The Global Wars for Oil and the Capitalist Hostility to Iran

The assassination of the Iranian military official General Qasem Soleimani has raised the question of why people who have power in this country have problems with the government and people of the nation of Iran. In my opinion, this hostility largely stems from the fact that Iran, and many of the nations of that region contain most of the oil resources of the world.

We all need transportation in order to get to our jobs. Most of this transportation uses gasoline that is a byproduct of oil. So, every single corporation in the world is totally dependent on oil for their profits.

Corporations are locked into a system where they must be obsessed with the drive to maximize profits. When the people of Iran receive more in resources for their day to day lives, corporations receive less in their drive for super-profits. When we understand these basic facts, the history of Iran and the rest of the Middle East becomes clear.

However, even before the current hostilities against Iran, we can go back to the Second World war to see how capitalist powers have always been obsessed with dominating the oil resources in the world. We might think about the fact that WWII was a highly mechanized war that depended on tanks, aircraft, naval destroyers, and aircraft carriers. All this military hardware depended on a constant supply of oil.

During WWII Germany’s sources of oil came from Romania and their synthetic conversion of coal to oil. Before the Japanese bombing of Pearl Harbor, the United States government cut off the oil exports to Japan. At that time, Japan depended on 80% of its oil from the United States. Japan made up some of this oil shortage with its colony in Indonesia. However, both Japan and Germany had insufficient amounts of oil to conduct the war.

This was one of the reasons why Germany invaded the Soviet Union, where there were plentiful oil supplies. Ironically the Soviet government of Joseph Stalin had been supplying the German Nazis with oil before the German invasion. The German fascists also worked to consolidate friendly relations with Reza Shah, who was the ruler of Iran at that time.

Reza Shah wanted to play a neutral role in WWII. He opposed the targeting of Jews by the Nazis, and Iranian diplomats protected hundreds of Jews from persecution.

However, both Britain and the Stalinist Soviet government were opposed to the neutral stance of the Shah. The British depended on Iranian oil. The Soviet Union had been invaded by the fascists and formed and alliance with Britain and the United States. The United States needed to supply the Soviets with armaments via a rail line going through Iran.

For these reasons Britain and the Soviet Union invaded Iran and defeated Iranian resistance in two months. Mohammed Reza Pahlavi, the son of the former Shah, was placed in power and Iranian oil became a vital part of the allied war effort.

However, most of the oil used in the Second World War came from the region around the state of Texas. Initially the Germans sent submarines to the Caribbean Sea to destroy tankers filled with oil coming from Texas.

The United States government advanced a huge infrastructure project aimed at getting oil from this country into the Second World War. Scientific advancements, and a huge labor force, combined to produce the Big Inch and Big Little Inch Pipelines. These two pipelines connected Texas’ oil to New Jersey and Pennsylvania. These pipelines also made it easier for Texas oil to be delivered to Europe.

After Germany was defeated at the battle of Stalingrad, the Allied forces invaded at Normandy. From that point on, the United States moved to become the superpower of the world.

In the war against Japan, the United States manufactured over 100 aircraft carriers, while the Japanese only managed to produce eight. This large disparity in war production gave the United States a tremendous advantage in the naval war in the Pacific. The Japanese also had to contend with the national liberation movements in China, Korea, and Vietnam.

Looking at this history we see how oil production was one of the reasons why the United States became the super-power of the world.

A brief background to the history of the United States

The capitalists in the United States were the real victors of the Second World War. Their victory allowed the United States to replace Britain as the world’s super-power.

The British ruled the world by using their colonial system. That system included colonies in South Africa and Palestine.

The United States had a different approach to ruling the world. For most of Britain’s former colonies, the United States relied on indigenous governments that ruthlessly carried out the dictates of Washington and Wall Street. However, in South Africa and Israel the United States relied on colonial settler states that advanced a course similar to the history of the United States.

The thirteen colonies were a settler regime that confiscated huge areas of land from the native inhabitants. Capitalists in the U.S. were also tied to the system of chattel slavery that advanced a perspective that Black people were not entitled to citizenship rights. While the revolution that created the United States did away with British rule, the theft of native land, as well as chattel slavery continued.

However, chattel slavery also was a roadblock to the advancement of capitalism. This reality convinced northern capitalists to support the Union forces in the Civil War. That war ended chattel slavery.

However, after the Civil War the federal government abandoned the idea of giving Black people equal rights and supported the segregationists who made Jim Crow segregation the law. This meant that Black people lost citizenship rights in this country.

Then, in the 1960s the civil rights movement forced the government to outlaw Jim Crow. Discrimination in the United States became a covert rather than overt policy.

The creation of the apartheid states of Israel and South Africa

In 1948 both Israel and South Africa formed new governments that expropriated lands from the original inhabitants. Then, those governments adopted laws that legally discriminated against the indigenous inhabitants.

The history textbooks of the United States routinely argue that the land where the European colonists settled was a wilderness. A wilderness is a place where there is no life. However, millions of people representing about 500 nations lived on that land.

The Zionist movement that organized to create the state of Israel argued in 1895 that the Palestinian people would need to be removed from their homeland in order for the state of Israel to be established. This was in a written statement by one of the founders of Zionism, Theodore Herzl. Every Israeli prime minister has echoed that sentiment. This attitude meant that the Israeli government never took seriously the idea of equal rights for Palestinians.

The United States became an indispensable supporter of Israel. Every year the U.S. gives Israel billions of dollars in aid. In fact, the U.S. gives Israel more money than any other nation in the world. Yet Israel only has a population of only about seven million. So, we can ask the question: Why does the U.S. give all this money to Israel?

When we look at the map, we see that Israel is located in the region where most of the oil in the world is located. Today Israel is the dominant military power in that region. Included in the Israeli arsenal are atomic bombs capable of destroying vast areas of land along with its inhabitants.

So, when we look at the absolute need of oil to support the capitalist system, the reason for the enormous aid the United States gives to Israel becomes clear.

The United States capitalists continue to consolidate their dominance after WWII

The pro-capitalist media routinely portrays the allied victory in the Second World War as an immense victory for the human race. Clearly, the regime of Adolf Hitler and the Nazis was one of the most destructive in human history. However, after WWII the United States government inflicted numerous horror stories on the people of the world.

In order to consolidate its dominance of the Pacific region, the United States went to war against Korea and Vietnam. These wars cost the lives of millions of people who lived in those regions. In 1965 the United States supported a coup in Indonesia that cost the lives of hundreds of thousands of people in that country.

In the Middle East the United States government also worked consistently to advance its position as the super-power of the world. In 1953 the U.S Central Intelligence Agency worked to overthrow the Iranian government of Mohammad Mosaddegh. The government headed by Mosaddegh nationalized Iranian oil and worked to limit the powers of the Shah. 

In Iraq the United States government favored the 14 Ramadan Coup of 1963 to depose the government of Abd al Karim Qasim. The Qasim government nationalized Iraqi oil and was a popular government. The Ba’ath Party organized the coup and the regime of Saddam Hussein eventually took power.

These coups resulted in decades of ruthless repression of the people of Iran and Iraq. However, the oil and auto corporations in the United States gouged out super-profits during those same years.

Then, in the year of 1959 a revolution erupted in the nation of Cuba. The Cuban revolutionary government of Fidel Castro was different from the governments that had been overthrown in Iran and Iraq. The new Cuban revolutionary government worked to solidify its relations with the masses of Cuban people.

So, when the United States organized a military force to invade Cuba at the Bay of Pigs (Playa Girón), the Cuban people organized to defend their government. The results of this history are clear for everyone to see.

Iran and Iraq are minerally rich nations that have vast deposits of oil. Cuba is a relatively poor country in mineral deposits, and relies on income from tourism, sugar, and nickel.

As a result of the coups in Iran and Iraq those countries went through decades of ruthless repression. In spite of the fact that the land in Cuba is relatively poor, today Cuba has three times more doctors per capita as the United States. Today thousands of children die every year in the United States because this country doesn’t have the professionalism of Cuban health care. While pregnant Cuban women and children receive regular medical check-ups, this is not the case in the United States for the majority of the population.   

Conclusion

When we look at this history, I believe a clear picture emerges. The 1979 revolution in Iran was a clear denunciation of a U.S. supported regime in that country. Clearly the current Iranian government doesn’t have the revolutionary character of the Cuban government. However, the imperialist character of the United States government demands that Iran have a government that is totally compliant with its goals. I believe that the history I’ve pointed to underscores this point.

The current reality of Iraq is clear to anyone who looks clearly at that nation today. As horrendous as the regime of Saddam Hussein was, the current reality is even worse. The U.S. imposed economic embargo and war created these conditions.

In the United States while corporations have been gouging out super-profits, the overall standard of living has been in decline for about 50 years. For me, this reality means that workers and farmers in this country have the same interests as workers and farmers in Iraq, Iran, and Cuba. These interests stem from the fact that human needs are more important than profits.

When we look at this history of the world since the Second World War, I believe a clear picture emerges. One of the priorities of U.S. imperialist foreign policy has been to control the world’s supply of oil. We see this in the U.S. policy with respect to Iraq, Iran, Israel-Palestine, and now Venezuela.

The workers and farmers in these countries have the same interests as workers and farmers in this country. For these reasons, as a worker, I oppose the hostilities the U.S. government has advanced towards Iraq, Iran, Palestine, and Venezuela.    

Cuba has shown the world how to defend the interests of workers against international capitalist drive for profits. I believe that today more and more people in the world are learning that lesson.

What’s wrong with the economy?

I believe that most working people ask ourselves questions about the economy throughout our lives. Why do the affluent have so much money, when there are hungry people all over the world? The government argues that the military works to provide for our security. If that is the true, why doesn’t the government make it a priority to feed the hungry? Why is so much money spent on banks, insurance companies, advertising agencies, and corporate law firms, when these enterprises add no value to the commodities we all need and want? Well, allow me to make an attempt at answering these questions.

First, I can say that these problems do not happen because people with power made mistakes, or that they are insensitive, or because of human nature, or because they are just plain stupid. No, my opinion is that these problems stem from the fact that we live under a system known as capitalism.

When we look at capitalism from an historical perspective, there are legitimate reasons why it came into existence. First, there were tribal societies that lived in a communal and truly democratic way of life. Then, the oligarchs of the slave societies of Greece and Rome began to understand that they could live more comfortable lives through military conquest. The feudal societies replaced slavery, and the craft guilds began to advance technology. Capitalism replaced those societies and began to create mass-production industries that operated for profit.

However, just as the societies of the past had been replaced, today capitalism has outlived its usefulness and needs to be replaced. So, in a nation that claims to be democratic, where they say there is “liberty and justice for all” what is the problem?

We can start with the writings of Adam Smith and David Ricardo. These were two economists who first outlined the fundamental laws of the capitalist system. Both Smith and Ricardo understood that there was a fundamental problem with capitalism that could not be resolved using capitalist methods. This is the problem of overproduction.

In their pamphlet titled, The Communist Manifesto, Karl Marx and Frederick Engels labelled this problem a “disease.” They went on to say that overproduction had never occurred before in history. In other periods of history, when there was a surplus of goods that people needed, those were seen as good times and people celebrated. But with capitalism, when there are more commodities than people will buy, corporations throw people out of their jobs and workers go through difficult times. These times are called recessions or depressions.

Why is overproduction a problem in the capitalist system?

So, the question arises: Why would overproduction create recessions and depressions? This appears to be illogical. Allow me to make a hypothetical case using the table below with the performance of a hypothetical corporation over a period of three years.

	First Year	Second Year	Third Year
Sales	$10	$100	$1,000
Profits	$2	$10	$50
Percent Profit	20%	10%	5%

 

So, we see in this chart that the hypothetical corporation has increased sales and profits in three consecutive years. This appears to be a positive trend from the corporate point of view. However, the bad news comes with the percent of profit on investment. While sales and profits are increasing, the percent of profits on investments are going down. Why do I think that this is the reality that corporations face today?

Back in the 1970s interest rates on savings accounts were about four or five percent. Today those same interest rates are less than one percent. For the average worker, this might not be very significant because we rely on our paychecks for an income. Interest on savings was never a big part of our income.

However, the deteriorating savings account interest rates reflects a decline in the rate of return on investments. This is the tendency reflected in the above chart. So how does this decline in the rate of profit effect the overall economy, and how do corporations deal with this decline in the rate of profit?

The answer to this question lies in the routine day to day corporate practices. Workers see this reality in the corporate drive to cut costs, sell more commodities, raise prices, and go into astronomical corporate debt. These are the methods that are necessary to maintain profitability, while the overall rate of profit is declining.    

So, when workers improved the standard of living in this country with the labor, civil rights, and women’s movements, corporations responded by investing huge amounts of money in factories around the world. In those nations the prevailing wages are between $1 and $10 per day.

Some people see this tremendous export of capital as a matter of thoughtless greed by capitalists. However, when we understand the nature of capitalism, this export of huge amounts of capital was absolutely necessary for capitalism to survive. So, while President Trump and all pro-capitalist politicians have a strategy of “America First,” the reality is that capitalist enterprises are routinely driven to invest in other nations.

How does the government support the corporate drive to maximize profits?

This brings up another point. In order for corporations to function as they do, it is absolutely imperative that the government make the drive to maximize profits their primary concern. So, while there have been cutbacks and enormous price increases for education and health care, the government has dumped trillions of dollars in a scheme known as quantitative easing. This meant that when banks were unable to collect on vast amounts of money from mortgages, the government spent trillions of dollars to purchase those worthless pieces of paper.

The government also subsidized the oil and auto industries by spending trillions of dollars on roads, highways, bridges, and tunnels. Why do I say this? Automobiles have no value if there are no roads to drive on.

This brings us to another question. Why are there wars in the world? The First and Second World Wars were about what nation would become the super-power and dominate the world. Britain used to have that role, but their empire went into inevitable crisis. Germany, Japan, and the United States went to war to determine what nation would be the new super-power. The United States won those wars at a cost of about eighty million deaths.

After WWII the United States government went to war against Korea, Vietnam, Iraq, and Afghanistan. We might think about the fact that none of these wars were declared. The government didn’t feel confident enough to get Congress to declare war because of the unpopularity of all those wars. When we understand the nature of capitalism, it becomes clear that all these wars were about consolidating the United States position as the world’s super-power.

As I mentioned, corporations are driven to cut costs and they have made enormous investments in nations where the prevailing wages are between $1 and $10 per day. Those nations usually need ruthless and repressive governments to enforce those conditions.

The government of Saddam Hussein in Iraq was this kind of ruthless and repressive government. However, Hussein decided that he would advance an independent course from Wall Street and invaded the nation of Kuwait. The punishment for this act of disobedience was a United States invasion that destroyed much of that nation. The U.S. government then installed a puppet government in Iraq.

The nation of Cuba doesn’t have many financial resources. However, the government there makes the needs of the people its top priority. So, the people of Cuba who once lived in dire poverty, now have lifetime rights to education and health care. This relatively modest change provoked Washington to implement a trade embargo against Cuba for sixty years.

How will a worker’s government change this reality?

The Cuban example begins to expose the basic myths of capitalism. While the Cuban people have lifetime rights to education and health care, workers in the United States pay exorbitant prices for both education and health care. Yet the government in this country claims that we live in a democracy.

We can begin to answer this riddle with the equation Karl Marx used to explain how the prices of commodities are determined. This was his formula:

Constant Capital (machinery and buildings used to manufacture commodities), plus variable capital (wages paid to workers), plus surplus capital (profits and other expenses not directly related to production), equals Capital (the average price of commodities.)

When we look at this equation, we see that constant capital and variable capital will always be needed. Machinery and workers must be maintained in order for everyone to have the things we need and many of the things we want.

However, when we think about what surplus capital is, we see many enterprises that in no way directly contribute to the manufacture of commodities. Saying this, we can say that both health care and education are necessary to humanity. Yet these services only contribute indirectly to the manufacture of commodities.       

However, there are the enterprises of banking, insurance, advertising, corporate law, and corporate management. These enterprises do not contribute directly to production, and are primarily concerned with generating profits for corporations.

We see examples of surplus capital in the skylines of cities throughout the world. These skylines are filled with office buildings that usually house the enterprises representing what Marx called surplus capital.

We all need many things. These include: food, clothing, housing, transportation, communication, health care, education, and exposure to culture that includes: music, dance, art, theater, film, literature, etc… While many goods and services are designed by engineers in office buildings, most of the enterprises housed in these buildings are completely unrelated to the manufacture of goods and services.

As I said, corporations need to accumulate vast quantities of debt. In the past Michael Milken and Bernie Madoff were sentenced to terms in prison for violating the laws regulating the sale of bonds.

Finance companies found a way to deal with this problem by inventing a fund called derivatives. These derivatives are complex bets on investments that are difficult or impossible to understand. Therefore, they are not regulated by the government.

The so-called economists who invented derivatives actually received a Nobel Prize for their efforts. Today derivatives are valued at hundreds of trillions of dollars. I believe Karl Marx would have called these investments surplus value or fictitious capital. So, while investors went to prison in the past for violating the laws regulating bonds, today investors reap obscene amounts of money on investments that are not regulated, but are highly volatile.        

So, while banking, insurance, and advertising contribute nothing to the manufacture of commodities, we need to pay for all those services with literally every commodity we purchase. This is one of the reasons why prices are so high.

Today, many of the commodities we use, like food, clothing, and cell phones are produced in other nations. The wages in these nations are between $1 and $10 per day. The workers who toil under those conditions are the ones who create much of the wealth in the world. Why do I say this?

Karl Marx wrote a three-volume analysis of capitalism titled Capital. The first sentence of this work stated: “The wealth of those societies in which the capitalist mode of production prevails, presents itself as ‘an immense accumulation of commodities.” In other words, Marx defined wealth, not as money, but in terms of the commodities we all need and want. Looking at the world from this perspective, we can say that there are enormous amounts of wealth that could be used to eliminate poverty and greatly improve the standard of living in the world.

Instead of investing in banks, or insurance companies, or advertising agencies, those massive investments could be made to eliminate poverty, end racial and sexual discrimination, remove the root cause of war in the world, and make sure that all enterprises work in harmony with the environment.

What would a socialist world look like?

Understanding these facts, we can question any politician or corporate representative who claims we don’t have the resources to make dramatic improvements in the standard of living. When we look at the skyscrapers in all the major cities, we are looking at monuments of the exploitation of workers around the world. How would this change if human needs were the primary concern of the government?

Working people would eventually be able to work considerably less and retire at a much earlier age. This would mean that we could all have time to pursue whatever interest we might have.

Black people, Native Americans, Latinos, and all oppressed nationalities would begin to have real control of their communities. The routine harassment, brutality, and prisons we see today would be an ugly memory. Students would learn the truth about the history of slavery, Native American genocide, the theft of land from Mexican people, all so a tiny minority could live in opulence.

Women would have access to top quality day care and would have time to truly enjoy life. They wouldn’t be judged merely by their appearance, but by their character. In that environment women wouldn’t feel the need to invest in billions of dollars in cosmetics, jewelry, mascara, and extravagant clothing. They would be appreciated for who they are.

People who are now called immigrants would no longer need to come to this country to earn a living. They could remain in their homeland and live fruitful lives. People from around the world would travel, not for money, but to gain an appreciation of our sisters and brothers all over the planet.

When we see what could be possible and then think about our current reality and where it is heading, I believe there is a clear choice. The struggle to make this a world where human needs are more important than profits is the struggle of our lifetimes.