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DECLINE OF THE WEST
"It is becoming all too clear that the power of the oil cartel threatens the future of Western civilisation." wrote Fortune, leading U.S. business magazine, in a December 1974 editorial. First, there is the short-term problem: the petrol billions are piling up in the form of short-term deposits in British (and American) banks. These banks cannot make long-term loans on these short-term deposits to those countries which are now faced with massive trade deficits. The danger is that the latter "may have to cheapen their currencies, or restrict imports or both" to lessen trade deficits. As a result, "world trade will shrink" and a global depression result the long-term problem says Fortune, is that the high price of oil leads to an unprecedented and unacceptable transfer of wealth". In 1975, the Organisation of Petrol Exporting Countries (OPEC) will have more capital reserves than all the gold and currency of the rest of the capitalist world combined. The sustained, but comparatively gradual growth in the power of West Europe and Japan in relation to the United States in the late '50s and throughout the '60s led to crises in the'70s until the United States was forced to recognise its new power relationship with Europe. Some theoreticians at the time speculated, somewhat mechanically, on the danger of war between the U.S. and Europe, based on the very real clash of economic interests. The virtual overnight rise of the OPEC nations into a major centre of finance capital, impoverishing European capitalist powers and threatening the U.S., makes the danger of a war between them and the U.S. even more likely. The threat of Kissinger and Ford to "send in the marines" is therefore no idle boast. Imperialism finds such sudden shifts in power very difficult to absorb. The conservatives of OPEC - Iran and Saudi Arabia - are the ones with the aces, as they are the major oil producers. They recently vetoed a plan by OPEC radicals for a new attack on U.S and Europe, to finance cartels of other producers of raw I materials, cut back production of oil to meet only the OPEC nations current expenditure, and withdraw oil billions from western banks. Iran and Saudi Arabia instead proposed to freeze oil prices and recycle the petrodollars to Europe and the U.S., in return for a form of "indexation" of oil prices to other commodity prices. The real question remains, even within the conservatives' plan, whether U.S. and European imperialism will accept the "unacceptable" transfer of wealth that is taking place. If they do not, the world could be thrown into a worldwide conflict.
DECLINE OF THE WEST (1975, February 11). Tribune (Sydney, NSW : 1939 - 1991), p. 3. Retrieved July 21, 2021, from http://nla.gov.au/nla.news-article236919722
