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From The New International, Vol. XVII No. 6, November–December 1951, pp. 328–332.
Transcribed & marked up by Einde O’Callaghan for ETOL.
The Persian oil dispute has flared up in a world already filled with too many danger spots. That it has arisen while a Labor Government has been in power, has made it even more important from a socialist point of view. What should be the attitude of a socialist to such a question? Is the dispute the result of Russian aspirations or of Dr. Mossadegh’s fanaticism? These and other questions need to be honestly posed and, if possible, answered, if we are to understand the events in the Middle East.
To consider the oil dispute as one which has arisen from the defections of individuals, or of Russian ambition would be quite wrong. One has only to look at Persia to see the basic and underlying cause for the present crisis.
It is a grim fact that 4 out of every 5 children in Persia die in infancy; that 9 out of 10 of the remainder remain illiterate. With practically no health services, venereal disease and drug addiction take their toll of human lives.
Persia may boast of good oil, but its water supply is scandalous. Part of Teheran’s water supply runs as open gutters in the middle of the street, where beggars wash their feet and the dirt – and disease – accumulates. On the one hand we see extreme poverty the like of which we cannot visualize, and on the other, extreme wealth, for remember, Dr. Mossadegh himself is a rich landowner.
We will understand nothing until we grasp the almost unbelievable poverty which is characteristic of the areas which are now beginning to awaken. This unbearable mode of life becomes even more difficult when we realize that the population of the earth is increasing at the rate of over 60,000 a day – 25,000,000 a year. If the entire 50,000,000 population of the United Kingdom were wiped out tomorrow, the deficit in population would be made up by the rest of the world in – two years!
The average expectation of life in Britain is 68. In America it is 70. In the East – it is 33. The infant mortality rate per 1,000 is 32 in Britain, in the East it is 170. The food problem brings out the contrasts even more. The calorie intake per day per person in Britain is 3,000 (the minimum necessary for good health is 2,000). In the East it is 1,500. The animal protein consumption per day in Britain is 44.7 grams. In America it is 60.3 grams, but in China it is 4.5 grams, and in India it is 4 grams – only one eleventh of British consumption! It is not easy to realize what this means in terms of human lives and suffering.
Against this background of grinding poverty we see a world which is changing. A world in which the backward peoples are demanding a greater share. Not only do masses of peoples need more food, but more and more people are struggling to obtain more food. It is an inevitable social revolution on a world scale, and it is a process which cannot be held back.
One writer said that Persia of 1950 equalled the Britain of Henry 8th. There was more than a grain of truth in his remark, for the regime is a semi-feudal regime controlled by a group of rich landlords and corrupt politicians. Britain experienced such conditions hundreds of years ago. It has taken over 400 years to reach our present level of industrial development. Our Labor movement, unique in its strength, unity and democratic traditions, had its origins way back in the 14th century.
Persia is experiencing the “pains of compression.” The most advanced of industrial technique and organization has been imposed on a regime so backward and corrupt that social convulsions are inevitable after a period of time. It is a sample of combined development where two ages of man’s development is being compressed into one. Our duty is to ease the pain of such a development, and to help the common people to reach our standard of life. We ourselves cannot progress when such conditions exist for most of the world’s population.
Into this volcanic picture comes the Anglo-Iranian Oil Co. Commencing from an oil concession granted to Mr. D’Arcy in 1901, it experienced a rapid growth. The first oil came forth in 1908. Commercial production began in 1913. The concession area covers 100,000 square miles, and the company operated 1,700 miles of pipeline covering 82 producing oil wells. Fifty-six per cent of the ordinary shares are owned by the British Government, 22 per cent by the Burma Oil Co., and 22 per cent by the public.
The original concession was revised in 1933, the length of which was fixed at 60 years, and in 1993, the assets of the company were to revert to the Persians without payment. Such generosity on the part of the British is sufficiently unusual to deserve further investigation, and the results confirm the suspicions.
The total reserves of the area were estimated at 7,000 million barrels (7.5 barrels equals 1 metric ton). The daily production is 650,000 barrels, or around 240 million barrels a year (32 million tons). Total production to date equals 2,380 million barrels, or one-third of the estimated potential reserve.
At the present rate of production, the remaining 4,620 million barrels will be exploited within the next 19 years – and 1993 is still 42 years hence! It is doubtful if fresh oil discoveries will make it last much longer than 1993, for the original potential reserves will need to be nearly doubled (over 5,000 million extra barrels) to make it last even that length of time. Small wonder the British were proposing to give the assets to the Persians in 1993!
The Anglo Iranian Oil Company claims to have made a big contribution in raising the standard of life and cultural level of the Persian people in its employ. This is largely true. It is essential, for highly developed industrial technique, that its servants can read, write, and live long enough to serve them well. In addition, a part of the monies which have been paid to the Persian government have gone into the pockets of the politicians, or into grandiose schemes like the incomplete Teheran Opera House.
The Anglo Iranian Oil Company is a tremendous organization and highly profitable, with the British treasury receiving over £18 million yearly. The fact is that the gigantic equipment at Abadan has been paid for out of the super-profits of the industry. As Mossadegh truthfully said – maybe they have received £114,000,000 from the British, but over 50 years it doesn’t mean so much!
The victims of power politics are always the common people, and Persia has been no exception. Neither the British nor the Persians have seriously attempted to raise the basic living standards. In this picture, the Russians have appeared merely as another factor interested in oil extraction.
At the end of the war, after the British had withdrawn from Southern Persia, the Russians extracted a promise from Persia that in return for withdrawal from the North, they agree to a setting up of a Russian Persian Oil Co. to exploit the reserves of the Northern area. It was proposed that the Russians hold a 51 per cent interest, the Persians, 49 per cent. After the withdrawal, the Persian Parliament promptly rejected the proposal with only two in favor. No doubt this was prompted by the experience they have had with a joint Russian-Persian (50/ 50) fishing company which had been functioning for 25 years with little profit for the Persians.
The additional instrument which Russian diplomacy employs is the now illegal Tudeh (Communist) Party, and there is no doubt that it enjoys mass support amongst the peasants. To talk about Communist barbarism would be rather futile to those who have never experienced democracy or the conditions which we take for granted.
In these areas – as in China – any party which promises agrarian reform and nationalization cannot but obtain mass support, and if we are unable to divert this social revolution into a genuinely socialistic and democratic direction, then the whole of the East will fall into the hands of “Uncle Joe” almost as if it were voluntarily presented to him!
The problem of Persia is the problem of its social structure. The Times made the interesting observation in March of this year:
The inner tension of Persian society has now become such that it can be met only by an acceleration of the drive against the external scapegoats. This is the real explanation of the present crisis ... The old order is on the point of collapse. The oil question is only the point on which the conflicting forces within Persia have been focussed: the real issue is the emergence of a new Persia.
The number of Persians employed on the staff at Abadan totalled 3,258. The number of laborers totalled 25,772. The number of Persian technicians employed is around 100 at most, and barely equals 10 per cent of the total. To say the least, the British have trained the Persians in a very leisurely fashion, and the Persians are faced with such international problems as the provision of adequate tankers; marketing and selling problems; keeping pace with technical advances; replacements which come only from Britain, and many other problems which reflect the backwardness of the country.
In addition, the Persian Exchequer received £3 million yearly from income tax imposed on A.I.O.C. employees. This accounted for 15 per cent of the revenue excluding revenue from the oil company as such. Today, they are paying unemployment pay to thousands of workers, and the income is nil.
All this means that Persia is facing a serious economic crisis. A complete collapse may well make Persia another “Peoples Democracy.” The interests of the Persian ruling class make it necessary to reach an agreement, and most likely this will be achieved, to the considerable advantage of the Persians.
The main purpose of this contribution is not to deal with events so much as to outline the basic facts of the case, and to raise some fundamental issues for consideration by the Labor movement. This crisis developed and exploded whilst a Labor government was in power – what should have been its policy – or did it act correctly under the concrete circumstances?
British Labor’s foreign policy is subject to more criticism than probably any other aspect of its program. “A Socialist Government” say some critics, “should grant immediate and unconditional independence to all its colonies, and renounce all claims which are imperialistic in character.” Such an attitude, correct in an abstract and scholastic sense, is hopelessly divorced from real life.
Faced with backward peoples exploited by corrupt feudalistic rulers, and overshadowed by the aims of either Russia or America, we need, as Socialists, to help and protect, if possible, the aspirations of the ordinary people in those countries. Persia was an example of how it could have been possible to do this, and also expose the reactionary character of the Persian ruling class in the process. As it happened, the pattern of events were similar to pre-war.
It was not until May of this year that the government recognized the “principle of nationalization.” The A.I.O.C. suggested a 50/50 profit sharing scheme only after it had opposed it for over a year. Small wonder the Persians were suspicious. If it were the Persians who have owned the British coal mines, would British Labor have approved of foreign opposition to the “principle of nationalization”?
If the British Labor government had taken the initiative on this matter, the whole complexion of events in the Middle East would have been quite different. One of the best solutions, which would be in keeping with present circumstances, would be the transformation of the A.I.O.C. into a co-operative oil company, based on similar principles as our own co-operative movement.
Under such a scheme, the management committee of the cooperative would be partly composed of the main purchasers of oil, who would receive their “dividend on purchases” in the usual manner. Since most of the purchasing interests would be capitalist interests, the Trade Union movement would have to be adequately represented on the committee as well, with ample opportunity for working class participation in management gener[osity].
As with our own cooperative movement, amounts would be set aside for raising the living and cultural standards of the Persian people, and a check made to ensure that monies were not squandered on useless projects.
Far be it for me to presume that such a line of thought would be easy to apply concretely – but that applies to all pioneering efforts, and this would be a pioneering venture on an international scale. The effect of such an approach would force many Eastern countries along more radical lines, and it would provide a lead of a socialistic character which would have far reaching consequences.
When our “realistic” friends explain that a solution along these lines is not practical, one is reminded of the Ramsey Macdonald days of the movement, when the “practical” answer to the internal crisis of 1929 was economy cuts of extreme severity. Today we know better. The Labor government, although head of a country basically much weaker than it was in 1929, had been astonishingly successful by the adoption of socialistic policies, imperfect though they may be.
Likewise in the field of foreign affairs, the day will come when present conception of “realism” will be seen to be born of ignorance of basic socialist principles. If the Persian episode can teach us that, and enable a more far-sighted policy to be applied in future situations of a similar character, then we will have progressed a long way.
October 1951
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