Saudi Arabia and the political economy of oil


in Bombs and rockets, Economics, History, Politics, The environment

The fact that oil money helped develop the power of the muwahhidun in Arabia after 1930 and made possible the resurgence of Islamic political movements in the 1970s has often been noted. But it is equally important to understand that, by the same token, it was an Islamic movement that made possible the profits of the oil industry. The political economy of oil did not happen, in some incidental way, to relied on a government in Saudi Arabia that owed its own power to the force of an Islamic political movement. Given the features of the political economy of oil – the enormous rents available, the difficulty in securing those rents due to the overabundance of supply, the pivotal role of Saudi Arabia in maintaining scarcity, the collapse of older colonial methods of imposing anti-market corporate control of the Saudi oilfields – oil profits depended on working with those forces that could guarantee the political control of Arabia: the House of Saud in alliance with the muwahhidun. The latter were not incidental, but became an internal element in the political economy of oil. ‘Jihad’ was not simply a local force antithetical to the development of ‘McWorld’; McWorld, it turns out, was really McJihad, a necessary combination of social logics and forces.

Mitchell, Timothy. Carbon Democracy: Political Power in the Age of Oil. Verso; London. 2013. p. 213 (italics in original)

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