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Not About Oil
Natascha Sadr Haghighian
Immateriality and Oil
In 1973 the world was confronted with the first global energy crisis. The so-called oil
crisis is usually explained by the Yom Kippur War. But there are clues, which are well
documented, indicating other reasons and that the scarcity of oil was fabricated. [1]
The crisis was related to several economic, political, and cultural paradigm shifts and
was, or is to be regarded as part of larger crises. [2]
At the time of the so-called oil crisis, on different levels, the discourse concerning
virtual money, immaterial labour and Conceptual Art intensified. The value of the
dollar was no longer based on the gold standard, which had been in effect since the
Bretton Woods conference that followed the Second World War. [3] It now became a
virtual currency, secured only by the oil industry; but stayed the key currency. [4]
The oil industry was an adequate safeguard for the dollar, because the need for oil
was inflexible and therefore could act as a stabilising factor. [5]
Many industries did not want to meet growing wage demands of their workers. But
they could not confront the unions’ power, only circumvent it, and they therefore
looked for possibilities for automation and outsourcing of capital and production. An
intensification—following commodities and goods—of a third, primarily servicerelated economy was the result. So-called immaterial labour is based on changing
conditions of production within this relocation. The main resource is not land, natural
resources or labour anymore, but knowledge. [6]
In art, the notion of the object within modernity became discredited or declared
uninteresting. What counted from then on was the idea. Works were produced,
which now, in part, only existed in the mind. [7] All of these levels were connected to
a changing understanding of production and added value. At the same time they
indicated a crisis situation. In order to understand this crisis it is not only necessary
to look at the Bretton Wood system and the role of the US dollar in the global
economy, but also the rebounding cultural discourse of the impairment of the object
and the growing interest in ideas of immateriality and dematerialisation. The latter
ideas contained great utopian potential, and only seem to be in opposition to the
ruling power. In fact, all the different levels combined constitute the paradigm shift
towards immaterial and dematerialised production. The energy crisis was the turning
point and catalyst for this change. The immense profits, called ‘petrodollars’, which
were realised in a short time with the rise of the oil price by 400% in 1973, were the
planned financing for this. [8]
Experience Versus Knowledge
"I remember this moment. I was still very small. It was cold, because I was dressed
warmly. My sister was too. Her arms were sticking out, because she had so much
stuff on. I believe she had just learned to walk, I had it drummed into my head that
one shouldn’t run onto the street for any reason. And suddenly everything was
changed. I went off waddling in the middle of this big street in front of our house
with my sister. We weren’t the only one. Everybody was outside. Like in a state of
emergency. But a good one. That made an impression on me."
On November 25th 1973, the so-called oil crisis led to the first car free Sunday in the
history of the Federal Republic of Germany. The travel ban affected around 13
million drivers. Exceptions applied to emergency vehicles and certain professions.
The regulation was extended to three further Sundays in the winter of 1973–74. The
empty or pedestrian-filled streets were discussed in the press, and were often paired
with threatening analyses of an international crisis and the scarcity of oil deposits.
On the one hand, this led to anxiety and uncertainty because the basic value of
modern industrialised business was—along with other things—expansion and
mobility. These suddenly appeared to be limited.
On the other hand, there was the experience of being able to walk on an empty street
and the chance to experience the place of the street completely differently—an initial
experience of an ecological consciousness and emancipatory approaches to the use of
street space. To this day there are countless initiatives for car free streets that refer
back to this first car free Sunday.
NOTES
[1] The energy crisis of 1973–74 is customarily blamed on the Organization of the Petroleum
Exporting Countries (OPEC); indeed it was OPEC that raised the price it charged the oil companies for
crude oil. The OPEC decision, however came only after the assent of the Saudi Arabian government.
Other OPEC countries had been demanding price rises for years but could not effect them because of
Saudi opposition. Saudi Arabia, as the largest producer within OPEC, had (and has) virtual power to
set short-term price levels unilaterally through decisions about its own production. Being dependent
upon US political support, the Saudi government has always made its production and pricing
decisions in collusion with US economic planners. The central Saudi bank (SAMA) is managed in
coordination with the US Treasury Department. Up until 1980, the Saudi state oil company Aramco
was run by a team of US oil companies. After 1980, it was completely nationalised but is still managed
in partnership with the same oil companies, and much of its management is US and European. The
Saudi decision to back higher prices for crude oil in 1973 came only after the US government gave the
Saudis the go-ahead. In 1971 the US government began telling Saudi Arabia, and OPEC as a whole,
that the price of crude oil should increase. The US role in pushing up the oil price has been well
documented. See VH Oppenheim, ‘Why Oil Prices Go Up: The Past: We Pushed Them’, Foreign
Policy, No.25, Winter 1976–77, and Pierre Terzian, OPEC: The Inside Story, Zed Press, London,
1985).
The Yom Kippur War of 1973 is usually presented as the reason for the oil price rise: the Arab states
supposedly wanted to punish the West for supporting Israel. But the war was largely immaterial to the
mechanics of the rise. In fact, the Arab oil embargo was virtually non-existent and the flow of oil was
at no point seriously disrupted. The oil price rise was begun by OPEC, but the oil companies
immediately raised their own prices on top of the new charges from the OPEC states. In fact, all
energy companies—whether based in natural gas, coal, uranium, often one and the same—raised their
prices above and beyond the increase in oil prices. Energy sector capitalists reaped enormous profits
from these price increases. Much of the increased revenue gained by the Gulf states (Saudi Arabia and
Kuwait in particular) ultimately returned to international banks and stock markets. This process,
known as the recycling of petrodollars, involved enormous sums—hundreds of billion of dollars—and
became essential to capitalist strategic planning thereafter. At the time, they represented the largest
financial flows in the world. This new mass of investment capital allowed capitalists to intensify the
automation and computerisation of factories in North America, Europe, and Japan. See “Midnight Oil
in Oil, Guns and Money”, Midnight Notes Collective, Autonomedia, 1992.
[2] “The real challenge of the energy problem is not a struggle with outside adversaries, as in most
great crises of the past, but within and among our respective societies. Our peoples need a wartime
psychology to fight this war against ourselves. They should be prepared to tighten their belts and to
share sacrifices among themselves—because it will be a long, uphill struggle.” John C. Campbell, Guy
de Carmoy and Shinichi Kondo, Energy: The Imperative for a Trilateral Approach, The Trilateral
Commission, 1974.
[3] “Starting in the 1950s, the United States began running persistent trade deficits that created
liabilities in the United States to other central banks, and beginning in the early 1960s, the United
States no longer had sufficient gold to cover these liabilities. To alleviate this problem, the United
States Congress on March 18, 1968 repealed the requirement for a gold reserve to back US currency.
However central banks could still redeem US dollars for gold. This became a serious problem in the
early 1970s when rising US inflation caused a lack of confidence in the US dollar, leading central
banks, particularly the Bank of France, to redeem US dollars for gold. As a result, the United States
went off the gold standard on August 15, 1971, when President Richard Nixon announced that the
United States would no longer convert dollars to gold at a fixed value... Nixon’s move undermined the
Bretton Woods system and left the International Monetary Fund, Bank For International Settlements,
and World Bank, all without any foundation for global monetary policy other than to rely on the US
dollar as a reserve currency. This was seen as an imperial move by many, removing any and all
semblance that these institutions were mediators or regulators of money markets. They were, in effect,
marketing agencies for the US dollar and a system in which other currency was necessarily bound to
it.” <http://www.wordiq.com/definition/Gold_standard>
[4] ‘Fiat money’ or ‘fiat currency’ (usually paper money) is a type of currency, which only has value in
that a government made a ‘fiat’ (i.e. decreed) that the money is a legal method of exchange. Unlike
commodity money or representative money it is not based in another commodity such as gold or
silver, and is not covered by a special reserve. Fiat money is a promise to pay by the issuer and does
not necessarily have any intrinsic value. Its value lies in the issue’s financial means and
creditworthiness. Most currencies in the world are fiat monies.
[5] “To prevent speculative and manipulative attacks on their currencies, the world’s central banks
must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The
higher the market pressure to devalue a particular currency, the more dollar reserves its central bank
must hold. This creates a built-in support for a strong dollar that in turn forces the world’s central
banks to acquire and hold more dollar reserves, making it stronger. This phenomenon is known as a
‘dollar hegemony’, which is created by the geopolitically constructed peculiarity that critical
commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars
can buy oil.” Henry C K Liu, ‘US Dollar Hegemony Has Got to Go’, Asia Times, April 11, 2002.
[6] “The transition to an information economy requires... a change in the quality of work and in the
character of the work process. These are the sociological and anthropological implications
immediately in effect during the transfer from one to another economic paradigm. Information,
communication, knowledge, and affect play a fundamental role in the production process in this
respect. The first aspect of these changes, as much research has already shown, concerns the change in
factory work; choosing the automotive industry as a reference point, then it is about the transition
from the Fordist to the Toyotoist model. The deciding difference between both these models is, that
the system of communication between production and consumption of goods, meaning the transition
of information from the factory to the market and back, changes structurally. Because the production
of services is aiming at non-durable goods, the work that is done in this production process can be
called immaterial work, which means a kind of work, which produces immaterial goods like service,
knowledge, and communication.” Michael Hardt, ‘Affective Labor (Affektive Arbeit)’, in Norm der
Abweichung, ed. Marion von Osten, Edition Voldemeer, Zurich, 2003.
[7] “During the 1960s the anti-intellectual, emotional/intuitive processes of art-making characteristic
of the last two decades have begun to give way to an ultra-conceptual art that emphasizes the thinking
process almost exclusively. As more and more work is designed in the studio but executed elsewhere
by professional craftsmen, as the object becomes merely the end product, a number of artists are
losing interest in the physical evolution of the work of art. The studio is again becoming a study. Such
trend appears to be provoking a profound dematerialization of art, especially of art as object, and if it
continues to prevail, it may result in the object’s becoming wholly obsolete.” Lucy R. Lippard, ‘The
Dematerialization of Art’, Art International, Vol. 12, no. 2, February 1968.
[8] “To focus on the study of the emerging petroleum revenues in light of the sharp increase in its
price as of the beginning of 1974, I wish to introduce a new term Petrodollars. It may be defined as the
Unites States dollars earned from the sale of oil. For certain historical reasons, price of oil has been
and still is denominated in United States dollars.” Dr Ibrahim M Oweiss, ‘Petrodollars: Problems and
Prospects’, speech at the Conference on The World Monetary Crisis, Arden House, Harriman Campus,
Columbia University, 1–3 March 1974.
[IMAGES with captions, on following 6 pages]
[oil.jpg]
so-called ‘energy crisis’
The most common unit for oil is the barrel, which is 42 US gallons (approximately 35
UK gallons or 159 litres). Oil is traded in US dollars and the profits gained from the
oil trade are called petrodollars. Since the oil crisis in 1973 the recycling of petrodollars has played a mayor role in stabilising the US economy.
[gold.jpg]
now a fiat currency
The Krugerrand was the first gold coin to contain precisely one ounce of fine gold
(31g). The Bretton Woods Agreement, signed in 1944, created a system of fixed exchange rates that allowed governments to sell their gold to the United States treasury
at the price of $35 an ounce (gold standard). The end of the gold standard was announced by US President Richard Nixon in 1971. At that point for the first time in
history, formal links between the major world currencies and real commodities were
severed.
[fordcar.jpg]
doing more with less
1972 Ford Granada Baujahr. Fordism is a ‘form of production’ or ‘production
paradigm’ that prevailed in post-war decades in western industrial countries. It consisted of domestic mass production and stabilising economic policies that provided
national demand and social stability by paying relatively high wages and various other economic policies. A crisis in the international economy created a shift from Fordism towards a post-Fordist form of production. One that is dominated by information and communication technology
[carfree.jpg]
slalom biking along the freeway
Car free Sunday, autumn 1973, Kurfürstendamm, Berlin. On 25 November 1973, the
so-called oil crisis led to the first car free Sunday in the history of the Federal Republic of Germany. Photo: Klaus Lehnartz. Courtesy: Landesbildstelle Berlin.
[artklein.jpg]
object’s becoming wholly obsolete
Yves Klein, Cession de ‘Zone de sensibilité picturale immatérielle’, cession à M.
Blankfort/Série no.4, Zone 01, Paris, 2 February 1962. Yves Klein exchanged his
‘Zones of immaterial pictorial sensibility’—empty space—for 20 grams of gold leaf.
The buyer received a certificate for the property conceived and signed by the artist.
Half of the gold was then thrown in the air and the buyer had to destroy his receipt.
© ADAGP, Paris and DACS, London 2006.
[workfever.jpg]
as immaterial labour
Saturday Night Fever (1977). Directed by John Badham. A Brooklyn youth feels his
only chance to get somewhere is as the king of the disco floor. © Paramount Pictures