Cold Death by Neoliberalism
The Political Economy of Fuel Poverty
John Foster
Scotland has some of the worst statistics in Europe for winter deaths among older people. Most of these deaths do not happen dramatically. Hypothermia cases are rare. But many result indirectly. Strokes occur when the body compensates for lowered temperatures by concentrating the blood in the main organs – which are less able to cope when people are old. Bronchial illnesses are also much more prevalent. In the UK, “last winter, more than 25,000 older people died as a result of cold-related illnesses.”¹
Why should this be when Scotland has milder winters than the rest of the Europe? There are two immediate reasons.
The first is the poor standard of housing. The second is fuel poverty. The 2002 Scottish House Condition Survey found that 76 per cent of houses in Glasgow failed to meet housing quality standards. In ex-council stock the figure was 86 per cent. On top of this people are increasingly unable to afford to heat these houses.
Already in 2002, when gas and electricity prices were at a historic low, the Scottish Executive Fuel Poverty Statement found that 55 per cent of all older people were in fuel poverty – that is, having to spend more than 10 per cent of all income, including housing benefit and their winter fuel allowance, to heat their homes adequately. Excluding pensioners, 55 per cent of other households on benefits were also in fuel poverty.²
Since then fuel prices have increased by 77 per cent and the number of households in fuel poverty has risen from 282,000 in 2002 to 646,000 at the end of 2006. One third of all Scottish homes is now affected.
To adequately heat their houses, single pensioners dependent on pension credit have to spend 16 per cent of their income – in reality much more as their housing benefit goes direct to their landlord. Additionally, housing benefit is effectively capped with any shortfall having to be met by the individual. A single pregnant woman dependent on income support would have to spend 42 per cent of their disposable income.³
This is because energy is more expensive in the UK. Electricity users pay 75 per cent more than consumers in Finland or Spain, 55 per cent more than in Sweden and Austria, 46 per cent more than in France and 24 per cent more than in Germany.⁴
So, again, we have to ask why this should be – when the North Sea provides over 90 per cent of the UK’s gas consumption and gas is a main source of its electricity generation?
It is this question which is the focus of this article. Our answer has a number of different layers but all ultimately come to the same thing: The UK’s energy prices are far more exposed to market forces than those elsewhere in Europe and these market forces, especially in their current guise, are geared to profit maximisation over very short periods.
There are three main causes. The first is the privatisation of energy sources and their distribution. The second is the liberalisation of the energy market. The third is the deregulation of financial markets. All these have been carried much further in Britain than elsewhere and it is their interaction that has produced the current crisis.

Privatisation of energy sources and their distribution
The UK’s energy sources were privatised between 1984 and 1990. These included coal, hydroelectric generation and the very considerable public assets in North Sea oil and gas. BP, 51 per cent state-owed, was the biggest producer. Britoil operated as the state-exploration and production firm. British Gas produced the bulk of gas output in the southern North Sea. The British National Oil Corporation created in 1976 had overall powers to purchase 51 per cent of all oil produced in the North Sea and, from 1982, would have had powers to impose depletion controls over private oil companies similar to those in Norway. Had these been used, the UK would still have had comparable reserves of oil and gas. All were privatised.
As a result, oil was pumped out of the North Sea quite profligately during the battle to break the power of the third world producers in the Organisation of Petroleum Exporting Countries in the 1980s. Much of the gas was just flared off. After that investment fell quickly and from the 1990s the big US and UK companies used their income from the North Sea to invest in the much more productive oil fields now available in the Middle East, Central Asia and elsewhere. Significant amounts of oil and gas remain but current investment levels make it unlikely that it will be fully extracted. Output is due to fall to half its peak level by 2012.⁵
However, the big oil companies continue to benefit. Global pressures on oil and gas supplies have made North Sea production almost uniquely profitable compared with other industrial sectors in the UK. This is shown in the figures released by the Office of National Statistics in January 2007. In 2006, while pensioners faced a 30 per cent increase in energy costs, the North Sea operations of UK companies yielded a 42.9 per cent return on capital.
Turning to the power industry, privatisation took place somewhat later, between 1988 and 1990. Here privatisation involved breaking up integrated gas and electricity systems into regional companies and separating the national grid from distribution.
Electricity privatisation was later described by a Department of Trade and Industry investigation as grossly favourable to the new private owners. The main academic study describes the profits of the new private companies as “massive” and far above the average for stock exchange quoted companies through the 1990s.⁶ The new companies achieved this by selling off property assets, liquidating reserves and cutting the industry’s overall workforce from 142,000 to 72,000.
It was the loss of these workers that did the most damage. If they had been simply surplus to requirements, then long-run efficiencies would have resulted. But this was not the case. They were the employees who possessed the knowledge and skills essential for maintaining the infrastructure – and also included a large slab of the research staff.
The 2004 Commons Select Committee on Trade and Industry concluded that there was now a “real danger” that the electricity infrastructure was deteriorating to a level where, as in the privatised railways, “it would take several years to repair”. Professor Robin Maclaren, Chair of the Electricity Association Networks Board, told the committee that it had been company policy to “sweat” the gold-plated assets inherited from the publicly owned industry and to undertake only minimal maintenance. The Select Committee entertained serious doubts as to whether sufficient levels of skilled personnel remained within the industry to undertake the work now required.⁷
Levels of research and development also plummeted far below other comparable countries. In 2002 the UK was spending $68m on energy research and development against $70m by Norway, $89m by Finland, $336 by Germany, $523m by France, and $4,524m by Japan.⁸
The long-term result for the UK’s gas and electricity industries has been under-developed and damaged infrastructures, high levels of energy loss, weak placement in renewable technologies and by 2006 inadequate generating capacity in electricity and inadequate storage capacity for gas.
Privatisation has, however, been very profitable for the investors, and remains so, and this brings us to the second strand of explanation: the impact of energy deregulation.

Liberalisation of the energy market
The neoliberal justification for privatisation is that it maximises consumer choice, ends state monopoly control and frees market forces to drive down prices through competition.
The problem in public utilities like energy supply is that such a market does not exist naturally and the government has to create it artificially and expensively. In the UK, this meant separating the ownership of the grid from generation and distribution and regulating both prices and investment. The regulator, Ofgem, assesses proposals for investment and then agrees to a proportionate price rise – calculating the return on capital very lucratively on the same basis as private finance initiatives.⁹
This, however, still leaves a quasi-monopolistic relationship with the consumer and this is compounded by another factor neo-liberal ideologists tend to forget, the tendency to monopoly in the private sector.
Throughout the last decade utility companies have returned a consistently higher operating surplus than the services industry generally and far more than manufacturing industry. This has had two consequences. The companies themselves have expanded very quickly into other areas and have themselves become targets for take-over. Their high and relatively risk free revenue stream is very attractive to big investors.
Scottish Power provides a typical example. Its asset base at privatisation was the generation and distribution network servicing central Scotland. Within a decade its profits had enabled it buy into power franchises across England, Ireland, Asia and particularly in the United States. By 2004, within a decade and a half of privatisation, over two thirds of its capital and employees were outside Scotland. Some of its more speculative investments in the US failed and its big investors started looking for a buyer that would maximise the value of their holdings. In November 2006, Scottish Power was sold to Iberdrolla, the Spanish energy and real estate conglomerate.¹⁰
Scottish Power’s story demonstrates the degree to which the income which should have been re-invested in Scotland’s energy infrastructure and in developing new forms of carbon free energy went elsewhere. Today the eighteen energy companies created at privatisation have been reduced to six. Only two, Scottish & Southern Energy and Centrica (British Gas), remain as British companies.
So the net result of privatisation has been to create semi-monopolistic companies which are unaccountable to government while operating, to their own considerable benefit, within a government imposed framework which guarantees income but which also fragments energy supply, control of the grid and generation.

Deregulation of financial markets
The third strand of explanation concerns the impact of financial deregulation on how these companies operate and the way energy is traded.
In the decade after1979 the UK lifted all controls over the movement of capital and today the City of London is the world centre for trading in shares, currencies and commodities. Much of the capital comes from elsewhere, mostly the United States, and the operation of the City of London as a world financial trading centre has had a profound effect on the UK economy.
The ownership and control of British companies has always been somewhat exceptional. Elsewhere in Europe, as in Germany and France, the typical pattern is for one or two shareholders to control dominant blocks of shares in major companies, to hold these long term and to oversee long-term investment programmes. Often these shareholders are state governments and sometimes banks, often in turn part owned by the state or local government. Long-term, interlocking shareholdings, generally with a degree of regional accountability, tended also to lead to synergies with other regionally based companies.
The high productivity and success of French and German energy companies, like the state-owned Electricite de France or E.on and RWE of Germany, rest on these foundations.¹¹
By contrast shares in British companies have always been far more actively traded on the stock exchange. Financial deregulation intensified this. Over a third of shares are now owned from overseas – most by US financiers and investment companies. Typically these investors will review their portfolios monthly. At any one time a company will have five or six big investors looking to the maximisation of investor value over the next twelve months.
Before it was sold Scottish Power went through two chief executives in as many years. They had no specialist knowledge of energy. Their training was as accountants and they had to respond to a handful of often very belligerent big investors wanting quick results.
However, in terms of the recent spikes in energy prices, it is another aspect of financial deregulation that has probably done most damage. The same financial institutions that speculate short-term in shares also do so in commodities. Increasingly they do so by betting on both future prices and derivatives that insure against risk. Recent studies indicate that the fourfold spikes in energy prices in 2001 and again in 2006 were significantly worsened by a flood of speculative money into the market.¹²
Elsewhere in Europe energy suppliers were far less vulnerable. France and Germany had integrated power companies with their own generating capacity. Usually these also have long term contracts for energy feed stocks. In Germany a big proportion is produced directly from renewables. The fragmented structure of the British industry left it much more vulnerable to market fluctuations. The separation of the grid from generation, and generation from retailing, amplifies market exposure and in part accounts for the scale of the price increases to consumers.
California experienced some of the more extreme consequences of a similarly liberalised energy structure in 2001. As in the UK, liberalisation was meant to guarantee maximum efficiency through full competition. But it was not proof against private monopoly power. One of the biggest generating companies, Enron, bought up many of the others. It then decided to take a big slab of its generating capacity out of commission for maintenance and bet heavily on electricity futures. Unfortunately for Enron, as the price of electricity shot up and parts of California suffered blackouts, the state governor imposed a price freeze and the company’s debt overload took it into bankruptcy.
As far as Scotland is concerned, therefore, the fuel crisis seems to have three origins. Privatisation of oil and gas wasted the long-term potential of North Sea reserves and did considerable damage to the efficiency of energy production and distribution. Energy liberalisation intensified tendencies to monopoly and made the industry more vulnerable to energy price fluctuations. Finally, financial deregulation put the UK at the centre of speculative activity by capital on a global scale.
This seems to be the reason why, despite the UK’s unique possession of its own large gas and oil reserves, energy prices are today so much higher than elsewhere in Europe.

Are things likely to get better?
Current projections do not look good. Retail fuel costs in Scotland are likely to come down somewhat from their current highs over the next few months and liquid gas imports from the Middle East may ease shortages by the end of 2007. But over the medium run, world energy reserves will come under extreme pressure. The current world output of 85 million barrels of oil a day is unlikely to increase much above 90 million (some commentators say it has already peaked). Yet the US government expects its domestic consumption to rise from 20m to 26m barrels over the next decade. The combined demand from India and China has doubled from 4m to 9m over the past five years and is likely to continue to increase at the same rate.
In these circumstances price spikes of the kind experienced in 2006 are bound to recur. The UK will be particularly vulnerable. By 2020 the government estimates that there will be a 75 per cent dependency on imported supplies of energy of which the biggest part will be gas.
Nor does it seem likely that the control of energy will become any less monopolistic. The British government is pushing strongly for the full implementation of the EU directive on energy that would dismantle state owned companies across the continent and again split control of the grid from generation and distribution. This is likely to intensify the growth of pan-European monopolies.
The government’s main response to the crisis is to push for more nuclear power stations to replace those that will be phased out in the 2020s. But again the controlling companies have been privatised – the research and development arm as recently as two years ago – and a heavy price will have to be paid by consumers to subsidise what is a very expensive form of energy and to meet the costs of nuclear decommissioning.
As far as Scotland is concerned, the Scottish Executive’s June 2006 Response to the UK Energy Review stresses its commitment to renewables. It expresses the hope that the British government will increase the financial incentives for companies to expand their renewable portfolios from wind power to marine power, biomass and clean coal technologies. It also details its steps to combat fuel poverty by insulation programmes and the installation of central heating – so far extending to about 10 per cent of homes.¹³
But it does not state the obvious. Privatisation in energy has failed about as disastrously as it has in transport – and with probably far more lethal consequences for the future. If policy continues to rely on very large private companies with increasingly remote ownership, the problems can only get worse.
Tackling fuel poverty is best done locally. It requires community energy provision: combined heat and power plants, heat pumps (only really efficient on a combined locality basis) and micro-generation systems. To tackle the overall problem of ensuring cheap sustainable energy for the next generation, there needs to be massive planned investment immediately in research and development that can maximise the efficient and clean use of Scotland’s remaining fossil fuels and harness its renewable energy.¹⁴ Neoliberal economics cannot do this – although it will certainly continue to deliver very high profits and more cold deaths for pensioners.

Notes
1 http://www.helptheaged.org.uk
2 Scottish Executive Fuel Poverty Statement, 2002: paragraphs 3.3, 5.6, 5.9: some of the flaws in the government’s approach to fuel poverty are outlined in Brenda Boardman, ‘New Directions for Household Energy Efficiency’, Energy Policy, vol. 32/17, November 2004
3 Energy Watch press release, 6 December 2006
4 Energy Advice, November 2006
5 Energy White Paper 2003, HMSO; OILC published a study in September 2006 based on data from 600 wells warning of rising water content and a much faster level of decline Sunday Herald 10 September 2006. The wider political economy of North Sea oil is examined by Charles Woolfson, Paying for the Pipe: Capital and Labour in North Sea Oil, Mansell, 1996
6 Massimo Florio, The Great Divestiture: Evaluating the Welfare Impact of British Privatisations, MIT, 2004
7 House of Commons Select Committee on Trade and Industry, Third report Session 2003-04, The Resilience of the National Electricity Network, 2 March 2004
8 International Energy Agency website.
9 Dieter Helm pointed out these problems shortly after privatisation ‘British Utility Regulation Theory’, Oxford Review of Economic Policy, 1994, 10/3
10 Sandy Baird et al., ‘Ownership and Control in the Scottish Economy’, Red Paper on Scotland, ed. V. Mills, Glasgow Caledonian University, 2005
11 Bruno Amable, The Diversity of Modern Capitalism, Oxford University Press, 2003
12 Jeremy Grant, ‘How Traders May Distort Energy Costs’, Financial Times, 25 January 2007
13 Scottish Executive Response to the UK Energy Review, June 2006
14 Some these issues are examined in J. Foster, ‘Scotland’s Energy Crisis’, Red Paper on Scotland, ed. V. Mills, 2005

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Living on oil under democracy:
From Texas to Patagonia and home
Owen Logan
Oil is “fluid and fugitive” says one geologist. The description could be applied to an almost endless network of industrial adaptations, influences and affiliations which link oil – in our minds at least – to power more than energy. To understand something about this demands journeys. Stepping away from greasy ladders I felt I knew a bit too well, I went to meet people who could add something real to the characterisations which haunt the North Sea industry – especially its UK sector, where the industry’s human resources have been described as “the same 50,000 arseholes who drift around the world”, and where the UK media discusses the oil business as seriously as the soap opera Dallas being turned into a movie. On my journey I fell in with a Marxist-run bank, spoke to trade unionists who want to recruit the unemployed, met oil workers who risked covert execution for defending the environment, and encountered others whose otherworldliness to us reflects the way successive UK governments have made us partners in the rise of an American empire which now sickens the citizens of its homeland.

Houston, USA
As a business and banking representative, Rosemary Ryan has spent a lot of time in places like the Hyatt Regency Hotel in Houston. It was an appropriate place to meet to talk about her life story interview recorded for the Oil Lives oral history project. Early on in her career she represented a special ‘Petroleum Industry Yellow Pages’ publication and this helped her to begin building an impressive range of international contacts. As a woman, however, she was an unusual presence in oil business circles and she dealt with this shrewdly. When entertaining clients, waiters knew her requests for a gin and tonic really meant only sparkling water with ice and lemon. The thought that Rosemary was drinking put the clients at ease, but as she says, “I had to be on my toes and they had to be comfortable and relaxed”. Similarly, her restaurant bills were put aside so she could pay them in private, so sparing men an awkward moment when they would have felt obliged to reach for their wallets.
Rosemary was born in 1927 into a cosmopolitan Catholic family living in Mexico and her outlook has been influenced by life in both Latin America and the United States. Her mother’s background was French and Spanish and her Swiss father, who had come to Mexico as a mining engineer, spoke seven languages. In 1930 the Federales came to their house where her mother was, against the law, celebrating Mass. The whole family was lined up to be shot. Her father saved them by arguing that far from adhering to the Mexican state’s regulation of church activities, the unlawful summary execution of foreign nationals would turn out to be an international incident. By the time she was six her father had been murdered; the culprits were never caught and the family suspected he was killed in an act of revenge by the same Federales or their agents.
Twenty years after marriage, Rosemary went to work to help support her seven growing children. She remarks humorously that the family she produced attests to the unreliability of the rhythm method but she says that Catholicism has been in her family, and her husband’s family, ever since they were “swinging from the trees by their tails”. The way she puts this gives a clue to her political beliefs at a time when Darwin’s evolutionary theory is countered in the United States by Christian fundamentalism in the education system. Government welfare is also being attached to ‘faith based’ projects which blur the difference between charity and what were once thought to be the duties of the state. However, Rosemary believes that there should be a firm separation between the functions of the state and religion, and she opposes the new conservatism in which a welfare state is regarded as an obstacle between the individual and God.
Rosemary feels it’s “totally wrong” that the burden of taxation has been shifted away from big business and the rich and put on ordinary people. Her own business makes much less sense under this “irksome” system and she continues mainly out of loyalty to an old client. One of the reasons Rosemary never drank on business is that she was worried her lisp would become more pronounced and might annoy people. Today, although she is only drinking milk with her lunch, she is not shy at all and quickly points to foolishness at the heart of government and arrogant policies long associated with the Texas elite. In 1954 Republican president Dwight Eisenhower, wrote to his brother:
“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labour laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H.L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is small and they are stupid”.
In his famous 1961 farewell address, Eisenhower warned of the danger posed to US democracy by an oligarchy he eventually chose to call the ‘military industrial complex’. By the 1970s, in a country bearing the costs of the Vietnam war, and feeling the impact of greater competition in the international market, the kind of people Eisenhower thought stupid were becoming more influential. Many people would say that the Texas based Bush family most faithfully represents the aims of this elite today. For decades their preferred solutions to the problems of the US have been ever greater technology in warfare and more sophisticated financial mechanisms allowing for the seemingly endless extension of federal debt while at the same time protecting the dollar as the world reserve currency.
Rosemary went into the oil business in 1971, the same year Richard Nixon’s government abandoned the country’s commitment to backing the value of the dollar with a reserve of gold. Following Nixon’s default there were a series of momentous capital outflows from the US but by 1975 they had been brought to an end by an agreement with OPEC ensuring oil would be traded only in dollars. To one of its critics, the ‘petrodollar’ settlement, which compels all countries to hold dollar assets, means that the US prints dollars and the rest of the world makes the things dollars can buy. Ironically, the increasingly taught lifeline for the dollar bill is now an economic game of double jeopardy between China and the United States. If such manoeuvring sounds like a bit of a swindle, Herman Kahn, the cold war warrior on whom the film character of Dr Strangelove was modelled, couldn’t conceal his delight. The system of ‘dollar recycling’ had originally emerged from the arms industry and according to Kahn it was “the greatest rip off in history – we’ve run rings round the British Empire!”
The labour movement was weakened by the sort of paternalistic corporatism that Eisenhower thought was unquestionable and McCarthyism did a great deal to bring trade unions to their knees organisationally and ideologically. In the absence of a mass base for socialist politics, it’s not surprising that the most audible criticism of the flaws in corporatism – the weaknesses that allowed it to subside under the weight of imperial ambition – come from a Texas Republican. In his February 2006 speech to congress entitled ‘The End of Dollar Hegemony’, Congressman Ron Paul said “unlike the old days, we don’t declare direct ownership of natural resources – we just insist that we can pay for them with our paper money. Any country that challenges our authority does so at great risk”. Paul argued that the war on Iraq and an aggressive stance against Iran and Venezuela, three countries which have tried to undermine the petrodollar system, will not prevent its collapse as more people understand that support of US imperialism is not in their interests.
Although not a proponent of Ron Paul, Rosemary also thinks her country is living on borrowed time. After her father’s death her family went through hard times yet in many ways her life epitomizes the American Dream of hard work rewarded by upward mobility. But the US has not lived up to the promises of its ‘manifest destiny’ and in comparison with others it is now at the low end of the scale in terms of countries providing opportunities for all. Hurricane Katrina revealed a desperately fragmented society and the unwillingness of the state to protect its citizens.
Rosemary lost a house in Tropical Storm Alison and is prepared for more turmoil. She is among the 85% of US citizens who according to polls conducted by Duke University support environmental policies. Yet the essentials of global warming, the cause of increasingly destructive weather patterns, are still refuted by a cohort of market extremists in the United States. To a range of people, including former President Jimmy Carter, they are imposing a ‘fundamentalist ideology’ on the world. It was NASA scientist who led one of the most important international investigations warning that climate change would spin out of control unless strong corrective action is taken. This would entail the sort of state-led intervention not seen since the days of the New Deal but very few politicians, anywhere, will discuss the sort of emergency measures that are required. At an economic level these would surely involve regulating speculative markets as was done during two world wars. Instead with oil reserves in decline, disasters and wars only increase the frenzied profits of speculation.
It is estimated that one New York speculator made $15 million dollars from Hurricane Katrina. The United States has been called a vending machine democracy, shaped by the people with money to feed into the system and this may help to explain why a minority of Americans vote. Rosemary hopes that more ordinary people will vote but the sovereignty of the people in a democracy depends on more than their votes. It requires an egalitarian ethos in knowledge and communication (known to the ancient Athenians as Isegoria) and a popular empowerment specifically resisted by the Federalists who rose to power in the wake of the American Revolution. Alexander Hamilton, who desired centralized power and the minimum participation on the part of ordinary citizens, won a battle of ideas which Thomas Jefferson, who wanted a republic built from the bottom up, clearly lost. Now delirious under the influence of a strikingly enriched political class, the representative system in the US is in a state of denial about the legacy of that defeat. However, that same defeat seems to have had much less bearing on Native Americans (only hastening their total persecution) and in this sense George Bush senior was quite right when he dismissed the Kyoto Treaty by saying that “the American way of life is not negotiable”.

Caracas, Venezuela
For “special meritorious conduct in the fulfilment of his high functions and anti-communistic attitudes”, Dwight Eisenhower awarded Venezuela’s dictator Pérez Jiménez the United States Legion of Merit in 1954. In 1957 Jiménez held a plebiscite to garner support for his rule at home. Rosemary Ryan was living in Caracas at the time and she remembers this because the vote was also extended to foreign residents. Translated from Spanish, her ballot paper read: “Yes, I do want to vote for Pérez Jiménez, or No, I will not vote against Pérez Jiménez”. If this seems laughable, the choices on offer in the world today won’t be seen any less absurd or outrageous in the future. With all the key decisions and most honestly educated discussion removed from the arena of citizenship, future generations have a high price to pay for our own round in the manufacturing of consent.
Much has been said about ‘oil rich’ Venezuela, its populist President Hugo Chávez Frías and the anti-imperialist insurrection in his country. Less is written about the hollow democracy that preceded Chávez’s election in 1998 as an ‘anti-party’ president at the forefront of a movement not dominated by any single party or organisation. Venezuela’s first ‘anti-party’ president, Rafael Caldera, a Christian Democrat who betrayed some radicalised election promises in 1993, no doubt helped turn decades of public disaffection with a corrupt and meaningless party system into the broad network of support for Chávez that still includes some of the president’s most serious critics. Nevertheless, if there is a single idea that connects the disparate groupings that have lent popular meaning to the Chávez presidency it is that of democratizing democracy. Whether this will be sustained in practice following Chávez’s 2006 re-election and his new call for a united party of the Bolivarian revolution is an open question, but the underlying shift towards democratisation began more than two decades ago. A two-party system of patronage politics had done little else but pave the way to economic collapse in 1983 and by 1989 had turned towards the enforcement of structural adjustment policies that typically reward those responsible for truly historic levels of mismanagement and further punish their victims.
In contrast, it is worth remembering that Norway was not the rich country it is today when the oil industry developed in the North Sea. With a nationalised industry its governments did not go on a spending spree but implemented depletion policies and saved revenue in a trust fund helping to protect the Norwegian economy from distortion. Regimes in countries like Venezuela did the opposite by enriching the middle classes who were prepared to cling to oligarchic power and anything that might have passed for economic planning was delivered by imperial hands or, in the terminology of one confession, by ‘economic hitmen’, while their willing local collaborators doggedly followed the rationale of ‘trickle down’. Typically again, nothing of real worth did trickle down. When Chávez took office 45% of households were still living without potable water and 27% were without sewage services. His government has responded with traditional social democratic interventions (consistent with the reformist character of Venezuela’s historic figurehead, Simón Bolívar) but in the face of the ‘roll-back’ of the state’s social role going on everywhere, many people will argue that such interventionist policies now have a revolutionary significance. Nevertheless, it is perhaps an unhappy testament to the way state institutions are drowned in the upside down logic of capitalism that the most successful public interventions in areas like literacy and health in Venezuela have bypassed existing state structures, being organised instead as social ‘missions’.

Banmujer
Possibly the only consensus to be found across the borders of different oil economies is that ordinary people in different places with varying histories seem to expect oil income to support an equitable and sustainable form of development. This common expectation has been misplaced in all but a very few cases. It’s not so much that oil and democracy don’t mix, but more that the oil economy reveals the exceedingly dubious nature of modern democracy.
Nora Castañeda is the president of the woman’s development bank, Banmujer. By 1957, when Rosemary was pregnant with her fourth child and was looking askance at her Yes Yes Jiménez ballot paper, Nora – fifteen at the time – was becoming politicised in a secondary school with a reputation for activism. At university, on her way to being an economist, she was active in student and staff politics and today Nora describes herself as a Marxist-feminist. Of course it’s difficult to imagine those two words coming together to describe the director of any other bank, and Nora has the capacity to confuse and surprise many of her adversaries. Asked by a representative of the World Bank what was the point of a woman’s bank, she replied simply that “men have controlled all the other banks in the world”. Indeed the bank’s goals are not confined to women, the tens of thousands of micro-credits it lends to co-operatives, and its strategy to encourage interchanges between co-operatives to build a ‘solidarity economy’, means that its policies are small scale and structurally ambitious at the same time.
The people at Banmujer will argue persuasively that if Venezuela is to escape its historic dependency on oil, in a way that doesn’t punish the people who were the victims of past economic squandering, then diversification should begin at the bottom and respond to ordinary people’s initiatives. The bank’s policy is geared towards building an economy based on co-operation rather than competition. Bearing in mind that, as a system of power, capitalism has a deep aversion to real competition, the bank’s ideal might be a good definition of socialism. Nora would argue that women have long been forced to rely on co-operative strategies because of patriarchal irresponsibility. As the daughter of a liberal landowner who neglected his family but is revered for his public spirit, this kind of irresponsibility is very much part of Nora’s story, and she points to her mother-in-law as an exemplary figure who she says was as “a struggler” and “a woman of the people”. Perhaps an unexpected consequence of women’s extra burden in this respect can be witnessed in the way that the bank gives loans on the strength of a “woman’s word”, and, contrary to the expectations of unsympathetic journalists, have always repaid their debts. More concretely though, loans are recovered because the bank also promotes repayment with the direct supply of goods to public sector bodies like schools, universities or health projects, and it’s through the expansion of these and other non-monetary interchanges that a solidarity economy is conceived.
If solidarity emerges from social conflict, in the case of an economic strategy it will come from the competition to define the political arena and the character of a democracy. On a journey into the mountains West of Caracas, with Yadira Pérez and Aida Pompa, two of Banmujer’s local staff, Carlos Izquiel, a local government official, remarks that it was once rare to find peasants who were socialists – now it is rare to meet one who is not. However there are no large co-operatives in the area and where they have been formed peasants have complained about the poor implementation of land reform.
Dorain Cadiz and her family live and work at a high altitude on a small-holding at Sanguijuela overlooking the hills that descend down to Venezuela’s coast. As a member of a co-operative, Dorain got credit from Banmujer to develop crops and livestock. In her own way she began with the purchase of a single cow and she explains that the five members of the co-operative separated amicably after one year to form individual enterprises. This is not unusual and many small businesses are founded as co-operatives on paper only. Yet the combination of agricultural development loans, mass literacy, health and welfare programs, and the greater fiscal responsibility now given to citizens’ assemblies, have all contributed to an obvious change in political consciousness. Although the redistribution of wealth may underpin this ideological shift, it is the redistribution of power that everyone on this journey thinks is the most important task now.
Although they are well attended here and women speak confidently in them, citizens’ assemblies have not always been successful as independent political arenas. Whether they can exercise a real counterbalance to the electoral and representative politics of the state is a question that preoccupies a range of people in Venezuela. They hope that the talk of a “revolutionary process” is not providing a new gloss for corrupt politicians and bureaucrats who, having exhausted all other possibilities, began to drape themselves in red.

UNT
Oil has fuelled corruption across the American empire’s ‘client states’, and Venezuela is no different. Without a purge of parasitical elements, different interests continue to operate behind the scenes of a popular movement for a more meaningful democracy. While the subversive intent of US foreign policy in Venezuela and its financing of vote buying there (through the fantastically misnamed US organization, the National Endowment for Democracy) is all well documented, less striking is the way petty everyday corruption can undermine citizens’ assembles as arenas of direct democracy.
Denyys Torres, an organizer in the National Union of Workers (the UNT confederation), hopes that this will change as workers become more confident and demand more in return for the support they have given to the Chávez presidency. The strength of UNT has come from its organisation through workers’ assemblies which Dennys helped pioneer in the fertilizer company he works for. Emerging from the political wreckage of CTV, a notoriously corrupted union confederation whose leaders helped orchestrate the typically unbeautiful military coup against Chávez in 2002, UNT has to a great extent replaced the old confederation and revealed its democratic vacuum. Many pundits habitually answer the shortcomings of liberal democracy with overarching accounts of a ‘vigorous civil society’. However, the way media owners, managers, union bureaucrats and NGOs were instrumental in preparing the ground for what’s been called a “civil society coup” to oust Chávez should expose the obvious: the notional civil society of so-called opinion formers only guarantees more political engineering, not more democracy.
The sort of dynamics that led to the coup are also played out against the new union, albeit on a smaller scale. In their Valencia office, under a portrait of a companero shot by the police under a previous government, UNT were holding their meetings last year to mobilise against what they described as a criminal frame-up of their activists. A factory owner is said to have employed gangsters in his company to perform his own kidnapping and in connivance with the local judiciary helped prosecute his factory’s militants for the faked abduction. Demanding control in their workplace UNT called for the expropriation of the company, but, as in the state oil company, the avenues through which workers’ control could develop in pursuit of a solidarity economy are deadlocked. This, and the issue of greater political autonomy from the government, is at the heart of some dramatic arguments within UNT.
Orlando Chirinos, who belongs to one of the Marxist currents in UNT, is a popular national co-ordinator often identified at the centre of the battles in UNT. He wants the confederation to be a clearly autonomous workers’ movement able to challenge government and he has called for a new party to be formed at the moment Hugo Chávez seems to desire the consolidation of his own power through a mass party. Orlando can’t remember at what point in his life he became politicised, even as small boy he was cycling to deliver pamphlets for his older sister who belonged to a guerrilla unit. Because of this depth of experience a great deal of faith is placed in the abilities of people like Orlando to provide accountable national leadership for UNT whilst preserving an open grass-roots organisation. That sense of trust may not be misplaced, however, UNT can’t effectively challenge employers or the state without also building links between people who have been divided by ‘Third World’ conditions where a vast underclass exists beneath the relative, albeit meagre, privileges of industrial workers. For this reason radicals like Orlando want the new confederation to also represent the unemployed and cut across the boundaries of traditional trade unionism.
Whether leaders like Orlando, and rank and file activists like Dennys can help secure such a radical turn may be the most important question of all. Active solidarity between different workers has never been easily achieved and always hard to sustain over prolonged periods of struggle. With globalisation, capitalists have easily out-flanked workers’ capacities with structural disinvestment from nations and the outsourcing of jobs being common threats wielded against organised labour. But in the creation of greater inequalities, globalisation also pushes exploitation and privilege into closer proximity, in turn ushering in new forms of segregation. To look at an emphatic example in Caracas one only needs to walk through the affluent district of Chacao, an opposition stronghold, and see the propaganda of an informal apartheid hinging on the fear of the poor and their forms of crime. Against this historically segregated reality, arguably the most radical feature that runs across the Latin American political landscape is the active desire to re-organise and create new spheres of unity.
Such radical responses may recall the ideas of people like Michael Bakunin in the 19th century, reigniting arguments about a limited scope of labour politics or indeed Leon Trotsky’s theory of combined and uneven development with which he envisaged more advanced forms of solidarity emerging at the peripheries of advanced capitalism. In a more visceral recollection, Nora Castañeda points out that during the repression of the Caracazo, the 1989 popular rebellion, it was street criminals (maladoros) not the leftist parties who confronted the army and defended unarmed citizens at the cost of their own lives. Even with such chaotic scenes in mind, the by-product of the search for unity is the renewed attention to the practices of classical democracy. Without them, it is argued, there is little chance of extending the boundaries of solidarity and presenting an even more profound challenge to those who have long since perfected dispossession from above.
It is only too clear that the United States has projected its power abroad using the increasingly empty rhetoric of its representative democracy. The machinery of the state resists any duties to its high-sounding beliefs. The most popular official interactions with Jefferson’s declarations on “life, liberty and the pursuit of happiness” are confined to putting people to death, mass incarceration and the pursuit of war. But what happens when people start taking democracy seriously may be the sting in the tail for an empire that enforces its downgraded modern version. Although it is not at all fashionable to remember it, and the political class on both right and left have either ignored or postponed its deeper implications, democracy depends on equality.

General Mosconi, Argentina
General Enrique Mosconi was one of the earliest advocates of a nationalised oil industry outside of the Soviet Union. In 1922 he became the first director of the Argentine enterprise Yacimientos Petrolíferos Fiscales (YPF), one of world’s largest public owned enterprises until its eventual privatisation in 1999. The oil town in Salta, in the North of Argentina, built by YPF and named after Mosconi, is also the place that many unemployed workers have looked to for an example of the possibilities of their self-organisation. The upper structure of a disused oil rig lies across a piece of scrubland not far from the town centre. Used as a shelter for a tree nursery, the saplings growing in its shade are part of a reforestation project and undoubtedly its image would be a green-washing coup for an oil company if the scheme didn’t belong to UTD (Union de Trabajadores Desocupados), a Piquetero (Picketers) movement begun by redundant oil workers in 1996.
By collecting signatures across the town in support of their demands and blocking highways, UTD not only won the reinstatement of many of their jobs on full salary but like other Piquetero groups they went on to design and develop projects and co-operative enterprises including the construction of social housing projects. Two brothers, Pepino and ‘Hippie’ Fernandez, are among the most well known activists here, and Hippie is proud of the ‘conceptual map’ showing UTD’s plans for the whole Mosconi area. Within a scheme for oil production and environmental protection the map includes housing, a popular university, schools, hospitals and sports facilities. It would be easy to dismiss what seems to be a rather romantically hand-drawn vision were it not for the fact that UTD are doing quite well in winning concessions to their cause.
At the base of all UTD’s activism are the issues of the environment and public health. This goes back to UTD’s foundations and the role of the Fernandez brothers in the organisation. It was the arrival of companies like Haliburton during the Vidella dictatorship in the 1970s that alerted Pepino and Hippie to the impact of the regime’s drive for greater profits. New chemicals were used to speed up the production process and these seeped into the town’s water supply with poisonous effects denied by the industry. When Pepino raised the issue as an employee in YPF he was told that he would be “cleansed” from the company – an ice-cold threat carried out against the many thousands of Argentinians who disappeared without trace over the years of military rule. Known for their persistence and courage in this respect, and a lineage of trade unionism in their family, the brothers were also among the first employees to join with unemployed workers at their roadblocks in 1998. At these blocks, several workers have been killed in confrontations with the full force of the militarised state. And although Pepino and Hippie no longer work in the industry, such gruelling episodes have helped UTD maintain and extend solidarity in Mosconi. The organisation has now returned to disrupting oil production in pursuit of their demands.
The extent to which Piquetero groups in Argentina have been successful in prising a wide variety of social projects from the government means that they have been accused of becoming incorporated into the logic of political pay-offs and of becoming a mere arm of the state. As a result some groups divided on questions of their democratic mechanisms and internal accountability. The Fernandez brothers are keenly aware of what Pepino says is “the prostitution of politics through welfarism” and in pointing to the rise of regressive taxes like VAT, he argues that UTD is concerned with “taking back what is ours”. This attitude strikes a chord with other Piquetero groups who say that their best form of defence against corporatism is to always struggle for greater autonomy and not to cease militancy on different fronts. Of course were UTD a conventional trade union the scale of that ambition might become an obstacle, but in crossing between the unemployed and the employed by building a co-operative base for different workers, UTD is in a sense both legal and illegal. Indeed Pepino concludes a discussion about the questions of democratic organisation saying that you need “chaos and order in the same place”.
After decades of suffering under both military and civilian governments, Argentina is a place where people from different backgrounds are alert to the crucial difference between constitutional government and genuine democracy. If the country’s popular rebellion in 2001 was overly celebrated (in part by those who ignore the profoundly undemocratic manoeuvring of international financial institutions) the hundreds of popular assemblies that sprang up, calling for the entire political class to be removed from power, does attest to widespread public scepticism about the rules of the game for everyone not involved in high-finance. In 2002, polls suggested that 63% of the population did not believe in representative democracy. Of course this will include some who don’t consider military dictatorship to be a manifestation of economic warfare but an answer to it. And as the return to minority government shows, pursuing democracy demands more than a convention of popular assemblies and requires the radical restructuring of the state through a permanent articulation of workers’ and citizens’ power. For the time being global financial institutions, the real home base of a cowardly, and therefore increasingly extreme form of economic domination are daily cancelling out the meaningful participation of all but the most confident and articulate citizens of any country.

Patagonia
If UTD in the far north of Argentina conjures a slightly romantic green tinged vision, of saplings grown under a disused oil rig, it’s especially important to remember the obstacles to such a self-organised reality. In the south of the country the desolate looking Patagonian town of Las Heras is also monopolised by a near total dependency on oil. Indeed the industry has reduced the town’s prospects so much that a local school teacher, Hector-Roul L’Euquen, blames it for an epidemic of teenage suicides. Segundino Mamaní arrived in Las Heras in 1984. Like other migrant workers he had heard about the money that could be made in the Patagonian oil industry but not the conditions or the bitter climate. He was elected as a trade union delegate in 2000. His union has pursued a popular campaign against the double taxation of pay – a consequence of a voucher system that makes up a substantial portion of workers’ salaries. As a socialist, Segundino had comradely relationships with radicals in his Santa Cruz based union, Sindicato Petrolero y Gas Privado, but this relationship broke down. Ignoring the fact that they didn’t have support from the mass of union members still waiting for a tribunal decision on the taxing of their pay, Segundino saw the minority grouping piecing together an unrealistically hopeful agenda and going on to pursue Piquetero tactics in an attempt to widen the terms of the dispute and create a link with the unemployed. A move that succeeded in bringing the dissatisfaction of the unemployed out on to the streets broke out into fatal violence, ushering in state repression, further alienating most union members from a broader politics. However, at a time when Argentina is alert to any shifts in the balance of power, what was in all probability an ill-conceived and poorly timed vanguard action was met by a media circus that sensationally greeted the symptoms of division as if another popular uprising was taking place. In fact the division between employed workers and the unemployed was driven home even more in Las Heras and the leadership of the union continues to be dominated by the mind-numbing corporatist logic articulated most tenaciously in Argentina by Peronism.
The frustrations in Las Heras could illustrate the truism that power structures are dismissed at one’s peril, but this is a mounting problem for trade unions everywhere. As a young trade unionist in Chile says, “relationships are changing, people use each other, spend less time with their family. All they talk about is money, things. You have to be a Quixote to be a union leader these days!” Unlike several ‘hard’ Piquetero groups, the system in the vast majority of trade unions relies on the expertise of representatives on holding rather than sharing authority, and of course an emphasis on the micro-politics of the workplace that tends to cast a veil over the rest of life. This may well mean that unions are prone to the dwindling democracy that neoliberal governance enforces more generally.
It was impossible to find the union radicals in Patagonia to put their side of the story. But it’s difficult not to conclude that instead of trying to jump-start a rebellion, had they been more concerned with the struggle for meaningful participation in their union and the sort of democracy evident in several ‘hard’ Piquetero groups, they might have found the broader basis for organisation that Segundino says was fabricated in great haste. Among the mass of union members who waited for ‘due process’ are people whose sons and daughters find the choice between life and death to be an ambiguous one. Facing the barren horizons of Las Heras the unemployed also commit suicide. However, as a preference to living pointlessly, suicide in fact places a very high value on life.

Coming Home
For the moment there are very few established labour movements that have taken the opportunity of the widespread democratic deficit to rethink how their constituency could be extended in the way that the story of UTD in General Mosconi might imply. Indeed it’s the strength of that implication that really compelled a sobering visit to Las Heras at the opposite end of Argentina to see how conventional trade union and social movement tactics don’t fit together with any ease. Writing about Brazil, Francisco De Oliveira says unions do not yet know how to operate in the restructured and atomised universe created by globalisation. Nevertheless, the political core of this problem for unions and social movements alike is still about the discomforts of representation and how they so easily hinder and corrupt the scope of politics in everyday life. As Oliveira jibes against Brazil’s leftish political class, “All that is solid melts into jobs for the boys”. Internally UTD may not be among the most rigorously democratic of Piquetero organisations, but their ambitious development helps to explain why it has been an example for others that are, and why trade union leaders like Orlando Chirinos in Venezuela look beyond the workplace to the mass of the unemployed, not simply to help them, but for their help in the assertion of an honest trade unionism.
It should go without saying that nobody need wait on the economic meltdown experienced in Argentina, or inspect the ‘revolutionary process’ spoken about in Venezuela, to consider the art of democracy and organisation. Less than half of Scotland’s population voted in elections to their illustrious new parliament. According to polls however, almost 100% were against their semi-elected representatives voting themselves a £100 per week pay rise in 2002 when nurses were being told to accept the drastically less generous rise of £7 per week. Only one MSP voted against his own pay increase while another made the disarming aside that she was sure that 99% of the public would be in favour of beheading the members of the Scottish Parliament. Needless to say, that option wasn’t included in the pollsters’ more orderly orchestration of opinion.
Paying little more than token attention to inequality on our doorstep, UK trade union leaders have entered into unholy alliances in and out of workplaces. The big unions in the oil industry are bogged down by the mantras of partnership as their leaders adapt to a range of suspiciously unenlightened policies in relation to their industry and segregation among its global workforce. The smaller, so-called ‘deviant’ unions, see the machinations of the labour movement serving the interests of its own bureaucracy, not workers. Given their poor democratic standards nobody can be confident in the recent formation of a Euro-American super union – is this really going to confront the divide-and-rule power of multinational capital, or is it more of an administrative response to some steep declines in union membership? At worst it will be a convenient element in a foreign policy scheme plotted out by Zbigniew Brezinski in which Europe props up US imperialism as Texan style ‘domination’ runs out of steam. This might be an overly conspiratorial suggestion but an increasingly managerial administration of trade unions goes well beyond their industrial activities and makes them ripe for all sorts of abuse.
Under the umbrella of Make Poverty History, UK unions teamed up with companies like the arms manufacturer BAE systems and were content enough to exclude the Stop The War Coalition from the campaign – the outcomes of which could have been designed by the International Monetary Fund itself. Needless to say that organisation could never have popularised its awards for compliance so effectively. Unfortunately there were few people like Stuart Hodkinson of Red Pepper magazine who were alert and vocal about the dubious alliances behind such a diversionary pseudo-event as Make Poverty History, an event the head of Christian Aid remembers as “a celebration of celebrities”.
In their own way, the development of grass-roots politics in Latin America is no less artful of course. But leaving aside the critical meaning of “chaos and order” to the UK where order prevails over more order, the classical issues of democracy have remained unanswered by both trades unions and parties of the left. The question of ‘primitive democracy’ was never simply regarded as an ideal by Marx and Engels, nor by Marxists who adapted their social theory whilst trying to keep faith with its philosophical basis. For Lenin it was the single most important form of power against bureaucracy so that “all may become bureaucrats for a time and that, therefore nobody may be able to become a bureaucrat”. According to Jo Freeman, writing in 1970, the same ethos was re-founded in the women’s movement which revived the ancient Athenian tradition of random rotation by lot as a response to the ‘tyranny’ of its informality – that deceptive openness that can be found today in ‘horizontal’ social forum politics. But ancient methods of democratic organisation have never survived well when removed from the world of work and practical needs.
Sadly, all the classical principles of democracy have now been put on hold by most self-declared revolutionaries in favour of centralised authority and fixed responsibilities, not to mention a fondness for leaders and gurus who are said to be required, however temporarily, for effective organisation and proper understanding. To a cultural critic like Susan Buck-Morss, the phenomenon of these ‘mental labourers’ is more like “a membrane that spans across the world like an oil slick, thin but tenacious, and capable of suffocating the voices of anyone speaking beneath it”. Certainly, in mainstream circles much of the intellectual attention paid to the crisis of democracy has explicitly strived to dignify the growing ‘non-sovereignty’ of populations. However, if parties and trade unions were thought of as a couplet that might answer the political shortcomings of one another, coming home to Scotland, where leadership has fractured a lively socialist party and lost its trade union support, and where the trade union movement more broadly is withering on the branch of New Labour, one can’t help wondering what the future really holds.
It is certainly worth pausing to consider the place of some old arguments. In ‘State and Revolution’, Lenin wrote:
Trade unions did not develop in absolute freedom but in absolute capitalist slavery, under which it goes without saying, a number of concessions to the prevailing evil, violence, falsehood, exclusion of the poor from the affairs of higher administration, “cannot be done without”. Under socialism much of primitive democracy will be revived, since for the first time in the history of civilised society, the mass of the population will rise to taking an independent part, not only in voting and elections but also in the everyday administration of the state. Under socialism all will govern in turn and soon become accustomed to no one governing.
Even Lenin appears naïve in his sheer faith in the future, but more dangerous was his confidence in the Soviets offering “a higher type of democracy”. It is doubtful they were sufficiently democratic and the opening they represented was certainly closed under the conditions of the Russian civil war. By 1920 Lenin was apologising for “a full-fledged oligarchy” by dismissing the arguments of the left opposition in the communist movement as “infantile” propositions. In Germany they were impatient with “a party of leaders” and called for a new union organisation, but, tellingly, Lenin argued that to try and break down divisions of labour through the working class movement and to embark on the “all-round development” and “all-round training” so that people can do everything as they would under “mature communism would be like trying to teach higher mathematics to a child of four”.
There are plenty of arguments for the necessary evils of concentrated power, fixed duties and other inflexible forms of representation which have nothing to do with the battening down of hatches during a civil war. However, the arguments also tend to hinge on the idea that socialism is a battle that one day can be won and in the meantime sacrifices have to be made. A different view is that socialism reflects a much longer historical trend towards the completion of democracy and as such it lives and breathes in the atmosphere of that movement. For instance, it’s very difficult to imagine enacting libertarian schemes like G.D.H. Cole’s Guild Socialism without a truly democratic public consciousness. Time and again socialists have found themselves in an impossible position when having attained a measure of power through the means of existing democracy they face the impoverished political reality of its culture. And having made an uneasy pact with the system, they have few real policies against it. However, if socialism can learn anything from warfare, it must be that the most imaginative armies built entirely new roads in the heat of their battles and made their enemy’s maps quite meaningless in the process.
Observing the ideological success of advanced capitalism in the popular imagination, the US-Marxist writer Fredric Jameson observed that “it is easier to imagine the ‘end of the world’ than a far more modest change in the mode of production, as if liberal capitalism is the ‘real’ that will somehow survive even under the conditions of a global ecological catastrophe…” The truth here should cut both ways. In socialist politics and in the labour movement internationally, many on the left will also conceive of the end of the world more readily than fight for some relatively modest changes in our means of organisation.

End notes
My warm thanks to Rosemary Ryan, Nora Castañeda and everyone at Banmujer; Dora Cadiz and her family in Sanguijuela; Luis Damiáni at the Central University of Venezuela; Denyys Torres, Orlando Chirinos and all the UNT organisers in Valencia. In Argentina, thanks to Pepe and Hippie Fernandez, and UTD in Mosconi; Segundino Mamaní, Roul L’Euquen and many others in Las Heras; and to everyone for their kindness at the Bauen Hotel, a democratic workers co-operative in Buenos Aires. Around the North Sea, my thanks go to Jake Molloy at OILC in Aberdeen and Kari Bukve at SAFE in Stavanger; Dick Stabbins, the geologist; to Paul Dukes, Centre for Russian Studies at the University of Aberdeen; Andy Cumbers, University of Glasgow; and to Hugo Manson and Terry Brotherstone, my colleagues in the Lives in the Oil Industry oral history project at the University of Aberdeen.
The interviews for this article were made possible by a research grant from The British Academy.

Secondary Sources
‘The Truth about Welfare Reform’, by Frances Fox Piven and Barbara Ehrenreich in Telling the Truth, Socialist Register, Merlin Press (2006)
Hot Money and the Politics of Debt, R.T Naylor, McClelland and Stewart, Toronto (1987)
The End of Dollar Hegemony, filmed congressional speech (2006), Ron Paul Archives, http://www.lewrockwell.com/paul/paul303.html
Our Endangered Values - America’s Moral Crisis, by Jimmy Carter, Simon & Schuster (2005)
Democracy Against Capitalism, Renewing Historical Materialism by Ellen Meiksins Wood, Cambridge University Press, (1995)
‘Democratizing the Democracy? Crisis and Reform in Venezuela’, Brian F. Crisp; Daniel H. Levine, Journal of Interamerican Studies and World Affairs, Vol. 40, No. 2. Summer, 1998, School of International Studies, University of Miami.
Creating a Caring Economy, Nora Castañeda and the Woman’s Development Bank of Venezuela, Crossroads Books, (2006).
The Chavez Code: Cracking U.S. Intervention in Venezuela by Eva Golinger, Editorial Jose Marti, Instituto Cubano del Libro (2005)
Faces of Latin America, by Duncan Green, Latin America Bureau, London (2006)
Confessions of an Economic Hitman, by John Perkins, Plume/Penguin (2004)
‘Was Lenin a Marxist? The Populist Roots of Marxism-Leninism’ by Simon Clarke, Historical Materialism, No.3 Winter 1998
Dreamworld and Catastrophe: The Passing of Mass Utopia in East and West by Susan Buck-Morss, MIT Press (2002).
‘Ruling the Void? The Hollowing of Western Democracy ’, by Peter Mair, ‘Strategy After Bush’ by Achin Vanaik, ‘Lula in the Labyrinth’ by Francisco de Oliveira, New Left Review, Nov/Dec, 2006.
‘G.D.H. Cole and the conundrum of sovereignty’, by Chris Wyatt, Capital & Class, Issue 90, Autumn 2006.
The State and Revolution, ‘Left Wing’ Communism – An Infantile Disorder, taken from ‘V.I. Lenin, Selected Works’, Lawrence and Wishart (1971)
The Comintern and the German Communist Party, Louis Proyect, http://www.columbia.edu/~lnp3/mydocs/organization/comintern_and_germany.htm
‘The Tyranny of Structurelessness’, by Jo Freeman, (1970) reprinted in Variant no.20, Summer 2004
A Taste of Power, The Politics of Local Economics, edited by Maureen Makintosh and Hillary Wainwright, Verso (1987)
Soviet Operational and Tactical Combat in Manchuria, 1945 ‘August Storm’ by David M. Glantz, published by Frank Cass (2003)
Mapping Ideology, edited by Slavoj iek, Verso, (1994)

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Many sellers. One buyer.
Jake Molloy & Ronnie McDonald
Known as bagong bayani, or “new heroes”, Overseas Filipino Workers (OFWs) make a crucial contribution to the Philippine economy. At any given time, up to 12% of the country’s 80 million population is hard at work in a country other than Philippines. Currently 160 nations play host to OFWs including, since the summer of 2006, Britain’s offshore oil and gas industry. Flexible, industrious, and frequently skilled, Filipinos are increasingly making their way into niche employment markets around the world.
Filipino OFWs are one of the biggest sources of stability for the economy of a country perennially known as the sick man of Asia. In yet another nation cut adrift in the global economy, worker’s remittances – the money OFWs send back to their families, account for over 20% of the nation’s gross national product and constitute around half its foreign currency earnings. Without OFW dollars, yen, pounds and pesos the country would quickly tip over into bankruptcy and the poverty endemic in rural and urban Philippines would deepen.
While foreign remittances keep the nation’s huge economic deficit in check, the human costs cannot be disguised. Mothers who work overseas – 65% of OFWs are women – usually leave families in the hands of relatives or older siblings (the stay-at-home-father is a concept yet to gain acceptance in the Philippines). Spouses are often separated for the majority of their married life and many children live the emptiness of losing one or both parents to distant shores for years on end.

Booking your job
State institutions are directly involved in facilitating the foreign labour system through the Philippine Overseas Employment Administration (POEA), the ministry overseeing deployment of OFWs. Foreign principals must channel their manpower requirements through POEA-licensed private employment and manning agencies. Filipino workers aspiring to be OFWs are medically examined by government accredited medical clinics, and trade-tested and trained by training providers authorized by the POEA.
The agents charge service fees to the foreign employers and are permitted also to collect from workers a placement fee equivalent to one month’s salary. Other fees normally charged to workers include documentation and processing costs, trade/skill testing, medical examination, passport, clearances, inoculation, authentications, health premium, and any other related costs.
Depending on country of destination, the OFW might see as much as the first three months’ salary disappear in obligatory costs. In addition to the legally permitted charges, palms along the way may also have to be greased.

Diminishing returns
Various scams are occasionally reported, the most common of which is the amended contract. On arrival in the host country the OFW is presented with a new contract, the terms of which are grossly inferior to what was promised. In hock to an employment agent for fees, and faced with the option of immediate repatriation back to the Philippines, the aspiring OFW has a stark choice: accept the reduced terms or go home to penury.
In fairness, the POEA works hard to monitor and improve the welfare, human rights and protections offered to OFWs in host countries, and a variety of government-to-government agreements and protocols have been established to that end. Nevertheless, it has to be said that the Philippine Government is careful not to raise standards and financial expectations too high so not to price the Filipino OFW out of the international labour market. The Philippines is a low wage economy but its emerging competitors in the migrant labour scene, Vietnam for example, are ultra-low wage economies.
The Philippine Labour Code requires POEA-licensed agents to at least attempt to ensure that OFWs are paid no less than the minimum wage in the host country, where such regulations exist. Contracts of engagement must also incorporate all minimum statutory requirements of the host country including provisions for hours of work and paid holidays. These contracts in practice are often worthless.

Meet your ‘sweetheart’ unions
Enshrined in the UN Convention of Human Rights, and monitored by the ILO (International Labour Organisation), all workers, including temporary migrant labour, have the right to be treated no less favourably than the native. But apparently not in the UK: Amicus and GMB officials earning a good union salary for servicing the needs of employers in the offshore oil and gas industry seem to have forgotten the principle – assuming they knew it in the first place. In 2006 Amicus/GMB signed an agreement expressly allowing for discrimination against Filipino workers employed on rigs in the UK offshore oilfield.
In June 2006 the offshore construction contractor AMEC hired through an agent 150 Filipino workers to complete the Buzzard oilfield hook-up. Another 200 were employed on other of the company’s offshore UK projects. AMEC alleged that a skills shortage compelled them to look abroad because in the UK hardly a welder, pipe fitter or rigger was to be had. The purpose of a hook-up is to bring a new oil and gas production platform on-stream and the work is covered by the Amicus/GMB/Offshore Contractors Association (OCA) partnership ‘agreement’ covering various aspects of employment such as remuneration and redundancy selection.
Amicus/GMB officials, on signing the agreement, announced that they had achieved for the Filipino workers complete parity of pay and conditions in every respect with UK colleagues. This was lauded as a significant and welcome development, including by OILC the offshore workers’ trade union not signatory to the so-called partnership agreement. The brouhaha claims made by the Amicus/GMB bureaucrats turned out to be untrue.
As a hook-up contract nears completion and first oil is imminent, redundancies among the construction workforce naturally result. A proportion of the hook-up workforce will be retained after the platform has entered its production phase to perform ongoing maintenance. The employment of personnel surplus to requirements is terminated in a process of phased down-manning except where a suitable similar position exists on another of the company’s contracts.
Selection for redundancy, as well as the order in which transfers are made to alternative worksites, is done according to rules laid out in the Amicus/GMB/OCA “agreement” and in accordance with the relevant employment legislation. The usual regime of “last in first out” has a bearing on selection but comes second to the need to retain particular skills. The redundancy selection procedure needs to be fair, transparent and lawful, and above all applied with integrity. Getting it wrong can cause costly employment tribunal hearings and hefty compensation awards. The Filipino workers, on the other hand, may be run off without recourse to the provisions of the agreement and without statutory compensation, courtesy of Amicus/GMB.
Foreign workers’ entitlement to be treated no less favourably than the native, a fundamental principle of the UN Charter, is dispensed with to allow the Filipinos to be “prioritised”. Institutionally discriminated against. They are sacked ahead of, and in preference to, other nationalities as part of Amicus/GMB partnership “agreement”.
Of course, there are those who believe that the Filipino workers should never have been brought to the UK in the first place and it is therefore correct that they should be the first to go. Others see “skills shortage” as a cover for the real story which is that AMEC saw an opportunity to avoid the buggerance and expense of recruiting and inducting four or five hundred UK nationals for work in the UK oilfield when an off-the-shelf Filipino workforce was already available following the company’s completion of the Bonga hook-up off the coast of Nigeria. Skills shortage is a complete Aunt Sally!
Whatever the truth, the Filipino OFWs are here and as such deserve to be treated no less favourably than the rest of us. The priority for Amicus/GMB was in the first instance to ensure that UK labour was hired. This they singularly failed to do. In fairness, the foreign hiring was almost certainly fait accompli by the time the union bureaucrats heard of it, and the most AMEC was prepared to offer was a face-saving form of weasel-words, allowing the officials to claim that parity of terms had been achieved and also to chant the mandatory mantra; “Safety will not be compromised”. Two claims now known to be false.
Those who campaign for equal treatment for foreign workers are often accused of being hypocrites who in reality care little for the welfare of foreign workers. The accusation continues that campaigners’ demands for parity are no more than a ploy to keep foreign workers out. The real motive is to raise the cost and effort associated with employing foreign workers thereby removing the incentive to bring them in. It is true that foreign worker numbers would drop as an intended or unintended consequence of equal treatment. But the temporary migrant workers who remained would at least enjoy the benefits of no less favourable treatment – a fundamental principle of basic rights established under the UN charter to protect all workers, domestic and foreign.
Every western democracy legislates accordingly. Discrimination on racial, ethnic, religious or nationality grounds is forbidden. The UN Charter says so, the European Commission on Human rights says so, and here in the UK the TUC agrees and the UK Race Relations Act makes it a criminal offence. Yet, here is discrimination incorporated into the terms of a so-called “partnership” agreement signed by Amicus and GMB.
In an age of spin where safety is such and emotive issue, it was fascinating to watch the Amicus/GMB attempt to put a positive slant on their ineffectiveness and impotence in the face of employer dictat. Rightly sensing the potential for acute embarrassment, a press statement was issued claiming, with reckless abandon, that the unions had “negotiated an agreement on the use of non-UK labour” which required all personnel “be competent in the appropriate disciplines for which they are employed, consistent with the competence requirements that apply UK employees”. They had negotiated nothing of the sort, as subsequent events proved.
Acting on concerns raised by offshore workers, OILC asked the Health and Safety Executive (HSE) to investigate inadequacies in the competence assurance systems on the AMEC contract. The HSE did indeed find that the management systems were incapable of verifying competence and achieving compliance with safety law. In early September, HSE informed OILC: “The Buzzard project has a significant number of Filipino together with numbers of UK-based “green hats” (persons not yet experienced in offshore work) ... your concerns appear to be justified ... AMEC have failed to demonstrate the competency of riggers on the project ... HSE [has been given] an assurance that where personnel are unable to demonstrate their competency they will not be allowed to work without suitably competent personnel being present. Thank you for drawing this to our attention.”
Ironic that AMEC and its partners Amicus/GMB were so adept at identifying a skills shortage in the UK as a whole, yet failed to notice one under their own noses in the UK oilfield, apparently of their own making.
British workers on the offshore contracts have been treating their Filipino colleagues with courtesy and respect, and that is how it should be. Xenophobia is not evident. The attitude is that the Filipino lads are here for the same reasons as we are: to make a decent living for our families back home. But there is a strong feeling that the full rate should be paid for the job. It is disconcerting when the man working alongside you is paid a wage only a third of what you regard as the absolute minimum acceptable.
In reality the Filipino workers themselves will have to make the case for better treatment and until they do things will stay as they are. But the prospect of the Filipino workers rebelling is remote. For a start, they would be up against the Amicus/GMB partnership “agreement” that provides for their servitude.
The Filipino workers and the UK trades’ foremen who supervise them have been warned on pain of dismissal that details of pay and conditions must remain absolutely confidential. The reason for the compulsory secrecy enforced by intimidation isn’t hard to work out. In the meantime, reflect on the curse of sweetheart trade unionism: offshore workers, foreign or native, surely have the right to better treatment.

Nursing the debt
According to the International Labour Organisation in 2005 the number of jobless people in the world reached 200 million, 7% of the total labour force. The Philippines has a big slice of that, with domestic unemployment at 12%. Were every oversees worker to return home tomorrow the rate would more than double. Temporary foreign employment is the only realistic option for many and the Philippines is likely to remain the world’s second largest exporter of labour after Mexico. Indeed, so fundamental to the economy has foreign employment become that the higher education system increasingly focuses on enhancing students’ employability prospects abroad.
The Philippine health service trains more nurses than it could ever need. At first this was to compensate for the continuous exodus of qualified nurses leaving the country, but it is now part of a national strategy aimed at maximising the number of OFWs remitting earnings into the coffers of the Central Bank, thereby helping to service the nation’s huge foreign debt of $50 billion. Another astonishing statistic illustrating the sheer scale and impact of foreign employment on Philippine society is that 2,215 qualified doctors went abroad in 2004 – retrained as nurses!

Monopsony
Proponents of neoliberal globalisation point to the benefits accruing to developing economies through increased mobility of labour. It causes wealth to be transferred from the rich nations to the poorer in the form of wages sent home, so we are asked to believe. The reality is that another facet of exploitation and impoverishment has been added to the burden already carried by the poor on behalf of the rich.
True labour mobility would be immensely beneficial to the temporary migrant, to the host economy, and to the economy to which cash is remitted. But what is happening here is inflexible labour mobility in which the transfer of wealth is deliberately constrained by monopsony employment. Monopsony is analogous to monopoly: the latter being the sole control of a commodity enabling the seller to inflate the price; the former, one single source of employment giving the employer the power to depress pay and conditions and, indeed, to decide if there should be any employment at all. Put simply, monopsony is the opposite of monopoly; it is many sellers facing one buyer.
The Filipino housemaid, employed on a pittance and midway though a three-year contract in an abusive household in Jeddah, contemplating the distant prospect of reunion with her three kids currently in the care of a grandmother in a Manila slum, is oppressed utterly by the unassailable power of her employer. Permission to be in the country is solely on the basis of her presence in that household and she may not seek employment elsewhere. Were she to leave prior to the expiry of her contract she would do so broke and without her passport and airfare home.
Slavery and bonded labour, still depressingly prevalent in many parts of the world, are outlawed by international agreement. Monopsony, on the other hand, remains legal and increasingly used to control and depress the pay and conditions of workers. The employer exercising monopsonistic power over a captured workforce wields the ultimate coercive weapon able to annihilate even the slightest notion of worker rights.
Our 400 Filipino colleagues working in the UK oilfield wear the chains of monopsony stoically. On the other hand, some of the natives are thoroughly ashamed that a link in this chain is the Amicus/GMB ‘partnership agreement’.

Jake Molloy is General Secretary of OILC, the offshore workers’ trade union, and Ronnie McDonald is its previous General Secretary.

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The Fictitious Commodity
Andy Cumbers
“The question is not how men and women can be fitted to the needs of the system – but how the system can be fitted to the needs of men and women.”¹
When Tony Benn, Minister for Industry, turned the valve to allow the first oil from the North Sea to come ashore on the 18th June 1975, few would have predicted the shape the industry would take over the next three decades. In economic terms, it was obvious, even at this early stage, that the oil revenues would provide a much needed boost to the UK’s broader economic fortunes and its flagging Balance of Payments position. In the political climate of the mid 1970s – with a strong and growing trade union movement – optimism abounded, that oil might provide the impetus for broader social change. Certainly, for Benn and many on the left of the labour movement, even the young Gordon Brown – who was then making his way as an emerging socialist politician – there was much debate about the prospects for economic democracy and public ownership. One of the key elements of this transformation was the establishment on a nationalised oil company, the British National Oil Corporation, to ensure that the benefits of oil were shared with workers and communities, rather than lining the pockets of the oil companies and their financial backers in the City.
In the fledgling North Sea oil industry itself, working conditions presented a more sobering reality as Tony Benn himself noted at the time:
Wednesday 16 July 1975
“Took the HS-125 to Aberdeen […] We were then flown in a Bristow Helicopter down to the Graythorpe I platform. […] The little community on the platform has its own satellite communication network, a heliport and all the necessary equipment [...] for the pumping of oil which goes 120 miles to Cruden Bay and then right down to Grangemouth. […] In the middle of winter when the conditions are exceptionally rough, it must be absolute hell to work there.
At the Station Hotel in Aberdeen I met the inter-union Oil Committee and the North Sea Action Committee and they raised a number of important points, mainly about unionisation on the rigs. They cannot get union representatives on to the rigs and they are very anxious about safety. They say if they can’t make progress, they are determined to black the rigs.”²
Four years later, the election of Margaret Thatcher’s Conservative Government was to set the scene for a very different kind of social transformation than that envisaged by Benn and the Left. The next two decades were to bring about a shift in the balance of power towards big business whilst at the same time leading to the emasculation of the trade union movement. Not only was there a mass privatisation of publicly owned institutions and assets – including the selling off of BNOC in 1983 – but there was also an assault on union power. The big set-piece battle was the 1984-5 miners’ strike, but this was accompanied by a series of trade union laws which seriously constrained the rights of workers and their unions to organise. As one business commentator put it, somewhat euphemistically at the time, the Thatcher counter-revolution was first and foremost about restoring “the right of management to manage”.

The harsh realities of working life in the North Sea
In the wake of the election of the Conservatives in 1979, the issue of workers’ rights and union representation in the North Sea disappeared from the agenda. As is now well known, the result was an employment environment driven by the interests of multinational corporations, which coincided with the desire of the Government to pump oil out of the seas as fast as possible to prop up the ailing public finances. The broader context of the time was rising unemployment, the haemorrhaging of British industry and a deeply unpopular government. Oil revenues brought the Tories much needed breathing space and, following their re-election in 1983, on the back of the patriotic fervour of the Falklands campaign, they were to pay for the cuts in higher rate taxes (from 63p in the pound to 40p) that ensured two further triumphs at the polls in 1987 and 1992.
Meanwhile in the North Sea, the absence of basic workers’ rights and union representation was to have savage consequences in an appalling health and safety regime – culminating in the Piper Alpha disaster and the loss of 167 lives in 1988, when a fire broke out on a production platform operated by the Occidental oil company. Whilst the safety regime has improved in the wake of Piper Alpha and the subsequent Cullen Inquiry, there continue to be concerns that workers are pressured to cut corners and under-report dangerous incidents.³
Alongside poor safety conditions (reflected in a recent confidential Health and Safety Executive report)⁴ employment contracts themselves have remained largely unregulated, meaning that workers are prone to casualisation and fluctuating wages and conditions. A lack of basic employment rights means that many workers have little in the way of pension and holiday entitlement or severance pay. Perhaps the most pernicious management tactic has been the use of the NRB (‘Not Required Back’) practice, whereby it is widely held within the industry that ‘troublemakers’, particularly those suspected of being active unionists have been identified and blacklisted by firms. The workforce remains highly fragmented with the oil companies outsourcing much of the work to first and second tier contractors. Whilst the lucky few – working for the oil companies as permanent staff – enjoy a relatively privileged existence, the majority of the offshore workforce are employed as contractors, subject to the whim of oil market fluctuations. For some, this has meant a drop in wages when oil prices fall; as recently as the period 2001-3 wages for associate professional workers fell from £13.08 per hour to £11.40.⁵
The divide and rule tactics of the employers mean that workers can be paid very different rates for the same job. This was illustrated through two agreements signed by the RMT/TGWU unions, representing Grade 4 catering workers, with the Catering Offshore Trades Association COTA in 1998. Although the Agreements were with the same six employers, the workers on mobile drilling rigs received around £3,000 less in salary than their counterparts on production platforms. Whilst the latter also received a pension scheme with a 5% contribution from the employer, those on the mobile rigs received nothing.

The rogue traders of the labour movement
Offshore workers have become used to the callous indifference of oil companies and their suppliers. Two recent variants of the old “divide and rule” principle have included a growing tendency for contractors to register their workforce in “ghost” companies in offshore tax havens, as far away as Singapore, to avoid paying National Insurance contributions⁶ and the increased use of low wage workers from the Third World to undermine the conditions of the existing workforce. Such tactics can fan the flames of racism and xenophobia, alongside perpetuating divisions among workers. Disgracefully, some union activists who have protested about the employment of foreign workers in such conditions have been accused by employers of racism, when the goal has been to secure workers the same rate for the job, independent of the colour of your skin or nationality.
What may come as a shock to some has been the connivance of the trade union establishment in the oil companies’ nefarious practices. The election of the Labour Government in 1997 was heralded as a new dawn for trade unions and their workers, with promise of a new Employment Relations Act to provide basic rights long denied under the Tories. To the casual observer, two collective bargaining agreements between the AEEU (now Amicus), GMB and the offshore employers in 2000 appeared to confirm the mood shift in industrial relations. However, more seasoned campaigners rightly viewed these agreements with suspicion. Wasn’t one of these unions – the AEEU – the self same organisation that was prepared to “undercut” other unions to sign “sweetheart” deals, guaranteeing no-strike agreements, with Japanese inward investing firms during the 1980s? Some of the phrases in the agreements sounded eerily familiar. For example, “union acceptance of management’s right to manage”, whilst others, such as the guarantee of a “Total Non-disruption Factor”, represented a new spin on an old theme. Another older tendency at work was the total absence of any workforce consultation before the signing of these “voluntary” agreements.
Whilst the General Secretary of the TUC at the time, John Monks, lauded these new spirit of partnership abroad in the North Sea oil industry, as far as the workers themselves were concerned these Agreements were not fit for purpose. The no-strike clause and the lack of freedom to be represented by a union of your choice both infringed basic UN recognised human rights.⁷
The desire of union professionals for power and influence with employers and the government has won out over what should be the primary task of trade unions: providing independent representation for workers. Such machinations prompt the question: when does a trade union shift from representing workers to managing industrial relations?

The nirvana of the “Norwegian model”
For many in the UK, Norway has often been looked to as a more humane and decent model of oil development. They do things differently there. They have strong unions and good employment conditions. Wages are high and the ‘two weeks on - two weeks off’ system, of British rig life contrasts poorly with the recent Norwegian deal of ‘two weeks on - four weeks off’. Norway has pursued a more sensible and balanced approach to oil development where corporate interests have been countered by a social dimension to oil. A nationalised oil company, Statoil, and a social fund to use oil revenues for welfare and infrastructure spending have been acclaimed by many on the British and Scottish left as the model to emulate.
Norway has also had a better health and safety record than the UK with more trade union representation in safety procedures from the outset. However, Norway also had its own Piper Alpha, when 123 oil workers were killed after a floating hotel collapsed off the coast of Stavanger in March 1980. Nevertheless, it prides itself as the “gold standard” of the international oil industry and has developed considerable kudos for its social and environmental standards. Statoil, for example, was one of the first multinationals to sign a worldwide collective agreement with a trade union.
The Norwegian model did not arise because of some natural predisposition of the country towards humane and egalitarian development, but was shaped by one of the world’s strongest and most militant labour movements in the period before the Second World War. In the period 1927-37, the International Labor Office in Geneva noted that the three Scandinavian democracies had the highest number of days lost to strike activity in the industrialised world.⁸ Such labour strength underpinned the more human capitalism that emerged in Norway under North Sea oil. But, the oil industry is still fundamentally the same creature as it is in the UK. The bottom line is profit and, in the context of an increasingly competitive global environment, even left-leaning national governments and strong trade unions can be cowed by the threat of multinationals to invest elsewhere if labour costs are not kept down. In Norway, the desire to protect the reputation of its “social model” has led to some more insidious abuses of workers rights as two recent cases have shown.

The unsung heroes of North Sea oil
Few in the UK will have heard the name Rolf Engebretsen, but, along with a friend, his private investigation of a government cover-up in the Norwegian sector has been one of the most remarkable stories in North Sea oil history. Rolf, now 53, is a “retired” diver. Retired in the sense that he was forced out of the industry by brain damage and a disorder of the nervous system which meant that he failed his medical in 1992. Because of severe memory loss and the inability to concentrate, Rolf was unable to find another job. Even worse, Rolf’s condition had not been officially diagnosed at the time so he did not qualify for any insurance or compensation from his employer. Rolf was not alone. Almost no diver in the Norwegian sector is fit enough to carry on working beyond their mid-forties. More seriously, 23 divers have committed suicide over the last decade whilst the death toll from accidents across the UK and Norwegian sectors is estimated at over 60.
Rolf and the association he formed to fight his campaign, the North Sea Divers Alliance, have shown that the state, oil companies and the divers’ trade union at the time, NOPEF, colluded in the 1980s in the setting up of a diving standards regime that was fundamentally unsafe. Indeed, it was based upon US military standards during warfare rather than under normal commercial circumstances. Collapsing oil prices and the imperative to explore in ever greater depths in the North Sea produced an unholy coalition of the willing. In this case, those willing to sacrifice a few divers to keep the oil flowing and revenues coming in to the Norwegian state coffers. Divers were encouraged to go down to depths of over 300 metres for up to 10 hours – when respected medical opinion is that depths of 180m alone causes High Pressure Nervous Syndrome (HPNS) and fundamental long term health problems.⁹ Subsequently, the Government has been forced to make an official apology and admit liability; legal proceedings have now been started to agree compensation for divers and their families.
If Rolf and the divers’ story is a tragic one, that of another victim of the “Norwegian model” is equally heart-rending and horrifying in revealing the depths that state and corporate complicity can reach. In 1976, Ingunn Vier Gabrielsen was a twenty-one year old mother of two, when she heard that her husband, Axel, had died with six others in an accident aboard a life boat after the drilling rig they had been working on had itself capsized. For over twenty years, the incident was hushed up by Odfjell Drilling (the Norwegian company involved) and the state authorities. Ingunn and other relatives were told the accident was due to the negligence of the skipper of the vessel, so there was no possibility of a compensation claim. Attempts to meet with other relatives were frustrated by the company who refused to give out names on the basis that the bereaved did not wish to be contacted.
Left with no support and a wall of secrecy from officialdom, Ingunn spent the next twenty- five years bringing up two children on her own with little financial support. Traumatised by the experience, the accident was never talked about in the household. Until, that is, a chance article in a Norwegian men’s magazine about one of the survivors of the accident. One of Ingunn’s daughters saw the article and asked her mother for the first time, what had really happened to her father? The family began to investigate and were able to contact other families by adverts and the use of the internet. The family of the captain of the boat had also never discussed the incident. They had been told their father’s negligence was responsible for the deaths of six people. As the families began to gather evidence of what really happened, it became clear that nothing could have been further from the truth.
When the Odfjell rig capsized off the Norwegian coast – less than one kilometre from the shore – the wintry conditions made it difficult for the lifeboat to navigate, resulting in it being overturned. The subsequent investigation revealed that the navigation equipment on board the boat was faulty; the battery powering the navigation system hadn’t worked. Worse, an inspection weeks before had revealed this to the company but no replacement was ordered. The six men who lost their lives – including Axel – were sitting on top of the lifeboat to help the captain steer through the dangerous conditions. Not only was the lifeboat faulty but the capsizing of the rig itself could have been avoided. Further investigation revealed that, given the appalling weather conditions, the captain of the drilling rig had earlier asked for a pilot to be flown out to the rig to help guide it in to port. The company refused on the grounds of cost; later revealed at NOK 10,000 (about £1,000).
Not only did the company manage to avoid all responsibility at the time – the Government was asked to re-open the case in 2003 – but, in a macabre post-script to the story, they actually made money from the accident twice over. In the first instance they were able to make an insurance claim running into millions of dollars from the salvage of the vessel. Then, in a bizare twist, the damaged rig was sold to the offshore construction firm, Aker Verdal, to be converted into a floating production vessel.

The “fictitious” commodity and the “double movement”
The Hungarian economist, Karl Polanyi, once referred to labour as the “fictitious” commodity. Free market economists like to think of labour as a commodity like any other, to be sold on the market at whatever is the going price. When Margaret Thatcher famously proclaimed that there was no such thing as society, her indoctrination in free market thinking was laid bare. Such a “logic” has long been the justification for companies to exploit and abuse workers and their families in pursuit of profit maximisation.
Polanyi, in his most influential work, The Great Transformation¹⁰, reminds us of the basic humanity of labour; the dignity, respect and rights that all workers are entitled to, which goes beyond a market logic. Workers are also part of families and communities. If the economic logic becomes “disembedded” from this social reality, society falls apart, the law of the jungle takes over, with the kind of tragic consequences that have occurred in both the UK and the Norwegian sectors of the North Sea over the past three decades. Polanyi’s insight and the cases of Rolf and Ingunn also help us to understand why the exploitation of workers can happen in “so-called” social democratic capitalist economies such as Norway, as well as more free-market oriented ones such as the UK, when a market logic prevails over respect for human beings.
One of Polanyi’s other great insights was what he termed the “double movement”. He recognised that whilst free market forces will lead to the destruction of society, resistance will arise to these forces as people “refuse to act like lemmings marching over a cliff to their own destruction”¹¹ Thus there is a movement against the unfettered market as individuals and groups attempt to reign in the forces of capital. Not only is this expressed in the form of courageous individuals such as Rolf and Ingunn but in the North Sea this has given rise to new collective movements. In both the UK and Norway, grassroots unions have emerged to fill the void left by their increasingly market-friendly counterparts.

Back from the depths: the “double movement” in the North Sea
A critical element in the campaigns of both Rolf and Ingunn was the support of the Stavanger based offshore workers union, SAFE. Although a relatively small union, with just over 7,000 members, its willingness to fight for individ