[OPE-L:6164] Re: oil rent

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Tue Nov 06 2001 - 17:18:28 EST

thank you for pushing the discussion forward. It seems (as was implicit in 
Fred's comments) that the accumulation remains the independent variable, in the 
sense that world demand for and thus the price of energy is determined thereby. 
This all affects the magnitude of Arab oil rent. 

In Marxian terms, the gulf--and Sa'udi--oil fields in particular would seem to 
potentially generate DR I and DR II. In terms of DR II, the capital invested by 
the Sa'udi state in the infrastructure for these fields seems to have been 
enormous; thus, the differential fertility is not only naturally great, but has 
also been artificially increased.  

 As you have been suggesting, my guess (which follows Chibuzo Nwoke) is that 
Marxian theory is wrong in the sense that the landlord, viz., the House of 
Saud, has not in fact been able to capture much of DR I or DR II. Which may 
mean given the capital investment by Sa'udis themselves they may not even be 
receiving a full return on their own investments!  The fields have been lent to 
American oil companies cheap in order to secure US security services for the 
very unpopular ruling families whose luxury consumption across the globe is 

The combination of capital return on infrastructure and rent from ownership  is 
then further expended on US arms  in order to purchase  the security lent by 
the US govt to the House of Sa'ud (Michael Klare details the security 
relationship in Resource Wars). From what I remember reading, $200 bn was spent 
in the 80s on arms, and at least $100bn in the 90s. The Sa'udis and other Gulf 
elites also payed for the 'liberation of Kuwait'. 

After the royal family's expenses are then met on top of US claims, there seems 
little money left for even those few who are Sa'udi citizens. The deficits and 
the debt of the regime have grown, unemployment and poverty have risen 
considerably. The population  is young, and without a future. 


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