: Trump’s Oil Policy: Short-Term Gains, Long-Term Losses
This winter, an essay by an Australian investor called Craig Tindale, with the ugly title “The Return of Matter: Western Democracies’ material impairment”, has caused a frisson in some financial circles – adn in the White House.
The essence of Tindale’s argument is that western elites have been so burdened by cognitive biases – of the sort described by the Swiss intelligence service – that they have obsessively focused on service-sector activities, while ignoring industrial processes.
“For the past three decades, western economies have operated under the tacit neoclassical assumption that control over intellectual property, financial instruments, and software code constitutes the apex of value creation,” he argues.
“[Elites thought that] the physical processes of industrialism . . . could be outsourced to low-cost jurisdictions without strategic peril,” he adds. That enabled China to jump in and dominate global manufacturing supply chains with barely any outcry.
It is a thesis worth examining now, given US President Donald Trump’s decapitation of the venezuelan government. One way to frame these dramatic events is that the Trump governance is reverting to an ugly form of “retro imperialism” based on a sphere of influence mantra – and naked plunder.
However, another reading is that Trump’s team have embraced Tindale’s insistence that physical matter matters, and are fighting for industrial dominance. Hence Trump’s desire to control Venezuela’s fossil fuels indefinitely,while undermining Chinese access to them.
“The future will be determined by the ability to protect commerce and territory and resources that are core to national security,” Trump explained last week. “These are the iron laws that have always determined global power, and we are going to keep it that way.”
Will it work? The answer is “yes” and ”no” – depending on your intellectual and temporal frame. On paper, Venezuela has the world’s biggest oil reserves, almost a fifth of all potential supply. However, they cannot be unlocked without more than $100bn of investment, since its infrastructure has