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Saudi Texas Vs. Japanese Texas (Part 3 of 3)

Is it wrong to equate wealth generation with resource extraction?

April 8, 2002

Is it wrong to equate wealth generation with resource extraction?

If Texas were an independent republic, as it was from 1836-1845, it would be a third world country — with a small first world sector embedded in it. Think of it as a big Saudi Arabia enfolding a small Japan.

The older Texan economy is based on primitive commodity capitalism — cotton, cattle, oil. The mentality of the traditional Texan businessman is that of the premodern “seigneurial” elite. According to the Italian historian Raimondo Luraghi, this grouping included not only the slave-owners of the U.S. South — but also the British “Nabobs” of the West Indies, the Mexican hacendados, and Brazil’s plantation owners.

Thus, it is not an industrial capitalist mindset at all. Rather, this strain of the Texas mentality is that of the Spanish conquistador — who dreamed of quickly acquiring fabulous wealth by plunder rather than effort.

One of the most popular tales in the impoverished folklore of Anglo-Celtic Texas is a story about fabled knife-fighter Jim Bowie. In this story, the legendary Mr. Bowie discovered a lost Spanish silver mine near San Antonio — just before he was killed in the Battle of the Alamo.

As Cortes and Pizarro and other Spanish thugs dreamed of American Indian treasure, Bowie and other Anglo-Celtic Texan thugs dreamed of Spanish treasure. The idea of making one’s fortune through hard, steady, patient work has been strange and repugnant on both sides of the Rio Grande River.

Equally alien to this older Texas economy is the idea of invention. The “Yankee inventor” — Thomas Edison, Henry Ford — is a familiar icon. But there has only been one famous Southern inventor — Cyrus McCormick, a Virginian.

As it turns out, his invention, the McCormick Reaper, was not wanted in the pre-Civil War South — simply because slaves were cheaper than machines. McCormick made his fortune in the North, where high wages among free workers created incentives for mechanized agriculture.

The discovery of oil in Texas was a social disaster. It made the Texas oil man a global symbol of the crass parvenu — at least until the vulgar Saudi sheikh appeared.

As in Saudi Arabia, oil riches prevented the reform of antiquated social structures and archaic habits of mind.Thanks to oil, Texas did not need to reform its pathetic school system to produce world-class professionals and thinkers. Texan Christianity remained in a fundamentalist rut.

Oil also permitted the rich families of Texas to import technicians, scientists and intellectuals for Texan companies and Texan universities from other parts of the United States and the world.

In this way, it is reminiscent of the manner in which Arab monarchies — afraid of educating their subjects — bring in foreign experts. (Of course, the Saudis also segregate these interlopers by invitation in separate compounds.)

Members of Texas’ old cotton-farming and cattle-ranching elite — allying themselves sometimes with wealthy immigrants like George Bush, Sr. — grew easily into an oil-patch elite.

The strategy was always the same. First, buy land. Then, use market power to try to rig the prices of the commodities on top of it — or the minerals underneath it.

Until it was replaced by OPEC, it was the Texas Railroad Commission that rigged the world price for oil from the 1920s until the 1970s. A few years back, the wealthy Hunt brothers of Fort Worth actually tried to corner the global silver market. Jim Bowie must have congratulated Coronado in Hell.

A minority of Texan leaders — mostly from poor or middle-class backgrounds — have shared a different vision. It is a vision of a high-tech, multi-racial Texas based on brainpower and meritocracy — and not on resource extraction and inherited wealth. These visionary modernizers — including Lyndon Johnson, Ross Perot and former National Security Agency director Bobby Ray Inman — have sought to replace Saudi-style commodity capitalism with Japanese-style state capitalism.

The logic that they have employed has been similar to that of modernizers in many newly-industrializing countries. In such backward rural societies, the government must lead the way in technological modernization.

Thanks to Lyndon Johnson’s influence in the U.S. Congress in the 1930s and 1940s, the federal government built the industrial infrastructure of Texas around hydroelectric power. It was a bold move that helped to turn poor farmers into a suburban middle class.

In the 1980s and 1990s, Mr. Perot campaigned for higher educational standards in Texas, as Mr. Inman and others helped to transform Austin into today’s “Silicon Hills” — a high-tech government-university-private-sector research park.

As is the case in many third world countries, the middle-class modernizers such as Mr. Inman and Mr. Perot often have military backgrounds. In a society such as Texas — in which a few rich families dominate the civilian economy — the military is often the only institution that is meritocratic and open to fresh talent. Leftists and liberals, who reflexively equate the military with conservatism, have never figured this out.

This civil war between competing visions of a Saudi Texas and a Japanese Texas explains the epic struggle between the Bush dynasty and Mr. Perot in 1992 — when Mr. Perot’s run for president may have cost the senior Bush his job as President of the United States.

The Bush family stood for oil wells and cheap labor on farms and ranches. On the other hand, Mr. Perot stood for computers and air-conditioned office parks. He viewed the Bush family as upper-class parasites enriching themselves through the exploitation of natural resources.

And George W. Bush? Like the father from whom he inherited the White House, “Dubya” is a product of commodity-exporting third world Texas — and not high-tech first world Texas. He plays the pre-modern country gentleman on his vast hacienda near rural, pious Crawford.

Thus, he also avoids Austin — a city which has been over-run by brainy scientists, engineers and entrepreneurs from East Asia and South Asia who do not share the Southern disdain for hard work and creative thought. In fact, Austin’s most prominent high-tech business leader, Michael Dell, is Jewish.

The diverse and cosmopolitan world of computers and biotech is as much a puzzlement to the Bush dynasty as it is to their friends in the Saudi royal family. Indeed, both families have similarly used oil revenues to keep social liberalism and secularism at bay.

What’s the analytical conclusion of all this? Combine primitive Saudi-style oil-patch economics with primitive West Bank settler-type religion, and you have the milieu from which George W. Bush emerged — and in which he feels most at home.

As fate would have it, at the beginning of the 20th-century — thanks to rural over-representation in the U.S. electoral college — leadership of the most advanced technological economy and the leading liberal society on earth has fallen to a reactionary politician.

This U.S. President hails from a pre-modern religious subculture, rooted in a backward region — and dependent upon a primitive extractive economy. In siding uncritically with God’s chosen people in the Holy Land and hoping to use military force to try to control as much mineral-rich territory as possible, George W. Bush has been acting like a man of his century — the 17th century.