Ivan Eland, a Senior Fellow at The Independent Institute on The U.S. Government Should Stop Meddling in the Oil Market:
Hawks and protectionists have seized on a bid by the primarily state-owned China National Offshore Oil Corporation (CNOOC) to take over California-based Unocal Oil. They allege that China could use the acquisition to meddle in oil pricing or even withhold supplies from the United States. U.S. officials have admitted heartburn over a communist-run corporation owning a major U.S. oil company.
But ironically those communists—now in name only—are trying to teach U.S. government bureaucrats and their protectionist pals in the “land of the free and the home of the brave” something about economic freedom and unfettered markets. According to Chinese Foreign Ministry spokesman Liu Jianchao, “The economic cooperation between China and the U.S. serves the interests of both sides. The bid by CNOOC for Unocal is a normal commercial activity between enterprises. We think that these commercial activities should not be interfered in or disturbed by political elements.”
Whether one favors the current conflict in Iraq or not, its ultimate basis, and the largest factor in U.S. foreign policy in the region is our dependence on oil. In the end, our involvement in the region has increased hundreds of times over during the last 50 years, while the United Kingdom was slowly pulling itself out of its former colonies.
In fact, the primary motivation for most conflicts in the Middle East (religious wars aside) have been based on commerce and access to trade routes, dating back to the silk and spice routes. Given our government’s shoddy record of effecting change in the region (think: Shah of Iran, U.S. support for Saddam prior to Gulf War, Beirut), do we really need to begin directing our long history of foreign policy intervention in the marketplace towards “protecting” American oil companies from a natural aspect of capitalism on all fronts? Isn’t this sort of activity best left to the industry to sort out for itself, rather than risking a trade war, or worse, military confrontation in direct violation of capitalist market principles?
The Administration needs to think long and hard about our own record of military and foreign policies debacles over the last five decades with respect to oil resources in the Middle East before engaging in a risky and unnecessary conflict with the largest nation on the planet on that front.
This entry also posted at the weblog for Veterans for Common Sense.