Let's Eliminate The "Dictator Dividend"

Washington State’s Senator Maria Cantwell has been in the forefront of demands to “make price gouging illegal.”

But private-sector oil companies, the evil spawn of John D. Rockefeller, own a mere 6 percent of crude oil production. The rest is owned by government-owned national oil companies. As Max Schulz in TCS Daily writes:

Red Caveney of the American Petroleum Institute noted, "Nearly 80 percent of the world's reserves are owned by these national oil companies and a mere 6 percent are controlled by investor-owned companies."

So how does Senator Cantwell propose to make the evil price gougers of OPEC illegal?

The problem goes beyond “price gouging” to what Max Boot calls a “dictator dividend.” Only one major oil-exporting country is a well-established democracy. The rest are mostly dictatorships. And the run-up in oil prices has delivered a $500 billion per year dividend to these fine global citizens.

This windfall helps to squelch liberal forces and entrench noxious dictators in such oil producers as Russia (which stands to make $115 billion more this year than in 2003) and Venezuela ($36 billion).

The problem with oil-exporting countries, as we have said here before, is that in resouce-rich nations the people are a cost. Only in advanced developed countries are the people a resource, where it pays the ruling elite to develop and enhance their skills and welfare so that they will generate more tax revenue for the elite to spend. In a country like Saudi Arabia, the people are just a cost. They reduce the amount of money available for the House of Saud to spend at the gaming tables of Europe and on prosletizing their Wahabism worldwide.

How can we reduce the dictator dividend? Everybody wants to raise taxes, but the better solution would be to drill, drill, and drill again. Let’s get all the oil out of the ground and then go onto the next energy resource. Could it be nuclear, or solar panels in space? Who cares? We are humans and we will figure it out.

But first of all, let’s scotch the dictator dividend.