More about oil money.

Yesterday I spewed out a not-very-well-thought-out rant decrying the idea that oil producing nations should get compensation if a global warming agreement causes lower oil consumption. I am not the least bit sorry for using the "f-word" to suggest an appropriate reply to this idea. I am a bit sorry I did not take the time to explain why this such a criminal idea. Fortunately, it appears, based on this book review in the Economist, that Peter Maass may be doing that in a book called "Crude World: The Violent Twilight of Oil".

Here is a fact: Countries with natural resource based economies tend to do far worse than those with more diverse economies. This is contrary to what we might reflexively think, but look at who is rich and who is poor in the world. Oil does not make a people rich, and in fact, according to Maass' book and most other studies, retards the development of the rest of the economy. Here are a few quotes from the book review, paraphrasing the book itself (I have not read this book, but hope to!)

Oil weakens the bonds between governments and people by flooding public coffers with money, removing the need for wise spending. And it rends societies, making them vulnerable to civil war

The recurring tragedy of oil is that it produces wealth but not what is needed most in poor countries: jobs. Once wells or refineries are built, they take few men to run them. So the money just pours out of the ground, much of it hauled off by foreign companies, and the rest sucked up by greedy regimes. Equatorial Guinea’s tiny population and recent oil discovery should make it one of the richer countries in the world. Its capital, Malabo, has a direct flight to Houston. Yet most of its people remain miserably poor while its cartoonish and bloodthirsty ruler gives himself a presidential Boeing 737 with gold-plated bathroom fixtures.

So, I guess what I should be wanting to say to the Saudis is....well, pretty much what I said yesterday, adding "...We'd be doing your people a favor by getting your country off it's addiction to oil money".