HOW COAL BROUGHT US DEMOCRACY, AND OIL ENDED IT: LESSONS FROM THE NEW BOOK CARBON DEMOCRACY
By Matt Stoller
September 17, 2012
Long before politicians mewled helplessly about the power of “Big Oil,” carbon-based fuels were shaping our very political, legal, intellectual, and physical structures. It was, for instance, coal miners who brought us the right to vote. Israel’s founding had a lot to do with British fears of Palestinian labor unrest in coastal energy complexes. And the European Community was a post-WWII experiment to switch that continent to oil, a task begun before World War I by British conservatives to defeat their domestic political opponents. Glass-Steagall crimped financial flows, partially at the behest of the oil industry. In fact, you can’t understand modern democratic or third world political structures without understanding energy, and particularly, coal and oil. That’s the contention of Tim Mitchell’s new book, Carbon Democracy Political Power in the Age of Oil, a history of the relationship between carbon-based fueling sources and modern political systems. It’s a book that tackles a really big subject, in a sweeping but readable fashion, and after reading it, it’s hard to imagine thinking about political power the same way again.
Everything in our politics flows through dense carbon-based energy sources, and has for three to four hundred years. For instance, the invasion of Iraq in 2003 was a pivotal moment in America’s strategic outlook. America, a global hegemon whose empire was weakening, seized the second largest oil deposits in the world as a way of preventing its economic and political decline. Was there any precedent for this kind of action? As it turns out, yes. The last declining global hegemon, Great Britain, also engaged in a brutal and highly controversial British occupation of Iraq, in the 1920s, pressed aggressively by the well-known British conservative, Winston Churchill. Churchill supported this occupation not just because he wanted Iraq’s oil, but because he wanted to defeat democratic forces -- particularly militant coal miner unions -- at home. Churchill and conservative elites running through British history (most recently Margaret Thatcher) understood that as long as the British power grid, and more importantly the military, was dependent on radical coal miners, his left-leaning labor opponents would be able to demand higher wages, social insurance, voting rights, and a share of the economic gains of the British economy. He preferred to have the British economy running on oil, so he sought imperial strategies to ensure access to resources without being reliant on his political opponents. Globally, in fact, the switch from coal to oil was a fight about labor.
The use of coal and oil in the context of industrialization has always been about who has the power to profit from the surplus these energy forms produce, but until now, no one has pulled the various historical details together into a historical narrative laying bare the fascinating power dynamics behind the rise of Western political systems and their relationship with energy. Carbon Democracy is an examination of our civilization’s 400-hundred-year use of carbon-based energy fueling sources, and the political systems that grew up intertwined with them. Rather than presenting energy and democracy as separate things, like a battery and a device, Mitchell discusses the political architecture of the Western world and the developing world as inherently tied to fueling sources. The thesis is that élites have always sought to maximize not the amount of energy they could extract and use, but the profit stream from those energy sources. They struggled to ensure they would be able to burn carbon and profit, without having to rely on the people who extract and burned it for them. Carbon-based fuels thus cannot be understood except in the context of labor, imperialism, and democracy.
This book is a response to David Yergen’s The Prize: The Epic Question for Oil, Money, and Power, a classic story of hardy entrepreneurs taking huge risks to find oil in the most remote places. Yergen’s narrative centers on oil scarcity, and its contributions to economic growth in a capitalist framework. Oil is, to Yergen, the prize, solving the key problem of how to supply enough energy for a modern consumer society with a flexible and inexpensive fuel source.
In Carbon Democracy, Mitchell has a counterintuitive take on oil, one that after awhile, makes much more sense than what Yergen argues. Mitchell points out that the problem of oil has never, until recently, been that it is a scarce commodity, but that it is a surplus commodity. We had too much of it. And the central problem that this created was now how to find more of it, but how to ensure that oil cartels profiting from high oil prices could make sure that very few new oil finds, especially from the massive fields in the Middle East, came online. Far from a hardy band of entrepreneurs searching for more oil, the story of oil is one of parasitic cartels manipulating governments and inventing concepts like mandates, self-determination, and national security to ensure they could retain high profits selling a widely available commodity. But Mitchell takes the story much deeper than Yergen did, because Yergen’s book is fundamentally a fairy tale that skirts over questions of labor and colonialism.
Mitchell goes back before the widespread use of oil, to the industrialization of England and England’s use of carbon-based fuels, like forests, peat, and coal. Industrialization demanded two seemingly contradictory factors -- huge new tracts of land to grow industrial raw materials like cotton and high energy food crops like sugar, and far more centralized urban centers for manufacturing. What happened, of course, is that England simply acquired colonies with large land tracts overseas, using slave labor to harvest necessary commodities, while becoming an urban society in its core areas. Eventually, England began using coal to fuel its economy, leading to substantial economic growth and imperial strength. Coal, though, presented a challenge to the governing élites, since the characteristics of coal, with its labor-intensive extraction methods, were quite vulnerable to strikes. Coal was hard to transport, and miners operated underground in a collaborative manner. Once on the surface, coal had to be moved by fixed networks of trains. There were multiple bottlenecks here, and in the late 19th century, for the first time, the energy system of the industrialized world was reliant on workers who could withhold their labor and block a key resource. This translated directly into political power.
As Mitchell put it, “Coal miners played a leading role in contesting work regimes and the private powers of employers in the labour activism and political mobilization of the 1880s and onward. Between 1881 and 1905, coal miners in the United States went on strike at a rate of about three times the average for workers in all major industries, and at double the rate of the next-highest industry, tobacco manufacturing.” The coal industry was the key radicalizing force in bringing democracy to the Western world. For instance, in the United States in the 1930s, the radical Congress of Industrial Organizations, which is now the CIO part of the AFL-CIO, was founded by John Lewis, of the militant United Mine Workers. The rise of labor militancy in the coal mines had global political significance. “Between the 1880s and the interwar decades, workers in the industrialized countries of Europe and North America used their new powers over energy flows to acquire or extend the right to vote and, more importantly, the right to form labour unions, to create political organizations, and to take collective action including strikes.”
World War I, which was the first war fought with opposing armies both using the applied force of a dense carbon-based fuel, was both incredibly bloody and important in terms of bringing strength to labor. Workers had leverage, because they fueled military forces, in particular the British Navy. Welsh coalfields produced steam coal, a type of coal that both packed full of energy and quick to heat, by far the best fuel for coal-powered battleships (see "Updated" below). But these miners had been engaged in a wave of strikes and unrest from 1910-1914, which led Winston Churchill, then in charge of the admiralty, to switch the navy to oil. Whereas Britain had very small discovered deposits of oil (large discoveries in the North Sea would come much later), oil had different physical characteristics than coal. It could be drilled, and easily shipped through pipelines and oil tankers, thus rendering it far less vulnerable to labor slowdowns and sabotage. Churchill, in switching away from coal, was in effect trading dependence on Welsh labor and his left-wing political opponents at home for dependence on corporate cartels operating in the Middle East. Not coincidentally, Britain occupied Iraq in a brutal and controversial period during the 1920s, foreshadowing America’s later actions in the region.
And oil companies operated not to maximize production, but to sabotage it. Mitchell wrote, “The companies had learned from Standard Oil that it was easier to control the means of transportation. Building railways and pipelines required negotiating rights from the government, which typically granted the further right to prevent the establishing of competing lines. After obtaining the rights, the aim was usually to delay construction, but without losing the right. Iraq became the key place to sabotage the production of oil. It would retain that role through much of the twentieth century, and reacquire it in a different way in the twenty-first century.”
It is here that Carbon Democracy truly shines. Mitchell has reinterpreted the creation of much of our democratic apparatus, from labor laws to minimum wages to the right to vote to resistance to imperialism, as the struggle between different types of carbon-based fuels and the various characteristics of the labor required to extract and use them. Oil and how it flows is modern democracy. Even the creation of modern economics, he shows, the notion of the “economy” itself, is a function of coal and oil. The first massive collections of government statistics, Mitchell points out, were attempts to quantify coal reserves. And in the early 20th century, there were two different conceptions of economics, one by economists like Thorsten Veblen that focused on the scarcity of resources, and the other by those who ultimately became neoclassical and Keynesian, which assumed infinite resources. The latter ended up winning, because the massive surplus of oil allowed for industrial agriculture to solve our food supply issues, and petrochemicals to provide a virtually infinite array of material shapes and sizes for any number of uses.
In the 1930s, Keynes essentially invented the concept of the “economy,” as a sphere where political choices should not intrude. This created the period of “managed democracy,” which lasted until the 1970s. Oil was the fuel source that created this pseudo-democratic system, which involved strict financial controls to stop oil speculators from driving the price of oil down and crimping oil company profits. Glass-Steagall and the strict financial laws set up in the Depression, as it turns out, had at their core the protection of the oil industry (political scientist Tom Ferguson echoes this interpretation in his work). Similarly, the unraveling of this system because of higher oil demand in the 1970s led the neoliberals to gradually break this system of financial regulation.
Flowing through the narrative is the question of imperialism and neo-imperialism. A variety of ideological mechanisms, such as the self-determination ostensibly preached by Woodrow Wilson, were in fact ways for Western oil-consuming states to control and slow the flow of oil from poorer but oil-rich countries. Mitchell shows how Palestinian strikes at oil installations in the late 1930s led Britain to support a Jewish state in the area, and how American mining engineers helped craft the apartheid regime in South Africa. At the same time, aggressive left-wing parties in the British parliament sought to combat imperialism, because they understood that imperialism abroad was meant to break the power of British labor -- in particular coal mining -- at home. Mitchell pays particular attention to the negotiations of the Treaty of Versailles and the period of negotiations after World War II to set up an international management framework. The League of Nations, he writes, “was to be an economic mechanism to replace, not war between states, but its taproot -- the conflict over material resources.”
In addition to what would become the World Bank and IMF, Keynes wanted to establish an international body to manage commodities, including and especially oil. While no institution was ever set up to do this, a framework of national security and “the Cold War” managed to keep Middle Eastern and Russian offline for a long period of time. In addition, the oil companies used public relations to encourage a high oil-consumption lifestyle in the United States, so as to keep the price of oil as high as possible. In Europe, Mitchell encourages a revised view of the Marshall plan, as a joint European and American élite plan to break European labor power. It’s a particularly interesting way to interpret the rise of the European Union, one deeply at odds with thinkers like George Soros who see the EU as a success of far-sighted visionaries who sought to to build an “open society.” Mitchell cites American intervention in post-WWII European economic and political arrangements as evidence.
Three years later, after rapid inflation caused real wages to collapse, coal miners joined a series of strikes demanding that the government increase pay levels or extend food rations… Rather than yield to these claims, France and other European governments turned to the United States. Keen to promote their new corporate-management model abroad (and to have Washington subsidize their exports), American industrialists used a fear of the popularity of Communist parties in Western Europe to win support for postwar aid to Europe. ‘The Communists are rendering us a great service,’ commented the future French prime minister Pierre Mendès-France. ‘Because we have a “Communist danger” the Americans are making a tremendous effort to help us. . . . The European Coal and Steel Community, established as a first step towards the political union of Europe, reduced competition in the coal industry and supported the mechanization of production, with funds provided to alleviate the effects of the resulting pit closures and unemployment. The United States helped finance the program, which reduced the ability of coal miners to carry out effective strikes by rapidly reducing their numbers and facilitating the supply of coal across national borders. The third element was the most extensive. The U.S.-funded initiatives to convert Europe’s energy system from one based largely on coal to one increasingly dependent on oil.
Thus, the European Community, which is currently in the thrall of a monetary crisis, was created out of a fierce political battle over oil, coal, profits, and labor. And now, with the Cold War over and the European infrastructure dependent on labor-immune oil, the welfare states of the Eurozone are being destroyed. Carbon Democracy, as a historical narrative, explains why this is not a an anomaly. Chucking labor and social insurance overboard is a feature, not a bug, of the European experiment. Only by understanding the relationship of Europe to coal and oil does this become apparent, and can we cast aside quaint notions of democracy that ignore realpolitik.
The ultimate conclusion of the book is that a climate crisis, and peak oil, are putting our deeply held political arrangements in a period of uncertainty and crisis. Once you’ve gone on this journey through time, and you understand Mitchell’s narrative that our very intellectual horizons are dominated by oil as a surplus and infinite commodity, it becomes hard to conclude that our cultures will look remotely similar to what they look like today in just a few years. Against this sweeping narrative, our current political debates seem incredibly tiny, almost irrelevant. We have, as it turns out, been living in a land of fairy tales about how our society works, because we’ve been ignoring what powers it, oil, and what drives that commodity. The pipelines, the wells, the financial channels, these construct our physical society, as well as the intellectual environment in which we conceive of and organize our social relations.
I have only one reservation about Mitchell’s work. This book utterly blew me away. But because it did, because it sits so far outside of the orthodox sources of information I understand, it’s extremely difficult to incorporate it into contemporary political rhetoric. Most of the time, when I read a book on politics, though the information may be new, especially when the book contains a well-reported story, the influences come from a fairly standard set of ideas. For instance, I really loved Neil Barofsky’s book Bailout, because it was his observations on working the levers of power in Washington. And though the information in it was new, the book was a response to Tim Geithner’s worldview. We are mostly familiar with the various economic and legal ideas to which Barofsky referred, and so we can understand the political implications of what he’s saying. The book presented new information, but in a framework that was familiar, an extension of arguments I already understood. Carbon Democracy does not do this. Indeed, it could not. It introduces ideas and concepts that will need new political rhetoric before it can be absorbed by the public and policymakers. These ideas are desperately important, because they persuasively explain why our social arrangements are the way they are. I suspect that those who run our oil companies, and perhaps our banks, would instantly understand what Mitchell is saying, and find it almost obvious. The rest of us, though, will have to wake up from our dreamscape of democracy before truly recognizing what Carbon Democracy has put right in front of us.
UPDATE: I made an inadvertent error in this review by saying that steam coal was the best kind of fuel for battleships. This is not what Mitchell writes, and it isn’t what I meant. The intent was to argue that the supply of a particular kind of fuel best suited for a coal-powered British navy was dependent on militant coal miners, not to assert that coal was a more energy-dense fuel type than oil. In other words, what I meant to write, and what Mitchell argued, was that steam coal was the best kind of fuel for coal-powered battleships. I have modified the text to reflect this. Here’s the passage from the book (h/t commenter KM).
“The south Wales coal strikes that had launched the Great Unrest were a particular threat to the navy. The Welsh coalfields produced steam coal, a hybrid grade of fuel combining the high calorific value of anthracite with an ability to generate heat quickly, making those fields the only source of fuel for coal-fired battleships. At the Admiralty, Churchill immediately set up the Royal Commission on Fuel and Engines, to examine switching the Royal Navy’s ships from coal-and oil-fired steam engines to internal combustion engines dependent on oil. The political unrest in the Welsh coalfields influence Admiralty thinking. It provided another incentive for the decision to abandon coal in favor of oil, and the consequent change in policy towards Anglo-Persian. In committing the Royal Navy to a new source of energy, the government was making itself vulnerable to the monopolistic powers of the oil companies. At the same time, it was freeing itself from the political claims of the coal miners.”
(footnote 45: “. . . Similar unrest among a different group of coal miners had shaped Admiralty planning a decade earlier. In 1903, the Commission on Fuel Oil had recommended only a partial switch from coal to oil, partly because the Great Pennsylvania Coal Strike of 1902, a turning point in American labor struggles, had caused a domestic switch to oil and a reduction in U.S. oil exports, raising Admiralty concerns about the security of supply . . .”