May 10, 2008
The Asia Times

An Oil-addicted Ex-superpower

by Michael T. Klare

Nineteen years ago, the fall of the Berlin Wall effectively eliminated the Soviet Union as the world's other superpower. Yes, the USSR as a political entity stumbled on for another two years, but it was clearly an ex-superpower from the moment it lost control over its satellites in Eastern Europe.

Less than a month ago, the United States similarly lost its claim to superpower status when a barrel of crude oil roared past US$110 on the international market, gasoline prices crossed the $3.50 threshold at American pumps, and diesel fuel topped $4. As was true of the USSR following the dismantling of the Berlin Wall, the US will no doubt continue to stumble on like the superpower it once was; but as the nation's economy continues to be eviscerated to pay for its daily oil fix, it, too, will be seen by increasing numbers of savvy observers as an ex-superpower-in-the-making.

That the fall of the Berlin Wall spelled the erasure of the Soviet Union's superpower status was obvious to international observers at the time. After all, the USSR visibly ceased to exercise dominion over an empire (and an associated military-industrial complex) encompassing nearly half of Europe and much of Central Asia. The relationship between rising oil prices and the obliteration of America's superpower status is, however, hardly as self-evident. So let's consider the connection.

Dry hole superpower

The fact is, America's wealth and power has long rested on the abundance of cheap petroleum. The United States was, for a long time, the world's leading producer of oil, supplying its own needs while generating a healthy surplus for export.

Oil was the basis for the rise of the first giant multinational corporations in the US, notably John D Rockefeller's Standard Oil Company (now reconstituted as Exxon Mobil, the world's wealthiest publicly traded corporation). Abundant, exceedingly affordable petroleum was also responsible for the emergence of the American automotive and trucking industries, the flourishing of the domestic airline industry, the development of the petrochemical and plastics industries, the suburbanization of America, and the mechanization of its agriculture. Without cheap and abundant oil, the United States would never have experienced the historic economic expansion of the post-World War II era. . . .

According to the latest data from the US Department of Energy, the United States is importing 12-14 million barrels of oil per day. At a current price of about $115 per barrel, that's $1.5 billion per day, or $548 billion per year. . . .

Russia exports a substantial portion of its oil and gas to neighboring countries, making it the only Great Power not dependent on other states for its energy needs. . . .

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Michael Klare is a professor of peace and world security studies at Hampshire College and author of the just-released Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books). A documentary film based on his previous book, Blood and Oil, is available from the Media Education Foundation and can be ordered at bloodandoilmovie.com.

[The Department of Defense's planned expenditures for the fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defence budget, is itself larger than the combined military budgets of Russia and China. Defence-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. . . .

Our short tenure as the world's lone superpower has come to an end. As Harvard economics professor Benjamin Friedman has written: "Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence and cultural influence. It's no accident that we took over the role from the British at the same time that we took over the job of being the world's leading lending country. Today we are no longer the world's leading lending country. In fact we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone".

Some of the damage can never be rectified. There are, however, some steps that the US urgently needs to take. These include reversing Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defence budget all projects that bear no relationship to national security and ceasing to use the defence budget as a Keynesian jobs programme.

If we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression.--Chalmers Johnson, "Why the US has really gone broke," Le Monde diplomatique, February 2008]

David Leigh and David Pallister, "The New Scramble For Africa," Guardian, June 1, 2005

Michael T. Klare, "Is Energo-fascism in Your Future?," TomDispatch.com, January 16, 2007

Amy Chua, "Day of Empire: How Hyperpowers Rise to Global Dominance - and Why They Fall," Doubleday (October 30, 2007)

John Gray, "Control Oil and Water, Control the World," Observer, March 30, 2008

[In one respect, it is hardly surprising. Iraq, Afghanistan and the rise of China. The credit crunch. The $124 a barrel oil price. The unbelievable unfairness of Bush's tax cuts. The racism and violence that still pockmark American life. Yet the pessimism is overdone. The more I visit the US the more I think the pundits predicting the US's imminent economic and political decline hugely overstate their case. Rather, the next 50 years will be as dominated by the US as the last 50. The US will widen its technological and scientific dominance, sustain its military hegemony, launch a period of reindustrialisation and continue to define modernity both in culture and industry.--Will Hutton, "Forget the naysayers - America remains an inspiration to us all," Observer, May 11, 2008]

[The world's tallest building is in Taipei, and will soon be in Dubai. Its largest publicly traded company is in Beijing. Its biggest refinery is being constructed in India. Its largest passenger airplane is built in Europe. The largest investment fund on the planet is in Abu Dhabi; the biggest movie industry is Bollywood, not Hollywood. Once quintessentially American icons have been usurped by the natives. The largest Ferris wheel is in Singapore. The largest casino is in Macao, which overtook Las Vegas in gambling revenues last year. America no longer dominates even its favorite sport, shopping. The Mall of America in Minnesota once boasted that it was the largest shopping mall in the world. Today it wouldn't make the top ten. In the most recent rankings, only two of the world's ten richest people are American. These lists are arbitrary and a bit silly, but consider that only ten years ago, the United States would have serenely topped almost every one of these categories.--Fareed Zakaria, "The Post American World," Newsweek, May 12, 2008]

[Buchanan shows how the Bush Regime has broken from the sound policy of President Reagan and is replicating the British folly of self-destruction. "There is hardly a blunder of the British Empire we have not replicated," laments Buchanan.

The distinct American hubris that we are "the indispensable nation" and the braggadocio that we are an "omnipower" has us overcommitted in alliances that we cannot fulfill. Despite 25 percent of the Iraqi population killed, injured or displaced, the "world's only superpower" cannot even control Baghdad.

In March 2002, prior to Bush's decision to impose Israel's will on the Middle East, oil was $25 a barrel. Today oil is $125 a barrel, a five-fold increase that has seen our oil import bill rise from $145 billion in 2006 to $456 billion presently, a $300 billion addition to a trade deficit that was already running $700-$800 billion annually.--Paul Craig Roberts, "How Empires Fall," counterpunch.org, May 13, 2008]

[Here, then, is the unnerving possibility: that another, imminent global crisis could make the half-century between the 1970s and the 2020s the equivalent for the United States of what the half-century before 1950 was for Britain. This may well be the Big One: the multi-decade endgame of U.S. ascendancy.--Kevin Phillips, "The Old Titans All Collapsed. Is the U.S. Next?," Washington Post, May 18, 2008]

Richard C Cook, "Extraordinary Times, Intentional Collapse, and Takedown of the U.S.A.," australia.to, May 19, 2008

[The forces of globalization may be reducing the "developmental gap" between the US and China, the US and India, and China and India. However, they do not necessarily force one to conclude that the US has become a declining power.--Ehsan Ahrari, "The mythical post-American era," Asia Times, May 20, 2008]

[Before Bush began his wars of aggression, oil was $25 a barrel. Today it is $130 a barrel. Some of this rise may result from run-away speculation in the futures market. However, the main cause is the eroding value of the dollar.--Paul Craig Roberts, "War Abroad, Poverty at Home," counterpunch.org, May 23, 2008]

Jonathan Wright, "Mideast governments increasingly ignore U.S. views," Reuters, May 26, 2008

Jon Basil Utley, "Left and Right Against the Military-Industrial Complex," Antiwar.com, April 1, 2009