 of the 19 September 11th hijackers were Saudis), it needs to relieve its dependence on Saudi oil. This is where Iraq comes in. Iraq sits atop 11% of the world’s proven oil reserves, the second largest concentration after Saudi Arabia. If the U.S. could secure access to Iraq’s oil, it could more effectively combat terrorism without jeopardizing its oil supply. Ready supply means low fuel prices, which means lots of happy SUV-driving, soccer-mom voters. What this also means, according to the blood-for-oil thesis, is profits for greedy Republicans. Because the White House is so closely tied with the oil industry, the American executive has personal reasons to see rising oil supply. Indeed President Bush used to work in the oil industry, Vice-President Cheney used to run Texas-based Halliburton and national security advisor Condoleezza Rice sits on the Board of Chevron and even has an oil tanker named after her. Those who support the blood-for-oil thesis are very suspicious of the official arguments for the War. If WMD is a concern, why are we not invading North Korea, which has kicked out UN inspectors, abrogated its commitments under the Nuclear Nonproliferation Treaty, openly declared its intention to develop a nuclear deterrent? Looking at both cases, the blood-for-oil crowd notes the variable that North Korea does not have is oil (indeed it is highly dependent on China in this regard). They conclude that the different outcome must be a result of oil, revealing in broad daylight the true purpose of the war. Arguing that the war was fought mainly for oil provides a simple Manichaeistic view of international relations that fits neatly with preconceived ideology. All nuance is dispelled in favor of compartmentalized good and evil.
While this is an appealing argument to explain imperialist state behavior, it fails to hold up to close scrutiny. The first fallacy is that the Iraq War was that it was profitable. In fact, the Iraq War has been predictably expensive directly through the costs of military operations, and indirectly through its effect on the markets. Of course what is rarely examined is the opportunity cost of the Iraq War, namely how else taxpayer money could have been spent (for a fascinating view of this see: http://costofwar.com/). U.S. military operations alone cost $143 billion, reconstruction so far has cost $19 billion with more than $50 billion projected in the future. These are the direct costs, which already outweigh the benefits of extra oil production. Even a two-term Bush presidency would be long over before Iraq's broken economy realized its full capacity of 6 million barrels per day.
The indirect costs of the war can be seen in the fluctuation of oil prices and economic uncertainty. The simple threat of war added a $6 to $10 insurance premium to the price of an oil barrel. Multiply this by 19.761 million barrels, the daily oil consumption of the U.S. in a single day in 2002 and you quickly get an idea of the cost of instability (for a graphic analysis in the fluctuation of oil prices see: http://www.eia.doe.gov/emeu/cabs/chron.html). In the lead up to the War, there were serious concerns that the oil fields of Iraq would be damaged as the ones in Kuwait had been in 1991. This would have only jacked the price of oil even further. At this point many blood-for-oil proponents change their argument and say: “aha! You see the oilmen started a war to drive up the prices of oil so that they could reap more profits.” This is a very different argument from the previous one (in fact the opposite) that claimed that the U.S. started a war to get cheap oil, but it is equally deceptive. A rapid increase in the price of oil could easily cause a recession both in the U.S. and the world, causing a decrease in economic activity, decreased demand for oil, decreased prices, and consequently decreased returns for American oil companies. Indeed, in the period leading up to the Iraq War, we see a slowing down of GDP growth in the U.S. during the fourth quarter of 2002 and the first quarter of 2003, reflecting uncertainty in future energy costs (see http://www.bea.doc.gov/bea/newsrel/gdp_glance.htm). Even if the invasion had carried on without a hitch, a rise in the production of oil would not necessarily be in the best interest of the oil lobby. A flooding of the market could cause oil prices to decrease along with profits for oil firms. Furthermore plummeting oil prices would kill off the less competitive domestic American oil producers. Thus we see that fixing oil prices through military action is not as straightforward as the blood-for-oil crowd would like us to believe. After all, if the American oil lobby wanted to see a fall in the price of oil without the risky political fallout of an invasion, it would have been easier to lift the sanctions slapped on Iraq after the Gulf War and/or attempt a rapprochement with Iran (in which case the left would accuse the U.S. of making another pact with the devil to satiate its oil addiction). Indeed when Iraq was permitted to export oil again under the UN’s oil-for-food program in 1995, the worldwide price of oil decreased accordingly.
Another major problem with the blood for oil thesis is that it misreads the international energy market. In 2002, just as the diplomatic storm was gathering over a war in Iraq, Canada was publicizing the discovery of oil sands in Alberta that could represent some 174.4 billion barrels (up till then Canada’s proven reserves stood at 4.5 billion barrels). This would give Canada the second largest proven oil reserves in the world after Saudi Arabia. It would be hard to explain then why America would launching a war literally at the other end of the planet, stoking the flames of religious militants, precisely at a time when huge oil deposits were being discovered on the grounds of its largest and most reliable trading partner, neighbor, and ally.
The real problem with the blood-for-oil thesis is that it is politically unfeasible. The possible long-term economic benefits are out of synch with American political cycles and therefore could not have a substantial electoral impact. A potential war could have cost the Republicans the White House if it went badly. Because there is a lot of uncertainty involved in war and because the election is so hotly contested, a war for oil could be politically suicidal. Furthermore, there was widespread agreement in the lead up to the invasion that years of investment in Iraq’s infrastructure would be necessary before the oilfields would begin to generate returns. The majority of the costs of the war were foreseeable. The risks were generally known. Even if we were to accept for a second that the Bush administration was run by crooks, we would have to recognize that these crooks were taking extraordinary risk for uncertain and long term benefits. We would also need to explain why this Administration has repeatedly and publicly committed itself to handing over the control of oil to the new government of Iraq, and why a majority of Congress voted to give the President the authority to go to war with Iraq, despite their lack of ties with the oil industry.
From a philosophical point of view, the main flaw of the blood-for-oil thesis is that it is unfalsifiable. While this may intuitively seem like an asset, it actually discredits the argument because statements that cannot be proven to be false in principle are scientifically unsound. This is a basic tenet of the philosophy of science that was pioneered by Karl Popper in 1950s. In his treaties on scientific method, he argued that Marxism and Freudian psychology were pseudo-scientific for this reason. Marxism argued that either the workers would rebel against the bourgeois. If they failed to exhibit any signs of resistance Marx stated that it was due to false consciousness caused by bourgeois brainwashing. The same goes for the blood-for-oil thesis. Whether the U.S. goes to war, applies sanctions or contrarily protects and aides a country, it is all due to oil interest. If an ‘imperial’ war causes oil prices to spike, it is because the powers that be want to reap highly profits. If on the contrary, oil prices drop it is because gluttonous America wants cheap oil. Oil becomes the Rosetta Stone of international relations. It explains everything. It even gives contradictory explanations for the same event. This is why I have become skeptical of the blood-for-oil thesis. Anti-war demonstrators have deployed the same arguments for virtually every war of the last 15 years. The Kosovo campaign was not about protecting Muslim Kosovars or diffusing an ethnic powder keg in Europe’s backyard; it was about securing a pipeline from Turkey to Western Europe. Russia’s Chechnyan campaign is not designed to deter terrorism or forestall a Balkanization of its southern territory but instead to maintain access the immense gas reserved of the Caspian. America’s promotion of Project Colombia is not a misguided attempt at controlling its own domestic drug problem; no here too it’s about securing an oil pipeline from Venezuela. A 1993 piece in the Los Angeles Times argued that there could be significant amounts of oil and natural gas in Somalia, ripe for the taking if the US-led UN operation had restored peace. The war in Afghanistan? That was not about rooting a tyrannical regime that was indirectly responsible for the death of over 3,000 Americans three years ago. No, that was about establishing a natural gas pipeline. Never mind that any energy sector analyst will tell you of the tremendous costs and difficulties of establishing a pipeline across such mountainous terrain. Furthermore, let us imagine that there were no oil or gas in Afghanistan. Would it be so inconceivable that the U.S. would have had other reasons to invade?
I know that many will sneer that I am simply being naïve about geopolitics and international political economy. Yet I find it equally naïve to think that world peace would reign if we severed our dependence on oil (Although stopping to drive SUVs would be desirable since they cause more pollution and endanger the lives of those who drive of smaller cars). The reality is more complex. In our frustration with a dangerous world and a reckless Administration, it is tempting to hold onto straightforward economic explanations. While there is no doubt that natural resource exploitation is an important prism through which to analyze international affairs, it is not the only one nor is it necessarily the most important one. This simple minded and mono-causal outlook is not only intellectually problematic but also fundamentally dangerous. It is dangerous because it distracts us from problems that are direly need of fixing. As long as we dismiss the Iraq War as oil grab, we will not address the problems of the intelligence community, which inform our decision-makers, guides our foreign policy, and safeguards our diverse values and interests. Responsible and enlightened citizens have every reason to morally oppose the Iraq War, question its motives and conduct, and deplore its consequences. Yet focusing on the issue of oil is not the most intelligent way to do so.
For a more refined perspective on the role of natural resources in world conflict listen to this interview with Prof. Michael Klare on NPR’s Fresh Air (http://freshair.npr.org/day_fa.jhtml;jsessionid=2VXLQXMENPW0RLA5AINSFFI?display=day&todayDate=09/09/2004) or read his books Blood and Oil (New York: Metropolitan Books, 2004) and Resource Wars (New York: Owl Books, 2002).

Thursday, September 09, 2004

One Nation Under Canada

Book Review

Michael Adams. Fire and Ice: The United States, Canada and the Myth of Converging Values. Toronto: Penguin Canada, 2003.

Living abroad and living with Americans made me wonder why it is that Canadians are so obsessed with differentiating themselves from Americans. We, in Canada that is, seem to cling to the narcissism of small differences with our one and only neighbor. These purported differences range from the significant (secularism, gun control, health care, tolerance, internationalism) to the trivial (flavors of chips, beers, metric system, etc…). While many Canadians were thrilled by the successful Molson “I Am Canadian” beer ads, most spectators from outside the continent and south of the border could not hold back laughter and this pitiful attempt to mark ourselves off. This struggle for differentiation leads to some contradictions. The Globe and Mail put it succinctly: “We have become a people who, without a trace of irony, love to yell about how modest we are.” Despite all our loud kicking and screaming we are still more likely to be asked by an ignorant foreigner: “so what state are you from?”
In his latest book Fire and Ice, Michael Adams, the head of a Toronto based poling group Environics, attempts to prove the underlying differences between Americans and Canadians through quantitative poling analysis. More poignantly, Adams seeks to show that value differences between Canucks and Yankees have actually been widening over the course of the 1990s. Adams starts by drafting a value map that charts respect for authority, individualism, survival, and fulfillment. Based on these basic markers he constructs four quadrants representing status/security, authenticity/responsibility, exclusion/intensity, and idealism/autonomy. His basic conclusion is that over the 1990s Americans are drifting from the traditional authenticity/responsibility quadrant to the nihilistic and materialist exclusion/intensity quadrant while Canadians have been retrenching in the idealist/autonomy quadrant. Adams makes the interesting observation that while America came into being through individualist and idealist values contrary to Canada’s counterrevolutionary and conservative heritage, today these positions have reversed. By 2000, Canadians were to ones that had become more tolerant, idealist and willing to question authority. This helps explain the clashes between the U.S. and Canadian governments since the most influential segments of their populations come from antithetical poles of North American society (Progressive Quebec versus traditional U.S. South).
While Adams provides a refreshingly empirical view of what many Canadians feel on a daily basis, the book remains falls victim to the same nationalist obsession that plagues the debate in the first place. Adams is unabashedly a Canadian nationalist and makes it known throughout the book that Canada is not only different, but also superior (while recognizing that the U.S. is far more creative and entrepreneurial). In a most strongly worded passage regarding the U.S. Adams writes: “The pursuit of happiness often leads to strange and saccharine theme parks, mindless television and movie fare, addiction, gambling, substance abuse, and even often to the pathetic pursuit of salvation promised by huckster Christian evangelists- all diversions to compensate for a deep spiritual deficit.” While most of the Canadian readership may nod in agreement with his statements, they severely corrode the semblance of objectivity that such a pollster would seek to maintain. They also make this study relatively indigestible for any Americans that would be curious about their neighbors to the North. Furthermore, Adams should watch what he says since value shifts in the U.S. are often, although not always, forecasts for other lifestyle changes around the world. Adams also draws his conclusions from nothing more than a three surveys over an 8-year period. One wonders if such a time span is sufficient to accurately depict the sea change of values in North America. The biggest criticism however, is Adams’ treatment of America as a monolithic cohesive social group. The U.S. is incredibly diverse- and divided as we are seeing in this election year- which makes all this discussion of “Americanization” questionable. Which America are we becoming? We may be furthering ourselves from deep South Americans, but we certainly share a lot in common with the millions of Americans that live in the Northern Pacific Coast, New England, and cities such as New York, San Francisco, and Seattle (all of which display just as much tolerance as Canadians towards alternative lifestyle choices such as homosexuality). Moreover, it is common that the differences within the U.S. are greater than the differences between Canada and certain regions of the U.S. It is also important to keep in mind a third variable namely: whether or not Americans and Canadians are becoming closer with regards to the rest of the world. Adams never places Canadian and American values in the context of European or Asian values. We never know the answer to the essential question: Are the differences between Americans and Canadians trivial in comparison to the differences between North American values and those of the rest of the world.
Generally speaking Adams makes a well though out and empirical case for distinguishing Americans and Canadians. His study will give ammunition to those who wish to prove that Canada is a distinct society. Yet the way in which the book is written will almost guarantee that Adams will be preaching to the choir.

To take the test and see where you stand vis a vis American and Canadian values: http://fireandice.environics.net/surveys/fireandice/main/fireandice.asp?surveyID=1

Cost of the War in Iraq
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