Jed Rothwell wrote:
If they did draw up a blueprint it was for convenience only, to save a
few months of work by corporate finance and legal wonks. All businessmen
always collude, when they can get away with it. They do that is
naturally, the way birds fly and fish swim. You can clip the wings and
stop them with antitrust legislation, but they will always try to
circumvent it. Businessmen in collusion always betray one another as
well. A 19th-century businessman said, "price-fixing lasts roughly as
long as it takes the first man to leave the meeting to run to the
telegraph office and underbid the others."
U.S. antitrust legislation has no authority over OPEC, needless to say.
There is no such thing as an international law to prevent this kind of
thing as far as I know. I am sure there is no law in Saudi Arabia or
Venezuela that prohibits colluding internationally, so these companies
are perfectly within their rights.
Let's not get too down on OPEC. After all, from about 1980 to 2000 they
were the only government-level organization which was actually doing
something to reduce world oil consumption.
We may not have liked their methods, of course, and it might have been
better if the lily-livered United States government had had the guts to
put a sensible tax on oil and so divert at least some of the money from
the Saudis to the U.S. coffers. But none the less the fact remains that
pretty much the only actions taken by the United States to reduce oil
consumption were hand-wringing and finger-pointing, while the Arabs were
out there sweating to hold the line and so keep the consumers from
drowning themselves in the brown sticky stuff.
Collusion to raise world oil prices did far more to reduce U.S.
dependence on foreign oil than the CAFE law and all the attendant hot
air blown around in Congress.
Of course, once we got into the new millennium with Bush at the wheel,
the United States invaded Iraq which surely pushed up world oil prices,
and that in turn has probably had some beneficial consequences on
consumption. So, these days I'd have to say the United States is also
working, in its own inimitable way, to hold down world oil consumption.
(And people say I only ever look at the dark side of things ... hah.)
- Jed
