The Social Life of Oil in the Wake of WWI and the Transition to Fordism



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)” ]


By mid-1920’s APOC was re-organizing into a new form of business organization, which four decades later David Lilienthal named the multi-national corporation[199]. This re-organization was coming at the apex of what has been labeled the second industrial revolution, a problematic term that, nevertheless, highlights the fundamental nature of the changes that were taking place. Fordism is an industrial and political-economic order that has been built on oil as its primary material, and is organized through the vertical and horizontal integration of related economic activities within corporate giants with global reach, that combine industrial scale production with mass consumption. Its workings are based on both the detailed control of the labor process, as well as on sustained and disciplinary intervention into the reproduction of labor power. The daily lives, consumer habits, political imaginaries, and cultural preferences of workers, their families, and the general population, are integral to the functioning of consumer society. Fordism relies on the increased commodification of labor power and the expansion of the wage contract, and the active participation of laborers and the general population in the mass consumer market. The financial system, and the welfare and social policies planned by experts and implemented by public institutions, form the basis of the Fordist regime of accumulation.
As we have seen in this chapter, the emergence of the Fordism and the social policies of the welfare state were not the inevitable outcomes of historical progress and rational planning. To paraphrase Aglietta, history has no ‘laws’; it is a creative and contentious process. “History is initiatory… we can act in history not calculate it”[200]. The protracted shift to Fordism and the institutionalization of social policies that accompanied it, were shaped in large part during the unpredictable conflicts of WWI, and then accelerated in the course of social conflicts and global crises that followed. As one of Britain’s largest and most strategically important corporations APOC’s practices and organization were not insulated from the social and political events and processes discussed in this chapter. However, as we shall see in the following chapters, this does not imply that practices and forms of expertise shaped in wartime Britain and in the interwar years were simply transmitted by the Company to its Khuzestan operations. The analysis provided in this chapter sheds light on the historical context where ‘the social question’ was posed in Britain with great urgency, and the new arts of government that emerged out of it and reshaped the habitus there. As we shall discuss in the following chapter, these events had a direct bearing on what transpired in the oil complex in Khuzestan; but they did not determine the outcome. They contributed to shaping the oil habitus in Abadan, but they did not define it.
As an industrial leader APOC’s reorganization in the post war era was driven in part by the adoption of labor saving technologies, and by its fevered attempts to capture and monopolize markets for their mass-produced consumer goods. In Britain, APOC began, with significant assistance form the state, to build national networks of distribution, gas stations, a major refinery, fund research and development projects, initiate the development of new petrochemical products, and so on[201]. Like other businesses it was affected by the convulsions of the era of mass politics and the labor strife that ushered in the welfare state. It was also a global company, producing oil in far-flung corners of the Empire, for consumption by navy ships, the Royal Airforce, military transport, as well as private consumers. It was a majority government owned corporation, even if it was operating in a grey area between the state, the empire, and the market.
Together, these crossed historical ties and global-local forces affected the attitude of APOC toward its employees in Abadan, the urban population, and the Iranian state. The planned construction of the Abadan bazaar was not an exception; but one of the first crucial steps in a strategic change of approach from a corporation that was shifting identity from a speculative extractive mining operation to a major global industrial business, during a revolutionary period. From this juncture the Company began to get increasingly involved in attempting to actively shape and ever more directly plan minute aspects of the lives of its employees and their families. These social policies were conceived by a new breed of technocrats as the solution to the complex political challenges, and the social and class frictions that the Company’s operations faced in Iran. These social policies were adopted with great reluctance, but always framed and presented as generous and benevolent acts, serving the general welfare. The Company had hitherto skirted the claims of social responsibility, because they had nothing to do with maximizing profits from oil production. Building the bazaar of Abadan, investing in schools, company housing for staff and (much later) for workers, public health measures, urban planning and involvement in building municipal infrastructure, gradually became the first hesitant steps in what soon became a growing repertoire of what can only be called “reluctant paternalism” that defined the Company’s new approach [202].


198. See Aglietta, A Theory of Capitalist Regulation, 151–163.

199. It was David Lilienthal who coined the term in 1960. See Geoffrey Jones, Multinationals and Global Capitalism: From the Nineteenth to the Twenty-first Century (New York: Oxford University Press, 2005), 4.

200. Aglietta, A Theory of Capitalist Regulation, 66–67.

201. Ferrier, History of the British Petroleum Company; Laurence Lockhart, The Record of the AngloIranian Oil Company, Ltd. (London: Anglo Iranian Oil Company (AIOC), 1938).

202. See the insightful essays by Charles S. Maier, “Between Taylorism and Technocracy: European Ideologies and the Vision of Industrial Productivity in the 1920s,” Journal of Contemporary History 5, no. 2 (1970): 27–61; and the follow up essay in Charles Maier, In Search of Stability: Explorations in Historical Political Economy. (Cambridge: Cambridge University Press, 1988), 53–68.

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