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The Curse of Oil
…and what it means for Iraqi democracy.


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Ramesh Ponnuru

John Judis has written a terrific cover story for the New Republic on how oil wealth can be too much of a good thing for a country. (The link’s only good for digital subscribers.) He argues that the presence of large amounts of oil gives the state too many resources. The state can extract those resources from the ground rather than depend on the enterprise of the people (in which case the people would have a certain degree of leverage over the state). It can use those resources to buy clients, to co-opt potential opponents, and generally to prevent the emergence of an independent civil society. The existence of such a civil society, Judis further claims, is a precondition of democracy. Thus, he concludes, a democratic Iraq is unlikely to develop.

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It also seems to be true that even where an oil-heavy economy has co-existed with some form of democracy, the oil has weakened the democracy. Consider the example of Venezuela (to go beyond Judis’s article): There oil appears to have encouraged an illiberal politics based on the economics of fantasy.

Judis writes: “Given the political history of oil states, America’s primary objective should not be to immediately hold nominal elections but to gradually create a social and economic infrastructure that can sustain elected governments over the coming decades.” In principle, I agree entirely. But there will be substantial pressure for immediate elections, and that pressure will, I suspect, be impossible to resist. Judis’s argument is a bit like saying that Iraq would benefit from a few years of mild and liberal authoritarianism. This is undoubtedly true. But there are limits to Americans’ capacity to be good old-fashioned imperialists, whatever the theoretical merits of their playing the role.

Similarly, there is a case — following the logic of Judis’s article — for keeping Iraq’s oil in the private sector. We have said many times that the oil belongs to the Iraqi people; this implicit pledge could be made good by distributing shares in oil companies to all Iraqis. But we are not going to place ourselves in any position to insist on this arrangement.

But while Judis’s article does not make it clearer what to do in postwar Iraq, it does at least help us dispel some conceptual fog. There has been a certain willful obtuseness to discussions of Iraq’s oil. I am referring not merely, or even primarily, to the antiwar protesters’ glib accusation that America has gone to war out of greed for it. Supporters of the war (and opponents of political paranoia, regardless of their position on the war) have been so eager to discredit that accusation that they have claimed that the war has nothing to do with oil.

And that’s not true. We wouldn’t have worried so much about the possibility that the Iraqi regime would invade (or use nuclear weapons to blackmail) its neighbors if the neighborhood were not geopolitically important. And everyone knows the principal reason that it is important. It is a vulgar error to suppose that either the first or the second Gulf war concerned the price of oil; but these wars have very much concerned the power of oil.

The power is, however, tied to the price. We have all heard that we are “too dependent on Mideast oil.” Actually, we are too dependent on Mideast oil sold at state-cartel prices. The tragedy of the Mideast is that it is dominated by totalitarian and other illiberal regimes that are sustained by oil sold at state-cartel prices. Anything that reduces those regimes’ revenue reduces their power — and their ability to fund evil. Whether or not we declare it to be such, one of our war aims should be a freer international market in energy. In contrast to an immediately liberal, democratic Iraq, that is an outcome to this war that stands a fair chance of happening.



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