Oil, the currency, the foundation…

One of the central controversies spilling over from yesterday’s budget relates to the rise in cost of oil production at the North Sea. Osborne has denied such a rise will have an effect upon consumer prices. This is hard to believe given there is no concrete regulation preventing such an occurrence. Osborne suggests that these taxes will be offset by wider international competition. However, this ignores the current political context, with democratic uprisings in the Middle East making oil prices rocket alongside destabilising likely revenues.

Oil is the reason many in the Middle East and many in the West distrust Western intervention. It has become a currency in itself, one that is very unstable. Venezuelan economy was ruptured in the 80s because of its heavy reliance on oil revenue, as the initial boost resulted in a massive cash inflow and extravagant increase in public spending. This was followed by a crash as oil prices plummeted seriously collapsing the economy, resulting in an IMF bailout that devalued the currency and plummeted living standards.

Oil damages the environment. It breads corruption. The West can ignorantly sit back, ignoring pressures to revoke licenses to Saudi – and other corrupt regimes we support – alongside ignoring Saudi’s extremely poor record on women’s rights, because of its heavy dependence on their oil. However, the recent cable leaks cast doubts on the actual levels of oil Saudi have. It is in there interests to keep the rest of the world thinking they have limitless supplies. Contradictions are central to the current global political system. The USA constantly barrage Venezuela with political criticism whist buying around half of Venezuela’s cheaper than water oil. The Venezuelan revolution is based upon oil, undermining the Chavez logic of anti-neoliberalism.

The budget was a sorry state of affairs for alternative and renewable energy. The carbon taxes will only encourage nuclear production, which as shown by Japan is hardly a ready ‘alternative’. The inability to consider an alternative is rooted in the political elites’ ignorance to conceive of a radically different structured world. As it stands our institutions are governed by neoliberal logic. European debates today are shaped in this vein, with Cameron arguing for Europe to be even more neoliberal. These constraints, outdated and illogical measures of ‘growth’ and fascination with oil will eventually bring this global order down.

Whilst there are criticisms of Wallerstein, I tend to sympathies with his views of needing a new world order, as socialist revolutions never really entirely take place under the current system. The interconnections between countries, within countries and between societies/communities are profoundly effected by these neoliberal values. There are ways to diversify our energy production, we can localise production so as to match the needs of local areas alongside sharing work; we can move away from our ongoing fascination with endless growth in the name of profit. Whilst this may seem idealistic, it is worth working with an ideal in mind, especially when the foundations of the current global system are destabilising.

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2 thoughts on “Oil, the currency, the foundation…

  1. Renewables are resisted because there are no huge profits to be had from them. Once they are up and running, you don’t have to feed them with anything you’ve dug up somewhere. No-one wants that, now, do they. Such a waste of an opportunity.
    Honestly, it’s that simple. Rich people can’t stand losing an opportunity to get richer.

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