Hey Candidates, If You Want to Run an Anti-War Campaign, Start Talking About Oil

Posted by Greg Allen on 05.08.2007

Republicans are getting off easy in the early debates by saying the Iraq War was a failure because of poor management. The truth is that the basic premise of how to go about founding Iraqi Democracy has been bunk from the start. So long as the Iraqi government is making all its money from oil, it doesn't need to care about its people.

President Jimmy Carter once remarked that the United States should view reducing its dependence on oil as "the moral equivalent of war." While Carter's timetable describing the US' oil troubles turned out to be way off (Carter thought demand would outstrip supply by the early 80's), his priorities are more timely than ever. It's easy to see how rampant energy consumption in the United States is simultaneously subsidizing America's enemies and creating new foes, but before Americans can care enough about those distant repercussions to agree with President Carter, they must realize the logical fallacies inherent in the most prevalent arguments against policy action, namely that attempts to change the existing energy order will destroy the American economy.

The first step in ending any addiction is admitting it exists. President Bush took an important first step in his last State of the Union by finally using the phrase, "Addicted to Oil." It would have been even better if the Administration had avoided taking it back less than twenty four hours later. The Administration's Secretary of Energy said of President Bush's energy goals: "He didn't mean it."

Welcome to the central problem with energy politics in this country.

Every time a politician musters the will to speak up about the sad state of affairs we live in, he or she shuns, denies, or otherwise shirks the responsibility to endure the consequences of transitioning to a post-oil economy. That is a shameful consequence of sound-bite democracy. Don't be fooled: barring some fantastic technological breakthrough, getting America off of oil is going to have serious withdrawal pains. Still, the point of breaking any addiction is that enduring those pains ends up being far safer than remaining an addict.

Actually, there's more to it than just safety. Done right, the transition could be the driving force behind economic growth in the 21st century. Some would go so far as to say that switching off oil as soon as possible will create far more American growth and job opportunities than scouring the Earth to secure dwindling supplies of oil ever could. The logic is simple: as oil supplies worldwide dry up, energy prices will rise. This higher price will lead to a huge demand for both energy conservation technologies and new energy supply sources. By specializing early, before oil prices reach peaks we haven't even imagined yet, the United States could secure a commanding lead in the sectors destined to be the biggest growth areas for the early 21st century economy.

Don't forget, if the United States shirks its chance to change now, Europe and Japan will be happy to move in.. The beginnings of these woes are already being realized. Witness American automakers who have no idea how to make anything other than gas-guzzling cars and are thus denied access to foreign car markets with high fuel efficiency standards. America's unwillingness to pass stringent energy regulations (or positive incentives) has left its firms unlearned in the ways of efficiency and conservation. Further stalling will only add a handicap to American corporations racing against energy-wise competitors with a frightening head start. It's not too late to catch up, but the sooner politicians act, the better.

This is not to say that moving past oil will lead to some wonderful dream where efficiency falls from the sky. It is far more likely to come involve years of enduring higher energy prices and enormous transitional difficulties. The most immediate priority is to end the billions of dollars in subsidies and tax breaks that oil companies currently enjoy. These billions conceal the true price of oil addiction from the people who need to understand it most—American consumers. Dick Cheney is fond of saying that the free market will tell us when alternative energies are profitable. The real truth is that were the market truly free, alternative energies, especially wind, already would be profitable.

Unfortunately, politicians, afraid of voters who demand to pay for gas in taxes rather than at the pump, can't resist giving constituents their daily oil fix. There's no harm in promoting rational consumer choice-making through markets. Indeed, some of the most promising solutions to energy consumption are those that work the hardest to retain market aspects. For example, in the same way cigarette taxes can theoretically internalize the eventual health care costs of smoking, a gas tax might help make the long term economic costs of global warming apparent to drivers. Putting up with consumption taxes and other incentives that drive innovation now might help avert many of those costs in the future, when they are likely to cost even more. Additionally, we can make sure that these innovations are protected by American-owned patents so that other countries seeking to cope for the high oil prices of the future can only do so by buying our products.

Of course the fact remains that most Americas are of the opinion that the short term economic costs of measures to encourage energy independence are prohibitive. In truth, they probably will be. But they should be seen primarily as an investment. It is entirely possible that this investment will turn out unprofitable if measured solely in dollars. But, when considered against the potential foreign policy and environmental gains, the debate becomes overwhelmingly one-sided.

It has long been said that money from oil exports has fueled terrorism. That statement received a surge of credibility on 25 November when a classified government memo obtained by the New York Times estimated that roughly half of all funds obtained by the Iraqi insurgency, amounting to tens of millions of dollars, come from illegal oil smuggling. Clearly, if America truly believes disrupting terrorist financing is a priority, then reducing oil imports should be of equal importance.

Efforts to found true democracy in Iraq will always be plagued by the disconnect that exists in countries with state controlled oil riches. Because income from the oil industry is as or even more important than government revenue from taxes, the groups in power have a greatly lessened need to address the concerns of constituents other than their own power base. After all, without taxation, why provide representation? It is in the immediate interest of Iraqi democracy to move past oil as a primary source of income. Once that occurs more of the population will have a stake in the success of the central government, and the government will find it equally in its interest to address the concerns of all ethnic groups.

Think about it. If the Sunni-area economies prosper, the Shiite majority government gets more tax revenue to do with as it sees fit. Elections by themselves will never produce democratic peace in Iraq. That will only happen once the interests of all ethnic groups are tied together, which will likewise never happen so long as US oil imports subsidize illiberal democracy in Iraq. This is not to say reducing oil imports will guarantee peace in Iraq, merely that their existence constitutes a largely impassable barrier.

The same principles hold true elsewhere. Russia moves closer to autocracy every year as their energy exports give the government ever greater independence from the population. In Venezuela, the situation could be described as even worse, although oil wealth has been somewhat redistributed back to the population. Normally this would be a good sign, except that it engenders artificial public support for the country's President while he works to consolidate power and undermine checks on his authority. If President Bush wants to talk about spreading peace and democracy throughout the world, he would do well to remember how powerful an impact economic factors can have on the growth of both.

On all issues and from all angles, energy independence is the moral equivalent of war. If Americans intend to hold onto their economic supremacy for the current century, win the war on terror, and set a course for lasting peace worldwide, it's time they treat it as such.