Freedom Versus Oil

Wed, 2009-09-23 22:42

Below is an interesting graph from Foreign Policy about the First Law of Petropolitics.

petro graph

The First Law of Petropolitics is a spinoff of the Oil Curse. When the price is high, oil-producing countries don’t need to worry about the rights of their population because they can afford to buy their way out of their problems without ever dealing with fundamental issues. As oil goes down in value and they have less money, they need to be nicer to everyone to remain in power. Nicer = more freedom, because people like that.

On that front, the good news is that oil is going down lately. $90 a barrel is still expensive, but relative to $145/barrel a few months ago, it’s quite a bit cheaper. My two problems with high oil prices:

1) The U.S. needs oil to survive at the moment (lots of it, in fact, simply because we like to drive inefficient cars) and

2) Countries that have oil don’t like us (Russia, Venezuela, Iran, Saudi Arabia, Kuwait, Nigeria, etc.). It makes sense because those countries tend to have less freedom, and that kind of goes against what America preaches about all of the time. At the end of the day, every barrel of oil we import not only ships American dollars overseas, but it goes directly to people who hate America.

distro of economic freedom

Did you notice that the only countries that aren’t suffering from a financial crisis at the moment are the ones that we’ve shipped a few trillion dollars to over the last few years? It sure would be nice right about now if we had kept that money inside the United States.

Of course, part of me thinks that the drop in the price of oil is a BAD thing. For a while, I was happy that oil was expensive because I reasoned that it would finally get America to invest in alternatives so we could stop caring about oil and the countries that produce it. It might be a painful few years, but in the end, we’d undoubtedly be better for it. Now, with oil getting cheaper again, there’s a good chance everyone will hop back in their SUVs. We’ll keep shipping our money overseas to our enemies, and ten years from now, we’ll be right back where we are now because we never fixed the problem.