Monday, April 16, 2012

Global Capital warns Argentina over nationalization of oil company

We can quite often agree with the US 1%'s most important journal, appropriately called the Wall Street Journal.  It informs us today that in the oil business it "isn't curiosity that kills cats----it is nationalization."  The reason for concern is that Argentina's government is considering nationalizing one of the major producers, YPF.

The WSJ is issuing a caution to the Argentinian government on behalf of global capitalism, reminding it of what happens when private production of this nature is nationalized.  "Neighbor Venezuela has experience in these matters" it writes.  Venezuela, obviously in an attempt to wrest some control and some of the revenue from the global oil giants began "exerting control over foreign majors' oil assets in the early 1970s. I also think Venezuela is probably as much a "neighbor" of the US as it is of Argentina.

The global corporations that control the production of oil, BP, Shell, Exxon, Chevron, Total etc. cut investment.  This is a logical move as why would investors risk their capital in a project whose assets are suspect to being taken over by the state?  Even if compensation is generous which is usually the case, taking production out of private hands in to state hands, even a capitalist state, is a bad precedent and only embarked upon when the losses are so great, or profits so weak in relation to investment,  the industry has to be shifted over to workers and the middle class, hopefully as a temporary measure as occurred with Northern Rock bank in the UK for example or the mortgage industry in the US.

The Journal reminds the Argentinian regime that when the oil companies went on a strike of capital, Venezuela's oil production fell 31% between 1973 and 1976. In the 90's under the rule of the Venezuelan Oligarchs who were quite willing to split the loot with their colleagues in the advanced capitalist countries by loosening "rules on foreign participation" output rose 55% the Journal boasts but with the election of Chavez, who has placed tighter restrictions on the looting of the national treasure output has dropped again by 28%.

The Journal uses some flowery literary language to describe the process and if my English grammar was any good I could use the correct term to describe it but but the Journal warns that "Argentina wants to make YPF feed the kitty. But milking the industry relentlessly is ultimately a route to starvation." This phrase comes from one of the Journal's patrons, Exxon. One of this giant's managers commented that "We were not feeding the kitty cat and then they were complaining that the kitty cat was dying" referring to Venezuela's tightening of control in the seventies.

But we can learn important lessons from our enemies here. It is not simply the concrete and steel of production that has to be taken out of private hands---the oil rigs, refineries but inevitably the production of society's energy itself, two other important components of the production process, capital and Labor power.   As long as the capitalists have the right to own capital, what is really the product of past dead Labor power and own the use of present Labor power (workers life activity and the process of production itself), nationalizing a refinery, a factory or an entire industry can be undermined by starving it as they say of fuel, of capital.  When the 1%'s propaganda machine says that nationalized health care is inefficient or doesn't work, we need to recognize that any inefficiencies that exist are due primarily to them starving it of capital.  You don't put gas in a car and it won't run very far, the same with industry starved of capital.

To take in to public ownership a major industry even by the capitalist state is a positive step as it undermines their whole ideological propaganda war that the private sector and the market is the answer to all things.  But liberating capital from the hands of the 1%, taking it under public ownership, along with the ownership of the production process itself has to be the goal. In this way, production for social needs can take precedence over private gain (profit for a few) and take place in a rational planned way.  If this is not done, the global capitalist class will starve the kitty (the mass of the population) as they so crudely put it.   We don't have to look far to see that their system is starving millions of people, especially women and children, on a daily basis through their control of capital and its allocation.

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