Oil is cheap because Pentagon’s expenditures keep it cheap
Postwar development relied on cheap & abundant oil, kept that way largely by threat or use of force. So matters continue. A large part of the Pentagon budget is devoted to keeping Middle East oil prices within a range that the US and its energy companies
consider appropriate. The only technical study of the topic concludes that Pentagon expenditures amount to a subsidy of 30% of the market price of oil. Estimates of alleged efficiencies of trade are of limited validity if we ignore such hidden costs.
Source: Profit Over People, by Noam Chomsky, p. 30-31
Jul 2, 1996
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