Conclusion: From Formal to Real Subsumption to Oil Capitalism



“Anglo-Persian Oil Company” advertisement 1920’s
Author: Kaveh Ehsani, Leiden University 
[ From “The social history of labor in the Iranian oil industry : the built environment and the making of the industrial working class (1908-1941)” ]


Abadan’s urban environment had to be carved out of the existing social order, by first fragmenting and then reintegrating it into the emerging regime of oil capitalism. The assembling and consolidation of this oil complex required its own spatial configuration and built environment of pipelines, wells, transport networks, ports, residential areas, security perimeters, and spaces of consumption and leisure. This process of creative destruction was not only about housing, food, public health, employment, property relations, and municipal infrastructure and services; but also ideology, culture, laws, novel institutions and, above all, a new spatial order. APOC’s archives and publications are replete with exasperated comments by company directors and managers complaining about the relentless burden of social responsibilities placed on their shoulders as a result of the scale of urban growth in Abadan, and the extent of the social disintegration in adjoining areas. Many among them thought of themselves as rugged and pioneering agents of civilization, the Empire, and scientific progress. Others sought their fortune and a career opportunities better than what was on offer in crisis-ridden interwar Britain (see chapter 4). The Company’s emergence had coincided with global events that redefined the next era, which was almost universally understood to be an important break with the world of pre-WWI. Alternatively various critical scholars have called this new era “the age of extremes”, “late capitalism”, “imperialism, the highest stage of capitalism”, or “the second great transformation”. Michel Aglietta has argued that these crucial decades augured a new mode of regulation based on a new regime of capital accumulation, while Eugene Weber saw this juncture as the end point of the transitional period when peasants were transformed into Frenchmen. Polanyi argued that the hundred year piece had come to a crashing close, and the market economy had to be either re-imbedded in a web of social and political obligations through planning, or collapse into barbarism[123].
Certainly this was an especially critical period for the colonized world[124] marked by the beginnings of nationalist calls for political participation, by the masses as well as by the new middle class professionals and nationalist elites. It was a new era for the rising class of professionals who became critically important intermediaries between labor and capital, and took on an expanding role in the regulation of social conflict in the name of universal welfare[125] (chapter 4). In Iran’s neighboring Russia and Caucasus the 1917 revolution had created a decisive historical break. For nominally independent Iran, Afghanistan, Turkey, the political turmoil as well as the popular possibilities opened up by constitutionalism and the rise of nationalism were offset by the untold miseries ordinary populations were to suffer. As I have argued in this chapter, in Khuzestan this period augured a revolutionary integration into a global[126] political and economic whirlwind that irrevocably undermined the existing social and political economic agrarian, pastoral, and tribal orders. The following decade of the 1920s saw the emergence and the intrusion of the central state and its bureaucratic- military apparatus. Oil was central to these transformations, and the sum result of the establishment of APOC and the oil complex in Khuzestan was the dispossession of customary forms of property and social organization.
Marx in volume one of Capital argues that the subjugation of labor to capital tends to begin as a formal process, with the products of labor being what matters to the capitalists, rather than who the laborer is and how they work and produce, but eventually turns into a real subjugation when capital takes hold of the entire labor process itself, as well as the laborers themselves and their reproduction. Initially capital is unconcerned with daily lives and social organizations of those who are left with no option but to sell their labor, and even those who buy the commoditized products of that labor. However, as competitions and class strife take root, and technical knowledge and more intricate division of labor gain more importance, the continued accumulation of capital needs to gradually take hold of ever more detailed aspects of collective and individual lives in order to continue the work of extraction from nature and surplus value form people. At some stage, the formal subjugation of labor is transformed into a real subjugation, when those who have to sell their labor power no longer have access to an alternative social and economic order, and end up with little option but to consider themselves integral to the process of accumulation of capital.
Marx’ reference point was England where by the last quarter of the 19th century, the organized laboring classes were no longer targeting industrial machines and the factory regime as the enemy, but had begun to negotiate a role within the industrial and capitalist order by treating their own labor power as a commodity, and pushing for improved material conditions and a greater say in the political society[127]. E.P Thompson noted that this coercive transition was profoundly cultural, and not purely material. The embodiment of industrial time and industrial rhythms in lieu of agrarian or even merchant regimes of time, based on seasons, knowledge of climate and navigation, etc. marked this passage as much as the emergence of the modern working class trade unions or electoral politics[128]. I have argued in this chapter that the establishment of APOC in Khuzestan was also fundamentally a process of primitive accumulation of capital in oil, the commodification of labor and space on the basis of enclosures and the dismantling of existing modes of collective social and economic life. The collusion of local magnates, tribal leaders, and political elites was pivotal in making this transformation a reality, as were legal contracts and geopolitical maneuvers, backed by the military and economic might of the British Empire, that created conditions where everincreasing populations were dislocated and had to move to the new urban environment that allowed the oil complex to come into existence. The assembling (rather than “the birth”) (see chapter 1) of the oil industry was predicated on dismantling the existing social order, and gaining exclusive access to land that was productive for oil capitalism. This assemblage required safety, certainty, and practicality. It had to be constantly maintained and reproduced through relentless effort, technical, scientific, financial, as well as political. It had to be defended, and made acceptable to those resisting or refusing to serve it. The history of Khuzestan in 1908-1911 reveals this protracted and highly contested process of real subsumption of the existing social order to the emerging oil complex. In the following chapters I will demonstrate that the real subsumption of labor to capital, began in earnest in the 1920s when the Company had to shift policy due to radically changing circumstances. These changes were taking place at all levels- global, national, and local- and in various domains: in the place of oil in the emerging Fordist regime of accumulation, the transformation of corporate organizations ushered in by the rise of multi national corporations, and in seismic global political shifts that included the Russian Revolution, the rise of the American prominence, the dismemberment of the Ottoman Empire and a changed regional dynamic, and not least in profound domestic political challenges facing post War Britain and Iran. As a result of these shifts at global and national scales, the Qajar dynasty was replaced by the nationalist and authoritarian Pahlavi state, whose mission was to build a modern and homogeneous nation state out of the heterogeneous population and fragmented territory of Iran. Locally in Khuzestan, APOC had to reluctantly adopt various forms of paternalism, in the form of municipal welfare, public health measures, and rudimentary urban planning. These measures were undertaken initially in order to retain and reproduce its skilled labor force, and to placate the rising central state, and a mushrooming urban population. As the industry was further consolidated the necessity of making a permanent industrial working class, to replace the casual and unskilled labor force became an unavoidable priority (chapter 6).

At the same time, by mid 1920s, the bureaucracy and administrative-military apparatus of the central government had begun to take shape and to lay claim to its sphere of sovereignty in Khuzestan. This administrative machinery was not purely coercive, since it had to also fill the vacuum left by the demise of Khaz’al and the tribal order. In other words, it had to display “the will to improve”[129] the general living conditions of the growing urban population of Abadan. Elaborating on Foucault’s theory of power to analyze the development regime in Indonesia, Tania Murray Li has argued that modern governmental power is exercised through three levels of sovereignty, governmentality, and disciplinary power[130]. The discussion in the next chapter will show that the governmental machinery, as it was gradually assembled and asserted in Khuzestan, operated at these three levels outlined by Murray-Li: It ruled and subjugated, it sought to perform and define general welfare, and it set up a disciplinary apparatus aimed at shaping the individual. At a micro level, the local society consisting of Bakhtiyaris, Arabs, Lurs, men and women, migrants from other regions, etc. found themselves dispossessed, materially as well as socially and culturally. They were effectively coerced to first adapt, and eventually to integrate into the intertwined systems of oil capitalism and nation-state. However, this integration was full of friction and turned out to be a protracted and negotiated process. The present chapter discussed the contractual relations between the Oil Company and provincial potentates in Khuzestan, that effectively prepared the ground for the creative destruction of the existing order to make room for the emergent oil capitalism. In the next chapter I will focus on the global shifts that took place during and after WWI and changed the nature of political power and the rules of accumulation in industrial capitalism. In chapters 5 and 6 we will return to the local scale, in order to analyze the frictions between the Oil Company, the emerging state bureaucracy, and local populations over property relations and the control of land and the built environment during the interwar years in Abadan, the heart of APOC’s operations in Khuzestan. Land/space was the key resource for all these actors, albeit in very different ways. How the power over shaping space was struggled over and reallocated tells us much about the nature of the oil encounter.



123. Vladimir Lenin, Imperialism as the Highest Stage of Capitalism; Eric Hobsbawm, The Age of Extremes: A History of the World, 1914-1991 (London: Michael Joseph, 1994); Michel Aglietta, A Theory of Capitalist Regulation, New Edition (London: Verso, 2000); Eugen Weber, Peasants into Frenchmen: The Modernization of Rural France, 1870-1914 (Stanford: Stanford University Press, 1976); Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time, 2nd ed. (Beacon Press, 2001); Ernest Mandel, Late Capitalism (London: Verso, 1978). Of course, for Polanyi the 1920s are just as decisive because of the crises caused by war reparations imposed on Germany, the crises of the abandonment and re-adoption of the gold standard, and the vagaries of laissez faire capitalism that led to the Great Dhad epression, the rise of fascism and Stalinism, and WW2.

124. See Frederick Cooper, On the African Waterfront (New Haven: Yale University Press, 1987); Frederick Cooper, Confronting Historical Paradigms: Peasants, Labor, And The Capitalist World System (Madison: University of Wisconsin Press, 1993); Timothy Mitchell, Rule of Experts: Egypt, Techno-Politics, Modernity (Berkeley: University of California Press, 2002), Chapters 2–4; Beinin, Workers and Peasants in the Modern Middle East.

125. See Robert Home, Of Planting and Planning: The Making of British Colonial Cities (New York: Routledge, 1996); Harold Perkin, The Rise of Professional Society: England Since 1880, 2nd ed. (New York: Routledge, 2002).

126. I am using the term ‘global’ not as a flat adjective implying the emergence of a unitary world system, but within the tradition of Global Labor History, as a maelstrom of transnational, conflicting, and deeply interlinked political, economic, and ideological currents (see chapter 1).

127. Marx saw this shift as important but futile, and believed only a revolutionary rejection of capitalism would serve as a solution to the crises of capitalism.

128. E.P. Thompson, Customs in Common, see especially Pp. 352-403; and idem, The Making of the English Working Class. Michel Foucault’s notion of disciplinary power is also deeply indebted to Marx, although without acknowledgment. Foucault wants to situate the discursive structures of modern power outside the time frame of capitalism, in order to avoid what he perceived as a reductionist metanarrative in the Marxist theory that reduced the analysis of power relations to forms of property, and a narrow definition of social class. Michel Foucault, Discipline and Punish : The Birth of the Prison (New York: Pantheon Books, 1977).

129. Li, The Will to Improve.

130. Ibid.


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