Capitalism unbound

The oil industry was born out of modern capitalism and its thirst for “black gold”. The industry was global long before the word was invented. Royal Dutch/Shell (Shell), the third largest oil and gas company in the world, operates in more than 145 countries across the globe. Per Olssen reviews Shell Shock - the Secrets and Spin of An Oil Giant by Ian Cummins and John Beasant - a story that reveals the true nature of the capitalist system.

The book begins with the crisis that erupts after Shell was forced to admit that it had overstated its proven reserves in January 2000. As the authors say, there are “Lies, damned lies and reserves”.

The share price tumbled and the company’s three top directors resigned. Shell’s reserves fell by a fifth, equivalent to 4.47 billion barrels. Over the last 12 months Shell has been forced to cut its proven oil and gas reserves by almost a third. (See box)

However, the book first and foremost deals with the history of oil and business in general and Shell in particular. British Shell took its first steps in the oil business in 1881 and made a fortune in shipping oil through the Suez Canal. “Of sixty-nine oil cargoes to transit the Suez Canal by the end of 1895, only four belonged to other than Marcus [Shell’s owner]”. It wasn’t long before the oil markets came under the control of a few, huge monopoly companies.

Shell was formed in 1907 by an alliance between Royal Dutch and Shell Trading and Transport but it was not until 2004 that the two merged. Shell, like other oil companies profited from World War 1 - the French fuel minister Henri Berenger said after the war: “Without Shell, the war could not have been won by the Allies.”

Russian revolution

However, in the wake of the war a revolutionary wave swept over the world. The 1917 October Revolution in Russia brought the workers and the oppressed to power - the revolution shook and changed the world, including Shell.

Shell was by far the biggest foreign player in Russia, with a fifth of the country’s entire oil production. The new workers’ government nationalised the oil industry and expropriated the company’s assets and interests.

Henri Deterding, Shell’s leader at the time, never gave up his ambition for a capitalist crusade against what he called “the murderous anti-Christ Soviet regime”. Shell tried everything in order to uphold the imperialist blockade against the new workers’ state in Russia.

Deterding’s “hatred of Marxists in general and the Soviets in particular was structural” and soon he became a committed Nazi, even though the British-based Shell was led and founded by a Jewish family. Shell and Deterding supported every fascist regime in Europe in the 1930s. Shell’s ideology was “anti-communist”, and still is.

The period of capitalist growth that followed World War II meant that Shell’s hunger for oil increased as oil consumption rocketed. In return, Shell’s record of defying governments, mobilising private armies and polluting whole areas of the earth became even worse.

The big oil companies exercise more political power than governments and, in upholding what they call “Capital discipline”, Shell gets blood on its hands.

Power

The authors ask the question: “Who’s running the country anyway?” and then lists a huge range of issues that have in fact been decided by Shell first and than carried out by the British government, particularly in the Middle East.

“When Shell or any of the other majors walked into a country such as Oman, they got what they wanted, when they wanted it…” Money talks, and that is why Shell and other transnational companies have such political influence.

Shell’s budget dwarfs most of the smaller states - its profits in 2004 are bigger than the GDP of many of the world’s poorest countries. Power comes from the production and transport of oil. Shell in Nigeria is a graphic illustration of this. (See box)

Recently, Shell has done a lot to portray itself as a company with a human face, caring for the environment (the “greenwash” campaign). They even donate money to environmental organisations; of course only to those who do not complain about the harmful impact of Shell’s operations on human health and the environment.

When scientists arrive at conclusions other than what Shell wants, the company consults others willing to go along with them.

This was the case when scientists discovered that grey whales off Sakhalin Island (Russia) were badly affected by the oil installations. In response, Shell hired its own consultants who reached, surprisingly, the opposite conclusion.

If you need more facts and arguments in the struggle against global capitalism, then Shell Shock - the secrets and spin of an oil giant provides them.

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