The rhetoric of oil and the dilemma of war and American hegemony.

DESPITE THE SIGNIFICANCE OF MANY UNPRECEDENTED and lasting historical transformations, the Twentieth Century may well be remembered for two epoch-making milestones that are now seemingly close to their final stages. They are the rise and fall of Soviet "communism" and the rise and fall of American global hegemony.

As we have seen, the fall of the Soviet Union, unthinkable just a few years ago, is now an established fact. But the fall of U.S. hegemony and the forces that have led to it, especially since the recent Kuwait-Iraq crisis and the "victory" of U.S. military forces in the Persian Gulf, have yet to be recognized equally by both the specialist and the lay observer, particularly in the United States. The standard argument within the political discourse runs as follows: As the Soviet Union lost its superpower position, the United States gained unrivaled dominance over the entire globe. Hence, the world has entered into a unipolar, second American century. This assessment is shared by many on both the left and the right of the political spectrum, particularly in the United States.

For instance, it is now common to singularly capitalize on the aftereffects of the vanished Soviet deterrence in order to explain the severity of America's asymmetric hostility against the tiny nation of Iraq, an all out act of aggression that could not have been imagined a few years ago. This line of reasoning seems to rely exclusively on the fall of the Soviet Union, without looking into the internal demise of the postwar international system of nation-states under the Pax Americana. In other words, this view refuses to acknowledge the sweeping changes that have forcefully led to the transnationalization of the world economy and to the undermining of postwar political institutions. Moreover, it neglects to consider that the rise of Japan and the emergence of the European Community are the result of certain fundamental changes that have themselves been caused, to paraphrase John Maynard Keynes, by "little else." The fall of the Soviet Union may be a necessary but not a sufficient cause for the recent U.S. behavior.

If one looks upon the Soviet Union and its former client-states, in addition to Western capitalism, in terms of a particular form of state capitalism, one can systematically account for the entire spectrum of global crises that have befallen the existing international system of nation-states. This view of reality, of course, necessitates the acceptance of a framework that would not necessarily identify the existence of markets with capitalism and the presence of (state) planning with communism on a worldwide basis. My purpose is not to engage in a debate on what is socialism and what is not. The argument that is put forth here pertains to the New World Order and the resultant U.S. hegemonic decline, and as such it should stand on its own. The decline of the present international system also points to the disintegration of its very constituent part: the sub-system of client-state order. This, in part, is due to the development of a world economy that has already superseded the boundaries of nation-states and, in part, is due to the inviability of national frameworks as reliable building blocks in the emerging world order. The immediate result of all this, for the Western half of the equation, is the decline of U.S. global hegemony.

Consequently, both the Soviet disintegration and U.S. hegemonic decline must present themselves as the necessary and sufficient conditions for an adequate understanding of present global upheavals, particularly recent U.S. action in the Persian Gulf. The size of the expedition, the flimsiness of the target, the manner of response, the dubious political objectives, and the lack of concern about the enduring and harmful political consequences against the United States itself are all telling of circumscribed hegemony. After all, this colossal military power was unleashed against a junior partner which was an active participant in U.S. (Persian Gulf) policy for a good number of years. While these days it is fairly easy to be dazzled by the shining armor of U.S. military capability, I wish to argue that obtaining such a military "victory" is a very expensive proposition that has been largely motivated by the United States' dim view of its future role in the New World Order. It is expensive not so much for its direct costs, but for the future repercussions that will be brought to bear on the region as a whole. Beneath this magnificent and unwavering show of force, therefore, is an intensified and accumulating political weakness of clumsily clinging to the status quo.

In what follows, I shall maintain that, given the fall of the Soviet Union as a momentary impetus conducive to the U.S. war option, the principal cause of such a reckless and unjustified act can be found in much deeper levels of incongruity. Neither the rhetoric of oil, nor the purported desire for democracy, can provide adequate answers to the puzzle of recent American misbehavior in the Persian Gulf. In my view, the answer has to do with the dynamics of the emerging New World Order and the concurrent decline of U.S. global hegemony. This commotion, therefore, constitutes a peculiar sign of resistance on the part of the United States against its evident hegemonic decline. Pax Americana is forced to pass the torch, reluctantly, but America is bound to remain as one of the great powers in the multi-polar world-in-the-making.

THE ASCENDANCY OF PAX AMERICANA

To understand the essential feature of the present global transformation, and to conceive of the peculiarities of current U.S. involvement in the Persian Gulf region, one cannot escape from the historical context of the inter-war changes (1919--1939), that have supported the ascendancy of the American global position so successfully, and that endowed it with an enduring hegemonic structure, scarcely in need of outright colonial conquest.(1)

What can be learned from this history, among other things, is that the essential mission of the emerging American system, known as the Pax Americana, was to establish an all-encompassing hegemony over the global economy, global polity and the socio-ideological fabric of the world community. This hegemony, of course, has been only indirectly predicated upon the rule of force through overt and/or covert military operations of varying magnitude. Here, the option of gunboat diplomacy was a unique exercise that, in responding to the Soviet challenge (or independent nationalist forces), covertly remained in the background during the ascending decades (1945-1975?) of Pax Americana.

Put in proper context, the origin and nature of the postwar U.S. stance cannot be adequately understood through U.S. military activities alone. For instance, America's military victory over Germany and Japan during World War II and its continued military superiority could not save the United States from its continuous hegemonic descent since the mid-1970s. To be sure, what has given the United States the status of a global hegemon, since 1945, was precisely the strength of its unrivaled economy combined with the dominance of its rising political power and omnipresent international institutions.

Contrary to the neo-conservative vision of "the end of history" and despite the hybrid liberal/radical views that subscribe to the thesis of "unipolar global order," I contend that in the face of today's transnational trend, the United States will continue its global decline.(2) In other words, the U.S.'s hegemonic decline is symptomatic of major global changes of historic proportion that have radically undermined the character of the postwar international system.

Although the international system of nation-states has a history dating back to the Industrial Revolution, the global system under Pax Americana has tended to absorb and internalize the colonial world systematically. U.S. policy makers have tried to reshape the world based on their own image, but they wished to do it by maintaining the status quo. The earliest U.S. military interventions were always supplementary to political and economic objectives, and conincided with America's global ascent. These interventions were conducted out of U.S. strength. In the past, the U.S. had sufficient hegemony to maintain the world. Now, it is striving to maintain that hegemony. Hence, we now see the type of military intervention that neither serves American interests nor substitutes for political weaknesses. Thus, at this historic juncture attempting hegemonic reassertion through aggression proves contradictory and self-limiting, thereby bringing into the open the most critical aspects of U.S. participation in the present global disorder. The present world order is descending, so are its global security arrangements. Thus, the latest search for security by the vanishing order through its ideologues in the academic community, media, etc. is not unlike the demand to put the fox in charge of the chicken coup again. As the saying goes, history tends to recur twice: the first time as tragedy, the second time as farce. The "American Century" is in trouble.

COLD WAR: AN AMERICAN DOCTRINE

From the standpoint of economic hegemony, the New World Order of post-1945 bestowed upon the U.S. dollar the status of universal currency. Institutionally, the powerful U.S.-dominated global entities, such as the International Monetary Fund (IMF) and the World Bank, came to direct and influence the modus operandi of global development, and paved the way for U.S. domination and hegemonic ascent throughout the world. Hence, for instance, the advent of a newly-devised international monetary arrangement in 1944, known as the Bretton Woods System (1945-1971).(3) This arrangement--coupled with the Marshall Plan for the post-war reconstruction of Europe, and the Agency for International Development (AID) for the Third World--exponentially increased U.S. power during the formative years of Pax Americana.

Indeed, the restructuring of the entire globe was preconditioned upon the global absorption of the nearly two-thirds of the Earth's population, consisting of formerly colonial and semi-colonial regions known metaphorically as the Third World. Eventually, the height of U.S. hegemony over the global economy was fulfilled through the careful imposition of an elaborate and nearly uniform system of land reform programs in many Third World client-states within the U.S. orbit. In Iran, for instance, traditional agriculture, in part, has been replaced by semi-mechanized production aimed at the exportation of cash crops. With traditional agriculture gone, its modern replacement could not compete with the cheap importation of food from the international market. This forced the country to become systematically dependent on the importation of food for its very existence. This is, ipso facto, one important facet of most Western models of development that, on a grand design, were forced upon many Third World countries during the 1950s, 1960s and 1970s.

What is unique is that, universally, all these economic reforms were scarcely accompanied by radical political reforms, aimed at genuine democratization. Instead, these programs were allowed to be carried out from above, often by the same decadent authoritarian regimes who, as darlings of Washington, have crushed all democratic tendencies at inception and who have held fast to the most backward aspects of postwar neocolonial legacies.(4) Therefore, rhetoric aside, in the minds of many it is doubtful that Washington has ever been interested in the democratization of the Third World, including that of the Middle East or the "Muslim World."(5)

From the standpoint of political hegemony, the United States tried to preserve the global status quo in terms of a broad dual objective: (1) putting the Russians on the defensive through an elaborate policy of containment, and (2) preempting Third World nationalism (including the democratic and independent alternatives) by way of planned subversion, often clandestinely and under the convenient rubric of anti-communism.(6)

The annunciation of the above twin goals was officially celebrated by the Truman Doctrine (upheld by all U.S. presidents, from Harry Truman through George Bush), that established the Cold War as the postwar global agenda. The consequence of this decision was to justify, at any cost, the spread of America's political and ideological hegemony around the world. In other words, the United States tried to reshape the world according to an image of American global order. For instance, the NATO alliance and many other smaller regional alliances, such as CENTO, SEATO, ANZUS, OAS, etc. came to symbolize the extent of America's global reach, readily dedicated to the institutional fire power of U.S. domination throughout the world. Under the camouflage of "national interest," the U.S. government engaged in covert and overt interventions of monumental magnitude, which demolished the sovereignty of smaller nations with impunity and without regard for democracy, freedom or independence.(7)

U.S. policy-makers deliberately partitioned the post-war international system into two separate political entities, each with very different rules of conduct. On the one side were the de facto orbit of client-states, and on the other were the independent nation-states, each with divergent concepts of national sovereignty. For the client-states, U.S. imperial interest has taken precedent over individual countries' national sovereignty, which has always been justified on the grounds of "national security." Such an Orwellian justification, however, has long been a given part of the U.S. public discourse, which has been regularly ritualized by the elite, intellectual and academic communities, and by their counterparts in the national media. Despite the rhetoric, the Clinton administration appears so far to be limping along the same familiar road. U.S. policy on Cuba and North Korea is a prime example. But the crisis of hegemony is not something that can be overcome with a handful of press conferences or talk shows. The entire socio-economic structure is at stake here.

Finally, these external containments have found their domestic counterparts in terms of massive social, political, and democratic control within U.S. society. The chickens of hegemonic order had to come home to roost and they came with vengeance. But the price has been too high and the inflicted wounds too deep. McCarthyism is only one example of such aftereffects that are still haunting the remains of American democracy. America itself has become a prime casualty that has yet to recover from its prolonged timidity, its chronic insecurity, and above all, the injuries sustained to its collective consciousness.(8)

As we have seen, the doctrine of Cold War containment provides, in good measure, a solid basis for the calibration and appraisal of American global hegemony. This doctrine consists of a composite triad of containment strategy that has woven the fate of the Soviet bloc, Third World nationalism and American democracy together. Here, both Americans and non-Americans have paid heavily for the preservation of U.S. global hegemony. For obvious reasons, the latter paid much more. What is ironic, however, is that the U.S. government likes to blame the Third World peoples for their lack of democracy, without accepting its own share of culpability for harboring and supporting dictatorial regimes in the first place. For instance, the people in Iran soon discovered that their Shah was an American Shah. The examples are plenty; but to name a few one may refer to the overthrow of Mossadegh (Iran, 1953), Arbenz (Guatemala, 1954), Lumumba (The Congo [now Zaire], 1960), Goulart (Brazil, 1964), Estenssoro (Bolivia, 1964), Bosch (Dominican Republic, 1965), Sukarno (Indonesia, 1965), and Allende (Chile, 1973); all to be replaced by hand-picked, U.S.-supported tyrannical regimes. Blum's The CIA: A Forgotten History provides an articulate summary of each U.S. intervention. This irony also has a counterpart within the heart of America, where the government of "national security" has long inhibited civil society and the ideals of civil liberty.

THE OIL WEALTH THAT FUELED THE WORLD

Before dealing with the historical transformation of the oil industry and the resultant internationalization of oil pricing, it is imperative to understand the connection between oil and the recent American intervention in the Middle East. It is hard to remain indifferent to the tempting argument of the oil scenario as the cause of American intervention. After all, many on the right and many on the left maintain that, given the insufficiency of Soviet deterrence, the real reason behind the deployment of U.S. forces against Iraq was oil--and nothing but oil.

In establishing the cause and effect relationship in this matter, I essentially differ with the above assessment. As I shall argue throughout this essay, the oil scenario is a popular myth that ignores (1) that the global economy will no longer obey the rules of conduct put up by the old system of nation-states, (2) that the international oil industry will no longer follow the pattern of national price determination, (3) that the post-World War II system (of nation-states) under the Pax Americana is no more, (4) that, as a consequence of (3), American global hegemony is no longer viable, (5) that with the fall of the Soviet Union, the Cold War bipolarity is no longer the case, (6) that the world has entered into an epoch in which national boundaries, geographical priorities, physical access and the force of administrative fiat can no longer play a lasting role in the presence of the transnationalization process, and (7) that, consequently, no matter who owns the oil in the Middle East it must be sold.

These points altogether invalidate the necessity of physical access to the so-called cheap Middle Eastern oil by the United States. Moreover, the above ramifications suggest that the recent American intervention in the Persian Gulf cannot be attributed to U.S. hegemonic ascension. For America's hegemonic rise, apart from the act of military intervention, remains an empty phrase in the face of the present global upheaval.

Thus, one has to search for a sensible link between a U.S. desire for military intervention in the strategic parts of the world and the declining U.S. global hegemony. Here, one must carefully avoid the pitfall of circularity by refusing to equate winning the war with rising hegemony. Consistent with the above reasoning, U.S. intervention only becomes explicable in terms of America's decline. The lack of a countervailing Soviet deterrence in this matter must be considered as a catalyst that triggered and thereby revealed the de facto inviability of the U.S. war option in reasserting America's global hegemony. For instance, America's failure to remove Saddam Hussein from power is a telling story by itself. Hence, one has to avoid the tautology of the oil scenario as a cause of U.S. intervention.

In the next three sub-sections, I shall turn to the stage-by-stage development of the global oil industry, starting from its formative years through its transnationalization and ultimately its post-cartelization since 1974. My purpose is to demonstrate that the globalization of the oil sector has gone hand-in-hand with the transnationalization of the world economy; and consistent with it, U.S. hegemonic decline. I suggest that even if all the Saudi oil fields are captured by the United States, the trend of U.S. hegemonic decline cannot be reversed, unless, of course, the entire world is prepared to abolish the network of capitalist oil markets everywhere.

CARTELIZATION IN ITS FORMATIVE YEARS

The entire history of Middle Eastern oil, including its development into a modern industry, can be divided into three distinct but interrelated stages: (1) the era of international cartelization, 1901-1950, (2) the era of transition, 1950-1972, and (3) the era of transnationalization and unified global pricing (since the 1973-1974 oil crisis).(9)

The first major oil discovery in the Middle East was made in southern Persia in 1908. This was followed by monumental oil discoveries in Iraq (1927), Bahrain (1932), Saudi Arabia (1938), Kuwait (1938), and Qatar (1939), all in the Persian Gulf region.(10) A slightly different historical periodization can be provided for the U.S. domestic oil industry: (1) the era of early oil trusts and classical cartelization of 1870-1910, (2) the era of regulated neo-cartelization of 1911-1972, and (3) the era of transnationalization and unified global pricing since the 1973-1974 oil crisis. The first stage in the development of U.S. domestic oil was simultaneous with the rise of horizontal and vertical integration in the industry that, among others, alarmed the public to the point of invoking the passage of the antitrust law of 1911 against the consolidating empire of John D. Rockefeller.

A close examination of the entire 1870-1970 period reveals that the triumph of adminstrative pricing and cartelized practices were more or less predominant in the oil business.(11) These practices, however, began to lose their effectiveness in the 1950s and 1960s, as oil pricing had to gradually follow the rules of the global marketplace, beyond regional or national boundaries. The early period of the international cartelization of Middle Eastern oil (1901-1950) contains compelling evidence of the potency of the political hegemony of a handful of transnational oil companies (TNOCs) over the entire region. In the next two sections, I shall attempt to explain how the oil sector has been transnationalized, and why, under such a system, physical control or the ownership of the oil fields is no longer effective against the prevailing forces within the global oil market.

MIDDLE EASTERN OIL: SHIFTING THE CENTER OF GRAVITY

The second stage in the development of the Middle Eastern oil industry constitutes the transition to transnationalization and market orientation in the pricing of oil (1950-1972). This stage saw the coexistence of vanishing cartelized arrangements and the emerging institutional norms of the capitalist market. The identifying features of this period include: (1) the dominance of long-term oil contracts, (2) recognition of the Persian Gulf as a second "basing-point" oil pricing system (next to the [U.S.] Gulf of Mexico), following the mammoth oil discoveries in the Middle East, (3) the utilization of "posted prices" for calculating the oil exporting governments' share of oil royalties and oil rents, and (4) collective representation of the major oil-exporting rentier states within OPEC. During this stage, U.S. domestic oil was controlled in order to stablize the "basing-point" price of oil at the Gulf of Mexico. This basing-point had been in use as the point of reference for the pricing of oil anywhere in the world within the network of TNOCs.(12)

In this period, the International Petroleum Cartel (supported firmly by the American and British governments) started to post similar prices for oil from both the Persian Gulf and the Gulf of Mexico. Because of advantage in the cost of the former, despite the heavy transportation cost associated with it, cheap Middle Eastern oil quickly penetrated Western markets. In this manner Middle East oil has gradually displaced U.S. oil even in markets close to the Western Hemisphere. This prompted oil companies to cut the Persian Gulf posted prices without fear of loss, thereby indirectly admitting the manifold profitability of their Middle Eastern operations.

Paradoxically, however, as the companies cut the price of oil from their Persian Gulf operations, this furthered the displacement of Western Hemisphere oil by its counterpart from the Persian Gulf. This flexibility in price setting, in turn, introduced an adaptable system of oil rents and royalties that allowed for adequate responsiveness to market conditions. Since the oil crisis of 1973-1974, however, the global pricing of oil has followed the patterns set by the spot markets, rather than the discretion of oil companies or the choice of rentcollecting oil-producing states (of OPEC).(13)

Finally, this transitional period saw the formation of OPEC, which came to represent certain rent-collecting oil exporters collectively. As a result, the struggle over setting the posted prices (basic formulae for determining OPEC oil revenues) became the focal point of contention between the international oil companies and the oil exporting governments.(14)

GLOBAL OIL ORDER: THE POST-CARTELIZATION ERA

Toward the end of the 1960s there emerged two major developments that undermined the cartelized character of oil production and that helped to unify the pricing of oil inter-regionally. First, there appeared a sweeping change in OPEC's relationship with the TNOCs, having simultaneously to do with the established center of gravity in the Persian Gulf and the further integration of the oil-exporting countries into the world economy. Second, there occurred a considerable increase in the cost of U.S. oil exploration and production (already among the oldest and most heavily explored in the world). This, in part, was due to the highly fragmented oil leases in the area of new exploration and, in part, due to exorbitant capital investments within the same aged oil fields.(15)

Today, contrary to the previous historical stages, oil pricing rests on worldwide competition among the various oil regions. Having the advantage of garnering additional revenue, the low cost oil regions appropriate higher profit rates than the industry's average. This excess profit is called oil rent that originates directly from the differential profitability of competing oil regions. This universal rule applies equally to both OPEC and non-OPEC regions and countries since 1974. This explains why OPEC posted prices can no longer remain insulated from the determining (and at times undermining) impact of spot prices in the global oil market.

The development of global spot (and futures) markets in oil is indeed the unique consequence of: (1) the globalization of the oil industry that, in turn, rests on a global economy that transcends regional and national boundaries; (2) the critical importance of U.S. oil costs in setting the world price; (3) the unification of global oil under one pricing mechanism; (4) the replacement of cartelized arrangements by the inherently unsettled and competitive global market forces; and by implication (5) the development of OPEC as a rent-collecting agency with no immunity from the grip of (oil) market fundamentals.(16)

The onset of post-cartelization had its origin in the oil crisis of the early 1970s that brought into direct competition OPEC and non-OPEC oil, and thus restructured the entire oil industry globally. OPEC as a whole has been frequently trying to increase its revenues, but its success in doing so lies elsewhere in the industry. Given market conditions, prices in the long run tend to accord with competition among the existing oil regions and conform to the magnitude of the costliest oil-producing region of the world, historically U.S. oil. If the highest cost regions manage to stay in business, the lower cost regions can receive an oil rent, in addition to their normal profit, according to their differential oil productivity. The highest cost regions receive normal profit. The price, of course, remains the same everywhere. Thus, contrary to the popular belief, it is not OPEC, but U.S. oil that is so critical in setting the price of oil worldwide.(17)

THE MIRROR IMAGES: HEGEMONY AND THE CLIENT-STATE SYSTEM

It is now widely recognized that Saddam Hussein of Iraq is a client who fell out of favor of the U.S. government.(18) Some even say that his cardinal sin has been that he was not a consistent client, one who did not always follow the "party line" according to Washington. But he is presumably no better or no worse than other dictators of other client-states, who are still supported by the United States throughout the region and the Third World. The question is, Why such sudden displeasure with the Iraqi dictator? It is now common knowledge that the U.S. government knew all along who Mr. Hussein was and, so far as the question of crimes against humanity are concerned, how he engaged in subjecting his own and other people to the weapons of mass destruction obtained from the West.

But the U.S.'s principal grievance against Saddam Hussein is that he violated the sacred rules of the household, notwithstanding the prevailing war cry by the United States that he posed a threat to "freedom" in Kuwait. The evidence is now crystal clear on the status of Kuwait: The Emir of Kuwait is back, the Kuwaitis who courageously stood up an fought against the occupation are now displaced, and the U.S. government is no longer interested in freedom and democracy in Kuwait.(19) The latter point is understandable in light of the evidence that the U.S. government has always preferred "stability" to democracy (in the Third World), having been concerned about the legitimacy of Pax Americana.

As the record shows, Mr. Hussein's story is just the tip of the iceberg, the rule rather than the exception so far as U.S. foreign policy in the region is concerned. Similarly, there are other client regimes in the region, with worse records of human rights than Hussein, who still enjoy the unconditional support of the United States. So, the realm of lip service has no boundaries. Meanwhile, the old client-state sub-system is crumbling. It is interesting to note that presently, in the absence of the crushed secular and democratic forces in many of these countries, there is a formidable challenge from the Islamic opposition which understands perfectly well how to press upon the weakest links. The once enduring vestiges of Pax Americana in the region and in many parts of the world are now beginning to unravel. In sum, most of these ideological outposts and the darker symbols of "the American way of life" are now being challenged from within.

Another important factor is the role of Israel in the Middle East. Israel is no stranger to post-war American hegemony and its triad of containments. First, Israel played a decisive role in assisting the United States in containing the Soviet Union. In fact, the containment of the Soviet bloc made Israel an organic part of the United States. Second, Israel has been given carte blanche to pursue its own regional interests, perhaps even with impunity and without limit. For instance, containment of the Middle East, especially having a firm grip on Arab nationalism, has long been synonymous with the existence of Israel. This role, of course, has been internally reinforced by the U.S. clientstates in the Arab World themselves. Finally, Israel has been given the privilege of playing in U.S. domestic politics, as the history of the Israeli lobby in the United States would indicate. It has been well documented that Israel has been the right hand (the other hand, of course, was the late Shah of Iran) of the U.S. government in the Middle East (known in foreign policy circles as a "strategic asset"). Israel has been so far part and parcel of the passing world of Pax Americana. Thus, Israel may have to redefine its purpose once again, this time according to a very different global context.

The picture becomes more complicated with the addition of (1) the general outlook of the ideological peculiarity of American society, and (2) the homebred forces that would hinder the task of democracy altogether in the clientstates, despite interference from outside parties. In other words, one must focus on the internal structures of Third World countries themselves and not blame everything on outside forces. Here, for the sake of sticking to the subject of this essay, I am obliged not to pursue this latter point. As for the first point, i.e. the ideological peculiarities of American society, in a nation in which enduring memory is a scarce commodity, and naked aggression becomes one's God-given right, one often finds no room for honest soul-searching and sincere self-criticism.

For instance, the act of hiding behind yellow ribbons is explicable in terms of society's own despair associated with this altered state of consciousness. Moreover, this becomes symptomatic of a decision to escape from responsibility and eternal self-indictment for those who managed to postpone the day of reckoning. What is worse in this ritual is the state of mind of those who lose their temper over a slight injustice, yet continue to support their troops, having seen fully, play by play, the details of this disturbing affair continuously on television throughout the recent war against Iraq. The cheer leading in support of this unfortunate encounter, or even passive approval of the destruction of a nation, whose only crime has been the inability to emancipate itself from the yoke of Saddam Hussein, is a telling story from the darker side of America. By contrast, the question of Bosnia will tell us yet another story, the story of benign neglect.

The present crisis, therefore, is as American as it is Middle Eastern and it is not finished by any means. It is as much the crisis of American hegemony as it is the crisis of Saddam Hussein.(20) Why should the U.S. government be worried about the lack of access to "cheap" Middle Eastern oil, knowing too well that the globalization of oil has already diminished the regional boundaries and, regardless of who owns or controls the oil fields, the omnipotent rules of the transnational market will have the final say? Is it, really, the control of oil or the reaction to hegemonic decline that has prompted the United States to reopen the old neocolonial wounds with such vengeance and self-pity?

The Pandora's box has already been opened. In the present era, the U.S. threat to peace is not from strength but from weakness. Rhetoric aside, one may ask: What is the idea of being the only superpower in the world where the old post-1945 power structure has no credibility? What is the significance of "winning World War III, without firing a shot," where, given the new rules of the game, there is no "winning side?"(21) It is apparent that at the present historical crossroads there are more questions than answers, but what is certain is the irreversibility of what has already taken place. We are now moving toward a multipolar world of transnational configuration in which U.S. (global) domination will recede into history.

As I have explained above, since "cheap" oil and "expensive" oil no longer exist in the eyes of the global market, one begins to wonder about the motivation of attaching a special priority to Middle Eastern oil.(22) Moreover, while the differential cost of Middle Eastern oil is sizable, it never the less appears as differential rent in the global price. The remaining motivation, therefore, is to divert a good deal from this sum (i.e., the Arab oil rent) in order to finance the cost of keeping the status quo, in the region and/or elsewhere. One only has to remember the covert financing of the various U.S. expeditions in Africa or Central America by the Saudis in the 1980s. This, of course, has nothing to do with oil pricing or the necessity of oil for Western economies. It certainly has everything to do with milking of certain client-states in the region in order to perpetuate the global system.

Despite all this, in objecting to the recent U.S. war against Iraq, certain commentators pointed out that "The military alternative to energy efficiency isn't cheap .... [They further emphasized that] counting military costs, Gulf oil now costs in excess of $100 a barrel."(23) The conclusion they have come up with was to urge the U.S. government to cut down on its "dependency" on Middle Eastern oil. In addition to the liberals, the radical left too argued the same way. Beneath the reasonable appearance of such arguments, however, are two unreasonable and false premises: (1) that global production and pricing are arbitrary, often determined (through conspiracy and intrigue) by a few Middle Eastern oil sheikhs or the shahs, in conjunction with the U.S. State Department, thereby distorting and overestimating the role of the U.S. government and its client regimes; and (2) that the U.S. government and its representatives are too stupid to realize that producing oil in this manner is un-economical, thereby distorting and underestimating the reality behind the U.S. global mission. By accepting the false premise of threat to our survival, the entire political spectrum, including the radical left in this country, tried (and are still trying) to come up with a viable solution according to their declared ideological positions. Some opted for the outright invasion of the oil fields, others for the protection of notorious regimes. Still others proposed conservation, increased energy efficiency, and a balanced energy and environmental policy. Regardless of their conclusions as well as their intentions, nearly all have missed the point that the need for oil is a sideshow.

During the heat of the war with Iraq, the U.S. government was forced to respond to the uproar of "No Blood for Oil" by inventing several reasons for choosing the war option. These included "jobs," "freedom," "democracy," "the naked aggression that will not stand," and "the rule of law." If this analysis is correct these are but hallowed justifications. For instance, one may find no consistency in the remarks made early on by President George Bush on the cause of war. He stated explicitly that the conflict was about the preservation of the "American way of life."

This objective was confirmed once again in his 1991 State of the Union Address: "We will get on our way to a new record of expansion, and achieve the competitive strength that will carry us into the next American century."(24) The emphasis is on the last four words whose pointed message is to revive the Pax Americana in the world. In other words, the singular ambition here is to preserve "the American way of life."

One year later, the same theme recurred in George Bush's 1992 State of the Union Address. "There are those who say that we can turn away from the world, that we have no special role, no special place. But we are the United States of America, the leader of the West that has become the leader of the world. As long as I am President we will continue to lead...for the safety and security of our children."(25)

"The American way of life," of course, means different things to different people. In other words, the American way of life, just like beauty, finds different meaning in the eyes of the beholder. The American way of good life for one, can be an American way of miserable life for another. What matters, therefore, is to figure out in whose interest this way of life is branded as American; in the interest of the power elite who benefit from the status quo, or in the interest of the rest of society. The point is what would George Bush's (American) way of life offer to the majority of American people and how would he guarantee the "security of our children." Perhaps, George Bush is using the "security of our children" the same way he is using the embargo against the starving Iraqi children, presumably to punish Saddam Hussein.(26)

On the other hand, one wonders what has the American way of life in common with the preservation of the way of life enjoyed by the Saudi and Kuwaiti regimes?(27) Buying off and neutralizing the Arabs with their own source of wealth is a "neat" and powerful idea that has long been pursued by the U.S. government for the sole purpose of extending American hegemony.(28) Crying for democracy and preventing it simultaneously has been the rule rather than the exception, as the study of all CIA interventions shows. This has been the post-war U.S. foreign policy par excellence in the Middle East for as long as one can remember. The irony is that all this has been done in the name of the American people. Therefore, the statement, "No Blood for Oil," has a limited, even a misleading connotation. The real issue is to demand: "No Blood for U.S. Hegemony," which requires class analysis and, in turn, brings to the fore the question of exploitation of both human and natural resources in global capitalism.

It is hard to understand how the appeal to democracy can be reconciled with the continued obstruction of democracy. It is indeed a conundrum that, in its modern version under the Pax Americana, has been an important point of global contention. In order to resolve this contradiction, it may be helpful to focus on the position of the client-state sub-system within the overall international

system of nation-states since 1945. Here, the post-war era saw the division of the globe into a two-tiered system of client-states and (sovereign) nation-states that made the former a political appendage of the latter.

American global hegemony has taken precedence over the cause of liberty and the pursuit of happiness especially in the client-states. Even though the spill-over of this peculiar policy also has blemished the cause of freedom and democracy in America, the whole system was riddled with the contradictory notion of democracy and the resultant double-talk under the Pax Americana.

The decline of U.S. global hegemony is essentially a self-inflicted matter. The post-war economic institution of the Pax Americana has led to the transnationalization of the global economy, beyond the boundaries of nationstates. The development of transnational corporations superseded the national economies and national borders in a major way. The U.S. as a new hegemon helped to reconstruct Western Europe and Japan after World War II. The economic consequence was the enhancement of globalization at the expense of U.S. hegemony, that is, the economic hegemony of a world order that had already embodied the potential of multi-polar transformation. The fall of the Soviet Union merely reinforced what had already been there.

From the standpoint of political hegemony, the nation-state system under Pax Americana lost its significance. The client-state system has been challenged by Third World resistance. The Vietnam experience, particularly, is a classic example among such encounters that was followed, more or less, by many Third World countries, and that set the stage for an all-encompassing crisis within the underbelly of the U.S. client-state system. Today, other challenges, such as Islamic resurgence, present themselves in a variety of forms.(29) In sum, the current transnationalized world economy and world polity are the corollary of the decline of Pax Americana. Here, the international system under U.S. hegemony laid the cornerstone for post-war global capitalism, and by doing so provided the conditions of its own unraveling nearly four decades later. This has been a self-generating aim, and an inevitable development, that was entirely beyond the intention of U.S. leadership.

The world of the future shall be shaped accordingly, despite the rhetoric advanced by America's leaders. The days of American global hegemony, with or without the Cold War, are numbered. The end of the Cold War has been a catalyst that has only magnified the existing symptoms. Accordingly, it may be appropriate to consider the client-state crises in the region as the crisis of the present global order. These upheavals are indeed the mirror image of American hegemonic decline. The transnationalization of oil has also provided a formidable challenge to U.S. hegemony since the early 1970s. No amount of conquest, not even a total military takeover of Saudi Arabia, will alter the decline of U.S. global hegemony at this stage of global transformation.

Meanwhile, the U.S. reaction to its hegemonic decline poses a threat to world peace. This is a sign of global disorder. The world order under the Pax Americana is no more. The New World Order has yet to arrive. The present world order is in a state of flux, and seems to be a New World Disorder. Accompanying all this are also other problems that are outside the scope of our discussion and have nothing to do with the paradigm of U.S. hegemony. These include anachronistic tendencies toward nationalism, tribalism, racism and ethnic cleansing in many parts of the world today. These are often unrelated and beyond the role of the United States. In other words, neither Pax Americana nor the United States, as a nation, can be held directly responsible for much of these terrible undertakings. There is no doubt that the recent break-up of the Soviet Union and its Eastern European satellites and indeed the very nature of Soviet rule account for many of these problems.

Finally, the recent war and the continued U.S. military presence in the Persian Gulf show that the Unitd States is unwilling to accept the reality of its modified role in all parts of the world. Saying farewell to the good-old-days is not easy and, above all, is not voluntary. Thus the world has limited recourse in avoiding the violent transitions that are in the works, such as those we have seen recently in the global arena.

NOTES

(1.)See Paul Kennedy, The Rise and Fall of the Great Powers (New York: Vintage Books, 1987), for a longer view of past transformations. For the immediate post-war period see I. F. Stone, The Truman Era 1945-1952 (Boston: Little, Brown and Company, 1953). In Chapter 16, titled: "Political Scientists at Work and Play: It May Be Political--But Is It Science?," Stone conveys his recollection of the forty-fifth annual meeting of the American Political Science Association (30 December 1949 - 2 January 1950) at the Hotel Roosevelt in New York where John Foster Dulles delivered the opening address and Lt. General Alfred M. Gruenther, deputy chief of staff of the U.S. Army, was the first luncheon speaker. Nowadays, of course, in addition to this, the purpose is served through hundreds of seminars, conferences, symposia, etc. that are held on a daily basis at the major research institutions in the United States. This time the troubling issue for all these truth-seekers is how to invent new enemies in order to deal with the problem of peace. But a new George Kennan has yet to be found to put an end to all this commotion and redirect the crowd to their "scientific" activity. On display, however, is the same old scenario by the same old mentality, as evidenced by the 1993 Harvard Commencement Day address by General Colin Powell is a case in point ("Keeping the Peace in a Post-Cold War World," Harvard Gazette, June 18, 1993, pp. 9-10).

(2.)See Cyrus Bina and Behzad Yaghmaian, "Post-War Global Accumulation and the Transnationalization of Capital," Capital & Class, No. 43 (Spring 1991). See also Francis Fukuyama, "The End of History," National Interest, Summer 1989. As the title of his article suggests, Fukuyama, vulgarizes Hegel to the point of absurdity, by delivering a racist and colonialist justification that "Through the two world wars in this century ... the various provinces of human civilization were brought up to the level of its most advanced outposts, ...forcing those societies in Europe and North America as the Vanguard of civilization to implement their liberalism more fully" (p. 5). He is apparently talking about the same two world wars that led to the unprecedented extermination of some 80 million people. See also the review of Fukuyama's recent book, The End of History and the Last Man, by M. F. Burnyeat, London Review of Books, 23 July 1992.

(3.)See Robert Solomon, The International Monetary System, 1945-1981 (New York: Harper & Row, 1982); Gerald M. Meier, Problems of A World Monetary Order (New York: Oxford University Press, 1974); Fred L. Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkley: University of California Press, 1977); Stephen A. Marglin, "Lessons of the Golden Age: An Overview," in Stephen A. Marglin and Juliet B. Schor, eds., The Golden Age of Capitalism: Reinterpreting the Post War Experience (Oxford: Clarendon Press, 1990), pp. 1-38.

(4.)For instance, see Fred Halliday, Iran: Dictatorship and Development (Harmondsworth: Penguin, 1979), or his earlier book, Arabia Without Sultans (Harmondsworth: Penguin, 1974) that is written specifically about the Arabian Peninsula and the role of imperialism.

(5.)Among many sources, the following books present more explicit analysis: Noam Chomsky and Edward Herman, The Washington Connection and Third World Fascism (Boston: South End Press, 1979); Noam Chomsky, The Culture of Terrorism (Boston: South End Press, 1988); Noam Chomsky, Necessary Illusions: Thought Control in Democratic Societies (Boston: South End Press, 1989); Philip Agee, CIA Diary (Baltimore, MD: Penguin Books, 1975); and, of course, Daniel Ellsberg's The Pentagon Papers. Also, Thomas Powers, The Man Who Kept Secrets: Richard Helms and the CIA (New York: Simon & Schuster, 1979) has useful materials on the start of the Cold War.

(6.)It is, therefore, astonishing to hear from both official and unofficial channels of the U.S. government that the goal is, and has always been, democratization of the Third World.

(7.)For a good summary on post-World War II U.S. interventions in the Third World see William Blum, The CIA: A Forgotten History (London: Zed Press, 1986); see also Necessary Illusions, op. cit.

(8.)See Cyrus Bina, The Economics of the Oil Crisis (New York: St. Martin's Press, 1985), Chapters 2 and 3.

(9.)Ibid., Chapter 3; See also Joe Stork, Middle Eastern Oil and the Energy Crisis (New York: Monthly Review Press, 1975), Chapter 2.

(10.)See also Robert Engler, The Brotherhood of Oil (Chicago: The University of Chicago Press, 1977); and Abbas Alnasrawi, OPEC in a Changing World Economy (Baltimore, MD: Johns Hopkins Press, 1985).

(11.)See Alnasrawi, 1985, op. cit.; Simon Bromley, American Hegemony and World Oil (University Park, PA: The Pennsylvania State University Press, 1991). The latter argues that American hegemony is still intact and is due to U.S. control of oil vis-a-vis Japan and Western Europe. My argument is precisely the opposite, namely, that U.S. hegemony has been declining as a result of the transnationalization of capital and that the entire international system of nation-states has come under fire. As for the oil factor, the oil sector also has been transnationalized since 1974 and the United States can no longer determine its direction.

(12.)Cyrus Bina, "Internationalization of the Oil Industry: Simple Oil Shocks or Structural Crisis," Review: Journal of the Fernand Braudel Center, Vol. 11 (No. 3), Summer 1988. For an historical analysis of the 1973-74 oil crisis see Joe Stork, "Oil and the International Crisis," MERIP Reports, No. 32, (November 1974).

(13.)Cyrus Bina, "Limits of OPEC Pricing: OPEC Profits and the Nature of Global Oil Accumulation," OPEC Review, Vol. 14 (No. 1) Spring 1990.

(14.)Bina, 1985, op. cit., Chapter 7.

(15.)Ibid., Chapter 9.

(16.)Cyrus Bina, "The Political Economy of Global Oil," The World & I (December 1990); Cyrus Bina, "Global Oil and Inviability of Pax Americana," Economic and Political Weekly, 11 July 1992.

(17.)Cyrus Bina, "The Law of Economic Rent and Property: Applied to the Oil Industry," American Journal of Economics and Sociology, Vol. 50, No. 2 (April 1992).

(18.)For a revealing account of Saddam Hussein's reign of terror see Samir al-Khalil, Republic of Fear (New York: Pantheon Books, 1989). The tip of the iceberg on the U.S. role in the Iran-Iraq war (1980-1988) can be seen in John Barry and Roger Charles, "Sea of Lies," Newsweek, 13 July 1992.

(19.)See Noam Chomsky, "Oppose The War," Z Magazine, February 1991. Within the Cold War paradigm, for the most backward-looking view on the Gulf War see Henry Kissinger, "A Postwar Agenda," Newsweek, 28 January 1991.

(20.)See Cyrus Bina, "War Over Access to Cheap Oil, or the Reassertion of U.S. Hegemony?," In Greg Bates (ed.) Mobilizing Democracy: Changing the U.S. Role in the Middle East (Monroe, Maine: Common Courage Press, 1991).

(21.)See the jubilant views on the Gulf War, for instance, in commentaries by J. Muravchilk, "At Last, Pax Americana," New York Times, 24 January 1991, and C. Krauthammer, "Bless Our Pax Americana," Washington Post, 22 March 1991.

(22.)See, for instance, the commentary by Edward L. Morse, "How to Make OPEC Obsolete," in which he suggests that in the aftermath of the Gulf War the U.S. must abolish OPEC and hold fast to Saudi Oil. This is a typical Cold War attitude toward oil and toward life in general, which is deeply ignorant of fundamental global changes. Morse simply fails to understand the post-1973 role of OPEC in the internationalization of the oil industry. See also Keith Scheider "Bush's Energy Plan Emphasizes Gains in Output Over Efficiency," New York Times, 9 February 1991. For possible scenarios pertaining to the future of the Middle East see James E. Akins, "The New Arabia," Foreign Affairs, Summer 1991. A fairly good background can be obtained from S. Muralidharan, "Saddam Hussein, Western Imperialism and Arab Identity," Economic and Political Weekly, 22 September 1990.

(23.)A. B. Lovins and L. H. Lovins, "Make Fuel Efficiency Our Gulf Strategy," New York Times, 3 December 1990. See also Matthew Wald, "Bush Asserts Need for Foreign Oil," New York Times, 21 February 1991. The worst case of distortion, in my opinion, is the position of the self-styled leftists who are still playing the familiar song and dance of OPEC-versus-the United States or the U.S.-versus-Europe scenario. By putting fact and fancy on the same level, these writers do not hesitate to present the public with heavy-sounding populist statements of no theoretical consequence. While there is no shortage of examples in the literature, one, for instance, may see Paul Aarts and Michael Renner, "Oil and the Gulf War," Middle East Report, July-August 1991. Here, the authors explicitly state: "A core of Gulf oil exporters is thus pivotal for the supply of oil to the world economy. This is a key reason for Washington's intervention in the Kuwait crisis" (p. 26). A few paragraphs later, the same authors speculate that "The U.S. is playing a highly ambivalent role in the game," presumably because "Japan and Western Europe are much more dependent on oil imports than the U.S." (p. 27). To be sure, this is a rehash of the same old conspiracy theory that appeared during the 1973-74 oil crisis. For a critique of this hypothesis, see Cyrus Bina, The Economics of the Oil Crisis, op. cit., Chapter 2, Section 3: "Conspiracy Theories of the Oil Crisis." See also Edward N. Krapels, "The Commanding Heights: International Oil in a Changed World," International Affairs, Vol. 69 (1), January 1993 in which the author presents a crudely voluntaristic argument before proposing a de facto boycott of all Middle Eastern oil.

(24.)"Text of President Bush's State of the Union Message to the Nation," New York Times, 30 January 1991.

(25.)"United States: State of the Union Address," Keesing's Record of World Events, Volume 38, No. 1, January 1992, p. 38711. One has to read all these official materials side by side with the real record of the U. S. government conduct in Ramsey Clark, et al., War Crimes: A Report on United States War Crimes Against Iraq (Washington, D.C.: Maisonneuve Press, 1992).

(26.)See the report by the Harvard Medical Team on the effect of the war and the continued embargo on Iraqi children, Harvard University, June 1991; on the firing of uranium shells by U.S. forces against Iraq see Eric Hoskins, "Making the Desert Glow," New York Times, 21 January 1993. This report has not been challenged by serious people, in and out of the U.S. government. See also "Excerpts From U.N. Report on Need or Humanitarian Assistance in Iraq," New York Times, 23 March 1991; and Trevor Rowe, "UN Secretary Troubled by Civilian Casualties in the Gulf," Boston Globe, 9 February 1991. By failing to present a serious and systematic analysis on the modus operandi of Pax Americana, particularly to acknowledge that the Saddam Hussein government has been an organic part of U.S. policy in the Middle East, and by implication a constituent part of the American global system since the 1980s, intellectuals in the Arab World experienced new divisions and, more importantly, new alliances. For instance, both the bleeding-heart liberals, including those who had once boasted for their ultra-leftist orientation, and the arch-reactionaries, including those who were consistent in their colonial belief, appear to have come to similar conclusions on the role of the United States in the region. Such respective views can be found in Samir al-Khalil, "Do It Right, March To Baghdad," New York Times, 27 March 1991, and Elie Kedourie, "Avoiding A Third Gulf War," New York Times, 13 March 1991. Samir al-Khalil even suggested: "Only the U.S. can create a democracy."

(27.)See Ahmad al-Khatib, "A Military Solution Will Destroy Kuwait," Middle East Report, January-February 1991; George J. Church, "An Exquisite Balancing Act," Time, 24 September 1990, p. 45, which is reporting on King Fahd's character. In order to understand the peculiar nature of U.S. foreign policy the existing government documents are excellent sources. For instance, U.S. Congress, Senate Committee on Foreign Relations, War in the Persian Gulf: The U.S. Takes Sides (Washington, D.C.: U.S. Government Printing Office, November 1987), or U.S. Congress, House Committee on Foreign Relations, Hearings before the Subcommittee on Europe and the Middle East, United States-Iraqi Relations (Washington, D.C.: U.S. Government Printing Office, April 26, 1990). See also Chris Hedges, "Saudi Rulers Resisting Pressure from Two Sides," New York Times, 14 February 1993.

(28.)See Thomas Friedman and Patrick Tyler, "From the First, U.S. Resolve to Fight," New York Times, 3 March 1991. See also Noam Chomsky, "What We Say Goes: The Middle East and the New World Order," Z Magazine, May 1991; and Patrick Tyler, "U.S. and Bahrain Near Pact on Permanent Military Base," New York Times, 25 March 1991.

(29.)Bradford R. McGuinn, "Why the Fundamentalists Are Winning," New York Times, 22 March 1993. Chris Hedges, "Egypt's War With Militants: Both Sides Harden Positions," New York Times, 1 April 1993.