War in Ukraine and the Death of the Petrodollar
October 25—US imperialism just deployed its 101st Airborne Division to Romania just six miles from the Ukrainian border. This is not to help the Ukrainian masses, who suffer and die more and more as the US-Russia war continues. It is to position US imperialism for a major escalation, bringing the world closer to World War III. Why are they willing to risk nuclear war with Russia over Ukraine?
In the capitalist-imperialist world we live in, Ukraine has become the battlefield where US imperialism is fighting for its survival as the world’s dominant imperialist power. One of its main contenders is Russia (allied with China).
In a communist world, Ukraine would be just another place where some of our human family live. Communism will have no borders, nations, money, or markets. There will be no need for genocidal wars like the one ravaging Ukraine today because in communism we will share the world’s resources to collectively produce and distribute everything according to need.
Under capitalism this is impossible. Competition is built into a system that reduces most of humanity to wage slaves and elevates money above everything. Money rules the world. And since the end of World War II, the US dollar enabled US imperialists to displace the British imperialists and rule most of the world.
However, in 1971 the US was unable to back all the dollars in circulation with gold. It had wasted its gold reserves in its war on Vietnam. The dollar was forced off the gold standard and left to fall freely. It quickly lost 10% of its value. The dollar’s future looked even bleaker with the Arab oil embargo of 1973.
But the US bosses had gained control of the oil rich Persian Gulf region after World War II, displacing British and French imperialism. They were able to force Saudi Arabia, then the biggest oil producer and exporter, to sell its oil in dollars only. By 1975, most oil-producing countries followed Saudi Arabia’s lead. Thus was born the petrodollar. This made control of the Gulf region – which had been the basis of world domination since the first world war – even more crucial.
Petrodollars enhanced US influence and world domination tremendously. They allowed US imperialism to control the world’s main financial and diplomatic institutions (like the IMF and the UN). It allowed the US to become the biggest debtor in history, to the tune of $31 trillion on a GDP of $23 trillion.
Petrodollars gave the US bosses a free lunch. They printed dollars at little or no cost and received trillions of dollars’ worth in other countries’ currencies. They used these to demand goods in return. The oil producing Arab bosses were also forced to recycle their fabulous petrodollar profits back to the US: investing in US Treasury Bonds, real estate and expensive weapons.
But the world has changed. The US has lost control of the Gulf region to China and Russia. Saudi Arabia and the United Arab Emirates recently refused Biden’s request to produce more oil, which would have hurt the Russian capitalist rulers.
Saudi Arabia and Russia have deepened their economic and military relation. Saudi Arabia is China’s major oil exporter. It plays a key role in China’s Belt and Road Initiative.
Iran, where the US lost its influence in 1979, is now part of an alliance with China and Russia challenging US imperialism for world domination.
US imperialists dread the day when China will demand that the Saudis accept their yuan for oil. That will mean the end of the petrodollar and the total collapse of the US economy and its global hegemony. Backed against the wall, they will drown the world in workers’ blood.
And Ukraine? It has little directly to do with the Gulf region. But it is a battlefield where US and NATO are fighting Russia to the last Ukrainian. They hope to accomplish two things: regime change in Russia and the destruction of Russia as military superpower. This would break the China-Russia-Iran alliance, giving the US imperialists a better chance to win a war with China.
Whichever imperialists win or lose, we workers always lose. Our goal must be to organize and mobilize the masses of youth, industrial workers, and soldiers for armed communist revolution before or during World War III.
Front page of this issue
