democracy, economics, freedom, globalization, governance, international relations, trade, why do countries become/remain democracies

Why Do Countries Become/Remain Democracies? Or Don’t? (10): The Curse of High Oil Prices? (Revisiting Friedman’s First Law of Petropolitics)

Thomas Friedman’s so-called “First Law of Petropolitics” states that the price of oil and the pace of freedom always move in opposite directions. As the price of oil rises and money floods into the hands of a “petrolist state”, the government of this state can use this money to crush the opposition, and also to gain the upper hand in their relations with the international community. They become less dependent on trade relationships with other countries and so they can do what they please domestically and internationally. They also are less dependent on taxation, and hence on democratic representation which normally evolves along with taxation. Revenues from energy sales allow for government spending to keep the population satisfied with autocracy and to dampen pressures for democratization.

I’ve been rather scathing about this “law” in an older post, and I’ve found some data to back me up. There seems to be no empirical evidence that high oil prices undermine democracy, help sustain autocracy, or prevent transitions to democracy.

This doesn’t mean that the West shouldn’t move away from its dependence on oil. It’s just that the reason is simply ecological rather than political: oil dependence isn’t bad because it supports autocrats elsewhere in the world; it’s bad because of the environment.

Other posts about the transition (or lack thereof) to democracy are here, here and here. A post about the related topic of “putinism” is here.

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5 thoughts on “Why Do Countries Become/Remain Democracies? Or Don’t? (10): The Curse of High Oil Prices? (Revisiting Friedman’s First Law of Petropolitics)

  1. Dependence on anything you can’t produce your self is ultimately a calculated risk. This risk should be re-assessed periodically to determine if it is still good policy to remain dependent.

    Questions to help assess the risk of the US in this context:

    Do we have something our suppliers need? (Not if we outsource all our manufacturing and become uncompetitive because of labor rates and currency exchange rates).

    Do our main suppliers have something to gain by our demise? (Philosophically, poitically = yes. Trade = no for now)

    Do we have viable alternatives to the supply that we can produce ourselves? (Yes if we consider coal, shale oil, offshore drilling viable supplies. No, if we consider them off limits because of “not in my backyard” or climate alarmism theories.

    How reliable are the supply lines and can we ensure their security? (This point alone explains why the US has annual military expenditures that are higher than any other country in the world.)

    What would be the impact of disruption to supply lines or from (hyper)inflation which made the resource unattainable at an economically viable price? (Since the US food supply is reliant on petroleum based fertilizers, tractors, refrigerated trucks, and since consumers must use petroleum to get, store, and cook food; in a word “devastating”.)

    I agree with your premise that it is not the price of oil which impacts our ability to retain democracy, but rather the ability of our democracy to engage in productive risk analysis and mitigation. Since we have a two party system that is a thinly veiled distraction from the oligarcy that is marching to its own progressive (cloward pivens) agenda, we are in affect a disfunctional democracy. It is our own disfunction that puts our democracy at risk.

    There folks who are attempting to raise public awareness of this, like yourself. If you haven’t already, check out http://www.chrismartenson.com for more resources that may help you in this important work.

    Thanks for your thoughtful post.
    Jamie

  2. High oil prices can’t be a curse. The United States is the 3rd largest producer of oil. Have we turned into a dictatorship? No, not yet. That said, do totalitarian regimes benefit from high oil prices? They do. But that’s true for any industry that is strong with a totalitarian system where the demand for the good is fairly inelastic. I don’t think this fact is not a fact for further independence from foreign oil, because I do believe it is one reason, but it is one among many, some of which are surely more substantial and credible (e.g. green technology is better for the environment).

  3. The single element responsible for the most obnoxious part of the oil curse, that which subordinates the citizens to an independently wealthy ruler; that which keeps in power all the gaddafis, the husseins and the chavezes of the world, and that makes a mockery of democracy, is that of the oil revenues going directly to the state.

    This is why I so profoundly resent and object to when the Extractive Industries Transparency Initiative, EITI, the initiative that basically monopolizes the debate about oil-curses, and that is backed by so many reputable organizations like Oxfam establishes, as their 2nd Principle, the following:

    “We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”

    http://theoilcurse.blogspot.com/

  4. Pingback: The Economic Cost of Taxing the Rich « P.A.P. Blog – Human Rights Etc.

  5. Pingback: Why Do Countries Become/Remain Democracies? Or Don’t? (5): Arab Democracy, an Oxymoron? « P.A.P. Blog – Human Rights Etc.

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