Edgar Hardcastle
Source: Socialist Standard, September 1956.
Transcription: Socialist Party of Great Britain.
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Because they do not understand the workings of the social system that dominates the world we live in most people see the struggles between political parties and governments in terms of good and evil; good men and good doctrine against evil men and evil doctrine. They see their own "honest, self-sacrificing and reasonable leaders" being prevented from applying just and beneficial policies by the greedy and unprincipled leaders of the other party or nation, and in the atmosphere of fear and anger that conflict arouses they are only too anxious to believe that all the fine sounding principles of law, morality, religion and humanity are on their side; they feel no need to probe deeper for explanations.
The men at the top see more clearly the economic issues and interests involved but as they need to rouse the emotions and win the support of the mass of the people they dress up most of their declarations in the rabble-rousing language likely to move their listeners and readers. So over Suez we have had from the Western politicians a spate of talk about law and illegality, international rights, and wrongs. Fascist acts of plunder, etc., while from the Middle East Nasser and his defenders have worked up themselves and their audiences with passionate speeches about imperialism, oppression, insults to dignity, sovereignty and nationhood.
Not all the utterances are like these. From the "take a strong line" Sunday Express (12 August, 1956) came the following:—
Forget all about the legalistic quibbles, about the rights and wrongs of the Suez dispute. Forget the mumblings of the self-styled moralists about the sort of example Britain should show the world. They do not matter. Only one thing counts. Say it again and again to yourself. If the Suez Canal falls into the control of Nasser, or any other enemy, then Britain is finished. And so are all our hopes for ourselves and our children."
and the like-minded Daily Mail (14 August), chiding the News Chronicle's opposition to forcible methods and its appeal to "the moral conscience of the world," replied:—
n international affairs there is, in the ultimate, no moral conscience. . . . It may be sad, but it is true, that self-interest is still the first law of nations. Nasser understands this, even if some people here do not. So do Nehru, Kruschev and Mao Tse-tung. The nation that neglects it goes to the wall.
The News Chronicle stands on this issue with those who pride themselves on not being either narrow nationalists or believers in using force in the first place to settle disputes; they believe that an appeal to reason through United Nations will produce solutions good for all parties and harmful to none. Only with United Nation's endorsement should force be used.
The Socialist does not belong to any of these groups, holding that capitalism cannot help engendering conflict and wars and that the only solution is not in the vain hope of running capitalism a different way but of ending capitalism and replacing it by a new and different system of society.
To the Socialist the world is not capable of being divided into the good and the bad statesman and the good and bad nations; they are all Capitalist and all are impelled by the nature of the social system to struggle for markets for their products, for sources of cheap raw materials, and for control of trade routes like Suez and strategic points like Cyprus. These are the things for which they fight, no matter what the fine phrases and slogans in which their aims and motives are garbed.
The crux of the Suez dispute is firstly the oil that exists in abundance in the countries of the Middle East, and secondly the Canal through which much of it, as well as other cargoes, is transported. Oil is now an indispensable fuel for the motors and tractors, aeroplanes and warships, merchant vessels and factories of the countries of the world. With cool production and hydro-electric power failing to keep up with rapidly growing demand for fuel and with atomic power only a development of the not very near future, all countries need oil and many of them, including Britain, have practically none within their own frontiers.
But though the Middle East is reputed to have the biggest oil reserves in the world and extraction is expanding fast, it has a long way to go to catch up with the older oil producing areas.
The world's greatest oil production is still in U.S.A. and Venezuela, which, between them, produce well over half the world's oil. The output of U.S.A. alone in 1955, 2,748 million barrels, is almost equal to that of South America, Europe and the Middle East, and Russia and her satellites, added together (see report of Shell Co. l955, from which the following figures on oil production are also taken). The total production of the Middle East now exceeds 1,000 million barrels, mostly in Kuwait, Saudi Arabia, Iraq and Persia; Egypt has only the trifling output of 13 million. Russia and her satellites produce under 600 million barrels, less than a quarter of the output of U.S.A. Among the late comers, but growing fast, is Canada, with 131 million barrels last year. The great attraction of Middle Eastern oil is that it is much cheaper to extract than oil in the Americas, and the source or Europe's supplies has been switched from West to East. "Before the war most of Europe's oil came from the Western hemisphere; even in 1947 nearly two-thirds of the imports came from the Caribbean or the United States. But in 1955 four-fifths of the imports came from the Middle East" (Times, 14 August). At the same time America's internal demand for oil has grown so enormously that some oil is now taken from the Middle East to U.SA, in preference to using high cost American wells.
The oil industry in the Middle East is mostly controlled by American, British, Dutch and French companies, to whose shareholders large profits flow after paying royalties to the Arab Governments in whose territories they operate and maintain pipe lines.
The magnitude of profits made in the oil business is shown by results for one group, Royal Dutch-Shell, about an eighth of whose output comes from the Middle East. In 1955 the group made a net profit, after paying taxes, of £160,000,000, of which £33 million was paid out six dividends.
In the Middle East, then, is a great prize for the Power or Powers that can gain control. Each of the Arab countries looks hopefully to being able to squeeze out the oil companies. Egypt's position is different. With practically no oil of its own it has the, at present, irreplaceable Canal through which much of the oil must be shipped. Immediately British troops left the Suez base the way was open for Egyptian capitalism to strike its first blow, which, if it succeeds, will enlarge hopes of achieving the ambition phrased by Col. Nasser as "creating a great Arab Power, stretching from the Atlantic to the Persian Guff " (Observer, 12 August, 1956); an ambition about which the other Arab States may have their own ideas.
Faced with this situation the Western countries, now dependent on the Canal, are being forced to consider the much more expensive voyage round South Africa (some new oil tankers are already too big for the Canal), and building more pipe-lines like the American-owned £80 million "Tapline" that stretches over 1,000 miles from Arabia to the Mediterranean—but these too are tempting objects for "nationalisation" by the Governments through whose territory they have to pass.
The Lebanon has already threatened to nationalise pipe-lines, and the Financial Times (15 August) expresses the opinion that though existing pipe-lines may be extended it is unlikely that any company will put vast sums into new pipe-lines in view of the risk of nationalisation.
Seemingly the Arab countries are being encouraged to attack the oil companies by the Russian Government, which may hope to get much needed oil in the Middle East or even some form of control of oil resources if Western companies are pushed out. It will be remembered that in 1946, with its armies in occupation, Russia forced Persia to agree to put North Persia oil under Russian control for 50 years; but when the troops withdrew Persia blandly declined to ratify the concession.
It has been a matter for comment that the American Government held back from the more belligerent Anglo-French threats of using force against Egypt. Apart from pre-occupation with winning the forthcoming presidential election and the fact that Suez is not a major American interest, the American Government and even the American companies with big holdings in Middle Eastern oil, are not greatly concerned with the Anglo-French fear that if Egypt nationalises the Canal this will encourage the Middle East Governments to nationalise the oil wells. The American Government has in the past encouraged Middle East oil production partly in order to conserve her home oil resources but the growing importance of Canadian oil may reduce this need. Also the Observer's Washington correspondent reports a divergent view among American oil companies themselves:—
Another group opposed to any military action over the Suez Canal is the American oil industry. Several oil companies are reported to have expressed the view that they can protect their interests best for quite a long time by making monetary concessions to the Arab States if necessary. This, the companies think, is possible because the cost of extracting oil is much lower in the Middle East than it is in North America, or even Latin America." (Observer, 12th August, 1956.)
The South African and Canadian Governments were also lukewarm in their attitude to the issuer and why not? South Africa would welcome more shipping going round the Cape, and Canadian capitalism has its hands full building up its own oil industry.
At the time of writing the discussions between the Powers have not produced a settlement though the evident lack of war-fever among British workers and the disinclination of other Governments to back up Britain and France in forcible action against Egypt have had some effect in restraining the Eden Government and its supporters.
On the other hand Arab workers, misled by the belief that nationalisation of the Canal Co. (and eventual nationalisation of the oil industry) is in their interest, have been reported as giving vigorous backing to their Governments.
This is the real tragedy of the Suez dispute, that there is no unity among the workers of the different countries in opposing the war-talk of their Governments. In the main the trade unions in each country give such large measure of support to the claims of their own Capitalists and Governments that the basis does not exist on which they could act in unity with the workers of other countries when a clash of Capitalist interest is involved. Not realising the possibility and necessity of building a social system in which production solely for use will replace production for sale in competitive markets, because private property is the means of production and distribution will have given place to common property, the workers of the world do not realise that their common interest should unite them impartially against Eden, Nasser, Kruschev, Eisenhower, and all their kind. The trouble, as we said at the beginning, is that most people do not yet understand the workings of the social system, Capitalism