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When OPEC raised the price of oil in October 1973, purportedly as a political weapon over the Yom Kippur war, it did not do so as a challenge to imperialism. Indeed, despite the confrontationist rhetoric of Gaddafi and others, OPEC's Saudi anchor derived advantages for the U.S. government in an intraimperialist show of force. In 1971 , when President Nixon delinked the dollar from the gold standard, the administration puzzled over strategies to exert power over the global economy. One of these was a rise in the oil price, which would, the Nixon administration surmised, do at least two things for the United States: put an immense squeeze on the two main economic competitors, Western Europe and Japan; and earn profits for the oil lands, which would, in all probability, be recycled into U.S. financial institutions because the Gulf states, at least, did not have adequate productive capacity to absorb the petro-profits. The elimination of capital controls in the U. S . economy by 1974 further facilitated the recycling of these petro-profits (then held almost exclusively in dollars), and therefore the global enhancement of the status of the dollar as the instrument of "hard currency." Since the oil states held their main currency reserves in dollars, it behooved them to help stabilize the U. S . economy (and work against the depreciation of the dollar, which contributed to the deindustrialization of the United States). The 1973 price rise certainly improved the position of the oil lands momentarily, but in the long run it benefited the U.S. government and the major transnational firms that did business in dollars. Despite the best intentions of the public cartel, then, it did not necessarily inconvenience or challenge the structure of imperialism.
the financial component of this is really fascinating (and quite key imo)
[...] Hemmed in by pressures from the advanced industrial states, the aristocratic rural classes, and the emergent mercantile classes, the new state had little time. Things had to change in a hurry. But socialism requires imagination and time. It cannot be made in a hurry. To create socialism in a hurry without mass support, and institutions that can channel this support, led many Third World states to disaster.
generalising from Tanzania
The ujamaa program began with the assumption that the national liberation regime should create a democratic economy that worked in the interests of the vast mass of the people. Since most of the people in the formerly colonized world in general and in Tanzania in particular lived rural lives, Nyerere's 1961 slogan resonated with them: "While other countries aim to reach the moon we must aim for the time being, at any rate, to reach the village." Whatever Nyerere's intentions and those of the many Third World governments that had similar agricultural schemes (from Algeria to Burma, and on), the move to consolidate agriculture had the net effect of trying to control the peasantry, to agglomerate peasant production under the domination of the national liberation state. Once collected, peasant production in the Third World would now be made subservient to the dynamics of world trade (and imperialism) rather than the subsistence needs of the localities that could have governed their development. To render the relatively autonomous petty commodity sector subservient to the state, the regime abolished the marketing cooperative movement in 1975. Formed to gain better prices for agricultural produce (notably cotton), the movement brought some benefits to the peasantry. But the state decided to buy directly from the growers, often at prices set by the central government. Additionally, in 1972, the regime adopted the counsel of the U.S. consulting agency, McKinsey and Co., which advised it to replace the local government agencies with "development teams" that reported directly to central government ministries. These teams, wrote a scholar at the University of Dar es Salaam, "effectively replaced the local government system with an elaborate system of vertical information and planning flows centralized to the higher echelons of the government and party."
aaaaah what a mess
[...] Instead of doing much to turn the divide around, the state simply tried to siphon more welfare toward the poor. Short of socialism, the national liberation state in places like India wanted to produce higher growth rates. As output increased, regardless of the means to do so, the state would have a larger aggregate pool of capital and resources to distribute to the population. Market socialism or the mixed economy was a socialism of consumption not production. In the attempt to industrialize and create agricultural change, there was only a muted effort to change the relations and methods of production. The process of industrial as well as agricultural production remained similar to that found in any advanced capitalist country: workers had no say in the process of production, which was run by a detached management class. Deliberation was kept to a minimum. Socialism made its appearance in the marketplace and on the threshing floor - to more equitably divide the spoils rather than to more equitably produce them in the first place.
i like this juxtapositional framing
Industrial, agricultural, and financial elites who gained through several decades of import-substitution policies now outgrew their training wheels and restraints. Reasonable growth and considerable accumulation by this class gave them the confidence to exert their own class interests over the needs of their population. Many of the most aggressive leaders of this class had been born toward the end of the era of full-blown imperialism. They had experienced neither colonialism nor anticolonialism. The structures that enabled them to flourish now seemed to be shackles. The intellectual leaders of this class spent time in international institutions (such as the IMF and the World Bank) . Here, these intellectuals experienced the change from a Keynesian development model (that the state should intervene to create demand by social welfare and social wage policies) to a monetarist accumulation one (that the state should withdraw to the simple function of managing the money supply and ensuring low levels of inflation). People such as India's Montek Ahluwalia and Manmohan Singh as well as Venezuela's Moises Nairn and Miguel Rodriquez are good examples of this tendency. In addition, migrants to the advanced industrial states who made good turned their capital and expertise to the homeland during the era of stagflation in their host countries; people such as India' s Sam Pitroda and Taiwan's Miin Wu brought their skills and worldview to bear on the development of the new information technology sector in their homelands. This infusion of skills and business philosophies enthused the emergent bourgeoisie in the darker nations, which saw the future through their eyes rather than the lens of the Third World agenda. This class was not motivated to become an economic proxy for the Atlantic powers. It believed in its capacity and wanted the opportunity to flourish.
noooo
this almost reminds me of that line from Down and Out in the Magic Kingdom (which itself echoes a line from The Diamond Age) about the children of revolutionaries
The Third World agenda understood that the economic suffocation of the darker nations came not only from abstract economic principles but crucially because these principles had been set up through the political intervention of powerful actors. The rules of international trade, for instance, were not simply those of an a priori economic theory but were devised by the powerful to suit their interests. Because of this analysis, any reform had to be both about the politics of the economy (who writes the rules) and the economics of politics (who holds the economic muscle to allow themselves to write the rules) . The interrelationship between economics and politics defined the work of the Third World agenda.
[...] Drawing from the work of w. Arthur Lewis, a comrade and friend of Prebisch, the Jamaican government pursued the policy of "industrialization by invitation." A system of leases permitted the government to channel industrial investment into those areas of the economy that allowed for social development. Economic policy generally drew from the import-substitution theory, and the government relied on targeted direct foreign investment, notably in the bauxite sector. The latter provided Jamaica with most of its foreign exchange earnings. Discovered in the 1940s, the bauxite reserves fell prey to Canadian and U.S. firms starting in 1 952. These firms have since dominated the extraction of the mineral, with Jamaica becoming the largest exporter to North America in the 1960s. But as with sugar and tourism, the Jamaican people did not benefit from their natural resources. The only return to Jamaica came in the way of modest taxes to the government, meager wages to the working class, and a small tribute to the Jamaican managers at the mines and plantations - for this reason, what Jamaica exported despite its fabulous resources was cheap labor, and what it gained for that was a pittance toward its grandiose development aims.
By the early 1 970s, the government reactivated its efforts to break Jamaica out of its impoverished chrysalis at the nether end of global capitalism. Manley' s son Michael ran a ferocious and successful political campaign against the global economic system that stacked the decks against countries like Jamaica. Once in power, Michael Manley promoted the construction of democratic socialism for Jamaica, but his regime did not try to disassociate itself from the world capitalist system, or even the overwhelming dominance of financiers of the commercial or IMF variety. Keeping Jamaica hooked up to the infusion of foreign aid or investment meant that the government had to respond to the demands of the foreign money managers rather than the long-term developmental needs of the people of Jamaica. Short-term returns to the investors dominated the planning even of the democratic socialist state.
[...] World inflation, high oil prices, and a drop in commodity prices effected the reserves, as it did those of most of the darker nations. In 1960, the total debt of the 133 states that the world Bank counted as part of the "developing countries" held a total public and private debt just short of US $18 billion. In ten years, the debt had escalated to $75 billion, and when Jamaica went into fiscal crisis, it was $113 billion. By 1982, the debt had reached the astronomical figure of $612 billion. While many scholars and commentators blame the oil crisis of 1973-74 for the ballooning debt, this is a superficial argument. The rise in oil prices due to the action of the OPEC cartel only exacerbated tendencies that had already stymied the social development of the formerly colonized states. The distorted development agenda followed by most of the Third world, whether those that adopted or shunned socialism, and the imperialist pressure faced by these states produced a structurally impoverished international political economy. When the oil crisis hit, it provided the conjuncture for the Third World's structural rot.
hmmm a slightly different perspective. useful
[...] During the first six months of 1974, when the fiscal effects of the oil crisis became clear, the G-7 enjoyed a $6 billion surplus with the nonpetroleum exporting Third World states, but it suffered a $4 1 billion deficit with the oil exporting states. A year later, the nonpetroleum states owed $2 1 billion, whereas the G-7 owed the oil group $2 1 billion.21 The scale had been balanced. The rise in oil revenue for the G-7 had been offset by the surplus owed by the oil-less Third World. Furthermore, the oil states, as we saw earlier, held their profits largely in U.S . dollars, which meant that as the U.S. dollar abandoned the gold standard in 1971 , its own standing in the global economy remained high because petrodollars kept it in demand. The rise in petrodollars allowed the United States to abandon the very macroeconomic restrictions it demanded of the Third World, and therefore run a deficit to strengthen its domestic economy and expand its already-considerable military.