Introduction
There
is no question that, in the immediate aftermath and for several years following
US military conquests, wars, occupations and sanctions, US multi-national
corporations (MNC) lost out on profitable sites for investments. The biggest
losses were in the exploitation of natural resources – in particular, gas and
oil – in the Middle East, the Persian Gulf and South Asia.
As
a result, some observers speculated that there were deep fissures and
contradictory interests within the US ruling class. They argued that, on the
one hand, political elites linked to pro-Israel lobbies and the military
industrial power configuration promoted a highly militarized foreign policy
agenda; and, on the other hand, some of the biggest and wealthiest
multi-national corporations sought diplomatic solutions.
Yet
this seeming ‘elite division’ did not materialize. There is no evidence, for
example, that the multi-national oil companies sought to oppose the Iraq,
Libyan, Afghan, Syrian wars. Nor did the powerful 10 largest oil companies,
with a net value of over $1.1 trillion dollars, mobilize their lobbyists and
influentials in the mass media to the cause of peaceful capital penetration and
domination of the oil fields via neo-liberal political clients.
In
the run-up to the Iraq war, the three major US oil companies - Exxon Mobil,
Chevron, Conoco Phillips - eager to exploit the third largest oil reserves in
the world, did not engage in Congressional lobbying or exert pressure on the
Bush or later Obama Administration for a peaceful resolution of the conflict. At
no point did the Big Ten challenge the pro-war Israel lobby and its phony
arguments that Iraq possessed weapons of mass destruction with an alternative
policy.
Similar
‘political passivity’ was evidenced in the run-up to the Libyan war. Big Oil
was actually signing off on lucrative oil deals when the militarists in
Washington struck again, destroying the Libyan state and tearing asunder the
entire fabric of the Libyan economy.
Big
oil may have bemoaned the loss of oil and profits, but there was no concerted
effort, before or after the Libyan debacle, to critically examine or evaluate
the loss of a major oil producing region. In the case of economic sanctions
against Iran, possessing the second largest oil reserves, the MNC again were
notable by their absence from the halls of Congress and the Treasury Department
where the sanctions policy was decided. Prominent Zionist policymakers, Stuart
Levey and David Cohen, designed and implemented sanctions which prevented US
(and EU) oil companies from investing or trading with Tehran.
In
fact, despite the seeming divergence of interest between a highly militarized
foreign policy and the drive of MNC to pursue the global accumulation of
capital, no political conflicts erupted. The basic question that this paper
seeks to address is: Why did the major MNCs submit to an imperial foreign
policy which resulted in lost economic opportunities?
Why the MNC Fail to Oppose
Imperial Militarism
There
are several possible hypotheses accounting for the MNC accommodation to a
highly militarized version of imperial expansion.
In
the first instance, the CEO’s of the MNC may have believed that the wars,
especially the Iraq war, would be short-term, and would lead to a period of
stability under a client regime willing and able to privatize and
de-nationalize the oil and gas sector. In other words, the petrol elites bought
into the arguments of Rumsfeld, Chaney, Wolfowitz and Feith, that the invasion
and conquest would “pay for itself”.
Second,
even after the prolonged-decade long destructive war and the deepening
sectarian conflict, many CEO’s believed that a lost decade would be compensated
by “long term” gain. They believed that future profits would flow, once the
country was stabilized. The oil majors entry after 2010; however, was
immediately threatened by the ISIS offensive. The ‘time frame’ of the MNC
strategic planners was understated if not totally wrong headed.
Third,
most CEO’s believed that the US-NATO invasion of Libya would lead to monopoly
ownership and greater profits than what they received from a public-private
partnership with the Gadhafi regime. The oil majors believed that they would
secure total or majority control. In other words the war would allow the oil
MNC to secure monopoly profits for an extended period. Instead the end of a
stable partnership led to a Hobbesian world in which anarchy and chaos inhibited
any large scale, long-term entry of MNC.
Fourth,
the MNC, including the big oil corporations, have invested in hundreds of sites
in dozens of countries. They are not tied to a single location. They depend on
the militarized imperial state to defend their global interests. Hence they
probably are not willing to contest or challenge the militarists in, say Iraq,
for fear that it might endanger US imperial intervention in other sites.
Fifth,
many MNC interlock across economic sectors: they invest in oil fields and
refineries; banking, financing and insurance as well as extractive sectors. To
the degree that MNC capital is diversified they are less dependent on a single
region, sector, or source for profit. Hence destructive wars, in one or several
countries, may not have as great a prejudicial effect as in the past when “Big
Oil” was just ‘oil’.
Sixth,
the agencies of the US imperial state are heavily weighted to military rather
than economic activity. The international bureaucracy of the US is
overwhelmingly made up of military, intelligence and counter-insurgency
officials. In contrast, China, Japan, Germany and other emerging states
(Brazil, Russia and India) have a large economic component in their overseas
bureaucracy. The difference is significant. US MNC do not have access to
economic officials and resources in the same way as China’s MNC. The Chinese
overseas expansion and its MNC, is built around powerful economic support
systems and agencies. US MNC have to deal with Special Forces, spooks and
highly militarized ‘aid officials’. In other words the CEO’s who look for
“state support” perforce have mostly ‘military’ counterparts who view the MNC
as instruments of policy rather than as subjects of policy.
Seventh,
the recent decade has witnessed the rise of the financial sector as the
dominant recipient of State support. As a result, big banks exercise major
influence on public policy. To the extent that is true, much of what is ‘oil
money’ has gone over to finance and profits accrue by pillaging the Treasury. As
a result, oil interests merge with the financial sector and their ‘profits’ are
as much dependent on the state as on exploiting overseas sites.
Eighth,
while Big Oil has vast sums of capital, its diverse locations, multiple
activities and dependence on state protection (military), weaken its opposition
to US wars in lucrative oil countries. As a result other powerful pro-war
lobbies which have no such constraints have a free hand. For example the
pro-Israel power configuration has far less ‘capital’ than any of the top ten
oil companies. But it has a far greater number of lobbyists with much more
influence over Congress people. Moreover, it has far more effective propaganda
– media leverage- than Big Oil. Many more critics of US foreign policy,
including its military and sanctions policies, are willing to criticize “Big
Oil” than Zionist lobbies.
Finally
the rise of domestic oil production resulting from fracking opens new sites for
Big Oil to profit outside of the Middle East – even though the costs may be
higher and the duration shorter. The oil industry has replaced losses in Middle
East sites (due to wars) with domestic investments.
Nevertheless,
there is tension and conflict between oil capital and militarism. The most
recent case is between Exxon-Mobil’s plans to invest $38 billion in a joint
venture in the Russian Arctic with the Russian oil grant Rosneft. Obama’s
sanctions against Russia is scheduled to shut down the deal much to the dismay
of the senior executives of Exxon Mobil, who have already invested $3.2 billion
in an area the size of Texas.
Conclusion
The
latent conflicts and overt difference between military and economic expansion
may eventually find greater articulation in Washington. However, up to now,
because of the global structures and orientation of the oil industry, because
of their dependence on the military for ‘security’, the oil industry in
particular, and the MNC in general, have sacrificed short and middle term
profits for “future gains” in the hopes that the wars will end and lucrative
profits will return.
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