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It is sometimes thought that certain major exporters of important materials such as oils and rare earth metals have what amounts to a “weapon.” It is sad that such language is regularly used. Why, for instance, might Saudi Arabia have an oil “weapon?” Well, the idea is that they have something we want, oil, and by withholding it from us they can torture us.

I find it funny that people worry about this for two reasons:

  1. For places like Saudi Arabia, with little resources outside of oil, they are more dependent on us oil consumers than we are on them. Seriously. What else is going on in that economy? If we find a substitute for oil, what becomes of all that gooey stuff beneath their sands? If anything, I would argue that the Saudi’s have every incentive to keep us hooked on oil.
    1. As a side insight here, isn’t it funny how people can hold the view that evil corporations like McDonalds inundate us with advertising to make us consume their products, but that when it comes to worrying about resource weapons such arguments disappear? Aren’t the Saudi’s in exactly the same position as McDonalds? I’d argue they’re in a far more precarious position, since McDonalds has and will continue to be able to adopt to changes in consumer tastes and competitor offerings. Never mind that, that big giant pink elephant in the room is a figment of my imagination.
  2. Don’t consumers of this oil have just as much of  a weapon? I may or may not think that, but the reason I offer it up is to point out another tension in this view. Many activists like to think the power of the consumer is really important in shaping policy and the direction firms go. We see boycotts of all kinds of products, e-mails urging us to shop more consciously and the like. So why is it when it comes to oil we see so little in the way of consumers having a weapon many times deadlier than the producers do? There’s likely a simple answer, but I want to keep these posts short.

2 Responses to “The Oil and Rare Earth Weapon”

  1. Harry says:

    Many people hate the Chicoms because they hold so many federal reserve notes (paper dollars), and trillions of dollars of our short-term debt, along with who knows how many Fannie Mae and Freddie Mac bonds (after the Federal Reserve stepped in to buy a trillion of bad tranches).

    This evokes the old saying, “When you owe the bank $100,000, you have a problem. When you owe the bank $100,000.000, the bank has a problem.” As Wintercow might put it, every morning everybody is drinking more hair of the dog these days.

    This is not to say that we should take our eyes off the Chinese, who at the expense of their people are building a big navy and air force and aggressive intercontinental ballistic missiles as part of their peaceful space program; nor should we shut our eyes to Iran, or even Saudi Arabia.

    However, we enrich them every time we throw shackles around the legs of North American energy producers, which includes Canada, the US, and Mexico.

  2. chuck martel says:

    Of course the simple answer to the question posed in paragraph 2 is that there just aren’t enough willing to buy into the plan. So socialism insists on coercing the desired behavior and it’s not simply economic. Put your child in a safety seat, no smoking almost anywhere, fasten your seat belt, build a car that gets x miles per gallon, don’t paint your house pink, mow your lawn and on and on.

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