Oil and war

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It’s pretty widely assumed that several recent wars (most obviously those in Iraq and Georgia) have been motivated, in part at least, by the desire to control oil and other valuable resources including natural gas and (one that is close to my heart) water. The other side of the same coin is the idea (again evident in both these cases) that countries with control over valuable resources can use that control to further their own geopolitical ends.

But examples where either of these strategic ideas has been applied with success are thin on the ground to say the least. While I don’t subscribe to simple ideas of “war for oil” in relation to Iraq, it’s pretty clear that one of the many motives for going to war was the desire to put Iraq’s oil under the control of a government friendly to the US (and preferably not so friendly to rivals like France and Russia). The war has been as spectactular a failure in this respect as in many others. With the best part of a trillion dollars already spent and trillions more to come, the US is worse off in the oil market than it has ever been.

On the other side, the oil embargo of 1973 signalled the change from a market dominated by a buyer cartel to one dominated by a seller cartel. But in geopolitical terms it was a disaster. The Israeli occupation arising from the 1967 war, then only six years old, is still almost intact 35 years later (the Egyptians got the Sinai back, but not because they had any oil).

More generally, I suspect that countries wanting oil can’t do better than to buy it at the going price, and that those wanting to maximise the benefits from owning oil would be best off selling it for the same price and using the money to promote their strategic goals (or, more sensibly, investing it in projects like education).

Of course, showing that it’s stupid to go to war over oil doesn’t prove that people won’t do it. Empirical observation gives us plenty of evidence of the fact that people are more than usually stupid when war is concerned. In the early 20th century, Norman Angell’s Great Illusion demolished the idea that modern nations could secure economic benefits by fighting over war and resources. He was proved right in the most appalling way possible: the Great War that began in 1914 led to the ruin of all the parties.

29 thoughts on “Oil and war

  1. JQ, you are again digressing and playing rhetorical tricks, as follows:-

    You are the one who made the original overstatement “the Great War that began in 1914 led to the ruin of all the parties”, which I refuted.

    – Therefore “The relevant comparator is to trend growth” is false, two ways: it’s not “the” but “a”; and, a relevant comparator is any comparator that tests your assertion.

    – “There’s nothing to show that the US was better off than if it had stayed out altogether rather than being a marginal participant” has indirect evidence against it. One, Machiavelli’s comments that the winners would always sideline neutrals at the peace conference, and two, empirical evidence in support of that, e.g. Austro-Hungarian neutrality and Savoy/Sardinia participation in the Crimean War weakened Austro-Hungary in Italy. If the USA had not been active, it would have been in a poor position to press for debt repayment; I expect the Allies would have made that a charge on Germany.

    – ‘But if you want to say “all the main partiesâ€?, I don’t have a problem with that’ isn’t your call, it’s your readers’ call. That is, you made the original inaccurate charge, and it’s not down to me or anyone else to provide an accurate one instead. As it happens, that is also inaccurate, because of what I reported about Britain. To be accurate you would have to firm it up even further, e.g. defining “main parties” as France, Russia, Germany, Austro-Hungary and Turkey – and Belgium. Only, that is not very well defined because Britain is arbitrarily excluded to make the data fit, while Belgium and Turkey are dragged in; neither of those chose that war but rather had it thrust upon them. (Serbia in a sense gained Yugoslavia.)

    In sum, your position has something to it but is overstated and it is impossible to draw out anything useful and informative because it only works with fudge factors. Now if only something general could be found to make the fudge less arbitrary…

  2. The security of trading patterns, hence access to resources is important. It is not just profits for individual companies, but the livelihoods of millions depend on it.

    Those entrusted with defending the trading patterns and the access to resources, do get it spectalurlarly wrong. Why? Could it be because everyone, the world over, has`a right to maintain their trading patterns and their access to resources – hence a global security system needs to be seriously considered?

  3. a global security system needs to be seriously considered?

    Yes – but over the Whitehouse’s (for one) dead body.

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