Energy Security and Global Politics

The Militarization of Resource Management

Daniel Moran, James A. Russell, Daniel Moran, James A. Russell

• Publisher: Routledge
• Year: 2008
• Print ISBN: 9780415776387
• eBook ISBN: 9781134001996
• Edition: 1
• Topic: History
• Subtopic: Military & Maritime History
• Index: History

This book analyses the strategic dimensions of energy security, particularly where energy resources have become the object of military competition. The volume explores the risks that may arise from conditions of increasing economic competition and resource scarcity, and the problems that may follow if major producers or consumers of energy lose con

1 The battlefield and the marketplace

Two cautionary tales

Daniel Moran

Contemporary discussions of energy security are bounded by complex and inconsistent assumptions about the relationship between war and international commerce. The most important is the belief that the growth of international trade has a stabilizing and pacifying effect on international relations. This outlook has a long history, briefly surveyed below. It also has the additional validation of having underlain American foreign policy throughout its tenure as a major actor on the international stage. Although there have always been those who have held that rivalries originating in the marketplace might easily bleed over into the battlefield, such episodes, when they have occurred, have come to be regarded as symptomatic of political under-development, or as irrational attempts to swim against the tide of history. This historical picture is widely regarded as reassuring.

The integrative and pacifying effect of global markets is now held in such high regard that it is deemed to operate independently of the ideological convictions of governments. This is especially true in the energy arena, in which profits are so large, and security of access so essential, that neither buyers nor sellers are thought likely to sacrifice their market position on behalf of other interests, at least not for long. This proposition is sometimes boiled down to the claim, widely bruited in the run-up to the American-led ejection of Iraq from Kuwait in 1991, that it does not matter which (or what kinds of) governments control energy resources, because whoever they are, and however reprehensible they may be in other respects, they must sell it to the rest of us in the end, or else go hungry.

These beliefs exist uneasily with another, however, the idea that economic sanctions, boycotts, and so on are useful and broadly acceptable tools of international coercion. Such measures are presumed to be more humane and less dangerous than the actual use of force, while being capable of achieving similar results. Their ostensibly non-violent character has caused them to be held in particular regard by market-oriented liberal democracies. In their own way such measures also testify to the respect that the power of the market now commands. Yet the use of economic pressure as a substitute for war inevitably blurs the line between them, and casts doubt on the claim that the natural consequence of market integration is peace. When states use trade strategically, in lieu of force, market integration ceases to be a source of peaceful stability, and is revealed instead to be a vulnerability.

The aim of this chapter is not to overturn any of these propositions directly, but to explore their operation in two famous episodes in which their effects were clearly in play, and which turned out differently than contemporaries expected. The first is the crisis of July 1914, by which the rapidly globalizing world economy of the nineteenth century, powered by the coal-fired Industrial Revolution in Europe and North America, was cast into the abyss by statesmen who without exception would have insisted that one of their chief cares was to sustain the economic prosperity of their respective nations.¹ The second is the decision by the United States, in July 1941, to freeze Japanese dollar-denominated assets, an action which the US regarded as consistent with the politics of peacetime, albeit of the “hardball” variety, but which the Japanese perceived as equivalent to an act of war; from which a more unmistakable act of war, the Japanese attack on Pearl Harbor, followed.

All Santayanean clichés about the lessons of the past notwithstanding, history does not repeat itself. If it did it might be easier to avoid the kinds of catastrophic miscalculations that lie at the center of these two seminal crises. Their histories are not prophetic, but merely cautionary tales, which warn against the pernicious effects of unspoken assumptions on the conduct of foreign policy. For while it is true that nothing ever happens again, it is also (strangely) true that in politics nothing ever seems to happen for the first time, either. If, at some point in the future, the balance between the battlefield and the marketplace were again to collapse into global war, as it has done twice in the last century, historians of that future will certainly look back on the episodes recounted below as events to which we or our descendants had neglected to lend sufficient weight. That is reason enough to pay them some heed.

The industrialization of war

Energy security is a subject about which the history of earlier times appears to have little to say. “Earlier times” in this context means the entire recorded past before the emergence of the global market for petroleum, which began to acquire something like its current form after World War II, and has evolved toward an increasingly open, diversified, and efficient structure ever since. One of the distinctive features of the present is that so much of the material from which energy is generated is consumed far from where it is produced. This was not true when the dominant source of fuel for mankind was wood and charcoal (i.e. for most of human history); and true only to a limited extent after wood products were displaced by coal.

Mineral coal was known as “sea-coal” at the dawn of the industrial era in Great Britain because it often arrived in major cities by boat. Its energy density was sufficiently high to make it worthwhile for a maritime nation to maintain a coastal trade in it. Coal also moved around on rivers and canals and by rail, and in Europe and North America it crossed the occasional international frontier in the process. But no global market in coal developed, because it was not valuable enough to transport across oceans. Most of the strategic perils to which oil and natural gas are exposed—and which are transmitted to the industrial economies that rely on them—are a product of their high energy value, relative to the effort required to move them long distances.² But even so, coal was the first form of energy that could possibly be called cheap in human terms—a vast legacy from a remote geological past, whose break-neck consumption has transformed the human prospect in countless ways.³

European soldiers in the nineteenth century would not have recognized coal fields as a distinctive target, nor as requiring special defense. Although the value of coal deposits was sometimes acknowledged when occasion arose to draw up lists of war aims, they were mainly viewed as features of the population centers and industrial infrastructure that grew up around them. But military planners were intensely aware of the new technologies that industrialization was making available for their own use; and also of the disturbing social and cultural attitudes that the accelerating consumption of a new form of energy was engendering among the urban masses. It was by way of thinking through the strategic implications of the new economic and social order that coal was creating that the requirements of the modern battlefield and the modern marketplace became entangled with each other; a subject which will be considered further later.

Students of the new economy—who became known as “economists”⁴—were equally aware of the danger that war posed for their vision of the future. Cheap energy is the defining characteristic of modernity, as J. R. McNeill has observed,⁵ but realizing its revolutionary potential required the cooperation of governments. They were (ideally) expected to protect property rights and enforce contracts according to rational norms, but otherwise to get out of the way of a wide range of social and economic transactions that had formerly been mediated by the state. Persuading governments to do this for their own subjects was generally a matter of convincing them that the increased productivity made possible by new practices paid off in terms of state revenues. The international dimensions of the problem were harder to manage, because there was by definition no sovereign authority to whom one could appeal, and because the moral identity of traditional European states, and of the traditional elites that predominated within them, were deeply connected to their willingness and ability to fight each other.

The growth of international trade was a central, and not merely a beneficial or derivative, feature of the Industrial Revolution, because it is the nature of industrial methods that they produce more goods than can be consumed locally. In addition, to the extent that industrialization increased the wealth of workers, managers, and investors, it also increased demand for products from faraway places: sugar, cotton, and tea, for instance (to take but three quotidian examples) are all produced in remote corners of the world as far as Europeans are concerned. The views that governments adopted toward such long-distance trade were critical to its existence, and depended on their attitudes toward money, and toward war.

Pre-industrial European states regarded money as something to accumulate. This made trade across international frontiers into a kind of contest, to be won or avoided as circumstances dictated. Such an outlook, known as “mercantilism,”⁶ was a stimulus to the creation of overseas empires, which held out hope that the markets and resources required by the new economy might reside within the control of a single government. Early theorists of laissez-faire rejected such beliefs, arguing instead that wealth arose from the circulation of money among buyers and sellers, wherever they were. They also defined a nation’s economic success in terms of the prosperity of its population, rather than the wealth of the state. Their ideas made headway in part because they were more easily represented in systematic terms—“mercantilism” was less an economic system than a means of rationalizing the preferences of governments—and also because of their natural appeal to men of commerce and industry, whose political influence increased along with their economic significance (though by no means in proportion to it). The ideal of the free market also benefited from the failure of empire to fulfill its economic promise. By the turn of the twentieth century it was already apparent that the driver of global prosperity was going to be trade and investment among developed countries, which far outweighed that between the metropoles of Europe and their imperial hinterlands.

It was in this latter respect that the claims of market proponents bore upon the concerns of warriors. While the pursuit of empire might multiply reasons for the great powers to fight each other,⁷ the increasing mutual integration of their economies cut no less strongly in the opposite direction. Where the mercantilists had bound war and commerce together in a single, zero-sum game defined by the interests of the state, early capitalist theorists like Adam Smith and David Ricardo had sought not simply to tear war and commerce apart, but to argue that the latter might eventually displace the former as the principal vehicle for international relations. One of the main advantages of free markets, in the eyes of early advocates, was that they might bring an end to wars, by making them so expensive that even the most blinkered militarist would have to think twice.⁸

The cause of peace could be expected to advance on multiple fronts as trade and industry increased. To begin with, the increasingly lethal weaponry that industrial technology was creating promised to raise the direct human costs of war to levels previously unimaginable; a possibility of which professional soldiers were of course acutely aware. In addition, it was assumed that the new economy would diminish the social and political standing of entrenched agrarian elites, whose values were still rooted in the martial attitudes of the medieval warrior cast from which they believed themselves to be descended. Finally, market advocates thought that the new economy would raise the indirect costs of war to insupportable heights, a phenomenon which their own approach to economic theory was supposed to illustrate.

Mercantilism portrayed war as a kind of high-risk investment, but one fully consistent with economic rationality if undertaken from a position of sufficient strength. Market advocates judge the risks higher in relation to the rewards, because they calculated the cost of war in less favorable terms. In addition to the expense of maintaining armed forces, and to the death and destruction that resulted from their use, they added large intangible costs, caused by the disruption of commerce, foregone investment, and so on. Under modern conditions these were more economically significant than the immediate suffering that war caused. In these terms war appeared to be another of those misguided habits, like excise taxes or the licensing of monopolies, in which governments still engaged out of ignorance of their true economic effects.

Market relationships were not simply antithetical to military rivalries. They were, or were destined to become, obstacles to them. Increasingly interdependent markets would create overwhelming material incentives for peace, since their disruption would produce universal misery that could not be offset by the prospective gains of war. And if war should occur nevertheless, the resulting precipitate decline in productive activity would limit its scope and duration, further highlighting its pointlessness. As the nineteenth century neared its end, commentators in Britain especially—the nation that had done the most to create the new economy, and had benefited the most from it—were inclined to believe that such conditions were visibly at hand, so that the moment might be approaching when the marketplace would replace the battlefield as the final arbiter of politics among civilized nations.⁹

July 1914

It is against this background that the first of our cautionary tales unfolded. The onset of the Great War had nothing to do with energy, but it had a good deal to do with the social and economic conditions that cheap energy created, and especially with the way those conditions were interpreted by the men responsible for making war. Ever more extensive, complex, and integrated global markets were supposed to restrain the bellicosity of the great powers, whose greatness was supposed to be recognizably dependent upon access to the wealth that the new economy had laid at their feet. Yet somehow this act of recognition failed to occur. The question is why.

The famous crisis by which Europe “slithered” into war requires only the briefest summary.¹⁰ On 28 June 1914 the Archduke Francis Ferdinand, heir to the throne of Austria-Hungary, was assassinated in Sarajevo by a Bosnian Serb named Gavrilo Princip. Austria demanded satisfaction from the Serbian government, which it judged to have been complicit in Princip’s deed. This demand was couched in terms that were intended to be refused, thus affording a pretext for war against what would today be considered a “rogue state” and a sponsor of terrorism. Serbia, however, enjoyed the patronage of Russia, which had been a competitor with Austria for influence in the Balkans, and which backed Serbian foot-dragging with a promise of military support. Austria for its part looked to its more powerful ally, Germany, to deter the Russians from intervening on behalf of the Serbs.

Germany, however, had reasons of its own to wish to cut through the Gordian Knot of continental alliances in which it felt it had become ensnared; above all that between Russia and France, a traditional foe against which German military plans were chiefly directed. Although Berlin had no interests to speak of in the Balkans, the Franco-Russian alliance, which dated from the 1890s, had grown more ominous in the eyes of German military planners because of the accelerating pace of Russian military modernization. If allowed to continue, improvements in Russian military efficiency would pose a threat to Berlin’s future freedom of action. Germany did not seek general war, but it was prepared to risk a regional one if it offered the possibility of detaching Russia from France or, failing that, of confronting them both before the danger posed by their alliance had fully matured. Germany therefore encouraged Austria to press its case against Serbia unreservedly, a course that could only have ended in war. Yet Germany’s own military plans, featuring an overwhelming initial offensive into France, ensured that when war came France and Russia would fight side by side. They would be joined by Great Britain, whose efforts to mediate the crisis fell foul of Berlin’s willingness to let events devolve into war, and whose broader interests militated against the acceptance of German hegemony on the continent.

No episode of modern history has been studied more closely than the July Crisis, in part because of its calamitous consequences, but also because after the dust settled all of the major governments implicated in it published vast collections of documents designed to show that the disaster was not their fault.¹¹ These collections make depressing reading for those seeking evidence of the moderating effects of market integration on strategic decision-makers.¹² On the contrary, the men of 1914 appear to have lived in a moral universe dominated by the logic of power per se, in which fear of losing prestige and credibility predominated as a motive for action. This in turn provides the beginning of an explanation for the failure of Europe’s rapidly globalizing economy to do its anticipated pacifying work: the new social and economic interests it had created, however significant they may have appeared, had not yet penetrated the corridors of political power. Those remained in the hands of pre-industrial elites for whom the war was a traditional means of self-assertion.¹³

The chief limitation of such a generic sociolo...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of contributors
• Acknowledgments
• Introduction: the militarization of energy security
• 1 The battlefield and the marketplace: two cautionary tales
• 2 Petroleum anxiety and the militarization of energy security
• 3 Al-Qaeda, oil dependence, and US foreign policy
• 4 Gulf oil and international security: can the world’s onlysuperpower keep the oil flowing?
• 5 Regional issues and strategic responses: the Gulf states
• 6 Energy security: the Russian connection
• 7 Central Asia: energy resources, politics, and security
• 8 Maintaining Gazpromistan: the politics of Turkmen gas exports
• 9 Energy security: the case of Venezuela
• 10 Chinese energy security and the Chinese regime
• 11 Resource mercantilism and the militarization of resource management: rising Asia and the future of American primacy in the Persian Gulf