My wife, Roberta, should be nominated as among the 10 most patient women on the planet. I say that because she lives with me. Unfortunately, over the years my collection of everything that might someday be useful multiplied secretly in the night, especially articles on national security, the environment, and energy. We won’t talk about the books, which multiply exponentially and cause the walls of our home to groan as only Atlas might have holding up the world. They also attract a lot of dust, which increases the need for housecleaning and keeps allergies perpetually agitated.
While digging through a pile of aging articles and sorting for the dust bin, I discovered one of those rare treasures that provided justification before my spouse’s critical eye of why I just can’t part with this item at this time. It came out of the May/June 2006 issue of Foreign Policy magazine and was titled “The First Law of Petropolitics” by economist Milton Friedman.
The theme of the article was that an overabundance of a natural resource—particularly in countries without well-established rules of law and democratic institutions and leaders with a proclivity for abuse of power—tends to undermine accountability of leaders to the led.
Friedman postulated that under “the first law of petropolitics, the price of oil and the pace of freedom always move in opposite directions in oil-rich petrolist states.” The high price of oil allows would-be dictators to institute repressive measures that curtail free speech, press freedom, fair elections, an independent judiciary, rule of law, and independent political parties. With their abundant financial resources and foreign markets hungry for their product, they’re immune to international criticism by their harsh internal measures.
The second law of petropolitics, according to UCLA political scientist Michael L. Ross, (using statistical analysis, Ross evaluated 113 countries between 1971 and 1977) was that oil dampened democratization via “the spending effect,” with government spending more to engage in political patronage among disparate political groups, which in turn reduced political pressure for internal reform.
The third law of petropolics was the “group formation effect”: when the government obtains a cash windfall, it reinforces the spending effect by preventing independent social groups from forming. This is done via more money spent on internal security forces, police, and intelligence operations to choke incipient democratic movements.
Where are these oil-rich petro states? The usual suspects are Russia, Venezuela, and Saudi Arabia, to name a few. Russia uses its oil revenues to primarily fund its military modernization programs. President Vladimir Putin loves oil at $80 a barrel and is elated when it hits above $100/barrel. He used the last petroleum windfall to modernize his nuclear arsenal, fielding the most powerful ballistic missile to be developed by any nation to date. By contrast, our newest nuclear system is more than 30 years old and increasingly vulnerable to an emerging alliance between Russia and China, augmented by threats from North Korea and soon Iran.
Ross’ postulation about freedom and democracy being suppressed by an unaccountable oil-rich autocracy is best demonstrated by Venezuela, once the richest nation in South America and now impoverished by 30 years of socialist tyranny, funded by abundant oil revenues. Communist Cuba supplies the internal security advisors that replaced Venezuelan police, rule of law, and an independent judiciary. Thousands of Venezuelans flee their country every year, many making their home in the U.S.
Why all the concern about high oil prices? When Third World dictators control a vital natural and essential resource, economic policies become distorted. People suffer, especially the working class and those who struggle just to survive. In Third World countries, artificially high energy prices actually lead to famine, especially in economies where millions live on only a few dollars a day. America’s not a Third World country yet, but the destruction of the American middle class is well under way.
President Biden and his Democrat allies shut down substantial segments of our national oil industry. Restrictions on fossil fuels are creating artificially high prices for gas even while Californians are sitting on an ocean of oil and gas. Nationally, hundreds of thousands of workers who once held head-of-household jobs with six-figure incomes are now unemployed, all by political fiat.
It doesn’t have to be this way, but perhaps I’m just too old and don’t understand why my fellow Americans really like paying $5, $6, or soon even $8 to $10/gallon for gas. After all, they voted the politicians into office responsible for this mess. Δ
Al Fonzi had a 35-year military career, serving in both the Vietnam and Iraq wars. Respond with a letter to the editor emailed to letters@newtimesslo.com.
This article appears in Nov 4-14, 2021.
Al is a good person. This absolutely isn’t about him paying more for gas. He’s simply looking out for the Venezuelan people.
And because he cares so much, we simply can’t just reduce our dependence on oil, but we must become a petro state ourselves. This is the correct understanding of oil dependence.
“The First Law of Petropolitics” by economist Milton Friedman.”
I bet I have that same article somewhere . . .
I, too, dislike giving up those publications that
explain how the world really truly works.
Our libraries won’t preserve so we have to
just in case our great great grands wonder
why the world is as it will/may be for them.
Fascinating that Milton Friedman is still a hero to the ignorant. Friedman’s philosophy (coined neo-liberalism by those who wanted to equate it to the economics of John Stuart Mill), as put into practice by the Reagan Administration, has led to nearly 40 years of federal budget deficits (Reagan more than doubled the deficit within eight years) and a total deficit which now far exceeds GDP.
Once upon a time, before Friedman’s ideas infected the body politic, the U.S. usually ran a yearly budget surplus. The ultra-wealthy paid upwards of 70% marginal tax rates and large corporations put their profits back into their company’s infrastructure and increased wages and benefits for their workers rather than today’s stock buybacks and excessive payments to CEO’s (CEO pay has grown by 940% since 1978).
Friedman’s philosophy upended nearly 50 years of American growth which produced a prosperous middle class. In the 1950’s and early 1960’s, at the height of Keynesian economics, America was the envy of the world. Now, on almost any statistic involving quality of life, the U.S. is far below average.
Anything written by Friedman should have been relegated to the scrap heap long ago.