In 1973 the world was confronted with the first global
energy crisis. The so-called oil crisis is usually explained by the Yom Kippur
War. But there are clues indicating that the scarcity of oil was fabricated,
for reasons other than that, which are well documented.[1] The
crises was related to several economic, political, and cultural paradigm shifts
and was, or is to be regarded as part of a larger crisis.[2]
At the time of the so-called oil crisis, on different
levels the discourse concerning virtual money, immaterial labour, and
Conceptual Art intensified. The value of the dollar was no longer based on the
gold standard, which had been in effect since the Bretton Woods
conference that followed the Second World War.[3] It now became
a virtual currency, secured only by the oil industry, but stayed the
key currency.[4]
The oil industry was an adequate safeguard for currency, because the need for
oil is inflexible and therefore can act as a stabilizing factor.[5]
The industries did not want to meet growing wage
demands of the workers. But they could not confront the unions' power, only
circumvent it and therefore looked for possibilities for automation and
outsourcing of capital and production. An intensification of the third sector,
which is primarily service related, was the result. So-called immaterial labour
is based on changing conditions of production within this relocation. The main
resource is not land, natural resources or labour anymore, but knowledge.[6]
In art, the notion of object within modernity became
discredited or declared uninteresting. What counted from then on was the idea.
Works were produced, which now, in part, only existed in the mind.[7]
All of these levels were connected to a changing understanding of production
and added value. At the same time they indicated a crisis situation. In order
to understand this crisis it is not only necessary to look at the Bretton Wood
system and the role of the US dollar in the global economy, but also the
rebounding cultural discourse of the impairment of the object and the growing
interest in the idea of immateriality and dematerialization. This idea
contained a great utopian potential, and only seems to be in opposition to the
ruling power. In fact, the different levels combined constitute the paradigm
shift towards immaterial and dematerialized production. The energy crisis was
the turning point and catalyst for this change. The immense profits called
'petrodollars', which were realized in a short time with the rise of the oil
price by 400% in 1973, were the planned financing for this.[8]
Experience Versus Knowledge
"I remember this moment. I was still very small.
It was cold, because I was dressed warmly. My sister was too. Her arms were
sticking out, because she had so much stuff on. I believe she had just learned
to walk, I had it drummed into my head that one shouldn't run onto the street
for any reason. And suddenly everything was changed. I went off ... waddling in
the middle of this big street in front of our house with my sister. We weren't
the only one. Everybody was outside. Like in a state of emergency. But a good one. That made an impression
on me."
On November 25, 1973, the so called oil crisis led to
the first car free Sunday in the history of the Federal Republic of Germany. The
travel ban affected around 13 million drivers. Exceptions applied to emergency
vehicles and certain professions. The regulation was extended to three further
Sundays in the winter of 1973/ 74. The empty or pedestrian filled streets were
discussed in the press, and were often paired with threatening analyses of an
international crisis and the scarcity of the oil deposits. On the one hand,
this led to anxiety and uncertainty because the basic value of modern
industrialized business was, along with other things, expansion and mobility.
These suddenly appeared to be limited.
On the other hand, there was the experience of being
able to walk on an empty street and to experience the place of the street
completely differently - an initial experience of an ecological consciousness
and emancipating approaches to the use of street space. To this day there are
countless initiatives for car free streets, that refer back to this first car
free Sunday.
Several people,
activists, cultural producers and such like, have gathered material on the
political, economic, and cultural background of the oil crisis in 1973. They
collected the material on a portable billboard, which they want to place
outdoors. The billboard folds up and one can carry it as a backpack. Two of
them walk along a street. It is a big street, probably an 'Autobahn'. The
street is empty. No cars are driving by. One of the women, let's call her A,
carries the billboard. The other woman, K, films with a small video camera.
They decide to set up the billboard for the documentary. A jams her finger
while unfolding it and therefore takes over the camera, while K sets up the
billboard. Afterwards K is rolling a cigarette for A and herself. They smoke,
sit on the street and look at their billboard. After a while they fold it up
again. A straps it on her back and K takes the camera again. Another camera
records everything the whole time it's happening.
[1] The energy crisis of 1973-74 is
customarily blamed on OPEC; indeed it was OPEC that raised the price it charged
the oil companies for crude oil. The OPEC decision, however came only after the
assent of the Saudi Arabian government. Other OPEC countries had been demanding
price rises for years but could not effect them because of Saudi opposition.
Saudi Arabia, as the largest producer within OPEC, had (and has) virtual power
to set short-term price levels unilaterally through decisions about its own
production. Being dependent upon US political support, the Saudi government has
always made its production and pricing decisions in collusion with US economic
planners. The central Saudi bank (SAMA) is managed in coordination with the US
Treasury Department. Up until 1980, the Saudi state oil company, Aramco, was
run by a team of US oil companies. After 1980, it was completely nationalized
but is still managed in partnership with the same oil companies, and much of
its management is US and European. The Saudi decision to back higher prices for
crude oil in 1973 came only after the US government gave the Saudis the
go-ahead. The US government, in 1971, began telling Saudi Arabia and OPEC as a
whole, that the price of crude oil should increase.
(The US role in pushing up the oil price has been well documented. See
V.H.Oppenheim, Why Oil Prices Go Up: The Past, We Pushed Them, Foreign Policy 25,
Winter, 1976, and Pierre Terzian, OPEC: The Inside Story, Zed Press, London,
1985)
The Yom Kippur War of 1973 is usually presented as the
reason for the oil price rise: the Arab states supposedly wanted to punish the
West for supporting Israel. But the war was largely immaterial to the mechanics
of the rise. In fact, the Arab oil embargo was virtually non-existent and the
flow of oil was at no point seriously disrupted.
The oil price rise was begun by OPEC, but the oil
companies immediately raised their own prices on top of the new charges from
the OPEC states. In fact, all energy companies Ñnatural gas, coal, uranium
(often one and the same) Ñ raised their prices above and beyond the increase in
oil prices. Energy sector capitalists reaped enormous profits from these price
increases. Much of the increased revenue gained by the Gulf states (Saudi
Arabia and Kuwait in particular) ultimately returned to international banks and
stock markets. This process, known as the recycling of petrodollars, involved
enormous sums Ñ hundreds of billion of dollars Ñ and became essential to
capitalist strategic planning thereafter. At the time, they represented the
largest financial flows in the world. This new mass of investment capital
allowed capitalists to intensify the automation and computerization of
factories in North America, Europe, and Japan.
Source: Midnight Oil in Oil, Guns and Money,
Midnight Notes Collective, Autonomedia 1992
[2] ÒThe real
challenge of the energy problem is not a struggle with outside adversaries, as
in most great crises of the past, but within and among our respective
societies. Our peoples need a wartime psychology to fight this war against
ourselves. They should be prepared to tighten their belts and to share
sacrifices among themselves - because it will be a long, uphill struggle.Ó
Trilateral Papers No. 5, Trilateral Commission, 1974
[3] Starting in the
1950s, the United States began running persistent trade deficits that created
liabilities in the United States to other central banks, and beginning in the
early 1960s, the United States no longer had sufficient gold to cover these
liabilities. To alleviate this problem, the United States Congress on March 18,
1968 repealed the requirement for a gold reserve to back US currency. However
central banks could still redeem US dollars for gold. This became a serious
problem in the early 1970s when rising US inflation caused a lack of confidence
in the US dollar, leading central banks, particularly the Bank of France, to
redeem US dollars for gold. As a result, the United States went off the gold
standard on August 15, 1971, when President Richard Nixon announced that the
United States would no longer convert dollars to gold at a fixed value. (...) NixonÕs
move undermined the Bretton Woods system and left the International Monetary
Fund, Bank For International Settlements, and World Bank, all without any
foundation for global monetary policy other than to rely on the US dollar as a
reserve currency. This was seen as an imperial move by many, removing any and
all semblance that these institutions were mediators or regulators of money
markets. They were, in effect, marketing agencies for the US dollar and a
system in which other currency was necessarily bound to it.
Source:http://www.wordiq.com/definition/Gold_standard
[4] 'Fiat money' or
'fiat currency' (usually paper money) is a type of currency, which only has
value in that a government made a 'fiat' (i.e. decreed) that the money is a
legal method of exchange. Unlike commodity money or representative money it is
not based in another commodity such as gold or silver, and is not covered by a
special reserve. 'Fiat money' is a promise to pay by the issuer and does not
necessarily have any intrinsic value. Its value lies in the issueÕs financial
means and creditworthiness. Most currencies in the world as of 2004 are 'fiat
monies'.
[5] To prevent speculative and
manipulative attacks on their currencies, the worldÕs central banks must
acquire and hold dollar reserves in corresponding amounts to their currencies
in circulation. The higher the market pressure to devalue a particular
currency, the more dollar reserves its central bank must hold. This creates a
built-in support for a strong dollar that in turn forces the worldÕs central
banks to acquire and hold more dollar reserves, making it stronger. This
phenomenon is known as a 'dollar hegemony', which is created by the
geopolitically constructed peculiarity that critical commodities, most notably
oil, are denominated in dollars. Everyone accepts dollars because dollars can
buy oil.
Source: Henry C K Liu, 'US Dollar Hegemony Has Got to
Go', Asia Times , April 11, 2002, atimes
[6] The transition to an
information economy requires (...) a change in the quality of work and in the
character of the work process. These are the sociological and anthropological
implications immediately in effect during the transfer
from one to another economic
paradigm. Information, communication, knowledge, and affect play a fundamental
role in the production process in this respect. The first aspect of these
changes, as much research has already shown,
concerns the change in factory work; choosing the automotive industry as a
reference point, then it is about the transition from the Fordist to the
Toyotoist model. The deciding difference between both these models is, that the
system of communication between production and consumption of goods, meaning
the transition of information from the factory to the market and back, changes
structurally. Because the production of services is aiming at non-durable
goods, the work that is done in this production process can be called
immaterial work, which means a kind of work, which produces immaterial goods
like service, knowledge, and communication.
Source: Michael
Hardt, Affektive Arbeit, in Norm der Abweichung, Hg. Marion von Osten, Zurich
[7] During the 1960s
the anti-intellectual, emotional/ intuitive processes of art-making
characteristic of the last two decades have begun to give way to an ultra-conceptual
art that emphasizes the thinking process almost exclusively. As more and more
work is designed in the studio but executed elsewhere by professional
craftsmen, as the object becomes merely the end product, a number of artists
are losing interest in the physical evolution of the work of art. The studio is
again becoming a study. Such trend appears to be provoking a profound
dematerialization of art, especially of art as object, and if it continues to
prevail, it may result in the objectÕs becoming wholly obsolete. Source: Lucy
R. Lippard, The Dematerialisation of Art, an essay published in Art
International 12:2
[8] To
focus on the study of the emerging petroleum revenues in light of the sharp
increase in its price as of the beginning of 1974, I wish to introduce a new
term Petrodollars. It may be defined as the Unites States dollars earned from
the sale of oil. For certain historical reasons, price of oil has been and
still is denominated in United States dollars.
Source: Dr.
Ibrahim M.Oweiss, Petrodollars: Problems and Prospects, speaking at the Conference on The
World Monetary Crisis Arden House, Harriman Campus, Columbia University, March
1 - 3, 1974