Petropolitics theories are slip-slidin’ away

Geopolitics, and about the role of oil, and about specious theories propounded by slick snake oil salesmen to connect the two.

Let me put it this way: the recent low prices of crude oil effectively tested the validity of one of the most hyped “petropolitics laws” that columnist and author Thomas Friedman postulated in 2006. And the test results were unflattering for Friedman.

In 2006, when oil prices were at $60 a barrel, Friedman formulated the “First Law of Petropolitics” (FLOP). Its essence: the price of oil and the pace of freedoms always move in opposite directions in oil-rich ‘petrolist’ states, which he defined as countries whose economy is dependent predominantly on oil production and whose governments have authoritarian tendencies. In other words, the higher the price of oil, the more authoritarian these regimes would be; conversely, the lower the price of oil, the more freedoms these regimes will be constrained to give their people.

They aren’t, yes, but on the other hand, there are oil-rich countries that are also democratic (Indonesia, Mexico), even if they are less-than-perfect democracies. But that’s not what Friedman’s petropolitics law was about. He argued that the regimes in Iran, for instance, or Venezuela would be compelled to open up their societies and loosen their grip on their countries if oil prices fell low and stayed low.

Friedman’s point was that authoritarian regimes in oil-rich states can use oil revenues to strengthen their grip on society (police, intelligence and so on), and won’t face pressure to reform their societies, and can buy off popular discontent.

Well, the recent plunge in global crude prices to below $30 a barrel hasn’t rendered these societies any more democratic than when prices were $100 a barrel. If anything, Russia and Iran have become more muscular on the international stage; and are just as repressive at home. In any case, Friedman’s unfortunately acronymed law had already been shown to be fallacious by academics who found his selective use of statistical data points opportunistic.

Pretty much. And in other cases, his own figures contradict his claim. And even if there was a correlation between oil price and political freedom, it had other explanations. Illustratively, in Iran in 1980, oil prices shot up to $90.46 (in average crude oil prices in 2006 dollaras), while the economic freedom index fell to its lowest point of 4.0. But the correlation is spurious: both changes were caused by the 1979 Iranian Revolution.

Well, only on the margins. Saudi Arabia is running up fiscal deficits, and is considering listing shares in state-owned Saudi Aramco to raise funds. That’s a big change. But there’s nothing to indicate that Saudi society breathes any more easier than it did earlier, which was the crux of Friedman’s ‘law’.

Colossally so. It was statistically on slippery ground, and, after the recent price plunge, has been empirically disproved.

A single factor such as oil price cannot explain a complex process like political reform. Friedman is guilty of slick oversimplification.

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