Abhijit Speaks :

On Fossil Fuels, Cold War, Terrorism and Globalization

Note: This is a rather long (read as boring) article. Hope people don’t sleep by the time they go to the last para.

I was thoroughly disturbed after the recent terrorist attack on Mumbai. Not just because, a lot of innocent people lost their lives, but also because, I was completely perplexed to understand the nature and causes of this “terrorism”. Inspite of huge outcry about “Islamic Fundamentalism” being the root cause of this globalized terror, somewhere deep inside, I was convinced, it is not so. We human beings do not keep on doing things for reasons other than economic reasons. However, the pieces were not fitting together to explain the cause completely, in fact had “Islamic  Fundamentalism” been real cause of global terror, I have offered solution, that if enacted would actually do a better justice to the cause than terrorism.

Then I came across a couple of articles written by Dimitri Orlov and thats when picture started becoming clearer. Though, I must admit with a benefit of hindsight – that I do not belong to the camp of runaway prices in Oil. Both (1 and 2)  of his articles are worth a read.

What I am attempting is to understand the things happening around as I see and offer my best guesses as to how we things might unfold in the coming few years. There is a certain amount of guesswork in this – and I don’t claim to be smart or prophetic, but this is how the whole pieces of puzzle are fitting together at-least according to me.

Role of Fossil Fuels in the Post Industrial Revolution based economy

It is often considered that with the invention of steam engine, the industrial revolution started in earnest. The progression of this revolution lead first development of schemes of mass production, emergence of cities, colonization (though it started much earlier) and eventually leading to the world wars. One of the basic themes of the Industrial Revolution was – use of fossil fuels. Initially it was coal and natural gas, then with the advent of automobiles and aircrafts – to gasoline and diesel. The importance of fossil fuels and thus controlling their sources became far more prominent when the Industrialization was becoming globalized. What more can explain the perceived importance of Oil (and similar natural resources) than one of the most significant political military developments in the four decades post world war II, viz. the Cold War.

Cold War – What it really Was

As per Wikipedia, On April 16, 1947 Bernaurd Baruch coined the term cold war on the relationship between the post WWII  United States and the Soviet Russia. The reason I mention the date here, is because it happens to be my Birthday as well. Up to this point I always believed Cold War was a war between two ideologies – a free market based capitalism on one side Vs. the government controlled/managed socialism (or communism – I don’t understand the difference) on the other side. However, the recent plans of Washington about bailing out the failing corporations led me to question Washington’s intentions of being Free Market Capitalists ever at all? Some of the acts Washington is doing will put strongest Socialists to shame. So afterall, it was not about ideology. And if it is indeed about ideology, why the same logic does not apply when US is happily in bed with China, another so called Communist country? what was it about? When I read Dimitri orlov’s article, it became clear, afterall, it was about a singluarly important thing called oil. This is the conjecture part – Perhaps, this all started with some intelligence report in Pentagon, suggesting that the oil reserves of the World Will come to an end by the turn of century and if we are dependent on oil for others, we better have a military control over it. So Cold War essentially was alignment of forces between Oil Consumers (by United States of America) and oil Producers (Russia or formerly USSR). The ensuing power struggle for superiority in space, nuclear weapons was all lead by this fundamental economic reason, viz. to control Oil as was perceived to be important. In hindsight, it is not hard to assume, why the producers aligned along the “government control” vs. “market controlled”. It is also not quite surprising, US exported “consumerism” to the world, as it was essential to align maximum forces in it’s direction. However, it was important to give this clash some ideological background, so that a lot of people (who are easily gullible) can become party to it. It is not entirely surprising that important military and political developments to align these forces happened during the early days of Cold War , eg. NATO in late forties and early fifties. Infact a certain Secretary of State of the United States went on the record indicating its real intentions – “To control Natural Resources.” The Cold war Activities were at its peak when the oil made its peak in the late 70′s and early 80′s. Then came the supply side shock to the Oil, with the discovery of new oil fields and new technologies of exploration, it started  becoming evident, afterall oil resources may last well beyond the turn of the millenium and this lead to a dramatic collapse in oil prices that lead to the collapse of one side of the Cold war, the oil Producers or in this form the USSR. This is where the real trouble started.

Before moving to next section, I am going to ask a question “So what Exactly is global terrorism?” One answer I can think of is – “Is it an unintended consequence of Cold war and thus a misplaced belief about importance of fossil fuel in the post WWII economy?” Before, I would make an attempt to answer that question, we are going to digress a bit and understand a different force acting “inspite of” or “alongwith” the cold war viz. the globalization. That’d help us understand the true nature of Terrorism and then we’d  explore terrorism in details.

Globalization

Even today, the word globalization draws a certain amount of xenophobic or anti american sentiments (for largely due to the fact that globalization to some is synonymous with americanization). However, globalization is not so much about americanization, it is a natural progression of our civilization, through stages over past few centuries. It is a different fact that only recently we’ve been able to put a name to this phenomenon of human endeavour. This process of globalization started almost five centuries back – to give an example, Christopher Columbus, an Italian was sponsored by Spain Government for his voyage towards West, for which he used a technology developed by Portugeese and information from Chinese and Vikings ( source – Adventure Capitalist). The discovery of America, perhaps symbolically was a first step in the ensuing globalization, which was further progressed by the Industrial revolution first and in the last couple of decades by information revolution. The way it has progressed, is as follows – first the common peoples (deliberate pluralization) were able to learn about it – that yes it is possible (by reading stories about ), then actually seeing people do it (through television) and finally participating in it.  It might be unfair to claim that a very large section of humanity is participating in globalization, however, certainly the number is substantial. To site a recent experience of mine – On my recent visit to Nepal, I happened to visit a Tibetan refugee village. The image of a Tibetan refugee village that I had conjured up in my mind was about people of all ages clad in long red cloth, rotating the some mystical drums and chanting mantras. What I found there was certainly startling – The first shop that I found there was selling Coca-Cola. There were a couple of small kids, all right clad in red cloth, but they were playing a game of cricket, a British game, now popularised by India,  using the yo-yo ball and a make-shift bat. And I did observe a bunch of kids walking past me, wearing a “Seiko watch” which were probably made in China. This is not what one would imagine in his or her wildest dreams about finding in a Tibetan refugee village. Such is the extent and reach of globalization.

Is terrorism a force against Globalisation?
Globalization is a natural consequence of human endeavour to question, to explore to seek out .. or as Mr. Gecko in the famous movie Wall Street would say it is the consequence of “Human Greed”. And as more and more nations are participating, globalization is truly achieving its promised destiny, a common humanity with tastes as diverse in religion, politics, languages and arts, but living in harmony with mother nature and itself. When we look at this ultimate goal of globalization (or as I would called it the Golden Age of Globalization), we’d start to understand the undercurrents, the forces that are acting against this very promise of globalization and this is where I believe in my opinion we find some answers to the current global terrorism.

Now let’s try to understand what is Terrorism in the first place and how it obtained the current form.

On Terrorism

I am not sure if any of you have seen this wonderful movie called “Lord of Wars” and in which there is a scene our narrator Yuri, while enjoying a vacation with his family watches the news of destruction of Soviet union and kisses the TV screen in sheer excitement. There are plenty of reasons for our guy Yuri to get excited about, the most important being, this opens a huge stock-pile of military weapons erstwhile controlled and held tight by russian government through its influence on military.

We now have two ingredients for the Global Terrorism

1. The force against globalization – Let’s look at the states that are patronizing terrorism, these are the states which are left behind in globalization viz. Pakistan, Afganistan. It is not entirely impossible to harness this frustration of not being able to participate into something that is “anti-islamic” and create a force (which calls itself “islamic fundamentalists”) that threatens to stall the progress of globalization.

2. Second important aspect – Easy availability of sophisticated weapons. This is certainly a consequence of the debacle of Soviet Russia (thanks largely due to supply side shock for the erstwhile important commodity viz. Oil) and an easy transit through russian maffia to the hands of this brand of neo Islamic Fundamentalists.

This was actually made possible by something else “A reserve currency of the world, the US Dollar”, a consequence of Breton Woods system, (which was perhaps motivated by Cold War in the first place?) Thus these three ingredients are largely constituting for the current state of global terrorism. Thanks also to the US hegemony, that there is an element of animosity that would lead to an ideological excuse of “Islamic Fundamentalism”, which can be proclaimed as cause of World Terrorism.

Thus perhaps, Terrorism is an unintended consequence of Cold War?

Now let us try to answer the question “Why the forces against globalization are acting thus?”. Everyone knows about the sour grapes story of the wolf. The states that are sponsoring terrorism are the very states that have been miserable failures in globalization or as I would say in the progress of human civilization. Take for instance Pakistan, a state that obtained independence exactly at the same time as its neighbouring state India. Which inherited almost an identical history, culture, political and education system. However, after five decades, where are we – India, despite its horrible economic policies,  uncontrolled inefficiencies is still way way way better than Pakistan, thanks largely to a single most factor and that is Globalization. Pakistan has thus failed miserably in globalization, so it is but natural that states similar to Pakistan would be involved in activities that will hamper globalization. Not surprisingly, such states are biggest patrons of terrorism.

Recently, a so called terrorist was captured during Mumbai terror attacks, allegedly he’s Pakistani. Wherever he belongs, he certainly is not benefiting from globalization or I would even go on to say he’s not participating in globalization. Given a choice what would a 21 year old kid like to have – An Apple iphone  or a Kalashnikov. Of course the former. But some kids are preferring the later. Unfortunately for them they don’t grasp the promise and reach of Globalization and are taking the other path, under the pretext of yes you got it right an ideology – “Islamic Fundamentalism”. If you tell them, what essentially they are doing is an Inventory cleanup of large stock of weapons developed during the Cold War, they’d not happily take up to the cause of terrorism. You tell them about “Kingdom of Allah”, Martyrdom in the cause of Jihad and so on, to which they can relate with, and they’d willingly pick up the Kalashnikov. Ideologies are important to promote a cause – For they help people just like their notions of God, to relate things with they know. Hence all the human activities have so far been performed under the pretext of these “isms” – The Free Market Capitalism, The Socialism, Islamic Fundamentalism and so on…..

So after all, Islamic Fundamentalism is not really the cause of this Global terrorism. There might be an argument which would say that – Well its not only poor 21 year olds (allegedly) from Pakistan that are taking up this path. There have been people, well educated in top notch “Western Universities”, working for Multinationals who are also participating in a few “acts of terror so to speak”. The answer to that is – Of course, since those people don’t understand the real economic reasons of terrorism, they are trying to belong to the ideology of “Islamic Fundamentalism” and incorrectly believe in achieving the path to “Kingdom of Allah” through these acts. Just as the best nuclear scientists in Russia were perhaps believed in the “Equality for Everyone” promise of the Socialism and were participating in an activity, which was driven by purely economical reasons they didn’t understand and wouldn’t appreciate.

To Wit – Global Terrorism is an unintended consequence of the Cold War (and associated proliferation of Weapons), which itself was a fallout about misconceptions about the supply of the  Fossil Fuels and its role in Global economy. This force is largely acting against the process of globalization.

Where will this all lead?
Possibly, the recent economic crisis would lead to a war, possibly of larger proportion, which would be fought for wrong reason again that is “Control of Oil?” Just as Second world war was fought for wrong reasons – “Control of Land and Human labor”. What would become a world order post this war, is difficult to predict as of now. However, whether the war may or may not manifest, we’d see an interesting development. The threat of terrorism will vanish almost as mysteriously as it came into existence. The reason I think for this is not a sudden realization of peaceful means, but an ensuing important economic development. Destruction of dollar as a reserve currency (as we approach this, it might itself trigger a geopolitical conflict).  Subsequently all the governments world over would take the credit for eliminating the threat of terrorism. (Just as all the central bankers took credit for controlling inflation which primarily happened due to near capitulation of oil prices). Why a demise of dollar would lead to end of terrorism? -  It will become economically unviable to fund terrorism without the reserve currency. When the Russian mafia realizes the dollar payments they are getting for the weapons they are selling are becoming as worthless as their former currency, there’d be a natural curtailment to the spread of sophisticated weapons. Without the reserve currency, it’d not be easier to obtain funding for the “terrorist activities”. This would lead to an “economic crisis” in the underworld and the very perpetrators of terrorism will find themselves at receiving ends, for they no longer can support their recruits. They’d become as I call it – victims of their own success.

In the coming years post war (assuming the war actually happens and doesn’t lead to a nuclear holocaust), fossil fuels based economy will come to an end and a new industry based on Green Energy will be developed. Just as post WWI, there were massive developments in Organic Chemistry, Post WWII period saw development of Semiconductors industry, we are likely to see developments in Green Energy. What that will be nobody knows – It may not even be in the current “non-conventional” energy forms, just as nobody could imagine the Internet in current form, but it came into existence, we’d see new sources of energy and related industries, coming up in the years that follow in next couple of decades. That will be an important driver for global economy, possibly for centuries to come.

This is when the true promise of Globalization will be realized. Eventually Globalization would win, but not before paying its price.