Tom Friedman: The Green Revolution(s)
... I believe in “The First Law of Petro-Politics,” which stipulates that the price of oil and the pace of freedom in petrolist states — states totally dependent on oil exports to run their economies — operate in an inverse correlation. As the price of oil goes down, the pace of freedom goes up because leaders have to educate and unleash their people to innovate and trade. As the price of oil goes up, the pace of freedom goes down because leaders just have to stick a pipe in the ground to stay in power.
Exhibit A: the Soviet Union. High oil prices in the 1970s suckered the Kremlin into propping up inefficient industries, overextending subsidies, postponing real economic reforms and invading Afghanistan. When oil prices collapsed to $15 a barrel in the late 1980s, the overextended, petrified Soviet Empire went bust.
In a 2006 speech entitled “The Collapse of an Empire: Lessons for Modern Russia,” Yegor Gaidar, a deputy prime minister of Russia in the early 1990s, noted that “the timeline of the collapse of the Soviet Union can be traced to Sept. 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market.
“During the next six months,” added Gaidar, “oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms. As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive.”
If we could bring down the price of oil, the Islamic Republic — which has been buying off its people with subsidies and jobs for years — would face the same pressures. The ayatollahs would either have to start taking subsidies away from Iranians, which would only make the turbaned shahs more unpopular, or empower Iran’s human talent — men and women — and give them free access to the learning, science, trade and collaboration with the rest of the world that would enable this once great Persian civilization to thrive without oil.
Let’s get serious: An American Green Revolution to end our oil addiction — to parallel Iran’s Green Revolution to end its theocracy — helps us, helps them and raises the odds that whoever wins the contest for power, there will have to be a reformer. What are we waiting for?
Read entire article at NYT
Exhibit A: the Soviet Union. High oil prices in the 1970s suckered the Kremlin into propping up inefficient industries, overextending subsidies, postponing real economic reforms and invading Afghanistan. When oil prices collapsed to $15 a barrel in the late 1980s, the overextended, petrified Soviet Empire went bust.
In a 2006 speech entitled “The Collapse of an Empire: Lessons for Modern Russia,” Yegor Gaidar, a deputy prime minister of Russia in the early 1990s, noted that “the timeline of the collapse of the Soviet Union can be traced to Sept. 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market.
“During the next six months,” added Gaidar, “oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms. As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive.”
If we could bring down the price of oil, the Islamic Republic — which has been buying off its people with subsidies and jobs for years — would face the same pressures. The ayatollahs would either have to start taking subsidies away from Iranians, which would only make the turbaned shahs more unpopular, or empower Iran’s human talent — men and women — and give them free access to the learning, science, trade and collaboration with the rest of the world that would enable this once great Persian civilization to thrive without oil.
Let’s get serious: An American Green Revolution to end our oil addiction — to parallel Iran’s Green Revolution to end its theocracy — helps us, helps them and raises the odds that whoever wins the contest for power, there will have to be a reformer. What are we waiting for?