The Paradox of Plenty: Oil Booms and Petro-States by Terry Lynn Karl

The Paradox of Plenty: Oil Booms and Petro-States by Terry Lynn Karl

PART ON E 
Commodities, 
Booms, and States 
"Grant me this boon then," Midas cried eagerly, "that 
whatever I touch may turn to gold." 
"So be it!" laughed the god... . 
And Midas left his presence exulting to know that 
henceforth his wealth was boundless. 
The Myth of King Midas 

O N E 
The Modern Myth 
of King Midas 
Structure, Choice, 
and the Development Trajectory 
of States 
1973. In the Middle East, it was the era of the "Great Civilization"; in 
Latin America, the epoch of "La Gran Venezuela." That year the mem-

bers of the Organization of Petroleum Exporting Countries (OPEC) 
succeeded in bringing about the most radical transfer of wealth ever to 
occur without war. By seizing the institutional capacity to set prices for 
oil and by nationalizing their domestic production, these countries, 
which had been virtual case studies of foreign domination in the past, 
finally appeared to gain control over their primary natural resource. 
Petroleum prices soared overnight—from $3 to $1 0 per barrel, eventu-

ally reaching a whopping $40 per barrel in the spot market after the 
second oil boom of 1980. In the brief period from 1970 to 1974 alone, 
government revenues of OPEC nations leapt elevenfold. Money poured 
into their national treasuries at an unprecedented rate. "More money," 
one finance minister reminisced, "than we ever in our wildest dreams 
thought possible."1 
The petrodollar deluge gave rise to new aspirations—for prosperity, 
national greatness, equity, and autonomy—in short, for a future that 
looked markedly different from the oil dependence of the past. Leaders 
of oil countries believed that they would finally be able to "sow the 
petroleum"—that is, redirect the capital accumulation from oil into 
other productive activities. New revenues from petroleum would pro-

vide the resources necessary to "catch up" to the developed world while 
simultaneously bringing political stability and a better life for their peo-

ple. As Venezuelan President Carlos Andrés Pérez explained (interview, 

The Paradox of Plenty: Oil Booms and Petro-States by Terry Lynn Karl