HubMP2012

The politics of extraction

JULY 4, 2025 

Mike Phipps reviews Extractive Capitalism: How Commodities and Cronyism Drive the Global Economy, by Laleh Khalili, published by Profile.

Modern capitalism is rooted in colonialism and the dispossession and enslavement of millions of indigenous people in the Global South. In response, alongside the wars of decolonisation, the demand has grown for the nationalisation of the resources extracted by the Western powers, principally oil.

But even nationalisation does not mean resource sovereignty. In most countries where state ownership has been enacted, only a tiny ruling elite benefits. The vision that ownership could lead to control of volume, price and even future usage has not been fulfilled. As Laleh Khalili says in this thoughtful new book, “New financial instruments, new forms of shipping, new standards of accounting and engineering, new rules of arbitration, and expanded markets for arms trading have all been cultivated, so the flow of petrodollars remains unidirectional.”

How this is done is the subject of this book. It focuses on the commodity traders, the shipping of oil, but other resources too. Four billion tonnes of oil are consumed annually, but 50 billion tonnes of sand are used for concrete, glass and electronics.

This international trade is rife with manipulation and abuse. The author quotes the 2016 example where Singapore’s records showed it imported $750 million of sand from Cambodia, “but the government of Cambodia reported exporting only $5 million. Cambodia had banned the unregulated export of sand in 2009, and so the difference between the two amounts indicated the misreporting of illegally stripped sand dredged from Cambodia’s fast-depleted rivers.”

The people whose livelihoods are destroyed by this process are invariably paid a pittance to haul away the sand from their place of habitation – beaches across Africa have disappeared overnight, exposing coastlines more to rising sea levels and storms. But the transformation of the raw material into a desirable commodity is open to vast profit-taking.

Local protest is met with repression, often lethal. Even in the US, indigenous protests against oil pipelines face extensive corporate surveillance and violence from private armed security.

Khalili contrasts the exploitative extractivism of the West with modern China’s Belt and Road Initiative in the Global South. While it is true that the latter comes with fewer conditions than many Western ‘aid’ projects, the author is right to temper her enthusiasm with a note of caution, highlighting these initiatives’ “meagre impact on local building capacity and knowledge transfer.”

She adds that in some African countries, “Chinese administrators manage casualised and precarious African labour in mines and on construction projects, with workers’ collective bargaining rights recognised only in cases where mass protests have belatedly led to state intervention.” We are clearly some way from the age of transnational anti-colonial solidarity.

This is a highly readable introduction to the subject with interesting discursions on a range of related topics, including commercial shipping abandoned at sea – 113 vessels and 1,555 seafarers in 2022 – superyachts, the Chagos Islands, the movement of former military leaders into corporate affairs and the role of management consultants. Eye-opening stuff.

Mike Phipps’ book Don’t Stop Thinking About Tomorrow: The Labour Party after Jeremy Corbyn (OR Books, 2022) can be ordered here.