Genie Out of the Bottle: World Oil since 1970
M. A. AdelmanISBN: 0262011514; 9780262011518;
Pictures of oil as the glittering prize, the source of global power and empires, or the hub of an energy crisis have gushed through the media since 1973. What actually happened was very different. M. A. Adelman had written in 1970 that "the genie is out of the bottle," that a group of oil producing countries would control the oil trade to raise prices. Now, twenty-five years later, he has written the fascinating history of the greatest monopoly ever known. The underlying economic analysis is contained inthe companion volume The Economics of Petroleum Supply. Oil was in oversupply in 1970. The oil companies could not keep prices from falling. But the members of OPEC (Organization of Petroleum Exporting Countries) could and did raise prices by restrainingoutput. However, they first had to restrain each other: an endless task, since each of them would gain by cheating on the others. With open and secret agreements, formal and informal, they "tried to fine-tune with coarse instruments,"...