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Gadhafi, or any tyrant who violates the human rights of citizens, can be reckoned as weak rather than strong from a Nietzschean standpoint. Such an analysis could embolden (i.e. awaken) protesters around the world who remain under the subterfuge of a ruler's enforcement of his or her assumed dominance.

USA Today reports that “(t)roops loyal to Moammar Gadhafi may be torturing and executing rebel prisoners.” This is according to human rights workers and physicians near the front lines. Such treatment would constitute war crimes under the Geneva Convention. Physicians said the bullet wounds on one man's body weren't meant to kill, but to torture. "When you put a gun to his head, that's execution," said Mohammed Hussain, the head of intensive care at a hospital near the front lines. "When you shoot him here and here and here, that's something else. That's torture. They want him to feel the pain." This last remark struck me as particularly revealing.

What sort of mentality derives a feeling of pleasure from perceiving another person in pain? To what extent is it the other person feeling the pain that is pleasurable to the person watching? Alternatively, the inflicting of the pain could be pleasurable. The inflicting pleasure for the inflictor might involve the pleasure of having power, as in having control of another person against the other person’s will. Such a will to power is a principal motivator, according to Nietzsche. He avers that human beings are primarily motivated to feel the pleasure that comes with exercising power. Yet such pleasure is in the exercise of one’s strength rather than in cruelty itself.  It is the weak, who, in being driven to dominate beyond their innate strength, delight in cruelty as a means to enforce their domination. In other words, the weak who have an irresistible urge to dominate have to instill (or inflict) their dominance because they are not strong and thus naturally to be respected as powers.

Therefore, the troops loyal to Gadhafi were displaying their condition of weakness rather than their strength by devoting time and energy to being cruel.  With the strong, damage is incidental to the charge rather than intended; the strong relish their experience of strength in conquering and therefore they are not interested in cruelty.  That is to say, harm is a byproduct of the vanquishing by the strong, as the latter conquer out of their overflowing confidence of strength. This can perhaps be thought of in terms of stepping outside in the cold after building up a sweat from exercise—the excess heat radiates outward from one’s body such that one does not even feel the cold air. What is the cold to me?  Similarly, what are the parasites to me who fall by the wayside as I take the village?  Any intent to be cruel to a parasite would be a waste or diversion from the strong vanquisher’s self-confident feeling of power that naturally issues out in his or her strength. Only weakness with a relentless instinct to dominate would be oriented to cruelty as a means, for the feeling of pleasure of strength is not available or realizable.

For example, "Col. Gadhafi's militias are brutal," said Mustafa El Gheriany, media liaison for the Transitional National Committee according to USA Today. "They did that probably on purpose to scare our young men, to show them that they are not taking prisoners.” This motivation would be an alternative to simply wanting to inflict pain or to see another person feel it. Even so, the use of cruelty as a means is ultimately to impose one’s dominance, which means that the person’s strength is not sufficient. In other words, the person using cruelty to send a message has an urge to feel more pleasure from power than his or her weakness can proffer in itself.

Essentially then, human rights advocates point to the tactics whereby the weak who suffer from a hypertrophic drive to dominate seek to enforce, or take, beyond their native pith. This investigation can lead to the following questions. Why is it that certain persons of weak constitutions seek to dominate nonetheless, rather than simply to be content with whatever pleasure naturally issues from the power in the strength they do have? Furthermore, is dictatorship as a form of government a weak form in that autocrats do not simply lead, but are almost invariably oriented to efforts to enforce their dominance by intentionally inflicting pain on protesters?  It would be ironic were unarmed protesters in the streets stronger than the rulers whose dominance is being questioned or repudiated.  Indeed, such repudiation strikes at the core of the effort of the weak to dominate; hence such violence as was evinced by Gadhafi should be no surprise.

To the weak who are driven to dominate, the refusal of others to acknowledge the imposition or enforcement of their claim must be utterly intolerable. “How dare they!” the weak dominator is apt to exclaim even though the strong naturally rebuff the pretentions of the weak.  In fact, Nietzsche thought it remarkable that the weak are able to hoodwink the strong into taking the autocratic enforcement mechanisms seriously.  In the case of the mass protests, enough fortitude among enough unarmed protesters could simply overflow the boundaries invented by the tyrants. Were the people itself mobilized, the autocrat might realize that were the entire populous killed, he would have no one to dominate!  There would be no feeling of pleasure in exercising power over a dead city. The strength in the people as a whole lies in simply being able to say no, yet this strength is typically hid from the strong by the weak who benefit from the subterfuge.

Click to add a question or comment on human rights in Libya according to Nietzsche.

Source: Greg Campbell, “Libyan Doctors Suspect Brutal War Crimes,” USA Today, April 12, 2011, p. 6A.

"When a leader's only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now." The White House issued this written statement five days after Qaddafi had turned in violence on his own people who were protesting unarmed in the street. Nearly three weeks after the first day that Qaddafi had lost legitimacy, President Obama tried to raise the pressure on the Libyan dictator further by talking about “a range of potential options, including potential military options."  Yet by then the politics of such intervention were getting more complicated by the day, according to The New York Times. The paper reported that critics were contending that the White House was too much concerned about perceptions, and that the administration was too squeamish on the military options on account of the preceding administration's invasion of Iraq based on a claim of danger to the United States from Saddam's access to WMD. Even the critics acknowledged that the best outcome militarily would be for the United States to join other nations or international organizations rather than go it alone. About a week after the president's hint of military options, the E.U. decided not to impose a No Fly Zone. A few days later, the Arab League, which, according to The Hoffington Post, had already barred Libya's government from taking part in League meetings, issued a statement that Qaddafi's government had "lost its sovereignty." The League decided to establish contacts with the rebels' interim government, the National Libyan Council, and to call on the Security Council of the U.N. to impose a No Fly Zone on Libya.  In a statement, the Arab League asked the "United Nations to shoulder its responsibility ... to impose a no-fly zone over the movement of Libyan military planes and to create safe zones in the places vulnerable to airstrikes." It would not be until March 18th, nearly a month after Qaddafi had first had weapons used against the protesters, that the Security Council would act. According to The New York Times, "After days of often acrimonious debate, played out against a desperate clock, as Colonel Qaddafi’s troops advanced to within 100 miles of the rebel capital of Benghazi, Libya, the Security Council authorized member nations to take “all necessary measures” to protect civilians, diplomatic code words calling for military action." Within days, according to The New York Times, "American and European forces began a broad campaign of strikes against the government of . . . Qaddafi, unleashing warplanes and missiles in the first round of the largest international military intervention in the Arab world since the invasion of Iraq."

Analysis:

It is tempting to focus on weighing the pros and cons of the military engagement, including how it came to be decided (It took too long), whether the genuine motive was oil or human rights (I suspect oil), and whether we were being consistent, given abuses against protesters going on in Bahrain and Yemen at the time (We were not, and this points back to the motive being to stop or reverse the gas price increase caused by speculators overstating the supply-impact of political instability--see my essay criticizing corporate political risk analysis and its self-fulfilling prophesy).  To be sure, I weave these matters in my analysis, even if merely implicitly in some of their aspects. However, I prefer to bring out dynamics that might otherwise be overlooked by tracking events on the ground. I approach the Libyan case as a learning opportunity that can be placed in a larger framework oriented to the long-term. Hoping for a progression in the way the human race organizes itself, I look at ways in which international organizations can be reformed and principled leadership involved to protect and defend citizens' human right to life against encroachments by their own governments. As a backdrop to my argument, I submit that the matter of whether or not to engage in a military intervention can be thought of in terms of a window of opportunity with respect to human rights. After discussing this matter, I turn to the matters of international organization reform and principled leadership geared to human rights. While this essay is long, I beg the reader's indulgence in my attempt to proffer a substantive treatment of the subject. My aim is not limited to agreement; I hope my thoughts and reasoning, and even the values I presume therein, stimulate (or provoke) the reader to greater thought and proposals than I can muster.

"This is a window of opportunity for the United States," Zahi Mogherbi, an adviser to the Libyan rebels' interim government, had said weeks before the Security Council's vote. The most basic shift that had occurred in the three weeks between Obama's two statements was from a government turning on its own people to a military divided between being loyal to Qaddafi and supporting of the rebels.  Even though the eventual international fire power is not without merit in protecting Libyan civilians, I contend that it is far easier to justify external military intervention against a government that has turned on its own unarmed people because such a basic betrayal involves a complete loss of legitimacy to rule, as the Obama administration noted in its statement five days after Qaddafi's decision to kill protesters.  By the time the conflict had become one between armed rebels and the military loyal to Qaddafi--that is, what the West was calling a civil war--the window to boldly declare with military force that the Libyan government would not be allowed to turn on its own (unarmed) people--had passed. The protesters had been replaced by rebels. Even if successful external military intervention was still possible, the human rights justification had weakened because a government is on firmer ground in fighting armed rebels. As the saying goes, it takes two to tango. To be sure, Qaddafi's forces were killing unarmed civilians "without mercy," according to the tyrant himself; the human rights element had not dissolved even if it was extant with contests taking place on the field of military battle.  Even so, just five days after the government of Qaddafi had turned on the people it was to protect, the claim that Qaddafi had lost the right to rule was being overlaid by the observation that Libya was entering a civil war with two armed camps. As the saying goes, it takes two to tango (though dancing alone or in a group seems to be the rule in techno music nightclubs). The transition from a human rights violation to the more ordinary civil war can occur in days in a fast-moving situation on the ground.  Referring to the window that was rapidly closing for military intervention, Zahi Mogherbi observed of the U.S. Government, "They are not taking it or they are taking their time."

Even if military action being delayed a month so diplomatic channels could result in a U.N. resolution could ultimately facilitate or bring about Qaddafi's downfall (hence such action is worthy of support), President Obama missed the window of opportunity in which he could have claimed to be stopping Qaddafi from violently turning on his own people rather than from winning a civil war by going after civilians and rebels in rebel areas. Talking to reporters on March 19th, the first day of the U.S. involvement in the action, Obama said, "we can’t stand idly by when a tyrant tells his people that there will be no mercy.” But the president did stand idly by, for roughly a month since Qaddafi's violence on February 21st.

Both the idiosyncratic and bureaucratic features of the diplomatic route that the U.S. and E.U. choose to take point to the need for a new international mechanism if the world wants to protect and defend--in real rather than diplomatic time--the human right of civilians to life when their own respective governments are acting to sever that right. Absent such an expedited mechanism, principled leadership by individual rulers with significant military force are obligated by a universal duty of conscience to fill the gap rather than wait on diplomats to make deals. The basis of such leadership would not be a self-serving desire to be the world's police or to protect some vital resource such as oil; rather, the operative principle would be what David Hume calls the sentiment of moral disapprobation, which all non-sociopath human beings feel at the sight of unjust harm.  I begin with the institutional reform argument, after which I discuss the naturalistic basis of principled leadership.

Governments siding with rebels against a ruler the other rulers don't like is far more familiar in international diplomacy, and thus readily routinized, than is standing on principle with teeth. It is thus no wonder that the politics became more complicated by the day as Obama consulted with allies before the Security Council's vote.  In short, the American president had missed the window when a non-routine idiosycratic decision to stop Qaddafi's violence against the protesters could have been taken in the realm of human rights rather than stopping a civil war. Obama rather quickly faced institutional and diplomatic hurdles involving other countries and international organizations. It could have been predicted, for example, that Hilary Clinton's statement that the matter must be decided by the U.N. would meet with Russia's apparent refusal to go along with even a no fly zone--that is to say, with paralysis until a deal could be made. Such is the nature of routine international relations: both the U.S. and Russia evinced the rigidity and absolutism (my way or the highway) of international diplomacy that eventuates the need for one government to pay off another. In the case involving Libya, the rise in oil prices was undoubtly in the mix motivating a deal; such an inducement, and indeed economic incentives in general, cannot necessarily be relied on to close such deals. Therefore, even if it is successful in particular cases, international diplomacy leading to a Security Council affirmative (i.e., non-vetoed) vote cannot be relied upon even for eventual action. it is certainly not set up to act on the expedited basis that is required to arrest human rights violations in real time. In short, the world needs another mechanism.

 Lest it be thought that the Arab League could be consistently relied on to de-recognize a member government's right to sovereignty, the League's decision against Qaddafi in particular was informed by the particular circumstances at the time.  According to The Hoffington Post, "Amr el-Shobaki, an Egyptian political analyst, said the decision reflects the upheaval in the Arab world, which also includes serious unrest in Bahrain and Yemen as well as rumblings of anti-government dissent in Saudi Arabia, Jordan and Iraq. . . . El-Shobaki also said Gadhafi has few real friends among Arab leaders – he has publicly clashed with and insulted many of them, including at Arab League summits." Rather than showing itself as a check on governmental abuse in the Middle East that the world could rely on, the League evinced concern for its members' internal political stability and dislike for a particular ruler. To the extent that the Arab League's request was requisite for the Security Council's vote oking military intervention, not to mention it just being debated, the entire chain of international diplomacy in this case can be seen as highly particular to this case, and therefore not necessarily to be triggered the next time a dictator turns against his or her people.

Therefore, lest mankind be left to the trepidations of indecision at the expense of arresting human rights violations in real time and to the self-interests of rulers as governments around the world and their international organizations hinge on the contingencies particular to the cases, I contend that either a permanent mechanism that involves a transfer of some governmental sovereignty beyond the nation state be designed and instituted, and, in the meantime, that some courageous ruler establishes the precedent of principled leadership to stop an abusive ruler in the act (or at least to divert his attention). While principled leadership would be an advance, it would only be of temporary utility, as leadership is not as long-standing as are institutions. With an accompanying transfer of sufficient governmental sovereignty (while designing a check to prevent abuse), an international institution can act in a timely manner befitting the timeline of human rights violations.

Going through the U.N. as it was initially designed cannot be relied up to stop or mitigate the violation of human rights by rulers unless some governmental sovereignty is transferred to the Security Council (e.g., no vetos). As discussed above, the existence of vetos translates into the need for governments to be essentially paid off, and such deals and the economic constallations conducive to them cannot be relied upon on a consistent basis because they are idiosycratic to the parties of the deals and the particular geo-political and economic context (as well as the particular villain). The combination of the vetos in the Security Council and the sheer diversity of opinion that one can expect in body representing over two hundred countries around the world--specifically, the diverse views on the nature and extent of national sovereignty--make it virtually impossible for the U.N. to proffer effective responses with teeth in real time. In dealing with Qaddafi, it took the Security Council about a month, and who knows but the governments themselves what China and Russia got in exchange for their abstentions.

As an alternative or co-reform, NATO could be reformed in its governance such that an expedited procedure could be devised to assess and possibly respond to a human rights violation by a ruler inside or out of NATO. While weighing the options on Libya, President Obama indicated that bureaucrats at NATO headquarters were weighing the options of the alliance attempting a joint military involvement, but NATO decisions take place in the allies' respective capitols rather than by bureaucrats at NATO.  This arrangement of power in the alliance inexorably makes for slow decision-making, even when a window of opportunity is brief. Because the diversity of opinion is likely to be less among NATO members than at the UN Security Council because NATO is on a smaller scale, that alliance is the more suitable agent to gear any military response to a government "gone rogue."  For this to be possible, some governmental sovereignty must shift to the alliance so a council or office holder standing for the entire alliance can make a timely decision. Just as an external military intervention itself implies that national sovereignty (e.g., of Libya) is not absolute, the same qualification must needs be applied to NATO for it to serve as a viable stand-in for the world in "just saying no" to continued governmental betrayal.

Given the staying power of the absolutist interpretation of national sovereignty, principled leadership might be the best the world could hope in the meantime. For example, the U.S. President or E.U. leaders could boldly make a stand against a government turning against its own people and intervene unilaterally or in a joint U.S./E.U. mission. Each of these unions is empire-scale, and thus would carry a lot of weight in standing on principle not just by saying that a ruler is no long legitimate, but also actively stopping him or her in real time. To be sure, to the rest of the world there would be more credibility involved when such an intervention is not limited to one region or two unions. In the Libyan case, the U.S. was indecisive from the outset and the E.U. was too divided and state rights' oriented.

 Governors of countries can discern the need to act quickly to respond in real time before a window closes from when an issue should be turned over to diplomatic channels. I suspect that the people of the world have come to the conclusion that the doctrine of the absolute right of national sovereignty is antiquated because it is incompatible not only with there being boundaries to legitimate rule, but also with the defense of human rights from across a political border. That is to say, the absolutism is incompatible with the interconnected world's growing demand that human rights be respected even by those in power.  Hence it should be no surprise that the world was dismayed by the shuffling by the Obama administration and the leaders of the E.U. while a dictator was on his own people.  Had the E.U. (or some of its state governments) and/or the U.S. exercised force based on principled leadership before the window of opportunity had closed, the world would have crossed a threshold through the establishment of a new precedent. Governments abusing their own citizens will have been put on notice rather than enabled like alcoholics by ineptitude and indecision until a possible Security Council resolution could be passed. A coalition of the willing is likely to naturally form in little time after a principled leader has taken a stand in action and not just word. Such a leader would not be delayed from endless debate on his or her country's best strategic interest; rather, he or she would act on principle. 

Although nearly a month after Qaddafi first turned on his compatriot protesters, Sarkozy expressed a principled basis for the external military intervention that had begun that day (albeit having waited for the Security Council's action a few days before). Referring to the "murderous madness" of a regime that has "forfeited all its legitimacy," Sarkozy justified the involvement of his airforce fighters as he spoke "in the name of the universal conscience that will not endorse such crimes." A universal conscience is rooted in human nature; such a basis is not conditional on a U.N. resolution. From his state capitol in the fractured E.U., Sarkozy made a principled declaration that resounded like a shot heard round the world--carried almost instantaneously as though by reflex by a mass of humanity "tweeting" through the ether. He asserted that it is our duty to respond to the anguished appeal of civilians.

                                          From NYT, March 20, 2011
What Sarkozy neglected to say, however, was that the appeals had begun roughly a month earlier when Qaddafi's henchmen began shooting down funeral mouners in the streets of Tripoli. To be sure, Libyan protesters-turned-rebels who would have been subject to Qaddafi's "no mercy" were surely saying, "better late than never," as they stood on the dictator's ruined tanks after the first bombing campaign of the international coalition. Even so, a bystander could certainly be pardoned for surmising that the duty to respond without standing idly by had been triggered in America and Europe by a desire to lower gas prices or even to keep them from going still higher than they had in the previous two or three weeks--a consumer-driven political response, in other words. A fundamental moral duty, meaning an obligation to act, that comes from "the universal conscience" of human beings, does not 'click in" as soon as political self-interest chimes in. The window for such a duty as the primary and genuine motive closes as time and selfish considerations are allowed to intercede and the immediacy of the felt-conscience fades. To grasp this point, it is necessary to discuss the nature of the duty's basis in human nature.

 The duty, being as universal as is conscience (i.e., excluding socio-paths and Yankee fans), is sourced in a naturally-felt psychological sentiment of misapprobation, which David Hume argued constitutes moral judgement itself. This sentiment is naturally felt in watching or learning of unjust harm, such as from a governor of a country turning against his own unarmed people by wantonly having them killed simply for protesting. Of course, while still active in the case of civilians, this feeling/principle is mitigated when it is armed rebels who are being killed--hence the window of opportunity for a human rights-based principled leadership. It is natural for any human being to be filled with utter disgust at the squalid sight of innocent civilians being shot by government troops. So it is also natural for a person to want to step in and stop the atrocious harm at once. The natural propensity of compassion manifesting in instantaneous word and deed is also evinced in a person who pulls a rapist off a young woman on a city street while people passing watch while quietly conferring with each other on what, if anything, they can or should do before they continue on with their plans. Such bystanders, unfortunately all too common in the world, are mere epigones in the human race; they are hardly natural leaders even if they have gained the power of political office by having woven words of saccarine silk. The person taking it upon himself to pull the rapist off the defenseless victim, on the other hand, is a natural leader in touch with his own humanity; he is thus able to act with humanity. He is not presuming to be his own police force for the city; rather, such a person is instantiating the highest that humanity has to offer: caritas naturalis, seu benevolentia universalis (natural higher human love raised high rather than remaining low in lust for power, money, or sex; that is, love as universal benevolence).

In conclusion, were the world not so focused on Qaddafi during his escapades, we might have used the ferociousness of his violence against civilians to evaluate not only the way other rulers reacted (or failed to react), but also what institutional reforms could have expedited the process befitting the nature of human rights violations and how principled leadership could override political expediency and bureaucratic meandering, even if only in theory yet. To be sure, principled leadership is contingent and short-lived, given the nature of leadership itself. For this reason, even in the event of such leadership manifesting and establishing a precedent, the world would be well advised to continue to work toward an international institutional mechanism that has some real teeth in protecting unarmed citizens from their own rulers. Even in the excitment over the Security Council's sanctioning of "all necessary means" to protect Libyan civilians, the world would be wise to ask: how could the process have been better from the standpoint of defending human rights? The key to the institutional reform, the world would realize, is the same as the rationale for removing a sitting governor: the qualification of national sovereignty from the absolutism advocated by Jean Bodin and Thomas Hobbes in the sixteenth and seventeenth century, respectively. For these two thinkers, only God's law can restrain the power of a human sovereign, and then most probably in the ruler's afterlife. According to Hobbes, for example, the human sovereign--the Leviathan, or king of the proud--has the exclusive right within his kingdom to interpret divine law (even such authority was thought by Hobbes necessary to avert civil war in the contentious seventeenth century in Britain). In any case, political theory in the twenty-first century need not be held hostage by an antiquated theory devised in and for a very different context and distant time. Technology alone has made the world much more interdependent, and thus in need of stronger international agency, albeit with adequate checks and balances to prevent abuse of the added authority.

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Sources:

http://www.nytimes.com/2011/03/08/world/middleeast/08policy.html?pagewanted=1&_r=1&ref=todayspaper
Jim Michaels, "Is Libyan 'Window of Opportunity' Closing?," USA Today, March 10, 2011, p. 6A.
http://www.huffingtonpost.com/2011/03/12/arab-league-asks-un-for-libya-no-fly-zone_n_834975.html
http://www.nytimes.com/2011/03/18/world/africa/18nations.html?hp
http://edition.cnn.com/2011/WORLD/europe/03/19/france.libya.meeting/index.html
http://www.nytimes.com/2011/03/20/world/africa/20libya.html?hp

With much power comes implicit responsibility. Hence, on February 21, 2011, the world recoiled when Gaddafi violently turned on his own people--using his power sans responsibility in a selfish attempt to stay in power. So too, the world had been shocked in April, 2010 when BP's Deepwater Horizon oil rig exploded in the Gulf of Mexico and that the Gulf itself was at risk. That a company could ruin something as big as the Gulf of Mexico came as a surprise to many. That a company, or three in this case, could have minimized such a risk by, for example, sending the U.S. Government contingency plans on Gulf clean up that included rescuing sea animals that actually live in the artic, shocked the public just as much. How could people holding such power treat its use with such carelessness concerning any downside?  The defense of having followed company policy or having excuted business procedures pales in comparison with the societal demand that power, whether public or private, be handled responsibly.  In other words, people take it for granted that power is given to adults rather than to children.  I think we would be surprised how often this has not been the case.  The case of Transocean demonstrates this thesis.

Transocean, which owned the Deep Water Horizon that exploded in April of 2010,  was the subject of a criminal investigation into possible tax fraud in Norway. The company indicated in S.E.C. filings that Norwegian officials could assess it about $840 million in taxes and penalties. The filings also contended that a final ruling against Transocean could have a “material impact” on the company. The company was also the target of tax inquiries in the United States and Brazil. Furthermore, drilling equipment from Transocean was shipped by a forwarder through Iran and until 2009 the company had held a stake in a company that did business in Syria. The State Department claimed at the time that Syria and Iran sponsor terrorism.

In reaction to these charges,  a Transocean statement simply claimed that the managers at the company had always acted appropriately and that they would prevail in any investigations. This is interesting, for “always” is quite an accomplishment.  Once I took a self-inventory and one question was “I always tell the truth.”  Of course, no one always tells the truth, so the question was geared to assessing how truthful one is in taking the test.  Had I answered yes, I would have been lying. The transocean statement, taken by itself, indicates a proclivity to lie, for no human being always acts appropriately. Transocean's statement evinces a certain arrogance, as if to say, "We are above reproach."  Such an attitude is dangerous where there is sufficient power at one's disposal that one's actions can do real damage to the planet.

Transocean, which drilled in some 30 countries and employed more than 18,000 people, owned nearly half of the 50 or so deepwater platforms in the world in 2010. “These people are capable and considered the gold standard of deepwater drilling,” said Peter Vig, managing director at RoundRock Capital Management, an energy hedge fund in Dallas.  I contend that expertise in drilling does not sufficiently counter the kind of charges that were brought against the company. To focus only on expertise in operating machinery or in managing a company as though they were all that matters in business is to hold an extremely narrow perspective on what counts. Furthermore, to let blantantly false asseverations stand (such as of always acting appropriately) is to enable a pattern that can literally destroy a major marine ecosystem.

Source: http://www.nytimes.com/2010/07/08/business/global/08ocean.html?_r=1&hp

See related: http://euandus3.wordpress.com/2010/06/10/bp-dividends-to-stockholders/   http://euandus3.wordpress.com/2010/06/17/tony-hayward-sticking-to-script-safety-is-bps-priority/

Even though people the world over instinctively recoiled as reports came in of Gadhafi's violent retaliation against Libyan protests on February 21, 2011, the official reaction from the US Government was muted at best. The refusal to act on an intuitive response to immediately remove the Libyan dictator's ability to wantonly kill people resisting his right to rule may have come from concerns that the mounting tumult of a change of government in a major oil-producing region of North Africa could cause even just a disruption in the supply of crude. Indeed, even the mere possibility was prompting a spike in the price of oil (and gas)--what one might call a risk premium. Even the prospect of an ensuing nasty electoral backlash from consumers having to face a possible increase in their largely non-discretionary gas expense was not lost on their elected representative in chief at the White House.  Even five days later, after some serious press on the rising price of gasoline hitting American consumers, the most the president would do is proffer a verbal "demand" from afar that Gadhafi leave Libya.  "When a leader's only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now," the White House said in a statement. The dictator must have been shaking in his boots.  In actuality, Gadhafi had lost his legitmacy to rule five days earlier, and by the day of the statement the American administration could have been actively involved with willing EU states in stopping him inside Libya. Given the progress of the protesters-turned rebels and the behavior of Brent crude that week, the interests of the American consumer (and Western oil companies, as well as the business sector over all) were by then firmly in line with an enforced regime change in Libya.  Oddly, the old dogma of an absolute governmental sovereignty was colluding with an inherently excessive risk-averse corporate political risk methodology to hold America back from acting as midwife to a new political awareness breaking out in the Middle East.

On the day of Gadhafi's self-vaunted shooting spree, Brent crude benchmark vaulted past $108 a barrel (settling at $105.74, a two-year high).  On the following day, it rose to $111.25. On the first day of March, the Dow Jones Industrial Average dropped 168.32 points, or 1.38%, to finish at 12058.02, its third triple-digit decline in the past week. Oil futures on the New York Mercantile Exchange, already up 6% this year, jumped 2.7% to settle at $99.63 a barrel.  Brent Crude in London hit $115.42 a barrel, the highest settlement since Aug. 27, 2008.The graph below shows the change in oil, though the change looks astounding in part simply because the graph only goes to 15%; were it to go to 100%, the picture might seem less dramatic.

The Wall Street Journal had reported already on February 21st that the rise was "driven by increasing unrest in the Middle East." Specifically, worries that the turmoil in Libya was curtailing output of that country's oil were said to be driving the price climb. However, USA Today cites Darin Newsome, an energy analyst at DTN, as pointing to the role of speculators around the world as propelling the price of oil. "The flow of money plays an enormous role in the direction, speed and volatility of these markets." In fact, the market mechanism itself may be flawed because speculators could push commodity prices out of sync with the underlying supply of the respective commodities. Turmoil in Libya cannot be blamed for the ensuing “creation” of artificial value (such an increase, by the way, had fueled the housing bubble in the US that came in for a hard landing in 2008). In fact, the rise in world oil prices began before the final third of 2010—before the prospect of widespread popular protest in the Middle East was realized. Indeed, the climb during the last third of 2010 looks a lot like that which took place in the first third of 2009 (during a recession). It was not until well into February, 2011, that the turmoil in the Middle East appeared, according to MSNBC, “to pose limited risk to global oil supplies. Neither Tunisia nor Egypt produce oil or gas.” Such “limited risk,” besides being mitigated, cannot very well be projected back well into 2010 to explain the rise in the price of gas.


Incidentally, another interesting feature of this graph is the sustained drop in 2008, before the financial crisis in September (and the U.S. Presidential election in November!).  The “V” pattern at the end of 2008 is classic “electoral.” It suggests that the price of gas may be very attuned to the electoral interests of those in power, and therefore to government policy. My contention in this essay is that this dynamic was alive and well in Washington when Gadhafi was turning on his own people.

In any event, The Wall Street Journal observed on the day after the massacre that rising oil prices "could have big implications for the U.S. economy." Although perhaps overreacting from the day's news, it is true that the price of oil has a big impact on a consumer-driven economy. Energy expenses, like food, are nondiscretionary, Howard Ward of GAMCO Growth Fund told MSNBC. “And they’re now poised to take a bigger share of wages than we’ve seen in several years. That will have a dampening impact on discretionary spending. We still have an economy that is 70 percent consumer spending.” In such an economy, how could politicians turn a blind eye to domestic consumer interests, even at the expense of defending human rights abroad? Arjun Murti, an oil analyst at Goldman Sachs, told The Wall Street Journal that even as people "put so much emphasis on the U.S., . . . what is going on in the rest of the world matters as much if not more."  However, elected representatives are inclined by their desire to stay in power to put world news through the prism of their constituents' pocket-books, and thus to frame foreign policy to protect their consumers. In other words, an elected representative is apt to be more finely attuned to the grievances of his or her electorate than to stopping human rights violations abroad. Perhaps it is such politics that keeps heads of democratic governments from agreeing on an intergovernmental or international military mechanism that would act to stop a regime once it has violently turned on its own people.

Besides the political implications from consumers being even potentially shell-shocked by higher gas prices, the business sector can be expected to be averse to political instability in a region of the world in which so much oil is produced.  This aversion is, in my view, overly risk averse. As MSNBC points out, it is unlikely that any new regime in an oil-producing country would withhold supply as a matter of policy because “any new government would badly need those oil revenues.”  Libya produces only 2% of global supply of crude, and the Saudi-controlled OPEC cartel would make up for any loss.  “OPEC is ready to meet any shortage in supply when it happens,” the Saudi oil minister, Ali al-Naimi, said at a news conference after an OPEC meeting, according to The New York Times on February 23rd. “There is concern and fear, but there is no shortage.” In my view, the minister’s statement reflects the excessive risk aversion in corporate political risk departments, for while fear is perfectly understandable for a protester who is being gunned down in the streets, the emotion represents or points to an over-reaction among managers assessing the political risk in financial terms from the vantage point of their carpeted offices in the steel fortresses of the modern cities.

In another piece in The New York Times on February 23rd, Clifford Krauss put forth the argument that the relative quality of Libya’s reserves magnified its importance in the price spike.  Saudi Arabia has more than 4 million barrels in spare capacity, but it includes “heavier grades of crude that are higher in sulfur content and more expensive to refine.” Larry Goldstein, a director of the Energy Policy Research Foundation, an organization partly financed by the oil industry, argues that “Quality matters more than quantity.”  Furthermore, should Europe need to buy sweet crude from Algeria and Nigeria, that could push prices higher. “Nigeria and Algeria are already producing flat out so they can’t come up with another million barrels a day,” Michael Lynch of the Strategic Energy and Economic Research consultancy firm, said. “That means there will be a scramble for lighter crude supplies.” The last time there had been a shortage of sweet crude (in 2007 and early 2008), oil prices soared to more than $140 a barrel, although the cause then was spiraling demand. Moreover, placing quality before quantity seems questionable to me  in looking at supply as it interacts with demand. Furthermore, the analysts are discounting the impact of the Saudis and OPEC to counter for any increase in costs by increasing supply. The New York Times reported on February 23rd that “Tom Kloza, the chief oil analyst at the Oil Price Information Service, estimated that the Saudis could pump an additional 1 million to 1.5 million barrels in a matter of days.” Additionally, OPEC has “a reserve capacity to deliver an additional four million to five million barrels to the world markets after several weeks of preparation. That is more than twice the oil that world markets would lose if production were halted completely by unrest in Libya.”  In other words, in the wake of Gadhafi’s massacre as Brent crude hit $110, the business analysts should have realized that the Saudis would have to virtually agree or otherwise go along with any cost-induced spikes. Or course, the political risk analysts have also argued that the Saudi royal family could fall, given the spread of protests throughout the region. To be sure, that is a possibility, but not necessarily as the analysts play it out or with a cut off in Saudi oil.

On March 2nd, The Wall Street Journal ascribed the previous day's market jidders to fears of unrest intensifying in Saudi Arabia as authorities there arrested a prominent Shiite cleric who had been calling for political reforms. "If there are problems in Saudia Arabia, we will feel it and that's causing concern, obviously," said Marc Pado, a U.S. market strategist at Cantor Fitzgerald. Also, Iran reported clashes between protestors and security forces in Tehran. Concerning Saudi Arabia, which seems to have been the epicenter for the worry, analysts believed at the time that the political instability in Bahrain meant that Saudi Arabia itself could be at risk. Indeed, the political risk argument may have come down to this contingency.  Kloza points out that unless the unrest were to spread to the streets of Jeddah and Riyadh, “I think it’s a very manageable situation and prices are closer to cresting than they are to exploding higher.” Even he could be overstating the risk, for besides discounting the financial appetite that a republic in Arabia would have in selling oil, his analysis projects too much based on a kinship between Saudi Arabia and Bahrain. The New York Times article also points to oil experts who argued at the time that the “island nation has a majority Shiite population with cultural and religious ties to the Saudi Shiite minority that lives close to some of the richest Saudi oil fields.” However, there are a number of “ifs” that must first be satisfied before this fuse could have gone off.  For one thing, Saudi oil fields are well defended. Also, that a majority population might do something does not mean that as a minority population it would do likewise (and in a different and much larger country). Were the unrest sweeping the Middle East to hit Saudi Arabia and turn it too into a republic, it would be a part of the broader sweep. In other words, I think the analysts overstate the significance of Bahrain and, moreover, miss the bigger picture (i.e., the transformation of the Middle East into democracies from autocracies). Such a historical transformation of the entire region could well be happening. but that doesn't necessarily mean that a significant sustained cut-off in the supply of oil would result. Indeed, such a conclusion ignores a basic fixture in human nature: greed. It is ironic that political risk analysts in business would miss that element. In short, they are over-reacting via over-projecting.

Going overboard in making projections is one indication of an excessive aversion to risk in a personality.  I suspect that this bias in corporate political risk analysis comes not only from like personalities, but also from corporate culture, which eschews controversy of any sort. In the rarified corporate office, conflicting values are willowed away in favor of the hegemony of efficiency and the associated business technique. This cultural aversion to uncertainty impacts business practice, including political risk analysis. A well-run corporation would have someone in that department saying, in effect, “hey, loosen up, guys.”  When it really is bad, such as it was in September, 2008 when the financial system almost collapsed, business is typically caught off guard just like the rest of us.  In terms of the protests in the Middle East, we can take it to the bank that business was on the side of political stability, and thus, the extant regimes.

The price of oil affects so many industries that virtually any industry can be expected to lobby for foreign policies that give priority to the stability in the status quo (rather than to revolution).  That is, both consumer and business interests could be expected to have pressured elected representatives in the U.S. Government to resist giving too much support to the protesters in the Middle East. For example, President Obama’s policy was that Mubarak should stay in power through the transition even as events in Egypt were rapidly forcing him out of office. Whereas strategic interests such as the Suez canal might have been foremost in Obama’s calculation regarding Egypt, oil, and thus American consumers and business, might have been primary in his muted statements in the wake of Gadhafi’s retaliation. This sets up an interesting dilemma. While the immediate reaction of most people worldwide who were recoiled in horror at the atrocities in Libya on February 21^st was for something to be done right away to stop Gadahfi even if it meant more chaos in the short-run, business political risk analysis proffered an alternative course--that of reducing the turmoil immediately even if that meant retaining Gadhafi in power. Whereas proponents of democracy and human rights viewed the protests in Libya as a good thing, such people would be surprised to find the activity portrayed from the business standpoint in negative terms even in our midst. For example, USA Today reported Peter Beutel, of Cameron Hanover, as saying, "We have all the wrong things working together at the right time: an economic recovery, (stocks) making new highs, a lower dollar, strong seasonal demand and unrest in the heart of oil production" (italics added).  Libyans putting their lives on the line is also unrest in the heart of oil production. It is the starkness in the vector of valuation (i.e., very good vs. very bad) that is striking here. That a person in one house could have been viewing the spreading protests in the Middle East as instantiating a much overdue development in government while a person next door was disdainful of all the unrest attests to how differently the same event can be viewed.

 From the standpoint of the environment of international business, standing on human rights is not as much of a priority as an observer might want. In other words, what is good for GM is not necessarily good for the world.  The theory that increasing international business (e.g., trade and foreign direct investment) leads to or guarantees peace suddenly looks insufficient as a sufficient philosophy of international business.  An implication is that if corporate lobbyists have real sway over governments, the latter can be expected to shy away from policies and actions that would increase short-term political instability even where such turmoil were a good thing from the standpoint of democracy and human rights. Politicians who allow themselves to be controlled by corporate executives can be expected to overstate stability and shortchange leadership (and real change).  It may be that even the very existence of large corporations in a republic could thus be problematic from this standpoint. Corporations, and even ironically elected representatives, may be predisposed to advocate policies that are at odds with expanding democracy in the world.

In general terms, I contend that both toady politicians and the timid business executives who do not want to rock the boat for financial reasons are short-sighted even by their own rather narrow criteria.  In the case of Libya, were an overwhelming multinational military force to have descended on Libya as Gadhafi's men were ravaging Libyans on the streets rather than waiting for the U.N. Security Council to act, Gadhafi could have been stopped in his tracks in short order and thus order and civilians preserved (i.e., oil supplies undisturbed and a slaughter averted). Of course, as with any military action, things can go wrong.  To be sure, military action is always risky. For example, Gadhafi could sabotage the Libyan oil wells as Saddam did in Iraq in the first Gulf War (1992). However, the failure of the world to take first initiative could have given Gadhafi time to set up explosives ready at the touch of a finger in Tripoli. Indeed, there were reports on the day following the massacre of Gadhafi intending to blow up the oil wells anyway.  So the destruction of Libyan oil production could have come either from the world acting or failing to act in the wake of Gadafhi's violence against the protesters. Given the ambiguity of such risk, corporate political risk analysis would probably still come down in favor of retaining Gadhafi because the status quo is typically presumed to proffer the most stability. This I would call the fallacy of the status quo, which I believe dominates bureaucratic and state department thinking.

Instead of placing corporate political risk analysis on center stage, I submit that business is not the focal point of society (or politics). At the societal level, the hub and spokes stakeholder framework must be replaced by a web-structure wherein there is no central entity. Corporate political risk analysis from this broader perspective should be consulted without being allowed to become dominate. Therefore, governments around the world ought to overcome the presssure from their respective corporate political risk analyses in favor of human rights to place real limits on governmental sovereignty backed up by an international or multinational force on permanent stand-by, with a mechanism for activation agreed to before any occasion.  Such a leap would of course take principled leadership. Such leadership could be partially reconciled with more immediate strategic political interests by making the mechanism go into effect after the present term of office. While not optimal, this method would indeed deliver (eventually). 

Hence, even after five days of carnage in Libya and worsening volitility and price spiking of oil, as well as gasoline and jet fuel, at the expense of the American consumer and business firm, the Obama administration--the regime of real change--could only muster a statement and a freezing of assets. "When a leader's only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now." It would be almost a month after Gadahfi had turned on his protesting people that the U.N.'s Security Council brought itself to act in authorizing all necessary means for member countries who want to step in to protect civilians in Libya. By that time, the protesters had become armed rebels and Gadafhi's military had been on the roll, killing rebels and civilians alike. A clean cut would have been better than a period of indecision.

Sources:

Jerry DiColo and Brian Baskin, "A Stealth Comeback for $100 Crude Oil," The Wall Street Journal, February 22, 2011, pp. C1, C3.

http://online.wsj.com/article/SB10001424052748704506004576173961240139414.html?mod=ITP_moneyandinvesting_0

Gary Strauss, "If Unrest Spreads, Gas May hit $5", USA Today, February 22, 2011, p. AI.

http://www.msnbc.msn.com/id/41739499/ns/business-personal_finance/

http://www.nytimes.com/2011/02/24/business/energy-environment/24oil.html?_r=1&hp

http://www.nytimes.com/2011/02/23/business/global/23oil.html?ref=todayspaper

http://www.msnbc.msn.com/id/41785849/ns/world_news-mideastn_africa/

http://www.nytimes.com/2011/03/18/world/africa/18nations.html?hp