Video (double projection) 19:26 min, downloadable billboard, Kunstverein Munich, 2004
„…deeply___to the notion
that the___world is
___to the observer…”
(committed) (real) (external)
The title of this project is based on a Henry Kissinger quote. Henry Kissinger was National Security Advisor and Head of State during the time of the oil crisis. The oil crisis in 1973 led to car-free Sunday in Germany and other european countries. This date functions as a coordinate to investigate a paradigmatic shift towards immateriality in the monetary system. in production, in labour and in art during that time.
Plot of the video: Two people have gathered material on the political, economic and cultural background of the oil crisis of 1973. They compiled the material onto a portable billboard, which they want to install outdoors. They walk on a highway probably a motorway. The highway is deserted, no cars on either sides. One person carries the billboard. The other documents their action with a small video camera. They talk about the possibility of having agency and a personal position within global events. A second surveillance camera records from a bridge nearby.
Introductory text (2004):
Immateriality and Oil
In 1973 the world was confronted with the first global energy crisis. The so-called oil crisis is usually explained by the Yom Kippur War. But there are clues indicating that the scarcity of oil was fabricated, for reasons other than that, which are well documented.1 The crises was related to several economic, political, and cultural paradigm shifts and was, or is to be regarded as part of a larger crisis.2
At the time of the so-called oil crisis, on different levels the discourse concerning virtual money, immaterial labour, and Conceptual Art intensified. The value of the dollar was no longer based on the gold standard, which had been in effect since the Bretton Woods conference that followed the Second World War.3 It now became a virtual currency, secured only by the oil industry, but stayed the key currency.4 The oil industry was an adequate safeguard for currency, because the need for oil is inflexible and therefore can act as a stabilizing factor.5
The industries did not want to meet growing wage demands of the workers. But they could not confront the unions’ power, only circumvent it and therefore looked for possibilities for automation and outsourcing of capital and production. An intensification of the third sector, which is primarily service related, was the result. So-called immaterial labour is based on changing conditions of production within this relocation. The main resource is not land, natural resources or labour anymore, but knowledge.6
In art, the notion of object within modernity became discredited or declared uninteresting. What counted from then on was the idea. Works were produced, which now, in part, only existed in the mind. 7 All of these levels were connected to a changing understanding of production and added value. At the same time they indicated a crisis situation. In order to understand this crisis it is not only necessary to look at the Bretton Wood system and the role of the US dollar in the global economy, but also the rebounding cultural discourse of the impairment of the object and the growing interest in the idea of immateriality and dematerialization. This idea contained a great utopian potential, and only seems to be in opposition to the ruling power. In fact, the different levels combined constitute the paradigm shift towards immaterial and dematerialized production. The energy crisis was the turning point and catalyst for this change. The immense profits called ‘petrodollars’, which were realized in a short time with the rise of the oil price by 400% in 1973, were the planned financing for this.8
Experience Versus Knowledge
“I remember this moment. I was still very small. It was cold, because I was dressed warmly. My sister was too. Her arms were sticking out, because she had so much stuff on. I believe she had just learned to walk, I had it drummed into my head that one shouldn’t run onto the street for any reason. And suddenly everything was changed. I went off … waddling in the middle of this big street in front of our house with my sister. We weren’t the only one. Everybody was outside. Like in a state of emergency. But a good one. That made an impression on me.”
On November 25, 1973, the so called oil crisis led to the first car free Sunday in the history of the Federal Republic of Germany. The travel ban affected around 13 million drivers. Exceptions applied to emergency vehicles and certain professions. The regulation was extended to three further Sundays in the winter of 1973/ 74. The empty or pedestrian filled streets were discussed in the press, and were often paired with threatening analyses of an international crisis and the scarcity of the oil deposits. On the one hand, this led to anxiety and uncertainty because the basic value of modern industrialized business was, along with other things, expansion and mobility. These suddenly appeared to be limited.
On the other hand, there was the experience of being able to walk on an empty street and to experience the place of the street completely differently – an initial experience of an ecological consciousness and emancipating approaches to the use of street space. To this day there are countless initiatives for car free streets, that refer back to this first car free Sunday.
The energy crisis of 1973-74 is customarily blamed on OPEC; indeed it was OPEC that raised the price it charged the oil companies for crude oil. The OPEC decision, however came only after the assent of the Saudi Arabian government. Other OPEC countries had been demanding price rises for years but could not effect them because of Saudi opposition. Saudi Arabia, as the largest producer within OPEC, had (and has) virtual power to set short-term price levels unilaterally through decisions about its own production. Being dependent upon US political support, the Saudi government has always made its production and pricing decisions in collusion with US economic planners. The central Saudi bank (SAMA) is managed in coordination with the US Treasury Department. Up until 1980, the Saudi state oil company, Aramco, was run by a team of US oil companies. After 1980, it was completely nationalized but is still managed in partnership with the same oil companies, and much of its management is US and European. The Saudi decision to back higher prices for crude oil in 1973 came only after the US government gave the Saudis the go-ahead. The US government, in 1971, began telling Saudi Arabia and OPEC as a whole, that the price of crude oil should increase.
(The US role in pushing up the oil price has been well documented. See V.H.Oppenheim, Why Oil Prices Go Up: The Past, We Pushed Them, Foreign Policy 25, Winter, 1976, and Pierre Terzian, OPEC: The Inside Story, Zed Press, London, 1985)
The Yom Kippur War of 1973 is usually presented as the reason for the oil price rise: the Arab states supposedly wanted to punish the West for supporting Israel. But the war was largely immaterial to the mechanics of the rise. In fact, the Arab oil embargo was virtually non-existent and the flow of oil was at no point seriously disrupted.
The oil price rise was begun by OPEC, but the oil companies immediately raised their own prices on top of the new charges from the OPEC states. In fact, all energy companies —natural gas, coal, uranium (often one and the same) — raised their prices above and beyond the increase in oil prices. Energy sector capitalists reaped enormous profits from these price increases. Much of the increased revenue gained by the Gulf states (Saudi Arabia and Kuwait in particular) ultimately returned to international banks and stock markets. This process, known as the recycling of petrodollars, involved enormous sums — hundreds of billion of dollars — and became essential to capitalist strategic planning thereafter. At the time, they represented the largest financial flows in the world. This new mass of investment capital allowed capitalists to intensify the automation and computerization of factories in North America, Europe, and Japan.
Source: Midnight Oil in Oil, Guns and Money, Midnight Notes Collective, Autonomedia 1992
- “The real challenge of the energy problem is not a struggle with outside adversaries, as in most great crises of the past, but within and among our respective societies. Our peoples need a wartime psychology to fight this war against ourselves. They should be prepared to tighten their belts and to share sacrifices among themselves – because it will be a long, uphill struggle.” Trilateral Papers No. 5, Trilateral Commission, 1974
Starting in the 1950s, the United States began running persistent trade deficits that created liabilities in the United States to other central banks, and beginning in the early 1960s, the United States no longer had sufficient gold to cover these liabilities. To alleviate this problem, the United States Congress on March 18, 1968 repealed the requirement for a gold reserve to back US currency. However central banks could still redeem US dollars for gold. This became a serious problem in the early 1970s when rising US inflation caused a lack of confidence in the US dollar, leading central banks, particularly the Bank of France, to redeem US dollars for gold. As a result, the United States went off the gold standard on August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value. (…) Nixon’s move undermined the Bretton Woods system and left the International Monetary Fund, Bank For International Settlements, and World Bank, all without any foundation for global monetary policy other than to rely on the US dollar as a reserve currency. This was seen as an imperial move by many, removing any and all semblance that these institutions were mediators or regulators of money markets. They were, in effect, marketing agencies for the US dollar and a system in which other currency was necessarily bound to it.
- ‘Fiat money’ or ‘fiat currency’ (usually paper money) is a type of currency, which only has value in that a government made a ‘fiat’ (i.e. decreed) that the money is a legal method of exchange. Unlike commodity money or representative money it is not based in another commodity such as gold or silver, and is not covered by a special reserve. ‘Fiat money’ is a promise to pay by the issuer and does not necessarily have any intrinsic value. Its value lies in the issue’s financial means and creditworthiness. Most currencies in the world as of 2004 are ‘fiat monies’.
To prevent speculative and manipulative attacks on their currencies, the world’s central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world’s central banks to acquire and hold more dollar reserves, making it stronger. This phenomenon is known as a ‘dollar hegemony’, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil.
The transition to an information economy requires (…) a change in the quality of work and in the character of the work process. These are the sociological and anthropological implications immediately in effect during the transfer from one to another economic paradigm. Information, communication, knowledge, and affect play a fundamental role in the production process in this respect. The first aspect of these changes, as much research has already shown, concerns the change in factory work; choosing the automotive industry as a reference point, then it is about the transition from the Fordist to the Toyotoist model. The deciding difference between both these models is, that the system of communication between production and consumption of goods, meaning the transition of information from the factory to the market and back, changes structurally. Because the production of services is aiming at non-durable goods, the work that is done in this production process can be called immaterial work, which means a kind of work, which produces immaterial goods like service, knowledge, and communication.
- During the 1960s the anti-intellectual, emotional/ intuitive processes of art-making characteristic of the last two decades have begun to give way to an ultra-conceptual art that emphasizes the thinking process almost exclusively. As more and more work is designed in the studio but executed elsewhere by professional craftsmen, as the object becomes merely the end product, a number of artists are losing interest in the physical evolution of the work of art. The studio is again becoming a study. Such trend appears to be provoking a profound dematerialization of art, especially of art as object, and if it continues to prevail, it may result in the object’s becoming wholly obsolete. Source: Lucy R. Lippard, The Dematerialisation of Art, an essay published in Art International 12:2
To focus on the study of the emerging petroleum revenues in light of the sharp increase in its price as of the beginning of 1974, I wish to introduce a new term Petrodollars. It may be defined as the Unites States dollars earned from the sale of oil. For certain historical reasons, price of oil has been and still is denominated in United States dollars.
Source: Dr. Ibrahim M.Oweiss, Petrodollars: Problems and Prospects, speaking at the Conference on The World Monetary Crisis Arden House, Harriman Campus, Columbia University, March 1 – 3, 1974