THE BIG PAYBACK51They were earning daily rents of $400 million on costs of $8 million. And
this despite the fact that the crude oil supplied was “unusable in its orig-
inal form.” Western buyers still had to transport it, refine it into prod-
ucts, distribute it, and market it. Primary- product exporters were now
in the driver’s seat. “It would be hard to recall when a worse bargain has
been struck, and on such a scale,” Ross griped.^21
Among the ministers who founded OPEC— men who had prevailed
against wildly unfair terms of the original concession agreements— these
grievances must have sounded familiar. Importing countries sought
recourse to the “OPEC stranglehold” through a host of emergency mea-
sures: conservation, technology switching, reinvigorated oil explora-
tion outside OPEC’s borders, and the stockpiling of crude in strategic
petroleum reserves.
While most of the attention was focused on the importing world,
transformative change was also taking place inside the exporting coun-
tries. Political scientists such as Seymour Lipset, Karl Deutsch, and
Samuel Huntington had developed a theory that would be put to the
test by the enrichment of Middle Eastern oil exporters. Termed “mod-
ernization theory,” it predicted that, as the once- poor citizens of auto-
cratic states gained wealth and stopped worrying about daily needs, their
attention would turn to how they were being governed. Prosperity was a
disruptive political force because it would trigger demands for political
participation.
In other words, the $400- million- a- day windfall from the embargo
would wreak havoc on autocratic petroregimes. According to the mod-
ernization thesis, it was only a matter of time before the sheikhs and
sultans were toppled by citizens demanding a say in their own gover-
nance. The Arabs’ rash embargo would backfire on its very authors,
who would be dethroned before they could enjoy the new golden age.
Huntington described a “king’s dilemma.” Absolute monarchs could
bow out voluntarily, keeping scraps of their privilege as constitutional
monarchs, or they could try to block modernization, using repression
to hold onto power.^22
Either way, predicted modernization theory, they were doomed.