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"America has two great dominant strands of political thought - conservatism, which, at its very best, draws lines that should not be crossed; and progressivism, which, at its very best, breaks down barriers that should never have been erected." -- Bill Clinton, Dedication of the Clinton Presidential Library, November 2004

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Wednesday, February 04, 2009


Zakaria on The Curse of Oil Wealth

posted by Aziz P. at Wednesday, February 04, 2009 permalink View blog reactions
In Fareed Zakaria's book The Future of Freedom, he makes an extended argument for why the possession of oil resources has historically been a barrier to liberalization and freedom. He made a condensed version of that argument in an essay in Newsweek back in April 2003 when the Iraq war was just beginning:


Vice President Dick Cheney recently remarked that Iraq's oil resourcesóthe second largest in the world--will be a "significant advantage" when building democracy. This is a common refrain, echoed by many within and without the administration. Unfortunately, the opposite is closer to the truth. With the exception of Norway, virtually all the worldís oil states are dictatorships. This is not an accident. Oil--like other natural resources--does not help produce capitalism, civil society and thus democracy. It actually retards that process.

Countries with treasure in their soil don't need to create the framework of laws and policies that produce economic growth and create a middle class. They simply drill into the ground for black gold. These "trust-fund states" donít work for their wealth and thus don't modernize--economically or politically. After all, easy money means a government doesn't need to tax its people. That might sound like a good idea, but when a government takes money from its people, the people demand something in return. Like honesty, accountability, transparency--and eventually democracy.

This bargain, between taxation and representation, is at the heart of Western liberty. After all, that is why America broke away from Britain. It was being taxed but not represented in the British Parliament. The Saudi royal family offers its subjects a very different bargain: "We don't ask much of you [in the form of taxes] and we don't give you much [in the form of liberty]." It's the inverse of the slogan that launched the American Revolution--no taxation without representation.


Far from limiting state power, oil actually strengthens it. There is always enough money for the army, the intelligence services and the secret police. Saudi Arabia, for example, spends 13 percent of its annual GDP on the military, four times America's level. Oil also means that corruption infects every aspect of the society. Businessmen are valued not for what ideas they have or how hard they work, but for who they know. Oil states have a courtier culture, not a commercial culture.

The only thing Zakaria is missing here is that part of teh reason for the above is that oil wealth also invites interference from other nations and powerful entities (corporations, crime syndicates, etc) and these also play a role in retarding the process of liberalization. in fact the entire history of the Middle East is one long excercise in interference by the "free" countries to keep the region under autocratic rule, the better to ensure "stability" with respect to the supply of oil. One wonders just how much of our freedom depends on the lack of it for others.

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About Nation-Building

Nation-Building was founded by Aziz Poonawalla in August 2002 under the name Dean Nation. Dean Nation was the very first weblog devoted to a presidential candidate, Howard Dean, and became the vanguard of the Dean netroot phenomenon, raising over $40,000 for the Dean campaign, pioneering the use of Meetup, and enjoying the attention of the campaign itself, with Joe Trippi a regular reader (and sometime commentor). Howard Dean himself even left a comment once. Dean Nation was a group weblog effort and counts among its alumni many of the progressive blogsphere's leading talent including Jerome Armstrong, Matthew Yglesias, and Ezra Klein. After the election in 2004, the blog refocused onto the theme of "purple politics", formally changing its name to Nation-Building in June 2006. The primary focus of the blog is on articulating purple-state policy at home and pragmatic liberal interventionism abroad.