Of all the current world developments, certainly the most interesting, if not the most important, is the decline of the house of Saud.
It would be no exaggeration to say the collapse of this richest of the rich dynasties is a sequel to the fall of IBM.
Saudi Arabia is unable to pay its bills on time. This is a confession, if not of economic bankruptcy, certainly of the bankruptcy of the policies of the Saudi Arabian monarchs and the imperialist monopolies that have dominated the Middle East for so long.
To see it in perspective, it's necessary to go back to the period of the 1970s — the Carter administration. After Nixon and Ford, Jimmy Carter was touted as honest and incorruptible, a plain-speaking person.
He was even from Plains, Ga., you know.
But in relation to the Middle East, his role was something else. Carter's presidential adviser, Stuart Eizenstadt, said at that time on national television that the Arabs held "a razor to our throats."
Carter fanned the flames of anti-Arab hatred. He blamed the Arabs for the oil boycott that had been called in response to Israeli aggression. And he created a campaign to demonstrate that the U.S. was running out of its oil reserves while the Arabs had a virtual world monopoly.
America had to tighten its belt, it was said, to overcome the voracious offensive the Arabs had unleashed. For the moment, the big danger to the U.S. was no longer an attack from the USSR. The danger came from the Arab oil potentates, of whom the Saudis were of course the most significant.
But what was the real situation? As later events were to prove, there was really no oil shortage. The Arab boycott only dried up a few taps; the imperialists soon found a way around it.
So all the hullabaloo was artificial. The imperialist monopolies deliberately concocted it in order to pull in fabulous profits — "windfall" profits, as they were called then.
In that period, the 1970s, the capitalist cycle was in an upward phase. So it was relatively easy to create an artificial shortage. But who manipulated it? The same oil monopolies that dominate the market today.
Time and again, whenever the OPEC oil ministers were about to meet, a slew of violent attacks would appear in the media showing that America was once again at the mercy of foreign oil exporters. But in reality, behind the scenes, it was more or less a pre-arranged scenario.
It should be remembered that hundreds of politicians and even some geologists peddled the canard that the world was running out of oil. America had better create a huge oil reserve, they said, or it would be taken in tow by foreign oil producers.
However, in time, capitalist overproduction of oil wiped out the artificial shortage created by the monopolies. This capitalist overproduction soon made it clear that the real manipulators behind the shortage had been the same ones responsible for the glut in oil.
They had created the shortage to take advantage of the political situation created by the emergence of the oil-producing nations of the Middle East. The basic objective was to curb them, put them in their place, so to speak — but not to ruin them. They were to be taken down just enough to be turned into willing instruments of the imperialist monopolies.
Of all the areas involved in the world struggle for oil, by far the most important was Saudi Arabia. The rising militancy of Middle East oil-producing countries was no accident. It was a time of militant struggle by oppressed nations all over the world. The Middle Eastern nations were at last coming into this historic development.
The Egyptian revolution led by Abdel Gamel Nasser fueled it. The Egyptian revolution gave the Saudis and other dynasties the courage to come into their own, even if lightly. The Egyptian revolution, instead of becoming a spearhead in the overthrow of the dynasties as one might have expected, instead emboldened them to stand up to the imperialists, at least with regard to the price of oil. But they did not embark on a struggle for political independence.
It is in this context that the Saudi dynasty was portrayed as omnipotent. The Western powers were attacked by their own media as having cringed and carried out OPEC's will by raising prices. And of course all this was being said on behalf of the long-suffering U.S. public, which was being gouged and forced to wait in long gas lines, etc.
But, as always happens with the creation of artificial shortages in commodities, capitalist production overcame the shortage, raising the specter of a price collapse.
A domestic version of this, not related to oil, occurred when the Hunts attempted to corner the silver market. This only raised the specter of overproduction. So, with the increased production of silver, plus a thorough investigation by the government, the attempt to corner the market ended in a fiasco.
Despite the prominence of the Saudis, all the money they make goes into Western banks — which invest it wherever they think is best. Some years ago, a U.S. film called "Rollover" created an imaginary scenario in which the Saudis withdraw their deposits from Wall Street banks and a total banking collapse follows.
But in fact it was the Saudi royal family that became dependent on the imperialist banks, not the other way around.
A few years after the oil boycott, someone thought of having a Third World bank — the BCCI. But it wasn't just run by the Third World. The CIA got into it, too, with the idea of subjugating the effort. The end result was great losses for the oil-producing countries that had big deposits in the bank.
In the years when the imperialist allies courted the Saudi monarchy, they made grandiloquent promises. If the Saudis followed the economic and financial advice of the monopolists, they were told, they would at last achieve their great dream of becoming a strong world industrial nation, on a par with a country like France. Indeed, so many stories came out about the great projects being built in Saudi Arabia that one was tempted to give it credence.
Now at last it has become clear that it was only a dream. It vanished into thin air. Saudi Arabia, once a principal creditor nation, has turned into a debtor in the same position as any other capitalist enterprise unable to pay its bills.
Overproduction in oil has been a common phenomenon for over a century. The idea that oil nations can become great industrial powers based solely on black gold has proven to be a mirage. No nation — not Mexico, not Venezuela or Nigeria — has turned into a capitalist industrial powerhouse based solely on oil production.
Wherever underdeveloped states have become industrialized, it was not due to the manipulation of the imperialist monopolies. It was because there was a socialist revolution. This was the lesson of the revolutions in Russia, China and, to a limited extent, Eastern Europe.
Saudi Arabia was promised that it could become an industrial paradise while retaining all its old traditions, like the semi-slavery of the working population. But now it has succumbed to the world capitalist crisis, which all the recent indicators show is continuing unabated.
Achieving industrialization requires the development of a strong bourgeoisie, and that of necessity must also develop a strong proletariat. This is what the Saudi royal family, with its hundreds of millionaires, finds unacceptable. But they spend their time in the fashionable watering places and casinos of the West.
The crisis of the Saud family is not peculiar to Saudi Arabia. It's part of the general crisis of capitalist overproduction, like that of IBM or Kodak or Sears Roebuck.
The so-called Islamic revolution cannot address this problem. Its adherents can inveigh and protest against it. But being opposed to the socialist revolution, they confine themselves to slogans that do not touch the basis of private property and capitalist ownership of the means of production.
For that reason, the fundamentalists' agitation turns out to be mere demagogy. It uses the desperate condition of the masses and their disillusionment with the current regimes, like that of Mubarak in Egypt.
Only the socialist revolution offers a true and fundamental change in the conditions of the masses.
Last updated: 15 January 2018