Nature's Evil

The Soviet Union and Venezuela are examples of the deep affinity between oil wealth and socialist teachings. Historically, these teachings were not about earning money but about its redistribution, and their practical success depended on a ready, disposable source of national income such as oil. However, socialism was born in the era of coal; fed by proletarian discipline, it reflected the life of large working collectives. Social welfare states – Weimar Germany, the America of the New Deal, some Nordic and Western European countries – were all formed in post-war periods. Their ideologies have not survived the era of oil. Again, an instructive example is the transformation of the Soviet Union, a country ruled by the party of the utopian left, into the Russian Federation, with its neoliberal economics and social conservatism. Ideologically, they are polar opposites, but most observers agree that their social and economic systems are surprisingly similar. It is the reliance on oil that secures the continuity of the petrostate. Its vital task – accumulating reserves by restraining the consumption of its own population – builds not on a socialist, neoliberal or authoritarian model but on the model of a mercantilist state of the imperial era. In this turbocharged field, ideological distinctions explain less than empirical ones, which focus on natural resources and their political qualities.

The science of curses

In contrast to the narrative world of a historian, political science is rigorous. But once they have counted up correlations and regressions, political scientists resort to metaphors, again taken from primitive religion. This is why political scientists talk about ‘the oil curse’ or – this is a minority opinion – ‘resource blessing’. What you get out of statistics depends on what you put in. In his groundbreaking article of 2001, the political scientist Michael Ross examined the data from fifty countries, from Kuwait to Kyrgyzstan, whose dependence on the export of oil and minerals made them vulnerable to the ‘rentier effect’ and the ‘resource curse’. Neither Russia nor the Soviet Union was included in these statistics. However, a book by Ross in the following decade,

The Oil Curse

(2012), includes a long and original chapter on Russia. 19

Globally, Ross enumerates four particular features of oil rent. It is large – the governments of petrostates are twice as big as the governments of neighbouring countries that don’t have oil. It is direct – the treasury depends mainly on income from state property and not on taxes from the citizenry. It is unstable because it depends on global oil prices that are beyond the control of any single state. And, finally, it is opaque and secretive, because it comes from the direct relationship between the state and nature, without much participation from the citizens. All this turns oil rent into the optimal means of enriching the elite. Since its main source of income, oil extraction, is not labour-intensive, the petrostate does not depend on its population. The elite justify their existence by their superb skills, magic tricks and lofty promises. The petrostate redistributes a part of its profits for the benefit of the population by building hospitals, buying food or supporting the currency. But, in as far as the beneficiaries of these blessings cannot influence them, the expenditure remains unproductive. The normative principle of democracy – no taxation without representation – doesn’t function in petrostates, because they don’t depend on taxes. Petrostates preach and practise another principle, empirical rather than normative:

no representation without taxation

. 20 Only oil is capable of generating income streams large enough to replace the taxation of the whole population. Earlier forms of resource dependency – silver, sugar, hemp, cotton – were partial. Pursuing its profit, the elite enslaved a part of the population, but another part remained free. With oil, the whole population is dependent on a petrostate.