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Carbon Democracy: Political Power in the Age of Oil

Nonfiction | Book | Adult | Published in 2011

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Chapters 2-4Chapter Summaries & Analyses

Chapter 2 Summary: “The Prize of Fairyland”

In Chapter 2, Mitchell explores the origins of the oil industry in the Middle East. Traditional accounts of this origin focus on “heroic pioneers discovering oil in remote and difficult locations” (8). This account suggests that oil was first discovered at Masjid-i-Suleiman (a city located in present-day Iran) in 1908 and led to the creation of British Petroleum (BP), which is now one of the largest oil companies in the world. Mitchell strongly disagrees with this account. Instead, he argues that oil companies and their allies intentionally delayed the emergence of the oil industry in the Middle East to maintain control over profits.

Mitchell turns to four ways in which oil companies and their allies in government and finance worked to delay or stop the construction of the oil industry in the Middle East. The first is by sabotage. Several of the largest oil companies at the time purchased rights to explore for oil in the Middle East. They promised the local governments that they would develop the oil region, including building railways and pipelines. However, these oil companies would then delay the development once they purchased the rights. Mitchell supports this idea with examples from Iraq (the author refers to Iraq historically as Mesopotamia), Egypt, Turkey (the author also refers to Turkey historically as the Ottoman Empire), and historic Persia (modern-day Iran). In all three places, oil companies purchased the rights to look for oil, but made little effort to develop the oil, which is a method of sabotage.

The second is that oil companies and their allies in government and finance learned “to portray their needs as furthering the imperial interests of the state, and thus contributing to the well-being of the nation” (54). British oil companies often blocked attempts from oil companies from other countries to gain rights over oil. They did this by framing the action as an attempt to protect their home country’s strategic interests. Mitchell uses the example of a British oil company blocking exports from the large Russian fields at Baku to illustrate this point. This action enabled Britain to expand India’s commercial and political ties into the Gulf (India was part of the British Empire at this time).

The third is the oil companies and large financial institutions used their exclusive oil and railway concessions to prevent others from developing them in the Middle East. Mitchell uses the example of the Baghdad Railway to support this claim. Initially, a railway connecting Mesopotamia and the Persian Gulf to Europe right before World War I (WWI) interested financers, shippers, contractors, and cotton and grain merchants. The Ottoman Empire built part of the railway in the 1890s, but Deutsche Bank, a German bank, controlled the rights to the remaining part of the railway. This concession enabled the bank to delay the rest of the railway’s construction (and thus the development of oil in Mesopotamia) for decades. By the eve of WWI, the world’s four-largest petroleum companies agreed to share the rights to Mesopotamia’s oil. This agreement included:

[A] famous ‘self-denying clause,’ under which Europe’s principal oil companies promised not to undertake oil production anywhere in the Ottoman Empire (except Egypt and Kuwait, which together with southern Persia were already under British control). (58-59)

Thus, the purpose of the agreement was to delay oil production.

Finally, oil companies from the US and Europe began to form an international oil cartel. The primary goal of this cartel was to monopolize oil production and distribution in the Middle East to maximize profits for the oil companies apart of the cartel and their allies. Governments made themselves vulnerable to this cartel by switching their dependence from coal to oil. At the same time, this allowed many governments to free themselves from the political power of coal miners.

Chapter 3 Summary: “Consent of the Governed”

In Chapter 3, Mitchell details how the principle of “‘self-determination’” (68) came about around WWI. Self-determination refers to the process by which a country determines its own government and alliances. Most scholars attribute this principle to President Woodrow Wilson. Mitchell, however, suggests that British imperialists transplanted this concept from South Africa to the Middle East.

In the late 19th century, the world’s largest deposits of gold were discovered in the two Boer Republics (the South African Republic and the Orange Free State), located in present-day South Africa. British mining companies flocked to the region. A bloody conflict ensued between the British and the people of the Boer Republics. The British defeated the Boer people and created a colony in South Africa. This colony was based on the new principle of self-government. Under this new principle, “only the white settler populations were to participate in electing and running the administration” (71). Self-rule thus meant European rule and not rule by the local peoples.

Mitchell also explains how leading up to WWI, the imperial powers (e.g., Britain and France) fought over various territories in the Middle East. Some historians suggest that this fighting led to the war. WWI was long and bloody. As the war endured, the British government “needed to intensify the ‘combing out’ of the protected industrial workforce to put more men onto the battlefields and into the shipyards” (78). They did this by forcing trade unions to suspend strikes for the duration of the war and preventing workers from changing jobs without their employer’s consent. The British people also suffered from rising costs and shortages of housing and food. Wartime protests broke out, including mass strikes.

To prevent further unrest and to increase manpower for the war, David Lloyd George, Britain’s Prime Minister at the time, “issued the first statement from any Allied leader listing the aims of the war, providing a justification for continuing the fighting” (79) in 1918. In his speech, Lloyd George called for a postwar settlement “based on ‘the right of self-determination or the consent of the governed’” (79). He suggested that this notion of self-determination should replace imperialism. Importantly, Lloyd George only called for this type of settlement on the continent of Africa. He was less clear about what would happen in the Middle East (likely because Britain was formulating plans for how to control this region). Lloyd George also called for an international organization which would help peacefully settle disputes and pursue control of arms.

President Woodrow Wilson, surprised by Lloyd George’s claims, issued his famous Fourteen Points, several days later in a speech to Congress. This proposal outlined Wilson’s vision for ending the war and making sure that another world war never occurred again. Wilson made no mention of self-determination in his Fourteen Points.

The League of Nations emerged from the war supposedly “to democratise imperial power” (76). This entity is often thought of as the first worldwide organization whose goal was to maintain peace between nations. The League of Nations had a representative legislature. This legislature took control over Germany and the Ottoman Empire’s colonies and territories, both of whom lost WWI. This legislature would then grant a member nation to govern the territory or colony, known as the League of Nations mandate. The member nations comprised of the five nations who had won the war. The mandate system turned “the demand for democratisation into the very different principle of self-determination, or ‘the consent of the governed’” (78). The doctrine of separate development replaced the mandate system, although it is similar. Under this doctrine, the rights of non-Europeans in colonies and territories “were suspended because they were in need of ‘development’” (82).

Mitchell argues that imperial powers never intended to use the League of Nations, the mandate system, or the doctrine of self-development to help implement democracy around the world. Instead, imperial powers used these new mechanisms to control non-European territories, especially the oil-producing Middle East.

Chapter 4 Summary: “Mechanisms of Goodwill”

Mitchell focuses on how Britain used the principles of self-determination and the doctrine of separate development to gain consent for imperial rule in Iraq and other surrounding countries after WWI. He also details how political forces in the Middle East responded to these new mechanisms of imperial rule.

To start, Mitchell explains how imperial powers, including Britain, controlled colonies prior to WWI. The doctrine of protection or protectorate was the most common method that the British government used to control “territories without incurring the degree of opposition and expense that came with immediate annexation” (90). The protectorate reinforced the authority of the local ruler by preventing the removal of the ruler by the local people. In exchange, the local ruler game some of their authority to the imperial power, increasing the imperial power’s control over the region’s natural resources. Similar to the principle of self-determination:

[The] doctrine of protection allowed imperial powers to acknowledge a claim of independence, while insisting that for less developed peoples (or, as they were sometimes called, non-Christians), the only way to advance that claim was under European control. (90)

This dynamic was not reproducible during WWI, however, since the British took control of countries in the Middle East without local rulers to depend on after the British destroyed the Ottoman Empire. Iraq represents one example. Mitchell notes that “the British needed a ‘native ruler,’ someone whose weakness would allow them to offer protection, and thus maintain indirect control” (92). The creation of an Emir, or male monarch or aristocrat, in Iraq represents Britain’s first solution to this challenge. While there were several local rulers already in Iraq, the British felt that they were too independent. As a result, the British chose a native ruler from outside Iraq, named Emir Faisal I. The British still faced local opposition.

In fact, by the end of the WWI, British government officials faced pressure not only from the citizens of Iraq and elsewhere in the Middle East to demobilize its troops and end its occupation, but also from the British people. Labor members in parliament and other critics of imperialism in Britain forced the British military and War Department to report military expenditures. As a result, they realized that it cost 50 million pounds annually to maintain occupation of Mesopotamia. The British people demanded an elimination to this wasteful spending.

The principle of self-determination, “or native rule” (88), offered a solution to the challenges pro-British imperialists faced both at home and within the occupying country. As Mitchell explains, “if the principle were defined to mean that occupied countries should be asked to consent to their occupation, and that mechanisms of native rule should be devised to produce that consent, then the new ‘liberal internationalism’ would provide a tool not for undermining of imperial interests, but to ensure their survival” (94).

Proponents of imperialism claimed it was democratic since they were training the locals how to govern themselves as well as providing schooling to “ensure that natives were ruled in the interests of civilisation” (100). Through these trainings and schoolings, the principle of self-determination morphed into the doctrine of self-development. This doctrine further stabilized Britain and other industrialized countries’ claims that their indirect rule of the Middle Eastern countries helped “civilisation” (101) more broadly.

Mitchell turns his attention to how the principle of self-determination enabled several major international oil firms to take control over the region’s oil during the interwar period. Several American, British, and French oil companies struck a deal known as the Red Line Agreement of 1928. In this agreement, these oil companies agreed to not develop new oil sources in the region unless all the other companies agreed.

Local government officials throughout the Middle East began to pushback against these oil companies’ refusal to develop the oil industry. Similar to European coal workers, locals in these countries targeted key points of vulnerability in the flow of oil-energy. Mitchell provides examples from Iraq, Palestine, and Syrian. In Iraq, several strikes, led by the Communist Party of Iraq, successfully shutdown major oil pumping stations. Palestinian forces also blew-up one of the major oil pipelines. The Syrian parliament refused to ratify the terms of agreement with an oil pipeline company, which would have rerouted a pipeline in Palestine to Syria.

The foreign oil companies quickly suppressed these political protests. In Iraq, they surrounded the oil fields with “machine guns and armoured cars and cut off supplies of food” (104). Many of the strike leaders also went to prison. In Palestine, they worked with British and U.S. government officials to support Zionism, a movement to develop and protect a Jewish nation state in what is today Israel. This action further destabilized the government in Palestine. Finally, the oil companies convinced the CIA to overthrow the Syrian (and eventually the Iranian) government and replace it with government more accommodating to foreign oil interests. Oil companies also “imported the system of racial segregation and the corresponding inequality in pay, working conditions, and housing that were familiar features of oil and other extractive enterprises in the United States” (106). The intent of these mechanisms was to inhibit local workers ability to organize and take political action. 

Chapters 2-4 Analysis

One of Mitchell’s goals in Carbon Democracy is to provide an alternative account of the beginnings of the modern oil industry in Middle East. In Chapter 2, Mitchell demonstrates how there are three issues with this traditional account. The first is that oil was already known to exist in the Middle East prior to its “discovery” at Masjid-i-Suleiman. Mitchell instead argues that oil companies intentionally delayed the development of oil production and distribution in the Middle East to maintain greater control over the profits generated from oil-energy.

The second issue is that traditional accounts only focus on the so-called protagonists of the story or the governments, oil companies, and individuals who helped discover oil. The traditional account plays up the role of the heroic pioneers who discovered oil in the middle of nowhere. Mitchell believes this account is woefully incomplete since it leaves out the workers and machinery producing the oil, the oil itself, the finances, and the knowledge around the production and distribution processes. Mitchell refers to this apparatus as the oil firm.

The final issue is that traditional accounts argue that oil companies in the Middle East “were never strong enough to monopolise the flow or stoppage of oil by themselves” (45). Rather, they needed help from the military and other financial sources. Mitchell strongly disagrees with this idea. In fact, he argues that oil companies deliberately monopolized the flow or stopped oil to maximize their own profits. He also suggests that oil companies and their allies also learned to present their own goals as “imperial needs” to bypass governments that had grown increasingly democratic due to coal-energy use.

In this section, Mitchell also continues to build on the theme that Fossil Fuels Create Both the Possibility and Limitations of Modern Democracy. In Chapter 3, he illustrates how politicians saw control of oil overseas, including in the Middle East, as a way of intentionally weakening democratic forces in their own country. One of the best examples that Mitchell uses is that of Winston Churchill. Churchill used the threat and then subsequent outbreak of WWI to weaken the political force of the masses.

At this time, the British Parliament represented mass political parties, partly due to the democratization efforts caused by coal miners and coal-energy. The British Parliament passed legislation for the masses, including national unemployment and disability insurance and healthcare programs. These programs cost substantial money. Government officials looked to cutting the navy’s budget to pay for these programs. As a result, the navy’s budget fell under greater scrutiny. At this time, the navy, prodded by Churchill, was attempting to switch from coal to oil. Part of the reason that Churchill was pushing for this switch was to make the navy less reliant on coal miners who caused one of the most intense periods of industrial action in Great Britain. This switch would have cost substantial money. For this reason, the British Parliament refused to approve the additional money. Churchill used the threat of war to commit the navy to oil. Churchill understood that oil required “fewer concessions to democratic political claims” (65). He played a key role in rolling back the democratic advances that coal miners had made in Great Britain and elsewhere.

In Chapter 4, Mitchell also details how the creation of the oil industry in Iraq and the surrounding countries created new opportunities for democratic principles, at least initially. After WWI, it seemed like local people in the Middle East could successfully exploit vulnerabilities in the oil-energy production and distribution processes to advocate for political freedoms and more egalitarian forms of life, similar to the European and American coal workers. Local workers shutdown oil pumping stations and blew-up major pipelines and local government officials refused to ratify agreements from European and American powers that put the local country at a disadvantage when it came to oil resources.

Unfortunately, this success was short-lived. Mitchell introduces another theme in this section, Western Countries and Fossil Fuel Companies are Complicit in Global Subjugation and Violence, which helps explain why these attempts in the Middle East for greater democratization failed. To suppress the political protests, oil companies and Western countries conspired together to use violence, such as weapons, racial segregation in the oil industry, and toppling governments. These actions prevented locals in Middle Eastern countries from paralyzing the coal-energy system and building “a more democratic order” (108).

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