If you’re still collecting evidence that a society built on extractive wealth is liable to moral pathology, put this one in your dossier. The Saudis are demanding that if we use less of their climate-toxic export, we should pay them (and the other oil-exporting countries) for what we don’t buy.
Let us pause in awe at the nerve of this idea. The policy-relevant citizens of Gulf oil states [update: Mark points out that these states are not all alike: Emiratis, for example are few and all pretty comfortable, while Saudi Arabian privilege and comfort is pretty much restricted to a relatively small population of royals, relatives, and wired-in hangers-on and there is a large population of disenfranchised poor] toil not, neither do they spin, yet Solomon in all his glory was not coddled as one of these privileged lottery winners, swanning around the lobbies of ridiculous hotels and airconditioned shopping centers in spotless white dishdashis, never carrying anything bigger than a cellphone with which to check on the steady inflow of unearned money from a no-work government job, or his brokerage account, or the current price of his pied-a-terre in Mayfair. If something actually needs to be, like, done (cook dinner, build a hotel, look for oil, drill for oil, pump it) they hire expats from around the world and watch. What the government doesn’t pay its men for knowing nothing and doing nothing, it spends to abuse its women, and to spread ignorance, superstition, and savagery through the land and maybe some terror amid the overseas suckers who found, extract, refine, and buy the oil.
They have had more than half a century to accumulate wealth beyond the wildest imagination of people who work for a living, simply because they were struck by underground magic lightning where they happened to have pitched their tents. That wealth could have made them the most educated, productive, creative, fixed-for-centuries society in the world, but they chose to spend it becoming the most incompetent, dependent, and primitive. Now these parasites propose that the world owes them this lifestyle even if our taste for oil changes to a taste for planetary survival?
Verily, the mind reels.
Author: Michael O'Hare
Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training.
He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management.
Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs.
At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.
View all posts by Michael O'Hare
Indeed, their arrogance is astounding - although their motives are not surprising. They're simply trying to cash in on the same thing other developing countries are, by demanding compensation and financial assistance from the Developed World in exchange for agreeing to any type of climate change treaty (although they're taking it a step further, by demanding "compensation" for activity within the Developed World that affects them, like reducing use of oil). They've been trying this for years, but I severely doubt they'll find any sympathetic takers within the Developed World.
Not only do I not feel sympathy for the Saudi government, I actually feel some serious schadenfreude (think Nelson from "The Simpsons" going "HA-HA!"). They've had forty years to use the gigantic wealth they've earned from oil extraction to do things like diversify their economy and build the foundations for a society not based on economic rent - and they haven't done it well, unlike some other countries in that area (the UAE has done a much better job diversifying their economy).
To be fair, the US and Europe import a lot of labor to do menial work, but the Saudis take it to a much greater degree and import labor to do pretty much everything while they sit around and drink coffee (or drive taxis, which is weirdly enough one of the few positions only open to Saudi citizens if I recall correctly). That said, I will be sad for the loss of extremely lucrative short-term jobs in Saudi Arabia (my dad knew a guy who did a two-year stint over there working on an oil-rig, and came back with $250,000 - untaxed - with all of his travel and living expenses covered on the side).
I'm wondering if there's something else going on here, though. The Saudi government might be lying about the size of their population - I remember reading at some point that the Saudi leadership did a census on the Saudi population back in the 1960s or 1970s, found the population to be very small, and then arbitrarily doubled the numbers, which they've been "updating" ever since.
True. I think we in the US share part of the blame, though - we more or less re-shaped our society and our culture around the car during the 1950s and 1960s, when gas was super-cheap due to still-abundant US supplies (we forget, but once upon a time the US was a massive oil producer and exporter - particularly from the East Texas fields - supplying the lion's share of oil in World War 2, and supplying nearly 90% of Japan's oil before we cut them off before Pearl Harbor). When those supplies ran low and it was a choice between becoming more and more dependent on the Saudis and their ilk for oil imports, or switching away from that car culture back to a society not based around petrol, we chose the former.
That said, I agree with your main point - the Saudis have had decades to use that wealth to build a thriving society and non-oil-based economy, but they didn't. They chose the easiest path.
Indeed. It would be like cigarette producers demanding "compensation" from the government for sales lost to government anti-smoking campaigns.
Funny, Connecticut Light and Power just said EXACTLY THAT to Connecticut residents. We have been conserving the heck out of our electricity, because it costs so much, and now the electric company wants to raise the rates so that the new lower level of power use costs us the same as the old, higher level of use.
Why?
Because they think they should have a guaranteed profit margin, and with everyone shutting off lights and running their appliances less, the electric company has experienced a plunge in profits in the last couple of years.
Big Biddness to the consumer: "cough it up, sucker!"
I can't imagine where the Saudis got their ideas from. Couldn't be from Wall St people who looted the system, got bailed out, and are clearly already back on the same track.
Must be commies.
Brett, there's a big difference between asking to be paid to modify your behavior and asking to be paid because your former customer has gone elsewhere. So I don't agree with the parallel you make in your first paragraph. On the rest of your comment, I think we're pretty much in sync (well, except that I know less than nothing about the Saudi census).
SBGypsy, I'm not familiar with your example, which sounds like the company gouging for money, but there is evidence (in California, for example) that it's a good idea to restructure power utilities' fee structures so as to reward the customer for being efficient, and so that the company doesn't get more money by selling more power, and doesn't get hurt badly by selling les power to the same number of people. The way you put this sounds like the company does want to get more money for more power (well, more money for less power, but in a way that would mean even more money if they sold more power), and that's not good, and not what I'm talking about. But this does seem like a golden opportunity to completely restructure how they make their money.
That's why I said the Saudis take it a step further. Although in hindsight, I probably should have made the separation more clear, so my bad.
Of course, we've got our own version of that pathology going on here; Borrowing money from abroad could be considered analogous to an extractive resource: It puts money into your economy for a while, without any real productive effort required, then runs out. The difference is that, when oil runs out, you're where you were, and when borrowing runs out, you're deep in debt.
In either case, a chief component of the pathological effect on society is that government, where the incoming funds first arrive, is enhanced relative to the private sector.
Warren - They want more money for less power. We have now the situation where people are encouraged to "choose"* their electric provider - you can choose an environmentally responsible provider, or even an all-sustainable provider, but you get to pay more for those. The rock bottom price providers are all coal fired plants. So, the financial incentive is to buy electricity produced from coal.
The way to do it to encourage sustainable energy production would be to bill all of them at the higher price, and use the difference to build more sustainable plants, or even to build solar panel production plants.
* we all know that you cannot separate out electricity made by any particular producer any more than you can separate out certain water in a river by the stream it originated in.
Along the same lines, most of the arguments against reforming the American health care system boil down to the premise that the insurance industry has a right to its current level of profit.
All economic and political progress comes at the cost of rendering obsolete business models uneconomic. To accept that corporations should have a protected right to profit from their business models is to assert that progress must be prevented in order to protect entrenched interests. The implications for progress and quality of life are equally self-evident and grim.
It's alarming how deeply this memetic poison has embedded itself in political discourse.
"Along the same lines, most of the arguments against reforming the American health care system boil down to the premise that the insurance industry has a right to its current level of profit."
Really? Never heard that one, you must have to distill away about a thousand gallons of argument to find that tiny residue in the bottom of the vat.
"The Saudi government might be lying about the size of their population – I remember reading at some point that the Saudi leadership did a census on the Saudi population back in the 1960s or 1970s, found the population to be very small, and then arbitrarily doubled the numbers, which they’ve been “updating” ever since.", Brett
A couple of years ago I read at The Oil Drum that they conduct similar calculations on the projected production of their oil fields…
No shortage of liars and prevaricators among human types.