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The History Of Oil, Protest And The Economy

In 2011, political theorist Timothy Mitchell published Carbon Democracy: Political Power in the Age of Oilwhich argues that the fossil fuel industry “helped create both the possibility of modern democracy and its limits.”

The book begins with the rise of coal: the rigid, concentrated structure of its production and distribution networks made them highly vulnerable to disruption by militant workers, who were able to achieve new and unprecedented forms of political power as a result. All that changed with the global shift from coal to oil, with its comparatively flexible networks and less reliance on workers—a shift that consolidated the power of the fossil fuel giants, and was also closely linked to the creation of the idea of an “economy” based on endless GDP growth.

I recently spoke with Mitchell at his Columbia University office about Carbon Democracy, and how the book resonates with the climate fight.

PR: Your book examines the origins and practice of sabotage. Could you talk about that, and how it plays into the relationship between fossil fuels and democracy?

TM: If one looks at the early 20th century, when coal had become the dominant fossil fuel, the dependence on coal is associated very strongly with the emergence of mass democracy. Working classes were able to transform their forms of politics and mount very serious claims for more egalitarian ways of life, starting with extending the right to vote, which led to further social rights. And they did so via sabotage. The word “sabotage” originally referred to the actions of energy workers—coal workers, rail workers, dock workers—who discovered the effectiveness of coordinated strikes along the energy chain, or what became known as the general strike. The rise of coal, as a single dominant energy source, had given them an unusual opportunity to have their voices heard and make effective demands.

Compare this to the rise of oil—workers who were inspired by the coal miners tried to do the same thing in Iraq, Iran and Saudi Arabia. They had far less success, for reasons that have nothing to do with the corrupting power of oil wealth or other reasons that historians traditionally blame for the weakness of democracy in oil-producing regions.

Because production of energy now occurred a long way from where it was consumed, it was more difficult for workers to coordinate actions along the energy chain. Oil also occurs in a fluid form so it’s much easier for managers to supervise or replace workers (as in the recent U.S. refinery strikes), and easier to shift supply routes so that if one area is on strike you can use a different source of supply.

PR: And this shift to oil influenced how we define “the economy.”

TM: Yes. Between the 1930s and 1950s, as the production of wealth came to depend on the growing use of oil, economists began talking about “the economy,” something that no economist really talked about before that time. Previously they discussed markets, business cycles, and prices.

The economy was a new object, a totality imagined and calculated in a new way. The purpose of government became the growth of the economy.

Before, the notion of growth was more problematic. Growth had physical and spatial connotations—the growth of cities, the expansion of territory, an increase in population. There was a sense in the early 20th century that growth was coming to an end—population increase was leveling off, empire was coming to an end, coal production was reaching a peak in several countries, and trade was contracting. John Maynard Keynes wrote an essay that actually saw this in positive terms. He believed that his grandchildren would have reached a kind of “steady state,” in which there would be no need for economists, because there would be so much wealth and well-being that the need for growth and the management of shortages would have disappeared. Utopian, perhaps, but these were very mainstream ideas.

Something really extraordinary happened in the mid-twentieth century, as we shifted to an oil-based energy system. Economists began focusing not on well-being but on national income, calculated in the narrow terms of GDP. And the growth of GDP was imagined as something that could go on forever. This coincided with a period when fossil fuels, and oil in particular, became extraordinarily abundant. There was a sense that you no longer had to account for the cost of energy, a cost that had previously made limitless growth unthinkable. So oil enabled not only a new form of accounting, but really a new form of failing to account for what you are doing.

PR: Oil’s new prominence put the fossil fuel companies in the position of being able to interrupt the entire economy.

TM: Yes. I talk in the book about sabotage as something workers used to secure new rights for themselves. With the rise of oil, it was much harder for workers to interrupt the flow of energy. But that’s not the end of the story of sabotage. The power of sabotage switched hands to the oil companies.

See, originally most business firms only had to concern themselves with rivals in the same region, because it was too expensive to transport goods between particular areas of dominance. But oil was so light and easy to transport that competition was a global threat.

Oil companies realized that their profits would only continue if they were able to organize sabotage power on a global level, to restrict supply and eliminate rivals. By the 1920’s, a handful of companies like Exxon Mobil (as they are known today) and Shell had taken control of every major site of oil production in the world, outside the U.S. and the Soviet Union, and they maintained that dominance for about half a century.

They used this control to strategically limit the production of oil for the purpose of keeping profits high. For example, the company that became BP, Anglo-Iranian, deliberately drilled shallow wells when they gained rights in Iraq so that they would not introduce more oil into the market.

To reduce the threat of over supply, the same companies also helped engineer fantastically oil-intensive lifestyles in the West. This required advertising, publications of road maps, and tourist guides; a whole cultural and political world that was formed from the mid-twentieth century around the automobile. Oil companies worked to prevent autos from being more fuel-efficient and went so far as to buy public transportation systems and shut them down.

PR: More and more activists are themselves trying to organize sabotage power over the fossil fuel industry, motivated by concerns about everything from the climate to public health to drilling and pipelines that damage water and soil. Could you compare these historic forms of sabotage with the current ones being practiced by the climate movement?

TM: I think there are many similarities. The sites and methods change, but the ability to block Keystone XL from being completed and similar campaigns with different pipelines in Canada, the campaign against fracking in the UK, all of these are forms of sabotage. You are finding points of vulnerability where you can interrupt both the high-consumption forms of life, and also focus political attention.

This sabotage takes economic forms as well. Another way of stating my argument about oil companies is to say that these were not companies set up to produce oil, they were companies set up to produce a return on investment. We should think of Exxon, BP, Shell etc. as financial machines, not energy companies. While it may seem like economic life today is dominated by the power of financial firms, the truth is that the history of energy has always been a history of finance.

Here’s why: the production of coal encouraged the development of railroads. These were the biggest industrial undertakings of the 19th century. Railroads gave rise to a new economic and political form—the modern business corporation. People who study the history of the corporation will tell you that the corporation arose because railroads were so big. You needed the managerial power of the large corporation to operate such a business.

I suggest we turn that story around. Entrepreneurs realized that, with coal and steam power, you could build a transportation structure that would offer revenue on a scale that had never been seen before. The railroad was an energy-finance machine that transferred that future revenue to present-day speculators. Passengers, shippers, and consumers would pay a charge, in higher transportation costs, to cover these speculative gains.

The railroads spawned the modern system of banks, stock markets, and regulatory agencies that set the stage for other large industries to emerge as similar revenue technologies. The biggest of these new revenue machines was the global oil company, which could promise enormous profits on a temporal scale of 50 years or more.

The larger point is that the history of fossil energy is a history of financial technologies that take wealth from the future and accumulate it in the present.

Once you realize an oil company functions not to deliver oil but to structure the future as a system of financial flows, then the points of sabotage shift a little bit. This is why I think projects like Carbon Tracker’s “Unburnable Carbon” are really important. Carbon Tracker shows that the share price of fossil fuel companies is a bubble, since it is based on a projected use of energy that is incompatible with keeping the planet livable. This campaign works precisely at the point at which the corporation understood as a set of financial flows is vulnerable—the calculability of future revenue.

Even forms of sabotage that work more directly on the physical infrastructure function this way. When you stop the building of a pipeline after the company has already bought millions of dollars worth of steel pipe, this is itself an interruption of the future. And this can be used to influence our whole system of producing energy.

Of course, there’s no rule that any one form of energy gives rise to a certain form of politics. Carbon Democracy illustrates how different vulnerabilities within energy systems could shape social relations in larger society, but a renewable or distributed energy supply will not inherently lead to a more democratic future. Look at the Middle Ages in Europe. Energy was renewable and decentralized, but it wasn’t a particularly democratic society. In fact, it was the vulnerability that came from being able to sabotage a centralized form of energy that gave rise to mass democracy in the first place. So whenever we are establishing an energy system, we need to do so with larger questions of social justice in mind. No energy system is democratizing unless we deliberately arrange its parts to make it so.

Patrick Robbins is a writer, researcher and activist based in Brooklyn. He is currently working with Sane Energy Project toward the goal of an entirely renewable New York, and was an active member of Occupy The Pipeline from 2012 to 2014.

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