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While
not rejecting the possibility out of hand, Henley avers that
"It's
either wrongheaded and wrong for the US to go to war to topple
the present Royal Family or it isn't, regardless of who pays
off whom."
BECAUSE
IT MATTERS
I'll
tell you why I spend an entire column "running on"
about this topic, Jim: because, contrary to what you seem
to believe, it matters a whole lot when very rich and politically
powerful people try to get the US government to do their bidding.
For example, as Murray
Rothbard, Gabriel
Kolko, and others have shown, the "progressive
era" reforms of the nineteenth century were initiated
and supported by large corporations for the purpose of keeping
out competition. In short, the various corporate clans –
Rockefeller, Morgan, etc., including both the
"Yankees" and the "Cowboys" of
the American business community – have not exactly been
shy in using State power to achieve their ends, both at
home and abroad.
TAKING
PANAMA
Take
the case of the Panamanian "revolution" of 1903,
in which the "founding fathers" were the members
of an American financial syndicate. As Rothbard points out
in Wall
Street, Banks, and American Foreign Policy:
"The
Panama Canal Company's lobbyist, Morgan-connected New York
attorney William Nelson Cromwell, literally sat in the White
House directing the 'revolution'
and organizing the final settlement. We now know that, in
1900, the shares of the old French Panama Canal Company were
purchased by an American financial syndicate, headed by J.
P. Morgan & Co., and put together by Morgan's top attorney,
Francis Lynde Stetson. The syndicate also included members
of the Rockefeller, Seligman, and Kuhn, Loeb financial groups…"
Selling
these shares, after the US-engineered "revolution,"
at double the price as the Panama Canal project was revived,
made a number of very well-connected people – including
Teddy Roosevelt's brother-in-law – quite rich. Were the
corporate connections of the Panamanian "revolutionaries"
irrelevant to the course of events in 1903? No more so than
the machinations of US oil companies in the Middle East today
– in other words, the corporate connection is highly
relevant.
THE
CORPORATE CONNECTION
Indeed,
in the context of the history of our involvement in the Middle
East, practically nothing else is at all relevant.
For why else are US troops in Saudi Arabia? There is, after
all, no oil shortage: far from it, the world is swimming
in the stuff, which is one reason why the Saudis are in
a bit of financial trouble. So it isn't access to oil, per
se, that our American centurions are guarding, but the
access of certain American corporate entities to Saudi oil
profits, to which they have become rather accustomed over
the years.
HEADING
FOR THE DOORS?
"When
right wingers start with the Rockefeller talk," smirks
Henley, "everyone else heads for the exits." Not
quite everyone: a lot of leftists and plain old populists
are prone to prick up their ears at this kind of talk. Yet
this merely points to the utter uselessness of conventional
"left-right" distinctions: one doesn't have to be
a Marxist to understand how and why corporate power is often
rooted in government power. Surely libertarians, who see government
as the sole source of monopolistic privilege, should be the
first to see the corporate connection to policymaking.
Unlike
the Left, however, libertarians see that the problem is not
the nature of capitalism but of government. Instead
of nationalizing industries in the name of "the people"
(i.e. certain people), libertarians call for the complete
separation of economy and state. The whole ostensibly "leftist"
analysis of the "war on terrorism" – that this
is a "war for oil" – actually confirms the
libertarian insight into the role of the State in world affairs.
But the Left cannot explain the subtleties of that policy,
blinded as it is by its cultural and political prejudices:
they are clueless when it comes to the reasons for the US-Saudi
rift. And so, I might add, are most conservatives, even those
with libertarian sympathies.
THOSE
IDLE PRINCES OF ARABY
Henley
goes on to cite a correspondent who points out that Aramco,
the company originally granted a monopoly franchise on oil
production by the Saudi monarchy, is state-owned, and is now
known as Saudi Aramco:
"Which
is to say, [owned by] lots of little princes. Abdullah announces
in 1998 that he wants to open it up to competition, which
is to say, make things rough for hundreds of trust fund babies
in the kingdom. Someone might have to earn a living! Might
some of those princes decide to play footsie with, oh, al
Qaeda?"
To
begin with, as
I pointed out in my original column on this subject,
the phony "nationalization" of the 1970s left the
Rockefeller-controlled Aramco consortium as the "managers"
of the operation, and these companies still received the lion's
share of Saudi oil. Their monopoly on production, refining,
and marketing was unbroken – until very recently, when
Crown Prince Abdullah announced that it was high time the
Saudi kingdom liberalized its economic policies.
WINNERS
AND LOSERS
Secondly,
Henley simply gets it wrong when he sees the Saudis, and not
Western oil interests, as the losers in this liberalization
process. The evolution of the state franchise system, embodied
in Aramco, shows the direction of the US-Saudi relationship,
with the latter pulling away from the former since the 1970s.
As
Richard Cowen of the University of California, at Davis, puts
it:
"In
all of the upheavals, the overriding concern of the majors
was clearly to retain control over crude oil shipping, refining,
and marketing. This was shown in 1974, when Saudi Arabia demanded
the nationalization of Aramco. If there were problems, the
Saudis threatened, they would simply offer 3 million barrels
a day directly to third parties (outside the majors). In the
end, Aramco quietly gave in, in return for contracts by which
it would handle all the shipping of Saudi crude."
STEPPING
OUT
But
the Saudis began
to step out on their own in 1988, going into the production,
refining, and marketing business for themselves, in alliance
with Texaco – the biggest of the Texan
"wildcatters" and the only major independent
factor in the original Aramco consortium, granted a mere 30
percent of ownership shares compared to 70 percent for the
Rockefellers and their corporate cohorts. This operation has
grown into the sixth largest oil and gas retailer in the US,
directly threatening the majors. A Saudi collision with Big
Oil was inevitable, from that point on, and the breaking point
came with Prince Abdullah's shocking announcement that the
downstream aspects of the oil industry – long dominated by
the majors – would now be opened up to the international
competition.
In
1976, Walter
S. Measday, chief economist of the Senate Subcommittee on
Antitrust & Monopoly asked us to:
"Recall
if you will the spring of 1973, when many of the OPEC governments
secured 25 percent participation and announced that they would
develop their own marketing capabilities as rapidly as possible,
while President Nixon suspended quantitative controls on imports.
Remember the large number of glorious plans for new independent
refineries which were announced – and try to remember
what happened to all but one or two of these plans.
"What
happened as the months passed, of course, is that after the
first flush of enthusiasm over participation, the host governments
came to the conclusion that the major integrated companies
offered the best opportunity for marketing their oil in a
manner which would avoid a break in OPEC prices. The door
to independents appeared to close in Saudi Arabia, for example,
last September when the Saudis announced they would not enter
any new contracts with private refiners. … [I]t was agreed
that after nationalization of production the state company,
Petromin, would retain only 5 percent of the nation's crude
output to maintain the contracts it entered into in 1973 and
1974; 95 percent of the output would continue to be marketed
by Exxon, Texaco, Socal, and Mobil."
Ah,
but no more. In creating Aramco, as the corporate offspring
of US and Saudi government-to-government relations, the Seven
Sisters are now being hunted by the monster they created.
The
analysts over at ICFAI give us an overview:
"In
1972, just before the Arab oil embargo sent prices through
the ceiling, state-owned oil companies accounted for just
6 percent of worldwide crude production, whereas companies
like Exxon and Mobil were the dominant players (Exxon and
Mobil together accounted for almost one-sixth of the global
market share). In the changing oil landscape, these domineering
companies of yesteryear today find themselves marginalized
by the state-owned companies. Today, state-owned companies
such as Saudi Aramco, Mexico's Pemex and Venezuela's Petroleos
de Venezuela account for almost 52 percent of global production,
compared to this Exxon and Mobile, pre-merger, accounted for
merely 2 percent and 1 percent respectively."
Screwed
out of their formerly privileged position, the major American
oil companies (otherwise known as "the Rockefellers")
have been maneuvering to reestablish their commercial hegemony.
One such maneuver was to cut the Saudis off at the pass: a
merger between one of the majors, Chevron, and Texaco,
Saudi Aramco's ally. After
a long series of negotiations and behind-the-scenes
political machinations, the merger was finally given the green
light by the Federal Trade Commission – on
September 7, 2001.
According
to the terms set down by the FTC, the two companies could
merge – provided Texaco divested itself of the
distribution and "downstream" marketing subsidiaries
that had made it attractive to the Saudis in the first place.
As the FTC news release states:
"Under
the terms of the proposed order, the combined Chevron/Texaco
would be required to divest all of Texaco's interests in two
joint ventures, Equilon Enterprises, LLC (Equilon), which
is currently owned by Texaco and Shell Oil Company (Shell),
and Motiva Enterprises, LLC (Motiva), which is currently owned
by Shell, Texaco, and Saudi Refining, Inc. (SRI). Outside
'the Alliance' defined by these two joint ventures, Texaco
would be required to divest assets including its one-third
interest in the Discovery natural gas pipeline system in the
Gulf of Mexico..."
And
so the door was still open to the independents, and to foreign
competitors like Saudi Aramco: the means to reach oil and
gas consumers directly was still within the grasp of the Saudis.
Four days later, "everything changed…."
CUI
BONO?
The
major US oil companies had won a Pyrrhic
victory in the FTC decision. Given their history of political
manipulation and influence-buying, why would they hesitate
to use the armed forces of the United States to win back what
had been lost? Contra Henley, who pays off whom is totally
relevant to the question of whether we ought to go to war,
or make some other policy move that is supposed to embody
the "national interest." For any libertarian worth
his salt is moved to ask "Whose interests are
being served?" Cui bono? Who benefits? In understanding
political events, the answer to this question, if it doesn't
tell the whole story, at least leads us in the right direction.
Henley
continues:
"Going
down the Rockefeller path causes Raimondo to make some very
dubious claims: 'Speaking through Jeff Jacoby – in an
act of ventriloquism that no doubt had the dummy-columnist's
full cooperation – the Aramco-Rockefeller consortium
delivered this "ultimatum" to their former business partners…'
"There
is a factual claim here, a serious one, and it comes without
evidence. The claim is that Jacoby is not just a neo-imperialist
crank but an agent of a particular corporate interest. Unless
Raimondo has evidence of Jacoby being rented, Krugmanlike,
for the duration of an article, it's not just bogus, but scurrilous."
In
calling for the US military conquest of the Saudi oil fields,
Jacoby is perhaps getting a little ahead of his corporate
mentors, but his bald statement amounts, in reality, to a
call for handing those oil fields back to the US oil majors.
This is not a "factual claim" but a simple
fact. If this is "scurrilous," then so be it. It
also happens to be true. You don't need canceled check stubs
to show that someone is serving, in effect, as an agent of
certain interests. The requirement that a pundit be "rented,
Krugmanlike," before we can detect his allegiances would
rule out of order Orwell's famous excoriation of pacifists
during World War II, which has proved such an inspiration
to Andrew Sullivan and other pro-war "bloggers."
He said that they were "objectively" aiding Hitler
in his quest to conquer Britain, and regardless of the merits
of that particular case, surely there is merit to the general
idea that it is possible to serve certain political or even
financial interests without being put on the payroll.
A
QUESTION OF TIMING
Henley
cites my reporting on a vital meeting that took place on September
23, 1998, when Prince Abdullah, on a visit to the US, told
a bunch of shocked oil company executives that he was opening
up Saudi markets to free competition. Oh, but this is "lax
timing," he says, why the time gap between the meeting
and the start of the anti-Wahabi campaign?
"Every
supposedly baleful, Rockefeller-inspired maneuver Raimondo
cites, from Martha McSally to Andrew Sullivan's 'sudden' outrage
over Saudi persecution of gays to the general outbreak of
anti-Wahabism among pundits, happened three years after Raimondo's
Big Meeting. If that's 'tandem' it's tandem like a Dr. Seuss
bicycle that extends across several pages from front seat
to back seat."
TIME
AND OPPORTUNITY
In
the context of the US-Saudi strategic relationship –
one of the longest and most closely-guarded alliances
of the postwar period – 1998 wasn't that long ago.
Unlike the latest development in the Paul Krugman scandal
or the Doris Kearns Goodwin/Stephen Ambrose plagiarism
brouhaha, the evolution of US-Saudi relations hardly
ever changes radically from day to day – except,
perhaps, from 9/10 to 9/11, as Henley himself points
out. While Prince Abdullah served notice on Big Oil
in 1998, it took time – and opportunity
– for the oil majors to mount an effective counterattack.
Before 9/11, if Daniel Pipes, Stephen Schwartz and the
editors of National Review had ranted and raved
about the alleged "totalitarian" threat from
Wahabism, people would simply have looked at them funny.
Post 9/11, however, this nutty idea has some demagogic
resonance, and why shouldn't we expect those
who stand to benefit to make the most of it?
IT'S
ALL IN THE DETAILS
Henley
goes on to note that the hijackers were all Saudis and that
they pulled off the 9/11 attacks "at the behest of a
rich Saudi guy" – leaving out, as the anti-Saudi
crowd always does, that this "guy" is the head of
an organization which has – like
Jeff Jacoby – vowed to overthrow the Saudi monarchy.
WHERE
DO I APPLY?
In
disputing my analysis of how state capitalism in the US works,
Henley asks:
"Surely
the outsiders could buy their own pundits and government officials,
couldn't they? Why do only The Rockefellers do that?"
The
Rockefellers and their allies made their bundle – a very
big bundle – before the income tax and the wave of egalitarianism
in public life made the accumulation of such a fortune practically
impossible. They and a few others had a head start, so to
speak, and this has been a great advantage to them. The "outsiders,"
by definition, have less resources, and less influence. As
to whether they are buying their own pundits outright, or
at least keeping accounts of who's been naughty and who's
been nice, is not for me to say. I can say, however,
that this pundit is for sale to the right (not the
highest) bidder, and if Mr. Henley knows where I can send
my application for the job, I would be more than happy to
do so.
GLENN
REYNOLDS, INSUFFERABLE SNOB
Speaking
of buying people off, the bloggers, led by their Lider Maximo,
Andrew "The
Enforcer" Sullivan, have been all atwitter lately
about the Paul Krugman scandal: it appears Krugman took $50,000
from the now bankrupt Enron to serve on some "advisory
board" or other. Bill Kristol, apparently, took $100,000
(but, somehow, this is deemed less important). InstaPundit
is filled with this blither, the general idea being to divert
attention away from any possible connection between Enron
and the Bush administration. It's all very tiresome, and partisan,
the kind of "gotcha" journalism that easily descends
into bitchiness. Indeed, the bitchy tone of Sullivan's blogging
seems to have infected his fellow "war-bloggers,"
especially evident in the non-response to my column on the
blogger phenomenon and Tim
Cavanaugh's devastating mockery of blogger pretensions.
Here, for instance, is the
snot-nosed little Glenn Reynolds, sneeringly asking:
"WHY
DO THEY HATE US? I suspect that Tim Cavanaugh's lame assault
on bloggers, mentioned below, is just the first of a wave.
The interesting thing is, the top-rank journalists like Michael
Barone, Walter Shapiro, Howard Kurtz, Charles Oliver, James
Taranto, etc., etc., seem to like the blogger phenomenon.
(Not to mention the ones who are bloggers themselves, of course).
It's the folks several rungs down, like Cavanaugh or Justin
Raimondo, who seem to have the most trouble.
"But
then, that's really no surprise. Imagine yourself in the position
of a lower-tier writer: sucking up to editors, letting them
rip up your writing, trying to fit in with their politics,
grimly hanging on in the hopes that, some day, a bigshot will
quote your stuff in a major national publication and you'll
get the chance to move up.
"Now
the bloggers appear. They write what they think. No sucking
up to editors. No ass-kissing. No grim hanging-on – hell,
these people are actually, and obviously, having the time
of their lives. And to add injury to insult, they're being
noticed by the bigshots while you continue to toil in obscurity.
"
Oh
yes, Glenn, you're soooo right: why, I'm positively
sleepless at night thinking that I would really much
rather be a well-paid warmonger like Candy Andy Sullivan,
posing for Gap ads and swooning over President Karzai's new
wardrobe. And, oh gee, I think I'll have an orgasm if Sullivan
– or some other puffed-up self-important "big boy"
– deigns to mention me. Maybe I'll even "get the
chance to move up" – up to the pages of The New
Republic and National Review, where I can add my
voice to the "amen!" chorus as we barrel down the
road to World War III. Sheesh! Is this guy kidding?
Unfortunately, it appears not….
A
PREFERENCE FOR HELL
Reynolds'
argument boils down to "The elite looooves us,
and only you 'lower rung' types are making a stink" –
and we are supposed to be the ones who are into "sucking
up"! Perhaps Instapundit ought to change its background
color from white to brown. But really, Glenn old boy, your
description of the bloggers fits me to a tee: no sucking up
to editors. No ass-kissing. Very far from grimly "hanging
on," I'm having the time of my life. And if being a "top
rank journalist" means having to be the talent-less James
Taranto, whose excursions into wit consist entirely of putting
"Our Friends, the…" in front of the targets of his
latest smear, then no thanks, bud – I'll stick
with the "lower rungs," thank you. Indeed, I'd prefer
the lowest rung of Hell.
After
that embarrassing display of petulant snobbery, and whining
all the while that he didn't get "bupkus" for hits
from being linked in my piece – which had dozens
of links – Reynolds has the gall to ask Cavanaugh to
"lighten up." Try it yourself, Glenn: who knows,
perhaps then your unhealthy obsession with status will subside
and you'll lose your own delusions of grandeur.
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