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This article is a summary of the author's book The Economic Decine of the West Guns, Oil and Oligarchs.
The collective "West" still has it good: its per capita incomes are four to five times that of the world average. However, optimism is mainly gone, and both relative and absolute measures of economic well-being have been declining steadily in recent decades. Narratives of collapse are widespread, fuelling political discontent and conspiracy theories alike. While it may be premature to expect its imminent and catastrophic collapse, it is clear that the West is facing an unfolding and intensifying crisis. The declines in its economic fortunes, global standing, and democratic systems aren't a mystery; they are a direct consequence of a deeply entrenched and self-perpetuating system, a Guns-Oil-Oligarchy nexus.
What is the Guns-Oil-Oligarchy nexus?
Guns
Guns refer to the Permanent War Economy (PWE), which is run for the benefit of a Military Industrial Complex. By 2022, total global military spending had exceeded US$2.2 trillion, and it is rising rapidly, with the number of state-based conflicts expected to reach its highest level since 1945 by 2025. Today, almost half of the US federal government's discretionary budget is allocated to its Department of Defence, and the country maintains around 900 military bases worldwide.
The PWE was emerged after the Second World War, which saw the final destruction of Europe's old empires and the emergence of the USA as the global hegemon. The production of military goods raised the US’s GDP by 72% between 1940 and 1945, resulting in a robust weapons industry - against which Eisenhower famously warned in 1961. The Cold War, the period between 1945 and the collapse of the Soviet Union in 1991, allowed the Military Industrial Complex to prosper and consolidate its hold on political power, foremost through powerful oligarchic firms.
At the end of the Cold War, a peace dividend was expected, given that defence spending could be scaled down. However, the US economy experienced an economic slump without the stimulus of war. This led to a dramatic increase in military interventions. Nearly a quarter of all US military interventions ever took place after 1999 - often based on the flimsiest of excuses, and in the case of the invasion of Iraq, on outright lies about weapons of mass destruction.
Post-Cold War military projects to benefit the Military Industrial Complex include the War on Terror, the militarization of Africa, the expansion of NATO, the reshaping of the Middle East, including the genocide in Gaza, the containment of China, the pivot of Silicon Valley towards the military to provide data and AI for military tech, and extensive economic warfare: the US is today imposing sanctions on a third of all countries in the world. The conflict in Ukraine, coupled with the narrative surrounding NATO's expansion, provides the excuse for Western countries to raise their defence spending. De facto, the EU has become a new cash cow for the US's military industry.
Oil
Oil refers to the centrality of fossil fuels, primarily coal, oil, and gas, as the drivers of economic growth in the West, ever since the discovery and use of coal to fuel the Industrial Revolution in 18th-century England. Today, fossil fuels provide more than 80% of the world's primary energy. Oil is, however, a finite resource and not available in equal measure to all countries. The easiest accessible oil has been used first, so that more and more energy is required every year to extract the same amount of oil, leading to less net energy available for other economic sectors. This phenomenon, known as declining Energy Return on Energy Invested (EROI), contributes to slowing down economic growth and increasing the cost of living and doing business.
The demand for and control over oil therefore directly intersects with the Guns aspect of the nexus. The United States, for instance, the world's newest Petrostate, has its energy resources and consumption deeply tied to its geopolitical power. The need for direct access to and affordability of oil is a significant motivation for US foreign policy and military strategy, including its presence in the Middle East.
Former US President Richard Nixon famously stated in 1973 that the US using "30 per cent of all the energy" was a good thing because it meant they were "the richest, strongest people in the world" with the "highest standard of living," and wished for it to "always be that way". However, it is not that way anymore - China, for instance, now use about 25% of the world's energy compared to the US's 15%. No surprise, therefore, that the containment of China has become an imperative of the US. The rise of China erodes the US's direct access to and affordability of oil, alongside its military lead, and the profits of its Silicon Valley oligarchs. This is also because China is developing better AI and Electric Vehicles faster and cheaper than the US.
Oligarchs
The third element of the nexus is the Oligarchy. It refers to the concentration of economic and political power in the hands of a small number of wealthy elites. The US has become home to the world's most advanced Oligarchy. The scale of their power is staggering: a study determined that each of the top 400 wealthiest Americans had, on average, about 22,000 times the political power of the average person in the bottom 90 per cent, and the top 100 had nearly 60,000 times as much.
This elite group comprises powerful entities across various sectors, including Guns and Oil; the following non-exhaustive list provides a flavour of the oligarchy that today is the dominant economic and political class in the West:
-Big Guns: More than 80% of all arms manufactured globally are produced by a dozen Western companies, including Lockheed Martin, RTX Corp, Northrop Grumman, Boeing, General Dynamics, BAE Systems, L3Harris Technologies, Leonardo, Airbus, HII, Thales, Leidos, Amentum, Booz Allen Hamilton, Rheinmetall AG, Dassault Aviation, Elbit Systems, Rolls-Royce, Honeywell, Boeing and Naval Group.
-Big Oil: Private oil is dominated by only six companies: ExxonMobil, Chevron, Shell, BP, Eni, and TotalEnergies. Seven state-owned companies dominate the industry: Saudi Aramco, Gazprom (Russia), CNPC (China), NIOC (Iran), PDVSA (Venezuela), Petrobras (Brazil), and Petronas (Malaysia).
-Food Barons: The global food supply is being controlled by the ABCD companies, the acronym standing for Archer-Daniels-Midland Company, Bunge, Cargill, and Louis Dreyfus. These four controls around 90% of the global grain trade
-Big Bankers: These include JPMorgan Chase, Wells Fargo, Citibank, as well as three investment firms - BlackRock, Vanguard, and State Street - that control over 40% of all public firms in the US.
-Media Moguls: Six companies control almost 90% of the media in the USA and are influential in other parts of the world. They are Comcast, Disney, Time Warner, Fox, CBS, and Viacom.
-Technofeudalists: These refer to the billionaire entrepreneurs controlling Google, Amazon, Microsoft, Meta and others. It also includes Starlink and Palantir, the latter described as the "AI arms dealer of the 21st century," which profits from war and deepens partnerships with the Military-Industrial Complex.
Once established, the oligarchy captures political power to secure further economic rents. Their game plan is to utilize economic wealth to gain political power, which is then reinvested to grow economic wealth. This manifests as direct policy capture and the use of sophisticated methods to "manufacture consent", through the Media Moguls, which ensures that information is filtered and narratives are framed in a way that promotes the agendas of the oligarchs. The Pentagon often collaborates with Hollywood to promote the narrative that military solutions are the primary means of addressing global challenges. By leveraging its economic power to shape policy and public opinion, the oligarchy directly and indirectly undermines democracy.
An oligarchy that has come to rely on a permanent war economy and unfettered access to fossil fuels to generate profits is the root cause of the crisis in the West. It has a profound negative impact on long-term economic prosperity by diverting investments away from productive uses, deepening inequality, eroding democracy, and driving climate change. Tragically, as oligarchs in Western capitals perceive the erosion of their countries' economic, political, cultural, diplomatic, and moral power, and realise the environmental destruction that their growth-addiction has caused, their refuge is, as in all failing empires in history, further militarism and mass killing. The Guns-Oil-Oligarch nexus is a self-reinforcing vicious cycle that has put the West on a path of wholesale destruction of the planet and its people for the profits of an elite. It offers a straightforward explanation for the West's decline - from which the solution is obvious: the oligarchs' grip must be broken.
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