Tuesday, April 24, 2007

The First Law Of Petropolitics

These charts illustrate a theory that Thomas L Friedman has thrown out there, he calls "The First Law Of Petropolitics." He's far from being the first one to see an inverse relationship between human freedom and commodity prices in resource based economies, but the elegance of these charts speak volumes.

"The First Law of Petropolitics posits the following: The price of oil and the pace of freedom always move in opposite directions in oil-rich petrolist states. According to the First Law of Petropolitics, the higher the average global crude oil price rises, the more free speech, free press, free and fair elections, an independent judiciary, the rule of law, and independent political parties are eroded. And these negative trends are reinforced by the fact that the higher the price goes, the less petrolist leaders are sensitive to what the world thinks or says about them. Conversely, according to the First Law of Petropolitics, the lower the price of oil, the more petrolist countries are forced to move toward a political system and a society that is more transparent, more sensitive to opposition voices, and more focused on building the legal and educational structures that will maximize their people’s ability, both men’s and women’s, to compete, start new companies, and attract investments from abroad. The lower the price of crude oil falls, the more petrolist leaders are sensitive to what outside forces think of them."

Here's another tidbit-- "As I followed events in the Persian Gulf during the past few years, I noticed that the first Arab Gulf state to hold a free and fair election, in which women could run and vote, and the first Arab Gulf state to undertake a total overhaul of its labor laws to make its own people more employable and less dependent on imported labor, was Bahrain. Bahrain happened to be the first Arab Gulf state expected to run out of oil." He also noticed that the middle east's only democracy other than Israel; Lebanon does not have a drop of oil. Now the theory, does not explain a number of other dictatorships in the region-until you look at the huge tranfers of wealth from the oil rich states. Anyway, it's just a theory.

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