Carbon Democracy and the Road to Serfdom

Carbon Democracy is a book about the links between the oil industry and the current world order. The basic hypothesis is that many of our political institutions, both in the developed world and in the rest of the world, are shaped by the oil industry.

When I read it, and without faulting the detailed footnotes and bundles of research, my reaction was that the author asked too much of the data, and didn’t give sufficient consideration to other explanations. But that was pre-Trump.

I took the book’s point that many developing countries which have oil have been ravished by oil companies, and beaten up when their respective peoples tried to organize themselves to get part of the action. Iran in 1953 democratically elected a prime minister who was overthrown by a CIA-engineered coup d’état (ironically in the interests of British Petroleum) when he nationalized Iran’s oil; Ken Saro-Wiwa paid the price for standing up to Royal Dutch Shell when the then government of Nigeria hung him on trumped-up charges and Shell failed to intervene, thereby winning an extension of its concession. The list goes on.

I also took the point that, just as Imperial Britain in the nineteenth century imported tea at such a vast rate that it had to export opium to make up the balance-of-payments gap, the West imports oil at such a vast rate that it has to export arms to cover the difference. Hence most petro-cracies are armed to the teeth – even if incapable of using those arms.

But, I thought when I read the book, oil doesn’t have Western democracies in its pocket in the same way. Yes, the author pointed out that, with oil reserves becoming increasingly difficult to find and expensive to bring to production, oil companies are now turning to the developed countries for reserves – hence, fracking and tar sands – and that the people who live next door are not enjoying extraction on their doorsteps. Poisoned groundwater just isn’t the same. But the developed economies, I thought, were sufficiently diversified that this would be a side-show

No longer. Tillerson aside, the US government’s agenda is essentially oil. To the extent that it has a discernible policy, it is to bring back manufacturing, and especially car manufacturing, to bring back coal-fired power stations and coal mining, and to burn, burn and burn. As the oil industry’s proxy, on top of their well-publicized de-funding of the EPA, etc., Trump’s administration has been quietly removing references to climate change from the US Government’s website.

The Trump administration is not exactly dominated by intellectual heavyweights. In fact, they’re noticeable by their absence. But the tradition they draw on stems from Hayek, the intellectual father of neo-liberalism. It was Hayek, they say, who decried government interference and regulations that increase the cost of doing business. Perhaps the later Hayek did – I don’t know; I’ve only just started reading him – but his earlier work, The Road to Serfdom (I’ve chosen a gee-wow review) doesn’t mention regulation at all. The thesis is that, when a government becomes singles out any industry or group of industries for favorable treatment, totalitarianism is round the corner.

There’s no doubt that Trump has singled out a group of industries for his favours; you don’t need The Economist to point out that Trump and his team seem barely even aware that there’s more to the economy that digging fossil fuels out of the ground and finding various ways of burning them. What, I wonder, would the father of neo-liberalism think of this?

Writing on how totalitarianism states come into being – a process that he lived through in pre-Nazi Austria, so had seen (and suffered from) first hand – Hayek sets out the steps. First, choose an industry or group of industries for favour (√). Given finite resources, this will come at the expense of other industries, so throw away the free market (think trade treaties: √). Because this will disadvantage those who are not favoured, win them over. As it is likely that the majority will be so disadvantaged, this is no easy feat. So some mass psychology is needed:

The most effective way of making people accept the validity of the values they are to serve [in the transition to totalitarianism] is to persuade them that they are really the same as those which they… have always held… And the most efficient technique to this end is to use the old words but change their meaning. Few traits of totalitarianism regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as the complete perversion of language.

I don’t it takes a critical reading of Trump’s abuse of language to see this in action. “Security” becomes the deprivation of rights, “fake news” the utterances of anyone opposed, and the like – so √ again.

The part of Carbon Democracy which I thought the author got dead right is that peak supply of oil has almost certainly passed, and that peak demand either soon will or has already happened. The result is that a massive and very powerful industry is dying – and knows it. Massive things are at their most dangerous in their death throes. As the oil industry is dominated by Anglo-American companies, it’s perhaps not surprising that British and American democracies will be the main victims.

This isn’t a conspiracy theory. People of similar dispositions and interests collaborate all the time without conspiring. It is, rather, the confluence of various independent historical trajectories that makes totalitarianism in Britain and America almost inevitable. But not quite. Because, as another hero of the right said, all it takes for the success of evil is for good men to do nothing – and good men are doing something.

Update: The UK is advancing Teresa May’s Snooper’s Charter. According to The Telegraph, the Hom Office wants to extend the already highly intrusive Investigatoy Powers Act seeks to give the government the right to read all communications in real time, and to ban the encryption of such communications. If that isn’t totalitarian, I don’t know what is.


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