Why the oil monarchies constitute capitalism’s inevitable “ endgame

The petromonarchies of the Persian Gulf are countries usually seen as strange, eccentric, unique, idiosyncratic or other similar words. Ever since I read Collins Gem: Basic Facts — Geography and various editions of The Guinness Book of Records I was aware they were extremely distinctive. Reading Gordon Robison’s 1996 Arab Gulf States gave me much more knowledge of these nations than could be garnered from either of previous book. Robison made these states seem more interesting than I had thought beforehand, although likely this is because I had not seen any reason to study them using the Grolier at Essendon Grammar Middle School.

The oil monarchies would always attract interest from me in subsequent years. Continuing alarm at Australia’s abysmal greenhouse gas emissions performance and the fact that Australia is fundamentally similar to the Gulf monarchies in being a high income resource-rich, low-latitude country, attracted attention at first. However, at this time I still assumed the petromonarchies as minor global players. Moreover, despite their reputation for extremely strict Islam — which Robison highlighted in his chapter on Saʽudi Arabia — I naïvely assumed the actual rulers of the petromonarchies were doing everything possible against al-Qaʽida. This belief was intensified by the one-eyed focus of Trotskyists upon Israel and the only slightly less one-eyed focus of the Right upon Iran, Hamas and Islamic Jihad. It is true that in his early writings Robert Spencer would highlight the rigidity of Islam in Saʽudi Arabia, where non-Muslims cannot practice their religion at all, but by the middle 2010s Spencer was ignoring the Saʽudis.

When I read Hans-Hermann Hoppe’s Democracy: The God That Failed, I wondered how writers like Hoppe viewed the petromonarchies. On the one hand, they clearly viewed monarchy as superior to democracy, yet they never so much as mentioned the Gulf States. I did, I must say, have the feeling that Hoppe and his ilk did admire these states, but out of fear that praising the Gulf States would either:

1. imply a sympathy to Islam that Hoppe obviously lacked, or
2. make for greater criticism from his Austrian School allies

The one thing that really made me slightly question the insignificance and plain strangeness of the oil monarchies was a small section of Chapter 9 of Kevin Williamson’s The Politically Incorrect Guide to Socialism, where Williamson said that the Arab oil states were cases where the oil industry had taken over the state, as I knew the coal industry had in Australia. I knew from the obscene greenhouse gas emissions of Australia and the Gulf States how dangerous a country where the fossil fuel industry is the government had to be. Under this condition, the government makes its money from greenhouse gas emissions, with the result that it will be dogmatically opposed to emissions reductions no matter how urgent or costly for the rest of the world.

What I did know about the petromonarchies, with hindsight, ought to have been enough to question the practical ignorance of them by Israel-obsessed Left. Nevertheless, it was not until reading two articles — ‘McJihad’ by Timothy Mitchell and ‘Taxation, Non-Tax Revenue and Democracy’ by Wilson Prichard, Paola Salardi and Paul Segal — that I began to understand that absolute petromonarchies are not eccentric, strange societies who are purely products of Western imperialism but something far more dangerous and even sinister. Prichard, Salodi and Segal showed that, contrary to Hoppe’s impression of an extremely limited government under absolute monarchy, the Gulf petromonarchies actually have the world’s highest government revenue with absolutely no taxes on capital (a facet I was long aware of via The Guinness Book of Records).

What this made me realise was that:

1. the Gulf petromonarchies are in fact very wealthy states who earn their wealth exactly as anarcho-capitalist theory says “private states” must: by selling what they own [petroleum and natural gas]
2. petromonarchies are, as was noted as early as 1982 by William Powell in his Saudi Arabia and Its Royal Family, family businesses run more akin to (nonprofit) capitalist enterprises than to post-Communist Manifesto Western governments
3. petromonarchies constitute genuine imperialist powers who exploit the workers of many other countries with an abundance of labour.

The Levant and South Asia have become oppressed colonies of the petromonarchies: their primary source of private and even public revenue is remittances from the Gulf. So have, more recently, large portions of sub-Saharan Africa. The effects of this are profound. Because the Levantine and Asian workers are prohibited from organising collectively in any way whatsoever in their new home, they lose the ability to gain from globalisation that workers in labour-rich nations historically possessed. Petromonarchy aid also plays an important role keeping in place authoritarian rulers throughout the Arab world, and most likely also South Asia and sub-Saharan Africa, as noted by Killen Clarke in this year’s ‘The New Rentierism’. Global de-democratisation is very plausibly driven by petromonarchy power to a greater degree than even Clarke notes. As writers like Martin Gilens, Benjamin Page and Sheldon Wolin noted in the late 2000s and early 2010s, influence of mass preferences on government policy has totally disappeared, whereas decline of formal democratic institutions has been much smaller. Additionally, scholars note how inequality changed from decreasing to increasing at the precise time the 1973 oil crisis multiplied Gulf non-tax revenues (see here for a description of how the revenues multiplied).

Many academics have observed downward pressure on capital taxation, yet none discuss the possibility that the rise of the tax-free Gulf monarchies with vast rent revenues is what has pressured capital taxation downwards since 1973. The existence of states where wealth is totally untaxed and revenue is independent of high-tax states [older tax havens depended upon support from high-tax states] must make revenue generation via wealth taxation less feasible elsewhere. With their rigid bans on strikes and unions, the Gulf monarchies possess an absolute, uncompromised dictatorship of capital over labour, which creates pressure for policies more favourable to the extremely wealthy in the rest of the world. This lowering of taxes has created a vicious circle of debt in those states unable to gain large rent revenues, further increasing the geopolitical power of the petrostates, especially since the rulers invest heavily in lobbying for and gaining favourable policies from foreign governments. The most graphic illustration of this is the refusal of the US to target Saʽudi Arabia and the United Arab Emirates after the September 11 terrorist attacks. Although all but two of nineteen hijackers were from those nations and support for al-Qaʽida by Saʽudi princes suspected at the time and confirmed re all four of the wealthiest Gulf states since, weakening the petromonarchies was and is entirely unacceptable to the rich. It would lessen downward pressure on capital taxation and make it easier for the masses to demand higher rates thereof.

Ron Rogowski in his 1989 Commerce and Coalitions demonstrated that if a sector of society gains economically, it will want to translate its gains into politics. Because for almost two millennia (before 1900) gains of capital at the expense of labour always occurred during economic declines, Rogowski could not grasp what capital would do at the expense of labour under the economic situation prevailing since 1973 — one where capital gains at the expense of labour from globalisation. What we have seen capital do is eliminate the economic power of labour — absolutely essential for anything beyond nominal democracy — and in the past decade seek to transform the whole structure of politics to match a reality well established for three decades of a hegemony over labour. If social structure would match the observed economic hegemony of capital over labour as per Gilens, Page and Wolin, then:

1. workers would logically have zero rights vis-à-vis their bosses
2. academia and media would have zero freedom to oppose bosses’ absolute power
3. bosses would seek to justify their power in terms of natural law and religion
4. bosses would logically have absolute ownership of property
5. this property owned by bosses would be fully owned privately

These exact conditions describe the Gulf States:

1. as noted above, (almost entirely expatriate) workers have zero bargaining power vis-à-vis their (citizen) bosses
• contra Austrian School dogma, most expatriate workers in the Gulf lack the option to choose employment elsewhere — increasing global substitution of capital for labour severely limits options inside labour-rich nations
2. no independent media whatsoever exist
3. education is dictated by the requirements of the national and religious ideology of the royal families
4. ownership of property is restricted to citizens (bosses), with workers (noncitizens) completely excluded
5. as discussed earlier and presciently by Powell, the Gulf monarchies are private states completely owned by the royal families
• what is popularly called the “public sector” is not “public” at all, but is owned as family property
• the division of the Gulf economies are instead into:
1. a “state” or “nonprofit” sector directly owned by the state and employing primarily citizens
• this is conventionally called the “public” sector but given that the state is a family business, this is a misnomer
2. a “non-state”, for-profit sector in which extremely few citizens are employed except as bosses

These facts point towards the Gulf petromonarchies being the inevitable endgame of capitalism carried to the point wished by the global super-rich. Capitalists obviously would desire a society without taxes, unions, unrest from workers, or freedom to so much as argue for a system where bosses lack absolute power over workers. Being run as private corporations makes petromonarchies plainly much closer to a capitalist enterprise than even a nominally democratic parliamentary state could possibly be. It also means that the public has virtually no knowledge of how they operate: the archives of the Gulf States are almost entirely inaccessible and were never even analysed in Kian Byrne’s survey of Middle East archives. This secrecy, as has been discussed since Powell’s work on Saʽudi Arabia, is a large part of why almost nobody recognises why the purest form of capitalism would be necessarily a society akin to the tax-, union-, and strike-free oil monarchies, and without any freedom of speech or the press for the immense majority.

The desert city finally confirmed

Yet again, the Bureau of Meteorology is predicting heavy rainfall for Victoria without the smallest sign of it.

Although not quite as extreme as my previous prediction, the weather since I wrote a month ago is further proof of just how dire the situation is. The evidence from the past month-equivalent’s weather is, without question, that the situation is much worse than I thought last month.

Rainfall for the first sixteen days of October. What is amazing is how the driest areas are almost precisely those where climate models were expecting heavy rainfall! This is proof of the state of runaway climate change brought about by the inability to expropriate the oil sheikhs of the Gulf and coal barons of Australia. Under a just global economic system these super-polluters would have their wealth cut by ten to twelve orders of magnitude without the tiniest compensation!

Last evening, writing on Wikipedia, clouds were so dark I became really confident of some decent rain for the first time in many months.

Total rainfall so far this year, reflecting runaway climate change as a necessary result of failing to expropriate Australia’s coal barons and establish a genuine “boycott, divestment and sanctions” against the Gulf oil sheikhs that would weaken their geopolitical power 

However, as the night wore on with me extremely tired and unable to stay up, I went to bed, but the noisy blinds in my bedroom inhibited my sleep, which was extremely erratic. There were tiny traces of rain, but I was aware by the time I settled that there would not be any rainfall in Melbourne. This morning, I decided to get up earlier than I have in recent days, feeling I had had a reasonable sleep.

Later this morning, my undeniably incurable inability to react to the weather other than emotionally reared its ugly head. Pointing out that it is never going to rain again in Melbourne in a screaming voice, and hitting the kitchen bench with a clenched fist, constitute awful behaviours. Although I am frequently told I like it, I do not!. However, there is no possibility of:

1. it ever raining properly again in Melbourne to calm my anger, or
2. me developing a more measured response when it fails to rain
• I have frequently been told I simply “don’t want to” react in a measured way
• this is utter garbage
• the fact being that I simply cannot and never will be able to react to unfulfilled expectations of rain in a measured manner
• the fact is also that it is many orders of magnitude easier for others to get used to my screaming

The early afternoon saw an even more violent anger on my part about rain. Whilst my brother is willing to see it will rain less — and this has been observed — over the past month and a half it has rained probably one-sixth to one-eighth the amounts predicted when the Bureau of Meteorology made its spring forecast. It is almost definitive that, when above-average rainfall was confidently expected, Melbourne will record its driest spring this year. The city needs to receive more rain in less than half the time to equal the record low 67 millimetres from 1938. Given that predictions in August were for above-average rainfall, it is thus practically certain that Melbourne’s average annual rainfall from 2026 onwards will be substantially less than one-eighth of the historic average. Likely with increasing global warming it will be substantially less than such an already catastrophic decline. One-eighth is around 80 millimetres — corresponding to the record low Victoria annual rainfall of 75.9 millimetres. Given that we should expect less annual rainfall even than that, how low Melbourne’s annual rainfall will be from 2026 onwards is difficult to comprehend. Likely it will be substantially less than 50 millimetres — less than the record low annual rainfalls of Broken Hill or Tibooburra. With that, and similar declines in historically wetter areas, absent an extraordinary revival if class war by the workd's workers Victoria is faced with an ecological carastrophe whereby all native flora are left with unsuitable climates, and even nurseries and gardens cannot survive.

For capitalists, needless to say, a hot desert city is the best of all possible worlds. The hot climate provides the lowest subsistence minimum to pay workers, while the abundant land gives them the advantage in the class war, so capitalists can lower taxes and pressure them downwards elsewhere. They can and do drive capital out of cooler or wetter regions more favourable for the immense majority, and indeed stop labour moving out.

Channelling anger into initial measures with the ultimate goal of expropriating the polluters and ensuring every confiscated cent pays for remedies and compensation at zero cost to the sufferers stands infinitely easier and more likely than the two possibilities noted three paragraphs above. It is also really gross to say that catastrophic climate change is not as bad as having me scream and scream until it rains — which will be never.

Were education not clouded by capitalist dogma and the hegemony of the parasitic super-rich in funding, the facts and solutions re climate change could be understood much more accurately at much less cost at a much younger age. That capitalism is the cause of climate change is undeniably demonstrated by such documents as:

• ‘Elon Musk’s electric planet-suicide vehicle: Automobiles, emissions and degrowth’
• Environment, Capitalism and Socialism (in 1990!)
• The Enemy of Nature: The End of Capitalism or the End of the World
• The Disenchanted Earth: Reflections on Ecosocialism and Barbarism
• ‘Tropical Cyclone Alfred and the politics of “keeping politics out of it”’
• ‘Why only socialism can save us from climate catastrophe’

That genuine socialism — a society in which workers run production without bosses via instantly recallable workers’ councils and production is planned in the collective need — could potentially solve the climate catastrophe with an apparently miraculous rapidity is also virtually undeniable.

That the wealthy oil sheikhs and coal barons have an incomprehensible amount to lose is also undeniable. Indeed, the polluters who gain their wealth from runaway global warming would minimally need to be stripped of all bar one-billionth of their accumulated wealth to reduce that wealth to a level adequate to maintain a society in which mass interest groups actually have any influence upon government policy. Red Flag discussed this in their ‘The United States Is Not a Democracy’ from 2020. After the Kyōtō Protocol, BDS-type campaigns against the Gulf petromonarchies — globally the greatest per capita emitters yet permitted carte blanche emissions increases — were already overdue. However, the blindness of socialist groups obsessed with prewar conflicts with Zionism meant that only in 2015 did anyone even suggest BDS was deserved more by the oil monarchies than by Israel.