Books: On Maps and Chaps (1961)

Book Review from the January 1961 issue of the Socialist Standard

“Geography”, said Mr. Bentley in one of his famous clerihews, “is about maps” and history—”about chaps “. But, as Mr. Andrew Boyd points out in his recently published book, geography is really about them both.

Those who remember Mr. J. F. Horrabin’s pre-war Atlas of Current Affairs and the way in which he dealt both with maps and chaps will certainly be interested in Mr. Boyd’s An Atlas of World Affairs (Methuen. 6s. 6d.). It is another of those convenient compendiums so useful to anybody with an interest in keeping abreast of the many events and developments in the world but who find themselves with so little time to do it. It will naturally be of interest to Socialists, in particular to writers and speakers.

The book consists of 70 maps, clearly drawn and annotated in black and white, each with its accompanying page of background information. Those maps which are inter-related are efficiently cross-referenced. The subjects they cover are many and varied and provide an impressive picture in themselves of the problems and complexities of the modern capitalist world.

Strategy, trade, production, race tensions, nationalism, disputes and troubles of every sort, are translated into graphic terms. So are the areas of the world where they happen—Africa, Cyprus, the Middle East, Korea, the Arctic, Europe with its trade divisions, France and North Africa, Poland’s frontiers, the development of China, these and many other aspects of the current world scene are mapped and factually described.

Of easy reference and readability, attractively produced and printed, it is in short an ideal repository of compressed information at a very reasonable price.

Stan Hampson

Afghanistan and the new Silk Road (2001)

From the November 2001 issue of the Socialist Standard

The following testimony by an oil and gas corporation executive (of Union Oil of California) to the Subcommittee on Asia and the Pacific of the US House of Representatives’ Committee on International Relations on 12 February 1998 throws much light on the strategic importance of Afghanistan to the Western capitalist powers and goes a long way to explain why they have gone to war there.

Mr. Chairman, I am John Maresca, Vice President, International Relations, of Unocal Corporation. Unocal is one of the world’s leading energy resource and project development companies. Our activities are focused on three major regions – Asia, Latin America and the US Gulf of Mexico. In Asia and the US Gulf of Mexico, we are a major oil and gas producer. I appreciate your invitation to speak here today. I believe these hearings are important and timely, and I congratulate you for focusing on Central Asia oil and gas reserves and the role they play in shaping US policy.

Today we would like to focus on three issues concerning this region, its resources and US policy:

• The need for multiple pipeline routes for Central Asian oil and gas.
• The need for US support for international and regional efforts to achieve balanced and lasting political settlements within Russia, other newly independent states and in Afghanistan.
• The need for structured assistance to encourage economic reforms and the development of appropriate investment climates in the region. In this regard, we specifically support repeal or removal of Section 907 of the Freedom Support Act.

For more than 2,000 years, Central Asia has been a meeting ground between Europe and Asia, the site of ancient east-west trade routes collectively called the Silk Road and, at various points in history, a cradle of scholarship, culture and power. It is also a region of truly enormous natural resources, which are revitalizing cross-border trade, creating positive political interaction and stimulating regional cooperation. These resources have the potential to recharge the economies of neighboring countries and put entire regions on the road to prosperity.

About 100 years ago, the international oil industry was born in the Caspian/Central Asian region with the discovery of oil. In the intervening years, under Soviet rule, the existence of the region’s oil and gas resources was generally known, but only partially or poorly developed.

As we near the end of the 20th century, history brings us full circle. With political barriers falling, Central Asia and the Caspian are once again attracting people from around the globe who are seeking ways to develop and deliver its bountiful energy resources to the markets of the world.

The Caspian region contains tremendous untapped hydrocarbon reserves, much of them located in the Caspian Sea basin itself. Proven natural gas reserves within Azerbaijan, Uzbekistan, Turkmenistan and Kazakhstan equal more than 236 trillion cubic feet. The region’s total oil reserves may reach more than 60 billion barrels of oil – enough to service Europe’s oil needs for 11 years. Some estimates are as high as 200 billion barrels. In 1995, the region was producing only 870,000 barrels per day (44 million tons per year [Mt/y]).

By 2010, Western companies could increase production to about 4.5 million barrels a day (Mb/d) – an increase of more than 500 percent in only 15 years. If this occurs, the region would represent about five percent of the world’s total oil production, and almost 20 percent of oil produced among non-OPEC countries.

One major problem has yet to be resolved: how to get the region’s vast energy resources to the markets where they are needed. There are few, if any, other areas of the world where there can be such a dramatic increase in the supply of oil and gas to the world market. The solution seems simple: build a “new” Silk Road. Implementing this solution, however, is far from simple. The risks are high, but so are the rewards.

Finding and Building Routes to World Markets

One of the main problems is that Central Asia is isolated. The region is bounded on the north by the Arctic Circle, on the east and west by vast land distances, and on the south by a series of natural obstacles – mountains and seas – as well as political obstacles, such as conflict zones or sanctioned countries.

This means that the area’s natural resources are landlocked, both geographically and politically. Each of the countries in the Caucasus and Central Asia faces difficult political challenges. Some have unsettled wars or latent conflicts. Others have evolving systems where the laws – and even the courts – are dynamic and changing. Business commitments can be rescinded without warning, or they can be displaced by new geopolitical realities.

In addition, a chief technical obstacle we face in transporting oil is the region’s existing pipeline infrastructure. Because the region’s pipelines were constructed during the Moscow-centered Soviet period, they tend to head north and west toward Russia. There are no connections to the south and east.

Depending wholly on this infrastructure to export Central Asia oil is not practical. Russia currently is unlikely to absorb large new quantities of “foreign” oil, is unlikely to be a significant market for energy in the next decade, and lacks the capacity to deliver it to other markets.

Certainly there is no easy way out of Central Asia. If there are to be other routes, in other directions, they must be built.

Two major energy infrastructure projects are seeking to meet this challenge. One, under the aegis of the Caspian Pipeline Consortium, or CPC, plans to build a pipeline west from the Northern Caspian to the Russian Black Sea port of Novorossisk. From Novorossisk, oil from this line would be transported by tanker through the Bosphorus to the Mediterranean and world markets.

The other project is sponsored by the Azerbaijan International Operating Company (AIOC), a consortium of 11 foreign oil companies including four American companies – Unocal, Amoco, Exxon and Pennzoil. It will follow one or both of two routes west from Baku. One line will angle north and cross the North Caucasus to Novorossisk. The other route would cross Georgia and extend to a shipping terminal on the Black Sea port of Supsa. This second route may be extended west and south across Turkey to the Mediterranean port of Ceyhan.

But even if both pipelines were built, they would not have enough total capacity to transport all the oil expected to flow from the region in the future; nor would they have the capability to move it to the right markets. Other export pipelines must be built.

Unocal believes that the central factor in planning these pipelines should be the location of the future energy markets that are most likely to need these new supplies. Just as Central Asia was the meeting ground between Europe and Asia in centuries past, it is again in a unique position to potentially service markets in both of these regions – if export routes to these markets can be built. Let’s take a look at some of the potential markets.

Western Europe

Western Europe is a tough market. It is characterized by high prices for oil products, an aging population, and increasing competition from natural gas. Between 1995 and 2010, we estimate that demand for oil will increase from 14.1 Mb/d (705 Mt/y) to 15.0 Mb/d (750 Mt/y), an average growth rate of only 0.5 percent annually. Furthermore, the region is already amply supplied from fields in the Middle East, North Sea, Scandinavia and Russia. Although there is perhaps room for some of Central Asia’s oil, the Western European market is unlikely to be able to absorb all of the production from the Caspian region.

Central and Eastern Europe

Central and Eastern Europe markets do not look any better. Although there is increased demand for oil in the region’s transport sector, natural gas is gaining strength as a competitor. Between 1995 and 2010, demand for oil is expected to increase by only half a million barrels per day, from 1.3 Mb/d (67 Mt/y) to 1.8 Mb/d (91.5 Mt/y). Like Western Europe, this market is also very competitive. In addition to supplies of oil from the North Sea, Africa and the Middle East, Russia supplies the majority of the oil to this region.

The Domestic NIS Market

The growth in demand for oil also will be weak in the Newly Independent States (NIS). We expect Russian and other NIS markets to increase demand by only 1.2 percent annually between 1997 and 2010.

Asia/Pacific

In stark contrast to the other three markets, the Asia/Pacific region has a rapidly increasing demand for oil and an expected significant increase in population. Prior to the recent turbulence in the various Asian/Pacific economies, we anticipated that this region’s demand for oil would almost double by 2010. Although the short-term increase in demand will probably not meet these expectations, Unocal stands behind its long-term estimates.

Energy demand growth will remain strong for one key reason: the region’s population is expected to grow by 700 million people by 2010.

It is in everyone’s interests that there be adequate supplies for Asia’s increasing energy requirements. If Asia’s energy needs are not satisfied, they will simply put pressure on all world markets, driving prices upwards everywhere.

The key question is how the energy resources of Central Asia can be made available to satisfy the energy needs of nearby Asian markets. There are two possible solutions – with several variations.

Export Routes

East to China: Prohibitively Long?

One option is to go east across China. But this would mean constructing a pipeline of more than 3,000 kilometers to central China – as well as a 2,000-kilometer connection to reach the main population centers along the coast. Even with these formidable challenges, China National Petroleum Corporation is considering building a pipeline east from Kazakhstan to Chinese markets.

Unocal had a team in Beijing just last week for consultations with the Chinese. Given China’s long-range outlook and its ability to concentrate resources to meet its own needs, China is almost certain to build such a line. The question is what will the costs of transporting oil through this pipeline be and what netback will the producers receive.

South to the Indian Ocean: A Shorter Distance to Growing Markets

A second option is to build a pipeline south from Central Asia to the Indian Ocean.

One obvious potential route south would be across Iran. However, this option is foreclosed for American companies because of US sanctions legislation. The only other possible route option is across Afghanistan, which has its own unique challenges.

The country has been involved in bitter warfare for almost two decades. The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognized as a government by most other nations. From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.

In spite of this, a route through Afghanistan appears to be the best option with the fewest technical obstacles. It is the shortest route to the sea and has relatively favorable terrain for a pipeline. The route through Afghanistan is the one that would bring Central Asian oil closest to Asian markets and thus would be the cheapest in terms of transporting the oil.

Unocal envisions the creation of a Central Asian Oil Pipeline Consortium. The pipeline would become an integral part of a regional oil pipeline system that will utilize and gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia.

The 1,040-mile-long oil pipeline would begin near the town of Chardzhou, in northern Turkmenistan, and extend southeasterly through Afghanistan to an export terminal that would be constructed on the Pakistan coast on the Arabian Sea. Only about 440 miles of the pipeline would be in Afghanistan.

This 42-inch-diameter pipeline will have a shipping capacity of one million barrels of oil per day. Estimated cost of the project – which is similar in scope to the Trans Alaska Pipeline – is about US$2.5 billion.

There is considerable international and regional political interest in this pipeline. Asian crude oil importers, particularly from Japan, are looking to Central Asia and the Caspian as a new strategic source of supply to satisfy their desire for resource diversity. The pipeline benefits Central Asian countries because it would allow them to sell their oil in expanding and highly prospective hard currency markets. The pipeline would benefit Afghanistan, which would receive revenues from transport tariffs, and would promote stability and encourage trade and economic development. Although Unocal has not negotiated with any one group, and does not favor any group, we have had contacts with and briefings for all of them. We know that the different factions in Afghanistan understand the importance of the pipeline project for their country, and have expressed their support of it.

A recent study for the World Bank states that the proposed pipeline from Central Asia across Afghanistan and Pakistan to the Arabian Sea would provide more favorable netbacks to oil producers through access to higher value markets than those currently being accessed through the traditional Baltic and Black Sea export routes.

This is evidenced by the netback values producers will receive as determined by the World Bank study. For West Siberian crude, the netback value will increase by nearly $2.00 per barrel by going south to Asia. For a producer in western Kazakhstan, the netback value will increase by more than $1 per barrel by going south to Asia as compared to west to the Mediterranean via the Black Sea.

Natural Gas Export

Given the plentiful natural gas supplies of Central Asia, our aim is to link a specific natural resource with the nearest viable market. This is basic for the commercial viability of any gas project. As with all projects being considered in this region, the following projects face geo-political challenges, as well as market issues.

Unocal and the Turkish company, Koc Holding A.S., are interested in bringing competitive gas supplies to the Turkey market. The proposed Eurasia Natural Gas Pipeline would transport gas from Turkmenistan directly across the Caspian Sea through Azerbaijan and Georgia to Turkey. Sixty percent of this proposed gas pipeline would follow the same route as the oil pipeline proposed to run from Baku to Ceyhan. Of course, the demarcation of the Caspian remains an issue.

Last October, the Central Asia Pipeline, Ltd. (CentGas) consortium, in which Unocal holds an interest, was formed to develop a gas pipeline that will link Turkmenistan’s vast natural gas reserves in the Dauletabad Field with markets in Pakistan and possibly India. An independent evaluation shows that the field’s resources are adequate for the project’s needs, assuming production rates rising over time to 2 billion cubic feet of gas per day for 30 years or more.

In production since 1983, the Dauletabad Field’s natural gas has been delivered north via Uzbekistan, Kazakhstan and Russia to markets in the Caspian and Black Sea areas. The proposed 790-mile pipeline will open up new markets for this gas, travelling from Turkmenistan through Afghanistan to Multan, Pakistan. A proposed extension would link with the existing Sui pipeline system, moving gas to near New Delhi, where it would connect with the existing HBJ pipeline. By serving these additional volumes, the extension would enhance the economics of the project, leading to overall reductions in delivered natural gas costs for all users and better margins. As currently planned, the CentGas pipeline would cost approximately $2 billion. A 400-mile extension into India could add $600 million to the overall project cost.

As with the proposed Central Asia Oil Pipeline, CentGas cannot begin construction until an internationally recognized Afghanistan government is in place. For the project to advance, it must have international financing, government-to-government agreements and government-to-consortium agreements.

Conclusion

The Central Asia and Caspian region is blessed with abundant oil and gas that can enhance the lives of the region’s residents and provide energy for growth for Europe and Asia.

The impact of these resources on US commercial interests and US foreign policy is also significant and intertwined. Without peaceful settlement of conflicts within the region, cross-border oil and gas pipelines are not likely to be built. We urge the Administration and the Congress to give strong support to the United Nations-led peace process in Afghanistan.

US assistance in developing these new economies will be crucial to business’ success. We encourage strong technical assistance programs throughout the region. We also urge repeal or removal of Section 907 of the Freedom Support Act. This section unfairly restricts US government assistance to the government of Azerbaijan and limits US influence in the region.

Developing cost-effective, profitable and efficient export routes for Central Asia resources is a formidable, but not impossible, task. It has been accomplished before. A commercial corridor, a “new” Silk Road, can link the Central Asia supply with the demand – once again making Central Asia the crossroads between Europe and Asia.

Thank you.

(Was to be found at: http://www.house.gov/international_relations/105th/ap/wsap212982.htm. Now not operational)

From America: The Panama Canal and the right of free access (1977)

From the October 1977 issue of the Socialist Standard

One of the hottest pieces for conversation in America these days is the Carter Administration’s treaty with Panama, scheduled for a pomp-and-ceremonial signing on Wednesday, Sept. 7, in Washington, with a glittering crowd of little Latin-American dictators and other dignitaries in attendance. Ownership of the Panama Canal is to be transferred to the Panamanian Government, effective as of 1999, albeit with continuing US rights in the area of military defense. As of this writing, opinion polls indicate that a sizeable majority of the US population opposes the deal and that, in the end, the US Senate will refuse to ratify. The Government is mounting an all-out propaganda blitz to win over popular sentiment and save the Treaty.

In a nutshell, the positions are: Pro: in the final analysis, it is free access and not ownership that is important. Panamanians in particular, and Latin Americans, in general, are said to feel that 75 years of US ownership of a waterway in their area is enough. Good public relations between US and the latinos demand the transfer. Con: “We” (the us Government) built the Canal and paid for it. It makes no sense to give it away to a tinhorn dictatorship. Surely American military muscle can easily handle the hostile guerrilla action by anti-Yanqui latinos, but to surrender it to Panama would be to invite trouble from the Communist world — particularly Soviet Russia — which might seize control.

There is much meat here for socialists to chew on. But first it may be helpful to have a look at some bare facts concerning the history of the Canal, facts which are easily verified in the history books. To begin with, the “sovereign” nation of Panama came into being just 75 years ago as the fruit of a conspiracy involving a French capitalist consortium, the Government of President Theodore Roosevelt, and Panamanian revolutionists who sought independence from Columbia of which the Isthmus of Panama was a part.

The French capitalist group had recently abandoned its attempt at building a canal across the Isthmus after sinking some $260 million. A major, insurmountable, obstacle for them was malaria-bearing mosquitoes that devastated the work force. Roosevelt's government now commenced negotiations with the Columbian Government to pick up the rights from the French after agreeing to pay some $40 million for their franchise and unfinished work. But the Columbian Parliament stalled, attempting to raise their ante, and the US Congress hemmed and hawed. Then, enter the conspirators, and a Gilbert & Sullivan-type production ensued.

The group of Panamanian rebel-nationalists was set in motion on the Atlantic side of the Isthmus and the flag of independence was raised. At the same time, three US warships showed up at Colon and Marines were landed to “restore order”. The entire Columbian military force on the Pacific side was bought off, privates receiving $50 a head and officers more, and the revolution was over — bloodless save for the accidental killing of a Chinaman. The news reached Washington at 11.30 in the morning of Nov. 6, 1903, and the Republic of Panama was recognised before one o’ clock of the same day.

There is much more, of course, to this fascinating tale of intrigue in high circles but the foregoing are, at least, among the more salient facts. American capitalism licked the malaria problem by draining the swamps that provided the breeding ground for the mosquitoes. In other words, rather than waste time swatting the critters or spraying them with the 1903 equivalent of Flit, the US got down to bed-rock — the source — and corrected it, a tactic we can hardly expect capitalism to pursue in its perpetual confrontation with problems such as poverty-in-the-midst-of-porential- abundance; war; discrimination, etc.

Now, what should we make of all this noise about the Canal, today? Does it really matter either to Panamanian or American workers which nation possesses the deed of ownership? President Carter tells us, soberly, that it is not ownership but free access that is really important. Aside from our feeling that this move is an attempt by US capitalism to get further out of the more overt type of colonialism, we can only wish that the majority would apply such reasoning to all of wealth-producing property. The reason that the Treaty is of no import either to American or Panamanian workers is that ownership and free access, under capitalism, is generally confined to the capitalist class, even in cases of government-owned and government-operated industry.

But in the face of this truth there is something strange, even weird, about capitalism. Whether or not the Panama Canal will actually become the property of the Panamanian capitalist class depends on how successful the political leaders are in selling a bill of goods to American and Panamanian workers in order to provide the necessary pressures on the politicians to pass and to ratify the legislation.

Socialists maintain, then, that there are three rather than two positions on the Panama Canal Treaty: (1) Agreement; (2) opposition; (3) a simple working-class declaration: It is not our property so don’t bother us. But think carefully about that point made by President Carter on ownership vs. free access. And apply it to the world situation. The answer is inescapable: World Socialism will mean the end of ownership in the sense of class ownership. And common ownership can only spell free access to all that is in and on the earth, even the Panama Canal, by all mankind.

Harry Morrison, 

WSP, Boston. 

Rise of American Civilisation, Beard 

A New American History, Woodward

The Suez Canal in World Affairs (1953)

From the July 1953 issue of the Socialist Standard

The Suez Canal is the gateway to the Orient, the connecting link between East and West, between Britain and the members of the Commonwealth in the East.

The story of the Canal and the struggle for control of this area is told by Hugh J. Schonfield in “The Suez Canal in World Affairs,” published by Constellation Books, London.

Many centuries ago the wealth of the East was brought to the Mediterranean via Egypt. About 2,000 years B.C. a canal was built joining the Red Sea and the Nile. This canal, called the Canal of the Pharoahs, was silted up and rebuilt during successive reigns and renamed under succeeding empires. Finally it was closed in 776 A.D. while Egypt was under Arab domination. Then trade between the East and West declined, in the 13th and 14th centuries Marco Polo and other travellers opened up the Northern Overland route to India and China. The growth of the aggressive power of Turkey blocked this route. A new route was sought. Christopher Columbus sailed west and Vasco de Gama rounded the Cape of Good Hope. The Cape route gave successively the monopoly of Eastern trade to the Portuguese, the Dutch, the French and the British. To gain and maintain this monopoly Britain made herself mistress of the seas.

France with her southern seaboard on the Mediterranean was interested in opening up the ancient route to the East through Egypt. But competition with the Cape route was impossible while goods had to be carried by camel to Alexandria, then transhipped. A canal between Suez and Cairo was suggested, but the political and practical obstacles seemed insurmountable. Egypt was part of the Ottoman Empire and it was thought that there was a difference of 30ft. in the sea levels of the Mediterranean and the Red Sea. English merchants aware of French designs sought privileges in Egypt. Both French and English governments sought influence in Egypt and Turkey and when war broke out between England and France in 1793, France tried to establish herself there, but Britain put an end to these territorial ambitions by defeating the French at the Battle of the Nile.

About 30 years after, an Englishman Lieut. Waghorn started a postal route to India via Egypt demonstrating practically the advantages of this route. Engineers investigated the question of the difference in sea levels and a sect founded by the utopian socialist Saint Simon set up an organisation to examine the question of a canal financially and technically. An alternative scheme for building a railroad was put forward, supported by Britain. But France continued to retain her interest in the canal. Both Governments sought concessions from the Viceroy of Egypt who played the one against the other. When the Viceroy died, Britain received a concession to build a railroad because she had paid court to his successor. The dispute between France and Britain might have become serious if they had not been already allied in prosecuting the Crimean War.

The advantage gained by Britain was offset when Ferdinand de Lesseps received a concession from Mahomet Said, the next Viceroy, authorising him to form an international company to build a canal. The British Government opposed the venture and effectively warned off British capital from taking part in it. But after the construction of the canal Britain realised her mistake and bought up about half the shares. Then in 1882 when rioting broke out in Alexandria British troops took possession. Britain wished to preserve the right to defend the Canal if any Power attacked Egypt and to guarantee with other Powers to keep the Canal open in peace and in war. Other Powers disagreed but a compromise was reached with the Convention of 1888, which made Turkey nominal guardian and guaranteed to keep the Canal open in any circumstances. But Britain still remained in Egypt.

Germany, seeking means of expansion, seized on the possibilities of the undeveloped near East and set out to build the Berlin-Bhagdad Railway which would offset Britain's domination of Egypt and her use of the Suez Canal. When war broke out between Britain and Germany in 1914, Egypt lined up with Britain and closed the Canal to enemy shipping. Turkey, seeking to regain control in Egypt set out to invade it. Britain made Egypt a Protectorate and with the defeat of Germany and Turkey became guardian of the Canal.

In 1922, Egypt was declared an independent stale but the Egyptian Government was dissatisfied with the conditions of the declaration. Italy's longstanding threat to Britain in the Mediterranean culminated in the declaration of war against France and Britain in 1940. The Canal was attacked by air and Egypt was attacked by land from Libya. Because of Italy's lack of success Germany took a hand. For a considerable time the Mediterranean was closed to allied shipping but with the halting of Rommel at El Alamein the Canal was made safe to send aid to Russia in the effort to defeat the Japanese in the Far East.

Since World War II, Egypt has sought to terminate the 1936 Agreement which allows British troops to occupy the Canal Zone. But Egypt, like all other belligerents in war, has shown that she won't pay any attention to the 1888 Convention which guaranteed to keep the Canal open to all shipping in peace or war. In the conflict between Israel and the Arab League, Egypt stopped supplies going to Israel.

Mr. Schonfield's story of the Canal shows its importance to the capitalist Powers in peace and in war.

Today Egypt wants Britain to evacuate her troops from the Canal Zone but Britain is reluctant to do so until she is assured of strong Middle East defences. Certain sections of British capitalist class opinion would like to make the Canal Zone the central base in these defences because of its geographical position, and oppose handing over to Egypt this base with its hundreds of millions of pounds worth of installations. Other sections of the British capitalist class remember the limited use of the Canal during the two world wars and its vulnerability to land attack and are of the opinion that the North East Mediterranean coast with the mountains behind forming a barrier to landborne troops would provide a more suitable base. They claim that the Canal will decline in importance with the increasing use of air instead of the sea for conveying troops and equipment.

To understand why the Canal is important it is necessary to know something about present day society. The means of producing society’s needs are owned by a small section of society, the capitalist class, and the vast majority, the working class, must sell their labour power to the few who own those means of production. In exchange for their labour power the workers receive wages that are very often barely enough to live on. What the workers produce over their wages allows the capitalist class to live comfortably and increase their capital. To realise this surplus the capitalist class must sell their goods and must find raw materials with which they can be produced. This means that there must be trade routes to bring the raw materials from where they are produced to where they are needed and to take the finished articles to the markets where they can be sold. And to protect these trade routes in event of war the different sections of the capitalist class struggle for control of strategic points.

Mr. Schonfield would like to sec the dream of Ferdinand de Lesseps come true. He would like the Canal used for the benefit of humanity. He would like the Canal used to build up the backward countries and raise their standards of living. But if the Canal is to be used for the benefit of humanity the means of living will have to be the property of all society. Then goods won’t be produced and exchanged for the profit of the few but distributed solely for the use of all.

J. T.

The wrangle over Egypt (1946)

From the June 1946 issue of the Socialist Standard

Let it first of all be made quite clear that in all the deliberations that have taken place, and will take place, over the evacuation of British troops from Egypt, the welfare of the Egyptian worker and peasant has never been an issue. Whether under the domination of British or Egyptian masters, they will not see much difference in their lot. Whether their rulers are British or Egyptian, they will still have to eke out a miserable existence; they will still have to labour from sunrise to sunset in their master’s fields; they will still be riddled with disease; in short, they will still be a subject class, ruthlessly and viciously exploited for profit.

What is, in fact, at issue in Egypt, as is quite openly admitted and taken for granted by both parties, is the preservation of the safety of British capitalism’s lines of communication through the Eastern Mediterranean. Opinions differ, however, as to the best means.

Said Mr. Anthony Eden, for the Conservatives, in the debate in the House of Commons: —

“His first complaint about the Prime Minister’s announcement at this time was that it gave the impression, by the manner in which the withdrawal of troops was referred to, that their purpose in Egypt was something other than it was-- namely, the Defence of the Canal Zone.”

(Times, 8/5/46.)

And Mr. Attlee, for the Labour Party, in the same debate:—

“The Government were as much concerned as anybody else with the security of the communications of the Commonwealth and Empire, with the security of the Canal, and with maintaining the best possible relations with Egypt and her continued alliance with this country, and it was precisely for those reasons that they were making the approach they were making.''

(Our Italics.) (Times, 8/5/46.)

What, then, is behind this, at first sight, rather sudden decision to withdraw troops from Egypt? The reasons are political and also military.

For many years past, the whole of the Middle East, of which Egypt is hut one part, has been the focal point of steadily expanding nationalistic feeling. During the past war, and in the period since, this nationalistic fervour has become even more intense. The recent outbursts in Egypt against British troops are an illustration of the feeling against the foreigner. Although still doing their utmost to retain as much influence as possible in the area, the capitalist Powers concerned have had to take note of this desire for independence.

That Mr. Herbert Morrison fully appreciates this is shown by the following quotation from his speech in the House of Commons: —

“If the British Government had told the Egyptian Government that they would give no undertaking about the withdrawal from Egyptian soil, the negotiations would not have gone on and then the British Government would have had to face certain consequences. There would be sharp antagonism on the part of the Egyptian Government and Parliament; almost certain disturbance and riots, possibly even revolution, and it might have led to British forces being attacked and having to defend themselves.”

(Times, ibid.)

Then there are military aspects that indicate the conceptions on which the new policy is based. The following statement is from an article in the Observer, (12/5/46) : —

”The Canal . . . . can he bombed and made unusable by aerial mining operations. Any Power with the use of air bases in the Eastern Mediterranean and a modern air force can reasonably hope to achieve this. The 10,000 British troops that the 1936 Treaty permits to be quartered in the Canal Zone are no defence against such attack The defence of the Canal itself is largely irrelevant. The vital area is the whole Middle East, with Palestine as its natural centre . . . Now that it is proposed that Egypt . . . . is to be militarily evacuated, there is only one part of the Middle East where the British have retained the right to keep troops: Palestine and the neighbouring State of Transjordan. It is my contention that this limited area can provide an adequate base for a Middle Eastern defence or police force. It has air bases which enable present-day transport aircraft to reach the Canal Zone in an hour, Cairo in less than two hours, and Baghdad in less than three. It has a port at Haifa capable of great development, and it has oil supplies in its immediate vicinity . . . ”

In short, the Labour Government and its advisers are willing to take troops out of Egypt because they believe they will be better placed elsewhere for the defence of the Middle East. Imperial aims have not been dropped, but merely modified. 

The Labour Party is not a Socialist party and was not elected with a mandate for Socialism. It must therefore of necessity administer affairs, whether domestic or foreign, within the framework of capitalism. In its domestic affairs it has already amply demonstrated to the capitalist class that, fundamentally, they have nothing to fear from its administration. In foreign affairs its policy has sometimes even dismayed some of its own members and, on the other hand, has met with warm approval from the Conservative Party. On the Egyptian issue both Parties are concerned with one aim—how best to preserve the security of communications in the Middle East. The Labour Party, no less than the Conservatives, has sought to safeguard the interests of British Capitalism.

Stan Hampson

What’s the deal with Greenland? (2025)

From the May 2025 issue of the Socialist Standard

Six months ago nobody would have imagined Greenland making headlines. Almost the only things most people know about the place is that it’s not as big as it looks on maps, and it is covered in ice that’s melting due to global warming.

Then came US Vice-President Vance’s unwelcome and controversial visit to the island in late March. The ensuing furore fortuitously diverted media attention from ‘Signalgate’, the disastrous security blunder which made Trump’s senior appointees look like fools. Democrats furiously demanded the resignation of Mike Waltz, the National Security Advisor, who inadvertently included a journalist in top-secret discussions about bombing the Houthis in Yemen, and Pete Hegseth, the Defense Secretary, who blithely joined in the chat from his – possibly monitored – hotel room in Moscow. Russia, be it noted, is friends with Iran, who are friends with the Houthis. Republicans too must have been quietly alarmed at such blithering incompetence on the part of people put in charge of US national security. Trump’s self-estimation as a genius clearly depends on him surrounding himself with loud-mouthed buffoons. His protégés duly followed Trump protocol – lie, deny, and go on the offensive – but he probably realised that he ought to sack them and hand the Democrats a big win, because covering for them would undermine his own credibility. But as we later saw with his astounding tariffs and subsequent craven roll-back, he believes his credibility is indestructible.

A handy diversion

In the event, Vance’s impromptu and perhaps calculated excursion to the Pituffik airbase in Greenland provided a useful distraction from the Signalgate fiasco. Vance publicly hectored Denmark for its supposedly poor stewardship of the island, reinforcing Trump’s claim that a US takeover was not just desirable but inevitable. Not surprisingly the Danes were politely enraged, saying ‘this is not how you talk to your allies’ and calling the move Trump’s ‘Crimea script’. Even Pituffik’s own commander tried to distance herself from Vance’s remarks, promptly earning herself the sack. The Greenlanders were also not best pleased. In polls, 80 percent of them want independence from Denmark, but 85 percent of them do not want to be annexed by the USA. What they do want, one can only imagine, is some sort of unworldly solution in which they no longer have to scrape by on Danish subsidies yet somehow manage to prosper as a lone island state the size of western Europe, with no industry or infrastructure, or even roads, and a population only one third the size of the Isle of Wight’s.

There is zero chance of that happening, because Greenland is just too important to major powers. Trump has been wanting Greenland since his first Presidency in 2016, and the US, for various reasons, has been wanting it since 1867. That was the year the US bought Alaska off the Russians for $7m. The US Secretary of State William H Seward, who oversaw the Alaska purchase, was also keen on buying Greenland and Iceland at the same time, in order to wedge Canada in on three sides and force it eventually to become part of the US. Trump may well be aware of this Seward plan, which would add context to his comments about annexing Canada. In 1868 Seward began negotiations with Denmark to buy Greenland. But Congress failed to ratify his similar plan to purchase the Danish West Indies (now the US Virgin Islands), and the Greenland plan was dropped.

Following a wartime occupation from 1941 to 1945 to stop a German invasion of Greenland, in 1946 the US secretly offered to buy it. Denmark refused, but did allow the US to build air bases there, as both countries were in the process of founding NATO. US interest in Greenland was now mainly military, as the island sits in the middle of the shortest missile flight path to Russia. It’s also part of a crucial choke point in the North Atlantic called the GIUK Gap, between Greenland, Iceland and the UK. Were Russia inclined to attack the US east coast using its Northern Fleet, based at Murmansk on the Barents Sea, its forces would have to pass through the gap. At the same time, a good reason not to press the Danes too heavily on the issue would have been that Denmark sits across the mouth of the Baltic Sea, meaning it could potentially bottle up the Russian Baltic Fleet at Kaliningrad.

Cold war refreezes

US interest cooled somewhat after the Berlin Wall fell and relations with Russia temporarily became less frosty. But now Russia has remilitarised all its old Soviet naval bases in the Arctic, heavily outnumbering equivalent NATO bases, with increasing Russian submarine patrols around the GIUK Gap. The global internet has also intensified concerns over this gap, as critically important undersea data cables pass right through it, or just south of it, making them vulnerable to submarine sabotage. This could potentially blind the USA and cripple its ability to respond in the event of any future Russian incursion into, say, the Baltic States or Finland.

In addition, the US needs ground stations for its military satellites, including in the Arctic Circle. Two of these are in Alaska and Svalbard, but the main base is Pituffik, scene of Vance’s recent outburst against Denmark. And the US very likely wants many more such bases on the island. As things stand, Greenland is terra incognita, a ‘security black hole‘ that’s impossible for Denmark’s meagre forces – mostly one aeroplane and some dogsled teams – to effectively monitor.

Not just wargames

There are also pressing non-military considerations. As the Arctic melts and the sea lanes open up permanently, Greenland could come to dominate global shipping, due to the fact that the two trans-Arctic routes, the Canada-hugging Northwest Passage (NWP) and Russia-adjacent Northern Sea Route (NSR) have the potential to cut 4,000 km off the Panama route and make the Suez Canal largely redundant. Just as the US wants back control of the Panama Canal, it will also be keen to control this polar traffic. Annoyingly for the US, in 1985 Canada claimed sovereignty over the NWP, while the US insists it is an international waterway. That might be another reason why Trump wants to annex Canada.

Then there are the untapped resources. Greenland could be the key to breaking China’s near global monopoly on producing rare earth elements (REEs) and critical minerals, as the biggest deposits of these outside China are in, you guessed it, Greenland. It is thought to have the 6th largest deposit of uranium in the world, and to be very rich in lithium, REEs, graphite, iron, nickel and copper. There is also gold, along with diamonds, rubies, sapphires and a host of other quartzes and gemstones. It has 43 out of the 50 critical minerals needed for the US economy, in particular green tech and electric vehicles. Elon Musk and the other tech bros have declared an interest for this and other reasons, including the fact that the vast territory and freezing temperatures are ideal for server farms, of which an order of magnitude more may be required to enable the AI revolution. And then there are the estimated reserves of oil and gas, which put Greenland on a par with Nigeria and Kazakhstan, and superior to Qatar.

What’s in it for the Inuit?

Almost certainly nothing. The local population doesn’t have the people, money, skills or infrastructure to exploit any of this stuff themselves, so Greenland is a sitting duck for whichever major power acquires it, either through a business deal or by military action. What could very well happen if these resources are exploited in an unregulated way by a ruthless foreign power is that Greenlanders could suffer the notorious ‘resource curse’ of places like the Congo, with the country becoming a corrupt rentier state whose ruling elite siphon off the wealth and defend their position by becoming more repressive and authoritarian (youtu.be/x8j2uWw3WfU). Faced with this awful prospect, the idealistic islanders may realise that their best chance is to do some kind of mutual back-scratching deal with the US, while retaining a fig-leaf of independence.

Deals under the table

After the Vance visit, Russia’s Vladimir Putin told journalists that relations between the US and Greenland were nothing to do with Russia, and that he had no interest in the place. This blithe response strains credulity, given Russia and China’s keen interest in the NSR, and given that a US takeover of Greenland would be as much of a strategic threat to Russia as Ukraine being in NATO, if not more so. Missiles based in Greenland, especially hypersonics, could take out Moscow, St Petersburg and Murmansk before the Russians could even react. And that’s beside the fact that Russia is – since the Ukraine invasion – now hemmed in with the addition of two new NATO members, Finland and Sweden, as well as NATO Norway.

One possible explanation for Putin’s professed indifference is that Transactional Trump has offered a private deal in which Trump takes Greenland and Russia gets to keep its captured territory (and the largest European gas reserves outside Norway) in Ukraine.

Is a similar Trumpian quid-pro-quo over Taiwan possible, making for a three-way neo-colonial carve-up? On the face of it, no. Hegseth continues to sabre-rattle at China by reiterating US backing of Taiwan, and Vance is also waving his stick at China for wanting to expand operations in Greenland. But China has operations almost everywhere, and anyway rejects any comparison with Taiwan, arguing that Greenland is a sovereign foreign state whereas Taiwan is China’s intrinsic territory. Why would they do a deal over what they see as already theirs?

Even so, TSMC and other Taipei chipmakers are racing to set up shop in Texas, California and Arizona in an energetic US bid to make Taiwan less of an Achilles heel for western tech industries. Should this attempt succeed – and there are wage-rate, skill-set and supply-chain reasons why it might not – US support for Taiwan could evaporate.

Take the money and run?

It seems hard to believe that the US would actually invade Greenland by force. But given its tiny population of around 56,000, one intriguing possibility is that the US could wait until the expected declaration of independence from Denmark, and then offer to pay the entire Greenland population $1m each to buy the place. $56bn might sound like a lot but it’s approximately what the place is valued at in potential revenues, and it’s only 1/15th of the planned 2025 US military budget, or about 1/8th of the US annual debt-servicing bill. That way, Greenlanders could all be millionaires and retire to beach houses in Bali. But would they take the payout and emigrate, or opt to stay poor for the sake of patriotism? It’s hard to say. Nationalism is powerfully embedded in capitalism’s ideology, and objective logic often plays very little part.

Paddy Shannon

Editorial: Gangs and counter-gangs (2024)

Editorial from the February 2024 issue of the Socialist Standard

Britain is a peace-loving country, so the claim goes. It just happens to always be at war. It can’t help it. There’s always bad people in the world, and Britain needs to fight for freedom, human rights and against an endless supply of Hitlers. So the pro-War camp from the Balkans to Iraq, to Libya, to Syria have always said. So, this time, when Britain and the United States bomb Yemen, it is refreshing to hear the powers that be say that it is to protect trade routes.

It is appropriate that this happened in the same month that General Sir Frank Kitson, GBE, KCB, MC & Bar, DL died at the age of 97: a man who effectively killed for Britain all over the world, including Malaya, Kenya and Northern Ireland. His writings on the role of military force in the modern world were clear-eyed:

‘Countries are obliged to fight where their interests demand they should, and this is not necessarily along their geographical frontiers.’

So, of course, when the flow of shipping is being re-routed away from the Red Sea, when the insurance cost of shipping is increasing by 10 percent with the consequence that everything that has been shipped will naturally cost more, it will be natural for our masters to turn to violence in order to protect their interests.

The protection, in this case, is from the Houthi rebels in Yemen, who are backed by Iran, a regional power itself trying to extend its interests by asserting control of the sea lanes. The US and its allies have been seizing Iranian ships and their cargo, and this month Iran has taken to boarding ships and has recaptured the St Nikolas (formerly the Suez Rajan) laden with oil which had been taken from them last year in a US ‘sanctions’ operation that confiscated 980,000 barrels of oil.

This is the hypocritical background to the UN Security Council resolution passed to condemn the Houthi rebels that asserts as universal values the navigational rights and freedoms of merchant and commercial vessels, which, in accordance with international law, must be respected. The Security Council also affirmed the right of UN member states to defend their vessels from attacks in accordance with international law. Navigational rights and freedoms, but on terms that suit powerful groups, and ‘self defence’ meaning the right to defend property and profits at the expense of human lives.

The slogan ‘none are free until all are free’ is resonant in this situation. While the only way the world is run is through force of arms seizing and controlling wealth, no one can be free from coercion and fear of violence. This is, perhaps, best summed up in the title of one of Kitson’s books Gangs and Counter-gangs.

Socialists are opposed to gangsterism and counter-gangsterism and for the common ownership of the world’s wealth so that co-operation and creation can replace conflict and destruction.

Suez Intrigue (1971)

Book Review from the November 1971 issue of the Socialist Standard

The Suez Affair, by Hugh Thomas. Pelican. 30p.

Early in the morning of November 6, 1956, a combined Anglo-French expeditionary force landed at Port Said. It was preceded the previous day by the capture of various strategic points by British and French paratroops. The Suez war had begun.

The immediate background was about six months of intrigue and collusion between Britain, France and Israel, with the most elaborate attempts at deception which would have done justice to a comic opera, were it not so serious. The aftermath has been fifteen years long, so far, with the Israelis firmly ensconced in the Sinai Peninsula and talks dragging on endlessly about cease fire, future boundaries, etc.

Hugh Thomas in this book recently republished as a paper-back, deals in some detail with the British, French and Israeli invasion of Egypt, but it really doesn’t add much more to our knowledge of the incident than was supplied by the Bromberger Brothers in their Secrets of Suez (Pan Books 1957)—incidentally a much more readable work. It is just that Thomas has the advantage of a great deal more hindsight than was available to the Brombergers. Nobody now denies that there was collusion between the Israeli and allied Governments; in fact Moshe Dayan has openly admitted it.

Nevertheless, Thomas has managed to unearth some interesting information on the rifts and dissensions among the various members of Anthony Eden’s cabinet, not to mention the double-talk and double-crossing between America and others. There is the rather surprising revelation however, that the American government were caught unawares by the allied action.

The story of the “police action”—as it was euphemistically styled at the time —is distressingly familiar. When the Egyptian rulers seized the Suez Canal, this was seen as a direct threat to British and French capitalist interests in the area. Indeed, so seriously did they view it, that they were prepared to go to war. As Eden said at the time: “Suez is a question of life or death for us”.

Additionally, the French were pre-occupied with their problems of rebellion in Algeria and suspected Nasser of sending help to the rebels. Those who recall the period, will remember the 24-nation conference and proposals for the international control of the canal, but all to no avail.

The Egyptian ruling class saw the canal as a rich and easy source of revenue and were not prepared to relinquish their hold. Perhaps their action in seizing the area was precipitated by the refusal of all the great powers at the time to help with the Aswan Dam project. The greater probability is that they would have nationalised the canal sooner or later anyway. This is a method of grabbing foreign capitalist assets, common enough among the newly formed states in recent years.

Incidentally, in the period that followed, it was Harold Wilson’s habit to refer contemptuously to the Tories as “Men of Suez”; this book is a timely reminder of the Labour Party stand over the whole Suez action. The parliamentary party, at least, was just as nationalistic as the Conservatives, and was certainly not opposed to the use of force in principle. As the author points out, what they wanted was “legalised” force. —prior United Nations sanction for any military action.

Hugh Thomas tells us of speeches in favour of this by Gaitskell, Bevan and other Labour leaders of the time. It was a pathetic and ineffective gesture and did nothing to halt the affair. In the event also, it seems they underrated the amount of popular support for the government’s action when it came to the crunch.

The establishment of Israel over twenty years ago was supposed to be an answer to the chronic problems of Middle East conflict, but the problems are there today as harrowing as ever, as the various capitalist powers jostle for elbow-room in the area. Ernest Bevin staked his political reputation on the post-war attempts at settlement. Perhaps it is a pity he is not with us today to read this book, and to see the bitter mockery capitalism has made of his efforts.

Eddie Critchfield

What is Behind the Fight for Suez (1956)

From the September 1956 issue of the Socialist Standard

Because they do not understand the workings of the social system that dominates the world we live in most people see the struggles between political parties and governments in terms of good and evil; good men and good doctrine against evil men and evil doctrine. They see their own "honest, self-sacrificing and reasonable leaders" being prevented from applying just and beneficial policies by the greedy and unprincipled leaders of the other party or nation, and in the atmosphere of fear and anger that conflict arouses they are only too anxious to believe that all the fine sounding principles of law, morality, religion and humanity are on their side; they feel no need to probe deeper for explanations.

The men at the top see more clearly the economic issues and interests involved but as they need to rouse the emotions and win the support of the mass of the people they dress up most of their declarations in the rabble-rousing language likely to move their listeners and readers. So over Suez we have had from the Western politicians a spate of talk about law and illegality, international rights, and wrongs. Fascist acts of plunder, etc., while from the Middle East Nasser and his defenders have worked up themselves and their audiences with passionate speeches about imperialism, oppression, insults to dignity, sovereignty and nationhood.

Not all the utterances are like these. From the “take a strong line" Sunday Express (12 August, 1956) came the following:—

“Forget all about the legalistic quibbles, about the rights and wrongs of the Suez dispute. Forget the mumblings of the self-styled moralists about the sort of example Britain should show the world. They do not matter. Only one thing counts. Say it again and again to yourself. If the Suez Canal falls into the control of Nasser, or any other enemy, then Britain is finished. And so are all our hopes for ourselves and our children."

and the like-minded Daily Mail (14 August), chiding the News Chronicle’s opposition to forcible methods and its appeal to “the moral conscience of the world,” replied:—

"In international affairs there is, in the ultimate, no moral conscience. . . . It may be sad, but it is true, that self-interest is still the first law of nations. Nasser understands this, even if some people here do not. So do Nehru, Kruschev and Mao Tse-tung. The nation that neglects it goes to the wall."

The News Chronicle stands on this issue with those who pride themselves on not being either narrow nationalists or believers in using force in the first place to settle disputes; they believe that an appeal to reason through United Nations will produce solutions good for all parties and harmful to none. Only with United Nation’s endorsement should force be used.

The Socialist does not belong to any of these groups, holding that capitalism cannot help engendering conflict and wars and that the only solution is not in the vain hope of running capitalism a different way but of ending capitalism and replacing it by a new and different system of society.

To the Socialist the world is not capable of being divided into the good and the bad statesman and the good and bad nations; they are all Capitalist and all are impelled by the nature of the social system to struggle for markets for their products, for sources of cheap raw materials, and for control of trade routes like Suez and strategic points like Cyprus. These are the things for which they fight, no matter what the fine phrases and slogans in which their aims and motives are garbed.

The crux of the Suez dispute is firstly the oil that exists in abundance in the countries of the Middle East, and secondly the Canal through which much of it, as well as other cargoes, is transported. Oil is now an indispensable fuel for the motors and tractors, aeroplanes and warships, merchant vessels and factories of the countries of the world. With cool production and hydro-electric power failing to keep up with rapidly growing demand for fuel and with atomic power only a development of the not very near future, all countries need oil and many of them, including Britain, have practically none within their own frontiers.

But though the Middle East is reputed to have the biggest oil reserves in the world and extraction is expanding fast, it has a long way to go to catch up with the older oil producing areas.

The world’s greatest oil production is still in U.S.A. and Venezuela, which, between them, produce well over half the world’s oil. The output of U.S.A. alone in 1955, 2,748 million barrels, is almost equal to that of South America, Europe and the Middle East, and Russia and her satellites, added together (see report of Shell Co. l955, from which the following figures on oil production are also taken). The total production of the Middle East now exceeds 1,000 million barrels, mostly in Kuwait, Saudi Arabia, Iraq and Persia; Egypt has only the trifling output of 13 million. Russia and her satellites produce under 600 million barrels, less than a quarter of the output of U.S.A. Among the late comers, but growing fast, is Canada, with 131 million barrels last year. The great attraction of Middle Eastern oil is that it is much cheaper to extract than oil in the Americas, and the source or Europe’s supplies has been switched from West to East. “Before the war most of Europe's oil came from the Western hemisphere; even in 1947 nearly two-thirds of the imports came from the Caribbean or the United States. But in 1955 four-fifths of the imports came from the Middle East” (Times, 14 August). At the same time America’s internal demand for oil has grown so enormously that some oil is now taken from the Middle East to U.SA, in preference to using high cost American wells.

The oil industry in the Middle East is mostly controlled by American, British, Dutch and French companies, to whose shareholders large profits flow after paying royalties to the Arab Governments in whose territories they operate and maintain pipe lines.

The magnitude of profits made in the oil business is shown by results for one group, Royal Dutch-Shell, about an eighth of whose output comes from the Middle East. In 1955 the group made a net profit, after paying taxes, of £160,000,000, of which £33 million was paid out six dividends.

In the Middle East, then, is a great prize for the Power or Powers that can gain control. Each of the Arab countries looks hopefully to being able to squeeze out the oil companies. Egypt’s position is different With practically no oil of its own it has the, at present, irreplaceable Canal through which much of the oil must be shipped. Immediately British troops left the Suez base the way was open for Egyptian capitalism to strike its first blow, which, if it succeeds, will enlarge hopes of achieving the ambition phrased by Col. Nasser as “creating a great Arab Power, stretching from the Atlantic to the Persian Guff.” (Observer, 12 August, 1956); an ambition about which the other Arab States may have their own ideas.

Faced with this situation the Western countries, now dependent on the Canal, are being forced to consider the much more expensive voyage round South Africa (some new oil tankers are already too big for the Canal), and building more pipe-lines like the American-owned £80 million “Tapline” that stretches over 1,000 miles from Arabia to the Mediterranean—but these too are tempting objects for “nationalisation" by the Governments through whose territory they have to pass.

The Lebanon has already threatened to nationalise pipe-lines, and the Financial Times (15 August) expresses the opinion that though existing pipe-lines may be extended it is unlikely that any company will put vast sums into new pipe-lines in view of the risk of nationalisation.

Seemingly the Arab countries are being encouraged to attack the oil companies by the Russian Government, which may hope to get much needed oil in the Middle East or even some form of control of oil resources if Western companies are pushed out. It will be remembered that in 1946, with its armies in occupation, Russia forced Persia to agree to put North Persia oil under Russian control for 50 years; but when the troops withdrew Persia blandly declined to ratify the concession.

It has been a matter for comment that the American Government held back from the more belligerent Anglo-French threats of using force against Egypt. Apart from pre-occupation with winning the forthcoming presidential election and the fact that Suez is not a major American interest, the American Government and even the American companies with big holdings in Middle Eastern oil, are not greatly concerned with the Anglo-French fear that if Egypt nationalises the Canal this will encourage the Middle East Governments to nationalise the oil wells. The American Government has in the past encouraged Middle East oil production partly in order to conserve her home oil resources but the growing importance of Canadian oil may reduce this need. Also the Observer's Washington correspondent reports a divergent view among American oil companies themselves:—

“Another group opposed to any military action over the Suez Canal is the American oil industry. Several oil companies are reported to have expressed the view that they can protect their interests best for quite a long time by making monetary concessions to the Arab States if necessary. This, the companies think, is possible because the cost of extracting oil is much lower in the Middle East than it is in North America, or even Latin America." (Observer, 12th August, 1956.)

The South African and Canadian Governments were also lukewarm in their attitude to the issuer and why not? South Africa would welcome more shipping going round the Cape, and Canadian capitalism has its hands full building up its own oil industry.

At the time of writing the discussions between the Powers have not produced a settlement though the evident lack of war-fever among British workers and the disinclination of other Governments to back up Britain and France in forcible action against Egypt have had some effect in restraining the Eden Government and its supporters.

On the other hand Arab workers, misled by the belief that nationalisation of the Canal Co. (and eventual nationalisation of the oil industry) is in their interest, have been reported as giving vigorous backing to their Governments.

This is the real tragedy of the Suez dispute, that there is no unity among the workers of the different countries in opposing the war-talk of their Governments. In the main the trade unions in each country give such large measure of support to the claims of their own Capitalists and Governments that the basis does not exist on which they could act in unity with the workers of other countries when a clash of Capitalist interest is involved. Not realising the possibility and necessity of building a social system in which production solely for use will replace production for sale in competitive markets, because private property is the means of production and distribution will have given place to common property, the workers of the world do not realise that their common interest should unite them impartially against Eden, Nasser, Kruschev, Eisenhower, and all their kind. The trouble, as we said at the beginning, is that most people do not yet understand the workings of the social system, Capitalism.

Edgar Hardcastle

50 Years ago: What is Behind the Fight for Suez (2006)

The 50 Years Ago column from the September 2006 issue of the Socialist Standard

The men at the top see more clearly the economic issues and interests involved but as they need to rouse the emotions and win the support of the mass of the people they dress up most of the declarations in the rabble-rousing language likely to move their listeners and readers. So over Suez we have had from the Western politicians a spate of talk about law and illegality, international rights, and wrongs, Fascist acts of plunder, etc., while from the Middle East Nasser and his defenders have worked up themselves and their audiences with passionate speeches about imperialism, oppression, insults to dignity, sovereignty and nationhood ( . . .).

To the Socialist the world is not capable of being divided into the good and the bad statesman and the good and bad nations; they are all Capitalist and all are impelled by the nature of the social system to struggle for markets for their products, for sources of cheap raw materials, and for control of trade routes like Suez and strategic points like Cyprus. These are the things for which they fight, no matter what the fine phrases and slogans in which their aims and motives are garbed.

The crux of the Suez dispute is firstly the oil that exists in abundance in the countries of the Middle East, and secondly the Canal through which much of it, as well as other cargoes, is transported. Oil is now an indispensable fuel for the motors and tractors, aeroplanes and warships, merchant vessels and factories of the countries of the world. With coal production and hydro-electric power failing to keep up with rapidly growing demand for fuel and with atomic power only a development of the not very near future, all, countries need oil and many of them, including Britain, have practically none within their own frontiers ( . . .)

At the time of writing the discussions between the Powers have not produced a settlement though the evident lack of war-fever among British workers and the disinclination of other Governments to back up Britain and France in forcible action against Egypt have had some effect in restraining the Eden Government and its supporters.

On the other hand Arab workers, misled by the belief that nationalisation of the Canal Co. (and eventual nationalisation of the oil industry) is in their interest, have been vigorously backing their governments.

This is the real tragedy of the Suez dispute, that there is no unity among the workers of the different countries in opposing the war-talk of their Governments.

(From front page article, Socialist Standard, September 1956)

Feeding Frenzies in the South China Sea (2021)

From the October 2021 issue of the Socialist Standard

All the talk of COP26 has tended to obscure other aspects of capitalism’s dark agenda that lurk below the surface, waiting to bite someone’s legs off. One such agenda burst to the surface last month with the gung-ho expedition of a British Carrier Strike Force through the South China Sea combined with the announcement of a new military (Aukus) pact between Britain, the US and Australia, designed to make Australia the nuclear submarine policeman in the Indo-Pacific and contain Chinese expansionism. Suddenly, instead of global warming, the papers were full of breathless talk about global war.

China, on its way to overtaking the US as the world’s premier superpower, economically if not yet militarily, is acting as if it owns that particular ocean and everything in it. Increasingly dodgy activities, including creating artificial island air bases and mounting amphibious landings that look like practice for invading Taiwan, are causing much alarm to regional powers and indeed anyone who wants to use that ocean as a shipping route (ie. everybody).

America’s motivation is obvious. Australia has just fallen out with China, it’s biggest trading partner, so will be happy to accept US/UK weapons tech as leverage. The UK meanwhile, having just bought two carriers it couldn’t afford (with a paltry 8 F-35 fighters on board which had to be supplemented by a further 10 US planes just so it didn’t look ridiculous), is desperate to preserve the illusion that it’s still a world player, with Boris Johnson wittering about ‘Global Britain’ to distract the voters from ‘Brexit Balls-Up’.

Meanwhile New Zealand, with its lovable mumsy Prime Minister Jacinda Ardern, is caught on the prongs of a dilemma, being in the ‘Five Eyes’ espionage ring with Australia, the UK, US and Canada, but simultaneously also having China as its biggest trading partner. It would be terrible for Jacinda’s image to be embroiled in a regional macho pissing contest, but she can’t stay out of the fray. She’s felt obliged to announce a ban on Australian nuclear subs in NZ waters, in line with existing policy on nukes, but must be squirming about the fact that New Zealand is also the administrator of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade pact (CPTPP). This pact was set up by the US expressly to restrict China’s trade influence, and includes Australia, Canada, Japan and Chile. But then Trump pulled the US out, and the UK applied to join. Now China has applied to join as well!

WTF? you might say. Indeed. And China is also in the Regional Comprehensive Economic Partnership (RCEP) which has 14 member states including South Korea, Japan and, er, Australia and New Zealand.

Funny that Britain fell over itself to exit a European trading bloc, supposedly in the interest of ‘free trade’, while elsewhere countries including the UK are falling over themselves to join trading blocs, even when they seem to be in competition with each other.

We offer no brilliant analysis of this regional game-play, except to observe that capitalist states circle each other like sharks sniffing for blood, and if they find any, it’ll no doubt be workers who end up as the fish food.

Paddy Shannon

The Great Discoveries and their economic effects. (1926)

From the February 1926 issue of the Socialist Standard

When civilisation was concentrated round the Eastern end of the Mediterranean, Phoenician ships from Syria pushed further and further westward, trading; and colonising as they went, and preventing the too credulous Greeks from intruding by spreading tales of the quite mythical sea monsters they had met on the voyage. They eventually reached the Atlantic and coasted south-west round Africa, and tradition has it that their ships made call at Britain for supplies of Cornish tin. Of this we are not sure and we know still less about the Scandinavian voyager, Leif, son of Eric the Red, who it is said reached America in the year 1,000.

But in 1492 Christopher Columbus, fortified by nothing more definite than his inability to believe “that the sun shines upon nothing, and that the nightly watches of the stars are wasted on trackless seas and desert lands,” sailed westward across the Atlantic to look for a route round the world to India and the East, and hit upon the West Indian Islands. This was the era of the Great Discoveries.

Five years later, after half a century of persistent Portuguese exploration of the West African coast, Vasco de Gama succeeded in passing the Cape of Good Hope and in opening direct sea communication with India. By 1500 the Portuguese were settled in Brazil and there followed innumerable explorations from end to end of the Atlantic shores of North and South America. In 1520 Magellan had rounded the southern tip of South America and found a sea route to Eastern Asia, although the voyage of over two years cost the lives of Magellan and half his crew. We read of repeated attempts during the succeeding centuries to find sea passages to the North of America and Asia.

To understand the effects of this era of expansion, we must consider the economic condition of Europe in the preceding centuries, and its relations with the East.

Over the greater part of Europe “natural economy” as distinct from “money economy” still prevailed. That is to say, food and clothing were in the main produced for use in the immediate neighbourhood ; trade, and the use of money, were comparatively rare, and limited to luxury goods. The exceptions were the great trading and manufacturing towns which had sprung up at convenient centres for the collection and distribution of commodities, and on the most important land or sea trade routes.

The sea trade was in the hands of merchants of Genoa and Venice and other Italian towns, and of the Hanse towns in the Baltic. The Hanse traders dealt chiefly with Russia, Scandinavia, and the Baltic lands, and were interested in raw materials such as wool, which they obtained from England, corn which they supplied to many Mediterranean nations, and fish.

The Genoese had a monopoly of the South Russian trade which came overland round the Black Sea bringing silks and spices from India and China. The spices were valued highly because it was only by their liberal use that the meat of those times could be made really palatable.

The Venetians, too, dealt in spices, drugs and other Eastern products transported by caravans which entered Egypt from the Red Sea and the Persian Gulf. These spices were grown in the East Indian Islands and reached the termini of the caravan routes in the ships of Arab traders who held undisputed sway over the Indian Ocean.

Both Genoa and Venice brought their luxury wares to depots such as Antwerp, where exchange took place with the Hanse merchants. Overland routes ran up the Rhone to Paris; over the Alps and down the Rhine ; and from Venice via Augsburg and Nurembourg to Hamburg and other Baltic centres.

Both groups of merchants made regular calls at English Ports, and the bulk of European trade was in their hands. It was this trade which gave political importance to the cities and was the cause of their rivalries. The chief source of the merchant’s wealth and the goal of every adventurer’s ambition was the East, which up to that time had not been directly and easily accessible to Europe.

During the 15th century, owing to the advance of the Turks into Europe, the whole of this trade was endangered. In 1453 Constantinople fell to them and the Genoese routes were altogether barred; while the Turkish approach to Egypt threatened also the activities of the Venetians. It was the Turkish invasion which was the immediate cause of the desire to reach India by sea, and consequently of the great expansion during the 16th century.

The marked increase of exploration had the effect, which was of great importance afterwards, of giving rise to a new tradition of more daring and skilful seamanship in Portugal and Spain and later in Holland and England. The discoveries caused the shifting of the centres of commerce from the Mediterranean to those countries with an Atlantic coast; the drying up of the overland routes to the Baltic and the consequent decline of the Mid-European cities ; the abandoning of much of the caravan communication with Asia; and the sapping of the vitality of Venice and Genoa. Spain, Portugal and England were thus encouraged to build their own mercantile fleets.

The Portuguese established an Indian Empire and gained control of the East Indian spice islands and a monopoly of the traffic in the Indian Ocean. The amount of trade increased enormously, but the distribution of the wares in Europe was conducted and financed by the Dutch, who obtained the bulk of the profits and laid the foundations of their own later financial supremacy. It was the Portuguese monopoly of the Indian Ocean and the endorsement of their claim which they obtained from the Pope, that induced the Spaniards to finance Columbus in his attempt to reach India by sailing westwards. The discovery of America was, however, not used by Spain to develop commerce. The finding of gold and silver and the extensive mining of the latter which began in 1530 enabled Spain to prosper for a while on a different basis. She attempted to make the new world merely a source of bullion monopolised by her, and to keep this bullion inside the mother country. The result of the monopoly and exclusion of foreign traders was to incite Dutch and English freebooters to attack the bullion ships, and the bullionist policy at home was equally disastrous in the long run. There was a world rise in prices as a result of the inflow of gold and silver, but instead of allowing the food and other industries to profit and grow by satisfying the big demand from the new colonies, the sheep-owning families who were the ruling class deliberately hampered them.

Then, owing to an anti-foreign agitation, due to a mistaken notion that the presence of foreigners in the country had caused the rise in prices, the Government expelled those who had been their best artisans and merchants and without whom industry declined. Spain then became largely dependent on supplies of fish, corn, and manufactured goods from Holland and England, this again stimulating the economic development of the latter.

The rise in prices had a generally quickening effect on trade outside of Spain, and not only did this affect the trading nations and their industries, but it materially speeded up the introduction of money in place of “natural economy.” This was the immediate cause of the peasant war in Germany in 1525, owing to bitter disputes about the money value of labour services. The war set Germany back economically, and the other advanced nations benefited by the removal of a rival. The working out and decline of her mining industries also affected Germany adversely. Accumulation of capital, which was rendered easier by the abundance of gold and silver, led to the opening of new commercial and industrial enterprises in the East and the New World as well as in Europe.

This growth of capital, the consequent greater power of the merchants, and the new contact with the non-Christian East were also the causes of a revival of slavery and had a depressing effect on the condition of the peasants and wage earners in Europe itself.

England rapidly changed from a wool exporting to a wool manufacturing nation and before the end of the 16th century her commerce was largely carried on in English ships; both the Venetian and Hanse fleets having ceased to call.

The high prices which ruled universally, and the particularly high price of wool due to the demand from Flanders and from home manufacturers were the chief causes of the great decrease of arable and increase of pasture farming in England, a process assisted by the suppression of the Monasteries and the dispersal of their lands in 1536. This agricultural revolution which was in progress up to 1600 had the effect of driving many thousands of tenants and labourers off the land into the towns, where for a long time there was no demand for their services. In the meantime vagrancy grew to be a serious problem and the Poor Law became a permanent national institution.

Great trading companies to East and West were formed and out of the strife of the early buccaneers an English merchant fleet was built which eventually surpassed that of the Dutch, and was to be the foundation of England’s future commercial and naval power.

The development of shipping and the demand for timber from Russia opened up communications with that country and materially hastened its internal political and economic growth.

New East coast towns like Boston and Hull grew up for the Baltic trade, while Bristol flourished on the trade across the Atlantic. England now became the centre of the Christian world, owing to her admirable position as a depot. There was a corresponding decline in the commercial monopoly previously exercised by Jews in the Eastern Mediterranean.

With the rise of her commerce and banking, Holland also carefully developed her agriculture, and her success in the use of root crops and grasses which for the first time made it possible to keep stock alive during the winter, was of great importance to England and other countries which later learned from her example.

For Europe as a whole the results were important and lasting. The need for big accumulations of capital to join in the new commercial enterprises, which were of an unprecedented size and expense, and the need for adequate protection against attack in distant waters, gave an urge towards national instead of city organisation. This was the economic basis of the new nations and Empires, Portugal, Spain, Holland and England.

The great increase in sea voyages, the new experiences and the new knowledge of navigation obtained from the Arabs gave an added importance to overseas trade and, as has been seen, destroyed the old Mediterranean and overland trade routes.

In its turn commercial activity created bigger markets and a steadier demand for raw materials and industrial products, which reacted immediately on the hitherto small and unprogressive industries. Local isolation tended to be broken down as bigger areas were drawn into the sphere of commerce either as sources of supply or as consumers of Colonial and Eastern goods. The use of money became everywhere more general with its disintegrating effect on the old Manorial relationships, and banking began to be of new importance as a support of industry.

In short, the discoveries began the era of industrial and commercial activity which continued without essential change till the Industrial Revolution.

Edgar Hardcastle