The sudden resurgence of Russia on account of its status as a major oil roducer has got the Americans and the Brits in a real lather...Russia's prosperity sticks in their collective craw, and, in response, the Russophobes have developed an entirely novel theory of political economy, which is an outgrowth of the environmentalist fad and the extreme nationalism of our ruling elites. It is the absurd idea that any and all countries that depend on oil to generate the bulk of their national income are unnatural, inherently flawed, and even intrinsically aggressive and a threat to the security of the West. Oil-producing states are inclined, by their very nature, to authoritarianism, they argue, although somehow I don't think they mean the state of Texas.
The Bizarro World "logic" of this new economic fallacy is based on the concept that oil is, somehow, not a commodity like any other, that it has some special status over and above all others, and yet this is clearly not the case. Oil – like wheat, cow's bellies, and platinum – is subject to market forces and is unevenly distributed geographically. The economic arrangements that go into the production, distribution, and sale of oil are not fundamentally different from those related to any other commodity, from bananas to high-grade steel. The U.S. has been a major oil producer, at least in the past, and that didn't distort or retard our economic and political development: quite the contrary, it fueled a new era of industrial and intellectual innovation, freeing the individual from the land and inaugurating a new era of political and economic liberalism.
Yet now we are told that oil is a curse that empowers tyrants, who can't be entrusted with such a precious commodity in any event. This is what is behind much of the buzz against Putin's Russia, flush with oil revenues, and the real source of friction between the Kremlin and the West. It is pure nonsense, economically, but, then again, like most war propaganda, it doesn't have to make sense; it only has to demonize the enemy from as many different angles as possible.
Read Raimondo's full column, here.