As a teenager growing up in the Bronx, Scarface was seen as the closest thing to gospel truth in existence. All the mysteries of the world–women, business, conflict, politics, why it was so infuriating when your sister dated one of your friends behind your back–could be answered through the intensive study of the rise and fall of Tony Montana. The less attentive and intelligent of my peers often gleaned the wrong lessons, not paying enough attention to the factors behind Tony’s downfall while glorifying the cocaine-fueled lifestyle he led. Those with more discerning minds noted the failure of Tony to heed Frank Lopez’s sage advice (“Never get high on your own supply”) and understood that any entry into that lifestyle is fraught with myriad costs, including the possibility of incarceration, poverty, and death. The great Malice of the rap duo Clipse stated the true wisdom of the film as succinctly as is possible: “If hustling is a must / Be Sosa, not Tony.”
I bring up Scarface–the clip above, specifically–for a very good reason. The relationship that Tony explicates between money, power, and the ability to attract sex partners is a fundamental underpinning of male psychology in the modern world. This is nothing earth shattering on its own; but let’s take a closer look at how it applies to our current geopolitical and economic situation, shall we?
Understanding this grants us an insight into how the politicians of oil-producing nations (who, without exception, are male) have (again without exception) accumulated absurd amounts of wealth at the expense of the people they purport to represent. Much as Tony’s ambitions outstripped his abilities, so too does the runaway need to accumulate wealth and power come up against some serious structural problems. Repressing people and flaunting your wealth in their faces has serious costs, after all. The term ‘resource curse’ is quite accurate, as the developing nations that have had oil discovered within their borders have seen the wealth generated from it go straight to the top. In turn, both the welfare of the people and the overall stability of these countries has failed to improve–though the GDP numbers are pretty.
In many ways, oil and the role that it plays in the geopolitical and economic landscape makes it the cocaine of nation-states. Both industries are subject to innovation, fluctuation in transportation costs and supply, and the constant threat of widespread violence. Those who control these industries (drug lords and politicians/dictators/monarchs/oligopolies in oil-producing nations, respectively) share a particularly ruthless mentality and bury their opposition in similar fashion. They also share a clearly demarcated division between the supply of raw product, processing, and shipment to market. While there is a obviously a clear difference in the legal status of the products in question, both oil and cocaine share similarly inelastic demand. Of course, demand and necessity are clearly different–there is demand for both cocaine and oil, but only oil is a necessity. The other major difference that becomes apparent in this comparison is that the relationship between national suppliers and the corporations that control the refining and transportation of petroleum to market is something that is simply not present in the world of cocaine: drug cartels control the entire means of production and shipment. In doing so, they incur the costs of getting caught, which is more than offset by the increased profit share that comes with such close supervision.
Perhaps the greatest similarity between oil suppliers and drug lords is the sheer ruthlessness of those in power. To rise to the top in a country such as Libya, Equatorial Guinea, or Sudan, one must be prepared to go to great lengths to establish dominance over others who may have similar ambitions. Such a mentality is difficult–if not impossible–to soften once the ability to become fabulously rich at the public trough presents itself. Part of the ‘oil curse’ phenomenon is that the revenues gained from selling oil inevitably falls under the direct control of a very small number of people in the ruling class. In essence, a Ponzi scheme of sorts is created on a national level. Corruption, then, isn’t really corruption if one looks at this from the perspective of those within this pyramid. It is instead a mere cost of doing business; and if everyone else is getting theirs, so to speak, I gotta get mine. This in turn creates a problem for the multinational companies that do business with these nations, as there’s a distinct and immediate penalty to a company’s bottom line if they don’t have access to the oil. If ExxonMobil doesn’t pay off the Minister of Energy to access oil fields in Angola, for example, then it is probable that Royal Dutch Shell or Total will pony up so as to undercut their rivals. The incentive to be corrupt on both ends of this bargain is simply overwhelming. When one considers that the same set of actors are the ones writing and enforcing the laws that would deter them otherwise, the prospect of punishment is almost laughably low.
So what does the upward trend in oil prices mean? In the short-term, it means instability and penury will reign supreme–as will oil company profits. It means that while Gaddafi flounders and the Libyan people fight for basic dignities, the Nguema clan will become even richer at their nation’s expense. One wonders, however, how long that can last. One thing drug lords don’t have to worry about is currying public favor to retain power, or crushing people power when things go awry. There’s the entire question of evading law enforcement, of course, so one can see these as similar business costs. Regardless, when one looks at what oil money can buy, it’s hard not to think of Pablo Escobar or Manuel Noriega. Their fates, as you’re probably aware, were rather inglorious. We’ll see as the upheaval of 2011 continues whether Gaddafi and those of his ilk meet similar ends.